- Net Revenue Increases 7.6%, Net Loss Improves Significantly, and Adjusted EBITDA Rises 108% from the Prior-Year Period
- "Christmas Casino & Inn by Bronco Billy’s" Concept Opened on November 1 in Cripple Creek, Colorado; Ferry Operations at Rising Star Casino Resort Began on September 29
- Company Prepares to Break Ground on Major Expansion in Cripple Creek, Colorado and Continues to Pursue Potential Growth Projects in Terre Haute, Indiana and Clovis, New Mexico
LAS VEGAS, Feb. 26, 2019 (GLOBE NEWSWIRE) -- Full House Resorts, Inc. (Nasdaq: FLL) today announced results for the fourth quarter ending December 31, 2018.
On a consolidated basis, net revenues in the fourth quarter of 2018 increased 7.6% to $40.7 million from $37.8 million in the prior-year period. Net loss for the fourth quarter of 2018 improved to a loss of $1.0 million, or $(0.07) per diluted common share, from a loss of $3.7 million, or $(0.16) per diluted common share, in the fourth quarter of 2017. Adjusted EBITDA(a) in the 2018 fourth quarter rose 108% to $3.8 million, reflecting the continued ramp-up of new growth projects and new marketing initiatives. Adjusted EBITDA for the fourth quarter of 2017 was $1.8 million, reflecting the effects of adverse weather. The weather in the recent quarter, on average across properties, was relatively normal for this off-season period.
For the full year, net revenues rose 1.6% to $163.9 million from $161.3 million. Net loss improved to a loss of $4.4 million, or $(0.23) per diluted common share, and includes a $2.7 million charge related to the refinancing of the Company’s debt in February 2018. Because of the Company's relatively large depreciation and other non-cash charges, it generally produces positive cash flows from operations in periods where it has net losses. For 2017, net loss was $5.0 million, or $(0.22) per diluted common share. Both periods also reflect non-cash adjustments to the fair value of the Company’s outstanding warrants. Adjusted EBITDA for 2018 rose to $17.7 million, a 7.2% increase from $16.5 million in the prior-year period. In addition to the items mentioned above, financial results for the full year reflect operating improvements at Silver Slipper and Rising Star, partially offset by adverse weather in early 2018.
"We ended 2018 with a very strong performance in the fourth quarter," said Daniel R. Lee, President and Chief Executive Officer of Full House Resorts. "A year ago, adverse weather significantly affected our properties in the fourth quarter of 2017 and the first quarter of 2018. While enduring those weather events, our management teams focused on new ways to improve operating efficiencies and contain costs, beginning first at Silver Slipper. Those efforts, combined with the continued ramp-up of new amenities, helped drive new property records in 2018. Silver Slipper, for example, had the best fourth quarter in its history.
"This operating strength should continue in 2019 through the launch of additional operating initiatives. These efforts span all departments and all properties.
"We also remain focused on our growth pipeline," continued Mr. Lee. "On November 1, we unveiled the new Christmas Casino & Inn in Cripple Creek, Colorado, a part of the Phase One expansion of our Bronco Billy's complex. We are excited by the initial response to the Christmas Casino and, more than ever, are excited for our longer-term plans for the market. We intend to break ground on the parking garage within the next few weeks, which is the next phase of this large project."
Fourth Quarter 2018 Highlights and Subsequent Events
Liquidity and Capital Resources
As of December 31, 2018, the Company had $20.6 million in cash and $99.0 million in outstanding senior secured notes.
Conference Call Information
The Company will host a conference call for investors today, February 26, 2019, at 4:30 p.m. ET (1:30 p.m. PT) to discuss its 2018 fourth quarter results. Investors can access the live audio webcast from the Company’s website at www.fullhouseresorts.com under the investor relations section. The conference call can also be accessed by dialing (888) 220-8474 or, for international callers, (323) 794-2591.
A replay of the conference call will be available shortly after the conclusion of the call through March 12, 2019. To access the replay, please visit www.fullhouseresorts.com. Investors can also access the replay by dialing (844) 512-2921 or, for international callers, (412) 317-6671 and using the passcode 2095369.
(a) Reconciliation of Non-GAAP Financial Measure
We define “Adjusted EBITDA” as earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, impairment charges, asset write-offs, recoveries, gain (loss) from asset disposals, preopening expenses, project development and acquisition costs, and non-cash share-based compensation expense. Although Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with generally accepted accounting principles (“GAAP”), we believe this non-GAAP financial measure provides meaningful supplemental information regarding our performance and liquidity. We utilize Adjusted EBITDA internally to focus management on year-over-year changes in our core operating performance, which we consider our ordinary, ongoing and customary operations and which we believe is useful information to investors. Accordingly, management excludes certain items when analyzing core operating performance, such as the items mentioned above, that management believes are not reflective of ordinary, ongoing and customary operations. A version of Adjusted EBITDA (known as Consolidated EBITDA, as defined in the indenture governing our senior secured notes) is also used to determine compliance with certain covenants.
In addition, because Adjusted EBITDA is not calculated in accordance with GAAP, it may not necessarily be comparable to similarly titled measures employed by other companies. A reconciliation of Adjusted EBITDA is presented below. However, you should not consider this measure in isolation or as a substitute for operating income, cash flows from operating activities, or any other measure for determining our operating performance or liquidity that is calculated in accordance with GAAP. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that, in the future, we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
Accounting Standards Codification No. 606, Revenue from Contracts with Customers ("ASC 606")
In accordance with GAAP, on January 1, 2018, the Company adopted the new revenue recognition accounting standard under the "modified retrospective" approach, which impacts the comparability of certain items between the 2018 and 2017 periods. The accounting changes have little effect on net revenues, Adjusted EBITDA, operating income, or net income. However, those changes substantially affect the characterization of revenue items leading to net revenues, as well as the treatment of certain departmental expenses. In accordance with the "modified retrospective" approach, figures for the 2018 periods are presented under the new standard, while figures for the 2017 periods are presented without adjustment. As a result, comparisons of departmental items in our financial statements between periods in 2018 and 2017, such as "casino revenues" and "casino expenses," are not meaningful, as much of the change is caused by the new accounting standard. To facilitate comparisons with the 2017 periods, we have provided a supplemental table showing affected items without the adoption of the new revenue recognition standard.
FULL HOUSE RESORTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues | |||||||||||||||
Casino (1) | $ | 27,944 | $ | 33,793 | $ | 114,313 | $ | 144,495 | |||||||
Food and beverage (1) | 8,965 | 7,712 | 35,058 | 32,471 | |||||||||||
Hotel (1) | 2,416 | 2,139 | 9,864 | 8,863 | |||||||||||
Other operations | 1,365 | 1,194 | 4,641 | 4,444 | |||||||||||
Gross revenues | 40,690 | 44,838 | 163,876 | 190,273 | |||||||||||
Less promotional allowances (1) | — | (7,038 | ) | — | (29,006 | ) | |||||||||
Net revenues | 40,690 | 37,800 | 163,876 | 161,267 | |||||||||||
Operating costs and expenses | |||||||||||||||
Casino (1) | 11,452 | 18,749 | 45,752 | 76,305 | |||||||||||
Food and beverage (1) | 9,435 | 2,931 | 38,619 | 12,528 | |||||||||||
Hotel (1) | 2,511 | 258 | 10,358 | 1,084 | |||||||||||
Other operations (1) | 1,128 | 590 | 3,434 | 1,923 | |||||||||||
Selling, general and administrative (1) | 12,501 | 13,583 | 48,694 | 53,485 | |||||||||||
Preopening costs | 134 | — | 274 | — | |||||||||||
Project development and acquisition costs | 286 | 46 | 843 | 284 | |||||||||||
Depreciation and amortization | 2,097 | 2,173 | 8,397 | 8,602 | |||||||||||
Loss (gain) on disposal of assets, net | — | — | 79 | (1 | ) | ||||||||||
39,544 | 38,330 | 156,450 | 154,210 | ||||||||||||
Operating income (loss) | 1,146 | (530 | ) | 7,426 | 7,057 | ||||||||||
Other (expense) income, net | |||||||||||||||
Interest expense, net of amounts capitalized | (2,787 | ) | (2,755 | ) | (10,306 | ) | (10,856 | ) | |||||||
Loss on extinguishment of debt | — | — | (2,673 | ) | — | ||||||||||
Adjustment to fair value of warrants | 785 | (1,107 | ) | 1,671 | (1,379 | ) | |||||||||
Other | (13 | ) | — | (13 | ) | — | |||||||||
(2,015 | ) | (3,862 | ) | (11,321 | ) | (12,235 | ) | ||||||||
Loss before income taxes | (869 | ) | (4,392 | ) | (3,895 | ) | (5,178 | ) | |||||||
Income tax expense (benefit) | 120 | (702 | ) | 476 | (150 | ) | |||||||||
Net loss | $ | (989 | ) | $ | (3,690 | ) | $ | (4,371 | ) | $ | (5,028 | ) | |||
Basic loss per share | $ | (0.04 | ) | $ | (0.16 | ) | $ | (0.17 | ) | $ | (0.22 | ) | |||
Diluted loss per share | $ | (0.07 | ) | $ | (0.16 | ) | $ | (0.23 | ) | $ | (0.22 | ) | |||
Basic weighted average number of common shares outstanding | 26,932 | 22,899 | 26,012 | 22,883 | |||||||||||
Diluted weighted average number of common shares outstanding | 27,271 | 22,899 | 26,461 | 22,883 |
Full House Resorts, Inc. Supplemental Information Fourth Quarter 2018 Impact of Adoption of New Revenue Recognition Standard (In Thousands, Unaudited) | |||||||||||||||
Three Months Ended December 31, 2018 | Three Months Ended December 31, 2017 As Reported | ||||||||||||||
As Reported | Balances without Adoption of ASC 606 | Effect of Change Higher/(Lower) | |||||||||||||
Statement of Operations | |||||||||||||||
Revenues | |||||||||||||||
Casino (1)(2) | $ | 27,944 | $ | 36,303 | $ | (8,359 | ) | $ | 33,793 | ||||||
Food and beverage (1)(2) | 8,965 | 8,730 | 235 | 7,712 | |||||||||||
Hotel (1)(2) | 2,416 | 2,215 | 201 | 2,139 | |||||||||||
Promotional allowances (1)(2) | — | (7,921 | ) | 7,921 | (7,038 | ) | |||||||||
Costs and expenses | |||||||||||||||
Casino (1)(3) | 11,452 | 18,728 | (7,276 | ) | 18,749 | ||||||||||
Food and beverage (3) | 9,435 | 2,827 | 6,608 | 2,931 | |||||||||||
Hotel (3) | 2,511 | 402 | 2,109 | 258 | |||||||||||
Other operations (3) | 1,128 | 707 | 421 | 590 | |||||||||||
Selling, general and administrative (3) | 12,501 | 14,367 | (1,866 | ) | 13,583 | ||||||||||
Operating income (loss) | 1,146 | 1,144 | 2 | (530 | ) | ||||||||||
Loss before income taxes | (869 | ) | (871 | ) | 2 | (4,392 | ) | ||||||||
Net loss | (989 | ) | (991 | ) | 2 | (3,690 | ) |
Year Ended December 31, 2018 | Year Ended December 31, 2017 As Reported | ||||||||||||||
As Reported | Balances without Adoption of ASC 606 | Effect of Change Higher/(Lower) | |||||||||||||
Statement of Operations | |||||||||||||||
Revenues | |||||||||||||||
Casino (1)(2) | $ | 114,313 | $ | 147,366 | $ | (33,053 | ) | $ | 144,495 | ||||||
Food and beverage (1)(2) | 35,058 | 34,607 | 451 | 32,471 | |||||||||||
Hotel (1)(2) | 9,864 | 9,043 | 821 | 8,863 | |||||||||||
Promotional allowances (1)(2) | — | (30,889 | ) | 30,889 | (29,006 | ) | |||||||||
Costs and expenses | |||||||||||||||
Casino (1)(3) | 45,752 | 75,912 | (30,160 | ) | 76,305 | ||||||||||
Food and beverage (3) | 38,619 | 12,354 | 26,265 | 12,528 | |||||||||||
Hotel (3) | 10,358 | 1,383 | 8,975 | 1,084 | |||||||||||
Other operations (3) | 3,434 | 1,994 | 1,440 | 1,923 | |||||||||||
Selling, general and administrative (3) | 48,694 | 56,085 | (7,391 | ) | 53,485 | ||||||||||
Operating income | 7,426 | 7,447 | (21 | ) | 7,057 | ||||||||||
Loss before income taxes | (3,895 | ) | (3,874 | ) | (21 | ) | (5,178 | ) | |||||||
Net loss | (4,371 | ) | (4,350 | ) | (21 | ) | (5,028 | ) |
Full House Resorts, Inc. Supplemental Information Segment Revenues and Adjusted Property EBITDA and Reconciliation of Adjusted EBITDA to Operating Income (Loss) and Net Income (Loss) (In Thousands, Unaudited) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net Revenues | |||||||||||||||
Silver Slipper Casino and Hotel | $ | 17,462 | $ | 14,526 | $ | 69,350 | $ | 64,046 | |||||||
Rising Star Casino Resort | 11,983 | 12,254 | 47,966 | 49,751 | |||||||||||
Bronco Billy's Casino and Hotel | 6,374 | 6,081 | 26,931 | 26,222 | |||||||||||
Northern Nevada Casinos | 4,871 | 4,939 | 19,629 | 21,248 | |||||||||||
$ | 40,690 | $ | 37,800 | $ | 163,876 | $ | 161,267 | ||||||||
Adjusted Property EBITDA(1) and Adjusted EBITDA | |||||||||||||||
Silver Slipper Casino and Hotel | $ | 2,988 | $ | 1,720 | $ | 12,126 | $ | 10,733 | |||||||
Rising Star Casino Resort | 706 | 7 | 2,806 | 2,678 | |||||||||||
Bronco Billy's Casino and Hotel | 495 | 667 | 3,919 | 4,758 | |||||||||||
Northern Nevada Casinos | 849 | 397 | 3,375 | 2,789 | |||||||||||
Adjusted Property EBITDA | 5,038 | 2,791 | 22,226 | 20,958 | |||||||||||
Corporate | (1,264 | ) | (974 | ) | (4,575 | ) | (4,491 | ) | |||||||
Adjusted EBITDA | $ | 3,774 | $ | 1,817 | $ | 17,651 | $ | 16,467 | |||||||
Depreciation and amortization | (2,097 | ) | (2,173 | ) | (8,397 | ) | (8,602 | ) | |||||||
Preopening costs | (134 | ) | — | (274 | ) | — | |||||||||
Project development and acquisition costs | (286 | ) | (46 | ) | (843 | ) | (284 | ) | |||||||
Gain (loss) on asset disposals, net | — | — | (79 | ) | 1 | ||||||||||
Share-based compensation | (111 | ) | (128 | ) | (632 | ) | (525 | ) | |||||||
Operating income (loss) | 1,146 | (530 | ) | 7,426 | 7,057 | ||||||||||
Other (expense) income | |||||||||||||||
Interest expense, net of amounts capitalized | (2,787 | ) | (2,755 | ) | (10,306 | ) | (10,856 | ) | |||||||
Loss on extinguishment of debt | — | — | (2,673 | ) | — | ||||||||||
Adjustment to fair value of warrants | 785 | (1,107 | ) | 1,671 | (1,379 | ) | |||||||||
Other | (13 | ) | — | (13 | ) | — | |||||||||
(2,015 | ) | (3,862 | ) | (11,321 | ) | (12,235 | ) | ||||||||
Loss before income taxes | (869 | ) | (4,392 | ) | (3,895 | ) | (5,178 | ) | |||||||
Income tax (expense) benefit | (120 | ) | 702 | (476 | ) | 150 | |||||||||
Net loss | $ | (989 | ) | $ | (3,690 | ) | $ | (4,371 | ) | $ | (5,028 | ) |
Forward-looking Statements
This press release contains statements by Full House and its officers that are "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Some forward-looking statements in this press release include those regarding our operating trends and expected results of operations; our future growth prospects; our beliefs regarding the impact of our recent renovations and improvements on our results of operations; our expectations for future operational improvements; our expectations regarding our new ferry boat service; our ability to make significant progress on our longer-term growth plans; our expectations regarding our Bronco Billy's expansion project, including timing for completion of the entire project and for commencement and completion of the project phases; our expectations for the Christmas Casino & Inn; our expectations regarding our proposal for a racetrack casino license in New Mexico, including timing for a decision by the New Mexico Racing Commission; and our expectations regarding our proposal for a new casino in Terre Haute, Indiana, including the related legislation. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the control of Full House. Such risks include, without limitation, changes in the Company’s business strategies, interest rate risks, the failure to obtain and/or maintain regulatory approvals (including in Colorado, Indiana, Nevada and Mississippi), the Company’s success in obtaining the state of New Mexico's sixth racing license; the ability to obtain financing upon reasonable terms (including for projects such as the Bronco Billy’s expansion); the potential increase in Full House's indebtedness due to the expansion of Bronco Billy’s; construction risks; legislative risks; dependence on existing management; competition; uncertainties over the development and success of our acquisition and expansion projects; the financial performance of our finished projects and renovations; effectiveness of expense and operating efficiencies; general macroeconomic conditions; and regulatory and business conditions in the gaming industry (including the future allowance of live table games at Indiana’s racinos, or the possible authorization or expansion of gaming in nearby states). Additional information concerning potential factors that could affect Full House’s financial condition and results of operations is included in the reports Full House files with the Securities and Exchange Commission, including, but not limited to, its Form 10-K for the most recently ended fiscal year and the Company’s other periodic reports filed with the Securities and Exchange Commission. The Company is under no obligation to (and expressly disclaims any such obligation to) update or revise its forward-looking statements as a result of new information, future events or otherwise, except as otherwise required by law. Actual results may differ materially from those indicated in the forward-looking statements.
About Full House Resorts, Inc.
Full House Resorts owns, leases, develops and operates gaming facilities throughout the country. The Company’s properties include Silver Slipper Casino and Hotel in Hancock County, Mississippi; Bronco Billy's Casino and Hotel in Cripple Creek, Colorado; the Christmas Casino & Inn in Cripple Creek, Colorado; Rising Star Casino Resort in Rising Sun, Indiana; and Stockman’s Casino in Fallon, Nevada. The Company also operates the Grand Lodge Casino at the Hyatt Regency Lake Tahoe Resort, Spa and Casino in Incline Village, Nevada under a lease agreement with the Hyatt organization. Further information about Full House Resorts can be viewed on its website at www.fullhouseresorts.com. The information contained on, or that may be accessed through, our website and Facebook page are not incorporated by reference into, and is not a part of, this document.
Contact:
Lewis Fanger, Chief Financial Officer
Full House Resorts, Inc.
702-221-7800
www.fullhouseresorts.com