Full House Resorts (NYSE Amex US: FLL) today announced results
for the three-month period ended March 31, 2012. Net income
attributable to the Company for the three months ended March 31,
2012 was $25.8 million, or $1.38 per common share, compared to net
income of $1.6 million, or $0.09 per common share, in the
prior-year period. Excluding a $40.8 million gain on sale of the
Company’s interest in Gaming Entertainment (Michigan), LLC (“GEM”)
and its FireKeepers management agreement, and a $1.7 million
pre-tax loss on debt extinguishment in the first quarter of 2012,
and $0.5 million in acquisition costs in the first quarter of 2011,
the Company would have reported net income attributable to the
Company per common share of $0.03 and $0.11 for the three months
ended March 31, 2012 and 2011, respectively.
First Quarter 2012 Highlights and Subsequent Events
- At its Rising Star Casino Resort for
the first quarter 2012, the Company recorded revenue of $22.6
million and EBITDA of $3.1 million, bringing total adjusted EBITDA,
as defined below, for the first year of the Company’s ownership to
$11.1 million.
- On March 30, 2012, the Company and its
50% joint venture partner in GEM, RAM Entertainment LLC, closed on
the $97.5 million sale of their interests in GEM and the
FireKeepers management agreement to the FireKeepers Development
Authority. The Company used a portion of the proceeds to pay off
the Company’s remaining outstanding debt of $25.3 million and to
extinguish the credit facility and related interest-rate swap
agreement.
- Management fees and success fees from
the Pueblo of Pojoaque for the first quarter 2012 were $0.5
million. The Company’s three-year management agreement with the
Pueblo commenced on September 23, 2011.
- Management fees for GEM, a formerly
50%-owned joint venture that managed FireKeepers Casino, were $5.3
million in the first quarter of 2012, compared to $6.4 million in
the first quarter 2011.
- Adjusted EBITDA and other items, as
defined below, for the first quarter of 2012 was $4.9 million
versus $4.0 million in the prior-year period. Adjusted EBITDA for
the first quarter of 2012 excludes a $40.8 million gain on sale
from the Company’s sale of its interest in GEM and the FireKeepers
management agreement. Prior-year period results include $1.5
million in equity in net income from the Company’s Delaware
management contract, which expired in August 2011.
- As of March 31, 2012, Full House
Resorts had $38.3 million in cash and no outstanding debt on its
balance sheet.
- On April 3, 2012, the Company announced
that it entered into definitive agreements with Silver Slipper
Casino Venture LLC to acquire all of the outstanding membership
interest of the entity operating the Silver Slipper Casino in
Hancock County, Mississippi. The purchase price is $70 million,
exclusive of estimated cash, net working capital balances, fees and
expenses and other adjustments as customary as of the closing date.
On May 2, the Company announced it had obtained financing
commitments for new credit facilities totaling $75 million to be
used to fund the acquisition. The agreements are subject to
customary documentation and closing conditions. In late March 2012,
the Company made a $2.5 million escrow deposit which is
non-refundable except for certain customary conditions.
“It was a very newsworthy and positive first quarter for Full
House, as our Rising Star Casino Resort continues to exceed
expectations and we closed a significant and successful chapter in
our history with the sale of our interest in the GEM management
agreement,” said Andre Hilliou, Chairman and Chief Executive
Officer of Full House. “We also started off the current quarter
with the major announcement of our acquisition of the Silver
Slipper Casino pending due diligence and customary regulatory
approvals. We recently obtained financing commitments for the
acquisition at an attractive overall blended rate, commenced the
licensing process in Mississippi and expect to close on the
acquisition in the third quarter of 2012. Once completed, we will
have significantly changed the face of Full House from a casino
management company to primarily an owner-operator of strong
locals-oriented casinos.”
First Quarter 2012 Results
For the quarter ended March 31, 2012, Full House reported
casino, food and beverage, hotel and other revenue of $27.5
million, up from $2.0 million in the prior-year period, primarily
due to the addition of the Rising Star Casino Resort during the
second quarter of 2011 and the Grand Lodge Casino on September 1,
2011.
Operating expenses for the first quarter 2012 were $27.8 million
compared to $4.0 million in the prior-year period, primarily due to
the addition of the Rising Star Casino Resort and the Grand Lodge
Casino. The Company also recorded $0.3 million of stock
compensation expense during the first quarter of 2012, while there
was no stock compensation expense during the prior-year period.
Last year’s first quarter included approximately $1.5 million of
income related to the Company’s Delaware management agreement which
expired in August 2011, resulting in no contribution to income in
the first quarter of 2012.
Operating income for the first quarter 2012 was $46.3 million,
compared to operating income of $5.8 million in the prior-year
period, due to a $40.8 million gain on sale of joint venture,
related to the sale of the Company’s interest in GEM and the
FireKeepers management agreement. Excluding the gain on sale,
operating income for the first quarter 2012 was $5.6 million.
Adjusted EBITDA, as defined below, was $4.9 million versus $4.0
million in the prior-year period.
The Company reported net income attributable to the Company per
common share of $1.38 and $0.09 for the three months ended March
31, 2012 and 2011, respectively. Excluding the aforementioned gain
on sale, and a $1.7 million pre-tax loss on debt extinguishment in
the first quarter of 2012, and $0.5 million in acquisition costs in
the first quarter of 2011, the Company would have reported net
income attributable to the Company per common share of $0.03 and
$0.11 for the three months ended March 31, 2012 and 2011,
respectively.
Liquidity and Capital Resources
As of March 31, 2012, Full House had $38.3 million in cash and
no outstanding debt on its balance sheet.
Conference Call Information
The Company will host a conference call and webcast today at
11:00 AM EDT. Both the call and webcast are open to the general
public.
The conference call number is 888-747-4664; international
callers can access the call by dialing 1-913-312-0849. Please call
five minutes in advance to ensure that you are connected prior to
the presentation. Interested parties may also access the live call
on the Internet at www.fullhouseresorts.com (select Investors and
then Upcoming Events). Please log on fifteen minutes in advance to
ensure that you are connected prior to the call's initiation.
Questions and answers will be reserved for call-in analysts and
institutional investors. Following its completion, a replay of the
call can be accessed for one week on the Internet at the above link
or by calling either 877-870-5176 or 1-858-384-5517 and providing
passcode 1757548.
Selected unaudited Statements of
Operations data for the three months ended March 31,
2012
CasinoOperations
-Nevada
CasinoOperations
-Midwest
Development/Management
Corporate Consolidated Revenues $
4,886,253 $ 22,630,217 $ 5,809,870 $ - $ 33,326,340 Selling,
general & administrative expense 1,567,543 5,017,010 136,386
1,839,689 8,560,628 Depreciation & amortization 241,691
1,028,166 593,052 2,386 1,865,295 Operating gains - - 40,762,005 -
40,762,005 Operating income 357,886 2,062,303 45,811,271 (1,907,959
) 46,323,501 Net income (loss) attributable to the Company 233,636
(1,037,974 ) 30,108,806 (3,456,135 ) 25,848,333
2011
CasinoOperations
-Nevada
CasinoOperations
-Midwest
Development/Management
Corporate Consolidated Revenues $
1,979,985 $ - $ 6,364,242 $ - $ 8,344,227 Selling, general &
administrative expense 461,963 - 152,240 1,039,505 1,653,708
Depreciation & amortization 238,815 - 593,196 19,733 851,744
Operating gains - - 1,519,897 - 1,519,897 Operating income (loss)
283,978 - 7,138,702 (1,591,046 ) 5,831,634 Net income (loss)
attributable to the Company 187,507 - 2,608,873 (1,188,936 )
1,607,444
Reconciliation of EBITDA before
unrealized gains/losses on notes receivable from tribal
governments, and other items for the three months ended March
31,
Net of
Non-Controlling Interest
2012
Casino OperationsNevada
Casino OperationsMidwest
Development /Management
Corporate Consolidated GEM
50%
Development /Management
Consolidated Operating income (loss) $ 357,886
$ 2,062,303 $ (1,933,046 ) $ 45,836,358 $ 46,323,501 $ 4,773,279 $
2,386,640 $ (4,319,686 ) $ 43,936,861 Add Back: Silver
Slipper acquisition costs expensed - - - 31,166 31,166 - - - 31,166
Depreciation and amortization 241,691 1,028,166 593,052 2,386
1,865,296 431,025 215,513 377,539 1,649,783 Deduct: Gain (Loss) on
sale of joint venture - - 6,544,007 (47,306,012 ) (40,762,005 ) - -
6,544,007 (40,762,005 )
$ 599,577 $ 3,090,469 $ 5,204,013
$ (1,436,102 ) $ 7,457,957 $ 5,204,304
$ 2,602,153 $ 2,601,860 $ 4,855,804
Net of Non-Controlling
Interest
2011
Casino OperationsNevada
Casino OperationsMidwest
Development /Management
Corporate Consolidated GEM
50%
Development /Management
Consolidated Operating income (loss) $ 283,831
$ - $ 7,138,703 $ (1,590,900 ) $ 5,831,634 $ 5,782,152 2,891,076 $
4,247,627 $ 2,940,558 Add Back: Rising Star acquisition
costs expensed - - - 469,654 469,654 - - - 469,654 Depreciation and
amortization 238,815 - 593,196 19,733 851,744 431,169 215,585
377,612 636,160 Deduct: Unrealized gain on notes receivable, tribal
governments - - 24,575 - 24,575 - - 24,575 24,575
$ 522,646 $ - $
7,707,324 $ (1,101,513 ) $ 7,128,457 $
6,213,321 $ 3,106,661 $ 4,600,664
$ 4,021,797
FULL HOUSE RESORTS, INC. AND
SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS
Three months
ended March 31,
2012
2011
Revenues Casino $ 25,715,472 $ 1,541,052 Food and beverage
1,326,828 412,583 Hotel 115,509 -- Management fees 5,809,869
6,364,242 Other operations 358,662 26,350
33,326,340 8,344,227
Operating costs and expenses
Casino
14,770,727 522,456 Food and beverage 1,175,023 472,773 Hotel
144,434 -- Other operations 1,151,688 -- Project development and
acquisition costs 97,049 531,809 Selling, general and
administrative 8,560,628 1,653,708 Depreciation and amortization
1,865,295 851,744 27,764,844
4,032,490
Operating gains Gain on sale
of joint venture 40,762,005 -- Equity in net income of
unconsolidated joint venture, and related guaranteed payments --
1,495,322 Unrealized gains on notes receivable, tribal governments
-- 24,575 40,762,005
1,519,897
Operating income
46,323,501 5,831,634
Other income
(expense) Interest expense (734,210 ) (210,635 ) Gain on
derivative instrument 8,472 -- Other income 4,825 387 Loss on
extinguishment of debt (1,719,269 ) -- Other
income (expense), net (2,440,182 ) (210,248 )
Income before income taxes 43,883,319 5,621,386 Income tax
expense (15,853,814 ) (1,406,863 )
Net
income 28,029,505 4,214,523 Income attributable to
non-controlling interest in consolidated joint venture
(2,181,172 ) (2,607,079 )
Net income attributable to the
Company $ 25,848,333 $ 1,607,444
Net
income attributable to the Company per common share $ 1.38
$ 0.09
Weighted-average number of common
shares outstanding 18,673,681 18,007,681
About Full House Resorts, Inc.
Full House owns, develops and manages gaming facilities. The
Company owns the Rising Star Casino Resort in Rising Sun, Indiana.
The Rising Star Riverboat Casino has 40,000 square feet of gaming
space with almost 1,300 slot and video poker machines and 37 table
games. The property includes a 190-room hotel, a pavilion with five
food and beverage outlets, an 18-hole Scottish links golf course
and a large, multi-purpose Grand Theater for concerts and
performance events as well as meetings and conventions. In
addition, Full House owns Stockman’s Casino in Fallon, Nevada which
has 8,400 square feet of gaming space with approximately 260 gaming
machines, four table games and a keno game. The Company also
operates the Grand Lodge Casino at the Hyatt Regency Lake Tahoe
Resort, Spa and Casino in Incline Village, Nevada on the north
shore of Lake Tahoe under a five-year lease agreement with the
Hyatt organization.
The Company also has a management agreement with the Pueblo of
Pojoaque for the operations of the Buffalo Thunder Casino and
Resort in Santa Fe, New Mexico along with the Pueblo’s Cities of
Gold and Sports Bar casino facilities.
Further information about Full House Resorts and its operations
can be viewed on its website at www.fullhouseresorts.com.
Forward-looking Statements
Some of the statements made in this release are forward-looking
statements. These forward-looking statements are based upon Full
House’s current expectations and projections about future events
and generally relate to Full House’s plans, objectives and
expectations for Full House’s business. Although Full House’s
management believes that the plans and objectives expressed in
these forward-looking statements are reasonable, the outcome of
such plans, objectives and expectations involve risks and
uncertainties including without limitation, regulatory approvals,
including the ability to maintain a gaming license in Indiana and
Nevada, financing sources and terms, integration of acquisitions,
competition and business conditions in the gaming industry,
including competition from Ohio casinos and any possible
authorization of gaming in Kentucky. 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.
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