Full House Resorts Announces Three and Six-Month Results for the Period Ended June 30, 2014
LAS VEGAS--(BUSINESS WIRE)-- Full House Resorts (NASDAQ:FLL) today announced results for three and six-month periods ended June 30, 2014. Net loss, which included an $11.5 million charge for impairment of intangible assets for the three months ended June 30, 2014, was $8.5 million, or $0.45 per common share, compared to $0.00 per common share, in the prior-year period. Excluding the non-cash impairment charge, net of tax, and $0.3 million in acquisition expenses, net of tax, net loss in the second quarter of 2014 would have been $0.04 per common share.
Second Quarter 2014 Highlights and Subsequent Events
- Adjusted EBITDA, as defined below, for the second quarter of 2014 was $2.6 million versus $4.4 million in the prior-year period.
- The Company’s Silver Slipper Casino in Hancock County, Mississippi recorded revenue of $12.4 million in the second quarter of 2014 as compared to revenue of $13.4 million in the prior-year period. The decline was primarily related to continued economic weakness in the region. The property recorded adjusted EBITDA for the second quarter 2014 of $2.1 million versus $2.5 million in the prior-year period. The property was able to offset potentially larger EBITDA declines by reducing operating costs, exclusive of depreciation, by approximately $0.6 million.
- The Company’s Rising Star Casino Resort in Rising Sun, Indiana recorded revenue of $13.5 million in the second quarter of 2014 as compared to revenue of $17.8 million in the prior-year period. The $4.3 million decrease was primarily due to increased competition from Ohio’s recently opened casinos and lower than expected market growth. Adjusted EBITDA for the second quarter of 2014 was $0.2 million versus $1.8 million in the prior-year period. The property was able to offset potentially larger EBITDA declines by reducing operating costs, exclusive of non-cash depreciation and impairment, by $2.7 million. In addition, the property began recognizing approximately $0.6 million per quarter in lower gaming taxes effective July 1, 2014 and implemented additional measures designed to reduce operating costs by an additional $0.5 million per quarter going forward.
- Northern Nevada revenue for the second quarter of 2014 was $5.0 million compared to $5.2 million in the prior-year period. Adjusted EBITDA for the second quarter 2014 was $1.0 million, compared with $1.1 million in the prior-year period.
- On July 21, 2014, the Company amended its first lien and second lien credit facilities to modify certain covenants, effective June 30, 2014, through the maturity date of each facility. As part of the amendment, the Company paid one-time fees aggregating $0.2 million to the lenders. In addition, the second lien facility interest rate was adjusted upward one percent through maturity. The Company plans to begin borrowing on its previously approved $10 million loan, available through the first lien credit facility later this year, to finish the construction of the Silver Slipper hotel, which is expected to open by early 2015.
“Our second quarter 2014 results were impacted by ongoing competition and soft economic conditions, particularly in our Midwest operations,” said Andre Hilliou, Chairman and Chief Executive Officer of Full House. “Despite a difficult operating environment, we are encouraged by the progress we have made in reducing operating costs and corporate expense and by the recent tax relief received at our Rising Sun facility in Indiana. We continue to remain laser focused on reducing costs across the enterprise where appropriate. Most importantly, we continue to execute on our strategic business plans, including our partnership with Keeneland Association to pursue gaming opportunities in Kentucky and the construction of our new hotel at the Silver Slipper casino on the Gulf Coast. While we are taking steps to optimize our operating structure we continue to focus on providing optimal service to our customers during this challenging environment as evidenced by our strong guest satisfaction scores.”
Second Quarter 2014 Results
For the quarter ended June 30, 2014, the Company reported total net revenue of $31.3 million, down from $36.7 million in the prior-year period. The decrease was primarily attributable to the decline in revenues at the Rising Star Casino Resort, as a result of additional competition from new gaming facilities in Ohio.
Operating expenses, excluding the non-cash impairment charge, for the second quarter 2014 were $31.4 million compared to $34.7 million in the prior-year period. The decrease was driven by $2.8 million in cost reductions at the Rising Star Casino, $0.4 million of cost reductions at the Silver Slipper Casino and a $0.4 million reduction in corporate operating expense.
Operating loss for the second quarter of 2014, which included an $11.5 million non-cash impairment charge at Rising Star Casino, was $11.6 million, compared to operating income of $2.0 million in the prior-year period. The operating loss for the second quarter also includes $0.3 million in expenses associated with an acquisition.
Adjusted EBITDA, as defined below, was $2.6 million for the second quarter of 2014 versus $4.4 million in the prior-year period.
In addition, second quarter of 2014 results include a $1.6 million of interest costs compared to $1.9 million in the prior-year period, primarily due to reduced Company debt and a negotiated decrease of one percent on the first lien credit facility.
Net loss for the three months ended June 30, 2014 was $8.5 million, or $0.45 per common share, compared to $0.00 per common share, in the prior-year period. Excluding the non-cash impairment charge and $0.3 million in expenses, both net of tax, net loss in the second quarter of 2014 would have been $0.04 per common share.
Six Month 2014 Results
For the six months ended June 30, 2014, the Company reported total revenue of $61.8 million, compared to total revenue of $75.8 million in the prior-year period, primarily as a result of increased competition in Ohio and unfavorable weather conditions in the first quarter of 2014.
Operating expenses for the six months ended June 30, 2014, excluding the non-cash impairment charge at Rising Star Casino, were $61.9 million compared to $70.7 million in the prior-year period. The decrease was primarily due to cost reductions of $6.9 million at the Rising Star Casino, $1.0 million at the Silver Slipper Casino, and a $1.0 million reduction in corporate operating expense. The Company recorded $0.2 million of stock compensation expense for the six months ended June 30, 2014, compared to $0.6 million in the prior-year period.
Adjusted EBITDA, as defined below, was $5.1 million, compared to $10.1 million in the prior-year period.
In addition, for the six months ended June 30, 2014 results include $3.1 million of interest costs compared to $3.8 million in the prior-year period, primarily due to reduced Company debt and a negotiated decrease of one percent on the first lien credit facility.
The Company reported a net loss of $0.51 per common share for the six months ended June 30, 2014, including the non-cash impairment charge, as compared to net income of $0.03 per common share for the prior-year period. Excluding the non-cash impairment charge and the $0.3 million in acquisition expenses, both net of tax, the net loss for the six months ended June 30, 2014 would have been $0.10 per common share.
Liquidity and Capital Resources
As of June 30, 2014, Full House Resorts had $13.0 million in cash and equivalents and $59.5 million outstanding on its first and second lien credit facilities.
Conference Call Information
The Company will host a conference call and webcast on Thursday, August 7, 2014 at 9:00 AM EDT.
The conference call can be accessed live over the phone by dialing 888-503-8169 or for international callers by dialing 1-719-325-2428. 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 3595293. The replay will be available until Thursday, August 14, 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 June 30 (in thousands),
| Casino Operations | ||||||||||||||||||||||
| Northern | Gulf | Development/ | ||||||||||||||||||||
| 2014 | Nevada | Midwest | Coast | Management | Corporate | Consolidated | ||||||||||||||||
| Net revenues | $ | 5,022 | $ | 13,541 | $ | 12,447 | $ | 300 | $ | -- | $ | 31,310 | ||||||||||
| Selling, general and administrative expense | 1,357 | 3,813 | 4,076 | -- | 1,173 | 10,419 | ||||||||||||||||
| Depreciation and amortization | 213 | 692 | 1,403 | -- | 4 | 2,312 | ||||||||||||||||
| Impairment loss | -- | (11,547 | ) | -- | -- | -- | (11,547 | ) | ||||||||||||||
| Operating income (loss) | 805 | (11,991 | ) | 721 | 20 | (1,177 | ) | (11,622 | ) | |||||||||||||
| Net income (loss) | 532 | (7,796 | ) | 470 | 85 | (1,782 | ) | (8,491 | ) | |||||||||||||
| Casino Operations | ||||||||||||||||||||||
| Northern | Gulf | Development/ | ||||||||||||||||||||
| 2013 | Nevada | Midwest | Coast | Management | Corporate | Consolidated | ||||||||||||||||
| Net revenues | $ | 5,203 | $ | 17,798 | $ | 13,370 | $ | 333 | $ | -- | $ | 36,704 | ||||||||||
| Selling, general and administrative expense | 1,513 | 4,369 | 4,689 | -- | 1,535 | 12,106 | ||||||||||||||||
| Depreciation and amortization | 177 | 726 | 1,292 | -- | 3 | 2,198 | ||||||||||||||||
| Operating income (loss) | 948 | 1,044 | 1,235 | 336 | (1,537 | ) | 2,026 | |||||||||||||||
| Net income (loss) | 626 | 672 | 800 | 116 | (2,256 | ) | (42 | ) | ||||||||||||||
Selected unaudited Statements of Operations data for the six months ended June 30 (in thousands),
| Casino Operations | ||||||||||||||||||||||
| Northern | Gulf | Development/ | ||||||||||||||||||||
| 2014 | Nevada | Midwest | Coast | Management | Corporate | Consolidated | ||||||||||||||||
| Net revenues | $ | 9,409 | $ | 26,789 | $ | 24,768 | $ | 793 | $ | -- | $ | 61,759 | ||||||||||
| Selling, general and administrative expense | 2,805 | 7,697 | 8,202 | -- | 2,345 | 21,049 | ||||||||||||||||
| Depreciation and amortization | 430 | 1,539 | 2,789 | -- | 9 | 4,767 | ||||||||||||||||
| Impairment loss | -- | (11,547 | ) | -- | -- | -- | (11,547 | ) | ||||||||||||||
| Operating income (loss) | 953 | (12,241 | ) | 1,472 | 458 | (2,354 | ) | (11,712 | ) | |||||||||||||
| Net income (loss) | 629 | (8,044 | ) | 965 | 405 | (3,528 | ) | (9,573 | ) | |||||||||||||
| Casino Operations | ||||||||||||||||||||||
| Northern | Gulf | Development/ | ||||||||||||||||||||
| 2013 | Nevada | Midwest | Coast | Management | Corporate | Consolidated | ||||||||||||||||
| Net revenues | $ | 10,528 | $ | 37,412 | $ | 27,080 | $ | 810 | $ | -- | $ | 75,830 | ||||||||||
| Selling, general and administrative expense | 2,997 | 8,774 | 9,295 | -- | 3,274 | 24,340 | ||||||||||||||||
| Depreciation and 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) | 1,260 | 1,637 | 1,790 | 497 | (4,650 | ) | 534 | |||||||||||||||
Reconciliation of adjusted EBITDA for the three months ended June 30 (in thousands),
| Casino Operations | |||||||||||||||||||||||
| Development / | |||||||||||||||||||||||
| 2014 | Northern Nevada | Midwest | Gulf Coast | Management | Corporate | Consolidated | |||||||||||||||||
| Operating income (loss) | $ | 805 | $ | (11,991 | ) | $ | 721 | $ | 20 | $ | (1,177 | ) | $ | (11,622 | ) | ||||||||
| Add Back: | |||||||||||||||||||||||
| Impairment Loss | - | 11,547 | - | - | - | 11,547 | |||||||||||||||||
| Stock Compensation | - | - | - | - | 72 | 72 | |||||||||||||||||
| Kentucky Project costs expensed | - | - | - | 3 | - | 3 | |||||||||||||||||
| Tunica Project costs expensed | - | - | - | 277 | - | 277 | |||||||||||||||||
| Depreciation and amortization | 213 | 692 | 1,403 | - | 4 | 2,312 | |||||||||||||||||
| Adjusted EBITDA | $ | 1,018 | $ | 248 | $ | 2,124 | $ | 300 | $ | (1,101 | ) | $ | 2,589 | ||||||||||
| Casino Operations | |||||||||||||||||||||||
| Development / | |||||||||||||||||||||||
| 2013 | Northern 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 | |||||||||||||||||
| Depreciation and amortization | 177 | 726 | 1,292 | - | 3 | 2,198 | |||||||||||||||||
| Deduct: | |||||||||||||||||||||||
| Silver Slipper acquisition costs expensed | - | - | - | (10 | ) | - | (10 | ) | |||||||||||||||
| Adjusted EBITDA | $ | 1,125 | $ | 1,770 | $ | 2,527 | $ | 326 | $ | (1,326 | ) | $ | 4,422 | ||||||||||
Reconciliation of adjusted EBITDA for the six months ended June 30 (in thousands),
| Casino Operations | |||||||||||||||||||||||
| Development / | |||||||||||||||||||||||
| 2014 | Northern Nevada | Midwest | Gulf Coast | Management | Corporate | Consolidated | |||||||||||||||||
| Operating income (loss) | $ | 953 | $ | (12,241 | ) | $ | 1,472 | $ | 458 | $ | (2,354 | ) | $ | (11,712 | ) | ||||||||
| Add Back: | |||||||||||||||||||||||
| Impairment Loss | - | 11,547 | - | - | - | 11,547 | |||||||||||||||||
| Stock Compensation | - | - | - | - | 151 | 151 | |||||||||||||||||
| Kentucky Project costs expensed | - | - | - | 10 | - | 10 | |||||||||||||||||
| Tunica Project costs expensed | - | - | - | 341 | - | 341 | |||||||||||||||||
| Depreciation and amortization | 430 | 1,539 | 2,789 | - | 9 | 4,767 | |||||||||||||||||
| Deduct: | |||||||||||||||||||||||
| Silver Slipper acquisition costs expensed | - | - | - | (8 | ) | - | (8 | ) | |||||||||||||||
| Adjusted EBITDA | $ | 1,383 | $ | 845 | $ | 4,261 | $ | 801 | $ | (2,194 | ) | $ | 5,096 | ||||||||||
| Casino Operations | |||||||||||||||||||||||
| Development / | |||||||||||||||||||||||
| 2013 | Northern Nevada | Midwest | Gulf Coast | Management | Corporate | Consolidated | |||||||||||||||||
| Operating income (loss) | $ | 1,908 | $ | 2,999 | $ | 2,737 | $ | 771 | $ | (3,278 | ) | $ | 5,137 | ||||||||||
| Add Back: | |||||||||||||||||||||||
| Stock Compensation | - | - | - | - | 551 | 551 | |||||||||||||||||
| Kentucky Project costs expensed | - | - | - | 33 | - | 33 | |||||||||||||||||
| Depreciation and amortization | 357 | 1,473 | 2,573 | - | 5 | 4,408 | |||||||||||||||||
| Deduct: | |||||||||||||||||||||||
| Silver Slipper acquisition costs expensed | - | - | - | (9 | ) | - | (9 | ) | |||||||||||||||
| Adjusted EBITDA | $ | 2,265 | $ | 4,472 | $ | 5,310 | $ | 795 | $ | (2,722 | ) | $ | 10,120 | ||||||||||
| FULL HOUSE RESORTS, INC. AND SUBSIDIARIES | ||||||||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||
| Three months | Six months | |||||||||||||||
| ended June 30, | ended June 30, | |||||||||||||||
|
2014 |
2013 |
2014 |
2013 |
|||||||||||||
| Revenues | ||||||||||||||||
| Casino | $ | 29,719 | $ | 35,262 | $ | 58,702 | $ | 72,931 | ||||||||
| Food and beverage | 5,285 | 5,935 | 10,309 | 11,975 | ||||||||||||
| Hotel | 1,321 | 1,037 | 2,516 | 2,068 | ||||||||||||
| Management fees | 300 | 333 | 793 | 810 | ||||||||||||
| Other operations | 1,039 | 1,199 | 1,650 | 1,984 | ||||||||||||
| Gross revenues | 37,664 | 43,766 | 73,970 | 89,768 | ||||||||||||
| Less promotional allowances | (6,354 | ) | (7,062 | ) | (12,211 | ) | (13,938 | ) | ||||||||
| Net revenues | 31,310 | 36,704 | 61,759 | 75,830 | ||||||||||||
|
Operating costs and expenses |
||||||||||||||||
|
Casino |
15,204 | 16,885 | 29,665 | 34,935 | ||||||||||||
|
Food and beverage |
2,223 | 1,985 | 4,322 | 4,060 | ||||||||||||
| Hotel | 215 | 161 | 323 | 291 | ||||||||||||
| Other operations | 732 | 1,347 | 1,463 | 2,620 | ||||||||||||
| Project development and acquisition costs | 280 | (4 | ) | 335 | 39 | |||||||||||
| Selling, general and administrative | 10,419 | 12,106 | 21,049 | 24,340 | ||||||||||||
| Depreciation and amortization | 2,312 | 2,198 | 4,767 | 4,408 | ||||||||||||
| 31,385 | 34,678 | 61,924 | 70,693 | |||||||||||||
| Operating losses | ||||||||||||||||
| Impairment loss | (11,547 | ) | -- | (11,547 | ) | -- | ||||||||||
|
Operating (loss) income |
(11,622 | ) | 2,026 | (11,712 | ) | 5,137 | ||||||||||
| Other expense | ||||||||||||||||
| Interest expense | (1,571 | ) | (1,883 | ) | (3,088 | ) | (3,768 | ) | ||||||||
| Other expense | (6 | ) | (18 | ) | (7 | ) | (21 | ) | ||||||||
| Other expense, net | (1,577 | ) | (1,901 | ) | (3,095 | ) | (3,789 | ) | ||||||||
| (Loss) income before income tax (benefit) expense | (13,199 | ) | 125 | (14,807 | ) | 1,348 | ||||||||||
| Income tax (benefit) expense | (4,708 | ) | 167 | (5,234 | ) | 814 | ||||||||||
| Net (loss) income | $ | (8,491 | ) | $ | (42 | ) | $ | (9,573 | ) | $ | 534 | |||||
| Net (loss) income per common share | $ | (0.45 | ) | $ | 0.00 | $ | (0.51 | ) | $ | 0.03 | ||||||
| Weighted-average number of common shares outstanding | 18,873,748 | 18,732,748 | 18,872,214 | 18,727,325 | ||||||||||||
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 August 7, 2014