HOUSTON, March 7, 2008 (PRIME NEWSWIRE) -- Nevada Gold & Casinos, Inc. (AMEX:UWN) today announced financial results for the third quarter ended January 27, 2008.
For the third quarter of fiscal 2008 the Company recorded a net income of $27.0 million compared to a net loss of $1.5 million in the third quarter of fiscal 2007. The Company recorded net income per diluted common share of $2.08, compared to a net loss per diluted common share of $0.12 in the prior year period. Net revenues decreased to $1.4 million compared to $3.8 million in the third quarter ended January 28, 2007. Net income before income tax expense for the third quarter of fiscal 2008 was $35.2 million compared to a loss before income tax benefit of $2.3 million in the third quarter of fiscal 2007.
Year-over-year comparisons of third quarter results were impacted by the following significant items:
* A gain of $39.2 million due to the sale of unconsolidated affiliates
including the Company's 43% membership interest in Isle of
Capri-Black Hawk LLC;
* No credit enhancement fees in the third quarter of fiscal 2008 due
to the River Rock Entertainment Authority ("RREA") buy-out
transaction which closed during January 2007, compared to
$2.3 million in the third quarter of fiscal 2007;
* Equity in earnings pertaining to the Isle of Capri-Black Hawk, LLC
was $0.9 million compared to $0.5 million in the third quarter of
fiscal 2007;
* No equity in losses from American Racing in the third quarter of
fiscal 2008 due to its sale in June 2007, compared to a
$2.1 million equity in loss a year ago;
* A $2.4 million impairment of notes receivable and accrued interest
in the third quarter of fiscal 2008 related to a development
project;
* Income tax expense of $8.2 million during the third quarter of
fiscal 2008 compared to a tax benefit of $0.8 million recorded
during the third quarter of fiscal 2007; and
* $536,000 lower corporate, legal and depreciation expenses.
The adjusted pre tax loss for the third quarter of fiscal 2008, which excludes significant and non-recurring items as well as credit enhancement fees and the loss from America Racing, was $1.5 million compared to a loss of $2.3 million in the third quarter of fiscal 2007.
Q3 FY08 Q3 FY07
----------- -----------
Pre-tax net income as reported $35,156,887 $(2,334,736)
Impairment of notes and interest
receivable 2,361,702
Gain on sale of unconsolidated affiliate (39,208,732)
Write-off of deferred loan issuance fees 165,000
Loss on sale of assets 15,207
Write-off of project development cost 15,000
Gain on sale of marketable securities (11,849)
Gain on settlement of development project (249,894)
--------------------------
$(1,509,936) $(2,581,479)
==========================
Credit enhancement fees, net -- (1,844,704)
American Racing loss -- 2,076,991
--------------------------
Adjusted pre-tax loss $(1,509,936) $(2,349,192)
==========================
Robert Sturges, Chief Executive Officer of Nevada Gold & Casinos, Inc., commented, "The Company's third quarter results reflect the significant progress we have made implementing our operating initiatives. We were very pleased to complete the sale of our interest in Isle of Capri-Black Hawk during the quarter, and look forward to moving ahead focused on compelling projects like our recently announced pending acquisition of the Horizon Casino Hotel that are well matched to our future growth strategies. We remain enthusiastic about the improvement in our balance sheet, which includes a significant reduction of our debt, an extension of the maturity date of our Revolving Credit Facility to June 2010, and the establishment of a $15 million project fund, of which we have used $2 million for deposit on the acquisition of the Horizon Casino Hotel, which will enable us to pursue similarly attractive acquisitions going forward."
Financial Results
For the third quarter of fiscal 2008, net revenues decreased to $1.4 million compared to $3.8 million in the third quarter of fiscal 2007. The revenue decrease is attributable to the elimination of $2.3 million of credit enhancement fees during January 2007 as the result of the RREA buyout of future credit enhancement fees from the Dry Creek Casino, LLC of which the Company was a 69% owner.
Operating expenses increased to $5.4 million from $3.5 million. The increase is primarily the result of a $2.4 million impairment of notes receivable and accrued interest related to a development project.
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 $918,000 for the third quarter ended January 27, 2008, compared to $561,000 for the same period a year ago. The Company did not record equity in earnings from American Racing during the third quarter of fiscal 2008 compared to a loss of $2.1 million for the same period a year ago. The sale of American Racing was completed during June 2007.
The net income for the third quarter of fiscal 2008 was $27.0 million compared to a net loss of $1.5 million in the third quarter of fiscal 2007. The improvement is primarily related to the $39.3 million gain on the sale of unconsolidated affiliates including the Company's interest in Isle of Capri-Black Hawk, offset by a $9.0 million increase in income tax expense and the elimination of $2.3 million of credit enhancement fees. The effective tax rate of 23.3% is due to reestablishing $4.5 million of a deferred tax assets which were fully reserved at April 29, 2007. The net income per diluted common share was $2.08, compared to a net loss per diluted common share of $0.12 in the comparable prior year period.
Diluted weighted average common shares outstanding in the third quarter were 13.0 million compared to 12.9 million in the prior year period.
James Kohn, Chief Financial Officer of Nevada Gold & Casinos, Inc. commented, "We are happy to report that as a result of the various transactions that occurred during this third quarter, our stockholders' equity per share book value has risen from $1.21 at our fiscal year end of April 29, 2007 to $3.33 at January 27, 2008. While the quarter had a number of significant items, it is important to note that on an adjusted pre-tax basis we recorded a loss of $1.5 million, an improvement of more than $800,000 compared to a year ago and we repaid over $39 million of debt."
Earnings Conference Call and Webcast
The Company will discuss third quarter financial results via the earnings conference call to be held today at 8:30 a.m. ET at www.nevadagold.com, Investor Relations, Events or by dialing (888) 820-9421 or (913) 312-1230 for international callers. If you are unable to participate, the conference call replay will be available by dialing (888) 203-1112 or (719) 457-0820 for international callers. The replay access code is 4055140. In addition, the call will be archived on the Company's website through March 14, 2008.
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 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 and California. The Company recently reached an agreement to acquire the Horizon Casino Hotel in Vicksburg, Mississippi pending licensing and other matters. Colorado Grande Casino in Cripple Creek, Colorado is wholly owned and operated by Nevada Gold. 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 the 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.primenewswire.com/newsroom/prs/?pkgid=1552
Nevada Gold & Casinos, Inc.
Consolidated Statements of Operations
(unaudited)
Three Months Ended Nine Months Ended
------------------------ ------------------------
January 27, January 28, January 27, January 28,
2008 2007 2008 2007
----------- ----------- ----------- -----------
Revenues:
Casino $ 1,446,103 $ 1,417,141 $ 5,141,177 $ 4,608,249
Food and
beverage 271,979 246,647 1,100,990 1,000,966
Other 18,258 32,111 87,564 102,510
Management fee -- 27,056 40,174 124,200
Credit
enhancement fee -- 2,304,796 -- 6,458,342
----------- ----------- ----------- -----------
Gross revenues 1,736,340 4,027,751 6,369,905 12,294,267
Less
promotional
allowances (324,061) (263,949) (1,113,602) (944,491)
----------- ----------- ----------- -----------
Net revenues 1,412,279 3,763,802 5,256,303 11,349,776
Expenses:
Casino 492,417 428,364 1,452,603 1,238,340
Food and
beverage 124,636 118,335 529,999 599,306
Marketing and
administrative 708,357 753,523 2,208,425 2,348,391
Facility 92,671 74,740 276,292 246,251
Corporate
expense 1,259,687 1,581,033 4,009,416 4,868,959
Legal expense 156,814 270,388 595,875 1,223,604
Depreciation and
amortization 175,059 276,183 579,439 812,685
Impairment of
unconsolidated
affiliate -- -- 100,000 --
Impairment of
note receivable
and related
interest 2,361,702 -- 2,361,702 --
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 15,574 22,301 39,897 74,710
----------- ----------- ----------- -----------
Total
operating
expenses 5,386,917 3,539,867 12,153,648 14,972,304
----------- ----------- ----------- -----------
Operating income
(loss) (3,974,638) 223,935 (6,897,345) (3,622,528)
Non-operating
income (expenses):
Earnings (loss)
from
unconsolidated
affiliates 917,947 (1,411,615) 4,061,415 (3,812,476)
Gain on sale of
unconsolidated
affiliate 39,208,732 -- 40,505,155 --
Gain on sale of
marketable
securities -- 11,849 -- 48,646
Gain (loss) on
sale of assets (15,207) -- 3,779 --
Gain on
settlement of
development
project -- 249,894 14,500 249,894
Interest
expense, net (979,947) (948,707) (2,554,356) (2,720,960)
Minority
interest -- (460,092) -- (1,286,831)
----------- ----------- ----------- -----------
Income (loss)
before income
tax (expense)
benefit 35,156,887 (2,334,736) 35,133,148 (11,144,255)
Income tax
(expense)
benefit
Current (8,219,205) -- (8,257,121) --
Deferred 16,957 845,320 16,957 4,045,646
----------- ----------- ----------- -----------
Total income
tax expense (8,202,248) 845,320 (8,240,164) 4,045,646
----------- ----------- ----------- -----------
Net income (loss) $26,954,639 $(1,489,416) $26,892,984 $(7,098,609)
=========== =========== =========== ===========
Per share
information:
Net income (loss)
per common share
- basic $ 2.08 $ (0.12) $ 2.08 $ (0.55)
=========== =========== =========== ===========
Net income (loss)
per common share
- diluted $ 2.08 $ (0.12) $ 2.08 $ (0.55)
=========== =========== =========== ===========
Basic weighted
average number
of common shares
outstanding 12,939,130 12,937,427 12,939,130 12,937,004
=========== =========== =========== ===========
Diluted weighted
average number
of common shares
outstanding 12,939,130 12,937,427 12,946,398 12,937,004
=========== =========== =========== ===========
Nevada Gold & Casinos, Inc.
Consolidated Balance Sheets
January 27, April 29,
2008 2007
----------- -----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 9,324,075 $ 2,803,560
Restricted cash 13,014,000 1,050,000
Accounts receivable 379,220 397,145
Accounts receivable - affiliates 60,006 124,685
Prepaid expenses 516,447 474,933
Prepaid interest 91,183 --
Notes receivable, current portion 1,100,000 --
Notes receivable - development projects,
current portion -- 1,357,904
Other current assets 54,606 55,055
----------- -----------
Total current assets 24,539,537 6,263,282
----------- -----------
Investments in unconsolidated affiliates 4,670,120 35,201,419
Investments in unconsolidated affiliates
held for sale -- 400,489
Investments in development projects 2,508,625 323,202
Investments in development projects
held for sale 3,437,932 3,914,765
Notes receivable 1,100,000 --
Notes receivable - affiliates 3,521,066 3,521,066
Notes receivable - development projects,
net of current portion 17,868,104 18,012,737
Goodwill 5,462,918 5,462,918
Property and equipment, net of
accumulated depreciation of $1,741,354
and $1,281,191 at January 27, 2008 and
April 29, 2007, respectively 1,505,966 2,063,026
Deferred tax asset 16,957 --
Other assets 5,075,855 4,868,442
----------- -----------
Total assets $69,707,080 $80,031,346
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 1,822,868 $ 1,540,781
Accrued interest payable -- 21,211
Other accrued liabilities 289,641 378,937
Guaranty liabilities -- 4,610,000
Taxes payable 8,219,234 --
Long-term debt, current maturities 7,802 2,066,518
----------- -----------
Total current liabilities 10,339,545 8,617,447
----------- -----------
Long-term debt, net of current maturities 15,565,125 55,021,031
Deferred income -- 8,591
Other liabilities 671,292 742,991
----------- -----------
Total liabilities 26,575,962 64,390,060
----------- -----------
Commitments and contingencies -- --
Stockholders' equity:
Common stock, $0.12 par value per share;
50,000,000 shares authorized;
13,935,330 shares issued and 12,939,130
outstanding at January 27, 2008 and
April 29, 2007, respectively 1,672,240 1,672,240
Additional paid-in capital 19,079,296 18,484,448
Retained earnings 32,587,072 5,694,088
Treasury stock, 996,200 shares at
January 27, 2008 and April 29, 2007,
at cost (10,216,950) (10,216,950)
Accumulated other comprehensive income 9,460 7,460
----------- -----------
Total stockholders' equity 43,131,118 15,641,286
----------- -----------
Total liabilities and stockholders'
equity $69,707,080 $80,031,346
=========== ===========