Full House Resorts Announces Earnings for the Quarter Ended March 31, 2011
LAS VEGAS--(BUSINESS WIRE)-- Full House Resorts (NYSE Amex US: FLL) today announced results for the three-month period ended March 31, 2011. Net income attributable to the Company for the three months ended March 31, 2011 was $1.6 million, or $0.09 per common share, compared to $2.0 million, or $0.11 per common share, in the prior-year period. Excluding $0.5 million in acquisition costs, net income attributable to the Company per common share in the first quarter of 2011 would have been $0.11.
First Quarter 2011 Highlights and Subsequent Events
-- Management fees for Gaming Entertainment (Michigan), LLC ("GEM"), a
50%-owned joint venture that manages FireKeepers Casino, were $6.4
million in the first quarter of 2011, compared to management fees of
$6.2 million for first quarter 2010.
-- EBITDA, before unrealized gains (losses) on notes receivable, Grand
Victoria transaction costs and other items net of RAM Entertainment,
LLC's ("RAM") share of GEM results, was $4.0 million versus $3.9 million
in the prior-year period.
-- As of March 31, 2011, Full House Resorts had $11.4 million in cash,
$33.0 million in outstanding debt and approximately $5.0 million of
availability on its new revolving credit facility.
-- On April 1, 2011, the Company closed on the acquisition of the Grand
Victoria Casino and Resort located in Rising Sun, Indiana.
"The first quarter of 2011 was another strong quarter for Full House, with continued strong revenue and earnings per share, as well as completing our acquisition of the Grand Victoria Casino and Resort," said Andre Hilliou, Chairman and Chief Executive Officer of Full House. "FireKeepers continues to perform admirably despite new competition in the marketplace. We are excited about the new 242-room hotel being built adjacent to the casino, and when it opens in late summer or early fall of 2012 it will further enhance the competitiveness of the FireKeepers casino. We are also pleased to own the Grand Victoria; the property and its strong management team have a great amount of potential, and we expect it to drive significant long-term value for our shareholders in the years to come."
First Quarter 2011 Results
For the quarter ended March 31, 2011, Full House reported casino, food and beverage, and other revenue of $2.0 million, a decline of 8% from the prior-year period, primarily caused by a lower slot hold percentage and general economic weakness at the Company's Stockman's Casino. In addition, during the first quarter of 2011, Full House recorded GEM management fees of $6.4 million for FireKeepers Casino, compared to management fees of $6.2 million for the first quarter 2010 despite the opening of new competition in early February 2011.
Full House recorded equity in net income of unconsolidated joint venture and related guaranteed payments of $1.5 million, an increase of 4% from the prior-year period. The equity in net income of unconsolidated joint venture represents Full House's 50% ownership interest in Gaming Entertainment (Delaware), LLC ("GED"), a joint venture between the Company and Harrington Raceway, Inc. GED manages the Harrington Casino under an agreement which terminates in August 2011.
Operating expenses for first quarter 2011 were $3.6 million, exclusive of $0.5 million of expenses related to the acquisition of the Grand Victoria Casino & Resort during the quarter, compared with $3.7 million last year.
Operating income for first quarter 2011 was $5.8 million, compared to operating income of $6.0 million in the prior-year period. EBITDA, before unrealized gains (losses) on notes receivable, Grand Victoria transaction costs, and net of RAM's share of GEM results, was $4.0 million versus $3.9 million in the prior-year period.
Full House reported first quarter net income attributable to the Company per common share of $0.09 for the three months ended March 31, 2011, as compared to $0.11 for the three months ended March 31, 2010. Exclusive of $0.5 million in acquisition costs in the first quarter of 2011, net income per common share in the first quarter 2011 would have been $0.11.
Liquidity and Capital Resources
As of March 31, 2011, Full House had $11.4 million in cash, $33.0 million in outstanding debt and $5.0 million of availability on its new revolving credit line with Wells Fargo. The Nevada State Bank credit facility was terminated on March 23, 2011. The Company drew down the $33 million of debt on March 31, 2011, in advance of closing on the Grand Victoria transaction on April 1, 2011.
2011 Guidance
For 2011, Full House is reiterating the following guidance:
For the full year 2011, we expect SG&A expense exclusive of Grand Victoria to be consistent with 2010 at approximately $6.5 to $6.8 million. Depreciation and amortization, including the Grand Victoria, for the final three quarters of the year is expected to be between $5.0 and $5.5 million. Interest expense for the full year 2011 is expected to be between $2.3 and $2.5 million, which includes the amortization of deferred loan fees. Income tax rate for the full year 2011 is expected to be between 45 and 46 percent.
The Company has provided this guidance for fiscal 2011 to give investors general information on the specific metrics of its business that it has a reasonable control over at this time. The guidance provided is subject to numerous uncertainties including, among others, overall economic and capital markets conditions, changes in gaming legislation, increased competition generally and in particular, the impact of the Gun Lake Casino on the FireKeepers Casino, and integration of the newly acquired Grand Victoria. The Company does not intend, and undertakes no obligation, to update its forward-looking statements, including forecasts and potential opportunities for growth in new and existing markets. Accordingly, the Company does not intend to update guidance during the quarter. Additional information about the factors that could potentially affect the Company's financial results included in today's press release can be found in the Company's Annual Report on Form 10-K and quarterly reports on Form 10-Q.
Conference Call Information
The Company will host a conference call and webcast later today at 2:00 PM EDT. Both the call and webcast are open to the general public.
The conference call number is 877-941-1430; international callers can access the call by dialing 1-480-629-9810. 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 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 4438468.
Selected unaudited Statements of Operations data for the three months ended
March 31,
2011 Casino Operations Development/ Corporate Consolidated
Management
Revenues $ 1,979,985 $ 6,364,242 $ - $ 8,344,227
Selling, general
and 461,963 152,240 1,039,505 1,653,708
administrative
expense
Depreciation and 238,815 593,196 19,733 851,744
amortization
Operating gains -- 1,519,897 -- 1,519,897
Operating income 283,978 7,138,702 (1,591,046 ) 5,831,634
(loss)
Net income (loss)
attributable to 187,507 2,608,873 (1,188,936 ) 1,607,444
Company
2010 Casino Operations Development/ Corporate Consolidated
Management
Revenues $ 2,149,124 $ 6,162,107 $ - $ 8,311,231
Selling, general
and 446,277 245,410 1,074,046 1,765,733
administrative
expense
Depreciation and 245,083 593,195 23,065 861,343
amortization
Operating gains -- 1,431,352 -- 1,431,352
Operating income 434,833 6,754,456 (1,164,391 ) 6,024,898
(loss)
Net income (loss)
attributable to 287,114 2,486,120 (764,617 ) 2,008,617
Company
Reconciliation of EBITDA before unrealized gains (losses) on notes receivable, tribal governments, and other items for the
three months ended March 31,
Net of Non-Controlling
Interest
2011 Casino Development/ Corporate Consolidated GEM 50% Development/ Consolidated
Operations Management Management
Operating
income $ 283,978 $ 7,138,702 $ (1,591,046 ) $ 5,831,634 $ 5,782,151 $ 2,891,076 $ 4,247,626 $ 2,940,558
(loss)
Add Back:
Grand
Victoria
acquisition - - 469,654 469,654 - - - 469,654
costs
expensed
Depreciation
and 238,815 593,196 19,733 851,744 431,168 215,584 377,612 636,160
amortization
Deduct:
Unrealized
gain on
notes - 24,575 - 24,575 - - 24,575 24,575
receivable,
tribal
governments
$ 522,793 $ 7,707,323 $ (1,101,659 ) $ 7,128,457 $ 6,213,319 $ 3,106,660 $ 4,600,663 $ 4,021,797
Net of Non-Controlling
Interest
2010 Casino Development/ Corporate Consolidated GEM 50% Development/ Consolidated
Operations Management Management
Operating
income $ 434,833 $ 6,754,456 $ (1,164,391 ) $ 6,024,898 $ 5,585,610 2,792,805 $ 3,961,651 $ 3,232,093
(loss)
Add Back:
Depreciation
and 245,083 593,195 23,065 861,343 431,168 215,584 377,611 645,759
amortization
Unrealized
loss on
notes - 10,764 - 10,764 - - 10,764 10,764
receivable,
tribal
governments
$ 679,916 $ 7,358,415 $ (1,141,326 ) $ 6,897,005 $ 6,016,778 $ 3,008,389 $ 4,350,026 $ 3,888,616
FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months
ended March 31,
2011 2010
Revenues
Casino $ 1,541,052 $ 1,712,012
Food and beverage 412,583 417,191
Management fees 6,364,242 6,162,107
Other 26,350 19,921
8,344,227 8,311,231
Operating costs and expenses
Casino 522,456 535,907
Food and beverage 472,773 487,025
Project development and acquisition costs 531,809 67,677
Selling, general and administrative 1,653,708 1,765,733
Depreciation and amortization 851,744 861,343
4,032,490 3,717,685
Operating gains (losses)
Equity in net income of unconsolidated joint 1,495,322 1,442,116
venture and related guaranteed payments
Unrealized gains (losses) on notes receivable, 24,575 (10,764 )
tribal governments
1,519,897 1,431,352
Operating income 5,831,634 6,024,898
Other income (expense)
Interest and other income 387 112,841
Interest expense, including amortization of debt (210,635 ) (3,655 )
costs of $128,974 and $3,655
Income before income taxes 5,621,386 6,134,084
Income taxes (1,406,863 ) (1,538,649 )
Net income 4,214,523 4,595,435
Income attributable to non-controlling interest (2,607,079 ) (2,586,818 )
in consolidated joint venture
Net income attributable to the Company $ 1,607,444 $ 2,008,617
Net income attributable to the Company per $ 0.09 $ 0.11
common share
Weighted-average number of common shares 18,007,681 18,001,681
outstanding
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 has a management agreement with the Nottawaseppi Huron Band of Potawatomi Indians for FireKeepers Casino in Battle Creek, Michigan with approximately 2,700 gaming devices, 78 table games and a 120-seat poker room. The FireKeepers Development Authority recently announced the development of a 242-room resort-style hotel including a special events center, a full service restaurant and an expanded bingo facility. For further information, go to www.FireKeepersCasino.com. In addition, Full House 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. For more information, please visit www.StockmansCasino.com. Full House also receives a guaranteed fee, through termination of the agreement in August 2011, from the Harrington Raceway and Casino at the Delaware State Fairgrounds in Harrington, Delaware. Harrington Raceway and Casino has a total of approximately 1,800 gaming devices, 40 table games, 10 poker tables, a 450-seat buffet, a fine dining restaurant, a 50-seat diner, a sports book and an entertainment lounge. For more information, go to www.harringtonraceway.com.
In April 2011, the Company completed the acquisition of the Grand Victoria Casino and Resort in Rising Sun, Indiana. The Grand Victoria Riverboat 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 201-room hotel with spa, pool, meeting space and a pavilion with five food and beverage outlets, including a fine dining restaurant, buffet, sports bar, quick service restaurant and coffee shop and a large, multi-purpose Grand Theater for concerts and performance events as well as meetings and conventions. The 300-acre grounds also contain an 18-hole Scottish links golf course with full-service clubhouse. The property is conveniently located within driving distance of Indianapolis, Indiana and Cincinnati, Ohio and near Lexington and Louisville, Kentucky. For more information on the Grand Victoria, please visit www.grandvictoria.com. 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 and Nevada, financing sources and terms, integration of acquisitions, competition and business conditions in the gaming industry, including the opening of the Gun Lake casino in Michigan, plans for other and new competition in Michigan, 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.
Source: Full House Resorts
Released May 9, 2011