HOUSTON, Aug. 31, 2005 (PRIMEZONE) -- Nevada Gold & Casinos, Inc. (AMEX:UWN) today announced financial results for the first quarter ended July 24, 2005.
For the first quarter of fiscal 2006, revenues increased to $3.8 million compared to $1.4 million in the first quarter ended June 30, 2004. The revenue increase was primarily due to $1.8 million in casino revenues and $501,000 in food and beverage revenues recorded during the first quarter from the Colorado Grande Casino-Cripple Creek, which the company acquired during April 2005. In addition, revenues increased as a result of a $567,000 or 42% increase in credit enhancement fees from the River Rock project.
Operating expenses increased to $3.2 million from $1.2 million primarily as a result of the inclusion of the casino operations, food and beverage, marketing and administrative, and facility expenses from the Colorado Grande Casino-Cripple Creek and higher corporate expenses. The Company experienced higher corporate expenses due to its pursuit of additional gaming opportunities and expanded casino operations.
The Company's equity in earnings from Isle of Capri-Black Hawk (IC-BH), the Company's joint venture with Isle of Capri Casinos, Inc., was $2.1 million for the first quarter ended July 24, 2005, compared to $2.4 million for the first quarter of fiscal 2005. IC-BH's first quarter adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA"), was $12.3 million in the first quarter of fiscal 2006 compared to $10.7 million in the first quarter of fiscal 2005. A reconciliation of EBITDA to operating income is provided in the following financial tables.
Net income for the first quarter of fiscal 2006 was $1.5 million compared to $1.7 million in the first quarter of fiscal 2005. Net income per diluted common share was $0.12, compared to $0.12 in the prior year period. Diluted weighted average common shares outstanding in the first quarter were 14.0 million compared to 15.4 million in the prior year period. During the first quarter of fiscal 2006, the Company repurchased 511,500 shares of the company's common stock in the open market.
H. Thomas Winn, Chairman, President and CEO of Nevada Gold & Casinos, Inc. commented, "Our first quarter results reflect our ongoing efforts to invest in new and existing projects to drive long-term earnings. We remain focused on redeploying our capital into new opportunities including acquiring additional gaming assets or through the repurchase of our shares in an effort to continue building shareholder value."
Recent Events
On August 24, 2005 the Company entered into an agreement to acquire a 50% equity interest in a new limited liability company with the remaining 50% owned by Tioga Downs Racetrack, LLC ("Tioga Downs"). Tioga Downs is jointly-owned by affiliates of Jeffrey Gural and Trackpower, Inc. (OTCBB:TPWR). The new company will develop Downs Tioga Downs Racetrack, located just west of Binghamton in Nichols, New York, as well as pursue acquisition of Vernon Downs Racetrack. Vernon Downs, located just east of Syracuse in Vernon, New York, is currently operating under the chapter 11 bankruptcy protection of its parent company Mid-State Raceway, Inc.
Construction of a $35.0 million redevelopment of Tioga Downs Racetrack recently began. Tioga Downs Racetrack will operate as a harness racetrack and offer approximately 750 video lottery terminal machines (VLTs) to its gaming and racing customers. A newly-constructed 90,000-square-foot grandstand will house a 19,000-sq.-ft. casino floor. Vernon Downs includes a harness track, 175-all suite hotel and 34,000-sq.-ft. gaming facility that will offer 1,000 VLT machines to its customers. Racing and gaming operations are subject to the receipt of certain regulatory approvals, including the receipt of VLT licenses from the New York State Lottery.
Concurrent with the completion of the transaction, Nevada Gold will also enter into a management agreement that will provide for the management of the VLT facilities at Tioga Downs and if acquired, Vernon Downs. Tioga Downs will oversee the management of the racing operations and will work with Nevada Gold to ensure the proper coordination of the racing and gaming operations. Nevada Gold will make an initial capital contribution of approximately $5 million on the Tioga project. If successful in the Vernon Downs acquisition, the capital contribution will increase to $9 million for both projects.
Financial Presentation
In presenting these results, the Company noted that on June 6, 2005, it changed its fiscal year to the last Sunday in April rather than March 31. The company will include information for this transition period from April 1 to April 24, 2005 in its Form 10-Q filed with the Securities and Exchange Commission. References in this press release to the first quarter of fiscal year 2006 refer to the three months ending July 24, 2005, and references to the first quarter of fiscal year 2005 refer to the three months ending June 30, 2004. Management believes that the three months ended June 30, 2004 provides a meaningful comparison to the first quarter of fiscal year 2006. Due to the changing of the fiscal year, the Company will file an extension of the 10-Q ending July 24, 2005. The Company now intends to file the 10-Q on Wednesday, Sept. 7, 2005.
Earnings Conference Call and Webcast
The Company will discuss first quarter financial results and provide updated 2006 guidance via the earnings conference call to be held at 4:30 PM ET today via the internet at www.nevadagold.com, Investor Relations, Events. If you are unable to participate during the live webcast, the conference call replay will be available by dialing 1-888-203-1112 or 1-719-457-0820 for international callers. Replay Pin Number 6949924. In addition, the call will be archived on the Company's website, http://www.nevadagold.com, through September 7, 2005.
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 Indian 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 & Casinos
Nevada Gold and Casinos, Inc. (AMEX:UWN) of Houston, Texas is a developer, owner and operator of gaming facilities and lodging and entertainment facilities in Colorado, California, Oklahoma and New Mexico. The Company owns a 43% interest in the Isle of Capri-Black Hawk LLC, which owns Isle of Capri-Black Hawk and Colorado Central Station, both of which are in Black Hawk, Colorado. Colorado Grande Casino in Cripple Creek, Colorado is wholly owned and operated by Nevada Gold. A new subsidiary to be formed will own a 50% interest in the Tioga Downs Raceway in New York and pursue the acquisition of Vernon Downs Racetrack. The Company also works with Native American tribes in a variety of capacities from the right to lease gaming equipment to development and management of their gaming properties. Native American projects consist of River Rock Casino in Sonoma County, California, Route 66 Casino west of Albuquerque, New Mexico, a casino to be built in Tulsa, Oklahoma for the Muscogee (Creek) Nation, a casino to be built in Pauma Valley, California for the La Jolla Band of Luisenyo Indians and a casino to be developed by Buena Vista Development Company, LLC in the city of Ione, California for Buena Vista Rancheria of Me-Wuk Indians. For more information, visit http://www.nevadagold.com
Nevada Gold & Casinos, Inc.
Consolidated Balance Sheets
July 24, March 31, April 24,
----------- ----------- -----------
2005 2005 2005
----------- ----------- -----------
(unaudited) (unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 2,605,313 $ 3,846,195 $ 2,888,697
Accounts receivable 1,480,229 794,435 1,513,870
Notes receivable - affiliates,
current portion 1,200,000 1,200,000 1,200,000
Income tax receivable 73,673 113,288 113,288
Other 737,945 227,303 294,067
----------- ----------- -----------
Total current assets 6,097,160 6,181,221 6,009,922
----------- ----------- -----------
Investments in unconsolidated
affiliates 23,670,921 21,647,329 21,646,041
Investments in development
projects 6,851,909 6,801,637 6,807,097
Goodwill 6,350,705 -- --
Notes receivable - affiliates,
net of current portion 2,777,136 2,777,136 2,777,136
Notes receivable - development
projects 23,095,294 6,562,323 6,973,813
Property and equipment, net of
accumulated depreciation of
$124,617 at July 24, 2005,
$73,048 and $76,890 at
July 24, 2005, March 31, 2005
and April 24, 2005,
respectively 726,343 110,549 108,797
Deferred tax asset -- 618,282 561,997
Other 2,041,765 632,037 702,048
----------- ----------- -----------
Total assets $71,611,233 $45,330,514 $45,586,851
=========== =========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and
accrued liabilities $ 1,491,272 $ 1,029,877 $ 997,575
Accrued interest payable 227,691 20,453 84,830
Long-term debt, current portion 4,789,999 3,317,499 6,589,999
Other Accrued Liabilities 518,720 -- --
Deferred tax liability 366,155 -- --
----------- ----------- -----------
Total current liabilities 7,393,837 4,367,829 7,672,404
----------- ----------- -----------
Long-term debt, net of
current portion and discount 34,585,255 9,632,773 6,366,428
Deferred income 290,744 178,835 200,565
----------- ----------- -----------
Total liabilities 42,269,836 14,179,437 14,239,397
----------- ----------- -----------
Commitments and Contingencies -- -- --
Minority interest 380,516 299,884 406,304
Stockholders' equity:
Common stock, $0.12 par value
per share; 25,000,000 shares
authorized; 13,360,203,
12,755,203, and 12,755,203
shares issued and outstanding
at July 24, 2005, March 31,
2005 and April 24, 2005
respectively 1,603,224 1,530,624 1,530,624
Additional paid-in capital 16,573,194 14,817,101 14,817,101
Treasury Stock, 511,500 shares
at July 24, 2005 (5,459,603) -- --
Retained earnings 16,054,850 14,419,719 14,509,676
Accumulated other
comprehensive income 189,216 83,749 83,749
----------- ----------- -----------
Total stockholders' equity 28,960,881 30,851,193 30,941,150
----------- ----------- -----------
Total liabilities
and stockholders' equity $71,611,233 $45,330,514 $45,586,851
=========== =========== ===========
Nevada Gold & Casinos, Inc.
Consolidated Statements of Operations
(unaudited)
24 Days
Three Months Ended Ended
------------------------- -----------
July 24, June 30, April 24,
----------- ----------- -----------
2005 2004 2005
----------- ----------- -----------
Revenues:
Casino $ 1,834,855 $ -- $ --
Food and beverage 500,890 -- --
Other 35,624 16,903 4,507
Credit Enhancement Fee 1,917,904 1,351,267 702,305
----------- ----------- -----------
Gross Revenues 4,289,273 1,368,170 706,812
Less promotional allowance (524,357) -- --
----------- ----------- -----------
Net Revenues 3,764,916 1,368,170 706,812
Operating Expenses:
Casino 559,557 -- --
Food and Beverage 499,513 -- --
Marketing and Administrative 461,434 -- --
Facility 54,334 -- --
Corporate Expense 1,504,345 1,126,580 396,563
Depreciation and amortization 89,095 39,336 18,509
Other 27,269 9,129 345
----------- ----------- -----------
Total operating expenses 3,195,547 1,175,045 415,417
----------- ----------- -----------
Operating income 569,369 193,125 291,395
Non-operating income
(expenses):
Earnings from unconsolidated
affiliates 2,492,777 2,819,985 --
Interest expense, net (342,144) (150,088) (38,733)
Minority interest (290,412) (202,944) (106,420)
----------- ----------- -----------
Income before income
tax expense 2,429,590 2,660,078 146,242
----------- ----------- -----------
Income tax expense (884,416) (936,084) (56,285)
----------- ----------- -----------
Net income $ 1,545,174 $ 1,723,994 $ 89,957
=========== =========== ===========
Per share Information:
Net income per common
share - basic $ 0.12 $ 0.14 $ 0.01
=========== =========== ===========
Net income per common
share - diluted $ 0.12 $ 0.12 $ 100,264
=========== =========== ===========
Basic weighted average number
of shares outstanding 13,018,868 12,519,769 12,755,203
=========== =========== ===========
Diluted weighted average
number of shares outstanding 13,990,573 15,410,793 14,247,762
=========== =========== ===========
Isle of Capri Black Hawk L.L.C.
Comparative Financial Highlights
on Continuing Operations by Casino Property
(In thousands)
-----------------------------------------------------------
Three Months Ended
-----------------------------------------------------------
July 24, 2005 July 25, 2004
---------------------------- -----------------------------
Adjusted Adjusted
Net Adjusted EBITDA Net Adjusted EBITDA
Revenues EBITDA Margin % Revenues EBITDA Margin %
(1) (2) (2) (1) (2) (2)
-------- -------- -------- -------- -------- --------
Isle-Black
Hawk 28,943 9,766 33.7% 26,297 10,186 38.7%
Colorado
Central
Station 10,413 2,526 24.3% 8,343 521 6.2%
----------------------------------------------------------------------
Total 39,356 12,292 31.2% 34,640 10,707 30.7%
Isle of Capri Black Hawk L.L.C.
Reconciliation of Operating Income from Continuing Operations (Loss)
to Adjusted EBITDA by Casino Property
(In thousands)
Three Months Ended July 24, 2005
----------------------------------------------------
Operating
Depreciation Operating Income
Adjusted & Income (Loss)
EBITDA (2) Amortization (Loss) Margin % (3)
---------- ------------ --------- ------------
Isle-Black Hawk 9,766 2,062 7,704 26.6%
Colorado Central
Station 2,526 994 1,532 14.7%
--------------------------------------------------------------------
Total 12,292 3,056 9,236 23.5%
Three Months Ended July 25, 2004
----------------------------------------------------
Operating
Depreciation Operating Income
Adjusted & Income (Loss)
EBITDA (2) Amortization (Loss) Margin % (3)
---------- ------------ --------- ------------
Isle-Black Hawk 10,186 1,716 8,470 32.2%
Colorado Central
Station 521 567 (46) -0.6%
--------------------------------------------------------------------
Total 10,707 2,283 8,424 24.0%
Isle of Capri Black Hawk L.L.C.
Reconciliation of Net Income (Loss)
to Operating Income (Loss) by Casino Property
(In thousands)
Three Months Ended July 24, 2005
-----------------------------------------------------------
Income
tax Net
Operating Interest Interest Manage- (provision) Income
Income Expense Income ment Fee benefit (Loss)
--------- -------- -------- -------- ----------- -------
Isle-Black
Hawk 7,704 (1,489) 111 (1,335) -- 4,991
Colorado
Central
Station 1,532 (1,368) 5 (504) 124 (211)
-----------------------------------------------------------
Total 9,236 (2,857) 116 (1,839) 124 4,780
Three Months Ended July 25, 2004
-----------------------------------------------------------
Income
tax Net
Operating Interest Interest Manage- (provision) Income
Income Expense Income ment Fee benefit (Loss)
--------- -------- -------- -------- ----------- -------
Isle-Black
Hawk 8,470 (707) 30 (1,268) -- 6,525
Colorado
Central
Station (46) (1,376) -- (265) 640 (1,047)
-----------------------------------------------------------
Total 8,298 (2,220) 30 (1,683) 401 5,478
(1) Net revenues are presented net of complimentaries, slot points
expense and cash coupon redemptions.
(2) EBITDA is "earnings before interest, income taxes, depreciation
and amortization." Adjusted EBITDA for each property was
calculated by adding preopening expense, management fees and
non-cash items to EBITDA. Adjusted EBITDA is presented solely as
a supplemental disclosure because management believes that it is
1) a widely used measure of operating performance in the gaming
industry, and 2) a principal basis for valuation of gaming
companies. Management uses property level Adjusted EBITDA
(Adjusted EBITDA before corporate expense) as the primary measure
of the properties' performance. Adjusted EBITDA should not be
construed as an alternative to operating income, as an indicator
of the Company's operating performance; or as an alternative to
any other measure determined in accordance with accounting
principles generally accepted in the United States. The
properties have significant uses of cash flows, including capital
expenditures, interest payments, taxes and debt principal
repayment, which are not reflected in Adjusted EBITDA. Also,
other gaming companies that report Adjusted EBITDA information
may calculate Adjusted EBITDA in a different manner than the
Company. Adjusted EBITDA Margin is calculated by dividing
Adjusted EBITDA by net revenue. Reconciliations of operating
income to Adjusted EBITDA are included in the financial schedules
accompanying this release.
(3) Operating income margin was calculated by dividing operating
income by net revenue.