Full House Resorts Announces EPS of $0.11 and $0.43 for the Three-Month and Full Year Periods Ended December 31, 2010
LAS VEGAS--(BUSINESS WIRE)-- Full House Resorts (NYSE Amex US: FLL) today announced results for the three-month and full year periods ended December 31, 2010. Net income attributable to the Company for the three months ended December 31, 2010 was $2.0 million, or $0.11 per common share, compared to $1.0 million, or $0.06 per common share, in the prior-year period. Excluding a $0.7 million impairment charge in the fourth quarter of 2009, net income per common share in the fourth quarter of 2009 was $0.08.
Fourth Quarter 2010 Highlights
-- Management fees for Gaming Entertainment (Michigan), LLC ("GEM"), a
50%-owned joint venture that manages FireKeepers Casino, were $5.8
million in the fourth quarter of 2010, compared to management fees of
$4.2 million for fourth quarter 2009.
-- EBITDA, before unrealized gains on notes receivable, tribal governments
and other items net of RAM Entertainment, LLC's ("RAM") share of GEM
results, was $3.8 million versus $2.9 million in the prior-year period.
-- As of December 31, 2010, Full House Resorts had $13.3 million in cash,
no outstanding debt and approximately $7.9 million of availability on
its revolving credit facility.
"2010 was a banner year for Full House with record revenues and earnings per share, as well as the announcement of our pending acquisition of the Grand Victoria Casino and Resort," said Andre Hilliou, Chairman and Chief Executive Officer of Full House. "FireKeepers continues to perform admirably, with the casino generating approximately $24.5 million in management fees in 2010, and seeing a 37% year-over-year increase in management fees in the fourth quarter alone. In addition, we are within a few weeks, pending final regulatory approvals, of officially adding the Grand Victoria to the Full House family, which we believe will be a significant driver of long-term value for our shareholders."
Fourth Quarter 2010 Results
For the quarter ended December 31, 2010, Full House reported casino, food and beverage, and other revenue of $2.1 million, a decline of 4% from the prior-year period, primarily caused by lower casino revenue at Stockman's Casino due to a lower slot hold percentage and general economic weakness. In addition, during the fourth quarter of 2010, Full House recorded GEM management fees of $5.8 million for FireKeepers Casino, compared to management fees of $4.2 million for the fourth quarter 2009.
Full House recorded equity in net income of unconsolidated joint venture and related guaranteed payments of $1.5 million, an increase of 7% from the prior-year period, slightly above the guaranteed annual increase provided in the Company's agreement with Harrington Raceway, Inc. 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.
Operating expenses for fourth quarter 2010 were $3.6 million, a decrease of 1% from the prior-year period. The Company expensed $0.08 million of costs related to the announced acquisition of the Grand Victoria Casino & Resort during the quarter.
Operating income for fourth quarter 2010 was $5.8 million, compared to operating income of $3.4 million in the prior-year period. EBITDA, before unrealized gains on notes receivable, tribal governments and other items net of RAM's share of GEM results, was $3.8 million versus $2.9 million in the prior-year period.
Full House reported fourth quarter net income attributable to the Company per common share of $0.11 for the three months ended December 31, 2010, as compared to $0.06 for the three months ended December 30, 2009. Exclusive of a $0.7 million impairment charge, net income per common share in the fourth quarter 2009 would have been $0.08.
Full Year 2010 Results
For the full year ended December 31, 2010, Full House reported casino, food and beverage, and other revenue of $8.4 million, compared to revenue of $9.1 million in the prior year, primarily as a result of lower casino revenue at Stockman's Casino due to a lower slot hold percentage and general weakness in the economy. In addition, during the year ended December 31, 2010, Full House recorded GEM management fees of $24.5 million for FireKeepers Casino, compared to management fees of $10.0 million for approximately five months in 2009.
The Company recorded equity in net income of unconsolidated joint venture and related guaranteed payments of $5.1 million, an increase of 3% from the prior year.
Operating expenses for the full year ended December 31, 2010 were $14.4 million compared to $13.0 million in the prior year, primarily due to increased amortization of FireKeepers-related contract rights, which was the result of the casino opening in August 2009.
Operating income for the full year ended December 31, 2010 was $23.5 million, compared to operating income of $8.6 million in the prior year. EBITDA, before unrealized gains on notes receivable, tribal governments and other items net of RAM's share of GEM results, was $15.2 million versus $8.3 million in the prior year. The 2009 results include a GEM member agreement resulting in the recognition of a one-time member agreement modification charge of $2.1 million.
The Company reported net income attributable to the Company per common share of $0.43 and $0.26 for the full years ended December 31, 2010 and 2009, respectively. Full year 2009 results included impairment charges of $0.8 million, as well as a member agreement modification resulting in the recognition of a one-time net pre-tax gain of $1.4 million consisting of the member agreement modification charge of $2.1 million, offset by a $3.5 million credit attributable to the non-controlling interest in GEM. Excluding these unusual charges in 2009, net income attributable to the Company per common share was $0.24 for the full year ended December 31, 2009.
Liquidity and Capital Resources
As of December 31, 2010, Full House had $13.3 million in cash and approximately $7.9 million of availability on its revolving credit line with Nevada State Bank. There was no debt outstanding as of December 31, 2010.
In December 2010, the Company executed a revised credit agreement and obtained financing commitments for a $33.0 million term loan and $5.0 million revolving line of credit to fund the Grand Victoria acquisition. The term loan's interest rate is expected to be LIBOR plus 550 (with a 150 floor) and it will fully amortize over the five-year term of the facility. The Company anticipates applying approximately $19.0 million of cash on hand and $33.0 million of debt to fund the acquisition, which is subject to the customary regulatory approvals. Of the $19.0 million the Company plans to fund from cash, it has made total purchase price deposits of $5.0 million and paid fees related to the acquisition of approximately $2.3 million, including financing costs of approximately $2.0 million which were capitalized as deferred financing fees in the fourth quarter. The Company believes regulatory approvals will be obtained to accommodate a closing early in the second quarter of 2011.
In May 2010, Full House Resorts announced that its Board of Directors authorized a program to repurchase up to $1.0 million worth of shares of the Company's common stock. The plan expired on December 31, 2010, and the Company did not repurchase any shares.
2011 Guidance
For 2011, Full House is providing the following guidance:
For the full year 2011, we expect the combined SG&A expense for Stockman's and corporate to be consistent with 2010 at approximately $6.5 to $6.8 million. Depreciation and amortization, including the Grand Victoria, for the final three quarters of the year is expected to be between $5.0 and $5.5 million. Interest expense for the full year 2011 is expected to be between $2.3 and $2.5 million, which includes the amortization of deferred loan fees. Income tax rate for the full year 2011 is expected to be between 44 and 46 percent.
The Company has provided this guidance for fiscal 2011 to give investors general information on the specific metrics of its business that it has a reasonable control over at this time. The guidance provided is subject to numerous uncertainties including, among others, overall economic and capital markets conditions, changes in gaming legislation, increased competition generally and in particular, the impact of the Gun Lake Casino on the FireKeepers Casino, the ability to obtain an Indiana gaming license and the close on the acquisition of the Grand Victoria early in the second quarter of 2011. The Company does not intend, and undertakes no obligation, to update its forward-looking statements, including forecasts and potential opportunities for growth in new and existing markets. Accordingly, the Company does not intend to update guidance during the quarter. Additional information about the factors that could potentially affect the Company's financial results included in today's press release can be found in the Company's Annual Report on Form 10-K and quarterly reports on Form 10-Q.
Conference Call Information
The Company will host a conference call and webcast on Tuesday, March 8 at 11:00 AM EST. Both the call and webcast are open to the general public.
The conference call number is 877-941-2322; international callers can access the call by dialing 1-480-629-9715. 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 www.fullhouseresorts.com (select Investors 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 institutional 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 passcode 4415847.
Selected unaudited Statements of Operations data for the three months ended
December 31,
2010 Casino Operations Development/ Corporate Consolidated
Management
Revenues $ 2,117,708 $ 5,773,464 $ - $ 7,891,172
Selling,
general and 439,791 136,835 1,023,309 1,599,935
administrative
expense
Depreciation
and 237,300 593,195 13,912 844,407
amortization
Operating gains -- 1,499,432 -- 1,499,432
Operating 387,460 6,542,866 (1,176,658 ) 5,753,668
income (loss)
Net income
(loss) 257,228 2,502,933 (807,608 ) 1,952,553
attributable to
Company
2009 Casino Operations Development/ Corporate Consolidated
Management
Revenues $ 2,199,630 $ 4,199,842 $ 10,988 $ 6,410,460
Selling,
general and 472,917 191,418 1,003,623 1,667,958
administrative
expense
Depreciation
and 241,122 593,084 22,145 856,351
amortization
Operating gains -- 674,656 -- 674,656
Operating 398,551 4,089,477 (1,093,475 ) 3,394,553
income (loss)
Net income
(loss) 266,405 1,450,534 (699,873 ) 1,017,066
attributable to
Company
Selected unaudited Statements of Operations data for the full year ended
December 31,
2010 Casino Operations Development/ Corporate Consolidated
Management
Revenues $ 8,338,757 $ 24,558,372 $ - $ 32,897,129
Selling,
general and 1,729,554 730,035 3,970,256 6,429,845
administrative
expense
Depreciation
and 960,675 2,372,781 87,800 3,421,256
amortization
Operating gains -- 5,091,764 -- 5,091,764
Operating 1,472,935 26,545,979 (4,479,875 ) 23,539,039
income (loss)
Net income
(loss) 976,664 9,680,712 (2,988,129 ) 7,669,247
attributable to
Company
2009 Casino Operations Development/ Corporate Consolidated
Management
Revenues $ 9,048,686 $ 9,953,009 $ 10,988 $ 19,012,683
Selling,
general and 1,757,923 586,291 4,128,903 6,473,117
administrative
expense
Depreciation
and 984,824 1,019,919 85,351 2,090,094
amortization
Operating gains -- 2,596,459 -- 2,596,459
Operating 2,064,293 10,892,130 (4,370,491 ) 8,585,932
income (loss)
Net income
(loss) 1,365,673 6,301,194 (2,898,628 ) 4,768,239
attributable to
Company
Reconciliation of EBITDA before unrealized gains on notes receivable, tribal governments, and other items for the three
months ended December 31,
Net of Non-Controlling
Interest
Quarter Development Development
ended Casino / Corporate Consolidated GEM 50% / Consolidated
December 31, Operations Management Management
2010
Operating
income $ 387,460 $ 6,542,866 $ (1,176,658 ) $ 5,753,668 $ 5,205,548 $ 2,602,774 $ 3,940,092 $ 3,150,894
(loss)
Add Back:
Grand
Victoria - - 79,133 79,133 - - - 79,133
expenses
Depreciation
and 237,300 593,195 13,912 844,407 431,169 215,585 377,610 628,822
amortization
Deduct:
Unrealized
gain on
notes - 28,218 - 28,218 - - 28,218 28,218
receivable,
tribal
governments
$ 624,760 $ 7,107,843 $ (1,083,613 ) $ 6,648,990 $ 5,636,717 $ 2,818,359 $ 4,289,484 $ 3,830,631
Net of Non-Controlling
Interest
Quarter Development Development
ended Casino / Corporate Consolidated GEM 50% / Consolidated
December 31, Operations Management Management
2009
Operating
income $ 398,551 $ 4,089,477 $ (1,093,475 ) $ 3,394,553 $ 3,614,325 $ 1,807,163 $ 2,282,314 $ 1,587,390
(loss)
Add Back:
Impairment - 727,567 - 727,567 - - 727,567 727,567
Depreciation
and 241,122 593,084 22,145 856,351 431,169 215,585 377,499 640,766
amortization
Deduct:
Unrealized
gain on
notes - 24,738 - 24,738 - - 24,738 24,738
receivable,
tribal
governments
$ 639,673 $ 5,385,390 $ (1,071,330 ) $ 4,953,733 $ 4,045,494 $ 2,022,748 $ 3,362,642 $ 2,930,985
Reconciliation of EBITDA before unrealized gains on notes receivable, tribal governments, and other items for the full year ended
December 31,
Net of Non-Controlling
Interest
Year ended Casino Development Development /
December 31, Operations / Corporate Consolidated GEM 50% Management Consolidated
2010 Management
Operating
income $ 1,472,935 $ 26,545,979 $ (4,479,875 ) $ 23,539,039 $ 22,200,684 $ 11,100,342 $ 15,445,637 $ 12,438,697
(loss)
Add Back:
Grand
Victoria - - 163,205 163,205 - - - 163,205
expenses
Unrealized
loss on
notes - 2,900 - 2,900 - - 2,900 2,900
receivable,
tribal
governments
Depreciation
and 960,675 2,372,781 87,800 3,421,256 1,724,675 862,338 1,510,443 2,558,918
amortization
$ 2,433,610 $ 28,921,660 $ (4,228,870 ) $ 27,126,400 $ 23,925,359 $ 11,962,680 $ 16,958,980 $ 15,163,720
Net of Non-Controlling
Interest
Year ended Casino Development Development /
December 31, Operations / Corporate Consolidated GEM 50% Management Consolidated
2009 Management
Operating
income $ 2,064,293 $ 10,892,130 $ (4,370,491 ) $ 8,585,932 $ 2,185,635 $ 1,092,818 $ 9,799,312 $ 7,493,114
(loss)
Add Back:
Impairment - 752,899 - 752,899 - - 752,899 752,899
Member - 2,147,327 - 2,147,327 7,046,833 3,523,417 (1,376,090 ) (1,376,090 )
Modification
Depreciation
and 984,824 1,019,919 85,351 2,090,094 718,952 359,476 660,443 1,730,618
amortization
Deduct:
Unrealized
gain on
notes - 567,348 - 567,348 585,418 292,709 274,639 274,639
receivable,
tribal
governments
$ 3,049,117 $ 14,244,927 $ (4,285,140 ) $ 13,008,904 $ 9,366,002 $ 4,683,002 $ 9,561,925 $ 8,325,902
FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months Twelve months
ended December 31, ended December 31,
2010 2009 2010 2009
Revenues
Casino $ 1,665,994 $ 1,735,956 $ 6,529,773 $ 7,194,476
Food and 428,866 443,775 1,728,879 1,775,623
beverage
Management fees 5,773,464 4,199,842 24,473,066 9,953,009
Other 22,848 30,887 165,411 89,575
7,891,172 6,410,460 32,897,129 19,012,683
Operating costs
and expenses
Casino 538,098 573,241 2,159,199 2,271,337
Food and 515,058 513,798 2,016,394 1,970,309
beverage
Project
development 139,438 79,215 423,160 218,353
costs
Selling, general
and 1,599,935 1,667,958 6,429,845 6,473,117
administrative
Depreciation and 844,407 856,351 3,421,256 2,090,094
amortization
3,636,936 3,690,563 14,449,854 13,023,210
Operating gains
(losses)
Equity in net
income of
unconsolidated
joint venture, 1,471,214 1,377,485 5,094,664 4,929,337
and related
guaranteed
payments
Unrealized gains
(loss) on notes
receivable, 28,218 24,738 (2,900 ) 567,348
tribal
governments
Member agreement -- -- -- (2,147,327 )
modification
Impairment gain -- (727,567 ) -- (752,899 )
(loss)
1,499,432 674,656 5,091,764 2,596,459
Operating income 5,753,668 3,394,553 23,539,039 8,585,932
Other income
(expense)
Interest and 2,689 240,570 120,750 389,008
other income
Interest expense (47,402 ) 21,751 (58,368 ) (173,819 )
Income before 5,708,955 3,656,874 23,601,421 8,801,121
income taxes
Income taxes (1,371,409 ) (857,933 ) (5,739,430 ) (3,184,955 )
Net income 4,337,546 2,798,941 17,861,991 5,616,166
Income
attributable to
noncontrolling (2,384,993 ) (1,781,875 ) (10,192,744 ) (847,927 )
interest in
consolidated
joint venture
Net income
attributable to $ 1,952,553 $ 1,017,066 $ 7,669,247 $ 4,768,239
the Company
Net income
attributable to $ 0.11 $ 0.06 $ 0.43 $ 0.26
the Company per
common share
Weighted-average
number of common 18,007,681 18,001,681 18,005,390 18,025,326
shares
outstanding
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. The Company has a management agreement with the Nottawaseppi Huron Band of Potawatomi Indians for FireKeepers Casino in Battle Creek, Michigan with approximately 2,700 gaming devices, 78 table games and a 120-seat poker room. The FireKeepers Development Authority recently announced the development of a 242-room resort-style hotel including a special events center, a full service restaurant and an expanded bingo facility. For further information, go to www.FireKeepersCasino.com. 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 1,800 gaming devices, 40 table games, 10 poker tables, a 450-seat buffet, a fine dining restaurant, a 50-seat diner, a sports book and an entertainment lounge. For more information, go to www.harringtonraceway.com. In addition, Full House owns 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. For more information, please visit www.StockmansCasino.com.
Full House has entered into a contract to acquire the assets of the Grand Victoria Casino and Resort in Rising Sun, Indiana, subject to financing, regulatory approval and other standard conditions. The Grand Victoria has 40,000 square feet of gaming space with almost 1,400 slot and video poker machines and 37 table games. The property includes a 201-room hotel with spa, pool, meeting space and a pavilion with five food and beverage outlets, including a fine dining restaurant, buffet, sports bar, quick service restaurant and coffee shop and a large, multi-purpose Grand Theater for concerts and performance events as well as meetings and conventions. The 300-acre grounds also contain an 18-hole Scottish links golf course with full-service clubhouse. The property is conveniently located within driving distance of Indianapolis and Cincinnati, Ohio and near Lexington and Louisville, Kentucky. For more information on the Grand Victoria, please visit www.grandvictoria.com. Further information about Full House Resorts can be viewed on its website 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, including the ability to obtain and maintain a gaming license in Indiana, financing sources and terms, including receipt of funding under the Wells Fargo credit facility, integration of acquisitions, including the successful and timely closing of the Grand Victoria acquisition, competition and business conditions in the gaming industry, including the opening of the Gun Lake casino in Michigan, plans for other and new competition in Michigan, competition from Ohio casinos and any possible authorization of gaming in Kentucky. 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.
Source: Full House Resorts, Inc.
Released March 7, 2011