Full House Resorts Announces First Quarter Results for the Period Ended March 31, 2008
Reports Earnings per Share of $0.05 for First Quarter 2008
LAS VEGAS--(BUSINESS WIRE)--
Full House Resorts (AMEX: FLL) today announced results for its first quarter ended March 31, 2008. For the three months ended March 31, 2008, income from continuing operations increased to $2.5 million compared to $0.2 million in the prior-year period mainly due to a $1.9 million unrealized gain on notes receivable recognized in the first quarter of 2008 and a full quarter of results from the Stockman's Casino acquired at the end of January 2007. Net income during the first quarter of 2008 was $1.0 million compared to net income of $0.1 million in the first quarter of 2007. Earnings per share in the first quarter of 2008 were $0.05 compared to $0.00 in the prior-year period based on diluted common shares outstanding of 19.3 million and 19.2 million, respectively.
First Quarter 2008 Highlights and Subsequent Events
-- On February 20, 2008, Full House closed on the sale of the
Holiday Inn Express in Fallon, Nevada. The Company 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.
-- Earnings from the Harrington Raceway and Casino management
agreement increased from $1.0 million to $1.2 million as a
result of the guaranteed minimum growth rate negotiated in
2007. In February 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.
-- On May 6, 2008, the FireKeepers Development Authority closed
on a $340 million Senior Secured Note financing and a $35
million F&E facility to fund the FireKeepers Casino project in
Battle Creek, Michigan. Full House owns 50% of the joint
venture Gaming Entertainment Michigan, LLC (GEM), which has
been and will continue to oversee on behalf of the Authority
the construction of the facility and has a seven-year
management agreement which begins when the facility opens.
Construction has commenced on the facility and it is expected
to open in the summer of 2009.
-- With the closing of financing, GEM received reimbursement from
the FireKeepers Development Authority of approximately $9.3
million for previously advanced development costs. The funds
were used to retire the $9.5 million obligation to Green Acres
carried by the Company as debt. The Company agreed to leave
the remaining $5.0 million receivable in the project until 180
days following opening. The balance will be paid from the
construction disbursement account provided funds are
available.
Commenting on first quarter results, CEO Andre Hilliou said, "We were pleased with first quarter results considering the difficult business environment we are operating in. In Delaware, we are locked into a minimum 8% management fee growth this year. Our Stockman's Casino performed within expectations, although we have seen some weakness in the Northern Nevada market. In addition, during the quarter, we completed the sale of the Holiday Inn Express at a very favorable multiple which allowed us to substantially reduce our debt. And most importantly, we are extremely pleased to have assisted the FireKeepers Development Authority in raising their project financing which has allowed construction to commence in earnest last week. We remain confident that the FireKeepers Casino will be a major driver of shareholder value upon its opening in the summer of 2009."
First Quarter Results
For the quarter ended March 31, 2008, Full House reported casino, food and beverage, and other revenue of $2.6 million, compared to revenue of $1.7 million in the first quarter of 2007. The prior-year period included only two months of operations for Stockman's Casino which was acquired on January 31, 2007.
The Company recorded equity in net income of unconsolidated joint venture and management fee income of $1.2 million compared to $1.0 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 first quarter 2008 were $3.1 million compared to $2.9 million in the prior-year period, primarily as a result of a full quarter's worth of Stockman's operations in 2008 as opposed to only two months of operations in 2007. Development expenses and corporate level SG&A declined on a year-over-year basis.
Income from operations for first quarter 2008 was $2.5 million compared to $0.2 million in the prior-year period. The 2008 figure includes a $1.9 million unrealized gain on notes receivable compared to $0.4 million last year, primarily due to the repayment of $9.3 million related to previously discussed financing for the FireKeepers Casino.
The Company reported earnings per share of $0.05 and $0.00 for the three months ended March 31, 2008 and 2007, respectively.
Liquidity and Capital Resources
As of March 31, 2008, the company had $7.2 million in cash and approximately $4.8 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 first quarter was $15.2 million. Aided by the closing of the sale of the Holiday Inn Express, the company prepaid $8.0 million of debt during the quarter. Following the closing of financing on the FireKeepers Casino in May 2008 and the subsequent retirement of the Green Acres obligation, the Company has approximately $6.4 million cash on hand, has reduced the long-term debt outstanding, including current maturities, to $5.8 million and has 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 on Thursday, May 15, 2008 at 11:00 a.m. EDT. Both the call and webcast are open to the general public.
The conference call number is 800-218-0530; international callers can access the call by dialing 1-303-262-2131. 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 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 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 11113998.
Selected audited Statements of Operations (for continuing operations) data for the three months ended March 31,
Casino Development/
2008 Operations Management Corporate Consolidated
----------------------------------------------------------------------
Revenues $ 2,569,601 $ --- $ 23 $ 2,569,624
Selling, general
and administrative 388,014 22,493 1,184,114 1,594,621
Depreciation and
amortization 243,877 19,152 7,513 270,542
Operating gains --- 3,061,261 --- 3,061,261
Income(loss) from
continuing
operations before
other
income(expense) 737,651 2,985,616 (1,192,396) 2,530,871
Income(loss) from
continuing
operations 785,012 2,346,594 (2,130,857) 1,000,749
Casino Development/
2007 Operations Management Corporate Consolidated
----------------------------------------------------------------------
Revenues $ 1,669,592 $ --- $ --- $ 1,669,592
Selling, general
and administrative 273,853 60,501 1,417,900 1,752,254
Depreciation and
amortization 264,545 16,650 2,385 283,580
Operating gains --- 1,452,020 --- 1,452,020
Income(loss) from
continuing
operations before
other
income(expense) 442,060 1,198,681 (1,444,353) 196,388
Income(loss) from
continuing
operations 475,432 1,128,917 (1,565,796) 38,553
Reconciliation of EBITDA before unrealized gains on tribal advances for the three months ended March 31,
Casino Development/
2008 Operations Management Corporate Consolidated
----------------------------------------------------------------------
Income from
continuing
operations before
other income
(expense) $ 737,651 $ 2,985,616 $(1,192,396) $ 2,530,871
Add Back:
Depreciation and
amortization 243,877 19,152 7,513 270,542
Deduct:
Unrealized gains
on notes
receivable,
tribal
governments - 1,898,524 - 1,898,524
--------------------------------------------------
EBITDA before
unrealized gains
on tribal advances $ 981,528 $ 1,106,244 $(1,184,883) $ 902,889
==================================================
Casino Development/
2007 Operations Management Corporate Consolidated
----------------------------------------------------------------------
Income from
continuing
operations before
other income
(expense) $ 442,060 $ 1,198,681 $(1,444,353) $ 196,388
Add Back:
Depreciation and
amortization 264,545 16,650 2,385 283,580
Deduct:
Unrealized gains
on notes
receivable,
tribal
governments - 404,533 - 404,533
--------------------------------------------------
EBITDA before
unrealized gains
on tribal advances $ 706,605 $ 810,798 $(1,441,968) $ 75,435
==================================================
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 completed an expansion resulting in a total of approximately 2,100 gaming devices, a buffet, gourmet steakhouse, 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 under construction. 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
Released May 14, 2008