Full House Resorts Announces Three and Six Months Results for the Period Ended June 30, 2010
Record Second Quarter with Earnings per Share of $0.08
LAS VEGAS--(BUSINESS WIRE)-- Full House Resorts (NYSE Amex US: FLL) today announced results for the three and six-month periods ended June 30, 2010. Net income attributable to the Company for the three months ended June 30, 2010 was $1.5 million, or $0.08 per common share, compared to $0.2 million, or $0.01 per common share, in the prior-year period.
Second Quarter 2010 Highlights
-- Management fees for Gaming Entertainment (Michigan), LLC ("GEM"), a
50%-owned joint venture that manages FireKeepers Casino, were $6.0
million. FireKeepers Casino opened August 5, 2009.
-- EBITDA, net of RAM's share of GEM results, was $3.2 million versus $0.8
million in the prior-year period.
-- As of June 30, 2010, Full House Resorts had $15.4 million in cash, no
outstanding debt and approximately $8.2 million of availability on its
revolving credit facility.
"The second quarter of 2010 saw another period of record revenue and earnings per share for Full House as FireKeepers continues to perform very well," said Andre Hilliou, Chairman and Chief Executive Officer of Full House. "GEM has earned approximately $22 million in management fees in the first 11 months of operations for FireKeepers, and we have been very pleased by FireKeepers' solid results. Stockman's Casino continues to be affected by the economic weakness in Northern Nevada; however, we continue to have a strong market share premium. As of the end of the second quarter, we now have over $15 million in cash on hand, approximately $8 million of availability on our line of credit and no outstanding debt. Our liquidity resources continue to grow in preparation for a meaningful acquisition opportunity which we are actively pursuing."
Second Quarter 2010 Results
For the quarter ended June 30, 2010, Full House reported casino, food and beverage, and other revenue of $2.0 million, a decline of 14% from the prior-year period, primarily caused by lower casino revenue at Stockman's Casino due to general weakness in the Northern Nevada economy and a lower-than-normal slot hold percentage. In addition, during the second quarter of 2010, Full House recorded GEM management fees of $6.0 million (prior to allocation of income to noncontrolling interest in consolidated joint venture) for FireKeepers Casino, which opened on August 5, 2009.
Full House recorded equity in net income of unconsolidated joint venture and related guaranteed payments of $0.6 million, a decrease of 23% from the prior-year period which as expected offset a 15% increase during the first quarter. This is attributed to the decreased net income of Gaming Entertainment (Delaware), LLC ("GED"), which we recognize under the equity method, as well as differences between distributions and the calculation of guaranteed payments. The equity in net income of unconsolidated joint venture represents Full House's 50% ownership interest in GED, a joint venture between the Company and Harrington Raceway, Inc.
Operating expenses for second quarter 2010 were $3.5 million, an increase of 22% from the prior-year period, primarily due to increased amortization of contract rights related to FireKeepers Casino which we opened in August 2009.
Operating income for second quarter 2010 was $5.2 million, compared to operating income of $0.4 million in the prior-year period. EBITDA, net of RAM's share of GEM results, was $3.2 million versus $0.8 million in the prior-year period.
Full House reported second quarter net income attributable to Full House per common share of $0.08 for the three months ended June 30, 2010, as compared to $0.01 for the three months ended June 30, 2009.
Six Month 2010 Results
For the six months ended June 30, 2010, Full House reported casino, food and beverage, and other revenue of $4.2 million, compared to revenue of $4.7 million in the prior-year period, primarily as a result of lower casino revenue at Stockman's Casino due to general weakness in the economy and a lower-than-normal slot hold percentage. In addition, during the six months ended June 30, 2010, Full House recorded GEM management fees of $12.2 million (prior to allocation of income to noncontrolling interest in consolidated joint venture) for FireKeepers Casino. FireKeepers Casino was not operational and, therefore, no management fees were earned during the first six months of 2009.
The Company recorded equity in net income of unconsolidated joint venture and related guaranteed payments of $2.1 million, comparable to 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 income calculations, distributions and the calculation of guaranteed payments. The reduced income is attributable to the decreased net income of GED which the Company recognizes under the equity method.
Operating expenses for the six months ended June 30, 2010 were $7.2 million compared to $5.8 million in the prior-year period, primarily due to increased amortization of FireKeepers-related contract rights, which we opened in August 2009, and the timing of incentive compensation expenses.
Operating income for the six months ended June 30, 2010 was $11.2 million, compared to operating income of $1.3 million in the prior-year period. EBITDA, net of RAM's share of GEM results, was $7.2 million versus $2.0 million in the prior-year period.
The Company reported net income attributable to the Company per common share of $0.19 and $0.04 for the six months ended June 30, 2010 and 2009, respectively.
Liquidity and Capital Resources
As of June 30, 2010, Full House had $15.4 million in cash and approximately $8.2 million of availability on its revolving credit line with Nevada State Bank. As of July 1, 2010, the amount available on the revolving credit line was reduced to $7.9 million. There was no debt outstanding as of June 30, 2010.
In March, Full House began collecting payment on the remaining $3.1 million it is due from GEM. As of June 30, Full House is due $0.7 million from GEM, and the Company expects to be fully repaid by the end of August 2010.
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 August 6, the Company has not repurchased any shares.
Conference Call Information
The Company will host a conference call and webcast today at 1:00 p.m. EDT. Both the call and webcast are open to the general public.
The conference call number is 877-941-4775; international callers can access the call by dialing 1-480-629-9761. 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 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 4340211.
Selected unaudited Statements of Operations (from continuing operations) data for the three months ended June 30,
2010 Casino Operations Development/ Corporate Consolidated
Management
Revenues $ 2,039,869 $ 6,018,598 $ - $ 8,058,467
Selling, general
and administrative 414,550 155,416 945,966 1,515,932
expense
Depreciation and 240,990 593,195 25,449 859,634
amortization
Operating gains -- 629,081 -- 629,081
Operating income 340,977 5,897,734 (1,038,209) 5,200,502
(loss)
Net income (loss)
attributable to 225,724 1,932,747 (687,356) 1,471,115
Company
2009 Casino Operations Development/ Corporate Consolidated
Management
Revenues $ 2,364,803 $ - $ - $ 2,364,803
Selling, general
and administrative 401,892 132,552 984,631 1,519,075
expense
Depreciation and 246,778 13,500 20,703 280,981
amortization
Operating gains -- 849,920 -- 849,920
Operating income 672,637 690,507 (1,007,293) 355,851
(loss)
Net income (loss)
attributable to 444,485 395,237 (672,761) 166,961
Company
Selected unaudited Statements of Operations (from continuing operations) data for the six months ended June 30,
2010 Casino Operations Development/ Corporate Consolidated
Management
Revenues $ 4,188,993 $ 12,180,704 $ - $ 16,369,697
Selling, general
and administrative 860,826 400,824 2,020,014 3,281,664
expense
Depreciation and 486,072 1,186,389 48,515 1,720,976
amortization
Operating gains -- 2,060,433 -- 2,060,433
Operating income 775,809 12,652,190 (2,202,599) 11,225,400
(loss)
Net income (loss)
attributable to 512,836 4,418,869 (1,451,973) 3,479,732
Company
2009 Casino Operations Development/ Corporate Consolidated
Management
Revenues $ 4,684,740 $ - $ - $ 4,684,740
Selling, general
and administrative 848,558 256,473 1,943,938 3,048,969
expense
Depreciation and 503,662 26,950 40,921 571,533
amortization
Operating gains -- 2,355,845 -- 2,355,845
Operating income 1,228,452 2,044,068 (1,987,517) 1,285,003
(loss)
Net income (loss)
attributable to 810,409 1,233,991 (1,341,234) 703,166
Company
Reconciliation of EBITDA before unrealized gains on notes receivable, tribal governments, for the three months ended June 30,
Net of Non-Controlling
Interest
2010 Casino Development/ Corporate Consolidated GEM 50% Development/ Consolidated
Operations Management Management
Operating
income $ 340,977 $ 5,897,734 $ (1,038,209) $ 5,200,502 $ 5,293,530 $ 2,646,765 $ 3,250,969 $ 2,553,737
(loss)
Add Back:
Unrealized
loss on
notes - 20,354 - 20,354 - - 20,354 20,354
receivable,
tribal
governments
Depreciation
and 240,990 593,195 25,449 859,634 431,169 215,585 377,611 644,050
amortization
EBITDA
before
unrealized $ 581,967 $ 6,511,283 $ (1,012,760) $ 6,080,490 $ 5,724,699 $ 2,862,350 $ 3,648,934 $ 3,218,141
gain on
tribal
advances
Net of Non-Controlling
Interest
2009 Casino Development/ Corporate Consolidated GEM 50% Development/ Consolidated
Operations Management Management
Operating
income $ 672,637 $ 690,507 $ (1,007,293) $ 355,851 $ (182,189) $ (91,095) $ 781,602 $ 446,946
(loss)
Add Back:
Settlement - 30,000 - 30,000 - - 30,000 30,000
loss
Depreciation
and 246,778 13,500 20,703 280,981 144 72 13,428 280,909
amortization
Deduct:
Unrealized
gain on
notes - 40,220 - 40,220 192,606 96,303 (56,083) (56,083)
receivable,
tribal
governments
EBITDA
before
unrealized $ 919,415 $ 693,787 $ (986,590) $ 626,612 $ (374,651) $ (187,326) $ 881,113 $ 813,938
gain on
tribal
advances
FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months Six months
ended June 30, ended June 30,
2010 2009 2010 2009
Revenues
Casino $ 1,574,987 $ 1,886,289 $ 3,286,999 $ 3,755,231
Food and 445,254 458,890 862,445 889,624
beverage
Management fees 6,018,598 -- 12,180,704 --
Other 19,628 19,624 39,549 39,885
8,058,467 2,364,803 16,369,697 4,684,740
Operating costs
and expenses
Casino 547,475 559,485 1,083,382 1,139,394
Food and 495,879 484,012 982,904 964,672
beverage
Project
development 68,126 15,319 135,804 31,014
costs
Selling, general
and 1,515,932 1,519,075 3,281,664 3,048,969
administrative
Depreciation and 859,634 280,981 1,720,976 571,533
amortization
3,487,046 2,858,872 7,204,730 5,755,582
Operating gains
(losses)
Equity in net
income of
unconsolidated
joint venture, 649,435 839,700 2,091,551 2,091,876
and related
guaranteed
payments
Unrealized gains
(loss) on notes
receivable, (20,354 ) 40,220 (31,118 ) 293,969
tribal
governments
Impairment loss -- (30,000 ) -- (30,000 )
629,081 849,920 2,060,433 2,355,845
Operating income 5,200,502 355,851 11,225,400 1,285,003
Other income
(expense)
Interest and 1,443 12,936 114,284 35,590
other income
Interest expense (3,655 ) (58,353 ) (7,311 ) (147,162 )
Income before 5,198,290 310,434 11,332,373 1,173,431
income taxes
Income taxes (1,229,760 ) (205,253 ) (2,768,409 ) (591,225 )
Net income 3,968,530 105,181 8,563,964 582,206
(Income) loss
attributable to
noncontrolling (2,497,415 ) 61,780 (5,084,232 ) 120,960
interest in
consolidated
joint venture
Net income
attributable to $ 1,471,115 $ 166,961 $ 3,479,732 $ 703,166
the Company
Net income
attributable to
the Company per
common share
Basic and $ 0.08 $ 0.01 $ 0.19 $ 0.04
diluted
Weighted-average
number of common
shares
outstanding
Basic and 18,004,414 17,996,525 18,003,048 18,049,495
diluted
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 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. Full House has a management agreement with the Nottawaseppi Huron Band of Potawatomi Indians for FireKeepers Casino in Battle Creek, Michigan with 2,680 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 2,100 gaming devices, a buffet, gourmet steakhouse, other food and beverage outlets and an entertainment lounge. 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, Inc.
Released August 9, 2010