Full House Resorts Announces Three-Month Results for the Period Ended March 31, 2014
LAS VEGAS--(BUSINESS WIRE)-- Full House Resorts (NASDAQ:FLL) (“the Company”) today announced results for the three-month period ended March 31, 2014. Net loss for the three months ended March 31, 2014 was $1.1 million, or $0.06 per common share, compared to net income of $0.6 million, or $0.03 per common share, in the prior-year period.
First Quarter 2014 Highlights
- Adjusted EBITDA, as defined below, for the first quarter of 2014 was $2.5 million versus $5.7 million in the prior-year period.
- At its Silver Slipper Casino in Hancock County, Mississippi for the first quarter 2014, the Company recorded revenue of $12.3 million compared to revenue of $13.7 million in the prior-year period primarily due to severe weather conditions. Silver Slipper adjusted EBITDA for the first quarter 2014 was $2.1 million versus $2.8 million in the prior-year period with an estimated $0.6 million of the adjusted EBITDA decline due to unusually cold and icy weather.
- At its Rising Star Casino Resort for the first quarter 2014, the Company recorded revenue of $13.2 million compared to revenue of $19.6 million in the prior-year period, primarily due to increased competition from Ohio’s casinos and inclement weather. Rising Star adjusted EBITDA for the first quarter 2014 was $0.6 million versus $2.7 million in the prior-year period, with an estimated $1.4 million of the adjusted EBITDA decline due to unusually cold and snowy weather.
- Northern Nevada revenue for the first quarter of 2014 was $4.4 million compared to $5.3 million in the prior-year period. Adjusted EBITDA for the first quarter 2014 was $0.4 million, compared with $1.1 million in the prior-year period.
- On March 21, 2014, the Company entered into a definitive agreement with The Majestic Star Casino LLC (“Majestic Star”) to acquire all of the outstanding membership interests of the entity operating Fitzgerald’s Casino in Tunica, Mississippi. The closing of the agreement is subject to the completion of financing, licensing, and other customary conditions. On May 7, 2014 the Company informed Majestic Star of the Company’s financing efforts and its belief that the Company will not likely be successful in obtaining financing for the purchase of Majestic Mississippi, LLC. As a result, we have requested Majestic Star consider termination of the agreement.
“Our first quarter 2014 performance was impacted by unusually extreme weather conditions across the country, increased competition and soft consumer trends,” said Andre Hilliou, Chairman and Chief Executive Officer of Full House. “Although we experienced several challenges during the quarter, we are excited about the potential for growth with our upcoming projects, including our relationship with Keeneland Association, Inc. to secure and develop potential instant racing opportunities in the Commonwealth of Kentucky. We are delighted that Keeneland has selected us as the operator of its to-be constructed historical instant racing facility at their Lexington, Kentucky location. We, together, with Keeneland are in the process of finalizing the management agreement and obtaining the requisite approvals. In addition, we continue working with Keeneland to pursue our proposed development near Corbin, Kentucky which will cater to the Knoxville, Tennessee market. We also remain focused on further improving our existing properties, implementing strategic cost containment measures without sacrificing customer service and continuing to build Full House as a locals-oriented regional casino company.”
First Quarter 2014 Results
For the quarter ended March 31, 2014, the Company reported total revenue of $30.4 million, down from $39.1 million in the prior-year period. The decrease was primarily due to a $6.4 million decline in revenue from the Rising Star Casino Resort resulting from inclement weather and increased competition in Ohio.
Operating expenses for the first quarter 2014 were $30.5 million compared to $36.0 million in the prior-year period. The decrease was primarily due to $4.2 million in cost reductions at the Rising Star Casino and $0.6 million of cost reductions at the Silver Slipper Casino.
Adjusted EBITDA, as defined below, was $2.5 million for the first quarter of 2014 versus $5.7 million in the prior-year period.
Net loss for the first quarter 2014 was $1.1 million, or $0.06 per common share, compared to net income of $0.6 million, or $0.03 per common share, in the prior-year period.
Projects
The six-story $17.7 million 142 room Silver Slipper Hotel in Mississippi is under construction and is expected to open by early 2015. The Company anticipates the hotel will favorably impact customer loyalty and financial performance by allowing guests to extend their visits at Silver Slipper Casino.
Full House, together with Keeneland Association, Inc., is currently pursuing potential opportunities in Kentucky, including the installation of instant racing machines at racetrack properties. On February 26, 2014, the Company entered into an exclusivity agreement with Keeneland Association, Inc. to own, manage, and operate instant racing and, if authorized, traditional casino gaming at race tracks in Kentucky, subject to completion of definitive documents for each opportunity. In addition, the Company and Keeneland Association, Inc. have a letter of intent that provides for an exclusive option to purchase the Thunder Ridge Raceway in Prestonsburg, Kentucky. The purchase will be subject to the completion of definitive documentation and to the approval of the Kentucky Horse Racing Commission, including the approval to transfer the racing license to a yet to-be constructed quarter horse racetrack near Corbin, Kentucky to be owned 75% by Full House and 25% by Keeneland Association, Inc. The Corbin facility will serve the Knoxville, Tennessee area.
Liquidity and Capital Resources
As of March 31, 2014, the Company had $14.5 million in cash and $59.5 million in first and second lien debt.
Conference Call Information
The Company will host a conference call and webcast today at 8:00 AM EDT.
The conference call can be accessed live over the phone by dialing 888-504-7963 or for international callers by dialing 1-719-325-2454. 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 5638037. The replay will be available until Thursday, May 22, 2014. The conference call can also be accessed live by webcast from the Company’s website at www.fullhouseresorts.com under the investor relations section.
|
Selected unaudited Statements of Operations data for the three months ended March 31 (in thousands), |
||||||||||||||||||||||||
| Casino Operations | ||||||||||||||||||||||||
|
2014 |
Northern Nevada |
Midwest | Gulf Coast |
Development/ Management |
Corporate | Consolidated | ||||||||||||||||||
| Revenues | $ | 4,387 | $ | 13,248 | $ | 12,321 | $ | 493 | $ | - | $ | 30,449 | ||||||||||||
| Selling, general & administrative expense | 1,448 | 3,884 | 4,126 | - | 1,172 | 10,630 | ||||||||||||||||||
| Depreciation & amortization | 217 | 847 | 1,386 | - | 5 | 2,455 | ||||||||||||||||||
| Operating income (loss) | 148 | (250 | ) | 751 | 438 | (1,177 | ) | (90 | ) | |||||||||||||||
| Net income (loss) | 97 | (248 | ) | 495 | 320 | (1,746 | ) | (1,082 | ) | |||||||||||||||
| Casino Operations | ||||||||||||||||||||||||
|
2013 |
Northern Nevada |
Midwest | Gulf Coast |
Development/ Management |
Corporate | Consolidated | ||||||||||||||||||
| Revenues | $ | 5,325 | $ | 19,614 | $ | 13,710 | $ | 477 | $ | - | $ | 39,126 | ||||||||||||
| Selling, general & administrative expense | 1,484 | 4,405 | 4,606 | - | 1,739 | 12,234 | ||||||||||||||||||
| Depreciation & amortization | 180 | 747 | 1,281 | - | 2 | 2,210 | ||||||||||||||||||
| Operating income (loss) | 960 | 1,955 | 1,502 | 435 | (1,741 | ) | 3,111 | |||||||||||||||||
| Net income (loss) | 634 | 965 | 990 | 381 | (2,394 | ) | 576 | |||||||||||||||||
|
Reconciliation of adjusted EBITDA for the three months ended March 31 (in thousands), |
|||||||||||||||||||||||
| Casino Operations | |||||||||||||||||||||||
|
2014 |
Northern Nevada |
Midwest | Gulf Coast |
Development/ Management |
Corporate | Consolidated | |||||||||||||||||
| Operating income (loss) | $ | 148 | $ | (250 | ) | $ | 751 | $ | 438 | $ | (1,177 | ) | $ | (90 | ) | ||||||||
| Add Back: | |||||||||||||||||||||||
| Stock Compensation | - | - | - | - | 79 | 79 | |||||||||||||||||
| Silver Slipper acquisition costs expensed | - | - | - | (8 | ) | - | (8 | ) | |||||||||||||||
| Kentucky Project costs expensed | - | - | - | 7 | - | 7 | |||||||||||||||||
| Tunica Project costs expensed | - | - | - | 64 | - | 64 | |||||||||||||||||
| Depreciation and amortization | 217 | 847 | 1,386 | - | 5 | 2,455 | |||||||||||||||||
| Adjusted EBITDA | $ | 365 | $ | 597 | $ | 2,137 | $ | 501 | $ | (1,093 | ) | $ | 2,507 | ||||||||||
| Casino Operations | |||||||||||||||||||||||
|
2013 |
Northern Nevada |
Midwest | Gulf Coast |
Development/ Management |
Corporate | Consolidated | |||||||||||||||||
| Operating income (loss) | $ | 960 | $ | 1,955 | $ | 1,502 | $ | 435 | $ | (1,741 | ) | $ | 3,111 | ||||||||||
| Add Back: | |||||||||||||||||||||||
| Stock Compensation | - | - | - | - | 343 | 343 | |||||||||||||||||
|
Silver Slipper acquisition costs expensed |
- | - | - | (9 | ) | - | (9 | ) | |||||||||||||||
| Kentucky Project costs expensed | - | - | - | 43 | - | 43 | |||||||||||||||||
| Depreciation and amortization | 180 | 747 | 1,281 | - | 2 | 2,210 | |||||||||||||||||
| Adjusted EBITDA | $ | 1,140 | $ | 2,702 | $ | 2,783 | $ | 469 | $ | (1,396 | ) | $ | 5,698 | ||||||||||
|
FULL HOUSE RESORTS, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) |
||||||||||||
|
Three months
ended March 31, |
||||||||||||
|
2014 |
2013 |
|||||||||||
| Revenues | ||||||||||||
| Casino | $ | 27,481 | $ | 35,792 | ||||||||
| Food and beverage | 1,966 | 2,146 | ||||||||||
| Hotel | 123 | 127 | ||||||||||
| Management fees | 494 | 477 | ||||||||||
| Other operations | 385 | 584 | ||||||||||
| 30,449 | 39,126 | |||||||||||
| Operating costs and expenses | ||||||||||||
|
Casino |
14,461 | 18,050 | ||||||||||
| Food and beverage | 2,099 | 2,075 | ||||||||||
| Hotel | 108 | 130 | ||||||||||
| Other operations | 731 | 1,273 | ||||||||||
| Project development and acquisition costs | 55 | 43 | ||||||||||
| Selling, general and administrative | 10,630 | 12,234 | ||||||||||
| Depreciation and amortization | 2,455 | 2,210 | ||||||||||
| 30,539 | 36,015 | |||||||||||
|
Operating (loss) income |
(90 | ) | 3,111 | |||||||||
| Other expense | ||||||||||||
| Interest expense | (1,517 | ) | (1,885 | ) | ||||||||
| Other expense | (1 | ) | (3 | ) | ||||||||
| Other expense, net | (1,518 | ) | (1,888 | ) | ||||||||
| (Loss) income before income taxes | (1,608 | ) | 1,223 | |||||||||
| Income tax (benefit) expense | (526 | ) | 647 | |||||||||
| Net (loss) income | (1,082 | ) | 576 | |||||||||
| Net (loss) income per common share | $ | (0.06 | ) | $ | 0 .03 | |||||||
| Weighted-average number of common shares outstanding | 18,870,681 | 18,721,816 | ||||||||||
About Full House Resorts, Inc.
Full House Resorts is a locals-oriented, regional casino company that owns, develops and manages gaming facilities. Full House owns the Rising Star Casino Resort in Rising Sun, Indiana, the Silver Slipper Casino in Hancock County, Mississippi, and Stockman’s Casino in Fallon, Nevada. Full House also operates the Grand Lodge Casino at Hyatt Regency Lake Tahoe Resort, Spa and Casino in Incline Village, Nevada under a lease agreement, and 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 casino facilities. For more information about Full House Resorts, please visit 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, the ability to refinance indebtedness, 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
Dan
Foley, 203-604-4553
investors@fullhouseresorts.com
Source: Full House Resorts, Inc.
Released May 14, 2014