Eldorado Resorts (ERI) Q1 2019 Earnings Call Transcript

Eldorado Resorts (ERI)
Q1 2019 Earnings Call
May. 02, 2019, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Eldorado Resorts 2019 first-quarter earnings conference call. Today's program is being recorded. And at this time, I'd like to turn the conference over to Joe Jaffoni of JCIR. Please go ahead, sir.

Joe Jaffoni -- JCIR

Thank you, Derrick. Good afternoon, everyone, and welcome to Eldorado Resorts 2019 first-quarter conference call. Joining us today from the company are Chief Executive Officer Tom Reeg, and President and Chief Operating Officer Anthony Carano. On today's call, we'll review the company's first-quarter financial results and the ongoing success and progress against the company's key strategic priorities.

We will then open the call to participants for questions. This afternoon, Eldorado Resorts issued a press release announcing its first-quarter financial results for the period ended March 31, 2019. The release is available in the Investor Relations section of the company's website at www.eldoradoresorts.com. And before we get started, I'd like to remind everyone that this call is being recorded, and a Webcast replay will be available for 90 days, the details of which are in today's press release.

During today's call, we may make certain forward-looking statements about the company's performance. Such forward-looking statements are not guarantees of future performance, and therefore, one should not place undue reliance on them. Forward-looking statements are also subject to the inherent risks and uncertainties that could cause actual results to differ materially from those expressed. For additional information concerning factors that could cause actual results to differ from those discussed in our forward-looking statements, you should refer to the cautionary statements contained in our press release, as well as the risk factors contained in the company's filings with the Securities and Exchange Commission.

Eldorado Resorts undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances that occur after the call. Also during today's call, the company may discuss certain non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measures most directly comparable to each non-GAAP financial measure discussed, and the reconciliation of the differences between each non-GAAP financial measure and in the comparable GAAP financial measure can be found on the company's Website at www.eldoradoresorts.com by selecting the press release regarding the company's 2019 first-quarter financial results. Thank you for your patience with that.

And at this time, it is my pleasure to turn the call over to the company's CEO, Tom Reeg. Tom?

Tom Reeg -- Chief Executive Officer

Thanks Joe. Good afternoon everyone, thanks for joining the call. We reported first-quarter 2019 adjusted EBITDA of $166.7 million on a same store basis up about 6.5% versus the prior year as if we had owned the Tropicana and Elgin assets and as if we had deep dive -- already divested the Pennsylvania assets in both quarters. First quarter is typically my least favorite to talk about because invariably the conversation turns to weather and this one was no exception.

I've heard enough about bomb cyclones and polar vortexes to last me for quite some time. We did -- we made an effort to quantify weather impact on our portfolio in the quarter and there is -- there's some art to this but our belief is that weather cost us $10 million to $15 million of EBITDA in the quarter, I think a good estimate for normalized EBITDA for the quarter is a little better than $180 million which would have been up 16% which foots with January before the weather hit us. We were up almost 21% for the month of January and then we had six weeks of weather across the portfolio, hit the west and the Midwest particularly hard, hit the east as well. In addition, we had a headwind in Colorado in the quarter with construction disruption that was more than we anticipated.

Colorado EBITDA was down significantly as we improved. We redid -- we're in the middle of redoing every hotel room in the property, as well as refreshing the casino. We get the whole hotel back completely in two weeks. We'll have the casino back by the end of this quarter; so ahead of the busy season in Colorado which was the intent and ahead of Monarch's prior projected opening.

So, that's all coming in as planned. There was a little more disruption than we were anticipating but not withstanding weather and Colorado disruption; we were able to post a strong same-store EBITDA growth performance of 6.5%. Margins expanded almost 300 basis points to just under 27% which was very strong for us in the first quarter. There were particular properties that had very strong quarters; EBITDA growth of more than 20% at Mountaineer, at Lumiere in St.

Louise and in Lake Charles. Scioto had yet another strong quarter of growth so there is a lot of strength in the portfolio despite weather but didn't get to the finish that we -- that the start foreshadow given what happened with weather during the quarter. We have no complaints about strength of the consumer, strength -- our consumer remains very strong, absent that February in the first two weeks of March. We had very strong margin, or volumes, across the portfolio.

Nothing interesting to say about April in terms of trajectory. You did have Easter calendar shift which everybody's aware of but April continues in the same vein as the first quarter and, you know, Frankly April ends up the least important month of the quarter by a wide margin by the time we're done. So we feel very good about how we're performing, where we're headed and the performance of the first quarter in the face of what we encountered. In terms of -- we closed our Pennsylvania asset sales; Presque Isle in January, Nemacolin in March.

We used the proceeds of that, those sales, plus some free cash flow that we generated to pay down over $200 million of debt in the quarter. You know, we -- in terms of where we are in the synergy process, in Trop and Elgin if you recall, we announced a combined $55 million synergy target. As we sit here today we're approaching $50 million and we would expect to meet and then exceed the target before this calendar quarter is over. We continue to be supremely confident that we can take the existing portfolio in excess of 30% consolidated EBITDA margins over the next couple of years.

I'd also note that similar to our prior-quarter call, we read the same newspapers that you read, so we read the same rumors about what we might or might not be doing. We're not going to comment on any particular potential transaction. We would reiterate that if you see potential targets that may become available that seem like they would fit our skill set, you should anticipate that we would take a hard look. You know, beyond that, I'd say Bret Yunker is not on our call today.

It's his first day as chief financial officer and I want to mention that Bret has joined us now. We didn't put him on a call the first day of employment but we'll be bringing him around to meet a lot of you. He'll be attending a couple of the conferences that I'm attending coming up and I'll bring him around in New York so that he can meet you. Bret brings multiple decades of experience in the space, has been an integral part of building Eldorado from a capital-structure standpoint, has been involved in every major financing that we've done for the past decade.

As I said on the prior call, he crossed with me at Bank of America when we were both much younger and slimmer. He has -- he built J.P. Morgan into a powerhouse in the gaming space. From an investment-banking standpoint, has diverse experience both in M&A and financing up to and including the largest and most complex transactions that have happened in this space so we're very excited to have Bret and then I'd finish my remarks by particularly noting Mike Whitemaine and Rob Mouchou who were Regional Vice Presidents for us.

Many of you have met them on property tours. Both of them work for us in excess of 30 years and really were two of the guys that I saw when I was on the investment side and we ultimately did the Shreveport deal that started this growth process for Eldorado and were guys that -- Mike moved to Louisiana, did the Shreveport asset then was the east region VP. He's now the south region VP so these are guys that were asked to change how they operated their entire careers and very quickly became leaders in the organization; both of them retired a couple of days ago. We have strong internal replacements that have taken their place but we want to recognize their contributions to the company.

We wouldn't be where we are today without the work that they put in. And with that, I'll turn it over to Anthony to go deeper into property-level performance.

Anthony Carano -- President and Chief Operating Officer

Thanks Tom and I'd like to echo the same comments on Rob and Mike; very important part of our company and will be important part of Eldorado going forward, helping us out still. So good afternoon and thank you to everyone on the call. I'd like to take a few minutes to provide you with some high-level operating perspectives before Tom takes over to review some additional details on the first-quarter results. Looking at our operating segments, I'll start with the east segment where adjusted EBITDA increased 4.5% year over year to $39.5 million.

As the adjusted EBITDA margin rose 130 basis points to 25%, adjusted EBITDA for Scioto rose for the 17th consecutive quarter and Mountaineer continues to have some strong catalyst with the lifting of the smoking ban, as well as the opening of the Sports Book at the property. Adjusted EBITDA for the south region was up 8.5% on a 6.6% decline in net revenue with five of the seven properties growing adjusted EBITDA including Lake Charles, Shreveport and Lula all rising by double digits. In Lake Charles we're back on track as we're now past the major portion of the bridge and roadway construction project that was impacting traffic patterns to the property. In Baton Rouge we continue to feel the impact of the smoking ban that was implemented in the second quarter of 2018 but we'll anniversary that at the end of June.

In the west we're experiencing -- we experienced challenging weather in Reno with significant snowfall impacting driving traffic to the market on 24 of the 28 days in February and the first two weekends of March. As Tom discussed, Black Hawk was impacted by construction disruption in the casino and the hotel. Those two issues were the drivers behind the adjusted EBITDA for the region declining 8.2% to $24 million. We expect to complete the rooms in the casino renovations in Black Hawk later this quarter which will position us to continue our strong performance as the Monarch Casino expansion comes online in the second half of the year.

As we've discussed before, we expect the Monarch expansion will help grow the overall Black Hawk market and we'll be in a position to capture our fair share of that market growth. In the Midwest region, adjusted EBITDA rose 5.2% on a 4% revenue decline with adjusted EBITDA in all six properties as the property-level adjusted EBITDA margin rose 330 basis points to 37.5%. Cape Girardeau and Caruthersville both had double digit EBITDA increases. Finally for our central segment, adjusted EBITDA rose 9.1% on a 3.5% revenue decline with the property-level margin increasing 370 basis points to 31.8%.

Elgin and Lumiere both had double digit adjusted EBITDA increases. In summary, the record Q1 results reflect ongoing growth we're generating from our implementation of best practices across the entire property portfolio, our ability to quickly achieve targeted synergies at our recently acquired properties and the initial upside we are getting from the expansion of sports betting in several of our markets. The results also reflect the tremendous commitment to excellence our team members have across the company. It's these team members that drive our ability to offer best in class guest experiences at our properties while remaining focused on our operating efficiency initiatives.

With these drivers, we remain on track to achieve record results again this year. With that, I'll now turn the call over to Tom for detailed insights on the first-quarter financial performance and additional details on our balance sheet and capital structure before we open up the call to Q&A. Tom?

Tom Reeg -- Chief Executive Officer

So I would just finish by saying we're pleased with the way first quarter came out in the face of the weather. We continue to see strong consumer -- nothing has changed in terms of our outlook for the year, we're not a -- I know we're not a guidance company but I tell you, I don't see any full-year numbers out there that trouble me. We feel real good about where the business is. We feel that we have a very strong stand-alone path in this portfolio, as I said before, I think we can get this existing portfolio to $900 million to a billion of EBITDA.

We've got the growth, the built in growth over time from the sports betting partnerships with William Hill and Stars Group. We've got the real estate development in Pompano with Cordish. So we feel very good about our stand-alone path. We also see -- we also are confident we can find opportunities in the M&A space that would be significantly accretive to us so we think we can continue operating from the same book, playbook, of significant organic growth that outpaces the rest of the sector by a multiple, in addition to accretive M&A added on in the future.

And with that, I'll turn it back to the operator for questions.

Questions & Answers:

Operator

Thank you. [Operator instructions] We'll take our first question from Carlo Santarelli with Deutsche Bank. Please go ahead.

Carlo Santarelli -- Deutsche Bank -- Analyst

Hey, guys, and thank you. Tom, you had said when we spoke on your 4Q call that you kind of expected you felt you could be at a 30% margin run rate as we exited this year. Obviously given the weather challenges in the first quarter, that might put you in a little bit of a bigger hold than maybe you thought you would have been or, I shouldn't say, hold, but might be a little bit lower than where you thought you would have been at that point in time. Is that 30% target now maybe a 2020 event or do you still feel like there's enough here where you can get back to that level even with kind of a $10 to $15 million of weather hit in the first quarter?

Tom Reeg -- Chief Executive Officer

Well, what I would say Carlo is I never would have given you that level of specificity of guidance. I -- I didn't say 30% by the end of this year. I said the same thing that I said in my prepared remarks that we think we can get this portfolio to in excess of 30% margins. Don't view 30% as where we think we can get it, we're going to get it higher than that.

We didn't put a time frame on that. If I had to put a time frame on that I think a 30% margin target, to me as we sit here today, is either for the full-year 2020 or we're run rating at that at some point in 2020 and then surpassing it. But that was a -- what you stated was a common misconception of our remarks from the prior quarter that we had set a specific date and a 30% target. We think we'll do better than that and we haven't given a specific date target.

Carlo Santarelli -- Deutsche Bank -- Analyst

Understood, understood, my fault. Just then if we could, just one quick follow-up on the weather impacts. It -- obviously it's -- the west clearly in Reno kind of took, it looks like, a good chunk of the brunt of it. If you could kind of parse out that $10 million to $15 million to the extent that you guys are able recognizing it's somewhat difficult between the segments as to kind of where you felt it most pronounced?

Tom Reeg -- Chief Executive Officer

I would say the west was half of it. I'd say the Midwest was, if you're seven and a half, I'd say another four or five was the Midwest and then the rest was central and east.

Carlo Santarelli -- Deutsche Bank -- Analyst

Great. Thank you very much.

Operator

Thank you. Our next question from -- comes from Dan Politzer from J.P. Morgan. Please go ahead.

Dan Politzer -- J.P. Morgan -- Analyst

Hey, good afternoon, everybody, and thanks for taking my questions. So, the first one, I know you guys -- I'm not going to ask you specifically about some of the M&A and where things stand but I guess can you help frame, I guess, there the size of the potential deals? How do you think more generally about financing and weighing the pros and cons of maybe partnering with REIT's and how do you think about potential regulatory hurdles and things like that; just in the broad scope of M&A and how you'll evaluate it.

Tom Reeg -- Chief Executive Officer

I mean, I would say we -- in terms of REIT's, REIT's are just the financing tool for us. We -- you know, we don't want to be heavily OpCo so you shouldn't expect REIT financing to be the dominant piece of any trade that we do. You know, in terms of antitrust, you know, that's deal specific. It would depend on where your overlap is and how material that is to the business and, you know, how you think -- or what you think you could do around it in terms of what we start with in a transaction is what can we do with this portfolio of assets that's different from what the current ownership is doing.

How can we quantify that, what level of conviction do we have and then we start building. What can we pay, how would we build the capital structure, what do borrowing costs look like and do all those line up with what the target is looking for? So, you know, there are typically dozens of reasons transactions don't happen; that's the case in any transaction that hasn't happened yet but we're constantly looking and, you know, you can see by our track record that we're pretty careful about building our expectations and -- building expectations around what we can do and we've got a well demonstrated track record of significantly exceeding targets very quickly. You shouldn't expect us to be giving you a target that's over a very long period of time. Most of what we do and what we have historically done is very quick turn synergies.

You know, we're talking about getting to targets in Trop, you know, kind of inside of eight months of closing and that's typical of what we've done in the past and that's what you should expect in the future. To me, improvement beyond that becomes, I guess you can call it synergies, but it's really just maximizing your own operating efficiencies. At some point, you own these things and it's not a synergy anymore.

Carlo Santarelli -- Deutsche Bank -- Analyst

All right .That's helpful. And then I guess you know, piggybacking on the Tropicana synergy comments, I know you mentioned that you think you're going to -- you know, there's probably upside there and you'll probably exceed those targets fairly soon. Can you, I guess, talk about some of the opportunities that lies ahead there and, you know, where do you see the opportunities across the portfolio? Is it marketing, is it labor, and just trying to -- give us some more color there as far as where the upside could be? Thanks.

Tom Reeg -- Chief Executive Officer

Yeah. I mean we're pretty methodical in the way we tackle this stuff. When we announce a synergy target it's typically going to be a lot of corporate and labor heavy early on and then it's going to move to operating level; both labor and then the upside typically comes from, as we drill down on marketing, and I know I've used the analogy with you before, it's -- it's akin to an assembly line where we have properties that have been on the line for a very long time now and we're tweaking and testing different changes to how we operate and seeing how they perform and we had a long list of items that we have implemented that have worked and then we've implemented them in other properties and the one that gets put on the line at the front of it we're -- we're going down that list of items that have worked in numerous acquisitions, in numerous locations across a number of years and just ticking them off one by one. And so it's just basic blocking and tackling and tightening the operating level.

You know, and I would say when you go out and you want to talk to third parties about what they think we can do synergy-wise, I will promise you they will have no idea what the hell they're talking about. So, when someone tells you we can't get to a number that we put out there, I would point to our track record to date and I'll stack that up against anybody who wants to say we can't do what we say we're going to do.

Carlo Santarelli -- Deutsche Bank -- Analyst

All right. Got it. Thanks so much for the detail.

Operator

Thank you. We'll next go to Chad Beynon with Macquarie. Please go ahead.

Chad Beynon -- Macquarie Group -- Analyst

Hi. Afternoon. Thanks for taking my questions. First, wanted to start with revenues.

I know it's much less of a focus just because, Tom, you called out the weather impact. I think $10 million to $15 million on EBITDA. Revenues year over year were down about 4.5% and if we assume, I guess 50% flow through on that $10 million to $15 million EBITDA, that would have gotten you to roughly flat from a revenue standpoint. And I just wanted to ask, is that how we should think about the business or is there still a lot of kind of intentional pruning particularly with the recently acquired properties that would result in, you know, negative year-over-year revenues? Thanks.

Tom Reeg -- Chief Executive Officer

There -- yes, Chad, thank you. The -- I typically model us in terms of reported revenue at flat plus or minus 100 basis points. When you have -- when you're early in acquisitions you're probably going to move toward the right side of that range and as you get further out you'll move toward the left side. So, your add-back is probably appropriate.

Chad Beynon -- Macquarie Group -- Analyst

OK. Great. Thank you. And that's kind of the right way to think about it roughly going forward? I mean, not that you're giving guidance but just generally, just because you're giving margin targets? Just wanted to make sure people weren't --

Tom Reeg -- Chief Executive Officer

Yeah. That's how I --

Chad Beynon -- Macquarie Group -- Analyst

On revenue.

Tom Reeg -- Chief Executive Officer

That's how I would model it.

Chad Beynon -- Macquarie Group -- Analyst

OK. Thanks. And then separately on Florida, obviously nothing to report yet but has there been just any movement or just any updates that are getting you closer to a date when something might be finalized and will be able to see more action on the -- on the ground there?

Tom Reeg -- Chief Executive Officer

Yeah. I'd say there's -- there's -- I'm thinking that legislative relief in terms of decoupling is unlikely in this session. There's the possibility of a special session for gaming later this year. We're going to operate under the assumption that horse racing is going to be around for a while and we're going to -- you should see us come out with something in the relatively near future that shows design with racing remaining at Pompano for the time being.

Chad Beynon -- Macquarie Group -- Analyst

OK. Thank you very much. Best of luck.

Operator

We'll next go to Barry Jonas with SunTrust. Please go ahead.

Barry Jonas -- SunTrust Robinson Humphrey -- Analyst

Yeah. Hey, I did notice that David Cordish had a presentation a few nights ago in Florida and he put out some preliminary specs. Just curious if that's still too preliminary to get a little more detail? I think he specifically said a summer 2020 groundbreaking.

Tom Reeg -- Chief Executive Officer

It's too early for us to discuss that with investors. David made a presentation to the local community on scope and talked a little bit about timing but we will be back to you in the relatively near future with specifics.

Barry Jonas -- SunTrust Robinson Humphrey -- Analyst

OK. Great. And then Baton Rouge, any updated thoughts on moving the casino to the atrium there?

Tom Reeg -- Chief Executive Officer

Still looking at the potential for that project. We're really -- really our work to date has been getting our arms around a property that was really struggling in the face of smoking ban and Mike Whitemaine got right in and turned it for -- when we took it over it was an EBITDA loser and he's made significant improvement to the point where it was a contributor in the quarter and hadn't been for a little while under Trop and that's been our focus to-date but we are continuing to consider what we do in terms of moving into the atrium. But no plans to announce at this point.

Barry Jonas -- SunTrust Robinson Humphrey -- Analyst

OK. Great. And then just last for me, you know, I'd love any more color you can give on sports betting now that you've been operating another quarter just whether it's direct contribution or visitations rather?

Tom Reeg -- Chief Executive Officer

Yeah. So direction contribution, all we really had since we opened the book in terms of significant events is the NCAA tournament and we did quite well across the portfolio there. But we do see it bringing in a customer base that has not been coming to our properties, it skews younger, you know, interesting anecdote for us is Mountaineer was the highest right in the portfolio in the quarter. So sports betting has done considerably well at Mountaineer; better than any property that we've got in terms of right and you saw EBITDA in the quarter was up almost 30%.

So it drove volume throughout the property which is what we would expect. We're encouraged to see legislative action in a number of states and we're working with William Hill to figure out how to capitalize in states where we're going to be able to offer it shortly. So we're -- you know, it's developing as we would have expected. We're here in Atlantic City today and Atlantic City book, if you haven't seen it, turned out beautifully.

So we're very pleased with sports betting to-date and we were among, if not the most bullish among the operators going into it and it's met our expectations thus far.

Barry Jonas -- SunTrust Robinson Humphrey -- Analyst

Great. Thanks so much.

Operator

Thank you. We'll next go to Harry Curtis with Instinet.

Harry Curtis -- Nomura Instinet -- Analyst

Good morning, every -- good afternoon everyone, it's -- wanted to just quickly follow-up on your comments about sports betting's impact in Atlantic City. Is there -- could you give us some sense of what you think the lift in visitation and table play is? You had made that comment in your -- in your --

Tom Reeg -- Chief Executive Officer

Yeah. It's hard to parse it out. You know, we're -- really what I can give you is, you know, table drop is up meaningfully on days where there are significant sporting events which is obviously a very small sample in the first quarter. So I don't want to extrapolate from there.

I'd tell you, Atlantic City as a whole for us is up about 4% in EBITDA since the openings of Hard Rock and [Inaudible]. You know, I think our book, certainly in the first quarter, helped us there versus peers. Our performance in this market has been well in excess of what we were expecting giving the competitive environment we were coming to and we've really just started to pull some levers here. So we think, you know, sports has been another addition to the Trop that's had great momentum and it helped continue it in the first quarter.

Harry Curtis -- Nomura Instinet -- Analyst

OK. And then my second question, going back to your comment about the existing portfolio potential is $90 billion to $100 -- to a billion of -- $900 million to $100 -- a billion, of EBITDA, I will eventually get that out of my mouth. The -- how much capex do you think is needed to get that growth versus being driven by cost cutting which it sounds like you've got a fair amount of runway on versus kind of same store growth -- revenue growth assumptions?

Tom Reeg -- Chief Executive Officer

So the capital we're -- we're kind of winding down the capital program in Reno with the renovation of the Silver Legacy rooms that will go into 2020. That's -- you're probably talking about $40 million-ish by the time we're done at Legacy. We'll do $75 -- the late Charles land-base move that we've discussed, $75 million to $100 million of costs that's spread over 2019 and 2020. The remainder of the $35 million that we're spending in Black Hawk and then they'll be a lot of development spending in Florida that will not be on our balance sheet that's capex that will drive revenue to that property, you know, all of that is in our target of getting to $900 million to a billion.

So there's both a growth element through investment capital, as well as continue operating improvements as we drill down on the way we acquire customers.

Harry Curtis -- Nomura Instinet -- Analyst

Do you think the biggest piece of that contribution is Florida?

Tom Reeg -- Chief Executive Officer

I would say yes, from a growth standpoint, from here. The biggest delta we've got in an individual property is Florida. I think you're talking about better than 2 times what it's doing today in EBITDA. We don't have another property that's that dramatic.

Harry Curtis -- Nomura Instinet -- Analyst

Got it. Well the demographics are in your favor. Appreciate it. Thank you.

Operator

We'll next go to David Katz with Jefferies. Please go ahead.

David Katz -- Jefferies -- Analyst

Afternoon everyone. So, I wanted to ask about -- get you're kind of broad-based reaction to two markets. You know, one is Atlantic City where you're entering now for the first time and the property is well known; was the heaviest promoter in that market but it is, you know, in a pretty competitive set of circumstances at the moment and the second market is really Las Vegas and, you know, sort of how you think about the strip in the context of how you've done what you've done and then I have one follow-up question.

Tom Reeg -- Chief Executive Officer

I would say we think about them both similarly in terms of destination market versus regional where your customers are coming in frequently and staying for a longer period of time. That's a different marketing model than the traditional regional market from a customer-acquisition standpoint and it impacts your pricing, your hold -- what you offer games-wise. You know, we've operated in Reno longer than we've operated anywhere else so we grew up in a market like that where we are a destination property because of our location adjacent to the interstate and downtown. So we have the longest experience anywhere we've got in a market that's similar to Atlantic City and Las Vegas and in terms of Atlantic City, you know, we -- we did -- we saw the hand-ringing about getting into Atlantic City and how competitive it is and, you know, we rung our hands ourselves a bit in terms of is there somewhere that we want to go? You know, our early experience has been, you know, strong from in terms of our own performance, the property that we purchased, the management team that we inherited and the opportunity that we see to do the sorts of things that we have done in terms of improving property.

So we see a ton of upside in Atlantic City from here and as I said, we've just started pulling levers that we typically pull. So, we thought we would be taking over a property that was down 10% plus in EBITDA due to new competition and Steve and Jason and the team here have -- are delivering a property that's actually grown EBITDA since the market expanded the way that it expanded. So we feel very good about Atlantic City and we recognize Vegas is a competitive market and if we were ever to go there, we would go in as we did here with eyes wide open. You know, but we're competing with people in Atlantic City that we would -- that are in the Las Vegas market and we've done just fine.

David Katz -- Jefferies -- Analyst

Got it. And one more question if I may, you touched on this a bit earlier about your specific approach. When there is debate around the ability to continue processing what you have, the -- the question comes up about [Inaudible] revenues and growing EBITDA and the heart of my question is, you know, how far can revenue -- do revenues flatten out at some point or do they continue to trim their way back while EBITDA grows? And, you know, is that a -- are those trends that can continue over a period of time? And I should say that I ask the question in the context that our ratings speaks for itself.

Tom Reeg -- Chief Executive Officer

Yeah. And I would -- look, David, I would tell you, and we've had this conversation before --

David Katz -- Jefferies -- Analyst

My sense is you'll have it again.

Tom Reeg -- Chief Executive Officer

Yes. What you see in reported revenue in our sector as a whole is -- does not reflect what's happening with the customer. So, we have been growing same store EBITDA at three to four times the rest of the space for multiple years at this point; did it again this quarter. That cannot happen unless we are growing the dollars that the customer is actually spending from his pocket faster than anyone in the space.

It's the only way that happens. There is not enough labor or cogs to cut for that not to be the case with the performance that we've been generating. Our job -- our customers want to come to our properties. What we tell our operating teams is it's our job to get out of the freaking way as much as possible can and the way that manifests itself in reported revenue is reported revenue is going to be in that flat to down a percent, and in a quarter where there's weather -- what are we down, four? It's not reflective of what's actually happening.

We are -- our customer acquisition spend was down in the quarter more than 12%. I don't know what others are doing, because I don't get to see that number in other companies, but there's no way it's anywhere close to that. So, I would encourage you to think of revenue in terms of dollars out of the customers pocket, not what gets reported to the SEC. You should not be rewarded if you and I -- if you and I give away a room and you book it at $75.00 and I book it at $50.00, you shouldn't be viewed as growing more than me.

All you've done is chosen a different accounting metric for the cost of the room that you gave to a customer for free.

David Katz -- Jefferies -- Analyst

Got it. I appreciate it. Thank you very much.

Operator

Thank you. And our final question in the queue comes from John DeCree with Union Gaming.

John DeCree -- Union Gaming -- Analyst

Hey, Tom. Thanks for taking my question. Maybe to build on that discussion a little bit, and a comment you made in your prepared remarks about how you're feeling about the customer today; still strong net of any weather impacts in the first quarter. I was wondering if you could elaborate or qualify at a high level some of the things that you're seeing that gives you confidence or comfort.

Is it on the slot floor, F&V, frequency of visits, anything like that that you could give us -- qualitative commentary on the customer so far this year?

Tom Reeg -- Chief Executive Officer

Yeah. I would say the only softness we had seen is really -- there's three areas of softness in the first four months of the year. It's our customers could not get to our property in Reno, as an example, when there's as much snow as there is in Tahoe in March, in February and March, literally the road -- the road to our property is closed. So we rely on traffic coming over the pass from 80.

When the pass is closed, we're not going to do very well. In the Midwest when people will not leave their homes, when they're being -- you know, when it's 40 below and they're being warned not to leave their homes, we're also not going to do very well. And then, you know, Easter weekend, wherever it falls in the first quarter, is going to be a lousy weekend if it's not comping to Easter weekend. Other than those three events, our business has been strong like it was in the fourth quarter.

As I said, we were up over 20% in EBITDA in January, we ended up March EBITDA up double digits as a -- on a percentage basis with the two fir -- the first two weekends washed out. So the difference between those numbers and what we reported is the six weeks of weather in the first quarter. And, you know, you wish it were -- what you -- you're always going to end up worried about weather in the first quarter but what you want is a cadence where you have weather, you have a break, you get the pent-up demand, you get a couple of other cycles of that. This was an odd circumstance where you had six weeks of virtually unbroken weather across much of the country.

You don't get all of that pent-up demand back and that's what we experienced in the first quarter. But, nothing has changed, that we can see, in underlying demand. When the customer can get to our property, they get to our property and they spend.

John DeCree -- Union Gaming -- Analyst

Thanks, Tom. That's helpful. And one more question, perhaps in the context of 1Q, or maybe more broadly, if it applies, and that's regarding the cadence or activity and promotional across the industry and marketing spend. If you've noticed, in some -- when there is weather in soft weekends, are your competitors chasing business? I mean, did that environment change at all just overall thoughts on the rational level of promotional activity in the industry and if that was out of line in the 1Q because of weather?

Tom Reeg -- Chief Executive Officer

The short answer is, I don't know. We don't focus on what others are doing, nor do we respond to it anymore. What I would say is, you know, February was enough of a disaster volume-wise that we were keen at the end of the month to go to our regional VP's, our GM's and tell them, you're not going to like what your February numbers look like. There is no promotion that was going to get people to come to Reno when I-80 was closed or to come to a Midwest property when it was 40 below.

Make sure that we don't chase. Because that's the mistake that you make is when you have a month like February where everyone agrees, hey, we're going to -- we're going to struggle, you look at your volumes and you say, what can we do to get people back and you throw a bunch of promo at them and then the people come back when the weather breaks and you attribute it to promo. That's the mistake that we don't make anymore. And so we can only speak to us.

We were disciplined and this is where we shook out and you can see where everybody else shook out.

John DeCree -- Union Gaming -- Analyst

That's helpful. Thanks for all the color, Tom.

Operator

And gentlemen, we have no further questions in the queue at this time.

Tom Reeg -- Chief Executive Officer

All right. Thanks, everybody, for your participation. We'll be at a few conferences. We'll see some of you.

If not, we'll talk to you after second quarter.

Operator

[Operator signoff]

Duration: 48 minutes

Call participants:

Joe Jaffoni -- JCIR

Tom Reeg -- Chief Executive Officer

Anthony Carano -- President and Chief Operating Officer

Carlo Santarelli -- Deutsche Bank -- Analyst

Dan Politzer -- J.P. Morgan -- Analyst

Chad Beynon -- Macquarie Group -- Analyst

Barry Jonas -- SunTrust Robinson Humphrey -- Analyst

Harry Curtis -- Nomura Instinet -- Analyst

David Katz -- Jefferies -- Analyst

John DeCree -- Union Gaming -- Analyst

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