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Twin River Worldwide Holdings, Inc (NYSE:TRWH)
Q3 2019 Earnings Call
Nov 14, 2019, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon. My name is Sheryl, and I will be your conference operator today. At this time, I would like to welcome everyone to the Twin River Worldwide Holdings Inc. Third Quarter 2019 Earnings Conference Call. [Operator Instructions]

Craig Eaton, Executive Vice President and General Counsel. You may begin your conference.

Craig Eaton -- Executive Vice President, General Counsel and Compliance Officer

Good afternoon, everyone, and thank you for joining us on today's call. By now you should have received a copy of our Q3 earnings release issued earlier today. If you haven't, the earnings release and the presentation that accompanies this call are available in the Investor Relations section of our corporate website at www.twinriverwwholdings.com under the News and Events & Presentations tabs.

With me on today's call are George Papanier, our President and Chief Executive Officer; Steve Capp, our Chief Financial Officer; Mark Crisafulli, our Executive Vice President and President of Twin River Rhode Island; Jay Minas, our Vice President of Finance; and Joe McGrail, our Executive Director of SEC Reporting.

Before we begin, we would like to remind everyone that comments made by management may contain forward-looking statements. These forward-looking statements include, plans, expectations, estimates and projections that might involve significant risks and uncertainties. These risks are discussed in the company's earnings release and SEC filings. Actual results may differ materially from the results discussed in 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 call.

I will now turn the call over to George.

George Papanier -- President and Chief Executive Officer

Thank you, Craig. Good afternoon, everyone, and thank you for joining us for our third quarter earnings call. After my introductory comments, I'm going to turn the call over to Steve, who'll follow-up and provide more detail about our financial and operational results as well as discuss the steady execution of our proven corporate strategy.

We're excited about the progress we've made as we continue to transform the company. Over the last year or so, we feel that the steps we've taken strategically and opportunistically grow and diversify the company, all while creating shareholder value and returning meaningful capital have positioned us extremely well for long-term value creation. Early results on both Tiverton and Dover continue to meet and exceed our already high expectations. We look forward to applying our demonstrated track record of successful M&A to Black Hawk, Kansas City and Vicksburg upon the expected closing of these previously announced deals in early to mid-2020.

Despite the anticipated short-term impact of competition to our Twin River Casino Hotel in Lincoln this quarter, we believe that our overall plan remains well on track and see no change to the long-term value proposition we have laid out for investors. In the quarter, as we introduced on our call for Q2, the new competition in the region had a greater than expected impact on Lincoln, particularly on our table games business in the third quarter. Promotional activity in the market, particularly, in Massachusetts was extremely aggressive during the quarter, which we feel fueled to prolonged trial period. Despite our competitions' $2.6 billion investment, we have seen little in the way of market expansion which was significantly less than most observer's expectations. Overall, the market only grew approximately 9% in the third quarter. We believe that our competition spend for market share during the quarter is unsustainable. When you think about it, our market right-sized $130 million Tiverton Casino project generated as much profit in its first quarter of operations as the $2.6 billion competition did.

After taking some time to fully understand the impact of new competition was going to have on the market, we began our competitive response with a targeted marketing spend as well as operational efficiency. We feel we've dealt with initial market competition spend during the period of trial and I'm optimistic there will be a more rational market spend going forward. We're yet to see a marked moderation in promotional environment, we did note that the overall revenue impact of the competition appeared to moderate and bottom out in August, reflecting what we feel our initial signs of recovery post Labor Day in line with my expectations. For September, revenue at Lincoln was down 17% year-over-year compared to decreases of 22% and 24% in July and August, respectively.

The break down to September numbers at Lincoln have been more slot, volumes showed signs of recovery but were down less than 13% in September year-over-year compared to decreases of approximately 17% and 16% in July and August, respectively. Table games continued to see more of an impact with volumes down 30% in September compared to the same period in 2018, but we saw a moderation compared to the 34% and 38% decrease as we experienced in July and August. Also, taking into consideration the fact that September 2019 had one less Saturday than the prior period, we view the September trend is positive and expect to see an accelerated recovery as we head toward year-end.

We also note that the trend continued for October where volume indicators shows slots in Lincoln continue to moderate and only down approximately 9% year-over-year, while table games also showed signs of recovery with year-over-year declines of 27% helping to offset the competitive pressure in Lincoln is the performance of our Tiverton Casino Hotel. We are extremely pleased with the performance of the property, which continues to show marked resilience in the face of new competition. In fact, October volume indicators for Tiverton showed estimated increases year-over-year of approximately 12% in slots and 22% in tables, underscoring this resilience.

Regardless of what the competition is doing, we're doing fine. We're executing on our marketing strategy, which is continuing to call back market share and we've implemented our efficiency initiatives. It should be noted that the current Massachusetts impact is the only significant competitive threat that our portfolio is facing, and aside from what we believe to be the short-term competitive impact at Lincoln, we were quite pleased with the company's results in the quarter at our other properties.

Our M&A strategy which has enabled us to transform from a single property operator prior to 2014 with the multi-property public corporation we are today continues to be further validated with Dover and Tiverton both performing extremely well in the quarter, and Biloxi continuing to provide consistent steady contribution for the group. We've been particularly pleased with Dover which contributed revenues of $25.9 million and adjusted EBITDA of approximately $6.1 million in the quarter. This adjusted EBITDA represented a 17% sequential improvement versus Q2 in just our second full quarter of ownership. This property continues to outperform our already high expectations.

In addition to seeing continued benefits from the initial synergies expected from the transaction, we have already begun to see an increase in profitability, as a result of instituting meaningful marketing strategies and several physical changes at Dover. We still feel we are in the early phases of our Dover transformation and anticipate additional upgrades and operating changes to be implemented. We expect that these additional changes will drive even more meaningful contributions to earnings over time. Based on the results of the quarter and expectation of improvements to come, we reaffirm our belief that Dover adjusted EBITDA run rate could exceed our initial estimates by double-digit percentages.

Turning to Biloxi, we are pleased to see another quarter of consistent performance at Hard Rock Hotel & Casino. Revenues and adjusted EBITDA was consistent year-over-year. Overall, our operations are stable and performing well. At the corporate level, we continue to make the necessary investments to prepare for further expected growth as evidenced by our announced planned acquisitions in Colorado, Missouri and Mississippi. These transactions continue to work through the regulatory process and remain on track for their scheduled closing.

We expect that Black Hawk will close in early Q1 of 2020 and that Kansas City and Vicksburg will be soon after that in late Q1 or early Q2 2020. We did recently receive regulatory approval in Mississippi. In Colorado, we were very pleased that Proposition DD recently passed which will result in us obtaining three sports betting licenses in the state upon closing of our Black Hawk acquisition. These licenses were not contemplated at the time we entered into the acquisition and represent unexpected upside to what we felt was already a compelling strategic and accretive transaction.

We remain extremely excited about the opportunities to further our strategy of accretive growth in diversification through these acquisitions. We believe these assets are a great fit for our portfolio and see the opportunity to increase the net cash flow from these properties by our redevelopment and/or operating plans. Beyond our recently announced acquisitions, the M&A pipeline remained strong. We are actively looking at many assets and opportunities and we will continue to be very disciplined. We remain focused on acquiring assets that we believe fit our strategy and provide the best opportunity for delivering enhanced shareholder returns.

Further to the subject of shareholder value creation, we made significant investments under our previously announced $215 million capital return program. With repurchases of approximately 6.6 million shares, our total consideration of approximately $163 million and the payment of a quarterly $0.10 per share dividend during the quarter. We continue to have one of, if not the best, balance sheet in the industry. Given our current position, there are many ways we feel we can return value to shareholders. We will continue to explore disciplined M&A of accretive assets, however, if we find that our shares represent a more prudent investment, we will not hesitate to continue to buy back shares as we did at meaningful levels in Q3.

Finally, Twin River continues to inform the public and legislators and Rhode Island on why they should reconsider the current proposed IGT deal. As a reminder, the primary reason for opposition to this deal is that it locks in IGT's virtual monopoly controller slot machines in our Rhode Island Casinos. It is worth noting that machines controlled by IGT are underperforming compared to that of competition in Rhode Island. We believe that the state and Twin River can improve performance with a more traditional approach to securing the best content for our customers. Over the course of the last few months, Twin River has testified at hearings scheduled by the Finance Committee in both chambers of the Rhode Island General Assembly. At present, the proposed IGT deal is under intense scrutiny and we believe any legislative action is now most likely deferred to next year.

Furthermore, we're pleased that the House of Representatives have moved to solicit bids for an independent analysis of the transaction and the analysis will include a focus on ensuring the state and the facilities maximize VLT performance. We are also pleased that this process has already led to some positive changes from our perspective. Lottery has reallocated 360 VLTs from IGT to other suppliers, our customers have responded well to these products. In addition, we are receiving another 270 new units under IGT's allocation including Aristocrat's Lightning Link which are some of the best performing games in the region right now.

And now, I'll turn it over to Steve.

Stephen H. Capp -- Executive Vice President and Chief Financial Officer

George, thanks. Before I get into some segment specific commentary, let me make an overarching comment about the business, which is that our business has growing revenues were at expanding company, we -- look, we added in two of three months in the quarter for Tiverton kind of annualizing, if you will, in the quarter, we added over the top line of this company is expanding. Yes, we have some pressure in our cash flow. Our revenues and our cash flow at Lincoln, as George mentioned, we believe that those are short term in nature. We do believe those have bottomed out in the July August timeframe as we've seen some initial signs of recovery in September and October there. So we'll work through that. I do expect that Q4 of this year will resemble Q3 in lot of ways, by the way. But nonetheless, we think the impact at Twin River Lincoln is short term in nature. Bigger point being that our business is growing at the top line and we're very pleased about that and we've got more coming with the acquisitions in Black Hawk, Kansas City and Vicksburg into the first and second quarters of next year.

Turning to the Rhode Island segment in particular, yes, the net income and adjusted EBITDA of $6 million and $35.6 million were down $11.4 million and $6 million respectively. That of course was driven primarily by the decrease in profitability in Rhode Island which was offset somewhat by the earnings at Dover Downs. Bear in mind that the increased interest expense resulting from our global refinancing in May had about a $5 million year-over-year impact on net income in the quarter. Regarding the Rhode Island segment, please note that Tiverton opened in September of 2018, so we lapped the opening in the third quarter of 2019. Therefore, portions of the Q3 comparability are impacted by the Newport Grand to Tiverton timing misalignment.

Our total revenue for the Rhode Island segment decreased $7 million, we got about $68 million from about $75 million. This $9 million decline in gaming revenues was partially offset by $1.7 million increase in hotel revenues due to Tiverton's hotel only being opened for a partial quarter last year and Lincoln's Hotel not opening until fourth quarter of 2018. Higher food and beverage revenues of about $0.5 million were offset by lower entertainment and racing revenue. It should be noted that gaming revenues were impacted by increased incentives to players in an effort to retain and grow market share at Lincoln and Tiverton respectively. These were primarily related to our new hotels at both Lincoln and Tiverton. These incentives are shown as a reduction of gaming revenues.

As part of our competitive response, we are actively launching several new initiatives with an emphasis on regaining table games market share. These initiatives include the introduction of Macau style Baccarat and Pai Gow Tiles through our offerings as well as introduction of free bet incentives on table games. In addition, we continue to launch new marketing programs aimed to drawing back customers who took part in some trial play at the new competition. We believe the decline in revenues hit bottom in August and since Labor Day, I'd say again, we've seen some stability and some recovery and we're very pleased with that trendline at this point.

Despite the decline in gaming revenue, overall, we actually performed better than our competitors from a market share perspective on an apples-to-apples basis or excluding the revenues from new regional competition opened within the last two years. Our market share actually grew by 73 basis points, which was more than our legacy competitors from Connecticut and Massachusetts. We define this market share as slot win prior to any adjustments for guest incentives.

The total revenue decline of $7 million combined with an expense increase contributed to an adjusted EBITDA decline of almost $11 million in the third quarter of 2019 versus the prior-year comparable period, drivers of this increase in expense include increased marketing and entertainment spend as well as the increased cost structure associated with operating Tiverton and as well as the revenue generating amenities at Lincoln for a full quarter.

As a reminder, last year's operations consisted of Newport Grand for two months and Tiverton for just one. As we've stated before, the two operations are quite different and the cost structures are not similar. Additional revenue generating amenities not in place last year include a new Sportsbook operation, stadium gaming and the new hotel. We did experience some labor savings in the third quarter, which reflect reductions made primarily in the third quarter, which we expect will be more pronounced in the fourth quarter as the labor reductions will be in play for the entire quarter. You should also note that additional incentives in the form of player comps and electronic free play increased by $3.3 million year-over-year. These costs are netted with gaming revenues and are not reflected in operating expenses.

Switching to the Delaware segment, as George mentioned, our Delaware segment consists of only Dover Downs that continues to exceed our expectations contributing revenue of nearly $26 million in the quarter. We want to remind everyone that the revenues at Dover are reported net of the state share of gaming revenues, which is consistent with our presentation of revenues in our Rhode Island segment and it represent a departure from how Dover was reported pre-acquisition. Operating income for Delaware was $3.8 million as the property begins to see benefits from cost savings initiatives and marketing investments instituted in both the second and third quarters of this year.

The resulting adjusted EBITDA, as George mentioned, was $6.1 million for the quarter. This quarter, we finalized our reconfiguration of the gaming floor at Dover and several updates to food and beverage options, including the opening of a new Italian restaurant. I'd also like to take this opportunity to announce a sugar factory licensing agreement, which we expect to open in the beginning of second quarter of 2020. We're quite excited to introduce this premium national brand, which we think will have a very positive impact on the overall customer experience.

Turning to Biloxi briefly. Hard Rock Biloxi saw stable results year-over-year as revenue for the quarter was about $33 million, a decrease of $100,000. Operating income decreased about $400,000 to $6.8 million and adjusted EBITDA was $9.8 million, a decrease of about $600,000. That decrease is just the normal ebbs and flows of the business that remains a very stable operation for us, consistent performer and a very nice and important part of the portfolio.

Finally, I want to briefly comment on the operations reported as other which primarily consist of corporate costs and the operations of our Arapahoe Park racetrack in Aurora, Colorado. When you exclude the impact of costs allocated under GAAP to our reportable segments, the adjusted EBITDA loss for our Other segment increased by about $400,000. In essence, this is additional corporate expense. We have certain additional new staff as we start to settle in as a public company and prepare for full SOX compliance readiness in 2020 among other initiatives and requirements. So yes, we continue to invest in corporate as necessary to properly settle in as a public company.

With that, let me turn away from the segment reporting and address a few other items that I hope will be interesting and important to our investor community. The first is a bit more detail about our return of capital program that George touched on. The $4.1 million dividend which we paid in Q2 is well known. I think the tender results are pretty well known but there is a slight modification to those. We did invest $74 million in the final tender of the second quarter, and with that purchased 2.5 million shares, there were a few shares returned and $1 million essentially backed out from on the stake by one of the brokers involved in the process, but don't worry, we've redeployed those funds rather quickly.

Following the tender offer and the necessary quiet period, we did pick up another 4.1 million shares in the company's stock buyback program on an open market basis and invested another $89 million in that program. So from the pre-tender share count of 41.1 million, we invested about $163 million in total and picked up 2.5 million shares in the tender, we picked up 4.1 million shares in the buyback program through the end of the quarter. We invested another $8 million subsequent to that during the month of October, picked up another 300,000 shares and where that brings us is to the total shares purchased all in of 6.9 million or approximately 17% of the 41.1 million shares having been repurchased through to the tender.

I mentioned both of the -- on the dividends that have also been paid, so if you add all that math up, we do have as of November 1 and subsequent to all of that buyback activity, I mentioned, right about $70 million -- that's $70 million left under the $250 million capital return program approved by the Board earlier in the year. We've been busy at this. We're very pleased to be making what we believe are potentially an accretive investment in our own stock in the form of this capital return program. And as George mentioned, there is a balance between growth and capital return and we will continue to maintain that balance, and as long as we see this being one of the better alternative investments that we will -- we may very well continue.

Couple more comments on what George mentioned about our balance sheet position. We have one of the strongest balance sheets in the entire industry. We have some of the lowest leverage in the entire industry. We finished the quarter with $230 million of total cash. In addition to that, we have an unfunded revolving credit facility of $250 million. So we have nearly $500 million of available liquidity to us. We had $700 million of total debt at quarter's end and about $250 million of book shareholders' equity. Our cash flow leverage on a net debt basis was under 3 at 2.8 specifically.

Let me make a couple of comments about what I perceive and received some feedback about the perception of a shareholder overhang issue facing the company. And in a nutshell, I think we've addressed much of that perceived problem. We've had a very active tender offer and share buyback program, and anecdotally, I understand that one or more of our prior shareholders who had been seeking liquidity have found that liquidity along the way, and the upcoming forms 13 filings, we may learn some specific details, I'm not sure exactly what will come out of that, but we've seen interesting lift in the stock from the low 20s recently to where it is, we think a part of that may very well be attributable to addressing that issue.

I'd also like to comment on some perception that standard general may be a desire seller. We do not believe that to be the case. We do not -- tender general is a natural seller, at this time, and the example cited to me when I get calls in on this are that, well, they tend to generate a couple of million shares into the secondary offering you tried to get off back in June. So obviously the seller, fact of the matter is, that tender general was trying to lead the way and provide some momentum for that secondary offering. To this day, I continue to think that secondary was a great idea. We tried to serve, we the company as a pivot point or would be sellers to address the overhang issue I'm talking about into would be buyers, and George and Craig Eaton and myself, put on a long road show that we -- and as we were looking to enable that kind of pivot of shares in an organized secondary fashion, it didn't work, but we thought it was a good idea and quite frankly, it should have worked. My point is that we believe Standard General put in as the show of leadership and to stoke some momentum in the sell-side aspect to that book and otherwise a natural seller. Likewise, I get feedback that gees, tender general was all in on the tender offer. Well, yes, but that's because you have to do that if you want to preserve your percentage ownership through pro rata percentage ownership in the company and we believe strongly that that's exactly what the motivation was there as well. So from an overhang perspective, I think we've made a lot of progress. I don't think these -- the largest shareholder in the company is a seller, so there's real progress and quite frankly we'll continue to do what we can, as necessary on a go-forward basis.

So look the summary of George's comments and mine are that we think the outlook for the company is robust. I do believe that as we get through Q3 and Q4 of this year and we continue what we believe will be a ramping at -- a recaptured market share at Lincoln particularly in table games. And as the Northeast market stabilizes, then we will continue to see lift there and a recovery of market share. In conjunction with that as we annualize Dover in our results and as Tiverton annualizes this quarter, we will fold in Black Hawk and then will fold in Kansas City and Vicksburg as the plan subject to regulatory approval. I anticipate that after we get through 2019, we will continue to back on the schedule of ramping by growing EBITDA quarter-to-quarter and that will be on a robust cash flow growth profile at that point. So essentially what we're doing is, look, given some of the competition that we've had at Lincoln set us back a quarter or two in terms of the growth trajectory and cash flow we had anticipated. But all this is kind of recalendarization of the growth in cash flows that we expect to see starting early next year with Black Hawk and beyond and continued improvements at Dover. So the valuation program here is very much still in line. We are excited about the future and see growing cash flows into next year.

One final comment, I've said this before. I'm not sure it's entirely clear. So I'm going to try it again. In Delaware and Rhode Island, a lottery system of gaming requires that the state be the operator -- tech be through the operator of VLT machines. And as such, we don't own the machines and we don't purchase the machines and we don't actually maintain the machines. What that means is that we don't actually spend capex dollars for the machines in Rhode Island or Delaware. There are about 7,300 machines between the two states. We calculate that the avoided capital expenditure from that gaming structure in these two lottery states for us is worth approximately $28 million if based on a couple of assumptions, right. $25,000 purchase price of a new machine, seven year replacement cycle, you can play with those assumptions if you want to. But my point is, most of us use adjusted EBITDA in this industry as a proxy for free cash flow. That's great, we're doing it for years. It's easy, it's effective, it's efficient, but if you want apples-to-apples with our adjusted EBITDA to the rest of the industry, I think you have to add back $28 million per year because that's the translated difference from our adjusted EBITDA to a pure free cash flow, after capex, after interest, you get the free cash flow, ours is a $28 million higher than you would expect to see if we were not in the lottery system of gaming in these two states.

So that's just a word, call it, action, if you will, that we think there is more bite to our EBITDA than rest of the industry has. Feel free to give me call if you want to going to walk through the math on that. We mentioned -- we've mentioned this ad dollars on couple of prior roadshows. It's real cash, it flows to the bottom line, it's real purchasing power at the free cash flow level. We think it's pretty powerful relative to the overall size of our EBITDA in the company.

So those are my comments, I'm going to turn it back to George. Thanks for your attention.

George Papanier -- President and Chief Executive Officer

Well, thank you, Steve. With that, I'll ask the operator to open it up for your questions.

Questions and Answers:

Operator

[Operator Instructions] The first question comes from John DeCree of Union Gaming. Please go ahead. Your line is open.

John DeCree -- Union Gaming -- Analyst

Hi, everyone. Thanks for taking my questions and all the color thus far.

George Papanier -- President and Chief Executive Officer

Hi, John.

John DeCree -- Union Gaming -- Analyst

Steve, George, I wanted to talk about the I guess operating leverage or margin in Rhode Islands. I think everyone's pretty well aware of the revenue trends the state reports those. But when we saw like the kind of sequential margin decline obviously some fixed cost there that you've talked about some labor adjustments. Wondering if you could elaborate on some of those cost initiatives, what you think about [Technical Issues]

Operator

John DeCree. Your line is still open.

John DeCree -- Union Gaming -- Analyst

Hi, if you guys not hear the question? I apologize.

George Papanier -- President and Chief Executive Officer

You got cut off halfway, John, sorry. Could you repeat?

John DeCree -- Union Gaming -- Analyst

Sure. Just, Steve, could you give us a little bit of additional color on some of the efficiencies you're looking to harvest in Lincoln, given the new level of gaming volumes and if we should expect kind of a recovery in the overall margin over the next couple of quarters or if we need to see some gaming volumes come back before we see some material margin improvement?

Stephen H. Capp -- Executive Vice President and Chief Financial Officer

Well, I think it's two ways spree, John, hard to get all the margin back with cost cuts on a business that's got a pretty significant fixed cost component to it. So we think it's very much hand in glove, if you will. With the modest recoveries we've seen so far in September and October, we certainly expect that that's a trend that we think will continue as Northeast marketing, excuse me, Northeast gaming market settles out and digest the relatively new competition within the last 18 months or so. So that's sort of relatively rising tide [Technical Issues] pretty focused on that. So we've had some labor cuts. Those have been announced a long away. Those have been widely publicized. As mentioned in the call, those were imposed along the way in Q3. So those will have relatively more impact in Q4 when they were applicable the entire quarter than the Q3 and so that will matter. Recovering revenues, if slowly and the quarterization, if you will, of some of our initiatives will come through more in Q4 and beyond. George, what else would you say?

George Papanier -- President and Chief Executive Officer

I mean, Steve touched on it that the full effect of the cuts from the third quarter will take place in the fourth quarter because we initiated those cuts effectively mid-August. So we're going to continue to create efficiencies through 2020 that's just part of -- that's just part of our direction that we're providing to the property. I just I think the point I want to add is just this, it's a crowded market that we're very effective competing in, and we're going to stay focused on profitable marketing, which is a big part of what we're implementing after we took a wait and see approach, and we're going to continue to provide the level of customer experience that the customers are tuned to do and we're going to keep cost in check. So we feel good about the direction that we're heading.

John DeCree -- Union Gaming -- Analyst

Thanks, Steve. Thanks, George. If I could ask one other on some of the negotiations with the state in Rhode Island that you've talked about, I think you've mentioned some additional machines coming from different suppliers, but some of the media reports we've seen not the best source of information, but I talked about, or I guess reported some other potential concessions that might be available as part of your negotiations, maybe something like a slot tax reduction or anything along those lines. I was wondering if you could comment on any of that and if there are some other opportunities for some concessions along the way as you continue negotiations with the state?

Unidentified Speaker

So we've enjoyed some really good discussions with the state recently. We're not looking at any sort of changes to our VLT tax rate or anything else. We have made some progress on adjusting our regulatory agreement to kind of fit our long-term growth strategy. And beyond that we're just going to continue to work in partnership with the state to evaluate the IGT deals. We -- there are some scenarios under which we would submit a competitive proposal, if that goes out to bid and we think we have an opportunity to improve on the quality of the products that we're offering to our consumers. But right now, as George mentioned earlier, that's something that we really see as coming off until next year.

John DeCree -- Union Gaming -- Analyst

Okay, thanks for the additional color. Thanks everyone.

George Papanier -- President and Chief Executive Officer

Thanks, John. Appreciate it.

Operator

Your next question comes from Brad Boyer of Stifel. Please go ahead. Your line is open.

George Papanier -- President and Chief Executive Officer

Hey, Brad, you there?

Operator

Brad Boyer? Your line is open.

Brad Boyer -- Stifel -- Analyst

Guys, can you hear me?

George Papanier -- President and Chief Executive Officer

Yes, we hear you now, Brad.

Brad Boyer -- Stifel -- Analyst

Can you hear me now?

George Papanier -- President and Chief Executive Officer

Yes.

Brad Boyer -- Stifel -- Analyst

Yes, sorry. Yes, so I had some technical difficulties. So I apologize if John asked this, I kind of heard the start of his first question, but I mean questions for George, Steve, or whoever wants to take it, but I guess I think some pretty encouraging signs there when you talk about sort of the trends you're seeing in October. I guess the question for me is sort of how should we think about the path back so to speak for the Rhode Island property and for Lincoln in particular. What I'm getting at is, obviously, it sounds like you guys are going to introduce some new game types maybe dig in a little bit on the promotional side, but there is obviously the two levers to EBITDAR, margins and revenue. I guess just how should we be thinking about that here over the next couple of quarters. I mean is this going to initially be a focus on rebuilding the revenues back maybe at the sake of the margin, a little bit of both? How should we just be thinking about that?

Stephen H. Capp -- Executive Vice President and Chief Financial Officer

Hey, Brad. That was close to what John DeCree asked previously, maybe we'll just summarize, again, in a nutshell. But look, we don't suggest that there is any golden solution to this. It's going to be a multi-faceted response by us over time. Just as we've not seen a dramatic turn in results at Lincoln in either September or October, although, there has been a bit of a turn we believe. That's going to be incremental. The margin rebuilding and the work we'll do there will be incremental and some of it kind of depends on the timing for how the Northeast gaming market kind of settles out and for how long the marketing in the promo activity remains as aggressive as it's been. Some of what we saw in September and October, we think is a bit of a pullback on free play that could return you don't know. We don't think that's long-term sustainable, I think George commented on that earlier. So all these things are incremental, taking a harder look at costs, which as George just mentioned will, it will be in place for a full quarter and we're doing some other things as well, introducing new games and also looking for revenue market share regains if you will along the way. So kind of multifaceted. George anything else?

George Papanier -- President and Chief Executive Officer

Yeah, hey Brad. So we've touched on this earlier, but it's -- there are two levers, we're looking to generate revenue -- increase revenues and we're also focused on cost containment. From a marketing initiative perspective, we touched on this a little bit earlier. We're focused on table games that seems to be where we've had more of a significant impact. And what we've done is we've introduced or providing incentives to table games rated customers that we historically did not do in the past, as Steve mentioned free bets, is an example of it. I'm not going to get real granular into details, it's competitive but we introduce Macau style Baccarat, Pai Gow Tiles and we're increasing the rate of offerings for BJ and minibox tournaments and focus a little bit more directly onto some of the Asian business that's more -- that lives in closer proximity to the Boston and we're also going to -- there's also going to be a component of relating to the introduction of some project capex in 2020 that will allow us to enhance some of these offerings that we have. So we're not just sitting around waiting to see if things happen, we're aggressively pursuing what we think will be profitable opportunities on both the table and slot side of the business. And just to add to a point that Steve made, I really feel that when [Indecipherable] opened up, there was a little bit -- there was a level of kind of rational behavior as they're trying to attract database and they weren't really focused on $2.6 billion that they had spent, which I thought was and itself has ability to draw some trial as opposed to the level of marketing that they did. So I really feel starting in after Labor Day that the level of this irrational spend in our zone in particular, started to diminish and hopefully they're looking toward the under-penetrated market that I always thought existed from Boston north and I think they could garner a lot more visitation from that at a lot less cost supposed to competing directly with established competition south of Boston.

Brad Boyer -- Stifel -- Analyst

Okay, that's helpful. And then second question just around capital returns. Realized you guys had the $200 million number out there and I think you said you're kind of just shy of $80 million as of November 1. I guess is there a sort of hard and fast timeline around when you expect it to expand that $200 million, was it sort of in perpetuity, how should we think about that?

Stephen H. Capp -- Executive Vice President and Chief Financial Officer

Brad, no, there is no set timeline. The $250 million capital return program approved by the Board earlier this year was open-ended on the time frame and it really is about where we will look to be opportunistic depending on the one hand, the price of the stock and our perceived return in that investment versus quite frankly other investment opportunities that we're looking at of various types and forms. So no, it's an opportunistic situation I think the number -- was it $80 million Goe at the end of the quarter.

George Papanier -- President and Chief Executive Officer

Left in the program, yeah, you're right about that, Brad.

Stephen H. Capp -- Executive Vice President and Chief Financial Officer

So yeah, look we may spend more or less than that depending on the relative opportunity in the stock.

Brad Boyer -- Stifel -- Analyst

Okay. And then last one is just around M&A, I mean, I think we all follow this fairly closely, but it seems like it's still pretty relatively healthy environment out there, maybe even a little bit healthier at the -- as far as opportunity set maybe at kind of that sub $40 million where you guys have kind of like to play ball, so to speak. I guess first question is, would you guys be willing and open to entering into additional M&A prior to sort of fully ramping and integrating the Eldorado assets? And then the second question is based on what you're seeing out there today in sort of your sweet spot, what is the competitive dynamic out there look like today? Thanks.

Stephen H. Capp -- Executive Vice President and Chief Financial Officer

Brad. Thanks, always a pleasure to have you on. Yeah look regarding M&A, our team is pretty busy. There are a lot of tires -- remain a lot of tires to kick in and we continue doing that. We are very focused on accretive investment opportunities here whether that's -- as mentioned previously, whether that's part of the stock buyback program or whether that's an M&A development or other growth initiatives and that remains the absolute overriding priority bar none that we consider job one. So the relative balance between return of capital and growth initiative is really settled by the perceived accretion of one versus the other.

On the M&A front, specifically look -- what we keep in close touch with our counterparts in the REIT sector and we know them well and we've spent a lot of time and we keep in close touch and that remains a very aggressive and viable financing option to us and to everyone else and we have not done, we did not execute one of those yet, but let me tell you, we remain open to that it is a very interesting path of liquidity available. And as you said, M&A market seems pretty healthy. So that may be of a really viable financing option for us. And look, I would just add -- quick observation is to kind of what we're seeing to lay the land out there, a lot of our -- a lot of or would be competitors in the M&A sector have bigger and bigger and other things going on and we're not -- it may be that we're not seeing quite as much kind of trafficking around some of the opportunities there than as would normally be the case given other things happening in the industry and whether that's true or whether that's just kind of a perception, doesn't really matter, we continue to focus on accretive driven processes internally as we look at the M&A opportunities and so we'll be very mindful of and disciplined for that as we proceed forward. So Brad, thanks for the questions. We appreciate it.

Brad Boyer -- Stifel -- Analyst

Yeah. Thanks for the answers, guys.

Stephen H. Capp -- Executive Vice President and Chief Financial Officer

You bet.

Operator

Your next question comes from Barry Jonas of SunTrust. Please go ahead. Your line is open.

Barry Jonas -- SunTrust Robinson Humphrey -- Analyst

Hey, guys. Hey, Steve, just to clarify the last question. As you're having conversations with REITs. Is it toward monetizing your existing real estate or more toward partnering for OpCo, M&A for new properties?

Stephen H. Capp -- Executive Vice President and Chief Financial Officer

Yes, Barry, definitely. I'm kidding a little bit. Yeah, that's the set of opportunities, right. We talk about all those things. You bet.

Barry Jonas -- SunTrust Robinson Humphrey -- Analyst

Okay, got it. So wanted to touch on Colorado, definitely a nice touch with the sports betting getting approved in that state. Just curious how you're thinking about those licenses, would you look to monetize them perhaps your partnerships or any early thoughts on a potential strategy there would be helpful?

George Papanier -- President and Chief Executive Officer

Hi, Barry. This is George. So, as you know, we expect to close on the three Black Hawk assets during the first quarter 2020, and for those who are not aware of the referendum authorizes Colorado splits running low to go into effect by May 1, 2020; and the roll out one skins or sports betting license per Casino and we had three. So we're in discussions with various third-party content providers with regard to the skins, but there's been no agreements at this point. But our current thinking is to potentially partner on two skins and keep the final one for the company.

Barry Jonas -- SunTrust Robinson Humphrey -- Analyst

Understood. Okay, thanks. The rest of my questions have already been asked.

George Papanier -- President and Chief Executive Officer

Thanks, Barry. I appreciate it.

Operator

Your next question comes from Lance Vitanza of Cowen. Please go ahead. Your line is open.

Lance Vitanza -- Cowen & Co. -- Analyst

Hi, thanks guys. And thanks for repeating the question on Lincoln, I too had some technical difficulties. But let me ask you a little bit about the outlook. And I just sort of following on in some of the other questions, potential M&A your leverage relative to peers is effectively even lower than it looks, right, given the sale leaseback structures and I know that you gave the core answer a second ago, but I would assume that if there was a property that perhaps checked all the other boxes you certainly wouldn't -- you wouldn't step out of the bidding because you've decided not to use the sale leaseback. I mean you would in fact consider that for a property that checked all the other boxes. Is that fair to check?

Stephen H. Capp -- Executive Vice President and Chief Financial Officer

Yeah, Lance. That's definitely right. Yeah.

George Papanier -- President and Chief Executive Officer

Lance, I would say, this is George. We're open to an OpCo/prop-co structure and we'll look -- we're going to continue to kick tires and I think that's something that opportunity will be situational and it's just like with our strategic plan and we're going to be opened to it.

Stephen H. Capp -- Executive Vice President and Chief Financial Officer

Lance look, we considered a financing option, right and it's really all that kind of gets back to the job number one which is, which financing alternative is best, as George said, for a given situation and we're definitely open to that. It's all about what in the end will create the most value.

Lance Vitanza -- Cowen & Co. -- Analyst

Okay, thanks. And then I wanted to follow up on Colorado with Denver such an important feeder market to Las Vegas, and I think we may have talked about this offline in the past, but are you already having conversations with state gaming officials there and regarding potential gaming facilities in less remote areas of the state. And if so how could you describe tone around those or can you discuss that at this stage?

Stephen H. Capp -- Executive Vice President and Chief Financial Officer

Lance, no not really -

George Papanier -- President and Chief Executive Officer

We're not prepared.

We're not going to get into that. Now look we're very focused on the integration -- the closing of the integration of Black Hawk right now. The news on the sports betting licenses is brand new, and although we've certainly had that on the radar screen. It's only just kind of come into reality. So our focus is on there -- look obviously, we operate Arapahoe and we let out many of those the other OTB licenses. So we're pretty busy in that state and that's the current focus.

Lance Vitanza -- Cowen & Co. -- Analyst

Okay. Last one for me is just a follow up on the share repurchase. And I think you guys have done a lot of good work there. A lot of progress on the buyback front, I hear you and I don't dispute that you probably cleared out most, if any, most of whatever overhang was there. That being said, given the low leverage, given the greater-than-expected level of competition, my thought is now would be a pretty good time to continue that program. Do you agree with that?

George Papanier -- President and Chief Executive Officer

Look, your comment and opinion are duly noted, as I think Brad or John mentioned earlier, look, we still have a lot of gun powder left on this -- in this program. And as I mentioned, look it's all about opportunism and the relative accretion we can create going one side or the other, whether it's a growth opportunity, M&A development, stock buyback look even if I had a firm answer, I wouldn't give it to you because it's a dynamic environment and those relative valuations change over time. But, look, we're paying very close attention as you can tell by the activity in the buyback program, we will continue to make those decisions very dynamically.

Lance Vitanza -- Cowen & Co. -- Analyst

Okay. And then lastly for me, just on the outlook for performance. You mentioned it seems stability recovering to some extent post Labor Day, I know that that's somewhat tempered, but how quickly should we think about potentially getting back to comping positive on the EBITDA line. It sounds like maybe that's more of the first half of '20 type of event. And I know obviously, there's lots of unknowns but or is that something that you think could happen in the fourth quarter?

Stephen H. Capp -- Executive Vice President and Chief Financial Officer

Hey Lance, would you clarify getting back to what positive on EBITDA line?

Lance Vitanza -- Cowen & Co. -- Analyst

To positive growth -- year-over-year growth on the EBITDA line, consolidated.

Stephen H. Capp -- Executive Vice President and Chief Financial Officer

You mean like out of Lincoln.

Lance Vitanza -- Cowen & Co. -- Analyst

No, I mean consolidated for the whole company.

Stephen H. Capp -- Executive Vice President and Chief Financial Officer

Whole consolidated.

Lance Vitanza -- Cowen & Co. -- Analyst

So in other words, you were comping nicely positive for last couple of quarters. Obviously with the pressure from the Boston opening that took a little bit of a U-turn in this quarter. I know it's a temporal thing and at some point, you're going to be comping positive on EBITDA again. My question is just how quickly should we realistically think you get back to that, is that fourth quarter or is that more likely going to be in the first half of next year?

Stephen H. Capp -- Executive Vice President and Chief Financial Officer

Yeah look that's fair question, Lance, we look -- as we look out over the horizon we kind of see I think I mentioned this in my comments, but I had so many that probably got lost. We look at 4Q probably lining up as a fairly similar quarter to Q3 quite frankly. Look -- and part of that seasonal right, we're heading into a low season quarter it's cold, it's our lowest seasonal quarter of the year and so that's cutting against us. So the fact that we can -- if we can maintain some measure of parity to Q3, that actually is a positive, as George often points out. So there is that going on. And then think about the other dynamics in play here. One, we do think, as we've said that we've bottomed out at Lincoln, September, October, if that continues, then we've got that kind of growing trend as we go or we intend we expect the full Black Hawk into the portfolio. We think in January and then April-May time frame, we think will be the other two assets from our friends at El Dorado. You package all that together with the annualization of results at Dover and we only have two quarters under our belt so far. We do see, yes, as we see growing cash flow story getting into 2020 of next year, fourth quarter a little flattish to be candid likely given all those dynamics, I just mentioned and then yes 2020, we anticipate growing cash flow platform program once again.

Lance Vitanza -- Cowen & Co. -- Analyst

Perfect. Thanks guys for the help.

Stephen H. Capp -- Executive Vice President and Chief Financial Officer

You bet. Thanks, Lance.

Operator

There are no further questions at this time. Mr. Papanier, I will turn the call back over to you.

George Papanier -- President and Chief Executive Officer

Thank you, operator. I want to thank you all for joining our call today and for your interest in Twin River. I hope -- hopefully everyone has a wonderful holiday season and we look forward to coming back and talking about Q4 in the New Year.

Operator

[Operator Closing Remarks]

Duration: 57 minutes

Call participants:

Craig Eaton -- Executive Vice President, General Counsel and Compliance Officer

George Papanier -- President and Chief Executive Officer

Stephen H. Capp -- Executive Vice President and Chief Financial Officer

Unidentified Speaker

John DeCree -- Union Gaming -- Analyst

Brad Boyer -- Stifel -- Analyst

Barry Jonas -- SunTrust Robinson Humphrey -- Analyst

Lance Vitanza -- Cowen & Co. -- Analyst

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