Red Rock Resorts, Inc. (“Red Rock Resorts,” “we” or the
“Company”) (NASDAQ: RRR) today announced the results of its
operations for the first quarter ended March 31, 2016.
First Quarter Financial Highlights
- First quarter consolidated net revenues
increased 4.8% and consolidated Adjusted EBITDA increased 11.2%
compared to the prior year period.
- Consolidated Adjusted EBITDA margin
improved approximately 210 basis points to 37.1% for the
quarter.
- Twelfth consecutive quarter of
year-over-year consolidated net revenue growth and twentieth
consecutive quarter of year-over-year consolidated Adjusted EBITDA
growth.
- First quarter Las Vegas net revenues
increased 3.1% and Las Vegas Adjusted EBITDA increased 7.0%
compared to the prior year period.
- First quarter Native American
management fees increased 41.9% compared to the prior year
period.
“Red Rock Resorts’ financial results for the first quarter of
2016 demonstrate the continued growth of the Las Vegas market, as
well as a strong increase in management fees generated from our
managed properties,” said Marc Falcone, Executive Vice President,
Chief Financial Officer and Treasurer. “We remain very focused on
driving same-store revenue growth, improving our margins and
examining high-return uses of available free cash-flow.”
Consolidated Results of Operations
The Company's consolidated net revenues for the first quarter
ended March 31, 2016 were $359.2 million, an increase of $16.5
million, or 4.8%, compared to the prior year period. Consolidated
Adjusted EBITDA for the quarter was $133.2 million, an increase of
$13.4 million, or 11.2%, and our Adjusted EBITDA margin increased
approximately 210 basis points to 37.1%. First quarter consolidated
income from continuing operations increased 30.2% to $59.5 million,
compared to the prior year period. In Las Vegas, net revenues
increased 3.1%, while Adjusted EBITDA increased 7.0% and Adjusted
EBITDA margin improved 130 basis points to 35.9%. The Company
continues to experience strong operating results from its two
Native American properties, which drove a 41.9% increase in
management fees to $20.4 million for the quarter.
“The key Las Vegas metrics that drive our business – job
creation, wage growth and increased discretionary spend – were all
strong in the first quarter,” said Mr. Falcone. “And our
high-quality assets, market-wide distribution, ongoing investment
in our properties and award-winning Boarding Pass loyalty program
will allow us to continue to benefit from these improving economic
trends as we go forward.”
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. Adjusted EBITDA
is further defined under the heading “Presentation of Financial
Information” and a reconciliation of Adjusted EBITDA to income from
continuing operations, the most comparable GAAP measure, is
included in the financial information attached hereto.
Balance Sheet Highlights
As of March 31, 2016, the outstanding principal balance of the
Company’s long-term debt was $2.0 billion (excluding a non-recourse
land loan of $115.7 million and debt associated with Fertitta
Entertainment) and cash and cash equivalents were $122.6 million.
As of March 31, 2016, debt (net of excess cash) to Adjusted EBITDA
ratio was 4.3 times, excluding the non-recourse land loan and debt
associated with Fertitta Entertainment.
Subsequent Events
On May 2, 2016, the Company successfully completed its initial
public offering (“IPO”) of approximately 27,250,000 shares at
$19.50 per share raising gross proceeds of approximately $531.4
million.
On May 10, 2016, the Company announced that Station Casinos LLC
has entered into a definitive agreement to acquire the Palms Casino
Resort in Las Vegas, Nevada for total cash consideration of $312.5
million.
“The successful completion of our initial public offering
enhances the growth opportunities of Red Rock Resorts,” said Mr.
Falcone. “In addition, our core business remains strong and is
generating significant free cash flow. As such, we are well
positioned to be a continued leader in the gaming space and to
drive positive shareholder returns.”
Conference Call Information
The Company will host a conference call on May 12, 2016 at 1:30
p.m. Pacific Time to discuss its first quarter 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 May 12, 2016 through May 19, 2016 at
www.redrockresorts.com. A live audio webcast of the call will also
be available at www.redrockresorts.com.
Presentation of Financial Information
This press release presents combined historical results for the
periods presented of Station Holdco LLC, the predecessor of Red
Rock Resorts, Inc., for financial reporting purposes. The financial
results of Red Rock Resorts, Inc. have not been included in this
press release as it did not engage in any business or other
activities prior to the consummation of the IPO on May 2, 2016.
Accordingly, these historical results do not purport to reflect the
results of operations of Red Rock Resorts, Inc. had the IPO and
related transactions occurred prior to the beginning of the periods
included in this press release. For example, these historical
results do not reflect the attribution of net income to
non-controlling interests or the provision for corporate income
taxes on any income that would have been attributable to Red Rock
Resorts, Inc. during such periods had the IPO and related
transactions occurred prior to the beginning of such periods. The
combined financial statements of Station Holdco LLC comprise the
financial statements of Station Holdco LLC, Station Voteco LLC,
Station Casinos LLC and Fertitta Entertainment LLC and each of
their respective consolidated subsidiaries. These entities were
under the common control of brothers Frank J. Fertitta III and
Lorenzo J. Fertitta during the periods presented.
Adjusted EBITDA is a non-GAAP measure that is presented solely
as a supplemental disclosure. We believe that Adjusted EBITDA is a
widely used measure of operating performance in our industry and is
a principal basis for valuation of gaming companies. We believe
that in addition to operating 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 income from continuing operations plus interest expense,
net, depreciation and amortization, preopening, share-based
compensation, write-downs and other charges, net, and change in
fair value of derivative instruments, and excludes Adjusted EBITDA
attributable to the non-controlling interests of MPM. To evaluate
Adjusted EBITDA and the trends it depicts, the components should be
considered. Each of these components can significantly affect our
results of operations and should be considered in evaluating our
operating performance, and the impact of these components cannot be
determined from Adjusted EBITDA. Further, Adjusted EBITDA does not
represent net income or cash flows from operating, investing or
financing activities as defined by GAAP and should not be
considered as an alternative to net income as an indicator of our
operating performance. Additionally, Adjusted EBITDA does not
consider capital expenditures and other investing activities and
should not be considered as a measure of our liquidity. In
addition, it should be noted that not all gaming companies that
report EBITDA or adjustments to this measure may calculate EBITDA
or such adjustments in the same manner as we do, and therefore, our
measure of Adjusted EBITDA may not be comparable to similarly
titled measures used by other gaming companies.
Company Information and Forward Looking Statements
Red Rock Resorts manages and owns a significant indirect equity
interest in Station Casinos LLC (“Station”). Station is the leading
provider of gaming and entertainment to the residents of Las Vegas,
Nevada. Station’s 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 owns and operates Red Rock Casino Resort Spa, Green Valley
Ranch Resort Spa Casino, 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 also owns a 50% interest in
Barley’s Casino & Brewing Company, Wildfire Casino & Lanes
and The Greens. In addition, Station 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 timing of the closing of the acquisition
of the Palms Resort Casino; the Company’s ability to consummate the
acquisition of the Palms Casino Resort on the terms described
herein (or at all); the Company’s ability to successfully integrate
the Palms with our existing properties or realize expected
synergies; the strength and sustainability of the recovery from the
recent economic downturn, and the effects of the economy generally,
and in particular in Nevada, on consumer spending and our business;
the effects of intense competition that exists in the gaming
industry; the risk that new gaming licenses or gaming activities,
such as expansion of internet gaming, are approved and result in
additional competition; our substantial outstanding indebtedness
and the effect of our significant debt service requirements on our
operations and ability to compete; the risk that we will not be
able refinance our outstanding indebtedness or obtain necessary
capital to finance any development or investment projects that we
may decide to undertake in the future; the impact of extensive
regulation from gaming and other government authorities on our
ability to operate our business and the risk that regulatory
authorities may revoke, suspend, condition or limit our gaming or
other licenses, impose substantial fines or take other actions that
adversely affect us; risks associated with changes to applicable
gaming and tax laws that could have a material adverse effect on
our financial condition; the impact of general business conditions
including competitive practices, changes in customer demand and the
cyclical nature of the gaming and hospitality business in general,
on our business and results of operations; the impact of volatility
in the capital markets,; adverse outcomes of legal proceedings and
the development of, and changes in, claims or litigation reserves;
risks, such as cost overruns and construction delays, 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.
Station Holdco LLC Condensed Combined
Statements of Income (amounts in thousands)
(unaudited) Three Months Ended March
31, 2016 2015 Operating revenues: Casino $
239,771 $ 234,065 Food and beverage 66,620 65,226 Room 34,384
31,391 Other 17,182 17,180 Management fees 26,649
19,950 Gross revenues 384,606 367,812 Promotional
allowances (25,359 ) (25,043 ) Net revenues
359,247 342,769
Operating costs and
expenses: Casino 87,421 85,031 Food and beverage 42,524 41,380
Room 12,385 11,788 Other 5,722 6,132 Selling, general and
administrative 75,090 78,349 Preopening 348 128 Depreciation and
amortization 39,427 35,193 Write-downs and other charges, net
2,368 3,015 265,285
261,016
Operating income 93,962 81,753
Earnings from joint ventures 612 410
Operating income and earnings from joint ventures
94,574 82,163
Other expense:
Interest expense, net (35,068 ) (36,462 ) Change in fair value of
derivative instruments (3 ) (3 ) (35,071 )
(36,465 )
Income from continuing operations 59,503
45,698
Discontinued operations - (132 )
Net income 59,503 45,566 Less: Net income attributable to
noncontrolling interest 1,864 1,459
Net income attributable to Station Holdco LLC $ 57,639
$ 44,107
Station Holdco
LLC Segment Information and Reconciliation of
Adjusted EBITDA to Income from Continuing Operations
(amounts in thousands) (unaudited) Three
Months Ended March 31, 2016 2015 Net
revenues Las Vegas operations $ 331,458 $ 321,499 Native
American management 26,487 19,786
Reportable segment net revenues 357,945 341,285 Corporate
and other 1,302 1,484
Net
revenues $ 359,247 $ 342,769
Adjusted
EBITDA Las Vegas operations $ 119,010 $ 111,249 Native American
management 20,432 14,403
Reportable
segment Adjusted EBITDA 139,442 125,652 Corporate and other
(6,226 ) (5,810 )
Adjusted EBITDA 133,216
119,842
Other operating (expense) income Preopening
(348 ) (128 ) Depreciation and amortization (39,427 ) (35,193 )
Share-based compensation (620 ) (3,007 ) Write-downs and other
charges, net (2,368 ) (3,015 ) Adjusted EBITDA attributable to MPM
noncontrolling interest 4,121 3,664
Operating income and earnings from joint ventures 94,574 82,163
Other expense Interest expense, net (35,068 ) (36,462 )
Change in fair value of derivative instruments (3 )
(3 )
Income from continuing operations $ 59,503 $
45,698
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160512006396/en/
Red Rock Resorts, Inc.Daniel FoleyVice President, Finance &
Investor Relations(702) 495-3683orLori NelsonVice President of
Corporate Communications(702) 495-4248
Red Rock Resorts (NASDAQ:RRR)
Historical Stock Chart
From Aug 2024 to Sep 2024
Red Rock Resorts (NASDAQ:RRR)
Historical Stock Chart
From Sep 2023 to Sep 2024