- Revenue Growth Continues at the Company
- Company Executes Sports Wagering Agreements,
Which Will Generate $7.0 Million of Minimum Annual Revenue Guarantees for Ten Years
- Construction Continues on the New Bronco Billy’s Parking Garage to Enable the Future Construction of Its New Hotel
- Company’s Proposal for a Major New Casino in Waukegan, Illinois Advanced by Waukegan City Council
LAS VEGAS, Oct. 31, 2019 (GLOBE NEWSWIRE) -- Full House Resorts, Inc. (Nasdaq: FLL) today announced results for the third quarter ended September 30, 2019.
On a consolidated basis, net revenues in the third quarter of 2019 increased 0.5% to $44.3 million from $44.0 million in the prior-year period. Net income for the third quarter of 2019 was $1.6 million, or $0.06 per diluted common share, in-line with $1.6 million, or $0.04 per diluted common share, in the prior-year period. Net income in both periods was affected by the accounting for the fair market value of outstanding warrants. Adjusted EBITDA(a) in the 2019 third quarter was $5.8 million versus $6.5 million in the third quarter of 2018, reflecting strong growth at Bronco Billy’s Casino and Hotel, though offset by road construction and increased marketing to introduce Rising Star’s newest amenities to the surrounding communities.
“The past several months were important months for the future growth of our company,” said Daniel R. Lee, President and Chief Executive Officer of Full House Resorts. “Most importantly, we executed six ten-year sports wagering agreements with three different companies, each allowing such companies to conduct mobile and online sports wagering throughout Indiana and Colorado. Additionally, we will have on-site sportsbooks at both Rising Star and Bronco Billy’s. Through these agreements, we will share in the revenues of those companies’ mobile sports operations in Indiana and Colorado, which include contractual minimums of $7.0 million of guaranteed annual revenue to Full House Resorts. Half of that amount is related to Indiana, where the legislature recently approved sports wagering. The other half is related to Colorado, subject to Colorado voters ratifying sports wagering in next week’s statewide election. If any of our six contracting businesses exceeds its minimum guarantee, we should receive more than $7.0 million per year. The agreements also include a total of $6.0 million of one-time market access fees, with $3.0 million already received by the Company and the remaining $3.0 million due upon ratification of sports wagering by Colorado voters. We expect our revenue guarantees for Indiana to begin as soon as our contracted companies begin mobile operations in the state, followed potentially by Colorado in the middle of next year. We believe that our tax losses from our existing operations, plus our considerable tax loss carryforwards, should offset much of the anticipated sports wagering income. All three of the contracting companies are significant operators in the gaming and/or sports book industry.
“With regard to existing operations,” continued Mr. Lee, “new leadership and revamped marketing helped increase both revenue and Adjusted Property EBITDA at Bronco Billy’s. The Christmas Casino at Bronco Billy’s contributed in part to that growth, posting its best revenue month in August, only to surpass that record in September. Work also continues on the new parking garage at Bronco Billy’s, having recently completed significant relocation of the power lines and now moving on to the relocation of storm sewer and sewer lines. We continue to expect to open the parking garage in the middle of next year. Additionally, we are installing the new Konami casino management system in November at Bronco Billy’s. With it, we believe that we will be able to compete and market more effectively.
“At Silver Slipper, operating results grew for the year-to-date period, but Hurricane Barry adversely impacted the property’s growth in the third quarter. Although the hurricane did not close the casino, its passage brought significant wind and rainfall to the area on an important weekend. As a result, guest visitation over that impacted weekend was down 25% versus the same weekend in 2018. Even with the short-term effects of Hurricane Barry, net revenues rose 1.0% and Adjusted Property EBITDA declined by only 2.1%. For the year-to-date period, Silver Slipper’s net revenues and Adjusted Property EBITDA have grown 8.4% and 14.3%, respectively.
“For our Northern Nevada segment, both net revenues and Adjusted Property EBITDA were stable. In recent weeks, we unveiled a significant renovation – though modest in total cost – of the steakhouse at Stockman’s Casino. That renovation will re-establish the steakhouse – now rebranded the Three Sisters Steakhouse – as the premier fine dining restaurant for the city and the nearby Fallon Naval Air Station.
“And lastly,” concluded Mr. Lee, “Rising Star continued to feel the impact of road construction on the major route to the property. Additionally, we launched a mass marketing campaign to reintroduce our casino and its many new amenities to potential guests. Those amenities include a new restaurant, Ben’s Bistro, which opened in the quarter, as well as our ferry service to Kentucky and our RV park. We are just completing the installation of the new Konami casino management system, similar to what will soon be installed at Bronco Billy’s. Perhaps most importantly, we are also in final preparations for our newest amenity, sports wagering, which we expect will launch shortly on-site and online, pending receipt of final regulatory approvals. We are excited for the new opportunities that sports wagering will provide our company.”
Third Quarter 2019 Highlights and Subsequent Events
Liquidity and Capital Resources
As of September 30, 2019, the Company had $27.8 million in cash and $108.2 million in outstanding senior secured notes.
Conference Call Information
The Company will host a conference call for investors today, October 31, 2019, at 4:30 p.m. ET (1:30 p.m. PT) to discuss its 2019 third 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) 204-4368 or, for international callers, (323) 994-2093.
A replay of the conference call will be available shortly after the conclusion of the call through November 14, 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 2770443.
(a) Reconciliation of Non-GAAP Financial Measure
The Company utilizes Adjusted Property EBITDA, a financial measure in accordance with generally accepted accounting principles (“GAAP”), as the measure of segment profit in assessing performance and allocating resources at the reportable segment level. Adjusted Property EBITDA is defined as earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, preopening expenses, impairment charges, asset write-offs, recoveries, gain (loss) from asset disposals, project development and acquisition costs, non-cash share-based compensation expense, and corporate-related costs and expenses that are not allocated to each property. The Company also utilizes Adjusted EBITDA (a non-GAAP measure), which is defined as Adjusted Property EBITDA net of corporate-related costs and expenses.
Although Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with GAAP, the Company believes this non-GAAP financial measure provides meaningful supplemental information regarding our performance and liquidity. The Company utilizes this metric or measure internally to focus management on year-over-year changes in core operating performance, which it considers its ordinary, ongoing and customary operations and which it believes 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 the Company’s senior secured notes) is also used to determine compliance with certain covenants.
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.
FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Revenues | ||||||||||||||||
Casino | $ | 30,644 | $ | 30,767 | $ | 87,392 | $ | 86,369 | ||||||||
Food and beverage | 9,262 | 9,371 | 26,783 | 26,093 | ||||||||||||
Hotel | 3,077 | 2,583 | 8,843 | 7,448 | ||||||||||||
Other operations | 1,276 | 1,307 | 3,398 | 3,276 | ||||||||||||
Net revenues | 44,259 | 44,028 | 126,416 | 123,186 | ||||||||||||
Operating costs and expenses | ||||||||||||||||
Casino | 12,188 | 11,934 | 35,565 | 34,300 | ||||||||||||
Food and beverage | 10,154 | 10,301 | 28,972 | 29,184 | ||||||||||||
Hotel | 2,522 | 2,708 | 7,321 | 7,847 | ||||||||||||
Other operations | 1,189 | 958 | 3,030 | 2,306 | ||||||||||||
Selling, general and administrative | 12,485 | 11,769 | 38,172 | 36,193 | ||||||||||||
Preopening costs | — | 140 | — | 140 | ||||||||||||
Project development and acquisition costs | 228 | 390 | 503 | 557 | ||||||||||||
Depreciation and amortization | 2,089 | 2,094 | 6,263 | 6,300 | ||||||||||||
Loss on sale or disposal of assets, net | 10 | — | 5 | 79 | ||||||||||||
40,865 | 40,294 | 119,831 | 116,906 | |||||||||||||
Operating income | 3,394 | 3,734 | 6,585 | 6,280 | ||||||||||||
Other (expense) income | ||||||||||||||||
Interest expense, net of capitalized interest | (2,428 | ) | (2,513 | ) | (8,062 | ) | (7,519 | ) | ||||||||
Loss on extinguishment of debt | — | — | — | (2,673 | ) | |||||||||||
Adjustment to fair value of warrants | (262 | ) | 463 | (161 | ) | 886 | ||||||||||
(2,690 | ) | (2,050 | ) | (8,223 | ) | (9,306 | ) | |||||||||
Income (loss) before income taxes | 704 | 1,684 | (1,638 | ) | (3,026 | ) | ||||||||||
(Benefit) provision for income taxes | (920 | ) | 119 | (635 | ) | 356 | ||||||||||
Net income (loss) | $ | 1,624 | $ | 1,565 | $ | (1,003 | ) | $ | (3,382 | ) | ||||||
Basic earnings (loss) per share | $ | 0.06 | $ | 0.06 | $ | (0.04 | ) | $ | (0.13 | ) | ||||||
Diluted earnings (loss) per share | $ | 0.06 | $ | 0.04 | $ | (0.04 | ) | $ | (0.16 | ) | ||||||
Full House Resorts, Inc.
Supplemental Information
Segment Revenues and Adjusted Property EBITDA
(In Thousands, Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net Revenues | ||||||||||||||||
Silver Slipper Casino and Hotel | $ | 18,066 | $ | 17,887 | $ | 56,238 | $ | 51,888 | ||||||||
Rising Star Casino Resort | 11,735 | 12,228 | 34,202 | 35,983 | ||||||||||||
Bronco Billy's Casino and Hotel | 8,114 | 7,520 | 21,431 | 20,557 | ||||||||||||
Northern Nevada Casinos | 6,344 | 6,393 | 14,545 | 14,758 | ||||||||||||
$ | 44,259 | $ | 44,028 | $ | 126,416 | $ | 123,186 | |||||||||
Adjusted Property EBITDA(1) and Adjusted EBITDA | ||||||||||||||||
Silver Slipper Casino and Hotel | $ | 3,009 | $ | 3,072 | $ | 10,448 | $ | 9,138 | ||||||||
Rising Star Casino Resort | 156 | 831 | 1,163 | 2,100 | ||||||||||||
Bronco Billy's Casino and Hotel | 1,582 | 1,463 | 3,074 | 3,424 | ||||||||||||
Northern Nevada Casinos | 2,108 | 2,066 | 2,516 | 2,526 | ||||||||||||
Adjusted Property EBITDA | 6,855 | 7,432 | 17,201 | 17,188 | ||||||||||||
Corporate | (1,064 | ) | (960 | ) | (3,582 | ) | (3,311 | ) | ||||||||
Adjusted EBITDA | $ | 5,791 | $ | 6,472 | $ | 13,619 | $ | 13,877 | ||||||||
(1) The Company utilizes Adjusted Property EBITDA as the measure of segment operating profit in assessing performance and allocating resources at the reportable segment level.
Full House Resorts, Inc.
Supplemental Information
Reconciliation of Net Income (Loss) and Operating Income (Loss) to Adjusted EBITDA
(In Thousands, Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net income (loss) | $ | 1,624 | $ | 1,565 | $ | (1,003 | ) | $ | (3,382 | ) | ||||||
(Benefit) provision for income taxes | (920 | ) | 119 | (635 | ) | 356 | ||||||||||
Interest expense, net of amounts capitalized | 2,428 | 2,513 | 8,062 | 7,519 | ||||||||||||
Loss on extinguishment of debt | — | — | — | 2,673 | ||||||||||||
Adjustment to fair value of warrants | 262 | (463 | ) | 161 | (886 | ) | ||||||||||
Operating income | 3,394 | 3,734 | 6,585 | 6,280 | ||||||||||||
Preopening costs | — | 140 | — | 140 | ||||||||||||
Project development and acquisition costs | 228 | 390 | 503 | 557 | ||||||||||||
Depreciation and amortization | 2,089 | 2,094 | 6,263 | 6,300 | ||||||||||||
Loss on sale or disposal of assets, net | 10 | — | 5 | 79 | ||||||||||||
Stock-based compensation | 70 | 114 | 263 | 521 | ||||||||||||
Adjusted EBITDA | $ | 5,791 | $ | 6,472 | $ | 13,619 | $ | 13,877 | ||||||||
Full House Resorts, Inc.
Supplemental Information
Reconciliation of Operating Income (Loss) to Adjusted Property EBITDA and Adjusted EBITDA
(In Thousands, Unaudited)
Three Months Ended September 30, 2019 | ||||||||||||||||||||
Project | Adjusted | |||||||||||||||||||
Development | Property | |||||||||||||||||||
Operating | Depreciation | Loss on | and | EBITDA and | ||||||||||||||||
Income | and | Sale of | Acquisition | Share-Based | Adjusted | |||||||||||||||
(Loss) | Amortization | Assets | Costs | Compensation | EBITDA | |||||||||||||||
Casino properties | ||||||||||||||||||||
Silver Slipper Casino and Hotel | $ | 2,119 | $ | 883 | $ | 7 | $ | — | $ | — | $ | 3,009 | ||||||||
Rising Star Casino Resort | (445 | ) | 601 | — | — | — | 156 | |||||||||||||
Bronco Billy’s Casino and Hotel | 1,156 | 423 | 3 | — | — | 1,582 | ||||||||||||||
Northern Nevada Casinos | 1,964 | 144 | — | — | — | 2,108 | ||||||||||||||
4,794 | 2,051 | 10 | — | — | 6,855 | |||||||||||||||
Other operations | ||||||||||||||||||||
Corporate | (1,400 | ) | 38 | — | 228 | 70 | (1,064 | ) | ||||||||||||
$ | 3,394 | $ | 2,089 | $ | 10 | $ | 228 | $ | 70 | $ | 5,791 | |||||||||
Three Months Ended September 30, 2018 | ||||||||||||||||||||
Project | Adjusted | |||||||||||||||||||
Development | Property | |||||||||||||||||||
Operating | Depreciation | and | EBITDA and | |||||||||||||||||
Income | and | Preopening | Acquisition | Share-Based | Adjusted | |||||||||||||||
(Loss) | Amortization | Costs | Costs | Compensation | EBITDA | |||||||||||||||
Casino properties | ||||||||||||||||||||
Silver Slipper Casino and Hotel | $ | 2,212 | $ | 860 | $ | — | $ | — | $ | — | $ | 3,072 | ||||||||
Rising Star Casino Resort | 74 | 651 | 106 | — | — | 831 | ||||||||||||||
Bronco Billy’s Casino and Hotel | 1,084 | 345 | 34 | — | — | 1,463 | ||||||||||||||
Northern Nevada Casinos | 1,867 | 199 | — | — | — | 2,066 | ||||||||||||||
5,237 | 2,055 | 140 | — | — | 7,432 | |||||||||||||||
Other operations | ||||||||||||||||||||
Corporate | (1,503 | ) | 39 | — | 390 | 114 | (960 | ) | ||||||||||||
$ | 3,734 | $ | 2,094 | $ | 140 | $ | 390 | $ | 114 | $ | 6,472 | |||||||||
Full House Resorts, Inc.
Supplemental Information
Reconciliation of Operating Income (Loss) to Adjusted Property EBITDA and Adjusted EBITDA
(In Thousands, Unaudited)
Nine Months Ended September 30, 2019 | ||||||||||||||||||||
Project | Adjusted | |||||||||||||||||||
Development | Property | |||||||||||||||||||
Operating | Depreciation | Loss on | and | EBITDA and | ||||||||||||||||
Income | and | Sale | Acquisition | Share-Based | Adjusted | |||||||||||||||
(Loss) | Amortization | of Assets | Costs | Compensation | EBITDA | |||||||||||||||
Casino properties | ||||||||||||||||||||
Silver Slipper Casino and Hotel | $ | 7,844 | $ | 2,599 | $ | 5 | $ | — | $ | — | $ | 10,448 | ||||||||
Rising Star Casino Resort | (637 | ) | 1,800 | — | — | — | 1,163 | |||||||||||||
Bronco Billy’s Casino and Hotel | 1,770 | 1,304 | — | — | — | 3,074 | ||||||||||||||
Northern Nevada Casinos | 2,070 | 446 | — | — | — | 2,516 | ||||||||||||||
11,047 | 6,149 | 5 | — | — | 17,201 | |||||||||||||||
Other operations | ||||||||||||||||||||
Corporate | (4,462 | ) | 114 | — | 503 | 263 | (3,582 | ) | ||||||||||||
$ | 6,585 | $ | 6,263 | $ | 5 | $ | 503 | $ | 263 | $ | 13,619 | |||||||||
Nine Months Ended September 30, 2018 | |||||||||||||||||||||||
Project | Adjusted | ||||||||||||||||||||||
Loss on | Development | Property | |||||||||||||||||||||
Operating | Depreciation | Disposal | Pre- | and | Share- | EBITDA and | |||||||||||||||||
Income | and | of | Opening | Acquisition | Based | Adjusted | |||||||||||||||||
(Loss) | Amortization | Assets | Costs | Costs | Compensation | EBITDA | |||||||||||||||||
Casino properties | |||||||||||||||||||||||
Silver Slipper Casino and Hotel | $ | 6,646 | $ | 2,491 | $ | 1 | $ | — | $ | — | $ | — | $ | 9,138 | |||||||||
Rising Star Casino Resort | 103 | 1,882 | 9 | 106 | — | — | 2,100 | ||||||||||||||||
Bronco Billy’s Casino and Hotel | 2,127 | 1,194 | 69 | 34 | — | — | 3,424 | ||||||||||||||||
Northern Nevada Casinos | 1,909 | 617 | — | — | — | — | 2,526 | ||||||||||||||||
10,785 | 6,184 | 79 | 140 | — | — | 17,188 | |||||||||||||||||
Other operations | |||||||||||||||||||||||
Corporate | (4,505 | ) | 116 | — | — | 557 | 521 | (3,311 | ) | ||||||||||||||
$ | 6,280 | $ | 6,300 | $ | 79 | $ | 140 | $ | 557 | $ | 521 | $ | 13,877 | ||||||||||
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 and opportunities; the impact of our finished projects and renovations on our results of operations and ability to compete; our proposed expansion of Bronco Billy’s, our ability to obtain financing for it, and our expected returns from that project; our construction budgets, time lines, and disruption expectations; expectations regarding our proposal to construct and operate a casino development in Waukegan, Illinois; expectations regarding the approval, timing and financial impact of legalized sports wagering in Indiana and Colorado and the related sports wagering agreements we have entered; expectations regarding our taxes and tax loss carryforwards; the likelihood and potential effects of legislative changes in Indiana; expectations regarding our new Konami casino management system; and expectations regarding management changes at Bronco Billy’s and Rising Star. 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 ability to obtain financing upon reasonable terms (including for projects such as the Bronco Billy’s expansion and the Waukegan proposal), the potential increase in Full House’s indebtedness due to the expansion of Bronco Billy’s, construction 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, 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), and the potential for Colorado voters to not approve sports wagering throughout the state. 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. 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; 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 is not incorporated by reference into, and is not a part of, this document.