Full House Resorts Announces EPS of $0.12 and $0.32 for the Three and Nine Months Periods Ended September 30, 2010
LAS VEGAS--(BUSINESS WIRE)-- Full House Resorts (NYSE Amex US: FLL) today announced results for the three and nine-month periods ended September 30, 2010. Net income attributable to the Company for the three months ended September 30, 2010 was $2.2 million, or $0.12 per common share, compared to $3.0 million, or $0.17 per common share, in the prior-year period. Excluding a one-time favorable GEM member agreement entered into in the third quarter of 2009, net income per common share in the third quarter of 2009 was $0.12.
Third Quarter 2010 Highlights
-- Management fees for Gaming Entertainment (Michigan), LLC ("GEM"), a
50%-owned joint venture that manages FireKeepers Casino, were $6.5
million in the third quarter of 2010, versus management fees of $5.8
million for approximately two months of the third quarter 2009.
FireKeepers Casino opened August 5, 2009.
-- EBITDA, before unrealized gains on notes receivable, tribal governments
and other items net of RAM's share of GEM results, was $4.3 million
versus $3.7 million in the prior-year period.
-- As of September 30, 2010, Full House Resorts had $17.5 million in cash,
no outstanding debt and approximately $7.9 million of availability on
its revolving credit facility.
-- On September 13, 2010, Full House Resorts announced that it had entered
into definitive agreements with Grand Victoria Casino & Resort, LP to
acquire all of the operating assets of the Grand Victoria Casino &
Resort, located in Rising Sun, Indiana on the Ohio River. The purchase
price is $43 million, exclusive of estimated cage cash and net working
capital balances of $8 million and fees and expenses as of the closing
date. The Company anticipates applying approximately $19 million of cash
on hand to the purchase price and funding the balance with a debt
financing commitment received on October 29. The Company anticipates
regulatory approvals will be obtained to accommodate a closing in the
first quarter of 2011. In addition, the Company incurred approximately
$84,000 of expenses related to the acquisition and made a $500,000
purchase price deposit during the quarter.
"The third quarter of 2010 saw a couple of milestones for Full House, as we celebrated the one-year anniversary of the opening of FireKeepers, and announced our largest acquisition," said Andre Hilliou, Chairman and Chief Executive Officer of Full House. "We continue to be pleased by the excellent results we have seen at FireKeepers, with the casino generating approximately $24.6 million in management fees in its first year of operations. Through careful stewardship of our balance sheet, we were well positioned to sign the purchase agreements and obtain the financing commitments to acquire the Grand Victoria Resort & Casino. We are very excited to be adding the Grand Victoria to the Full House family, pending regulatory approvals, in the first quarter of 2011, and think it is exactly the type of property we have been seeking to increase long-term value for our shareholders."
Third Quarter 2010 Results
For the quarter ended September 30, 2010, Full House reported casino, food and beverage, and other revenue of $2.1 million, a decline of 2% 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 third quarter of 2010, Full House recorded GEM management fees of $6.5 million for FireKeepers Casino, compared to management fees of $5.8 million for approximately two months of the third quarter 2009. FireKeepers Casino opened on August 5, 2009.
Full House recorded equity in net income of unconsolidated joint venture and related guaranteed payments of $1.5 million, an increase of 5% from the prior-year period, which is in line with 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 third quarter 2010 were $3.6 million, an increase of 1% from the prior-year period. Project development costs increased due to the recently announced acquisition of the Grand Victoria Casino & Resort and amortization of contract rights increased related to FireKeepers Casino. Those increases were mostly offset by lower incentive compensation expense in the third quarter of 2010 as compared to the prior-year quarter.
Operating income for third quarter 2010 was $6.6 million, compared to operating income of $3.9 million in the prior-year period. EBITDA, net of RAM's share of GEM results, was $4.3 million versus $3.7 million in the prior-year period. The 2009 results included a GEM member agreement resulting in the recognition of a one-time net pre-tax gain of $1.4 million. The net pre-tax gain consists of a member agreement modification charge of $2.1 million, offset by a $3.5 million credit attributable to the non-controlling interest in GEM.
Full House reported third quarter net income attributable to the Company per common share of $0.12 for the three months ended September 30, 2010, as compared to $0.17 for the three months ended September 30, 2009. Exclusive of the one-time GEM agreement net gain of $0.05 per share, net income per common share in the third quarter 2009 would have been $0.12.
Nine Month 2010 Results
For the nine months ended September 30, 2010, Full House reported casino, food and beverage, and other revenue of $6.3 million, compared to revenue of $6.8 million in the prior-year period, 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 nine months ended September 30, 2010, Full House recorded GEM management fees of $18.7 million for FireKeepers Casino, compared to management fees of $5.8 million for most of August and all of September in 2009.
The Company recorded equity in net income of unconsolidated joint venture and related guaranteed payments of $3.6 million, an increase of 2% from the prior-year period. Management expects that 2010 full-year results for GED will be lower than the 5% guaranteed increase due to differences between calculation of guaranteed payments, timing of distributions and financial statement income.
Operating expenses for the nine months ended September 30, 2010 were $10.8 million compared to $9.3 million in the prior-year period, 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 nine months ended September 30, 2010 was $17.8 million, compared to operating income of $5.2 million in the prior-year period. EBITDA, net of RAM's share of GEM results, was $11.3 million versus $5.4 million in the prior-year period. The 2009 results include a one-time GEM member agreement modification charge of $2.1 million as explained previously.
The Company reported net income attributable to the Company per common share of $0.32 and $0.21 for the nine months ended September 30, 2010 and 2009, respectively. Exclusive of the one-time GEM agreement net gain of $0.05 per share, net income per common share for the first nine months of 2009 would have been $0.16.
Liquidity and Capital Resources
As of September 30, 2010, Full House had $17.5 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 September 30, 2010.
In March, Full House began collecting payment on the remaining $3.1 million it was due from GEM. As of August 2010, the Company had been fully repaid by GEM.
At the end of October, the Company executed a credit agreement and obtained financing commitments for the Grand Victoria acquisition. In addition, the Company made an additional purchase price deposit of $4.5 million toward the acquisition and paid fees related to the financing of approximately $1.8 million, which will be capitalized as deferred financing fees in the fourth quarter.
In May 2010, Full House Resorts announced that its Board of Directors authorized a program to repurchase up to $1 million worth of shares of the Company's common stock. The plan expires on December 31, 2010, does not obligate the Company to acquire any particular amount of common stock and may be suspended at any time at the Company's discretion. As of November 5, the Company has not repurchased any shares.
Conference Call Information
The Company will host a conference call and webcast today at 4:30 p.m. EST. 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 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 4378444.
Selected unaudited Statements of Operations data for the three months ended September 30,
2010 Casino Operations Development/ Corporate Consolidated
Management
Revenues $ 2,032,056 $ 6,604,204 $ - $ 8,636,260
Selling,
general and 428,937 191,985 926,933 1,547,855
administrative
expense
Depreciation
and 237,302 593,197 25,374 855,873
amortization
Operating gains -- 1,531,900 -- 1,531,900
Operating 309,666 7,350,922 (1,100,617 ) 6,559,971
income (loss)
Net income
(loss) 206,600 2,758,909 (728,547 ) 2,236,962
attributable to
Company
2009 Casino Operations Development/ Corporate Consolidated
Management
Revenues $ 2,164,316 $ 5,753,167 $ - $ 7,917,483
Selling,
general and 436,448 138,400 1,181,343 1,756,191
administrative
expense
Depreciation
and 240,039 399,886 22,285 662,210
amortization
Operating gains -- (434,042 ) -- (434,042 )
(loss)
Operating 437,289 4,758,586 (1,289,499 ) 3,906,376
income (loss)
Net income
(loss) 288,860 3,616,670 (857,522 ) 3,048,008
attributable to
Company
Selected unaudited Statements of Operations data for the nine months ended September 30,
2010 Casino Operations Development/ Corporate Consolidated
Management
Revenues $ 6,221,049 $ 18,784,908 $ - $ 25,005,957
Selling, general
and 1,289,763 593,200 2,946,947 4,829,910
administrative
expense
Depreciation and 723,375 1,779,586 73,888 2,576,849
amortization
Operating gains -- 3,592,332 -- 3,592,332
Operating income 1,085,475 20,003,113 (3,303,217 ) 17,785,371
(loss)
Net income (loss)
attributable to 719,436 7,177,779 (2,180,521 ) 5,716,694
Company
2009 Casino Operations Development/ Corporate Consolidated
Management
Revenues $ 6,849,056 $ 5,753,167 $ - $ 12,602,223
Selling, general
and 1,285,006 394,873 3,125,280 4,805,159
administrative
expense
Depreciation and 743,701 426,836 63,206 1,233,743
amortization
Operating gains -- 1,921,803 -- 1,921,803
Operating income 1,665,741 6,802,654 (3,277,016 ) 5,191,379
(loss)
Net income (loss)
attributable to 1,099,268 4,850,661 (2,198,756 ) 3,751,173
Company
Reconciliation of EBITDA before unrealized gains on notes receivable, tribal governments, and other items for the three months ended September 30,
Reconciliation of EBITDA and Other Items
Net of Non-Controlling
Interest
Quarter Development
ended Casino / Corporate Consolidated GEM 50% Development / Consolidated
September Operations Management Management
30, 2010
Operating
income $ 309,666 $ 7,350,922 $ (1,100,617 ) $ 6,559,971 $ 5,948,862 $ 2,974,431 $ 4,376,491 $ 3,585,540
(loss)
Add Back:
Grand
Victoria - 84,072 - 84,072 - - 84,072 84,072
expenses
Depreciation
and 237,302 593,197 25,374 855,873 431,168 215,584 377,613 640,289
amortization
$ 546,968 $ 8,028,191 $ (1,075,243 ) $ 7,499,916 $ 6,380,030 $ 3,190,015 $ 4,838,176 $ 4,309,901
Net of Non-Controlling
Interest
Quarter Development
ended Casino / Corporate Consolidated GEM 50% Development / Consolidated
September Operations Management Management
30, 2009
Operating
income $ 437,289 $ 4,758,586 $ (1,289,499 ) $ 3,906,376 $ (1,531,697 ) $ (765,849 ) $ 5,524,435 $ 4,672,225
(loss)
Add Back:
Member - 2,147,327 - 2,147,327 7,046,833 3,523,417 (1,376,090 ) (1,376,090 )
modification
Depreciation
and 240,039 399,886 22,285 662,210 287,494 143,747 256,139 518,463
amortization
Deduct:
Unrealized
gain on
notes - 248,641 - 248,641 201,874 100,937 147,704 147,704
receivable,
tribal
governments
Impairment - 4,669 - 4,669 - - 4,669 4,669
adjustment
$ 677,328 $ 7,052,489 $ (1,267,214 ) $ 6,462,603 $ 5,600,756 $ 2,800,378 $ 4,252,111 $ 3,662,225
Reconciliation of EBITDA before unrealized gains on notes receivable, tribal governments, and other items for the nine months ended September 30,
Reconciliation of EBITDA and Other Items
Net of Non-Controlling
Interest
Year-to-Date Development
ended Casino / Corporate Consolidated GEM 50% Development / Consolidated
September Operations Management Management
30, 2010
Operating
income $ 1,085,475 $ 20,003,113 $ (3,303,217 ) $ 17,785,371 $ 16,995,136 $ 8,497,568 $ 11,505,545 $ 9,287,803
(loss)
Add Back:
Grand
Victoria - 84,072 - 84,072 - - 84,072 84,072
expenses
Unrealized
loss on
notes - 31,118 - 31,118 - - 31,118 31,118
receivable,
tribal
governments
Depreciation
and 723,375 1,779,586 73,888 2,576,849 1,293,506 646,753 1,132,833 1,930,096
amortization
$ 1,808,850 $ 21,897,889 $ (3,229,329 ) $ 20,477,410 $ 18,288,642 $ 9,144,321 $ 12,753,568 $ 11,333,089
Net of Non-Controlling
Interest
Year-to-Date Development
ended Casino / Corporate Consolidated GEM 50% Development / Consolidated
September Operations Management Management
30, 2009
Operating
income $ 1,665,741 $ 6,802,654 $ (3,277,016 ) $ 5,191,379 $ (1,428,690 ) $ (714,345 ) $ 7,516,999 $ 5,905,724
(loss)
Add Back:
Impairment - 25,332 - 25,332 - - 25,332 25,332
Member - 2,147,327 - 2,147,327 7,046,833 3,523,417 (1,376,090 ) (1,376,090 )
modification
Depreciation
and 743,701 426,836 63,206 1,233,743 287,783 143,892 282,944 1,089,851
amortization
Deduct:
Unrealized
gain on
notes - 542,610 - 542,610 585,418 292,709 249,901 249,901
receivable,
tribal
governments
$ 2,409,442 $ 8,859,539 $ (3,213,810 ) $ 8,055,171 $ 5,320,508 $ 2,660,255 $ 6,199,284 $ 5,394,916
FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months Nine months
ended September 30, ended September 30,
2010 2009 2010 2009
Revenues
Casino $ 1,576,780 $ 1,703,289 $ 4,863,779 $ 5,458,520
Food and 437,568 442,224 1,300,013 1,331,848
beverage
Management fees 6,518,898 5,753,167 18,699,602 5,753,167
Other 103,014 18,803 142,563 58,688
8,636,260 7,917,483 25,005,957 12,602,223
Operating costs
and expenses
Casino 537,719 558,702 1,621,101 1,698,096
Food and 518,432 491,838 1,501,336 1,456,511
beverage
Project
development 148,310 108,124 283,722 139,138
costs
Selling, general
and 1,547,855 1,756,191 4,829,910 4,805,159
administrative
Depreciation and 855,873 662,210 2,576,849 1,233,743
amortization
3,608,189 3,577,065 10,812,918 9,332,647
Operating gains
(losses)
Equity in net
income of
unconsolidated
joint venture, 1,531,900 1,459,975 3,623,450 3,551,852
and related
guaranteed
payments
Unrealized gains
(loss) on notes
receivable, -- 248,641 (31,118 ) 542,610
tribal
governments
Member agreement -- (2,147,327 ) -- (2,147,327 )
modification
Impairment gain -- 4,669 -- (25,332 )
(loss)
1,531,900 (434,042 ) 3,592,332 1,921,803
Operating income 6,559,971 3,906,376 17,785,371 5,191,379
Other income
(expense)
Interest and 3,776 112,848 118,061 148,438
other income
Interest expense (3,655 ) (48,408 ) (10,966 ) (195,570 )
Income before 6,560,092 3,970,816 17,892,466 5,144,247
income taxes
Income taxes (1,599,610 ) (1,735,797 ) (4,368,021 ) (2,327,022 )
Net income 4,960,482 2,235,019 13,524,445 2,817,225
(Income) loss
attributable to
noncontrolling (2,723,520 ) 812,989 (7,807,751 ) 933,948
interest in
consolidated
joint venture
Net income
attributable to $ 2,236,962 $ 3,048,008 $ 5,716,694 $ 3,751,173
the Company
Net income
attributable to $ 0.12 $ 0.17 $ 0.32 $ 0.21
the Company per
common share
Weighted-average
number of common 18,007,681 18,001,681 18,004,615 18,033,323
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. 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, 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 November 8, 2010