Penn National Gaming, Inc. recently (March 15, 2016) reported operating results for 2015 in its 10K filing with the Securities and Exchange Commission. As of December 31, 2015, the company (Nasdaq symbol PENN) operated 27 properties in 17 geographical jurisdictions offering 33,400 slot machines, 800 table games, and 4,600 hotel rooms.

Included in the 27-property portfolio were nine horse-racing tracks, as follows:

Freehold Raceway (NJ), Standardbreds
Hollywood Casino at Charles Town Races (WV), Thoroughbreds
Hollywood Casino at Dayton Raceway (OH), Standardbreds
Hollywood Casino at Mahoning Valley Race Course (OH), Thoroughbreds
Hollywood Casino at Penn National (PA), Thoroughbreds
Plainridge Park Casino (MA), Standardbreds
Rosecroft Raceway (MD), Standardbreds
Sam Houston Race Park (TX), Thoroughbreds
Zia Park Casino, Hotel, and Racetrack (NM), Thoroughbreds and Quarter Horses

PENN revenue for 2016 was nearly $2.9 billion compared to $2.6 billion in 2014. Gaming accounted for 88% of revenue with the rest coming from food, beverage, and other (including horse racing).

PENN’s 10K identified the sources of its revenue: “The vast majority of our revenue is gaming revenue, derived primarily from gaming on slot machines (which represented approximately 86% and 84% of our gaming revenue in 2015 and 2014, respectively) and to a lesser extent, table games, which is highly dependent upon the volume and spending levels of customers at our properties. Other revenues are derived from our management service fee from Casino Rama, our transition service fees from GLPI, our hotel, dining, retail, admissions, program sales, concessions and certain other ancillary activities, and our racing operations. Our racing revenue includes our share of pari-mutuel wagering on live races after payment of amounts returned as winning wagers, our share of wagering from import and export simulcasting, and our share of wagering from our off-track wagering facilities.”

The company had a net profit of $686 million in 2015 in contrast to almost a $184 million net loss a year earlier. In the past five years (2011-2015), PENN earned a profit in three years and incurred a loss in two years.

Earnings per share were one cent in 2015 and a negative $2.34 in 2014. EPS for previous years were a negative $7.59 in 2013 and positive returns of $1.98 in 2012 and $2.22 in 2011.

PENN common stock closed 2015 at $13.48 per share, a decline of 25 cents per share during the year. Since then it has recovered its loss and then some with a price per share of $16.69 on the last trading day of March 2016. The nearly 24% stock-price increase in the first quarter of 2016 is apparently due to investors’ collective belief or hope that the positive profit situation in 2015, compared to 2014, indicates that a corporate turnaround is underway.

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