• Studio City International Holdings Limited Announces Unaudited Third Quarter 2023 Earnings

    Source: Nasdaq GlobeNewswire / 07 Nov 2023 07:03:12   America/Chicago

    MACAU, Nov. 07, 2023 (GLOBE NEWSWIRE) -- Studio City International Holdings Limited (NYSE: MSC) (“Studio City” or the “Company”), a world-class integrated resort located in Cotai, Macau, today reported its unaudited financial results for the third quarter of 2023.

    Total operating revenues for the third quarter of 2023 were US$137.6 million, compared with total operating revenues of negative US$2.8 million in the third quarter of 2022. The change was primarily attributable to the relaxation of COVID-19 related restrictions in Macau in January 2023 and the opening of Studio City Phase 2, which led to an increase in revenue from casino contract and higher non-gaming revenues.

    Studio City Casino generated gross gaming revenues of US$256.3 million and US$20.6 million for the third quarters of 2023 and 2022, respectively.

    Studio City Casino’s rolling chip volume was US$713.6 million in the third quarter of 2023 versus US$42.1 million in the third quarter of 2022. The rolling chip win rate was 1.78% in the third quarter of 2023 versus 4.18% in the third quarter of 2022. The expected rolling chip win rate range is 2.85%- 3.15%.

    Mass market table games drop increased to US$809.1 million in the third quarter of 2023, compared with US$61.9 million in the third quarter of 2022. The mass market table games hold percentage was 27.5% in the third quarter of 2023, compared with 25.6% in the third quarter of 2022.

    Gaming machine handle for the third quarter of 2023 was US$673.9 million, compared with US$98.2 million in the third quarter of 2022. The gaming machine win rate was 3.2% in the third quarter of 2023, compared with 3.1% in the third quarter of 2022.

    Revenue from casino contract was US$48.6 million for the third quarter of 2023, compared with revenue from casino contract of negative US$18.2 million for the third quarter of 2022. Revenue from casino contract is net of gaming taxes and the costs incurred in connection with the on-going operation of the Studio City Casino which are deducted by Melco Resorts (Macau) Limited, the gaming operator of the Studio City Casino (the “Gaming Operator”).

    Total gaming taxes and the costs incurred in connection with the on-going operation of the Studio City Casino deducted from gross gaming revenues were US$207.7 million and US$38.8 million in the third quarters of 2023 and 2022, respectively.

    Total non-gaming revenues at Studio City for the third quarter of 2023 were US$89.0 million, compared with US$15.4 million for the third quarter of 2022.

    Operating income for the third quarter of 2023 was US$3.2 million, compared with operating loss of US$72.5 million in the third quarter of 2022.

    Studio City generated Adjusted EBITDA(1) of US$56.3 million in the third quarter of 2023, compared with negative Adjusted EBITDA of US$39.5 million in the third quarter of 2022. The change was mainly attributable to the increase in revenue from casino contract and higher non-gaming revenues.

    Net loss attributable to Studio City International Holdings Limited for the third quarter of 2023 was US$28.4 million, compared with net loss attributable to Studio City International Holdings Limited of US$85.2 million in the third quarter of 2022. The net loss attributable to participation interest was US$2.7 million and US$8.0 million in the third quarters of 2023 and 2022, respectively.

    Other Factors Affecting Earnings

    Total net non-operating expenses for the third quarter of 2023 were US$34.3 million, which mainly included interest expenses of US$36.4 million, partially offset by interest income of US$2.8 million.

    Depreciation and amortization costs of US$45.4 million were recorded in the third quarter of 2023, of which US$0.8 million was related to the amortization expense for the land use right.

    The Adjusted EBITDA for Studio City for the three months ended September 30, 2023 referred to in the earnings release of Melco Resorts & Entertainment Limited (“Melco”) dated November 7, 2023 (“Melco’s earnings release”) is US$11.5 million more than the Adjusted EBITDA of Studio City contained in this press release. The Adjusted EBITDA of Studio City contained in this press release includes certain intercompany charges that are not included in the Adjusted EBITDA for Studio City contained in Melco’s earnings release. Such intercompany charges include, among other items, fees and shared service charges billed between the Company and its subsidiaries and certain subsidiaries of Melco. Additionally, Adjusted EBITDA of Studio City included in Melco’s earnings release does not reflect certain gaming concession related costs and certain intercompany costs related to the table games operations at Studio City Casino.

    Financial Position and Capital Expenditures

    Total cash and bank balances as of September 30, 2023 aggregated to US$293.1 million (December 31, 2022: US$509.7 million), including US$0.1 million of restricted cash (December 31, 2022: US$0.1 million). Total debt, net of unamortized deferred financing costs and original issue premiums, at the end of the third quarter of 2023 was US$2.43 billion (December 31, 2022: US$2.43 billion).

    Capital expenditures for the third quarter of 2023 were US$14.8 million.

    Safe Harbor Statement

    This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Studio City International Holdings Limited (the “Company”) may also make forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. These factors include, but are not limited to, (i) COVID-19 outbreaks, and the impact of its consequences on our business, our industry and the global economy, (ii) risks associated with the newly adopted gaming law in Macau and its implementation by the Macau government, (iii) changes in the gaming market and visitations in Macau, (iv) capital and credit market volatility, (v) local and global economic conditions, (vi) our anticipated growth strategies, (vii) gaming authority and other governmental approvals and regulations, and (viii) our future business development, results of operations and financial condition. In some cases, forward-looking statements can be identified by words or phrases such as “may”, “will”, “expect”, “anticipate”, “target”, “aim”, “estimate”, “intend”, “plan”, “believe”, “potential”, “continue”, “is/are likely to” or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company’s filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company undertakes no duty to update such information, except as required under applicable law.

    Non-GAAP Financial Measures

     (1)"Adjusted EBITDA" is defined as net income/loss before interest, taxes, depreciation, amortization, pre-opening costs, property charges and other and other non-operating income and expenses. We believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results. This non-GAAP financial measure eliminates the impact of items that we do not consider indicative of the performance of our business. While we believe that this non-GAAP financial measure is useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute for the related financial information prepared in accordance with U.S. GAAP. It should not be considered in isolation or construed as an alternative to net income/loss, cash flow or any other measure of financial performance or as an indicator of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities. The use of Adjusted EBITDA has material limitations as an analytical tool, as Adjusted EBITDA does not include all items that impact our net income/loss. In addition, the Company’s calculation of Adjusted EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited. Investors are encouraged to review the reconciliation of the historical non- GAAP financial measure to its most directly comparable GAAP financial measure. Reconciliations of Adjusted EBITDA with the most comparable financial measures calculated and presented in accordance with U.S. GAAP are provided herein immediately following the financial statements included in this press release.
      
    (2)“Adjusted net income/loss” is net income/loss before pre-opening costs, property charges and other and gain on extinguishment of debt, net of participation interest. Adjusted net income/loss is presented as supplemental disclosure because management believes it provides useful information to investors and others in understanding and evaluating our performance, in addition to income/loss computed in accordance with U.S. GAAP. Adjusted net income/loss may be different from the calculation methods used by other companies and, therefore, comparability may be limited. Reconciliations of adjusted net income/loss attributable to Studio City International Holdings Limited with the most comparable financial measures calculated and presented in accordance with U.S. GAAP are provided herein immediately following the financial statements included in this press release.
      

    About Studio City International Holdings Limited

    The Company, with its American depositary shares listed on the New York Stock Exchange (NYSE: MSC), is a world-class integrated resort located in Cotai, Macau. For more information about the Company, please visit www.studiocity-macau.com.

    The Company is majority owned by Melco Resorts & Entertainment Limited, a company with its American depositary shares listed on the Nasdaq Global Select Market (Nasdaq: MLCO).

    For the investment community, please contact:
    Jeanny Kim
    Senior Vice President, Group Treasurer
    Tel: +852 2598 3698
    Email: jeannykim@melco-resorts.com

    For media enquiries, please contact:
    Chimmy Leung
    Executive Director, Corporate Communications
    Tel: +852 31513765
    Email: chimmyleung@melco-resorts.com

     

                
    Studio City International Holdings Limited and Subsidiaries
    Condensed Consolidated Statements of Operations (Unaudited)
    (In thousands, except share and per share data)
                
                
     Three Months Ended Nine Months Ended
     September 30, September 30,
     2023
    		 2022
    		 2023
    		 2022
                
    Operating revenues:           
      Revenue from casino contract$48,614  $(18,166) $98,546  $(44,171)
      Rooms 32,819   3,527   72,091   13,566 
      Food and beverage 19,295   3,509   42,611   12,855 
      Entertainment 24,747   871   58,785   1,175 
      Services fee 8,307   5,033   22,569   16,215 
      Mall 2,945   1,246   7,583   5,800 
      Retail and other 859   1,187   2,102   1,871 
    Total operating revenues 137,586   (2,793)  304,287   7,311 
                
    Operating costs and expenses:           
      Costs related to casino contract (7,297)  (9,622)  (21,265)  (21,864)
      Rooms (8,015)  (2,884)  (17,920)  (8,476)
      Food and beverage (16,319)  (5,162)  (37,089)  (18,241)
      Entertainment (17,870)  (536)  (49,352)  (1,704)
      Mall (1,282)  (979)  (2,770)  (3,041)
      Retail and other (589)  (273)  (1,543)  (904)
      General and administrative (29,943)  (17,280)  (79,904)  (59,457)
      Pre-opening costs (7,623)  (785)  (17,620)  (1,731)
      Amortization of land use right (826)  (823)  (2,474)  (2,474)
      Depreciation and amortization (44,557)  (31,029)  (116,189)  (92,854)
      Property charges and other (57)  (369)  (540)  (3,790)
    Total operating costs and expenses (134,378)  (69,742)  (346,666)  (214,536)
    Operating income (loss) 3,208   (72,535)  (42,379)  (207,225)
    Non-operating income (expenses):           
      Interest income 2,821   2,458   8,173   4,187 
      Interest expenses, net of amounts capitalized (36,362)  (23,181)  (93,806)  (70,430)
      Other financing costs (105)  (104)  (311)  (311)
      Foreign exchange (losses) gains, net (692)  162   2,521   6,402 
      Other expenses, net -   -   (61)  - 
      Gain on extinguishment of debt 80   -   80   - 
    Total non-operating expenses, net (34,258)  (20,665)  (83,404)  (60,152)
    Loss before income tax (31,050)  (93,200)  (125,783)  (267,377)
    Income tax benefit (expense) 11   9   77   (485)
    Net loss (31,039)  (93,191)  (125,706)  (267,862)
    Net loss attributable to participation interest 2,669   8,016   10,813   26,817 
    Net loss attributable to Studio City International Holdings Limited$(28,370) $(85,175) $(114,893) $(241,045)
                
    Net loss attributable to Studio City International Holdings Limited per Class A ordinary share:          
        Basic$(0.037) $(0.111) $(0.149) $(0.349)
        Diluted$(0.037) $(0.111) $(0.149) $(0.351)
                
    Net loss attributable to Studio City International Holdings Limited per ADS:           
        Basic$(0.147) $(0.442) $(0.597) $(1.396)
        Diluted$(0.147) $(0.442) $(0.597) $(1.404)
                
    Weighted average Class A ordinary shares outstanding used in net loss attributable to Studio City International Holdings Limited per Class A ordinary share calculation:           
        Basic 770,352,700   770,352,700   770,352,700   690,440,759 
        Diluted 770,352,700   770,352,700   770,352,700   762,952,519 
                


          
    Studio City International Holdings Limited and Subsidiaries
    Condensed Consolidated Balance Sheets
    (In thousands, except share and per share data)
          
          
     September 30, December 31,
     2023
    		 2022
      (Unaudited)   
    ASSETS     
          
    Current assets:     
    Cash and cash equivalents$292,951  $509,523 
    Accounts receivable, net 1,100   263 
    Receivables from affiliated companies 40,479   221 
    Inventories 5,735   5,121 
    Prepaid expenses and other current assets 39,780   38,721 
    Total current assets 380,045   553,849 
          
    Property and equipment, net 2,802,281   2,868,064 
    Intangible assets, net 346   1,373 
    Long-term prepayments, deposits and other assets 22,214   48,325 
    Restricted cash 129   130 
    Operating lease right-of-use assets 11,601   13,136 
    Land use right, net 105,875   108,645 
    Total assets$3,322,491  $3,593,522 
          
    LIABILITIES, SHAREHOLDERS’ EQUITY AND      
      PARTICIPATION INTEREST     
          
    Current liabilities:     
    Accounts payable$1,992  $501 
    Accrued expenses and other current liabilities 107,227   165,688 
    Income tax payable 4   22 
    Payables to affiliated companies 22,712   81,178 
    Total current liabilities 131,935   247,389 
          
    Long-term debt, net 2,434,981   2,434,476 
    Other long-term liabilities 3,024   21,631 
    Deferred tax liabilities, net 318   382 
    Operating lease liabilities, non-current 11,985   13,499 
    Total liabilities 2,582,243   2,717,377 
          
    Shareholders’ equity and participation interest:     
    Class A ordinary shares, par value $0.0001; 1,927,488,240 shares authorized; 770,352,700 shares issued and outstanding 77   77 
    Class B ordinary shares, par value $0.0001; 72,511,760 shares authorized; 72,511,760 shares issued and outstanding 7   7 
    Additional paid-in capital 2,477,359   2,477,359 
    Accumulated other comprehensive losses (20,985)  (11,671)
    Accumulated losses (1,780,059)  (1,665,166)
    Total shareholders’ equity 676,399   800,606 
    Participation interest 63,849   75,539 
    Total shareholders’ equity and participation interest 740,248   876,145 
    Total liabilities, shareholders’ equity and participation interest$3,322,491  $3,593,522 
          


     
    Studio City International Holdings Limited and Subsidiaries
    Reconciliation of Net Loss Attributable to Studio City International Holdings Limited to
    Adjusted Net Loss Attributable to Studio City International Holdings Limited (Unaudited)
    (In thousands, except share and per share data)
                
                
     Three Months Ended Nine Months Ended
     September 30, September 30,
     2023  2022  2023  2022 
                
    Net loss attributable to Studio City International Holdings Limited$(28,370) $(85,175) $(114,893) $(241,045)
     Pre-opening costs 7,623   785   17,620   1,731 
     Property charges and other 57   369   540   3,790 
     Gain on extinguishment of debt (80)  -   (80)  - 
     Participation interest impact on adjustments (653)  (99)  (1,555)  (712)
    Adjusted net loss attributable to Studio City International Holdings Limited$(21,423) $(84,120) $(98,368) $(236,236)
                
    Adjusted net loss attributable to Studio City International Holdings Limited per Class A ordinary share:           
        Basic$(0.028) $(0.109) $(0.128) $(0.342)
        Diluted$(0.028) $(0.109) $(0.128) $(0.344)
                
    Adjusted net loss attributable to Studio City International Holdings Limited per ADS:          
        Basic$(0.111) $(0.437) $(0.511) $(1.369)
        Diluted$(0.111) $(0.437) $(0.511) $(1.375)
                
    Weighted average Class A ordinary shares outstanding used in adjusted net loss attributable to Studio City International Holdings Limited per Class A ordinary share calculation:           
        Basic 770,352,700   770,352,700   770,352,700   690,440,759 
        Diluted 770,352,700   770,352,700   770,352,700   762,952,519 
                


     
    Studio City International Holdings Limited and Subsidiaries
    Reconciliation of Operating Income (Loss) to Adjusted EBITDA (Unaudited)
    (In thousands)
                
                
     Three Months Ended Nine Months Ended
     September 30, September 30,
     2023 2022  2023  2022 
            
    Operating income (loss)$3,208 $(72,535) $(42,379) $(207,225)
    Pre-opening costs 7,623  785   17,620   1,731 
    Depreciation and amortization 45,383  31,852   118,663   95,328 
    Property charges and other 57  369   540   3,790 
    Adjusted EBITDA$56,271 $(39,529) $94,444  $(106,376)
                


     
    Studio City International Holdings Limited and Subsidiaries
    Reconciliation of Net Loss Attributable to Studio City International Holdings Limited
     to Adjusted EBITDA (Unaudited)
    (In thousands)
                
                
     Three Months Ended Nine Months Ended
     September 30, September 30,
     2023  2022  2023  2022 
            
    Net loss attributable to Studio City International Holdings Limited$(28,370) $(85,175) $(114,893) $(241,045)
    Net loss attributable to participation interest (2,669)  (8,016)  (10,813)  (26,817)
    Net loss (31,039)  (93,191)  (125,706)  (267,862)
        Income tax (benefit) expense (11)  (9)  (77)  485 
        Interest and other non-operating expenses, net 34,258   20,665   83,404   60,152 
        Depreciation and amortization 45,383   31,852   118,663   95,328 
        Property charges and other 57   369   540   3,790 
        Pre-opening costs 7,623   785   17,620   1,731 
    Adjusted EBITDA$56,271  $(39,529) $94,444  $(106,376)
                


                 
    Studio City International Holdings Limited and Subsidiaries
    Supplemental Data Schedule
                 
                 
          Three Months Ended Nine Months Ended
          September 30, September 30,
           2023   2022   2023   2022 
    Room Statistics(3):          
      Average daily rate (4)  $167  $107  $148  $114 
      Occupancy per available room  92%  25%  88%  27%
      Revenue per available room (5) $155  $27  $129  $31 
                 
    Other Information(6):          
      Average number of table games  246   277   246   277 
      Average number of gaming machines  661   702   667   711 
      Table games win per unit per day (7) $10,380  $794  $8,331  $1,592 
      Gaming machines win per unit per day (8)$352  $54  $319  $82 
                 
                 
    (3)Room statistics exclude rooms that were temporarily closed or provided to staff members due to the COVID-19 outbreak
    (4)Average daily rate is calculated by dividing total room revenues including complimentary rooms (less service charges, if any) by total occupied rooms including complimentary rooms
    (5)Revenue per available room is calculated by dividing total room revenues including complimentary rooms (less service charges, if any) by total rooms available
    (6)Table games and gaming machines that were not in operation due to government-mandated closures or social distancing measures in relation to the COVID-19 outbreak have been excluded
    (7)Table games win per unit per day is shown before discounts, commissions, non-discretionary incentives (including the point-loyalty programs) as administered by the Gaming Operator and allocating casino revenues related to goods and services provided to gaming patrons on a complimentary basis
    (8)Gaming machines win per unit per day is shown before non-discretionary incentives (including the point-loyalty programs) as administered by the Gaming Operator and allocating casino revenues related to goods and services provided to gaming patrons on a complimentary basis

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