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MGM Grand chair to leave
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October 14, 1999: 1:13 p.m. ET
Lanni cites family reasons for resigning; gaming company beats 3Q estimates
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NEW YORK (CNNfn) - MGM Grand Inc. Chairman and CEO Terrence Lanni announced Thursday his intention to resign by the end of the year, citing his desire to be closer to his family in California.
Separately, the Las Vegas-based entertainment and casino company posted third-quarter earnings from operations well above the consensus estimate of analysts, as well as record revenue and cash flow.
In a conference call with analysts to discuss those financial results, Lanni said he plans to remain on MGM Grand's executive committee and board following his departure.
MGM Grand (MGG) Chief Financial Officer James J. Murren said the company expects to fill Lanni's positions by the end of the year, but said Lanni has made it clear he will remain very involved in the company's operations.
"It's pretty much going to be business as usual around here because he's going to basically be doing everything he's doing now," Murren said. "The executive committee meets constantly and really determines the direction of this company."
Operating profits up, net down
The gaming company posted operating income of $42.42 million, or 70 cents per diluted share, before one-time expenses, for the period ended Sept. 30.
That compared favorably with the $17.05 million, or 31 cents per share, MGM earned a year earlier, and easily topped the 52 cents a share consensus analyst estimate, compiled by First Call Corp.
When one-time expansion costs and a change in accounting principle were included, the company recorded net income of $12.6 million, or 21 cents per share, a 26 percent decrease from the same period last year.
Through the year's first nine months, MGM posted operating income of $99.91 million, or $1.64 per share, compared to the $47.71 million, or 83 cents per share, it earned a year earlier.
Including one-time charges and changes in its accounting method, the company has earned $46.1 million, or 76 cents per share, so far this year.
Strong revenue drives earnings
MGM recorded record net revenue during the latest quarter of $400.3 million, more than doubling its tally of $193.7 million from the comparable quarter last year.
Company officials attributed the increase to strong traffic through its main casino in Las Vegas, as well as positive contributions from its new casino in Detroit and the full consolidation of its New York operations.
MGM's operating cash flow also soared to an all-time high of $124.1 million, up from $55.5 million a year earlier -- helping to improve the company's cash flow margin to 31 percent.
But MGM's bottom line was stung by nearly $46 million in expenses written off to cover the completion of the company's Detroit casino and expand its Las Vegas operations.
MGM Grand shares rose ½ to 49-3/4 in early Thursday afternoon trading.
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MGM Grand Inc.
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