HOUSTON, Nov. 30, 2005 (PRIMEZONE) -- Nevada Gold & Casinos, Inc. (AMEX:UWN) today announced financial results for the second quarter ended October 23, 2005.
For the second quarter of fiscal 2006, net revenues increased to $3.3 million compared to $1.1 million in the second quarter ended September 30, 2004. The net revenue increase was primarily due to $1.4 million in casino revenues and $478,000 in food and beverage revenues recorded during the second quarter from the Colorado Grande Casino-Cripple Creek, which the Company acquired during April 2005. In addition, revenues increased as a result of a $670,000 or 63% increase in credit enhancement fees from the River Rock project.
Operating expenses increased to $3.3 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 as well as its internal efforts to develop a more substantial casino operations team.
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 $1.9 million for the second quarter ended October 23, 2005, compared to $1.7 million for the second quarter of fiscal 2004. IC-BH's second quarter adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA"), was $12.6 million in the second quarter of fiscal 2006 compared to $9.3 million in the second quarter of fiscal 2005. A reconciliation of adjusted EBITDA to net income is provided in the attached financial statements.
Net income for the second quarter of fiscal 2006 was $1.0 million compared to $1.1 million in the second quarter of fiscal 2005. Net income per diluted common share was $0.08, compared to $0.08 in the prior year period. Diluted weighted average common shares outstanding in the second quarter were 13.6 million compared to 14.7 million in the prior year period. During the second quarter of fiscal 2006, the Company repurchased 109,000 shares of the Company's common stock in the open market.
H. Thomas Winn, Chairman and CEO commented, "During the second quarter we made significant progress in our transition to an operating company. We made several important additions to our team including Jon Arnesen as President and COO, we formed American Racing and Entertainment, L.L.C. to develop and operate racetracks and video lottery terminal operations in New York, and we are continuing to enhance our operational infrastructure to best position the Company for growth. The next two years will be the busiest in our history as we plan on bringing on several projects including Tioga Downs, the Muscogee (Creek) Nation Casino, the LaJolla Band of Luiseno Indians casino and Vernon Downs, if it is acquired by American Racing."
Financial Presentation
In presenting these results, the Company noted that on June 6, 2005, it changed its fiscal year end to the last Sunday in April rather than March 31. The Company did not submit financial information for the three months period ended October 24, 2004 in its Form 10-Q because the information was not practical or cost beneficial to prepare. References in this press release to the second quarter of fiscal year 2006 represents the three months ending October 23, 2005, and references to the second quarter of fiscal year 2005 represents the three months ending September 30, 2004. Management believes that the three months ended September 30, 2004 provides a meaningful comparison to the second quarter of fiscal year 2006.
Earnings Conference Call and Webcast
The Company will discuss second quarter financial results via the earnings conference call to be held at 3:30 p.m. CST 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 4629979. In addition, the call will be archived on the Company's website, http://www.nevadagold.com, through December 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 & 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, New York and New Mexico. The Company owns a 43% interest in the Isle of Capri-Black Hawk, L.L.C., 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. The Company owns a 50% interest in the Tioga Downs Racetrack in New York and has a management contract for the facility. 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 Luiseno Indians and a casino to be developed by Buena Vista Development Company, L.L.C. in the city of Ione, California for Buena Vista Rancheria of Me-Wuk Indians. For more information, visit http://www.nevadagold.com.
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Nevada Gold & Casinos, Inc. Consolidated Balance Sheets October 23, March 31, 2005 2005 ------------ ------------ (unaudited) ASSETS Current assets: Cash and cash equivalents $ 4,551,289 $ 3,846,195 Accounts receivable 976,992 794,435 Notes receivable - affiliates, current portion 1,200,000 1,200,000 Income tax receivable -- 113,288 Other current assets 2,009,961 312,220 ------------ ------------ Total current assets 8,738,242 6,266,138 ------------ ------------ Investments in unconsolidated affiliates 26,792,794 21,647,329 Investments in development projects 7,065,564 6,801,637 Notes receivable - affiliates, net of current portion 2,566,412 2,777,136 Notes receivable - development projects 24,420,281 6,562,323 Goodwill 6,350,705 -- Property and equipment, net of accumulated depreciation of $191,315 and $73,408 at October 23, 2005 and March 31, 2005, respectively 2,575,907 110,549 Deferred tax asset -- 618,282 Other 1,294,674 547,120 ------------ ------------ Total assets $ 79,804,579 $ 45,330,514 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 2,396,444 $ 1,029,877 Accrued interest payable 256,063 20,453 Other accrued liabilities 596,702 -- Long-term debt, current portion 4,646,483 3,317,499 Deferred tax liability 1,012,620 -- ------------ ------------ Total current liabilities 8,908,312 4,367,829 ------------ ------------ Long-term debt, net of current portion and discount 40,812,247 9,632,773 Deferred income 568,757 178,835 ------------ ------------ Total liabilities 50,289,316 14,179,437 ------------ ------------ Commitments and contingencies -- -- Minority interest 443,030 299,884 Stockholders' equity: Common stock, $0.12 par value per share; 25,000,000 shares authorized; 13,417,703 and 12,755,203 shares issued and outstanding at October 23, 2005 and March 31, 2005, respectively 1,610,124 1,530,624 Additional paid-in capital 16,673,244 14,817,101 Retained earnings 17,093,202 14,419,719 Accumulated other comprehensive income 291,875 83,749 Treasury stock, 620,500 shares at cost (6,596,212) -- ------------ ------------ Total stockholders' equity 29,072,233 30,851,193 ------------ ------------ Total liabilities and stockholders' equity $ 79,804,579 $ 45,330,514 ============ ============ Nevada Gold & Casinos, Inc. Consolidated Statements of Income (unaudited) Three Months Ended ------------------------------- October 23, September 30, 2005 2004 ---------- ---------- Revenues: Casino $1,441,912 $ -- Food and beverage 478,321 -- Other 34,565 16,903 Credit enhancement fee 1,735,517 1,065,868 ---------- ---------- Gross revenues 3,690,315 1,082,771 Less promotional allowances (389,043) -- ---------- ---------- Net revenues 3,301,272 1,082,771 Operating expenses: Casino 685,433 -- Food and beverage 248,946 -- Marketing and administrative 497,891 -- Facility 49,626 -- Corporate expense 1,648,628 1,149,054 Depreciation and amortization 126,732 65,106 Other 27,091 19,356 ---------- ---------- Total operating expenses 3,284,347 1,233,516 ---------- ---------- Operating income 16,925 (150,745) Non-operating income (expenses): Earnings from unconsolidated affiliates 2,329,249 2,065,375 Interest income/(expense), net (445,510) 29,100 Minority interest (327,564) (158,881) ---------- ---------- Income before income tax expense 1,573,100 1,784,849 ---------- ---------- Income tax expense (569,692) (678,242) ---------- ---------- Net income $1,003,408 $1,106,607 ========== ========== Per share information: Net income per common share - basic $ 0.08 $ 0.08 ========== ========== Net income per common share - diluted $ 0.08 $ 0.08 ========== ========== Basic weighted average number of shares outstanding 12,811,516 13,038,239 ========== ========== Diluted weighted average number of shares outstanding 13,580,681 14,662,363 ========== ========== 24 Days Six Months Ended Ended --------------------- ---------- Oct. 23, Sept. 30, April 24, 2005 2004 2005 ---------- ---------- ---------- Revenues: Casino $3,276,767 $ -- $ -- Food and beverage 979,211 -- -- Other 70,190 33,805 4,507 Credit enhancement fee 3,653,421 2,417,135 702,305 ---------- ---------- ---------- Gross revenues 7,979,589 2,450,940 706,812 Less promotional allowances (932,658) -- -- ---------- ---------- ---------- Net revenues 7,046,931 2,450,940 706,812 Operating expenses: Casino 1,527,343 -- -- Food and beverage 473,721 -- -- Marketing and administrative 940,067 -- -- Facility 103,960 -- -- Corporate expense 3,085,954 2,321,529 408,982 Depreciation and amortization 215,827 73,869 18,509 Other 46,746 13,163 345 ---------- ---------- ---------- Total operating expenses 6,393,618 2,408,561 427,836 ---------- ---------- ---------- Operating income 653,313 42,379 278,976 Non-operating income (expenses): Earnings from unconsolidated affiliates 4,822,026 4,885,360 -- Interest income/ (expense), net (787,654) (120,988) (38,733) Minority interest (617,976) (361,824) (106,420) ---------- ---------- ---------- Income before income tax expense 4,069,709 4,444,927 133,823 ---------- ---------- ---------- Income tax expense (1,478,235) (1,614,326) (51,814) ---------- ---------- ---------- Net income $2,591,474 $2,830,601 $ 82,009 ========== ========== ========== Per share information: Net income per common share - basic $ 0.20 $ 0.22 $ 0.01 ========== ========== ========== Net income per common share - diluted $ 0.19 $ 0.20 $ 0.01 ========== ========== ========== Basic weighted average number of shares outstanding 12,915,192 12,780,421 12,755,203 ========== ========== ========== Diluted weighted average number of shares outstanding 13,785,696 14,930,353 14,247,762 ========== ========== ========== Computation of Earnings Per Share The following is presented as a reconciliation of the numerators and denominators of basic and diluted earnings per share computations, in accordance with SFAS No. 128: Three Months Ended Six Months Ended ------------------ ---------------- Oct. 23, Sept. 30, Oct. 23, Sept. 30, 2005 2004 2005 2005 ---------- ---------- ---------- ---------- Numerator: Basic: Net income available to common stockholders $1,003,408 $1,106,607 $2,591,474 $2,830,601 ========== ========== ========== ========== Diluted: Net income available to common stockholders $1,003,408 $1,106,607 $2,591,474 $2,830,601 Add: interest on convertible debt 17,115 59,788 40,719 121,969 ---------- ---------- ---------- ---------- Net income available to common stockholders $1,020,523 $1,166,395 $2,632,193 $2,952,570 ========== ========== ========== ========== Denominator: Basic weighted average number of common shares outstanding 12,811,516 13,038,239 12,915,192 12,780,421 Dilutive effect of common stock options and warrants 292,453 518,291 303,407 985,910 Dilutive effect of convertible debt 476,712 1,105,833 567,097 1,164,022 ---------- ---------- ---------- ---------- Diluted weighted average number of common shares outstanding 13,580,681 14,662,363 13,785,696 14,930,353 ========== ========== ========== ========== Earnings per share: Net income per common share - basic $ 0.08 $ 0.08 $ 0.20 $ 0.22 ========== ========== ========== ========== Net income per common share - diluted $ 0.08 $ 0.08 $ 0.19 $ 0.20 ========== ========== ========== ========== Isle of Capri Black Hawk L.L.C. Comparative Financial Highlights on Continuing Operations by Casino Property (In thousands) Three Months Ended ----------------------------------------------------------- October 23, 2005 October 24, 2004 ---------------------------- ----------------------------- Adjusted Adjusted Net Adjusted EBITDA Net Adjusted EBITDA Revenues EBITDA Margin % Revenues EBITDA Margin % (a) (b) (b) (a) (b) (b) -------- -------- -------- -------- -------- ------- Isle-Black Hawk $ 29,522 $ 9,896 33.5% $ 25,548 $ 8,852 34.6% Colorado Central Station 10,110 2,718 26.9% 8,073 409 5.1% ------- -------- -------- -------- -------- ------- Total $ 39,632 $ 12,614 31.8% $ 33,621 $ 9,261 27.5% ======== ======== ======== ======== ======== ======= Six Months Ended ----------------------------------------------------------- October 23, 2005 October 24, 2004 ---------------------------- ----------------------------- Adjusted Adjusted Net Adjusted EBITDA Net Adjusted EBITDA Revenues EBITDA Margin % Revenues EBITDA Margin % (a) (b) (b) (a) (b) (b) -------- -------- -------- -------- -------- ------- Isle-Black Hawk $ 58,467 $ 19,720 33.7% $ 51,845 $ 19,038 36.7% Colorado Central Station 20,522 5,245 25.6% 16,416 930 5.7% ------- -------- -------- -------- -------- ------- Total $ 78,989 $ 24,965 31.6% $ 68,261 $ 19,968 29.3% ======== ======== ======== ======== ======== ======= Isle of Capri Black Hawk, L.L.C. Reconciliation of Adjusted EBITDA to Net Income (Loss) by Casino Property (In thousands) Three Months Ended Six Months Ended ------ ------- ------- ------- Oct. 23, Oct. 24, Oct. 23, Oct. 24, 2005 2004 2005 2004 ------ ------- ------- ------- Isle-Black Hawk: Adjusted EBITDA $9,896 $8,852 $19,720 $19,038 Depreciation and amortization (2,231) (1,758) (4,293) (3,474) Interest expense, net (1,840) (884) (3,216) (1,562) Management fee (1,349) (1,204) (2,684) (2,472) ------ ------- ------- ------- Net income $4,476 $5,006 $ 9,527 $11,530 ====== ======= ======= ======= Net income margin % (c) 15.2% 19.6% 16.3% 22.2% ====== ======= ======= ======= Colorado Central Station: Adjusted EBITDA $2,718 $ 409 $ 5,245 $ 930 Depreciation and amortization (1,031) (661) (2,026) (1,228) Interest expense, net (1,344) (1,358) (2,707) (2,734) Management fee (493) (255) (997) (519) Income tax benefit 73 710 197 1,350 ------ ------- ------- ------- Net loss $ (77) $(1,155) $ (288) $(2,201) ====== ======= ======= ======= Net loss margin % (c) -0.8% -14.3% -1.4% -13.4% ====== ======= ======= ======= (a) Net revenues are presented net of complimentaries, slot points expense and cash coupon redemptions. (b) 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 as the primary measure of the properties' performance. Adjusted EBITDA should not be construed as an alternative to net 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 net income (loss) to Adjusted EBITDA are included in the financial schedules accompanying this release. (c) Net income (loss) margin was calculated by dividing net income (loss) by net revenue.