Michael P. Shaunnessy Joins Company as President and CEO
Adjusted EBITDA Increases Fourfold
HOUSTON, Dec. 12, 2012 (GLOBE NEWSWIRE) -- Nevada Gold & Casinos, Inc. (NYSE MKT:UWN) today announced financial results for the second quarter of fiscal 2013, ended October 31, 2012.
Second Quarter 2013 Financial Highlights
- Net revenues increased 28% to $16.4 million.
- Adjusted EBITDA(1) from continuing operations increased to $1.3 million from $0.3 million.
- Net loss per share from continuing operations, including non-recurring items, was $0.04 compared to $0.15 in the prior-year period.
Michael Shaunnessy, who joined Nevada Gold as President and CEO on December 1, 2012, commented, "With the company's newly streamlined organization, enhanced operations and a focus on practical growth options, I believe we are at an important turning point for Nevada Gold. I am excited about working with the board of directors and employees to optimize the collection of assets the company has amassed and to take advantage of new growth opportunities available in today's market."
Ernest East, who served as interim president from September 6, 2012 to November 30, 2012, stated, "We are pleased with the company's substantial increase in adjusted EBITDA during the quarter. Our Washington and South Dakota operations both performed according to plan and we implemented meaningful cost reductions, in excess of $1 million annually. During the quarter we also re-assessed our ongoing development efforts and, given the challenges of securing financing, decided not to pursue the Las Vegas Speedway Project. This quarter's results include the write-off of the $215,000 invested to date in that project as well as approximately $42,000 in other development costs."
William Sherlock, Chairman of the Board of Directors, observed, "We are delighted that the search process the board began in September moved forward so quickly, enabling us to retain a first-class executive for Nevada Gold. Mike's three decades in the gaming and hospitality industry, combined with his outstanding operational and financial skills, position him ideally to lead Nevada Gold to its next stage of development."
Mr. Shaunnessy concluded, "Going forward, the Nevada Gold team will explore opportunities that build on the company's current asset base, offer more immediate rewards, and take advantage of our recent licensing approval in Nevada. As I assume the leadership of Nevada Gold, I look forward to providing further information on our operational and financial goals."
Financial Results
The financial information presented below represents results from continuing operations. Financial information for the second quarter of fiscal 2013 also reflects the company's January 27, 2012 acquisition of a slot route operation in Deadwood, South Dakota. As previously announced, Nevada Gold completed the sale of the Colorado Grande Casino in Cripple Creek, Colorado in May 2012. As a result, the Colorado Grande's results have been reclassified as discontinued operations.
Excluding the non-recurring charges, operating results for the period ended October 31, 2012 reflect an operating income of $0.7 million compared to an operating loss of $0.2 million for the prior-year period. For the second quarter of fiscal 2013, net revenues increased 28% to $16.4 million compared to $12.8 million in the prior-year period. Operating expenses, excluding non-recurring charges, increased 20% to $15.7 million compared to $13.1 million in the prior-year period. The revenue and expense increases are primarily due to the addition of the South Dakota slot route operation. The non-recurring expenses recorded during the quarter ended October 31, 2012 include a $0.3 million non-cash write-off of project development costs, primarily related to the Las Vegas Speedway Project, and a $0.7 million charge for severance related to the former CEO and the elimination of several corporate positions. The annual cost reductions that have been implemented will be reflected in our operating results beginning in the third quarter of fiscal 2013. During the quarter ended October 31, 2011, Nevada Gold recorded a non-cash impairment adjustment of $2.3 million for vacant land the company owns in Colorado. Operating loss for the current quarter totaled $0.3 million compared to an operating loss of $2.5 million in the prior-year quarter. Net loss was $0.8 million compared to a net loss of $2.2 million, which includes the non-recurring charges, and a net loss from discontinued operations of $.1 million in each quarter. On a per share basis, net loss for continuing operations was $0.04 in the 2013 second quarter compared to $0.15 in the prior-year period. On a per share basis, net loss for discontinued operations was $0.01 in both the 2013 and the 2012 quarters.
Diluted weighted average common shares outstanding in the second quarter of fiscal 2013 were 16.0 million compared to 13.2 million in the prior-year period.
Conference Call and Webcast
The Company will host a conference call to discuss second quarter 2013 financial results today at 11:00 AM ET. The conference call can be accessed live over the phone by dialing 855-235-2089 or, for international callers, 778-327-3988. A replay will be available one hour after the call and can be accessed by dialing 877-870-5176, or for international callers, 858-384-5517; the conference ID is #91212. The replay will be available through December 19, 2012. The call will be webcast live from the Company's website at www.NevadaGold.com under the Investor Relations section.
(1) Non-GAAP Information
The term "adjusted EBITDA" is used by us in presentations, quarterly earnings calls, and other instances as appropriate. Adjusted EBITDA is defined as net income before interest, income taxes, depreciation and amortization, non-cash goodwill and other long-lived asset impairment charges, write-offs of project development costs, litigation charges, non-cash foreign currency transaction gains and losses, non-cash stock option grants, exclusion of net income or loss from operations held for sale, severance costs, and net losses/gains from asset dispositions. Adjusted EBITDA does not take into account greater or less than expected hold percentages in the gaming operations. Adjusted EBITDA is presented because it is a required component of financial ratios reported by us to our lenders, and it is also frequently used by securities analysts, investors, and other interested parties, in addition to and not in lieu of, U.S. Generally Accepted Accounting Principles ("GAAP") results to compare to the performance of other companies that also publicize this information. Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to net income as an indicator of our operating performance or any other measure of performance derived in accordance with GAAP.
Adjusted EBITDA reconciliation for the three months ended October 31, 2012 and October 31, 2011:
| Adjusted EBITDA reconciliation to net loss: | ||
| For the three months ended | ||
| October 31, 2012 | October 31, 2011 | |
| Net loss | $ (819,008) | $ (2,120,606) |
| Add: | ||
| Income tax benefit | (108,375) | (1,040,324) |
| Net interest expense | 478,146 | 369,971 |
| Loss on extinguishment of debt | -- | 154,270 |
| Impairments/Write offs | 257,733 | 2,273,966 |
| Loss on sale of assets | 1,718 | 22,340 |
| Depreciation and amortization | 538,534 | 464,541 |
| Deferred rent | 19,034 | -- |
| Stock option and ESPP grants | 65,682 | 20,780 |
| Severance expense | 725,877 | -- |
| Loss on operations held for sale | 138,472 | 97,924 |
| Acquisition expenses | -- | 13,721 |
| Adjusted EBITDA | $ 1,297,813 | $ 256,583 |
Forward-Looking Statements
This release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We use words such as "anticipate," "believe," "expect," "future," "intend," "plan," and similar expressions to identify forward-looking statements. Forward-looking statements include, without limitation, our ability to increase income streams, to grow revenue and earnings, and to obtain additional gaming and other projects. These statements are only predictions and are subject to certain risks, uncertainties and assumptions, which are identified and described in the Company's public filings with the Securities and Exchange Commission.
About Nevada Gold
Nevada Gold & Casinos, Inc. (NYSE MKT:UWN) of Houston, Texas is a developer, owner and operator of 10 gaming operations in Washington ("Washington Gold") and a 950-machine slot route operation in Deadwood, South Dakota ("South Dakota Gold"). The Company also has a gaming license in Nevada and an interest in Buena Vista Development Company, LLC, which is working on a Native American casino project to be developed in Ione, California. For more information, visit www.nevadagold.com.
The Nevada Gold logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=13803
| Contacts: |
| Nevada Gold & Casinos, Inc. |
| Michael P. Shaunnessy |
| (713) 621-2245 |
| LHA |
| Harriet Fried / Jody Burfening |
| (212) 838-3777 |
| hfried@lhai.com |
| Nevada Gold & Casinos, Inc. | ||
| Consolidated Balance Sheets | ||
| October 31, 2012 | April 30, 2012 | |
| (unaudited) | ||
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 5,868,748 | $ 5,200,161 |
| Restricted cash | 2,049,219 | 1,787,068 |
| Accounts receivable | 435,859 | 653,433 |
| Prepaid expenses | 1,211,394 | 909,834 |
| Notes receivable, current portion | 151,583 | 20,600 |
| Other current assets | 363,031 | 354,817 |
| Assets of discontinued operations | -- | 33,601 |
| Total current assets | 10,079,834 | 8,959,514 |
| Investments in development projects | 15,750 | 255,355 |
| Real estate held for sale | 1,100,000 | 1,100,000 |
| Notes receivable, net of current portion | 2,128,417 | -- |
| Goodwill | 16,103,584 | 16,090,799 |
| Identifiable intangible assets, net of accumulated amortization of $3,810,654 and $3,201,868 at October 31, 2012 and April 30, 2012, respectively | 7,173,667 | 7,782,453 |
| Property and equipment, net of accumulated depreciation | ||
| of $2,218,476 and $1,785,064 at October 31, 2012 and | ||
| April 30, 2012, respectively | 5,304,191 | 5,399,103 |
| Deferred tax asset, net | 5,270,922 | 5,251,236 |
| Other assets | 1,065,924 | 1,219,356 |
| Assets of discontinued operations | -- | 3,115,097 |
| Total assets | $ 48,242,289 | $ 49,172,913 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable and accrued liabilities | $ 2,419,630 | $ 2,176,545 |
| Accrued interest payable | 45,191 | 61,141 |
| Other accrued liabilities | 2,930,708 | 2,632,067 |
| Long-term debt, current portion | 1,885,324 | 1,400,324 |
| Liabilities of discontinued operations | -- | 23,699 |
| Total current liabilities | 7,280,853 | 6,293,776 |
| Other long term liabilities | 375,916 | 337,849 |
| Long-term debt, net of current portion | 13,690,000 | 15,155,000 |
| Total liabilities | 21,346,769 | 21,786,625 |
| Stockholders' equity: | ||
| Common stock, $0.12 par value per share; 50,000,000 shares authorized; 16,802,531 and 16,707,205 shares issued and 16,019,694 and 15,924,368 shares outstanding at October 31, 2012, and April 30, 2012, respectively | 2,016,304 | 2,004,865 |
| Additional paid-in capital | 24,303,834 | 24,155,158 |
| Retained earnings | 7,512,956 | 8,163,839 |
| Treasury stock, 782,837 shares at October 31, 2012 and April 30, 2012, respectively, at cost | (6,932,035) | (6,932,035) |
| Accumulated other comprehensive loss | (5,539) | (5,539) |
| Total stockholders' equity | 26,895,520 | 27,386,288 |
| Total liabilities and stockholders' equity | $ 48,242,289 | $ 49,172,913 |
| Nevada Gold & Casinos, Inc. | ||||
| Consolidated Statements of Operations | ||||
| (unaudited) | ||||
| Three Months Ended | Six Months Ended | |||
| October 31, | October 31, | October 31, | October 31, | |
| 2012 | 2011 | 2012 | 2011 | |
| Revenues: | ||||
| Casino | $ 14,290,425 | $ 10,896,447 | $ 29,051,685 | $ 21,817,723 |
| Food and beverage | 2,508,167 | 2,774,636 | 5,065,767 | 5,367,416 |
| Other | 658,882 | 554,114 | 1,327,581 | 1,069,601 |
| Gross revenues | 17,457,474 | 14,225,197 | 35,445,033 | 28,254,740 |
| Less promotional allowances | (1,073,786) | (1,392,611) | (2,250,642) | (2,671,683) |
| Net revenues | 16,383,688 | 12,832,586 | 33,194,391 | 25,583,057 |
| Expenses: | ||||
| Casino | 8,183,837 | 5,682,762 | 16,232,412 | 10,995,136 |
| Food and beverage | 1,178,027 | 1,031,703 | 2,363,249 | 2,009,082 |
| Marketing and administrative | 4,012,392 | 4,018,000 | 8,397,620 | 7,936,345 |
| Facility | 570,178 | 522,142 | 1,113,799 | 1,011,721 |
| Corporate expense | 1,452,736 | 891,423 | 2,326,510 | 1,974,187 |
| Legal expense | 40,575 | 20,658 | 79,437 | 27,591 |
| Depreciation and amortization | 538,534 | 464,541 | 1,077,515 | 903,204 |
| Deferred rent | 19,034 | -- | 38,067 | -- |
| Acquisition costs | -- | 13,721 | -- | 65,666 |
| Impairment of assets | -- | 2,273,966 | -- | 2,273,966 |
| Write-off of project development cost | 257,733 | -- | 257,733 | -- |
| Excise taxes | 297,918 | 295,743 | 610,238 | 587,994 |
| Other | 141,771 | 134,352 | 286,334 | 237,172 |
| Total operating expenses | 16,692,735 | 15,349,011 | 32,782,914 | 28,022,064 |
| Operating income (loss) | (309,047) | (2,516,425) | 411,477 | (2,439,007) |
| Non-operating income (expenses): | ||||
| Loss on sale of assets | (1,718) | (22,340) | (2,963) | (22,654) |
| Interest income | -- | 42,853 | 900 | 85,702 |
| Interest expense | (393,064) | (379,488) | (778,565) | (759,137) |
| Amortization of loan issue costs | (85,082) | (33,336) | (162,625) | (44,586) |
| Loss on extinguishment of debt | -- | (154,270) | -- | (154,270) |
| Loss before income tax benefit | (788,911) | (3,063,006) | (531,776) | (3,333,952) |
| Income tax benefit | 108,375 | 1,040,324 | 19,686 | 1,324,251 |
| Net loss from continuing operations | $ (680,536) | $ (2,022,682) | $ (512,090) | $ (2,009,701) |
| Net loss from discontinued operations, net of taxes | (138,472) | (97,924) | (138,793) | (302,765) |
| Net loss | $ (819,008) | $ (2,120,606) | $ (650,883) | $ (2,312,466) |
| Per share information: | ||||
| Net loss per common share - basic and diluted for continuing operations | $ (0.04) | $ (0.15) | $ (0.03) | $ (0.15) |
| Net loss per common share - basic and diluted for discontinued operations | $ (0.01) | $ (0.01) | $ (0.01) | $ (0.02) |
| Basic weighted average number of shares outstanding | 15,964,051 | 13,179,208 | 15,949,269 | 13,004,778 |
| Diluted weighted average number of shares outstanding | 15,964,051 | 13,179,208 | 15,949,269 | 13,004,778 |