Company cites positive expansion plans, not regional casino saturation, as cause
Several one-time charges and costs associated with the opening of a hotel-casino in Baton Rouge, La., caused regional gaming operator Pinnacle Entertainment to suffer a net loss in the fourth quarter.
The Las Vegas-based company said Wednesday its net loss in the quarter that ended Dec. 31 was $42.4 million, or 72 cents per share, compared with a profit of $25 million, or 40 cents per share, a year earlier.
The largest charge Pinnacle took in the quarter was a noncash write-down of approximately $25 million related to the company’s investment in a casino project in Vietnam. Pinnacle also reported one-time charges surrounding casino expansion projects in St. Louis and the opening of the L’Auberge Baton Rouge in September.
Pinnacle Entertainment board member John Giovenco, who served as the regional casino companys interim chief executive officer for five months, retired from his position last week.
The Las Vegas-based company made the announcement Friday.
Giovenco joined the Pinnacle board in 2003 and took part in many aspects concerning the companys growth.
After CEO Dan Lee resigned in November 2009, Giovenco stepped in and directed the company until the hiring of current CEO Anthony Sanfilippo in March 2010.
John has made significant contributions to the board’s decisions during his tenure, Pinnacle Chairman Richard Goeglein said in a statement.
INSIDE GAMING: How a Texas company competes in a Vegas casino world
The slot machine industry’s largest manufacturers in the past year have invested billions of research and development dollars in interactive gaming prototypes, social media casino efforts and systems, hoping to capitalize on the potential for legalized Internet gambling in the United States.
Multimedia Games, meanwhile, is growing the company the old fashioned way: It’s building actual slot machines.
The manufacturer could give rivals International Game Technology, Bally Technologies and WMS Industries competition for the casino floor by next year.
One analyst recently came away from meetings with company executives convinced the manufacturer is poised for years of increased game sales as it moves into major markets, including Nevada.
What has held Multimedia Games back is that it can sell slot machines only in roughly 40 percent of U.S. casino markets, primarily those run by Indian tribes.
Not that Indian gaming is a bad base.