LAS VEGAS, Aug. 08, 2017 (GLOBE NEWSWIRE) -- Red Rock Resorts, Inc. ("Red Rock Resorts" "we" or the "Company") (NASDAQ:RRR) today reported financial results for the second quarter ended June 30, 2017.
Net revenues were $403.5 million for the second quarter of 2017, an increase of 14.8%, or $52.0 million, from $351.5 million for the same period of 2016. The increase was primarily the result of the addition of $39.8 million of net revenues from the Palms Casino Resort (the "Palms"), an $8.8 million increase from same-store Las Vegas Operations and a $3.2 million increase from Native American Operations.
Net loss attributable to Red Rock Resorts was $25.9 million, or $0.39 per diluted share, for the second quarter of 2017, a decrease of $31.6 million, from net income of $5.7 million, or $0.01 per diluted share, for the same period of 2016. The decrease in net income was primarily attributable to the acquisition of the leases at Boulder Station and Texas Station, partially offset by lower income tax.
Adjusted EBITDA(1) was $119.5 million for the second quarter of 2017, a 1.8% increase from $117.4 million in the same period of 2016. The increase was the result of the addition of the Palms in operating results and continued strength in Native American Operations.
Red Rock Resorts also announced on August 4, 2017 that the Company had approved a cash dividend of $0.10 per share, payable on August 31, 2017 to shareholders of record as of August 15, 2017.
Las Vegas Operations
Net revenues from Las Vegas Operations were $371.5 million for the second quarter of 2017, a 15.1% increase from $322.9 million in the same period of 2016, primarily due to the addition of the Palms. Adjusted EBITDA(1) from Las Vegas Operations was $104.7 million for the second quarter of 2017, a 0.1% increase from $104.6 million in the same period of 2016, primarily due to the addition of the Palms and partially offset by continued construction disruption at Palace Station.
Native American Operations
Adjusted EBITDA(1) from Native American Operations was $22.7 million for the second quarter of 2017, a 12.9% increase from $20.1 million in the same period of 2016 due to continued strength at both Graton and Gun Lake.
Balance Sheet Highlights
The Company’s cash and cash equivalents at June 30, 2017 were $125.3 million and total principal amount of debt outstanding at the end of the quarter was $2.57 billion. As of June 30, 2017, debt (net of cash) to Adjusted EBITDA(1) ratio was 4.96 times and interest coverage was at 4.58 times, proforma for the acquisition of the Palms.
Conference Call Information
The Company will host a conference call today at 4:30 p.m. Eastern Time to discuss its financial results. The conference call will consist of prepared remarks from the Company and will include a question and answer session. Those interested in participating in the call should dial (877) 793-4361 or (615) 247-0185 for international callers, approximately 15 minutes before the call start time. A replay of the call will be available from today through August 15, 2017 at www.redrockresorts.com. A live audio webcast of the call will also be available at www.redrockresorts.com.
Presentation of Financial Information
(1) Adjusted EBITDA is not a generally accepted accounting principle (“GAAP”) measurement and is presented solely as a supplemental disclosure because the Company believes that it is a widely used measure of operating performance in the gaming industry and is a principal basis for valuation of gaming companies. We believe that in addition to net (loss) income, Adjusted EBITDA is a useful financial performance measurement for assessing our operating performance because it provides information about the performance of our ongoing core operations excluding non-cash expenses, financing costs, and other non-operational items. Adjusted EBITDA includes net (loss) income plus preopening, depreciation and amortization, share-based compensation, write-downs and other charges, net, related party lease termination, interest expense, net, loss on extinguishment/modification of debt, net, change in fair value of derivative instruments and income taxes, and excludes Adjusted EBITDA attributable to the noncontrolling interests of MPM.
Company Information and Forward Looking Statements
Red Rock Resorts manages and owns a majority indirect equity interest in Station Casinos. Station Casinos is the leading provider of gaming and entertainment to the residents of Las Vegas, Nevada. Station Casinos’ properties, which are located throughout the Las Vegas valley, are regional entertainment destinations and include various amenities, including numerous restaurants, entertainment venues, movie theaters, bowling and convention/banquet space, as well as traditional casino gaming offerings such as video poker, slot machines, table games, bingo and race and sports wagering. Station Casinos owns and operates Red Rock Casino Resort Spa, Green Valley Ranch Resort Spa Casino, Palms Casino Resort, Palace Station Hotel & Casino, Boulder Station Hotel & Casino, Sunset Station Hotel & Casino, Santa Fe Station Hotel & Casino, Texas Station Gambling Hall & Hotel, Fiesta Rancho Casino Hotel, Fiesta Henderson Casino Hotel, Wildfire Rancho, Wildfire Boulder, Wild Wild West Gambling Hall & Hotel, Wildfire Sunset, Wildfire Valley View, Wildfire Anthem and Wildfire Lake Mead. Station Casinos also owns a 50% interest in Barley’s Casino & Brewing Company, Wildfire Casino & Lanes and The Greens. In addition, Station Casinos is the manager of Graton Resort & Casino in northern California and owns a 50% interest in MPM Enterprises, L.L.C., which is the manager of Gun Lake Casino in southwestern Michigan.
This press release contains certain forward-looking statements with respect to the Company and its subsidiaries which involve risks and uncertainties that cannot be predicted or quantified, and consequently, actual results may differ materially from those expressed or implied herein. Such risks and uncertainties include, but are not limited to the Company’s ability to successfully integrate the Palms or realize expected synergies; the effects of the economy and business conditions on consumer spending and our business; competition, including the risk that new gaming licenses or gaming activities are approved; our substantial outstanding indebtedness and the effect of our significant debt service requirements; our ability to refinance our outstanding indebtedness and obtain necessary capital; the impact of extensive regulation; risks associated with changes to applicable gaming and tax laws; risks associated with development, construction and management of new projects or the expansion of existing facilities; and other risks described in the filings of the Company with the Securities and Exchange Commission. In providing forward-looking statements, the Company is not undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise, except as required by law. If the Company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those other forward-looking statements.
| Red Rock Resorts, Inc. | |||||||||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||||||||
| (amounts in thousands, except per share data) | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| June 30, | June 30, | ||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||||
| Operating revenues: | |||||||||||||||||
| Casino | $ | 258,396 | $ | 233,796 | $ | 521,368 | $ | 473,567 | |||||||||
| Food and beverage | 75,303 | 66,408 | 155,418 | 133,028 | |||||||||||||
| Room | 44,641 | 32,979 | 94,405 | 67,363 | |||||||||||||
| Other | 23,699 | 17,705 | 46,519 | 34,887 | |||||||||||||
| Management fees | 30,676 | 27,455 | 60,903 | 54,104 | |||||||||||||
| Gross revenues | 432,715 | 378,343 | 878,613 | 762,949 | |||||||||||||
| Promotional allowances | (29,222 | ) | (26,857 | ) | (57,388 | ) | (52,216 | ) | |||||||||
| Net revenues | 403,493 | 351,486 | 821,225 | 710,733 | |||||||||||||
| Operating costs and expenses: | |||||||||||||||||
| Casino | 103,170 | 88,986 | 204,824 | 176,407 | |||||||||||||
| Food and beverage | 55,059 | 44,501 | 110,105 | 87,025 | |||||||||||||
| Room | 18,239 | 11,893 | 38,306 | 24,278 | |||||||||||||
| Other | 9,079 | 6,305 | 16,912 | 12,027 | |||||||||||||
| Selling, general and administrative | 94,781 | 80,152 | 189,204 | 155,242 | |||||||||||||
| Preopening | 368 | 373 | 398 | 721 | |||||||||||||
| Depreciation and amortization | 46,807 | 38,436 | 92,060 | 77,863 | |||||||||||||
| Write-downs and other charges, net | 8,826 | 10,966 | 9,850 | 13,334 | |||||||||||||
| Related party lease termination | 98,393 | - | 98,393 | - | |||||||||||||
| 434,722 | 281,612 | 760,052 | 546,897 | ||||||||||||||
| Operating (loss) income | (31,229 | ) | 69,874 | 61,173 | 163,836 | ||||||||||||
| Earnings from joint ventures | 420 | 428 | 835 | 1,040 | |||||||||||||
| Operating (loss) income and earnings from joint ventures | (30,809 | ) | 70,302 | 62,008 | 164,876 | ||||||||||||
| Other (expense) income: | |||||||||||||||||
| Interest expense, net | (33,853 | ) | (34,078 | ) | (68,797 | ) | (69,146 | ) | |||||||||
| Loss on extinguishment/modification of debt, net | (975 | ) | (7,084 | ) | (2,994 | ) | (7,084 | ) | |||||||||
| Change in fair value of derivative instruments | 3,330 | 90 | 3,369 | 87 | |||||||||||||
| (31,498 | ) | (41,072 | ) | (68,422 | ) | (76,143 | ) | ||||||||||
| (Loss) income before income tax | (62,307 | ) | 29,230 | (6,414 | ) | 88,733 | |||||||||||
| Benefit (provision) for income tax | 11,813 | (7,502 | ) | 1,134 | (7,502 | ) | |||||||||||
| Net (loss) income | (50,494 | ) | 21,728 | (5,280 | ) | 81,231 | |||||||||||
| Less: net (loss) income attributable to noncontrolling interests | (24,574 | ) | 16,075 | 857 | 17,939 | ||||||||||||
| Net (loss) income attributable to Red Rock Resorts, Inc. | $ | (25,920 | ) | $ | 5,653 | $ | (6,137 | ) | $ | 63,292 | |||||||
| (Loss) earnings per common share: | |||||||||||||||||
| (Loss) earnings per share of Class A common stock, basic and diluted | $ | (0.39 | ) | $ | 0.01 | $ | (0.09 | ) | $ | 0.33 | |||||||
| Weighted average common shares outstanding: | |||||||||||||||||
| Basic | 67,311 | 30,031 | 66,506 | 19,960 | |||||||||||||
| Diluted | 67,311 | 30,193 | 66,506 | 20,041 | |||||||||||||
| Dividends declared per common share | $ | 0.10 | $ | - | $ | 0.20 | $ | - | |||||||||
| Red Rock Resorts, Inc. | ||||||||||||||||||
| Segment Information and | ||||||||||||||||||
| Reconciliation of Net (Loss) Income to Adjusted EBITDA | ||||||||||||||||||
| (amounts in thousands) | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| June 30, | June 30, | |||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||
| Net revenues | ||||||||||||||||||
| Las Vegas operations | $ | 371,492 | $ | 322,876 | $ | 757,730 | $ | 654,334 | ||||||||||
| Native American management | 30,543 | 27,320 | 60,648 | 53,807 | ||||||||||||||
| Reportable segment net revenues | 402,035 | 350,196 | 818,378 | 708,141 | ||||||||||||||
| Corporate and other | 1,458 | 1,290 | 2,847 | 2,592 | ||||||||||||||
| Net revenues | $ | 403,493 | $ | 351,486 | $ | 821,225 | $ | 710,733 | ||||||||||
| Net (loss) income | $ | (50,494 | ) | $ | 21,728 | $ | (5,280 | ) | $ | 81,231 | ||||||||
| Adjustments | ||||||||||||||||||
| Preopening | 368 | 373 | 398 | 721 | ||||||||||||||
| Depreciation and amortization | 46,807 | 38,436 | 92,060 | 77,863 | ||||||||||||||
| Share-based compensation | 2,326 | 3,681 | 3,738 | 4,301 | ||||||||||||||
| Write-downs and other charges, net | 8,826 | 10,966 | 9,850 | 13,334 | ||||||||||||||
| Related party lease termination | 98,393 | - | 98,393 | - | ||||||||||||||
| Interest expense, net | 33,853 | 34,078 | 68,797 | 69,146 | ||||||||||||||
| Loss on extinguishment/modification of debt, net | 975 | 7,084 | 2,994 | 7,084 | ||||||||||||||
| Change in fair value of derivative instruments | (3,330 | ) | (90 | ) | (3,369 | ) | (87 | ) | ||||||||||
| Adjusted EBITDA attributable to MPM noncontrolling interest | (6,418 | ) | (5,211 | ) | (11,056 | ) | (9,332 | ) | ||||||||||
| (Benefit) provision for income tax | (11,813 | ) | 7,502 | (1,134 | ) | 7,502 | ||||||||||||
| Other | - | (1,133 | ) | - | (1,133 | ) | ||||||||||||
| Adjusted EBITDA | $ | 119,493 | $ | 117,414 | $ | 255,391 | $ | 250,630 | ||||||||||
| Adjusted EBITDA | ||||||||||||||||||
| Las Vegas operations | $ | 104,711 | $ | 104,627 | $ | 225,277 | $ | 223,637 | ||||||||||
| Native American management | 22,695 | 20,096 | 46,012 | 40,528 | ||||||||||||||
| Reportable segment Adjusted EBITDA | 127,406 | 124,723 | 271,289 | 264,165 | ||||||||||||||
| Corporate and other | (7,913 | ) | (7,309 | ) | (15,898 | ) | (13,535 | ) | ||||||||||
| Adjusted EBITDA | $ | 119,493 | $ | 117,414 | $ | 255,391 | $ | 250,630 | ||||||||||
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