Full House Resorts (NYSE Amex US: FLL) today announced results
for the three-month and full-year periods ended December 31, 2011.
Net income attributable to the Company for the three months ended
December 31, 2011 was $0.5 million, or $0.03 per common share,
compared to net income of $2.0 million, or $0.11 per common share,
in the prior-year period.
Fourth Quarter 2011 Highlights and Subsequent Events
- At its Rising Star Casino Resort for
the fourth quarter 2011, the Company recorded revenue of $21.7
million and EBITDA of $2.2 million (including a $0.2 million
benefit from a one-time outstanding chip liability pick-up),
bringing total adjusted EBITDA, as defined below, for the first
nine months of the Company’s ownership to $8.0 million.
- Management fees and success fees from
the Pueblo of Pojoaque for the fourth quarter 2011 were $0.9
million. The Company’s three-year management agreement with the
Pueblo commenced on September 23, 2011.
- Management fees for Gaming
Entertainment (Michigan), LLC (“GEM”), a 50%-owned joint venture
that manages FireKeepers Casino, were $4.9 million in the fourth
quarter of 2011, compared to $5.8 million in the fourth quarter
2010.
- Adjusted EBITDA and other items, as
defined below, for the fourth quarter of 2011 was $4.5 million
versus $3.8 million in the prior-year period. 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 December 31, 2011, Full House
Resorts had $14.7 million in cash, $26.9 million in outstanding
debt (inclusive of swap agreement liability) and approximately $4.3
million of availability on its revolving credit facility.
- On February 27, 2012, the Company and
its partner in GEM, RAM Entertainment LLC, announced that it had
signed a letter of intent to sell their interests in the management
agreement to the FireKeepers Development Authority. In accordance
with the terms of the letter of intent, the purchase price would be
$97.5 million. The closing for the transaction is expected in the
second quarter, conditioned on the Authority obtaining financing
and the completion of definitive documents and other customary
closing conditions. The Company intends to use a portion of the
after-tax proceeds to pay off the Company’s remaining outstanding
debt.
“We were pleased with our fourth quarter performance, as our
Rising Star Casino Resort continues to perform beyond our
expectations, and we received our first full quarter of management
and success fees from Buffalo Thunder,” said Andre Hilliou,
Chairman and Chief Executive Officer of Full House. “In addition,
last week’s announcement of the letter of intent to sell our
interest in the GEM management agreement begins the closing of a
very successful chapter in Full House’s history. We would like to
thank the Nottawaseppi Huron Band of the Potawatomi for being
excellent partners throughout our relationship and wish them the
best of luck in the future. We intend to pay off our remaining debt
with our share of the sale proceeds and will be positioned to
continue looking for properties that fit our acquisition and growth
strategy.”
Fourth Quarter 2011 Results
For the quarter ended December 31, 2011, Full House reported
casino, food and beverage, hotel and other revenue of $26.7
million, up from $2.1 million in the prior-year period, primarily
due to the addition of the Rising Star Casino Resort during the
second quarter, the Grand Lodge Casino on September 1, 2011, and
the Buffalo Thunder management agreement in the fourth quarter of
2011.
Operating expenses for the fourth quarter 2011 were $27.6
million compared to $3.6 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 fourth quarter of 2011, while
there was no stock compensation expense during the prior-year
period.
Last year’s fourth 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 fourth quarter of 2011.
Operating income for the fourth quarter 2011 was $4.9 million,
compared to operating income of $5.8 million in the prior-year
period. Adjusted EBITDA, as defined below, was $4.5 million versus
$3.8 million in the prior-year period.
The Company reported net income attributable to the Company per
common share of $0.03 and $0.11 for the three months ended December
31, 2011 and 2010 respectively.
Full Year 2011 Results
For the full year ended December 31, 2011, Full House reported
casino, food and beverage, hotel and other revenue of $81.3
million, compared to revenue of $8.4 million in the prior year,
primarily due to the addition of the Rising Star Casino Resort
during the second quarter, the Grand Lodge Casino on September 1,
2011, and the Buffalo Thunder management agreement in the fourth
quarter of 2011. In addition, during the full year ended December
31, 2011, Full House recorded GEM management fees of $23.3 million
for FireKeepers Casino, compared to management fees of $24.5
million for the prior year. The Company also recorded $0.9 million
in management and success fees in 2011 from its management
agreement for Buffalo Thunder Casino & Resort.
The Company recorded equity in net income and related guaranteed
payments from the Delaware operation of $3.3 million, a 35%
decrease from the prior year, as the agreement between the Company
and Harrington Raceway, Inc. terminated at the end of August
2011.
Operating expenses for the full year ended December 31, 2011
were $84.7 million compared to $14.4 million in the prior year,
primarily due to the addition of the Rising Star Casino Resort and
the Grand Lodge Casino. The Company also recorded $0.7 million of
stock compensation expense for the full year ended December 31,
2011, compared to approximately $17,000 in the prior year.
Operating income for the full year ended December 31, 2011 was
$19.2 million, compared to operating income of $23.5 million in the
prior year. For 2011, the Company recorded a non-cash goodwill
impairment charge of $4.5 million ($2.7 million on an after-tax
basis) related to its Stockman’s Casino due to a decline of
operating results at Stockman’s resulting from the ongoing weak
economic conditions in Northern Nevada and slower than expected
improvement from changes made in marketing programs. In addition,
the Company recorded a valuation charge against its remaining
tribal receivables in the amount of $0.4 million ($0.3 million on
an after-tax basis) as a result of slower than expected progress by
the Nambe Pueblo in securing financing for its proposed casino
facility amid a weak credit environment. Absent these impairment
charges and $0.7 million in acquisition-related charges, operating
income for 2011 would have been $22.6 million. Adjusted EBITDA, as
defined below, was $20.5 million versus $15.2 million in the prior
year.
The Company reported net income attributable to the Company per
common share of $0.13 and $0.43 for the full years ended December
31, 2011 and 2010, respectively. Exclusive of the impairment
charges, acquisition costs and other unusual charges in 2011, net
income attributable to the Company per common share for the full
year ended December 31, 2011 would have been $0.31.
Liquidity and Capital Resources
As of December 31, 2011, Full House had $14.7 million in cash,
$26.9 million in outstanding debt (inclusive of swap agreement
liability) and $4.3 million of availability on its revolving credit
line with Wells Fargo. Subsequent to December 31, 2011, the Company
has made an additional principal payment on its credit facility of
$1.7 million.
Conference Call Information
The Company will host a conference call and webcast today at
11:00 AM EST. Both the call and webcast are open to the general
public.
The conference call number is 888-245-0988; international
callers can access the call by dialing 1-913-312-1517. 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 5480309.
Selected unaudited Statements of Operations data for the
three months ended December 31,
2011
CasinoOperations
-Nevada
CasinoOperations
-Midwest
Development/Management
Corporate Consolidated Revenues
$ 4,971,050 $ 21,705,737 $ 5,842,965 $ -
$ 32,519,752 Selling, general & administrative expense
1,698,866 5,325,993 163,820 1,350,041 8,538,720 Depreciation &
amortization 327,298 1,091,470 593,052 2,778 2,014,598 Operating
gains - - - - - Operating income (loss) 175,306 1,091,173 4,355,387
(690,226 ) 4,931,640 Net Income (loss) attributable to the Company
115,707 36,779 1,533,868 (1,207,825 ) 478,529
2010
CasinoOperations
-Nevada
CasinoOperations
-Midwest
Development/Management
Corporate Consolidated Revenues $
2,117,708 $ - $ 5,773,464 $ - $ 7,891,172 Selling, general &
administrative expense 439,791 - 136,835 1,023,309 1,599,935
Depreciation & amortization 237,300 - 593,195 13,912 844,407
Operating gains - - 1,499,432 - 1,499,432 Operating income (loss)
387,460 - 6,542,866 (1,176,658 ) 5,753,668 Net Income (loss)
attributable to the Company 257,228 - 2,502,933 (807,608 )
1,952,553
Selected unaudited Statements of Operations data for the full
year ended December 31,
2011
CasinoOperations
-Nevada
CasinoOperations
-Midwest
Development/Management
Corporate Consolidated Revenues
$ 12,313,161 $ 68,957,305 $ 24,185,594 $ 5,000
$ 105,461,060 Selling, general & administrative expense
3,540,791 16,378,319 610,097 4,899,792 25,428,999 Depreciation
& amortization 1,051,176 3,550,241 2,372,446 27,913 7,001,776
Operating gains (losses) (4,500,000 ) - 2,878,468 - (1,621,532 )
Operating income (loss) (3,433,408 ) 4,240,440 23,555,904
(5,189,838 ) 19,173,098 Net Income (loss) attributable to the
Company (2,265,815 ) 1,250,237 9,078,382 (5,719,805 ) 2,342,999
2010
CasinoOperations
-Nevada
CasinoOperations
-Midwest
Development/Management
Corporate Consolidated Revenues $
8,338,757 $ - $ 24,558,372 $ - $ 32,897,129 Selling, general &
administrative expense 1,729,554 - 730,035 3,970,256 6,429,845
Depreciation & amortization 960,675 - 2,372,781 87,800
3,421,256 Operating gains - - 5,091,764 - 5,091,764 Operating
income (loss) 1,472,935 - 26,545,979 (4,479,875 ) 23,539,039 Net
Income (loss) attributable to the Company 976,664 - 9,680,712
(2,988,129 ) 7,669,247
Reconciliation of EBITDA before unrealized gains/losses on
notes receivable from tribal governments, and other items for the
three months ended December 31,
Net of Non-Controlling Interest
2011
Casino Operations -
Nevada
Casino Operations
-Midwest
Development /Management
Corporate Consolidated GEM
50%
Development /Management
Consolidated Operating income (loss) $ 175,306
$ 1,091,173 $ 4,355,387 $ (690,226 ) $ 4,931,640 $ 4,384,667 $
2,192,333 $ 2,163,054 $ 2,739,307 Add Back: Rising Star
acquisition costs expensed - - 5 - 5
-
-
5 5 Rising Star re-branding costs - (2,647 ) - - (2,647 )
-
-
- (2,647 ) Grand Lodge acquisition costs expensed - - 458 - 458
-
-
458 458 Depreciation and amortization 327,298 1,091,470 593,052
2,778 2,014,598 431,025 215,513 377,539 1,799,085
$ 502,604 $
2,179,996 $ 4,948,902 $ (687,448 ) $
6,944,054 $ 4,815,692 $
2,407,846
$ 2,541,056 $ 4,536,208
Net of Non-Controlling Interest
2010
Casino Operations
-Nevada
Casino Operations -
Midwest
Development /Management
Corporate Consolidated GEM
50%
Development /Management
Consolidated Operating income (loss) $ 387,460
$ - $ 6,542,866 $ (1,176,658 ) $ 5,753,668 $ 5,205,548 $ 2,602,774
$ 3,940,092 $ 3,150,894 Add Back: Rising Star acquisition
costs expensed - - 79,133 - 79,133
-
-
79,133 79,133 Depreciation and amortization 237,300 - 593,195
13,912 844,407 431,169 215,585 377,610 628,822 Deduct: Unrealized
gain on notes receivable, tribal governments - - 28,218 - 28,218 -
- 28,218 28,218
$
624,760 $ - $ 7,186,976 $
(1,162,746 ) $ 6,648,990 $ 5,636,717 $
2,818,359 $ 4,368,617 $ 3,830,631
Reconciliation of EBITDA before unrealized gains/losses on
notes receivable from tribal governments, and other items for the
full year ended December 31,
Net
of Non-Controlling Interest
2011
Casino Operations
-Nevada
Casino Operations
-Midwest
Development /Management
Corporate Consolidated GEM
50%
Development /Management
Consolidated Operating income (loss) $
(3,433,408 ) $ 4,240,440 $ 23,555,904 $ (5,189,838 ) $ 19,173,098 $
20,929,817 $ 10,464,909 $ 13,090,995 $ 8,708,189 Add Back:
Rising Star acquisition costs expensed - - 482,084 - 482,084 - -
482,084 482,084 Rising Star re-branding costs - 209,201 - - 209,201
- - - 209,201 Grand Lodge acquisition costs expensed - - 43,535 -
43,535 - - 43,535 43,535 Stockman's Goodwill Impairment 4,500,000 -
- - 4,500,000 - - - 4,500,000 Depreciation and amortization
1,051,176 3,550,241 2,372,446 27,913 7,001,776 1,724,340 862,170
1,510,276 6,139,606 Nambé Note Impairment - - 419,703 - 419,703 - -
419,703 419,703 Unrealized loss on notes receivable, tribal
governments - - 7,864
- 7,864 - -
7,864 7,864 $ 2,117,768
$ 7,999,882 $ 26,881,536 $ (5,161,925 )
$ 31,837,261 $ 22,654,157 $ 11,327,079 $
15,554,457 $ 20,510,182 Net of
Non-Controlling Interest
2010
Casino Operations
-Nevada
Casino Operations
-Midwest
Development /Management
Corporate Consolidated GEM
50%
Development /Management
Consolidated Operating income (loss) $
1,472,935 $ - $ 26,545,979 $ (4,479,875 ) $ 23,539,039 $ 22,200,684
11,100,342 $ 15,445,637 $ 12,438,697 Add Back: Rising Star
acquisition costs expensed - - 163,205 - 163,205 - - 163,205
163,205 Depreciation and amortization 960,675 - 2,372,781 87,800
3,421,256 1,724,675 862,338 1,510,443 2,558,918 Unrealized loss on
notes receivable, tribal governments -
-
2,900 - 2,900
- - 2,900
2,900 $ 2,433,610 $ - $ 29,084,865 $
(4,392,075 ) $ 27,126,400 $ 23,925,359 $ 11,962,680
$ 17,122,185 $ 15,163,720
FULL HOUSE RESORTS, INC. AND
SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS
Three months
ended December 31,
Twelve months
ended December 31,
2011 2010
2011 2010
Revenues Casino $ 24,880,125 $ 1,665,994 $ 74,708,091
$ 6,529,773 Food and beverage 1,248,455 428,866 4,517,072 1,728,879
Hotel 166,570 -- 600,088 -- Management fees 5,837,818 5,773,464
24,185,587 24,473,066 Other operations 386,784 22,848
1,450,222 165,411 32,519,752 7,891,172 105,461,060
32,897,129
Operating costs and expenses
Casino
14,309,887 538,098 42,508,624 2,159,199 Food and beverage 1,197,609
515,058 4,469,488 2,016,394 Hotel 165,721 -- 546,212 -- Other
operations 1,293,466 -- 3,918,584 -- Project development and
acquisition costs 68,111 139,438 792,747 423,160 Selling, general
and administrative 8,538,720 1,599,935 25,428,999 6,429,845
Depreciation and amortization 2,014,598 844,407
7,001,776 3,421,256 27,588,112 3,636,936 84,666,430
14,449,854
Operating gains (losses) Equity in net income of
unconsolidated joint venture, and related guaranteed payments
--
1,471,214
3,306,035 5,094,664 Impairment losses -- -- (4,919,703 ) --
Unrealized gains (losses) on notes receivable, tribal governments
--
28,218
(7,864 ) (2,900 ) -- 1,499,432
(1,621,532 ) 5,091,764
Operating income 4,931,640 5,753,668
19,173,098
23,539,039
Other income (expense)
Interest expense (822,243 ) (47,402 ) (2,838,205 ) (58,368 ) Loss
on derivative instrument 50,864 -- (513,328 ) -- Other income
(expense), net 768 2,689 8,056 120,750
Income
before income taxes 4,161,029 5,708,955 15,829,621 23,601,421
Income tax expense (1,372,229 ) (1,371,409 )
(3,239,599 ) (5,739,430 )
Net income 2,788,800 4,337,546
12,590,022 17,861,991 Income attributable to non-controlling
interest in consolidated joint venture (2,310,271 )
(2,384,993 ) (10,247,023 ) (10,192,744 )
Net income
attributable to the Company $ 478,529 $ 1,952,553 $ 2,342,999 $
7,669,247
Net income attributable to the Company
per common share
$ 0.03 $ 0.11 $ 0.13 $ 0.43
Weighted average number of
common shares outstanding 18,673,681 18,007,681
18,397,599 18,005,390
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 201-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 has also
commenced a five-year lease agreement for the Grand Lodge Casino at
Hyatt Regency Lake Tahoe Resort, Spa and Casino in Incline Village,
Nevada on the north shore of Lake Tahoe, as well as acquiring the
operating assets and certain liabilities related to the Grand Lodge
Casino.
The Company has a management agreement with the Nottawaseppi
Huron Band of Potawatomi Indians for FireKeepers Casino in Battle
Creek, Michigan with approximately 2,700 gaming devices, 78 table
games and a 120-seat poker room. The Company also has entered into
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 the opening of the Gun Lake casino in Michigan, plans for
other and new competition in Michigan, 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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