Q2 2020 Twin River Worldwide Holdings Inc Earnings Call

Good morning, My name is Maria and I'll be your conference operator today.

At this time I would like to welcome everyone to the twin River worldwide Holdings second quarter, two Feldman 20 earnings conference call.

All participant lines have been placed in listen only mode to prevent any background noise.

After the speaker's remarks, there will be a question and answer session.

If you would like to ask a question at that time. Please press star one on your telephone keypad.

If you shouldn't need operator assistance, Please press star zero.

Thank you I'll now turn the call over to Craig Eaton.

Is that could have vice president and General Counsel. Please go ahead.

Good morning, everyone and thank you for joining us on todays call.

No you should have received a copy of our Q2 2020 earnings release issued earlier. This morning, you haven't the earnings release and presentation that accompanies as coal are available in the industry Relations section number website at Www Wind River W.W. Holdings Dot com.

Under the news and events and presentations tops.

With me on today's call or George company, or our President and Chief Executive Officer.

We've kept our chief financial Officer markers are following our executive Vice President and he's also president of Twin River, Rhode Island, Ci minus our Vice President Finance and finally, Joe Mcgrail, our Chief Accounting Officer.

Before we begin we'd like to remind everyone. The comments made by management today will contain forward looking statements. These forward looking statements include plans expectations estimates or projections that involve significant risks and uncertainties.

These risks are discussed in the company's earnings release, and that's using filings.

Actual results may differ materially from the results discussed these forward looking statements.

During today's call management will refer to certain non-GAAP financial measures reconciliations to the most comparable GAAP financial measures are included in the schedules contained in our earnings release or the presentation that accompanies this cool.

Do not provide a reconciliation of forward looking non-GAAP financial measures.

Due to our inability to reject special charges within certain expenses.

Today's call is also being broadcast live on our dusters site will be available for replay there shortly after the completion of this call.

I'll now turn the call over to George George.

Thank you Craig.

Good morning, everyone.

Hope that everyone is continuing to Stacy during these unprecedent times.

And I appreciate everyone joining us.

Well the last spoke exactly 90 days ago, all seven well the casinos, we owned at the time.

In closing response to cope with 19, we face significant uncertainty as to when.

To what extent, we could reopen.

That's for Richard today, we've emerged from the quarter with all mine, including our newly acquired Casino Casey The casino Vicksburg properties, having successfully and just as importantly safely riocan.

As part of Twin River is overall kubat 19 be opening plan at each property, we committed to meeting or exceeding all guidelines established by the CDC as such the company has implemented property specific comprehensive health and safety protocols.

Dolphin close consultation with Apple well state regulators and public health officials and local jurisdictions.

We're very confident in environments, we have created for our guests and value team members.

Speaking of her team members I would like to extend a heartfelt. Thank you to all of you you were responses and enthusiastic and it came time to reopen and your hard work, especially in the face of new procedures and many new safety sanitation protocols does not go unnoticed. Thanks.

Do you referenced tremendous attitude or reopenings have been extremely successful.

As we discussed last quarter the impacts it cobot, we're supposed to makes it difficult decisions to place most the brick team members on furlough.

Paul do you have been able to welcome back a large percentage of those affected we're still a number of employees one for a long.

As we await the ability to increase capacity is in amenities.

You said it last quarter no reiterated again.

We care deeply about the well being and where team members recognize the impact that these furloughs have had.

Well, we can't possibly mitigate the full impact of this we continued to provide support.

Form of ongoing health benefits coverage at no cost work Berlin team members during the quarter.

We also established a fun to provide financial assistance.

So those employees experiencing significant fortune.

Now, let's turn to the quarter more specifically our financial results since our operations have resumed.

We talk back in May we believe that we were well positioned, especially as a gaming company focused on local regional visitation.

Capitalize on the fact that we're not reliant on your list.

Destination, where convention business to drive results.

All of our Reopenings to date have certainly supported this thesis.

We're pleased with the strong initial results, which point to a robust pent up demand in regional markets.

In June the first month.

When all or properties were opening some capacity.

With the exception of Rhode Island, which is Mark will discuss a bit later, which was more in a preopening pilot phase for almost all of them off.

All or segments generated positive adjusted EBITDA with meaningful increases in year over year EBITDA margin.

We will ever able to achieve these results well operating with reduced casino capacities and limited amended.

Segments, where the company was able to operate a closer to normal capacity.

And with more amenities available for most of June, notably Biloxi in Dover, we experienced strong demand.

And significantly improved margins.

At hardware demand was strong with gaming volumes up a little under 10% in the comparable period prior year.

Well overall net revenues were up 2% impressively adjusted EBITDA for the property almost doubled in June 2.9 million in 2019 to 5.7 million 2020.

Representing an increase in adjusted EBITDA margins of over 2400 basis points.

Meanwhile, at Dover, well gaming volumes were down approximately 15% and overall net revenues down 30% for June.

Parents in the same month in 2019, as we navigate it capacity restraints.

Adjusted EBITDA results for the month were strong coming in at 2.1 million, which was essentially flat year over year and represented an increase in adjusted EBITDA margin of approximately 1100 50 basis points.

To expand a bit more on the margin increases as we noted in our prior releases, we leveraged the shutdown the resulting from cobot to review and Optimizer operations.

Since reopening we've realized meaningful new efficiencies and marketing and decreases in operating and that's DNA expenses.

We have also been selected whether amenities.

By focusing on higher margin business.

As a result of these expense reductions and new efficiencies, we're now operating at a higher margin than prior to the pandemic.

Well the initial margins results are very encouraging the gaming environment continues to be very dynamic.

We will remain adaptive and while we continue to be willing to spend money to retain.

And capture market share and drive revenue, we do not expect to simply returned to the old ways of doing business.

I believe many of the efficiencies we have realized for sustainable over a long term and will result improve profitability for a property, even though increase sanitation and safety cost or likely become the norm.

Just taking a step back well I think about the quarter and where we are today I'd like to think about it chronologically.

Starting in April we were in a period of no revenue you taking steps to control costs and plan for what was at the time and uncertain future in may.

Began to see signs reopening subsequently ramped up afterwards to prepare our properties to reopen indoors in June we saw returned to operations.

In the markets, where we were able to open to more normal capacity with more amenity strong demand and profitable results, especially in margin, which we just talked about.

Which brings us to our preliminary view July while we're still finalizing our monthly close process. We're excited to report that including our two recently acquired properties, which I'll talk about momentarily.

Looking at initial revenue figures would show a decrease in the range of 7% to 10% year over year. However, we saw continued strong margin performance and as a result year over year. Adjusted EBITDA is up with all segments contributing positive EBITDA for the month.

So now when you factor in their modest interest burden in a relatively low maintenance capex requirements. We are currently generating free cash flow on a consolidated basis, Steven <unk> color around her strong liquidity position shortly.

Turning to our recent M&A activity on July 1st we completed the 230 million dollar acquisition of her Kansas City, and Vicksburg properties from Eldorado. These two new properties expand or geographic footprint with access.

Assets in attractive markets represent agreed to poor portfolios.

I'm also pleased to report that both of these properties have come out of the gate strong preliminary July results for the properties indicates strong revenue demand with revenue volumes off just a little over 10% kit Casino Casey.

And revenue volumes up over 25% casino Vicksburg compared to July 2019.

On top of early results, we continue to see great opportunities to increase the net cash flow from these properties with their development redevelopment and operating plans, notably a casino Casey we remain committed to a proposed $40 million redevelopment plan, which we believe will greatly enhances.

Parents and enable us to reposition that property to grow market share.

That's a property loss in recent years as Steve will discuss we anticipate the majority of the capital spending associated with the project will occur in 2021.

We've enjoyed getting to know the local teams in the first month that we've owned the properties and look forward to working with them to realize the strategic benefits of this transaction. These are very exciting times for a company.

Equally exciting or three additional casinos under contract in Shreveport, Louisiana Lake Tahoe, Nevada, and Atlantic City, New Jersey, which we spoke about Atlanta last call you.

We see significant opportunities to create cross marketing for customers and multiple twin River look great locations nationwide. As result of these strategic acquisitions that we paid extremely attractive purchase multiples for.

We're currently working diligently through the regulatory processes and each other respective states jurisdictions.

We continue to expect the valley acquisitions will close in mid to late Q4, 2020 in Shreveport, and Mark Blue are likely to close in the first half 2021.

At valleys, we would like to address certain areas, we feel need improvement and we haven't planned to fundamentally transform the property by leveraging property upgrades to the facility, including renovated hotel rooms.

Full service Spa.

80 Convention center revitalizing the slot floor and dramatically improving proving the fleet food and beverage offerings.

But also like to comment on our recently announced partnership points, but which we think we will be able to leverage to effectively.

Efficiently tap into what we feel as lucrative opportunity in the Igaming space and the New Jersey market.

We spent will be a great addition to our growing partnerships with innovative leaders around the world.

Adding an exciting I gaming experience, it's such a prominent partner.

Subject to receiving regulatory approval for the acquisition, we're extremely excited to have the opportunity to participate in the best in class mobile gaming environment that New Jersey has created and that we believe will bring new and innovative offerings to the market.

When spent simply the first step for us.

Speaking or partnerships on May 1st we launched mobile sports betting in Colorado in conjunction with our previously announced strategic partners Fanduel and Draftkings.

These partnerships result in a unique opportunity for twin really to introduce Colorado as passionate sports fans to two of the nation's leading mobile and online sports betting platforms.

In addition, we recently announced the launch of the retail Sportsbook.

Connection with Draftkings that are Marty rock casino.

We are confident that this partnership the Draftkings allows us to provide an unmatched sports betting experience to Colorado.

You are looking forward to introduce or guess full renovated space in the coming months in the meantime, we're very excited to be able to provider guess the ability to safely place that's well many professional sports in the United States had begun to resume.

Lastly on sports betting was announced in late July but the road on on legislature passed legislation, which dropped the in person registration requirements from all new mobile sports betting account. This change will make it easier for sports betters in Rhode Island to gain access to our online sports betting.

We're confident we will experience increased mobile play as a result of this change around.

I'll wrap up by saying that while these are certainly the most challenging times or into she has space. We have speed significant progress over the past three months toward securing a promising an exciting future for twin River.

While uncertainty persists in the short term we're pleased with the initial response the properties reopening across the U.S.

The adaptability of our customers to the new operating environments safety protocols.

I'll now turn it over to Mark to provide some more detail around Rhode Island Mark.

Thanks, George and good morning, everyone as George noted when we first opened our twin river and tempered in properties in Rhode Island on June eight we did so in a very limited fashion that we like into more of a preopening pilot phase.

We were only open to a limited number of invited guests as we worked with local regulatory and health officials to ensure that our reopening in this state was gone in a miss addict methodical safe manner at the time of our initial reopening we were operating under significant restrictions and limitations, including limited hours fewer.

Gaming options and reduced amenities.

As a result of the constricted nature of operations during the period, we experienced less of a recovery of revenues than we experienced in our other markets and ended the month with slightly negative adjusted EBITDA. During this ramp up invitation only periods.

Despite the impact this had on fine on the financial results. We view the month of June as a success in Rhode Island.

We experienced gains during the Preopening pilot phase provided valuable unnecessary training for our staff as we welcome back our valued guests, while providing necessarily necessary assurances to low kept local health officials that we can operate in a safe and prudent manner.

On June Thirtyth, we received permission from the state regulatory authorities to eliminate the invitation only requirement and to broaden our offerings and expand the number of guest in our two Rhode Island casinos, while continuing to adhere to the strict social distancing and health and safety protocols, we have put in place to protect our.

I guess and team members.

Since reopening to the general public at the end of June we have experienced a rebound in revenue and profitability in Rhode Island, though we are still operating under material capacity at amenity restrictions looking at preliminary results July revenue for the segment is expected to be up approximately 240% sequel.

Actually from June 2020 on a preliminary basis and is approximately 60% of revenue experienced in the same period in 2019.

These results are with less than half of the LTL and less than one quarter of table game positions available to consumers.

I also wanted to provide a quick update on the status of the IGBT Twin River joint venture that we discussed on last call. The proposed legislation that would enable this joint venture has garnered support in both chambers of General Assembly as well as with the Governor we remain optimistic that it will be addressed at an approved later this summer.

In the event. It is we remain committed to proceeding with the expansion of twin River in Lincoln as soon as we can complete that design and receive all necessary permits and approvals our expectation is that all material provisions as outlined in the joint venture will move forward with twin River able to assume management of a portion of the vlccs on the floor.

On or before October 1st of this year, we continue to expect a joint venture with GE to commence on January one 2022, we will provide a further update as this develops I will now turn it over to Steve.

Mark Thank you.

First I'd like to address cash and liquidity.

As you know we closed a new 275 million dollar loan financing in May and so with those proceeds we ended the quarter with cash on hand of over $330 million and our $250 million revolver was completely unfunded for total liquidity at the end of the quarter of over $580 million.

On a pro forma basis would be approximately $230 million be paid to acquire casino Casey and casino Vicksburg, just last month. The company had total liquidity of approximately 350 million again, including the unfunded revolver.

Looking out even further.

Factor in the amounts will invest in the purchase of valleys and the Shreveport and month Blue properties, which purchase price totaled 165 million closing.

So former we have total liquidity of $185 million.

If we were to face another period of shutdown as a result.

<unk> 19 pandemic.

Based on our current cash requirements and ability to endure a phase two extended shutdown scenario.

Completely zero revenue environment, we believe our current liquidity of 185 million provides us with operating cushion well through 2021 inclusive of the acquisition commitments just mentioned.

In terms of capital expenditures all major capex projects have been suspended and we have greatly reduced our expected capex spend for the second half of this year. However in the meantime, we are planning scoping and continuing to position for a full return to normalcy of anytime.

As George mentioned, we certainly feel and tend to move forward with our proposed Capex program, but casino Casey for approximately $40 million as we think the project there will greatly enhance the property and yet and guest experience driving growth and nice return on investment however, with the timing of the close and the need for required approvals. This is largely a 2021 event.

As Mark mentioned, we also have talked about capex related to the proposed BLT contract and joint venture with HGTV, which would include an expansion to our flagship property in Lincoln. We expect that is largely a 2021 to 2022 capital spend and again that is subject to legislation being approved.

We also have some targeted capex refurbishment plans under developed a greatly improved the property and customer experience at valleys. This work will likely be spaced out over multiple years starting in 2021.

We're working closely with the new Jersey regulators to move forward.

Regarding taxes, as we noted last quarter, it or a certain aspect aspects of the cares act that will benefit us one such items as the employee retention credit, which benefited the company by $2.8 billion in the second quarter.

On that you're continuing to explore other aspects of the act, including as we mentioned the utilization of any well carry backs and other deductions and believe the overall positive cash flow to the company over the next year could will exceed the $15 million to $25 million. We previously noted.

Regarding our return of capital program, we did repurchase approximately 150000 shares at the very beginning of the quarter prior to the covert 19 shutdown.

Since those repurchases ended the condition of the amendment, we assign we signed the to our credit facility.

We have holton spending under the capital return program, including both share repurchases and the payment of a quarterly dividend. However, our capital return program has resulted in the buyback or approximately 11 million shares since last year. We currently have 30.5 million shares outstanding which is down about 25% from the date we listed.

The NYSE last year.

As for guidance as George noted, we continue to live in uncertain times, especially in the short term in a while we do not currently anticipate any significant operational interruptions near term outcomes are heavily dependent upon the future cobot 19, and our country's response to it.

As such we are not in a position to accurately projected results in the short term and therefore continue to refrain from providing specific guidance at this time.

Hi, My final remark.

Look we intend to maintain balance sheet discipline and remain position for future opportunities that may become available. We are not finished building this company by any means.

With the spacing of our acquisition pipeline.

Including recently, Colorado in January Kansas City Index for just last month.

And as mentioned by George you expect valleys later this year in the fourth quarter inch reported in Tahoe.

Yes likely in first half of next year.

That's schedule combined with natural timing required for acquisitions in this industry position us quite well to consider pursue additional M&A can is accretive to shareholders and the right fit for our expanding portfolio of properties.

Now I'll turn it back to George.

Thanks, Steve.

That concludes the prepared remarks section of the call ill now ask the operator to open it up to your questions.

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Our first question is coming from the line of Barry Jonas of Trust Securities.

Good morning.

Chairman of the Board said interviews that is aiming for 500 million earnings.

I think that's about two times.

Tim Runrate once all the M&A closes just curious.

You can reach a target.

And with that maybe any.

Her commentary on the M&A environment out there right now.

Thanks, Barry for the question and I'm going to hand, this over to Steve.

Yes, Thanks, George and I think very hey, good morning.

Thanks. Thanks for the question look very I think the the paraphrase on our chairman's comments in that interview was not necessarily.

To be taken specifically, but rather.

Bob.

That that it's too to mean that we are not done building the company.

[music].

We do.

And as just mentioned maintain a balance sheet. That's good that's that's deliberately prepared for opportunity.

As loans liquidity.

In terms of preparedness and that you.

I is wide open we will continue to be vigilant and focused on on accretion as we look at that future opportunities, but as I just mentioned.

We're not done building the company that there's a lot more to do here and we are we're focused on getting there.

To your question.

I I want to go down to a rabbit hole of do you how long it takes a double the size of the company even even from here at all depends on the environment right and.

Valuation.

Multiples in this market and the like but suffice it to say.

I think what he meant was we are very focused on continuing to grow the company and to do feel creatively.

Yeah, Hey, Barry as it very late to the M&A environment I think your second question.

Okay.

Very dynamic time out there and.

I think I think there obviously the the two keys to the M&A environment or what are the multiples that buyers and sellers are going to agree on in this.

Very unpredictable environment, and how well positioned as a company's balance sheet to actually execute on on an acquisition. Those those two things, obviously drive M&A and and they're particularly relevant in this environment because of the uncertainty around revenues due to co bid on the one and then secondly.

Yes, there aren't that many companies really in a position to execute on M&A from up from a funding standpoint, so in that regard media, we feel pretty good.

Thanks, Steve just doors I, just want to add to that you know we said this.

Previously you were going to just continue.

You know our to our disciplined diversification strategy, we're going to take an opportunistic approach and continue to evaluate opportunities with the strategic element to it we like the idea of continuing to enter into a new sports betting markets, especially with the potential for I gaming license and in the meantime, we're going to focus on the assets we just.

Fired and and died digest that through integration into our portfolio.

Thanks Grant I really appreciate all that color, it's really helpful.

Just touching on Rhode Island.

Really helpful commentary in terms of.

The you know the opening there the pre opening I'm just curious what do you think needs to happen in Rhode Island to kind of generate sort of results you're seeing.

Any other properties right now.

So I'm going to let I'm going to let mark kind of give you the lay the land from a a government perspective, and then I might add some or some color to that some more.

Oh, Thanks, George and thank you Brad Good morning, they're a couple of things in Rhode Island, we're still not even at 24 hours yet our VLP count is about half and the table games or about a quarter. So we need to be able to to start to expand that Unfortunately, Rhode Island right now from a co bid results standpoint.

<unk> numbers have been creeping up and it's actually been burdened the little bit by some quarantine rules. So if you're in Rhode Island, If you visit Rhode Island and you go back to another number of other states like Massachusetts, New York, Connecticut, then you have to quarantine or to demonstrate a negative test. So we're hopeful that the state can turn around the Corona virus issue.

In the next few weeks and get back to normal and then we would like to get to 24 hours is a big step continuing to expand table game availability VLP counts and maybe get somebody amenities running we are running some of the restaurants, there, but but not all of them. Obviously, so that's that's kept we're kind of on that pathway now.

Hopefully you know in the next few weeks two a month, we'll see some improvement again.

Yeah, that's if I just add a little color to that when we opened up in other markets. We had always anticipated some pent up demand.

And we did better than we had anticipated, particularly in the markets, where we could use more the amenities associated with that facility.

In Rhode Island, you know there little bit more stringent on their wonder a philosophy of allow allowing gatherings I'll call. It and as that is that lightens up as we improve from a covert perspective, there's certainly the demand is there.

So we think we're going to benefit from that soon as the the state's starts lightening up on the on the restrictions.

Got it and then just last one from me.

We've heard some commentary over the past few days from your peers about kind of a younger demographic coming in older Grant demographic, maybe a little more cautious coming in just curious if you can give any commentary about the types of players.

And with that maybe is the player catch man.

No.

He sort of color on who's coming in today would be would be really helpful.

Sure well each market is has a little bit different nuance to it and some people or less concern.

About oh that than others and what we're seeing is all its primarily are.

The demographic that we tempted typically would see.

And in some cases with the older demographic, there's less visitation however, their spend seems to be up.

We are drawing some but not really noticeable younger crowd. So again, it really does depend on the market and it depends on the amenities that you're providing a I think the I think really.

The impact that we seem to be haven't is more around the concern of government.

When they impose a waterfall negative cobot actions, but the demographic that we have is still so on older and older demographic or someone woods with discretionary income primarily from their investments is the market's been doing better from that perspective, and we're just seeing a little bit larger wallet currently.

Great. Thanks, so much for answering my questions guys.

Thanks, a lot better.

Our next question comes from one of Brad Blair Stifel.

Yes, thanks for taking the questions guys and for all the color. This morning.

First one I just want to expand upon various question on M&A.

I mean as as we look the landscape today, it's kind of curious no. If there's any sort of strategic drivers at this point for M&A or is that purely just kind of comes down to the numbers so to speak E.

If a deal.

Makes sense from a multiple acquisition perspectives and it's something you would consider or are there any particular markets jurisdictions would have you that.

Our of particular interest today.

[noise] words.

I touched on this a little bit earlier, you know, we're certainly going to be disciplined in our approach and I Didnt I didnt mention that we like states that.

We currently have sports betting so we're looking at sports betting markets and we're especially interested in the I gaming markets. So we feel is as states look for more revenue.

Maybe or tend to be more legislation associated around that so we're going to be opportunistic and what we what we look at all but certainly we're going to be aggressive about.

Entering into new markets, particularly as it relates to sports betting and again.

Okay. That's a that's a good segue into my next question just around sports kind of a broader question I mean, if it if we look at sort of some of your partnership announcements. So as far you obviously have to big Big brands in Colorado and the nice.

I would call a niche year player.

In New Jersey.

I guess, how should we think about the evolution of your partnerships your.

I don't want you to a totally pull back the curtain but.

Any thoughts around how you are approaching.

Partnership relations as you enter new jurisdictions.

Well you know.

Part of our strategy again is through diversification to try and through try and enter into these markets. We really believe that casinos and other forms of gambling are converging.

We believe that they're complementary to each other and not necessarily kinda cannibalizing each other so we feel there's an opportunity being both spaces. We love the idea of attaching brands existing brands as you've seen with ER fanduel and drafting.

So we're going to continue to look and explore for opportunities as it relates to that and in the meantime, you know as we develop as a company will start focus on how we.

Either burns with or potentially acquire or integrate with some tech stack.

That allows us to really get though we're fully.

Burst into.

Anti gaming in sports betting.

Okay helpful. And then last one just a housekeeping question Steve is there any we could put some some numbers around the the back half Capex outlook you said it was.

Likely going to be down I think you said, but anyway to put some numbers around that.

Right I mean for 2020.

Yes.

Well, it's because you know it's going to be minimal.

Actually I don't have I'd love a number for you Brad but look you know we didnt, even we didn't even make it through Q1 on our normal operating basis and as you might imagine we virtually shut down capex expenditures.

As of as of March not knowing what the what the future.

Would would hold.

For for the foreseeable.

So look on an <unk>.

Obviously, a distinguished between maintenance Capex and.

Expansion Capex. If you will we have we've done some for example, we do do we did some SMB work at Dover.

And we have planned similar.

The two to that elsewhere.

Not in the Capex budget excuse me not the maintenance Capex budget.

So.

So look I think for 2020, the maintenance numbers going to be a fraction of the of the the kind of guidance. We've given in prior years on the prior to 2019 portfolio of properties was approximately $20 million low twentys. We're good with wouldn't we're going to you.

You will be a fraction of that for a.

For this year, obviously she is not.

Not finished if this thing if we could pivot on cobot.

And then come out stronger than than that number could actually change even somewhat materially this year, but.

As it did that this point and we'll probably operating it you know kind of 20 fiveish percent that budget for the year.

Plus plus minus.

Okay. Thanks, guys. Appreciate all the color. Thanks, Brad Thanks, a lot Brett.

Our next question comes from one of John Decree Union gaming.

Hey, good morning, everyone and thanks for taking my question.

Steve, Georgia, I wanted to ask about new England, and Rhode Island pre Covanta. It was one of them more promotional markets with new supply coming online and it's been a couple of weeks since things are kind of getting going again, but curious if you've seen a competitive behavior.

As it relates to kind of reinvestment in new England any different than you are in other markets as it is it coming back more quickly and I'm, saying anything you've seen so far and then if you have an expectation.

If their post cold at World, we'll see that rationalization, its kind of taking hold and maybe less.

Work in new England as well.

Yeah, Hi, Joe and John So, yes, there's certainly been a.

Rationalization around marketing spend.

Some of that may be driven by the fact that.

The states or concerned about large gathering so I think.

Everyone's being cautious about that from a promotional perspective.

But.

You know.

Connecticut had a little bit of the headstart, they've opened up a little bit more fully than we had in Rhode Island as you know, Massachusetts opened up.

What about a month.

Subsequent to our opening so we certainly see rationalization from a spends in the market, we think thats an opportunity for everyone to all the kind of take a step back and I understand you could operate.

At better margins, particularly from a marketing perspective as you more towards your were more targeted towards specific customers. So I think that I think the that's going to linger for a while I'm, particularly as we continue to might migrate through this this cobot crisis and Uh huh.

We as a result of that we find out that we don't need to be really irrational from a marketing perspective, because the margins have improved.

Okay. Thanks to is that that's oh, good segue into my follow up question, which is probably mostly around where you see sustainability in some of the margin gains.

That you've realized through reopening so it sounds like targeted marketing is a good area, but was wondering if you could kind of unpack a little better give us some insight as to some of the buckets that you see some sustainable margin improvement.

Well the exercise that we were forced to go through as a result of a ship complete shutdown.

I'm really trying to understand how you mothball the operations really provided some valuable information to us.

Particularly in the ability to really understand from a contract perspective.

And purchasing perspective, theres opportunities there that we were able to take advantage of so we see we see that continuing for the with a time being a we also obviously one of the big Big items is in labor.

We've taken a step back as I said, and we've learned how to to operate or.

Our operations is just a little bit better from a variable perspective.

We think thats going to be continuing and lastly, what we touched on initially was from a marketing perspective, certainly going to be more targeted for the foreseeable future.

And it's going to be a slow ramp up back to being aggressive about promotional marketing.

Our defense and ER and entertainment, so again, that's going to linger for awhile and though.

What will realize is that we maybe able to maintain the same levels of business that we have historically with less promotional marketing approach.

Got it thanks, George and good luck with that continued reopening.

Thank you.

Thanks, John.

Again, ladies and gentlemen, if you wish to ask a question simply press Star then one on your telephone keypad.

Our next question comes from line of Christen out of Cowen.

Good morning, everyone. Thanks for taking my question I just one for me I believe previously the opposite of all this you guys had talked about burning maybe it was $78 million and cash redid. The outset from the pandemic and then improving that down to a figure that I think was more closer to like 3 million.

If we were to step you step backwards in terms of shutdowns.

Maybe what efficiencies if you found that could potentially adjust that 3 million or or pressure. It in the other direction in how might that be factored into that liquidity outlook that you provided earlier. Thanks.

Thanks, Chris and Steve all that you handle that.

[noise], Chris that 3 million could you clarify that's why we did.

Did you did you see 3 million per month.

I think Thats, what you guys told us at the outset of koby they might have been in the one Q call I'm going back to find out too, but I thought it started seven to eight and then you'd move it down to closer to three.

And your in your last I prepared remarks.

Listen to you know, we know where we were at the outset of co. Good was.

Obviously exploratory in locking down expenses and when we were kind of you know seven eight ish.

The even even even tennis yet at that initial phase and and as we got farther into it and realized what we could do that number did come down quite a bit.

Remember what would you are talking about there is a isn't opex number right, but there's still a balance sheet number right. We still have debt service, that's not part of that.

If we if we take your three.

And I look I'll tell you I think that's I think at 3 million as they is a very whittled down number.

But.

So when you add the balance sheet to it and.

And do the math on those numbers.

You know you and you end up with a with a Kerry.

That that I mentioned in the.

In the initial coal.

That.

It is your revenue environment.

It takes us well, who 2021, that's that's kind of the math around all that stuff.

But yeah. Your numbers are your numbers are accurate and I will say that as we as we work toward getting what was initially 78 million per month down to three to four ish or so that took a lot of introspection and.

Very sharp scalpel, if you will.

We feel like we could get there if we had two so you can do the math and that you that your annual Kerry kinda together with debt service.

So we're you know we feel pretty good about our ability to manage this business in difficult circumstances.

Okay. That's helpful. Thank you guys.

Thanks for sure Thanks, Chris.

And ladies and gentlemen that was our final question I'd like to turn the floor back over to George Pedersen here for any additional for closing remarks.

Well. Thank you operator, I want to thank you all for joining our call today.

You all enjoy the rest of your summer.

Thank you ladies and gentlemen, this does conclude today's twin River worldwide Holdings second quarter 2020 earnings Conference call. Please disconnect. Your lines at this time and have a wonderful day.

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