Full House Resorts Announces Three and Six-Month Results for the Period Ended June 30, 2013
LAS VEGAS--(BUSINESS WIRE)-- Full House Resorts (NASDAQ: FLL) today announced results for the three-month and six-month periods ended June 30, 2013. Net income (loss) attributable to the Company for the three months ended June 30, 2013 was near break-even or $0.00 per common share, compared to net income of $0.7 million, or $0.04 per common share, in the prior-year period. Excluding a $0.4 million gain on the sale of the Company’s interest in Gaming Entertainment (Michigan), LLC (“GEM”), and its FireKeepers management agreement and Silver Slipper related acquisition costs in the second quarter of 2012, the Company would have reported net income attributable to the Company per common share of $0.03 for the three months ended June 30, 2012.
Second Quarter 2013 Highlights
- Adjusted EBITDA, as defined below, for the second quarter of 2013 was $4.4 million versus $2.9 million in the prior-year period.
- At its Silver Slipper Casino in Hancock County, Mississippi for the second quarter 2013, the Company recorded revenue of $13.4 million and adjusted EBITDA of $2.5 million. The Silver Slipper Casino was acquired on October 1, 2012.
- At its Rising Star Casino Resort for the second quarter 2013, the Company recorded revenue of $17.8 million compared to revenue of $22.3 million in the prior-year quarter due to increased competition from recently opened Ohio casinos. Rising Star adjusted EBITDA for the second quarter 2013 was $1.8 million versus $2.8 million in the prior-year quarter.
- Northern Nevada casino revenue for the second quarter of 2013 was $5.2 million, comparable with the prior-year period. Adjusted EBITDA for the second quarter 2013 was $1.1 million, an increase from $1.0 million in the prior-year period.
- In April 2013, the Company announced that its lease with an affiliate of Hyatt Hotels Corporation for the Grand Lodge Casino at Hyatt Regency Lake Tahoe Resort, Spa and Casino in Incline Village, Nevada has been extended and is now scheduled to expire on August 31, 2018. All other terms of the lease remain unchanged.
- As of June 30, 2013, Full House Resorts had $22.8 million in cash and $66.3 million in outstanding debt on its balance sheet.
- On August 2, 2013, the Company received a commitment for a $10.0 million loan from its first lien facility lenders led by Capital One. The terms and conditions of the commitment, subject to completion of loan documentation, are: the First Lien Credit Agreement (1) will be increased by $10.0 million; (2) interest rate will be lowered by 1.0%; (3) will be extended to a new maturity date of June 29, 2016; and (4) certain financial ratio covenants will be revised to accommodate the additional extension of credit. The new First Lien Credit Agreement contracts are currently being drafted. The proceeds will be used to fund a portion of the $17.5 million construction of a 140-room hotel at the Company’s Silver Slipper property. The remaining $7.5 million of the construction will be funded from available cash. The Company anticipates closing the loan, signing construction contracts, and giving a notice-to-proceed within the next 30 days, and estimates that construction will take approximately one year from ground-breaking.
“Despite increased competition and a stagnant economy, our casinos continued to perform well in the second quarter,” said Andre Hilliou, Chairman and Chief Executive Officer of Full House. “In terms of new development, construction on the new third-party hotel adjacent to Rising Star remains on schedule, and we expect it to provide a boost to Rising Star upon its opening in the fourth quarter of this year. In addition, we continue to move forward on a much-needed hotel at our Silver Slipper property and expect to finalize financing and commence construction within the next 30 days. Our goal of building Full House into a locals-oriented regional casino company remains strong and we continue to evaluate opportunities to achieve this end in a measured and conservative manner.”
Second Quarter 2013 Results
For the quarter ended June 30, 2013, the Company reported total revenue of $36.7 million, up from $27.8 million in the prior-year period, primarily due to the addition of the Silver Slipper Casino on October 1, 2012 and partially offset by a $4.5 million decline in revenue from the Rising Star Casino Resort due to increased competition.
Operating expenses for the second quarter 2013 were $34.7 million compared to $26.9 million in the prior-year period. The increase was primarily due to the addition of the Silver Slipper Casino and partially offset by $4.0 million of cost reductions at Rising Star. The Company also recorded stock compensation expense of $0.2 million in the second quarter of 2013, compared to $0.3 million in the second quarter of 2012.
Adjusted EBITDA, as defined below, was $4.4 million for the second quarter of 2013 versus $2.9 million in the prior-year period.
Net income (loss) for the second quarter 2013 was near break-even or $0.00 per common share, compared to net income of $0.7 million, or $0.04 per common share, in the prior-year period. Current year results include $1.9 million of interest costs related to the credit facilities used to acquire the Silver Slipper Casino. During the second quarter of 2012, the Company had no debt and therefore no interest expense. Excluding a $0.4 million gain on the sale of the Company’s interest in GEM and its FireKeepers management agreement and Silver Slipper related acquisition costs in the second quarter of 2012, the Company would have reported net income attributable to the Company per common share of $0.03 for the three months ended June 30, 2012.
Six Month 2013 Results
For the six months ended June 30, 2013, Full House reported total revenue of $75.8 million, compared to total revenue of $61.2 million in the prior-year period, primarily as a result of the addition of the Silver Slipper Casino on October 1, 2012. The prior-year period’s total revenue included approximately $5.3 million in management fees from GEM, which the Company sold in March 2012.
Operating expenses for the six months ended June 30, 2013 were $70.7 million compared to $54.6 million in the prior-year period, primarily due to the addition of the Silver Slipper Casino. The Company also recorded $0.6 million of stock compensation expense in both the six-month periods ended June 30, 2013 and 2012, respectively.
Operating income for the six months ended June 30, 2013 was $5.1 million, compared to operating income of $47.7 million in the prior-year period, due to a $41.2 million gain in the prior-year period on sale of joint venture, related to the sale in March 2012 of the Company’s interest in GEM and the FireKeepers management agreement. Excluding the gain on sale, operating income for the six months ended June 30, 2012 would have been $6.5 million.
Adjusted EBITDA, as defined below, was $10.1 million versus $8.1 million, net of non-controlling interest, in the prior-year period; excluding GEM, adjusted EBITDA in the prior-year period would have been $5.5 million.
In addition, current year results include $3.8 million of interest costs related to the credit facilities used to acquire the Silver Slipper Casino. During the first six months of 2012 the Company extinguished all of its debt at the end of the first quarter and therefore had interest expense of $0.7 million.
The Company reported net income attributable to the Company per common share of $0.03 and $1.42 for the six months ended June 30, 2013 and 2012, respectively. Excluding the $41.2 million gain on sale of joint venture, a $1.7 million pre-tax loss on debt extinguishment and $0.4 million of transaction costs for the six months ended June 30, 2012, net income attributable to the Company per common share would have been $0.06 for the six months ended June 30, 2012.
Liquidity and Capital Resources
As of June 30, 2013, Full House had $22.8 million in cash and $66.3 million in outstanding debt on its balance sheet. The Company made its July 1st and October 1st scheduled first lien amortization payments ahead of schedule and has no required amortization payments until January 1, 2014.
Conference Call Information
The Company will host a conference call and webcast on Thursday, August 8, 2013 at 11:00 AM EDT.
The conference call can be accessed live over the phone by dialing 888-438-5491 or for international callers by dialing 1-719-325-2177. A replay will be available two hours after the call and can be accessed by dialing 877-870-5176 or for international callers by dialing 1-858-384-5517; the passcode is 8077527. The replay will be available until Thursday, August 15, 2013. The conference call can also be accessed live by webcast from the Company’s website at www.fullhouseresorts.com under the investor relations section.
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Selected unaudited Statements of Operations data for the three months ended June 30 (in thousands), |
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| Casino Operations | ||||||||||||||||||||||||||||
| Development/ | ||||||||||||||||||||||||||||
| 2013 | Nevada | Midwest | Gulf Coast | Management | Corporate | Consolidated | ||||||||||||||||||||||
| Revenues | $ | 5,203 | $ | 17,798 | $ | 13,370 | $ | 333 | $ | - | $ | 36,704 | ||||||||||||||||
| Selling, general & administrative expense | 1,513 | 4,369 | 4,689 | - | 1,535 | 12,106 | ||||||||||||||||||||||
| Depreciation & amortization | 177 | 726 | 1,292 | - | 3 | 2,198 | ||||||||||||||||||||||
| Operating income (loss) | 948 | 1,044 | 1,235 | 336 | (1,537 | ) | 2,026 | |||||||||||||||||||||
| Net income (loss) attributable to the Company | 626 | 672 | 800 | 116 | (2,256 | ) | (42 | ) | ||||||||||||||||||||
| Casino Operations | ||||||||||||||||||||||||||||
| Development/ | ||||||||||||||||||||||||||||
| 2012 | Nevada | Midwest | Gulf Coast | Management | Corporate | Consolidated | ||||||||||||||||||||||
| Revenues | $ | 5,179 | $ | 22,261 | $ | - | $ | 400 | $ | - | $ | 27,840 | ||||||||||||||||
| Selling, general & administrative expense | 1,570 | 4,645 | - | - | 1,497 | 7,712 | ||||||||||||||||||||||
| Depreciation & amortization | 247 | 1,274 | - | - | 2 | 1,523 | ||||||||||||||||||||||
| Operating gains | - | - | - | 438 | - | 438 | ||||||||||||||||||||||
| Operating income (loss) | 723 | 1,536 | - | 749 | (1,585 | ) | 1,423 | |||||||||||||||||||||
| Net income (loss) attributable to the Company | 476 | 1,450 | - | (150 | ) | (1,044 | ) | 732 | ||||||||||||||||||||
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Selected unaudited Statements of Operations data for the six months ended June 30 (in thousands), |
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| Casino Operations | ||||||||||||||||||||||||||
| Development/ | ||||||||||||||||||||||||||
| 2013 | Nevada | Midwest | Gulf Coast | Management | Corporate | Consolidated | ||||||||||||||||||||
| Revenues | $ | 10,528 | $ | 37,412 | $ | 27,080 | $ | 810 | $ | - | $ | 75,830 | ||||||||||||||
| Selling, general & administrative expense | 2,997 | 8,774 | 9,295 | - | 3,274 | 24,340 | ||||||||||||||||||||
| Depreciation & amortization | 357 | 1,473 | 2,573 | - | 5 | 4,408 | ||||||||||||||||||||
| Operating income (loss) | 1,908 | 2,999 | 2,737 | 771 | (3,278 | ) | 5,137 | |||||||||||||||||||
| Net income (loss) attributable to the Company | 1,260 | 1,637 | 1,790 | 497 | (4,650 | ) | 534 | |||||||||||||||||||
| Casino Operations | ||||||||||||||||||||||||||
| Development/ | ||||||||||||||||||||||||||
| 2012 | Nevada | Midwest | Gulf Coast | Management | Corporate | Consolidated | ||||||||||||||||||||
| Revenues | $ | 10,065 | $ | 44,892 | $ | - | $ | 6,209 | $ | - | $ | 61,166 | ||||||||||||||
| Selling, general & administrative expense | 3,137 | 9,662 | - | 136 | 3,338 | 16,273 | ||||||||||||||||||||
| Depreciation & amortization | 488 | 2,302 | - | 593 | 5 | 3,388 | ||||||||||||||||||||
| Operating gains | - | - | - | 41,200 | - | 41,200 | ||||||||||||||||||||
| Operating income (loss) | 1,081 | 3,599 | - | 46,560 | (3,494 | ) | 47,746 | |||||||||||||||||||
| Net income (loss) attributable to the Company | 709 | 412 | - | 29,959 | (4,499 | ) | 26,581 | |||||||||||||||||||
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Reconciliation of adjusted EBITDA for the three months ended June 30 (in thousands), |
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| Casino Operations | |||||||||||||||||||||||||||
| Development / | |||||||||||||||||||||||||||
| 2013 | Nevada | Midwest | Gulf Coast | Management | Corporate | Consolidated | |||||||||||||||||||||
| Operating income (loss) | $ | 948 | $ | 1,044 | $ | 1,235 | $ | 336 | $ | (1,537 | ) | $ | 2,026 | ||||||||||||||
| Add Back: | |||||||||||||||||||||||||||
| Stock Compensation | - | - | - | - | 208 | 208 | |||||||||||||||||||||
| Silver Slipper acquisition costs expensed | - | - | - | (10 | ) | - | (10 | ) | |||||||||||||||||||
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Depreciation and amortization |
177 | 726 | 1,292 | - | 3 | 2,198 | |||||||||||||||||||||
| Adjusted EBITDA | $ | 1,125 | $ | 1,770 | $ | 2,527 | $ | 326 | $ | (1,326 | ) | $ | 4,422 | ||||||||||||||
| Casino Operations | |||||||||||||||||||||||||||
| Development / | |||||||||||||||||||||||||||
| 2012 | Nevada | Midwest | Gulf Coast | Management | Corporate | Consolidated | |||||||||||||||||||||
| Operating income (loss) | $ | 723 | $ | 1,536 | $ | - | $ | 749 | $ | (1,585 | ) | $ | 1,423 | ||||||||||||||
| Add Back: | |||||||||||||||||||||||||||
| Stock Compensation | - | - | - | - | 310 | 310 | |||||||||||||||||||||
| Silver Slipper acquisition costs expensed | - | - | - | 89 | - | 89 | |||||||||||||||||||||
| Depreciation and amortization | 247 | 1,274 | - | - | 2 | 1,523 | |||||||||||||||||||||
| Gain (Loss) on sale of joint venture | - | - | - | (438 | ) | - | (438 | ) | |||||||||||||||||||
| Adjusted EBITDA | $ | 970 | $ | 2,810 | $ | - | $ | 400 | $ | (1,273 | ) | $ | 2,907 | ||||||||||||||
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Certain minor reclassifications in prior year balances have been made to conform to the current presentation, which had no effect on previously reported net income.
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Reconciliation of adjusted EBITDA for the six months ended June 30 (in thousands), |
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| Casino Operations | ||||||||||||||||||||||||||||||||||||||||||||||
| Gulf | Development/ | |||||||||||||||||||||||||||||||||||||||||||||
| 2013 | Nevada | Midwest | Coast | Management | Corporate | Consolidated | ||||||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 1,908 | $ | 2,999 | $ | 2,737 | $ | 771 | $ | (3,278 | ) | $ | 5,137 | |||||||||||||||||||||||||||||||||
| Add Back: | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock Compensation | - | - | - | - | 551 | 551 | ||||||||||||||||||||||||||||||||||||||||
| Silver Slipper acquisition costs expensed | - | - | - | (9 | ) | - | (9 | ) | ||||||||||||||||||||||||||||||||||||||
| Kentucky Project costs expensed | - | - | - | 33 | - | 33 | ||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 357 | 1,473 | 2,573 | - | 5 | 4,408 | ||||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 2,265 | $ | 4,472 | $ | 5,310 | $ | 795 | $ | (2,722 | ) | $ | 10,120 | |||||||||||||||||||||||||||||||||
| Casino Operations |
Net of Non-Controlling Interest |
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| Gulf | Development/ | Development/ | ||||||||||||||||||||||||||||||||||||||||||||
| 2012 | Nevada | Midwest | Coast | Management | Corporate | Consolidated | GEM | 50 | % | Management | Consolidated | |||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 1,081 | $ | 3,599 | $ | - | $ | 46,560 | $ | (3,494 | ) | $ | 47,746 | $ | 4,773 | 2,387 | $ | 44,173 | $ | 45,359 | ||||||||||||||||||||||||||
| Add Back: | ||||||||||||||||||||||||||||||||||||||||||||||
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Silver Slipper acquisition costs expensed |
- | - | - | 121 | - | 121 | - | - | 121 | 121 | ||||||||||||||||||||||||||||||||||||
| Stock Compensation | - | - | - | - | 621 | 621 | - | - | - | 621 | ||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 488 | 2,302 | - | 593 | 5 | 3,388 | 431 | 216 | 378 | 3,172 | ||||||||||||||||||||||||||||||||||||
| Deduct: | ||||||||||||||||||||||||||||||||||||||||||||||
| Gain (Loss) on sale of joint venture | - | - | - | (41,200 | ) | - | (41,200 | ) | - | - | (41,200 | ) | (41,200 | ) | ||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 1,569 | $ | 5,901 | $ | - | $ | 6,074 | $ | (2,868 | ) | $ | 10,676 | $ | 5,204 | $ | 2,603 | $ | 3,472 | $ | 8,073 | |||||||||||||||||||||||||
Certain minor reclassifications in prior year balances have been made to conform to the current presentation, which had no effect on previously reported net income.
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FULL HOUSE RESORTS, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) |
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Three months
ended June 30, |
Six months
ended June 30, |
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| 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
| Revenues | |||||||||||||||||||
| Casino | $ | 33,278 | $ | 25,352 | $ | 69,070 | $ | 51,068 | |||||||||||
| Food and beverage | 2,100 | 1,415 | 4,246 | 2,742 | |||||||||||||||
| Hotel | 160 | 135 | 287 | 251 | |||||||||||||||
| Management fees | 333 | 400 | 810 | 6,210 | |||||||||||||||
| Other operations | 833 | 538 | 1,417 | 895 | |||||||||||||||
| 36,704 | 27,840 | 75,830 | 61,166 | ||||||||||||||||
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Operating costs and expenses |
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Casino |
16,885 | 14,551 | 34,935 | 29,322 | |||||||||||||||
| Food and beverage | 1,985 | 1,409 | 4,060 | 2,584 | |||||||||||||||
| Hotel | 161 | 148 | 291 | 293 | |||||||||||||||
| Other operations | 1,347 | 1,337 | 2,620 | 2,489 | |||||||||||||||
| Project development and acquisition costs | (4 | ) | 175 | 39 | 271 | ||||||||||||||
| Selling, general and administrative | 12,106 | 7,712 | 24,340 | 16,273 | |||||||||||||||
| Depreciation and amortization | 2,198 | 1,523 | 4,408 | 3,388 | |||||||||||||||
| 34,678 | 26,855 | 70,693 | 54,620 | ||||||||||||||||
| Operating gains | |||||||||||||||||||
| Gain on sale of joint venture | -- | 438 | -- | 41,200 | |||||||||||||||
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Operating income |
2,026 | 1,423 | 5,137 | 47,746 | |||||||||||||||
| Other (expense) income | |||||||||||||||||||
| Interest expense | (1,883 | ) | -- | (3,768 | ) | (733 | ) | ||||||||||||
| Gain on derivative instrument | -- | -- | - | 8 | |||||||||||||||
| Other (expense) income, net | (18 | ) | 2 | (21 | ) | 6 | |||||||||||||
| Loss on extinguishment of debt | -- | -- | -- | (1,719 | ) | ||||||||||||||
| Other (expense) income, net | (1,901 | ) | 2 | (3,789 | ) | (2,438 | ) | ||||||||||||
| Income before income taxes | 125 | 1,425 | 1,348 | 45,308 | |||||||||||||||
| Income tax expense | 167 | 693 | 814 | 16,546 | |||||||||||||||
| Net (loss) income | (42 | ) | 732 | 534 | 28,762 | ||||||||||||||
| Income attributable to non-controlling interest in consolidated joint venture | -- | -- | -- | (2,181 | ) | ||||||||||||||
| Net (loss) income attributable to the Company | $ | (42 | ) | $ | 732 | $ | 534 | $ | 26,581 | ||||||||||
| Net (loss) income attributable to the Company per common share | $ | 0.00 | $ | 0.04 | $ | 0.03 | $ | 1.42 | |||||||||||
| Weighted-average number of common shares outstanding | 18,732,748 | 18,677,081 | 18,727,325 | 18,675,372 | |||||||||||||||
About Full House Resorts, Inc.
Full House owns, develops and manages gaming facilities. The Company owns the Rising Star Casino Resort in Rising Sun, Indiana. The Rising Star Casino has 40,000 square feet of gaming space with almost 1,300 slot and video poker machines and 37 table games. The property includes a 190-room hotel, a pavilion with five food and beverage outlets, an 18-hole Scottish links golf course and a large, multi-purpose Grand Theater for concerts and performance events as well as meetings and conventions. The Company acquired the Silver Slipper Casino in Hancock County, Mississippi on October 1, 2012, which has 37,000 square feet of gaming space with almost 1,000 slot and video poker machines, 26 table games, a poker room and the only live Keno game on the Gulf Coast. The property includes a fine dining restaurant, buffet, quick service restaurant and two casino bars. Full House also owns Stockman’s Casino in Fallon, Nevada and operates the Grand Lodge Casino at Hyatt Regency Lake Tahoe Resort, Spa and Casino in Incline Village, Nevada on the north shore of Lake Tahoe under a lease agreement (expiring on August 31, 2018) with an affiliate of Hyatt Hotels Corporation. In addition, the Company has a management agreement with the Pueblo of Pojoaque for the operations of the Buffalo Thunder Casino and Resort in Santa Fe, New Mexico along with the Pueblo’s Cities of Gold and Sports Bar casino facilities.
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 maintain a gaming license in Indiana, Nevada and Mississippi, financing sources and terms, integration of acquisitions, competition and business conditions in the gaming industry, including 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.
Full House Resorts, Inc.
Mark Miller, 702-221-7800
Chief
Operating Officer
www.fullhouseresorts.com
or
ICR
William
R. Schmitt, 203-682-8200
investors@fullhouseresorts.com
Source: Full House Resorts
Released August 8, 2013