Full House Resorts Announces Three and Nine Month Results for the Period Ended September 30, 2008
FireKeepers Construction Remains on Track for Summer 2009 Opening
LAS VEGAS--(BUSINESS WIRE)--
Full House Resorts (NYSE Alternext US: FLL) today announced results for the three and nine months ended September 30, 2008. For the three months ended September 30, 2008, income from continuing operations was $539,673, compared to income from continuing operations of $520,831 in the prior-year period. Net income for the three months ended September 30, 2008 was $539,673, compared to $604,791 in the prior-year period. Diluted net income per common share in the third quarter of 2008 is $0.03 versus $0.03 in the prior-year period.
Third Quarter 2008 Highlights and Subsequent Events
-- On July 7, 2008, the Company announced that its Board of
Directors authorized a program to repurchase up to $1 million
of the Company's common stock. On October 14, 2008, the Board
authorized the purchase of an additional $1,000,000 of the
Company's common stock, and extended the expiration of the
repurchase plan to April 30, 2009. Through November 7, the
Company had purchased 810,012 shares of common stock at a
weighted-average cost of $1.28 per share, for a total cost of
$1,061,850 (including transaction costs).
-- In late September 2008, the final piece of structural iron was
installed on top of the FireKeepers Casino. On November 4,
2008 the Company announced it had reached another construction
milestone with the enclosure of the building structure for
FireKeepers Casino prior to the onset of inclement winter
weather. The casino development project remains on schedule
for a summer of 2009 opening.
Commenting on third quarter results, CEO Andre Hilliou said, "Our third quarter results at Stockman's Casino were affected by the weak economic climate being experienced throughout the gaming industry. However, in Delaware, we continue to be insulated from the economic and competitive issues facing that market by our restructured joint venture agreement which provides us with at least 8% growth over last year's cash payments for 2008 and 5% each year thereafter through August 2011. With the achievement of key construction milestones during the past several months, we remain confident that the FireKeepers Casino remains on schedule and will be a major contributor to shareholder value upon its opening in the summer of 2009."
Third Quarter 2008 Results
For the quarter ended September 30, 2008, Full House reported casino, food and beverage, and other revenue of $2.4 million, down 7% compared to revenue of $2.6 million in the prior-year period, primarily as a result of lower slot and food and beverage revenue at the Stockman's Casino due primarily to general economic weakness.
The Company recorded equity in net income of unconsolidated joint venture and related guaranteed payments of $1.4 million, an increase of 34% 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. Quarterly results differ from the minimum 8% guaranteed growth due to timing differences in cash payments in the prior year.
Operating expenses for third quarter 2008 were $3.0 million, an increase of 2% from the prior-year period, primarily due to higher food and beverage costs during the quarter and increases related to GEM's management agreement for FireKeepers, partially offset by lower expenses in the casino segment.
Income from continuing operations before income taxes for third quarter 2008 was $914,538 compared to $487,754 in the prior-year period. The 2008 results include an unrealized gain on notes receivable from tribal governments of $137,356 compared to a loss of $209,106 in 2007.
The Company reported net income per common share of $0.03 for the three months ended September 30, 2008 and 2007, respectively.
Nine Month 2008 Results
For the nine months ended September 30, 2008, Full House reported casino, food and beverage, and other revenue of $7.4 million, compared to revenue of $7.2 million in the prior-year period, primarily as a result of a full nine-month contribution from Stockman's operations in 2008 as opposed to only eight months of operations in 2007. The 2007 results included a $0.3 million one-time Hard Rock Casino settlement payment received in the second quarter of 2007.
The Company recorded equity in net income of unconsolidated joint venture and related guarantee payments of $3.6 million, a 15% increase from the prior-year period. Year-to-date results differ from the 2008 minimum 8% guaranteed growth due to timing differences in cash payments in the prior year. Management expects that 2008 full-year results for GED will modestly exceed the 8% guarantee due to the timing of cash payments in the prior year.
Operating expenses for the nine months ended September 30, 2008 were $9.5 million compared to $9.6 million in the prior-year period, as lower stock compensation during 2008 more than offset an extra month of Stockman's operations.
Income from continuing operations before other income and non-controlling interest in net income (loss) of consolidated joint venture and income taxes for the nine months ended September 30, 2008 was $3.4 million compared to $1.4 million in the prior-year period. The 2008 figure includes $2.0 million of unrealized gains on notes receivable from tribal governments compared to $0.7 million in the prior-year period, with the year-over-year increase primarily due to the repayment of $9.3 million of notes receivable related to the FireKeepers Casino, in connection with the FireKeepers Development Authority obtaining construction and equipment financing for the project.
The Company reported earnings per share of $0.08 and $0.05 for the nine months ended September 30, 2008 and 2007, respectively.
Liquidity and Capital Resources
As of September 30, 2008, the company had $6.6 million in cash and approximately $5.3 million of availability on its revolving credit line with the Nevada State Bank. Long-term debt outstanding including current maturities at the end of the third quarter was $6.9 million. Full House repaid $0.4 million of debt during the quarter, bringing the total amount of debt reduction during 2008 to $18.0 million. Subsequent to September 30, 2008, Full House has used approximately $0.9 million of cash to purchase common stock and has made an additional voluntary payment on its revolving credit line of $0.6 million. As of November 7, 2008, the Company has approximately $5.8 million in cash and $6.0 million of availability on its revolving credit line.
Conference Call Information
The Company will host a conference call and webcast on Thursday, November 13, 2008 at 11:00 a.m. EST. Both the call and webcast are open to the general public.
The conference call number is 800-240-2134; international callers can access the call by dialing 1-303-262-2053. 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 11120923.
Selected unaudited Statements of Operations (from continuing
operations) data for the three months ended September 30,
Casino Development/
2008 Operations Management Corporate Consolidated
----------------------------------------------------------------------
Revenues $2,442,926 $ --- $ 1,400 $2,444,326
Selling, general and
administrative
expense 480,799 135,154 918,165 1,534,118
Depreciation and
amortization 271,413 14,364 21,112 306,889
Operating gains --- 1,509,524 --- 1,509,524
Income (loss) from
continuing
operations before
other income
(expense) and
noncontrolling
interest in net
income (loss) of
consolidated joint
venture and income
taxes 549,481 1,347,814 (988,078) 909,217
Income (loss) from
continuing
operations 551,049 780,256 (791,632) 539,673
Casino Development/
2007 Operations Management Corporate Consolidated
----------------------------------------------------------------------
Revenues $2,632,597 $ --- $ --- $2,632,597
Selling, general and
administrative
expense 490,999 22,137 933,636 1,446,772
Depreciation and
amortization 310,806 14,364 1,704 326,874
Operating gains --- 813,234 --- 813,234
Income (loss) from
continuing
operations before
other income
(expense) and
noncontrolling
interest in net
income (loss) of
consolidated joint
venture and income
taxes 712,219 711,395 (972,543) 451,071
Income (loss) from
continuing
operations 768,358 946,176 (1,193,703) 520,831
Selected unaudited Statements of Operations (from continuing
operations) data for the nine months ended September 30,
Casino Development/
2008 Operations Management Corporate Consolidated
----------------------------------------------------------------------
Revenues $7,399,461 $ --- $ 1,458 $7,400,919
Selling, general and
administrative
expense 1,386,315 316,935 3,162,960 4,866,210
Depreciation and
amortization 810,696 43,092 48,335 902,123
Operating gains --- 5,455,990 --- 5,455,990
Income (loss) from
continuing
operations before
other income
(expense) and
noncontrolling
interest in net
income (loss) of
consolidated joint
venture and income
taxes 1,628,562 5,014,461 (3,261,358) 3,381,665
Income (loss) from
continuing
operations 1,656,102 4,667,024 (4,749,363) 1,573,763
Casino Development/
2007 Operations Management Corporate Consolidated
----------------------------------------------------------------------
Revenues $6,887,897 $ --- $ 283,554 $7,171,451
Selling, general and
administrative
expense 1,164,904 137,684 3,951,461 5,254,049
Depreciation and
amortization 879,011 47,664 5,893 932,568
Operating gains --- 3,815,240 --- 3,815,240
Income (loss) from
continuing
operations before
other income
(expense) and
noncontrolling
interest in net
income (loss) of
consolidated joint
venture and income
taxes 1,772,741 3,321,331 (3,713,512) 1,380,560
Income (loss) from
continuing
operations 1,911,096 3,299,476 (4,493,039) 717,533
Reconciliation of EBITDA before unrealized gains (losses) on notes
receivable, tribal governments, for the three months ended September
30,
Casino Development /
2008 Operations Management Corporate Consolidated
----------------------------------------------------------------------
Income from
continuing
operations before
other income
(expense) and
noncontrolling
interest in net
income (loss) of
consolidated joint
venture and income
taxes $ 549,481 $1,347,814 $(988,078) $ 909,217
Add Back:
Depreciation and
amortization 271,413 14,364 21,112 306,889
Deduct:
Unrealized gain on
notes receivable,
tribal governments - 137,356 - 137,356
-------------------------------------------------
EBITDA before
unrealized gain on
tribal advances $ 820,894 $1,224,822 $(966,966) $1,078,750
=================================================
Casino Development /
2007 Operations Management Corporate Consolidated
----------------------------------------------------------------------
Income from
continuing
operations before
other income
(expense) and
noncontrolling
interest in net
income (loss) of
consolidated joint
venture and income
taxes $ 712,219 $ 711,395 $(972,543) $ 451,071
Add Back:
Depreciation and
amortization 310,806 14,364 1,704 326,874
Unrealized loss on
notes receivable,
tribal governments - 209,106 - 209,106
-------------------------------------------------
EBITDA before
unrealized loss on
tribal advances $1,023,025 $ 934,865 $(970,839) $ 987,051
=================================================
FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
----------------------------------------------------------------------
Three months Nine months
ended September 30, ended September 30,
------------------------ ------------------------
2008 2007 2008 2007
------------ ------------ ------------ -----------
Revenues
Casino $ 1,925,134 $ 2,031,271 $ 5,694,645 $ 5,385,458
Food and
beverage 498,175 587,103 1,633,989 1,452,885
Other operating
income 21,017 14,223 72,285 333,108
----------- ----------- ----------- -----------
2,444,326 2,632,597 7,400,919 7,171,451
----------- ----------- ----------- -----------
Operating costs
and expenses
Casino 541,732 584,205 1,819,068 1,664,040
Food and
beverage 599,502 534,368 1,754,819 1,407,200
Project
development
costs 62,392 102,541 133,024 348,274
Selling, general
and
administrative 1,534,118 1,446,772 4,866,210 5,254,049
Depreciation and
amortization 306,889 326,874 902,123 932,568
----------- ----------- ----------- -----------
3,044,633 2,994,760 9,475,244 9,606,131
----------- ----------- ----------- -----------
Operating gains
(losses)
Equity in net
income of
unconsolidated
joint venture,
and related
guaranteed
payments 1,372,168 1,022,340 3,566,950 3,096,045
Unrealized gains
(losses) on
notes
receivable,
tribal
governments 137,356 (209,106) 1,974,040 719,195
Impairment loss,
land previously
held for
development --- --- (85,000) ---
----------- ----------- ----------- -----------
1,509,524 813,234 5,455,990 3,815,240
----------- ----------- ----------- -----------
Income from
continuing
operations before
other income
(expense) and
noncontrolling
interest in net
income (loss) of
consolidated
joint venture and
income taxes 909,217 451,071 3,381,665 1,380,560
Other income
(expense)
Interest and
other income 33,196 378,057 128,873 664,536
Interest expense (122,381) (329,330) (420,767) (952,605)
----------- ----------- ----------- -----------
Income from
continuing
operations before
noncontrolling
interest in net
income (loss) of
consolidated
joint venture and
income taxes 820,032 499,798 3,089,771 1,092,491
Noncontrolling
interest in net
(income) loss
of consolidated
joint venture 94,506 (12,044) (480,740) (123,634)
----------- ----------- ----------- -----------
Income from
continuing
operations before
income taxes 914,538 487,754 2,609,031 968,857
Income taxes (374,865) 33,077 (1,035,268) (251,324)
----------- ----------- ----------- -----------
Income from
continuing
operations 539,673 520,831 1,573,763 717,533
Income from
discontinued
operations, net
of tax --- 83,960 38,141 214,461
----------- ----------- ----------- -----------
Net income $ 539,673 $ 604,791 $ 1,611,904 $ 931,994
=========== =========== =========== ===========
Income from
continuing
operations per
common share
Basic and
diluted $ 0.03 $ 0.03 $ 0.08 $ 0.04
=========== =========== =========== ===========
Income from
discontinued
operations per
common share
Basic and
diluted $ 0.00 $ 0.00 $ 0.00 $ 0.01
=========== =========== =========== ===========
Net income per
common share
Basic and
diluted $ 0.03 $ 0.03 $ 0.08 $ 0.05
=========== =========== =========== ===========
Weighted-average
number of common
shares
outstanding
Basic and
diluted 19,332,356 19,342,276 19,338,969 19,291,437
=========== =========== =========== ===========
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 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 November 12, 2008