Trump Trumpeting Comeback

While the company – formerly know as Trump Hotels & Casinos -- is still losing money in the second most lucrative gaming market in the country, there are definitive signs things are on the up swing.

Since emerging from bankruptcy in May 2005 with a restructuring plan that shed $400 million in debt, losses have narrowed and executives are confident the company is on a profitability path.

This week the company announced its second quarter results. Though still below analyst expectations, losses are narrowing.  For the quarter ended June 30, the company’s loss from continuing operations was $4.9 million ($0.16 per share). The loss for the first quarter 2006 was nearly twice as much when the company bled $9.7 million ($0.32 per share). So far this year the company has reported losses of $14.7 million. The company is not posting comparable results from the prior year since it is has completely reorganized and is now a different entity.

“In the year since the completion of our reorganization … since I arrived at the Company, I believe we have made significant strides and are ahead of the timeframe I envisioned in changing our culture and implementing targeted technology changes that will streamline our business,” said James B. Perry, Chief Executive Officer and President. “Our plans for the aggressive implementation of physical changes to our properties also continue to move forward…As we head into the rest of the year we will continue to focus on our plan to improve operations, our culture and our physical plant.”

Perry said that by this time next year, the Trump Entertainment Resorts should achieve industry average margins.

Deutsche Bank research analyst Elizabeth McNellis told Reuters she believes Trump Entertainment is moving in the right direction. "[Trump] represents an attractive multiyear turnaround story with a proven management team, extensive plan to upgrade assets and operations, and a widely-recognized brand name."

In Atlantic City, Trump is in the middle of a major $360 million renovation plan.  This week the company broke ground on a major expansion project at the 1,250 room Trump Taj Mahal. Construction has commenced on a $250 million, 40 story, 786-room hotel tower.

Already the organization has renovated rooms at all three of its Atlantic City properties which include the Taj Mahal, Trump Plaza and Trump Marina Hotel Casino. At Trump Plaza the casino has been completely renovated to transform its image to a more modern gaming facility, ridding itself of a stale image trapped in a 1980s aestetic. The Plaza has also opened the 24 Central Café.

At the Taj, the property has opened the Ego Bar and Lounge, a Trump Exchange retail store, an Asian Gaming Pit and a new noodle bar, The Rim. A renovation on the casino floor is also underway and construction has commenced on a new $25 million retail and dining entrance corridor.




A master plan for the Trump Marina is currently being developed.

The Donald and company are also looking to get into other established and emerging markets as well including Mississippi, Pennsylvania and Rhode Island.

In Mississippi, Trump has singed a letter of intent to form a joint venture partnership to develop, build and operate a $300 million destination casino resort in Diamondhead, Mississippi. The new casino venture will cover a minimum of 40 acres within the existing 404-acre tract owned by Mississippi Gaming Corporation, a wholly-owned subsidiary of Diamondhead.

In Pennsylvania the company is vying for one of two Category 2 gaming licensees (for slot machines) for a Philadelphia casino. The company recently made a presentation to the state for its TrumpStreet Casino and Entertainment Complex and has also signed an option to buy 12 acres in Philadelphia with Tasty Baking Company. This is in addition to an option for an additional 18 acres, which was previously signed.

A decision is expected to be made by the state before the end of the year. If Trump gets the official nod, they will be able to build a casino with up to 3,000 slot machines plus additional amenities including a hotel.

The company is also making a play in Rhode Island, a jurisdiction that already has two state run slot parlors, but is consideration for a gambling expansion. A November ballot initiative will give voters a chance to voice their opinion on changing the state’s constitution to allow gaming operations run by other entities. While Harrah’s has teamed with the Narragansett Indians on a proposed $1 billion casino, Trump is also looking to get the dice rolling here.


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