Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING

v3.7.0.1
SEGMENT REPORTING
 6 Months Ended
Jun. 30, 2017
Segment Reporting [Abstract]  
SEGMENT REPORTING
SEGMENT REPORTING
 
We manage our casinos based on geographic regions within the United States. The casino/resort operations include four segments: Silver Slipper Casino and Hotel (Hancock County, Mississippi); Rising Star Casino Resort (Rising Sun, Indiana); Bronco Billy's Casino and Hotel (Cripple Creek, Colorado); and the Northern Nevada segment, consisting of Grand Lodge Casino (Incline Village, Nevada) and Stockman’s Casino (Fallon, Nevada). Bronco Billy's Casino and Hotel was acquired on May 13, 2016.

The Company's management utilizes Adjusted Property EBITDA as the primary profit measure for its segments. Adjusted Property EBITDA is a non-GAAP measure defined as Adjusted EBITDA before corporate-related costs and expenses that are not allocated to each property. Adjusted EBITDA is a non-GAAP measure defined as earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, pre-opening expenses, impairment charges, asset write-offs, recoveries, gain (loss) from asset disposals, project development and acquisition costs, and non-cash share-based compensation expense. EBITDA is a commonly used measure of performance in our industry that we believe, when considered with measures calculated in accordance with GAAP, provides our investors a more complete understanding of our operating results and facilitates comparisons between us and our competitors. Management has historically utilized Adjusted EBITDA and Adjusted Property EBITDA when evaluating operating performance because we believe these measures are (1) widely used measures of operating performance in the gaming and hospitality industries, (2) a principal basis for valuation of gaming and hospitality companies, and (3) are utilized in the covenants within our debt agreements, although not necessarily defined in the same way as above.

Adjusted EBITDA and Adjusted Property EBITDA should not be construed as an alternative to operating income and net income for use as indicators of our performance; or as an alternative to cash flows from operating activities for use as a measure of liquidity; or as an alternative to any other measure determined in accordance with GAAP. We have significant uses of cash flows, including capital expenditures, interest payments, taxes and debt principal repayments, which are not reflected in Adjusted EBITDA and/or Adjusted Property EBITDA. Also, other companies in the gaming and hospitality industries that report Adjusted EBITDA and/or Adjusted Property EBITDA information may calculate Adjusted EBITDA or Adjusted Property EBITDA in a different manner.

The following tables present the Company's segment information:

(In thousands, unaudited)
 
 
 
 
 
 
 
 
For the
Three Months Ended,
 
For the
Six Months Ended,
 
June 30,
2017
 
June 30,
2016
 
June 30,
2017
 
June 30,
2016
Net Revenues
 
 
 
 
 
 
 
     Silver Slipper Casino and Hotel
$
16,437

 
$
14,494

 
$
33,095

 
$
29,339

     Rising Star Casino Resort
12,595

 
12,053

 
24,800

 
24,299

     Bronco Billy's Hotel and Casino
6,773

 
3,334

 
12,635

 
3,334

     Northern Nevada Casinos
4,316

 
4,678

 
9,211

 
9,571

 
$
40,121

 
$
34,559

 
$
79,741

 
$
66,543

 
 
 
 
 
 
 
 
Adjusted Property EBITDA (1)
 
 
 
 
 
 
 
     Silver Slipper Casino and Hotel
$
2,907

 
$
2,369

 
$
5,959

 
$
5,030

     Rising Star Casino Resort
637

 
432

 
1,956

 
1,733

     Bronco Billy's Hotel and Casino
1,477

 
1,088

 
2,323

 
1,088

     Northern Nevada Casinos
(53
)
 
624

 
499

 
1,390

 
4,968

 
4,513

 
10,737

 
9,241

 
 
 
 
 
 
 
 
Other operating (expenses) income:
 
 
 
 
 
 
 
Depreciation and amortization
(2,138
)
 
(1,899
)
 
(4,235
)
 
(3,591
)
Corporate expenses
(1,280
)
 
(1,113
)
 
(2,454
)
 
(2,275
)
Project development and acquisition costs
(53
)
 
(485
)
 
(185
)
 
(772
)
Gain on disposals, net
14

 
—

 
1

 
—

Share-based compensation
(176
)
 
(164
)
 
(269
)
 
(220
)
Operating income
1,335

 
852

 
3,595

 
2,383

Other (expense) income:
 
 
 
 
 
 
 
Interest expense
(2,707
)
 
(2,230
)
 
(5,386
)
 
(3,992
)
Debt modification costs
—

 
(601
)
 
—

 
(601
)
Adjustment to fair value of warrants and other
32

 
(241
)
 
32

 
(241
)
 
(2,675
)
 
(3,072
)
 
(5,354
)
 
(4,834
)
Loss before income taxes
(1,340
)
 
(2,220
)
 
(1,759
)
 
(2,451
)
Provision for income taxes
184

 
180

 
368

 
280

Net loss
$
(1,524
)
 
$
(2,400
)
 
$
(2,127
)
 
$
(2,731
)

(1) Please refer to Item 2 - "Management's Discussion and Analysis of Financial Condition and Results of Operations" - "Non-GAAP Financial Measures" for a reconciliation of Adjusted Property EBITDA to its most directly comparable financial measure calculated and presented in accordance with GAAP.

(In thousands)
 
 
 
 
June 30,
2017
 
December 31,
2016
 
(unaudited)
 
 
Total Assets
 
 
 
     Silver Slipper Casino and Hotel
$
79,918

 
$
79,975

     Rising Star Casino Resort
37,209

 
36,444

     Bronco Billy's Hotel and Casino
36,522

 
36,732

     Northern Nevada Casinos
13,423

 
12,722

     Corporate and Other
8,570

 
11,333

 
$
175,642

 
$
177,206