Full House Resorts Announces Three Months and Full Year Results for the Period Ended December 31, 2007
Stockman's Casino and GED Continue to Meet Management Expectations
LAS VEGAS--(BUSINESS WIRE)--
Full House Resorts (AMEX: FLL) today announced results for its fourth quarter and full year ended December 31, 2007. For the three months ended December 31, 2007, income from operations fell slightly to $493,443 compared to $514,663 in the prior-year period due to a $407,534 impairment charge taken in fourth quarter 2007. Net income applicable to common shares during the fourth quarter was $8,597 compared to net income of $243,910 in the prior period. For the fourth quarter ended December 31, 2007, earnings per share was $0.00 compared to $0.02 in the prior-year period based on diluted common shares outstanding of 19.3 million and 11.0 million, respectively. The net income includes an impairment loss of $269,972 or approximately $0.01 EPS for fourth quarter 2007; excluding impairment, net income would have been $277,569 and earnings per share would have been approximately $0.01 for the quarter. Earnings per share for the full year was $0.05 compared to $0.04 for the prior year.
Fourth Quarter 2007 Highlights and Subsequent Events
-- On December 14, 2007, Gaming Entertainment Michigan, LLC (GEM), a
50%-owned joint venture of the Company, received final approval
from the National Indian Gaming Commission (NIGC) for its gaming
management contract for the FireKeepers Casino in Battle Creek,
Michigan. In addition, the Tribe has engaged a construction
manager, substantially completed the design documents and executed
guaranteed maximum price contracts for the project construction.
GEM has identified a general manager who will join the project as
soon as the Tribe's financing is in place for the construction of
the project.
During the fourth quarter 2007, the Company recognized a $120,555
unrealized gain on notes receivable compared to a $655,747 gain in
the prior-year period. Based on the current project schedule for
the FireKeepers Casino, we adjusted the expected opening date to
June 2009 which along with other factors resulted in a lower than
expected unrecognized gain related to the valuation of our tribal
receivables.
The Company is now working with the Nottawaseppi Huron Band of
Potawatomi's FireKeepers Development Authority on financing and
construction of the FireKeepers Casino. Once financing is secured
by the Tribe, ground-breaking is slated to begin shortly
afterward. Full House will manage the FireKeepers Casino for seven
years after its opening.
-- On October 5, 2007, we announced that we had entered into an
agreement to sell the Holiday Inn Express in Fallon, Nevada for
$7.2 million in gross proceeds, with the hotel sales price
exceeding the operating cash flow multiple paid for the Stockman's
Casino and Hotel in January 2007. The transaction closed in
February 2008 and we received net proceeds at that time of $7.0
million, which were applied to the Company's revolving loan with
Nevada State Bank, reducing the balance on the loan from $10.9
million to $3.9 million while the Company's availability under the
facility increased to approximately $4.8 million. In addition,
future amortization requirements were reduced on a pro-rata basis
and the Company has no required principal payments on the facility
until January 2016.
-- During the quarter, we completed renovation of Stockman's Coffee
Shop, and the renovation of the Steakhouse was started and
completed in January 2008. Also, Stockman's market share of slot
win increased from 34.8% in 2006 to 36.2% in 2007.
-- In early 2008, the expansion and renovation of the Harrington
Raceway and Casino was completed, which brought the total number
of slot units to approximately 2,100. We are guaranteed an 8%
increase in our management fee during 2008 over the 2007 cash flow
from Harrington of approximately $4.1 million.
-- During the quarter, we recognized an impairment loss of $407,534
due to the discontinuation of the Manuelito project with the
Navajo Nation and the Nambe project with the Nambe Pueblo.
-- During the quarter, we recorded the liability associated with the
previously announced Green Acres transaction which increased
Michigan contract rights and long-term debt by approximately $9.5
million, which represents the remaining obligation to be funded
once project and transaction financing is obtained.
Commenting on 2007 results, CEO Andre Hilliou said, "2007 was a strong year for Full House. Stockman's Casino and the GED joint venture continue to progress nicely and in-line with our expectations, and we made a value-added divestiture of the Holiday Inn Express in Fallon, which enabled us to reduce our debt early in 2008. In addition, we are very happy that the NIGC has approved the GEM management agreement, and we look forward to beginning construction on FireKeepers Casino, which we believe will become a major driver of shareholder value when completed."
Fourth Quarter Results
For the quarter ended December 31, 2007, Full House reported casino, food and beverage, and other revenue of $2.4 million. No revenue was recorded in the prior-year period due to Stockman's Casino being acquired on January 31, 2007.
The Company recorded equity in net income of unconsolidated joint venture of $1.2 million compared to $0.9 million in the prior-year period. The equity in net income of unconsolidated joint venture represents Full House Resorts' 50% ownership interest in GED, a joint venture between the Company and Harrington Raceway, Inc.
Operating expenses for fourth quarter 2007 were $2.8 million compared to $1.1 million in the prior-year period, primarily as a result of the addition of the Stockman's operation during 2007 and increases in employee costs at the corporate level.
Income from operations for fourth quarter 2007 was $493,443 compared to $514,633 in the prior-year period. The 2007 figure includes a $407,534 charge for impairment of contract rights -consisting of a $207,534 charge for the Nambe Pueblo casino project and a $200,000 charge related to the discontinuation of a casino project with the Navajo Nation. Absent the impairment charges, income from operations would have increased by 75% from the prior-year period.
The Company reported earnings per share of $0.00 and $0.02 for the three months ended December 31, 2007 and 2006, respectively.
Full Year 2007 Results
For 2007, Full House reported casino, food and beverage, and other revenue of $9.6 million. No revenue was recorded in the prior year due to Stockman's Casino being acquired on January 31, 2007. The Company recorded equity in net income of unconsolidated joint venture of $4.3 million compared to $3.9 million in 2006.
For the year ended December 31, 2007, operating expenses increased from $4.4 million to $12.4 million. As in the fourth quarter, the increases for 2007 were due primarily from the addition of Stockman's Casino and stock compensation and other personnel costs.
The Company reported earnings per share of $0.05 and $0.04 for the year ended December 31, 2007 and 2006, respectively.
Liquidity and Capital Resources
As of December 31, 2007, the company had $8.0 million in cash and approximately $4.1 million of availability on a revolving credit line. Long-term debt outstanding including current maturities and the Green Acres obligation at the end of the fourth quarter was $23.2 million. The company prepaid $0.7 million of debt during the quarter, bringing total voluntary prepayments to $4.8 million. Following the sale of the Holiday Inn Express in late February 2008, the Company had approximately $7.3 million cash on hand, had reduced the long-term debt outstanding, including current maturities and the Green Acres obligation, to $15.7 million and had approximately $4.8 million of availability on the Nevada State Bank Revolving Credit facility.
Conference Call Information
The Company will host a conference call and webcast later today at 9:00 a.m. EDT. Both the call and webcast are open to the general public.
The conference call number is 800-240-6709; international callers can access the call by dialing 1-303-262-2130. 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 http://www.fullhouseresorts.com (select Investor Relations and then 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 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 800-405-2236 or 1-303-590-3000 and providing passcode 11110419.
Selected audited Statements of Operations (for continuing operations) data for the three months ended December 31,
----------------------------------------------------------------------
2007 Casino Development/
Operations Management Corporate Consolidated
----------------------------------------------------------------------
Revenues $ 2,329,959 $ --- $ --- $2,392,959
Selling, general
and administrative 397,904 (88,759) 1,248,128 1,557,273
Depreciation and
amortization 11,492 14,364 2,321 28,177
Operating gains --- 886,976 --- 886,976
Income (loss) from
continuing
operations before
other income 865,685 1,177,773 (1,550,014) 493,444
Income (loss) from
continuing
operations 881,343 983,433 (1,891,216) (26,440)
2006 Casino Development/
Operations Management Corporate Consolidated
----------------------------------------------------------------------
Revenues $ --- $ --- $ --- $ ---
Selling, general
and administrative --- 53,306 961,167 1,014,473
Depreciation and
amortization --- 16,650 2,121 18,771
Operating gains --- 1,569,257 --- 1,569,257
Income (loss) from
continuing
operations before
other income --- 1,317,465 (802,832) 514,633
Income (loss) from
continuing
operations --- 1,289,741 (989,300) (300,441)
----------------------------------------------------------------------
Selected audited Statements of Operations (for continuing operations) data for the twelve months ended December 31,
2007 Casino Development/
Operations Management Corporate Consolidated
----------------------------------------------------------------------
Revenues $9,280,857 $ --- $ 283,554 $ 9,564,411
Selling, general
and administrative 1,562,807 22,700 5,225,814 6,811,321
Depreciation and
amortization 946,253 62,028 8,213 1,016,494
Operating gains --- 4,702,215 --- 4,702,215
Income (loss) from
continuing
operations before
other income 2,582,677 4,499,104 (5,263,526) 1,818,255
Income (loss) from
continuing
operations 2,755,644 4,243,321 (6,344,667) 654,298
2006 Casino Development/
Operations Management Corporate Consolidated
----------------------------------------------------------------------
Revenues $ --- $ --- $ --- $ ---
Selling, general
and administrative --- 213,950 3,581,592 3,795,542
Depreciation and
amortization --- 66,600 8,480 75,080
Operating gains --- 5,538,323 --- 5,538,323
Income (loss) from
continuing
operations before
other income --- 4,712,898 (3,558,378) 1,154,520
Income (loss) from
continuing
operations --- 4,581,712 (3,942,037) 639,675
About Full House Resorts, Inc.
Full House owns, develops and manages gaming facilities. Full House owns the 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. Full House also receives a guaranteed fee from the operation of Harrington Raceway and Casino, formerly Midway Slots and Simulcast at the Delaware State Fairgrounds in Harrington, Delaware. Harrington Raceway and Casino recently opened an expansion and is remodeling its original building which will result in a total of 2,000 gaming devices, a buffet, gourmet Steak House, other food and beverage outlets and an entertainment lounge. Full House also has a management agreement with the Nottawaseppi Huron Band of Potawatomi Indians for the development and management of a first-class casino/resort with 2,500 gaming devices, 90 table games and 20 poker tables in the Battle Creek, Michigan area, which is currently in development. In addition, Full House has been working with the Northern Cheyenne Nation of Montana for the development and management of a 27,000 square foot gaming facility. Further information about Full House can be viewed on its web site 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-KSB 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, Inc.
Released March 27, 2008