Pinnacle Q1 Revenues At $269M

Also on the rise was consolidated adjusted EBITDA, which was $53.4 million during Q1 2009, versus Q1 2008's figure of $35.4 million. Pinnacle chair and CEO Daniel R. Lee pointed out that the reason for the high figures was due, in part, to the operations ramp-up at Lumiere Place in St. Louis, MO and the improved utilization of Lake Charles, LA-based L'Auberge du Lac.

"The major increase in revenues is due to L'Auberge," said Lewis Fanger, who heads up the company's investor relations department. "We began the hotel expansion in late 2007, completed the opening in 2008, and underwent a learning process as we went through who the customers are. The results are there."

Fanger did acknowledge that revenues at Pinnacle's Boomtown New Orleans in Harvey, LA were a little off, however, due to competition from a racetrack opening. Also impacting Boomtown New Orleans was roadwork along the property. Other properties in Bossier City LA and Biloxi, MS, however, continued strong due to "increased efficiency and improved focus of marketing," Fanger said.

Lee said that Pinnacle, overall, has a terrific cash position, with liquidity more than $230 million, representing more than the $190 million needed to complete the River City Casino in St. Louis. That liquidity position is growing, he pointed out, thanks to freecash-flow gains to the system.

This doesn't mean that Pinnacle is content to simply sit on a pile of cash, however. "We're continuing to talk to our banks, and have an open dialogue with most of them," Lee said. "We do sense a thawing of that market, in fact, in a number of markets."

Lee also discussed the unlikely possibility of future competition from Texas, which is adjacent to Louisiana. Many gamers come from East Texas to Louisiana to gamble. Though Texas is a strict non-gaming state, as mandated by the state constitution, the stateS legislature in session, and the topic is on the floor for debate.

Lee said that Texas isn't likely to become a gaming state any time soon, pointing out that the state's constitution requires a two-thirds vote from both the House and the Senate, and a vote by the majority of the people, to change an amendment. If that weren't enough of a hurdle, he continued, Texas is a conservative state, and not prone toward accepting gaming.

"We recently did a poll, and the conclusion of that poll was that, if it got to the vote of the people, it would not pass," Lee said. "It makes us feel a little better about our investment in Lake Charles."

To get gaming legislation to pass, he added, the poll in the beginning has to be overwhelmingly favorable, as things will narrow as an election draws near. Without overwhelming support in the first place, the legislation doesn't stand a chance of passing, he said.