Full House Resorts Announces Three and Six Months Results for the Period Ended June 30, 2009
FireKeepers Casino Opened Doors August 5 - Experiencing High Visitation Levels
LAS VEGAS--(BUSINESS WIRE)-- Full House Resorts (NYSE Amex US: FLL) today announced results for the three and six-month periods ended June 30, 2009. Net income for the three months ended June 30, 2009 was $0.2 million, or $0.01 per common share, compared to $33,343, or $0.00 per common share, in the prior-year period.
Second Quarter 2009 Highlights and Subsequent Events
-- FireKeepers Casino opened its doors to the public on August 5, ahead of
schedule and under budget. The property located off Exit 104 on
Interstate 94 in Battle Creek, Michigan features 2,680 slot machines, 78
table games and a 120-seat poker room. In addition, the property has
five restaurants, a parking garage with 2,080 spaces and additional
surface parking. Since its opening, the property has been experiencing
high levels of visitation consistent with our expectations. Full House
Resorts, through its 50/50 joint venture Gaming Entertainment (Michigan)
LLC ("GEM"), is the manager for the casino and supervised development,
design and construction for the Nottawaseppi Huron Band of Potawatomi.
GEM will now manage the daily operations of the casino for the
FireKeepers Development Authority, an agency of the Huron Band, and will
be paid a management fee equal to 26% of pre-management fee income over
a seven-year period which commenced with the opening on August 5th.
-- Casino revenues for the quarter increased by 5% compared to the
prior-year period, primarily the result of a more favorable slot hold
percentage at Stockman's Casino. Food and beverage revenues for the
quarter were down 17% from the prior-year period due to the generally
weak economy and increased competition. Continuing expense reduction
efforts, coupled with lower food and beverage activity, resulted in
lower costs at Stockman's. As a result, EBITDA at Stockman's increased
from $0.6 million to $0.9 million.
-- As of June 30, 2009 the company had cash and equivalents of $4.5
million, debt of $4.4 million - of which $3.5 million is an obligation
of GEM - and availability on the company's credit facility of
approximately $7.9 million.
"We are extremely excited over the successful opening of FireKeepers Casino last week and while we were pleased that we were able to maintain profitability in the second quarter in the face of a continued difficult economy, we continue to be vigilant in controlling costs and deploying marketing dollars carefully," said Andre Hilliou, Chairman and Chief Executive Officer of Full House. "The construction of FireKeepers came in ahead of schedule and under budget despite increasing the number of slot machines and parking spaces from the original plan. Traffic at the casino is currently at capacity levels and we are pleased to announce that we opened the doors with over 60,000 customers already in our Red Hot Rewards Club. We look forward to a mutually beneficial partnership with the Huron Band as FireKeepers takes its place among the top destinations in Michigan. Furthermore, we continue to generate free cash flow, while the Company continues to have no significant current debt repayments or maturities, putting us in a strong position to take advantage of acquisition opportunities going forward."
Second Quarter 2009 Results
For the quarter ended June 30, 2009, Full House reported casino, food and beverage, and other revenue of $2.4 million, essentially flat with the prior-year period, as higher casino revenue at Stockman's Casino caused by a more favorable slot hold percentage was offset by lower food and beverage revenue due to general weakness in the economy and increased food and beverage competition.
The Company recorded equity in net income of unconsolidated joint venture and related guaranteed payments of $0.8 million, a decrease of 19% from the prior-year period. The equity in net income of unconsolidated joint venture represents Full House's 50% ownership interest in Gaming Entertainment (Delaware), LLC ("GED"), a joint venture between the Company and Harrington Raceway, Inc. The Company expects to continue receiving a 5% increase in distributions over the prior year from GED. The reduced income is attributable to the decreased net income of GED which the Company recognizes under the equity method. GED's reduced net income is mostly attributable to increased competition and higher costs, including recently enacted tax increases.
Operating expenses for second quarter 2009 were $2.9 million, a decrease of 14% from the prior-year period, primarily due to lower SG&A expenses, as well as lower casino and food and beverage costs.
Operating income, excluding impairment loss, for second quarter 2009 was $0.4 million, compared to operating income, excluding impairment loss, of $0.03 million in the prior-year period. The 2009 results include an unrealized gain on notes receivable from tribal governments of $40,022, compared to a loss of $0.1 million in second quarter 2008, primarily due to the opening of FireKeepers Casino on August 5.
The Company reported net income attributable to the Company per common share of $0.01 for the three months ended June 30, 2009, as compared to $0.00 for the three months ended June 30, 2008.
Six Month 2009 Results
For the six months ended June 30, 2009, Full House reported casino, food and beverage, and other revenue of $4.7 million, compared to revenue of $5.0 million in the prior-year period, primarily as a result of lower food and beverage revenue at Stockman's Casino due to general weakness in the economy and increased competition.
The Company recorded equity in net income of unconsolidated joint venture and related guarantee payments of $2.1 million, a 5% decrease from the prior-year period. Management expects that 2009 full-year results for GED will be lower than the 5% guaranteed increase due to payment timing variances which resulted in greater than an 8% increase in 2008. The reduced income is attributable to the decreased net income of GED which the Company recognizes under the equity method. GED's reduced net income is mostly attributable to increased competition and higher costs, including recently enacted tax increases.
Operating expenses for the six months ended June 30, 2009 were $5.8 million compared to $6.4 million in the prior-year period, primarily due to continuing expense reduction efforts throughout the organization and lower food and beverage costs.
Operating income, excluding impairment loss, for the six months ended June 30, 2009 was $1.3 million, compared to operating income, excluding impairment loss, of $2.6 million in the prior-year period. The 2009 figure includes $0.3 million of unrealized gains on notes receivable from tribal governments compared to $1.8 million in the prior-year period, with the year-over-year decrease primarily due to the repayment of $9.3 million of notes receivable related to the FireKeepers Casino, in connection with the FireKeepers Development Authority obtaining financing for the project in the prior year.
The Company reported net income attributable to the Company per common share of $0.04 and $0.06 for the six months ended June 30, 2009 and 2008, respectively. Excluding the asset impairment charges in the first half of both 2009 and 2008, and exclusive of the one-time gain on notes receivable in the first half of 2008 due to the repayment of the tribal receivable, net income attributable to the Company per common share was $0.04 and $0.03 for the six months ended June 30, 2009 and 2008, respectively.
Liquidity and Capital Resources
As of June 30, 2009, the company had $4.5 million in cash and approximately $7.9 million of availability on its revolving credit line with Nevada State Bank. Debt outstanding as of June 30, 2009 was $4.4 million, of which $3.5 million is an obligation of GEM. The Company has no required principal payments on its Nevada State Bank facility until 2021.
Conference Call Information
The Company will host a conference call and webcast on Tuesday, August 11th at 11:00 a.m. EDT. Both the call and webcast are open to the general public.
The conference call number is 877-941-8416; international callers can access the call by dialing 1-480-629-9808. Please call five minutes in advance to ensure that you are connected prior to the presentation. Interested parties may also access the live call on the Internet at http://www.fullhouseresorts.com (select Investor Relations and then Upcoming Events). Please log-on fifteen minutes in advance to ensure that you are connected prior to the call's initiation. Questions and answers will be reserved for call-in analysts and investors. Following its completion, a replay of the call can be accessed for one week on the Internet at the above link or by calling either 800-406-7325 or 1-303-590-3030 and providing pass code 4132386.
Selected unaudited Statements of Operations (from continuing operations) data for the three months ended June 30,
Development/
2009 Casino Operations Corporate Consolidated
Management
Revenues $ 2,364,803 $ -- $ -- $ 2,364,803
Selling, general and
administrative 401,892 132,552 984,631 1,519,075
expense
Depreciation and 246,778 13,500 20,703 280,981
amortization
Operating gains -- 849,920 -- 849,920
Operating income 672,637 690,507 (1,007,293) 355,851
(loss)
Net income (loss)
attributable to 673,462 654,345 (1,160,846) 166,961
Company
Development/
2008 Casino Operations Corporate Consolidated
Management
Revenues $ 2,386,935 $ -- $ 35 $ 2,386,970
Selling, general and
administrative 517,503 159,287 1,060,679 1,737,469
expense
Depreciation and 295,406 9,576 19,711 324,693
amortization
Operating gains -- 885,206 -- 885,206
Operating income 341,431 681,030 (1,080,882) (58,421)
(loss)
Net income (loss)
attributable to 342,648 796,891 (1,106,196) 33,343
Company
Selected unaudited Statements of Operations (from continuing operations) data for the six months ended June 30,
Development/
2009 Casino Operations Corporate Consolidated
Management
Revenues $ 4,684,740 $ -- $ -- $ 4,684,740
Selling, general and
administrative 848,558 256,473 1,943,938 3,048,969
expense
Depreciation and 503,662 26,950 40,921 571,533
amortization
Operating gains -- 2,355,845 -- 2,355,845
Operating income 1,228,452 2,044,068 (1,987,517) 1,285,003
(loss)
Net income (loss)
attributable to 1,227,892 1,926,120 (2,450,846) 703,166
Company
Development/
2008 Casino Operations Corporate Consolidated
Management
Revenues $ 4,956,535 $ -- $ 58 $ 4,956,593
Selling, general and
administrative 905,516 181,781 2,244,793 3,332,090
expense
Depreciation and 539,282 28,728 27,224 595,234
amortization
Operating gains -- 3,946,467 -- 3,946,467
Operating income 1,079,082 3,666,645 (2,273,277) 2,472,450
(loss)
Net income (loss)
attributable to 1,084,136 2,904,940 (2,954,984) 1,034,092
Company
Reconciliation of EBITDA before unrealized gains on notes receivable, tribal governments, for the three months ended June 30,
Development/
2009 Casino Operations Corporate Consolidated
Management
Operating income $ 672,637 $ 690,507 $ (1,007,293) $ 355,851
Add Back:
Depreciation and 246,778 13,500 20,703 280,981
amortization
Impairment loss - 30,000 - 30,000
Deduct:
Unrealized gain on
notes receivable, - 40,220 - 40,220
tribal governments
EBITDA before
unrealized gain on $ 919,415 $ 693,787 $ (986,590) $ 626,612
tribal advances
Development/
2008 Casino Operations Corporate Consolidated
Management
Operating income $ 341,431 $ 681,030 $ (1,080,882) $ (58,421)
(loss)
Add Back:
Depreciation and 295,406 9,576 19,711 324,693
amortization
Impairment loss - 85,000 - 85,000
Unrealized loss on
notes receivable, - 61,840 - 61,840
tribal governments
EBITDA before
unrealized gain on $ 636,837 $ 837,446 $ (1,061,171) $ 413,112
tribal advances
Three months Six months
ended June 30, ended June 30,
2009 2008 2009 2008
Revenues
Casino $ 1,886,289 $ 1,804,463 $ 3,755,231 $ 3,769,512
Food and beverage 458,890 551,828 889,624 1,135,813
Other operating income 19,624 30,679 39,885 51,268
2,364,803 2,386,970 4,684,740 4,956,593
Operating costs and
expenses
Casino 559,485 677,550 1,139,394 1,277,336
Food and beverage 484,012 555,045 964,672 1,155,318
Project development costs 15,319 35,840 31,014 70,632
Selling, general and 1,519,075 1,737,469 3,048,969 3,332,090
administrative
Depreciation and 280,981 324,693 571,533 595,234
amortization
2,858,872 3,330,597 5,755,582 6,430,610
Operating gains (losses)
Equity in net income of
unconsolidated joint 839,700 1,032,046 2,091,876 2,194,783
venture, and related
guaranteed payments
Unrealized gains (loss)
on notes receivable, 40,220 (61,840 ) 293,969 1,836,684
tribal governments
Impairment loss (30,000 ) (85,000 ) (30,000) (85,000
849,920 885,206 2,355,845 3,946,467
Operating income (loss) 355,851 (58,421 ) 1,285,003 2,472,450
Other income (expense)
Interest and other income 12,936 36,929 35,590 95,677
Interest expense (58,353 ) (118,491 ) (147,162 ) (298,385
Income (loss) from
continuing operations 310,434 (139,983 ) 1,173,431 2,269,742
before income taxes
Income taxes (205,253 ) (15,108 ) (591,225 ) (660,404
Income (loss) from
continuing operations net 105,181 (155,091 ) 582,206 1,609,338
of income taxes
Income from discontinued
operations, net of income -- -- -- 38,141
taxes of $23,377 in 2008
Net income (loss) 105,181 (155,091 ) 582,206 1,647,479
Plus loss (less net
income) attributable to
noncontrolling interest (61,780 ) (188,434 ) (120,960 ) 575,246
in consolidated joint
venture
Net income attributable $ 166,961 $ 33,343 $ 703,166 $ 1,072,233
to the Company
Income from continuing
operations attributable
to the Company per common
share
Basic and diluted $ 0.01 $ 0.00 $ 0.04 $ 0.06
Income from discontinued
operations attributable
to the Company per common
share
Basic and diluted -- -- -- $ 0.00
Net income attributable
to the Company per common
share
Basic and diluted $ 0.01 $ 0.00 $ 0.04 $ 0.06
Weighted-average number
of common shares
outstanding
Basic and diluted 17,996,525 19,342,276 18,049,495 19,342,276
Amounts attributable to
the Company common
shareholders:
Income from continuing $ 166,961 $ 33,343 $ 703,166 $ 1,034,092
operations, net of tax
Income from discontinued -- -- -- 38,141
operations, net of tax
Net income attributable $ 166,961 $ 33,343 $ 703,166 $ 1,072,233
to the Company
Disclosures necessary to conform to GAAP and SEC Regulations S-X have been omitted.
About Full House Resorts, Inc.
Full House owns, develops and manages gaming facilities. Full House owns the Stockman's Casino in Fallon, Nevada which has 8,400 square feet of gaming space with approximately 260 gaming machines, four table games and a keno game. The casino has a bar, a fine dining restaurant and a coffee shop. Full House also receives a guaranteed fee from the operation of Harrington Raceway and Casino at the Delaware State Fairgrounds in Harrington, Delaware. Harrington Raceway and Casino has a total of approximately 2,100 gaming devices, a buffet, gourmet steakhouse, other food and beverage outlets and an entertainment lounge. Full House also has an agreement with the Nottawaseppi Huron Band of Potawatomi Indians for the management of the recently opened FireKeepers Casino in Battle Creek, Michigan with 2,680 gaming devices, 78 table games and a 120-seat poker room. For further information, go to www.FireKeepersCasino.com. In addition, Full House has been working with the Northern Cheyenne Nation of Montana for the development and management of a gaming facility on tribal land. Further information about Full House Resorts can be viewed on its web site at www.fullhouseresorts.com.
Forward-looking Statements
Some of the statements made in this release are forward-looking statements. These forward-looking statements are based upon Full House's current expectations and projections about future events and generally relate to Full House's plans, objectives and expectations for Full House's business. Although Full House's management believes that the plans and objectives expressed in these forward-looking statements are reasonable, the outcome of such plans, objectives and expectations involve risks and uncertainties including without limitation, regulatory approvals, financing sources and terms, integration of acquisitions, competition and business conditions in the gaming industry. Additional information concerning potential factors that could affect Full House's financial condition and results of operations is included in the reports Full House files with the Securities and Exchange Commission, including, but not limited to, its Form 10-K for the most recently ended fiscal year.
For the foregoing reasons, readers and investors are cautioned that there also can be no assurance that the outcomes expressed in Full House's forward-looking statements included in this release and otherwise will prove to be accurate. In light of the significant uncertainties inherent in such forward-looking statements, the inclusion of such information should not be regarded as a representation or warranty by Full House or any other person that Full House's objectives and plans will be achieved in any specified time frame, if at all. Full House does not undertake any obligation to update any forward-looking statements or to announce revisions to any forward-looking statements.
Source: Full House Resorts
Released August 10, 2009