Exhibit 99.1

 

FULL HOUSE RESORTS ANNOUNCES FIRST QUARTER RESULTS

 

- Silver Slipper Anticipates Reopening by May 22, 2020

 

-  All Properties Expected to Have Reopened by June 14, 2020

 

- All Mobile Sports Wagering Providers are Now Licensed in Colorado

 

-  Company’s First Mobile Sports Wagering Provider in Colorado Expected to Launch Operations
by End of May 2020

 

-  Once Operational, Sports Wagering Agreements are Expected to Generate at Least
$7.0 Million of Annual Revenue for Ten Years

 

- Company Had $24.3 Million of Cash and Equivalents at End of First Quarter;
Total Debt Outstanding was $107.7 Million

 

Las Vegas – May 13, 2020 – Full House Resorts, Inc. (Nasdaq: FLL) today announced results for the first quarter ended March 31, 2020.

 

Due to the COVID-19 pandemic, various state regulatory agencies required all of the Company’s casinos to close in mid-March 2020. As a result, on a consolidated basis, net revenues in the first quarter of 2020 decreased 23.8% to $30.9 million from $40.5 million in the prior-year period.  Net loss for the first quarter of 2020 was $(4.4) million, or $(0.22) per diluted common share, compared to a net loss of $(1.6) million, or $(0.06) per diluted common share, in the prior-year period.  Net loss in both periods was affected by the accounting for the fair market value of outstanding warrants.  Adjusted EBITDA(a) in the 2020 first quarter was $(1.2) million versus $3.6 million in the first quarter of 2019. Results for the first quarter of 2020 also include $0.4 million of revenue guarantees related to a full quarter of operations for one of the Company’s three permitted sports wagering websites in Indiana.

 

“We are now approximately two months into the shutdown of our properties,” said Daniel R. Lee, President and Chief Executive Officer of Full House Resorts. “These and other government-mandated closures appear to have helped slow the spread of the coronavirus. With the worst days of the pandemic hopefully behind us, we are now beginning to look forward to reopening our properties and safely welcoming back our customers and employees.

 

“We have spent the last several weeks of the shutdown examining many aspects of our business, from how we sanitize our properties to how we interact with and entertain our guests. We began using infrared devices to test employee temperatures prior to our casino shutdowns. We now also intend to screen guest temperatures when we reopen. We also intend to allow customers to block adjoining slot machines to ensure social distancing, and we will provide gloves, masks and hand sanitizer to our employees and guests. In some locations, we are installing dividers between our most popular slot machines. We will also continuously wipe and disinfect our slot machines, paying particular attention to high-touch surfaces, such as buttons and screens. In our restaurants, we are spacing our tables more widely apart and, where appropriate, installing separating screens.

 

“We also spent our weeks in shutdown to reset and relaunch the marketing programs at our Rising Star and Bronco Billy’s casinos.  At both properties, we recently completed installation of a new slot system. We believe this new slot system is a huge improvement and, at Rising Star in particular, replaced a system that was 17 years old. Through the improved analytics of our new slot system, we should be able to market more effectively and efficiently to our guests, while also providing an improved guest experience.”

 

Continued Mr. Lee, “The likely first of our properties to reopen is also our most important property, the Silver Slipper. It appears that the Silver Slipper and other casinos in Mississippi, armed with new safety protocols, will reopen by May 22, just in time for Memorial Day weekend. Our other properties are expected to follow shortly thereafter, with Stockman’s Casino and Grand Lodge Casino expected to reopen before the end of May, Bronco Billy’s expected to reopen in early June, and Rising Star expected to reopen on June 14. Given the fluid nature of the coronavirus situation, these dates may change, but we look forward to welcoming back our guests and employees in relatively short order.

 

“Regarding the first quarter, we began the year well at several properties. At the Silver Slipper, our results through the end of February were ahead of the prior-year period until the arrival of coronavirus-related concerns in March. Similarly, through the end of February, financial results at our Northern Nevada operations were meaningfully ahead of the prior-year period. At both Bronco Billy’s and

Rising Star, our new slot systems were ramping up. The momentum at our properties was disrupted by the coronavirus and state-mandated closure in March 2020.

 

“Online sports wagering made significant strides during the first quarter. In Indiana, we had our first full quarter of one of our three permitted ‘skins,’ or sports wagering websites, during the quarter. Sports wagering contributed $0.4 million to Rising Star’s financial results during the first quarter. We expect our two other websites in Indiana to launch shortly, pending the receipt of customary regulatory approvals. In Colorado, we are also permitted three sports wagering websites, and all three operators of those skins received their gaming licenses in April 2020. When all of our sports wagering websites have commenced operations – which we believe will be by the third quarter of this year – our sports wagering revenue guarantees should total at least $7.0 million per year.  As we have noted, our sports wagering contracts have ten-year minimum terms, with each of our providers having two five-year extension options. Our three sports wagering providers are significant operators in the gaming and/or sports book industry. As mobile sports wagering ramps up, we believe it should contribute a significant portion of the Company’s income.

 

“Lastly,” concluded Mr. Lee, “we continued to focus on our financial liquidity. We stopped construction of our parking garage at Bronco Billy’s in order to conserve capital. We sought and received covenant amendments from our lenders for the March 31 period, and continue to discuss covenant amendments for future quarters. Most recently, two of our subsidiaries applied for and received small loans under the CARES Act. We intend to use those funds primarily to begin to welcome back many of our employees as we reopen. While the past several weeks have been challenging, we are beginning to see what we believe is the proverbial light at the end of the tunnel.”

 

First Quarter Highlights and Subsequent Events

 

 

 

 

 

Liquidity and Capital Resources

As of March 31, 2020,  the Company had $24.3 million in cash and equivalents, as well as  $107.7 million in outstanding senior secured notes. As of April 30, 2020, the Company had approximately $20.4 million in cash and equivalents and its cash burn rate while operations are closed is approximately $3 million per month, including interest and debt principal payments. The Company has historically utilized approximately $10 million to $12 million of cash in its operations, including for on-site cash in its slot machines, change and redemption kiosks, and cages. The balance of its cash was earmarked for completion of its parking garage in Colorado, which was under construction when operations were required to close. Whether or not the Company will be able to complete the parking garage in the near future will depend on the length of time that its casinos are closed, the operating results of its casinos when they reopen, and the capital markets that might be available to the Company at some future date. Subsequent to the end of the first quarter, as discussed above, the Company received approximately $5.6 million of loan proceeds under the CARES Act.

 

Conference Call Information

The Company will host a conference call for investors today, May 13, 2020, at 4:30 p.m. ET (1:30 p.m. PT)  to discuss its current situation and 2020 first quarter results. Investors can access the live audio webcast from the Company’s website at www.fullhouseresorts.com under the investor relations section. The conference call can also be accessed by dialing (888) 204-4368 or, for international callers, (323) 994-2093.

 

A replay of the conference call will be available shortly after the conclusion of the call through May 27, 2020. To access the replay, please visit www.fullhouseresorts.com.  Investors can also access the replay by dialing (844) 512-2921 or, for international callers, (412) 317-6671 and using the passcode 3113390.

 

(a) Reconciliation of Non-GAAP Financial Measure

The Company utilizes Adjusted Property EBITDA, a financial measure in accordance with generally accepted accounting principles (“GAAP”), as the measure of segment profit in assessing performance and allocating resources at the reportable segment level.  Adjusted Property EBITDA is defined as earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, preopening expenses, impairment charges, asset write-offs, recoveries, gain (loss) from asset disposals, project development and acquisition costs, non-cash share-based compensation expense, and corporate-related costs and expenses that are not allocated to each property.  The Company also utilizes Adjusted EBITDA (a non-GAAP measure), which is defined as Adjusted Property EBITDA net of corporate-related costs and expenses.

 

Although Adjusted EBITDA is not a  measure of performance or liquidity calculated in accordance with GAAP, the Company believes this non-GAAP financial measure provides meaningful supplemental information regarding our performance and liquidity.  The Company utilizes this metric or measure internally to focus management on year-over-year changes in core operating performance, which it considers its ordinary, ongoing and customary operations and which it believes is useful information to investors.  Accordingly, management excludes certain items when analyzing core operating performance, such as the items mentioned above, that management believes are not reflective of ordinary, ongoing and customary operations.  A version of Adjusted EBITDA (known as Consolidated EBITDA, as defined in the indenture governing the Company’s senior secured notes) is also used to determine compliance with certain covenants.

 

A reconciliation of Adjusted EBITDA is presented below. However, you should not consider this measure in isolation or as a substitute for operating income, cash flows from operating activities, or any other measure for determining our operating performance or liquidity that is calculated in accordance with GAAP. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that, in the future, we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

 

FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)

 

 

 

 

Full House Resorts, Inc.

Supplemental Information

Segment Revenues and Adjusted Property EBITDA

(In Thousands, Unaudited)

 

 

(1)    Includes amounts related to the property’s sports revenue guarantees in 2020.

(2)  The Company utilizes Adjusted Property EBITDA as the measure of segment operating profit in assessing performance and allocating resources at the reportable segment level.

 

 

 

Full House Resorts, Inc.

Supplemental Information

Reconciliation of Net Income (Loss) and Operating Income (Loss) to Adjusted EBITDA

(In Thousands, Unaudited)

 

 

 

Full House Resorts, Inc.

Supplemental Information

Reconciliation of Operating Income (Loss) to Adjusted Property EBITDA and Adjusted EBITDA

(In Thousands, Unaudited)

 

 

 

 

 

(1)    Includes amounts related to the property’s sports revenue guarantees.

Forward-looking Statements

This press release contains statements by Full House and its officers that are “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Some forward-looking statements in this press release include those regarding the impact of the COVID-19 pandemic and our expectations regarding timing of reopening of casinos in the respective states; our intentions to

implement adaptive measures as a result of COVID-19, social distancing measures, temperature screenings and disinfecting, among

others; expectations regarding the timing for commencement of sports wagering in Indiana and Colorado, anticipated revenues from sports wagering and related expenses, and the related sports wagering agreements we have entered into; estimated tax savings as a result of the new gaming tax schedule in Indiana; expectations regarding the new slot systems; expectations regarding the intended use and the potential forgiveness of loans received under the CARES Act; expectations regarding future covenant waivers or amendments with our lenders; and our expectations regarding the Waukegan proposal. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the control of Full House. Such risks include, without limitation, our ability to repay our substantial indebtedness; the adverse impact of the COVID-19 pandemic on our business, constructions projects, financial condition and operating results, including on our ability to continue as a going concern; actions by government officials at the federal, state or local level with respect to steps to be taken, including, without limitation, temporary shutdowns, travel restrictions, social distancing and shelter-in place orders, in connection with the COVID-19 pandemic; our ability to effectively manage and control expenses during shutdown or reopening periods; the impact of temporary or extended shutdowns on our ability to maintain compliance with the terms and conditions of our indenture and other material contract; changes in guest visitation or spending patterns due to COVID-19 or other health or other concerns, including a decrease in overall demand after reopening our casinos; the impact of restrictions and social distancing requirements placed on our operations and services after reopening our casinos, including an increase in operational costs;  a failure of the global response to contain the COVID-19 pandemic or if a rebound of the virus in the fall; changes by the SBA or other governmental authorities regarding the CARES Act, loan programs established under the CARES Act, or related administrative matters; our ability to comply with the terms of the loans and the CARES Act and to use the loans for permissible expenses and in a manner that results in forgiveness of some or all of the loans; the availability of forgiveness of the loans in whole or in part; the failure to obtain and/or maintain regulatory approvals (including in Colorado, Indiana, Nevada and Mississippi); the ability to obtain financing upon reasonable terms (including for projects such as the Bronco Billy’s expansion and the Waukegan proposal); the potential increase in Full House’s indebtedness due to the expansion of Bronco Billy’s; construction risks and cost overruns; dependence on existing management; competition; uncertainties over the development and success of our acquisition and expansion projects; the financial performance of our finished projects and renovations; effectiveness of expense and operating efficiencies; general macroeconomic conditions; risks related to entering into sports betting operations (including our ability to establish and maintain relationships with key partners or vendors, the ability and/or willingness of our sports wagering providers to sustain sports betting operations should they experience an extended period of unprofitability, and the ability to replace existing partners or vendors on similar terms as our existing revenue guarantees); and regulatory and business conditions in the gaming industry (including the possible authorization or expansion of gaming in the states we operate or nearby states). 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 and the Company’s other periodic reports filed with the Securities and Exchange Commission. The Company is under no obligation to (and expressly disclaims any such obligation to) update or revise its forward-looking statements as a result of new information, future events or otherwise. Actual results may differ materially from those indicated in the forward-looking statements.

 

About Full House Resorts, Inc.

Full House Resorts owns, leases, develops and operates gaming facilities throughout the country. The Company’s properties include Silver Slipper Casino and Hotel in Hancock County, Mississippi; Bronco Billy’s Casino and Hotel in Cripple Creek, Colorado; Rising Star Casino Resort in Rising Sun, Indiana; and Stockman’s Casino in Fallon, Nevada. The Company also operates the Grand Lodge Casino at the Hyatt Regency Lake Tahoe Resort, Spa and Casino in Incline Village, Nevada under a lease agreement with the Hyatt organization.  Further information about Full House Resorts can be viewed on its website at www.fullhouseresorts.com.  The information contained on, or that may be accessed through, our website, our Facebook page, www.BroncoBillysCasino.com or www.americanplace.us, is not incorporated by reference into, and is not a part of, this document.

 

Contact:

Lewis Fanger, Chief Financial Officer

Full House Resorts, Inc.

702-221-7800

www.fullhouseresorts.com