HOUSTON, March 12, 2007 (PRIME NEWSWIRE) -- Nevada Gold & Casinos, Inc. (AMEX:UWN) today announced financial results for the third quarter ended January 28, 2007.
For the third quarter of fiscal 2007, net revenues increased to $3.8 million compared to $2.9 million in the third quarter of fiscal 2006. The net loss for the third quarter of fiscal 2007 was $1.5 million compared to a net loss of $0.8 million in the third quarter of fiscal 2006. The net loss per diluted common share was $0.12, compared to net loss per diluted common share of $0.06 in the prior year period.
Robert Sturges, Chief Executive Officer of Nevada Gold & Casinos, Inc., commented, "We have taken several key steps in executing our operating initiatives and in positioning the company for the future. Most recently, we accepted a cash buyout for all of River Rock's remaining credit enhancement fees, generating net proceeds to us of $8.1 million, which enhanced our financial flexibility. We are very committed to disposing non-core assets, as evidenced by our decision to retain an auctioneer to assist us in divesting our 260-acre parcel of land in Black Hawk. We remain focused on reducing costs throughout the organization and on building our Native American consulting services business. We also revised American Racing's business plan to improve operating performance. While it may take some time for our initiatives to take hold and have a measurable impact on our financial results, we are optimistic about the progress we are making and about Nevada Gold's prospects for growth."
Financial Results
For the third quarter of fiscal 2007, net revenues increased to $3.8 million compared to $2.9 million in the third quarter of fiscal 2006. The revenue increase was primarily due to a $0.5 million increase in enhancement fees, and a $0.3 million increase in net revenues from the Colorado Grande Casino-Cripple Creek.
Operating expenses decreased to $3.5 million from $3.8 million. The decrease reflects lower operating costs related to Colorado Grande, decreased legal expenses and decreased corporate expenses despite recording one time expenses of $100,000 for employee search fees and $205,000 of severance costs related to headcount reductions made at the corporate offices during the quarter.
The Company's equity in earnings from Isle of Capri-Black Hawk (IC-BH), the Company's joint venture with Isle of Capri Casinos, was $0.6 million for the third quarter ended January 28, 2007, compared to $0.5 million a year ago. IC-BH's third quarter adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA"), was $10.0 million in the third quarter of fiscal 2007 compared to $10.8 million in the prior year period. A reconciliation of EBITDA to operating income is provided in the attached financial statements. The Company's equity in earnings from American Racing resulted in a loss of $2.1 million during the third quarter, primarily due to pre-opening expenses related to the Tioga Downs and Vernon Downs projects. Excluding the impact of American Racing's loss, the Company's net loss for the third quarter of fiscal 2007 would have been $164,000.
The Company also recorded a $250,000 gain related to the termination of our development agreement with the Muscogee Nation -- Tulsa during the third quarter of fiscal 2007.
The net loss for the third quarter of fiscal 2007 was $1.5 million compared to a net loss of $0.8 million in the third quarter of fiscal 2006. The net loss per diluted common share was $0.12, compared to net loss per diluted common share of $0.06 in the prior year period. The net loss per diluted common share in the third quarter of fiscal 2007 included the following significant items:
Net loss as reported ($0.12) American Racing Pre-Opening Expenses $0.05 Severance and search fees $0.02 Muscogee termination fee ($0.01) Adjusted net loss per diluted share ($0.06)
Diluted weighted average common shares outstanding in the third quarter were 12.9 million compared to 13.0 million in the prior year period.
Recent Events
On March 5, 2007, the Company announced that Dry Creek Casino, LLC, in which Nevada Gold owns a 69% interest, had reached an agreement with the River Rock Entertainment Authority to accept a cash buyout of $11.35 million for all remaining credit enhancement fees. Nevada Gold's portion of the cash buyout was approximately $8.1 million. Under the terms of the Original Agreement, credit enhancement fees were payable to Dry Creek Casino, LLC, for a period of five years, commencing June 1, 2003, and ending on May 31, 2008. In exercising its buy-out option, the River Rock Entertainment Authority would have had to pay a fixed monthly payment over the number of months remaining in the Original Agreement. Both parties agreed to a cash buyout in lieu of the fixed monthly payments. On a go forward basis our revenue is going to decrease by approximately $2.0 million quarterly.
On February 22, 2007, Nevada Gold announced it engaged Sheldon Good & Company, one of the country's leading real estate auction firms, to develop a real estate auction strategy for the approximately 260 acres of land it owns in Gilpin County near Black Hawk, Colorado. Nevada Gold expects Sheldon Good & Company to recommend a course of action by the end of April.
On March 8, 2007, the Company repaid a $3.3 million note that was classified as a current portion of long-term debt.
Earnings Conference Call and Webcast
The Company will discuss third quarter financial results via a conference call to be held at 9:00 ET on Monday, March 12, 2007. To access the webcast, please visit www.nevadagold.com and click on 'Investor Relations' and then 'Events.' The dial-in number for the call is 877-704-5380; please call approximately 10 minutes in advance to ensure that you are connected prior to the presentation. A replay of the call will be available until March 19, 2007 by dialing 888-203-1112; password 3041813.
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 entertainment facilities in Colorado, California, and New York. 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. The Company owns a 25% interest in the Tioga Downs Racetrack & Vernon Downs Racetrack in New York State and has a management contract for both facilities. The Company also works with Native American tribes in a variety of capacities. Native American projects consist of 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, LLC in the city of Ione, California for Buena Vista Rancheria of Me-Wuk Indians. For more information, visit www.nevadagold.com.
The Nevada Gold & Casinos, Inc. logo is available at http://www.primezone.com/newsroom/prs/?pkgid=1552
Nevada Gold & Casinos, Inc.
Consolidated Balance Sheets
Jan. 28, April 30,
2007 2006
------------ ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 1,478,677 $ 4,296,154
Restricted cash 1,050,000 --
Accounts receivable 1,005,836 940,177
Accounts receivable - affiliates 227,186 499,999
Other current assets 423,726 428,532
------------ ------------
Total current assets 4,185,425 6,164,862
------------ ------------
Investments in unconsolidated affiliates 36,241,271 35,691,747
Investments in development projects 4,734,144 6,876,527
Notes receivable - affiliates 3,521,066 3,637,099
Notes receivable - development projects 19,336,380 22,667,272
Goodwill 5,462,918 5,462,918
Property and equipment, net of accumulated
depreciation of $1,126,820 and $622,876
at January 28, 2007 and April 30, 2006,
respectively 2,241,546 2,580,093
Deferred tax asset 5,678,620 1,460,722
Other assets 4,476,498 3,601,850
------------ ------------
Total assets $ 85,877,868 $ 88,143,090
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 1,123,079 $ 1,550,405
Accrued interest payable -- 41,737
Other accrued liabilities 278,935 358,159
Guaranty liabilities 4,610,000 --
Long-term debt, current portion 6,164,555 7,051,845
------------ ------------
Total current liabilities 12,176,569 9,002,146
------------ ------------
Long-term debt, net of current portion 55,022,923 53,414,815
Deferred income 11,359 406,632
Other liabilities 749,652 157,633
------------ ------------
Total liabilities 67,960,503 62,981,226
------------ ------------
Commitments and contingencies -- --
Minority interest 246,200 278,674
Stockholders' equity:
Common stock, $0.12 par value per share;
25,000,000 shares authorized; 13,935,330
and 13,912,330 shares issued and
12,939,130 and 12,970,330 shares
outstanding at January 28, 2007 and
April 30, 2006, respectively 1,672,240 1,669,479
Additional paid-in capital 18,438,720 18,122,632
Retained earnings 7,774,979 14,873,589
Treasury stock, 996,200 and 942,000
shares at January 28, 2007 and
April 30, 2006, respectively (10,216,950) (9,781,669)
Accumulated other comprehensive income
(loss) 2,176 (841)
------------ ------------
Total stockholders' equity 17,671,165 24,883,190
------------ ------------
Total liabilities and stockholders'
equity $ 85,877,868 $ 88,143,090
============ ============
Nevada Gold & Casinos, Inc.
Consolidated Statements of Operations
(unaudited)
Three Months Ended Nine Months Ended
------------------------ ------------------------
Jan. 28, Jan. 22, Jan. 28, Jan. 22,
2007 2006 2007 2006
----------- ----------- ----------- -----------
Revenues:
Casino $ 1,417,141 $ 1,083,053 $ 4,608,249 $ 4,359,820
Food and beverage 246,647 237,657 1,000,966 1,216,868
Other 32,111 26,508 102,510 96,698
Management fee 27,056 -- 124,200 --
Credit
enhancement fee 2,304,796 1,810,540 6,458,342 5,463,961
----------- ----------- ----------- -----------
Gross revenues 4,027,751 3,157,758 12,294,267 11,137,347
Less promotional
allowances (263,949) (236,664) (944,491) (1,169,321)
----------- ----------- ----------- -----------
Net revenues 3,763,802 2,921,094 11,349,776 9,968,026
Expenses:
Casino 428,364 626,851 1,238,340 2,152,800
Food and beverage 118,335 215,882 599,306 690,093
Marketing and
administrative 753,523 542,968 2,348,391 1,483,035
Facility 74,740 85,546 246,251 189,506
Corporate expense 1,581,033 1,615,425 4,868,959 4,226,455
Legal expense 270,388 400,027 1,223,604 874,952
Depreciation and
amortization 276,183 246,100 812,685 461,927
Write-off of
notes receivable
related to
Native American
gaming projects -- -- 3,171,958 --
Write-off of
project
development cost 15,000 -- 388,100 --
Other 22,301 28,918 74,710 76,568
----------- ----------- ----------- -----------
Total operating
expenses 3,539,867 3,761,717 14,972,304 10,155,336
----------- ----------- ----------- -----------
Operating income
(loss) 223,935 (840,623) (3,622,528) (187,310)
Non-operating
income
(expenses):
Earnings (loss)
from
unconsolidated
affiliates (1,411,615) 428,118 (3,812,476) 5,686,882
Interest
expense, net (948,707) (559,985) (2,720,960) (1,347,639)
Gain on sale of
marketable
securities 11,849 105,374 48,646 105,374
Gain on
termination
of development
contract 249,894 -- 249,894 --
Minority interest (460,092) (363,403) (1,286,831) (981,379)
----------- ----------- ----------- -----------
Income (loss)
before income
tax (expense)
benefit (2,334,736) (1,230,519) (11,144,255) 3,275,928
Income tax
(expense) benefit 845,320 465,124 4,045,646 (1,169,235)
----------- ----------- ----------- -----------
Net income (loss) $(1,489,416) $ (765,395) $(7,098,609) $ 2,106,693
=========== =========== =========== ===========
Per share
information:
Net income (loss)
per common
share - basic $ (0.12) $ (0.06) $ (0.55) $ 0.16
=========== =========== =========== ===========
Net income (loss)
per common
share - diluted $ (0.12) $ (0.06) $ (0.55) $ 0.16
=========== =========== =========== ===========
Basic weighted
average number
of shares
outstanding 12,937,427 13,028,525 12,937,004 12,946,118
=========== =========== =========== ===========
Diluted weighted
average number
of shares
outstanding 12,937,427 13,028,525 12,937,004 13,690,800
=========== =========== =========== ===========
Isle of Capri Black Hawk, L.L.C.
Comparative Financial Highlights on Continuing
(In thousands)
Three Months Ended Nine Months Ended
------------------ ------------------
Jan. 28, Jan. 22, Jan. 28, Jan. 22,
2007 2006 2007 2006
-------- -------- -------- --------
Net Revenue (a) $ 34,787 $ 38,347 $113,904 $117,335
Adjusted EBITDA (b) $ 9,962 $ 10,803 $ 31,203 $ 35,706
Adjusted EBITDA Margin % (c) 28.6% 28.2% 27.4% 30.4%
Isle of Capri Black Hawk, L.L.C.
Reconciliation of Adjusted EBITDA to Net Income
(In thousands)
Three Months Ended Nine Months Ended
------------------ ------------------
Jan. 28, Jan. 22, Jan. 28, Jan. 22,
2007 2006 2007 2006
-------- -------- -------- --------
Adjusted EBITDA $ 9,962 $ 10,803 $ 31,203 $ 35,706
Depreciation and amortization 3,976 3,554 11,921 9,873
Interest expense, net 3,675 2,783 11,118 8,706
Management fee 1,584 1,764 5,118 5,445
Loss on extinguishment of debt -- 2,110 -- 2,110
Other Income -- (119) -- (1,135)
Income tax benefit (663) (431) (2,107) (628)
-------- -------- -------- --------
Net income $ 1,390 $ 1,142 $ 5,153 $ 11,335
======== ======== ======== ========
Net income margin % (d) 4.0% 3.0% 4.5% 9.7%
======== ======== ======== ========
(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 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 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 U.S. generally accepted accounting principles. The Company has 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 Adjusted EBITDA to net income are included in the financial schedules above accompanying this press release.
(c) Adjusted EBITDA margin % was calculated by dividing adjusted EBITDA by net revenue.
(d) Net income margin % was calculated by dividing net income by net revenue.