Red Rock Resorts, Inc. ("Red Rock Resorts" "we" or the "Company")
(NASDAQ:RRR) today reported financial results for the second
quarter ended June 30, 2017.
Net revenues were $403.5 million for the second quarter of 2017,
an increase of 14.8%, or $52.0 million, from $351.5 million for the
same period of 2016. The increase was primarily the result of
the addition of $39.8 million of net revenues from the
Palms Casino Resort (the "Palms"), an $8.8 million increase
from same-store Las Vegas Operations and a $3.2 million increase
from Native American Operations.
Net loss attributable to Red Rock Resorts was $25.9 million, or
$0.39 per diluted share, for the second quarter of 2017, a decrease
of $31.6 million, from net income of $5.7 million, or $0.01 per
diluted share, for the same period of 2016. The decrease in
net income was primarily attributable to the acquisition of the
leases at Boulder Station and Texas Station, partially offset by
lower income tax.
Adjusted EBITDA(1) was $119.5 million for the second quarter of
2017, a 1.8% increase from $117.4 million in the same period of
2016. The increase was the result of the addition of the
Palms in operating results and continued strength in Native
American Operations.
Red Rock Resorts also announced on August 4, 2017 that the
Company had approved a cash dividend of $0.10 per share, payable on
August 31, 2017 to shareholders of record as of August 15,
2017.
Las Vegas Operations
Net revenues from Las Vegas Operations were $371.5 million for
the second quarter of 2017, a 15.1% increase from $322.9 million in
the same period of 2016, primarily due to the addition of the
Palms. Adjusted EBITDA(1) from Las Vegas Operations was
$104.7 million for the second quarter of 2017, a 0.1% increase from
$104.6 million in the same period of 2016, primarily due to the
addition of the Palms and partially offset by continued
construction disruption at Palace Station.
Native American Operations
Adjusted EBITDA(1) from Native American Operations was $22.7
million for the second quarter of 2017, a 12.9% increase from $20.1
million in the same period of 2016 due to continued strength at
both Graton and Gun Lake.
Balance Sheet Highlights
The Company’s cash and cash equivalents at June 30, 2017 were
$125.3 million and total principal amount of debt outstanding at
the end of the quarter was $2.57 billion. As of June 30, 2017, debt
(net of cash) to Adjusted EBITDA(1) ratio was 4.96 times and
interest coverage was at 4.58 times, proforma for the acquisition
of the Palms.
Conference Call Information
The Company will host a conference call today at 4:30 p.m.
Eastern Time to discuss its 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 today
through August 15, 2017 at www.redrockresorts.com. A live audio
webcast of the call will also be available at
www.redrockresorts.com.
Presentation of Financial Information
(1) 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. We
believe that in addition to net (loss) 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 net (loss) income plus preopening,
depreciation and amortization, share-based compensation,
write-downs and other charges, net, related party lease
termination, interest expense, net, loss on
extinguishment/modification of debt, net, change in fair value of
derivative instruments and income taxes, and excludes Adjusted
EBITDA attributable to the noncontrolling interests of MPM.
Company Information and Forward Looking
Statements
Red Rock Resorts manages and owns a majority indirect equity
interest in Station Casinos. Station Casinos is the leading
provider of gaming and entertainment to the residents of Las Vegas,
Nevada. Station Casinos’ 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 Casinos owns and operates Red
Rock Casino Resort Spa, Green Valley Ranch Resort Spa Casino, Palms
Casino Resort, 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 Casinos also owns a 50% interest in
Barley’s Casino & Brewing Company, Wildfire Casino & Lanes
and The Greens. In addition, Station Casinos 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 Company’s ability to successfully
integrate the Palms or realize expected synergies; the effects of
the economy and business conditions on consumer spending and our
business; competition, including the risk that new gaming
licenses or gaming activities are approved; our substantial
outstanding indebtedness and the effect of our significant debt
service requirements; our ability to refinance our outstanding
indebtedness and obtain necessary capital; the impact of extensive
regulation; risks associated with changes to applicable gaming and
tax laws; risks 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. In providing
forward-looking statements, the Company is not undertaking any duty
or obligation to update these statements publicly as a result of
new information, future events or otherwise, except as required by
law. If the Company updates one or more forward-looking statements,
no inference should be drawn that it will make additional updates
with respect to those other forward-looking statements.
Red Rock Resorts, Inc. |
Condensed Consolidated Statements of
Operations |
(amounts in thousands, except per share
data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
June 30, |
|
June 30, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
Operating revenues: |
|
|
|
|
|
|
|
|
Casino |
$ |
258,396 |
|
|
$ |
233,796 |
|
|
$ |
521,368 |
|
|
$ |
473,567 |
|
|
Food and beverage |
|
75,303 |
|
|
|
66,408 |
|
|
|
155,418 |
|
|
|
133,028 |
|
|
Room |
|
44,641 |
|
|
|
32,979 |
|
|
|
94,405 |
|
|
|
67,363 |
|
|
Other |
|
23,699 |
|
|
|
17,705 |
|
|
|
46,519 |
|
|
|
34,887 |
|
|
Management fees |
|
30,676 |
|
|
|
27,455 |
|
|
|
60,903 |
|
|
|
54,104 |
|
|
|
Gross
revenues |
|
432,715 |
|
|
|
378,343 |
|
|
|
878,613 |
|
|
|
762,949 |
|
|
Promotional allowances |
|
(29,222 |
) |
|
|
(26,857 |
) |
|
|
(57,388 |
) |
|
|
(52,216 |
) |
|
|
Net
revenues |
|
403,493 |
|
|
|
351,486 |
|
|
|
821,225 |
|
|
|
710,733 |
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
Casino |
|
103,170 |
|
|
|
88,986 |
|
|
|
204,824 |
|
|
|
176,407 |
|
|
Food and beverage |
|
55,059 |
|
|
|
44,501 |
|
|
|
110,105 |
|
|
|
87,025 |
|
|
Room |
|
18,239 |
|
|
|
11,893 |
|
|
|
38,306 |
|
|
|
24,278 |
|
|
Other |
|
9,079 |
|
|
|
6,305 |
|
|
|
16,912 |
|
|
|
12,027 |
|
|
Selling, general and administrative |
|
94,781 |
|
|
|
80,152 |
|
|
|
189,204 |
|
|
|
155,242 |
|
|
Preopening |
|
368 |
|
|
|
373 |
|
|
|
398 |
|
|
|
721 |
|
|
Depreciation and amortization |
|
46,807 |
|
|
|
38,436 |
|
|
|
92,060 |
|
|
|
77,863 |
|
|
Write-downs and other charges, net |
|
8,826 |
|
|
|
10,966 |
|
|
|
9,850 |
|
|
|
13,334 |
|
|
Related party lease termination |
|
98,393 |
|
|
|
- |
|
|
|
98,393 |
|
|
|
- |
|
|
|
|
|
434,722 |
|
|
|
281,612 |
|
|
|
760,052 |
|
|
|
546,897 |
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income |
|
(31,229 |
) |
|
|
69,874 |
|
|
|
61,173 |
|
|
|
163,836 |
|
|
Earnings from joint ventures |
|
420 |
|
|
|
428 |
|
|
|
835 |
|
|
|
1,040 |
|
Operating (loss) income and earnings from joint
ventures |
|
(30,809 |
) |
|
|
70,302 |
|
|
|
62,008 |
|
|
|
164,876 |
|
|
|
|
|
|
|
|
|
|
|
Other (expense) income: |
|
|
|
|
|
|
|
|
Interest expense, net |
|
(33,853 |
) |
|
|
(34,078 |
) |
|
|
(68,797 |
) |
|
|
(69,146 |
) |
|
Loss on extinguishment/modification of debt, net |
|
(975 |
) |
|
|
(7,084 |
) |
|
|
(2,994 |
) |
|
|
(7,084 |
) |
|
Change in fair value of derivative instruments |
|
3,330 |
|
|
|
90 |
|
|
|
3,369 |
|
|
|
87 |
|
|
|
|
|
(31,498 |
) |
|
|
(41,072 |
) |
|
|
(68,422 |
) |
|
|
(76,143 |
) |
(Loss) income before income tax |
|
(62,307 |
) |
|
|
29,230 |
|
|
|
(6,414 |
) |
|
|
88,733 |
|
|
Benefit (provision) for income tax |
|
11,813 |
|
|
|
(7,502 |
) |
|
|
1,134 |
|
|
|
(7,502 |
) |
Net
(loss) income |
|
(50,494 |
) |
|
|
21,728 |
|
|
|
(5,280 |
) |
|
|
81,231 |
|
|
Less: net (loss) income attributable to noncontrolling
interests |
|
(24,574 |
) |
|
|
16,075 |
|
|
|
857 |
|
|
|
17,939 |
|
Net
(loss) income attributable to Red Rock Resorts, Inc. |
$ |
(25,920 |
) |
|
$ |
5,653 |
|
|
$ |
(6,137 |
) |
|
$ |
63,292 |
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per common share: |
|
|
|
|
|
|
|
|
|
(Loss)
earnings per share of Class A common stock, basic and diluted |
$ |
(0.39 |
) |
|
$ |
0.01 |
|
|
$ |
(0.09 |
) |
|
$ |
0.33 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
67,311 |
|
|
|
30,031 |
|
|
|
66,506 |
|
|
|
19,960 |
|
|
|
Diluted |
|
67,311 |
|
|
|
30,193 |
|
|
|
66,506 |
|
|
|
20,041 |
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share |
$ |
0.10 |
|
|
$ |
- |
|
|
$ |
0.20 |
|
|
$ |
- |
|
Red Rock Resorts, Inc. |
Segment Information and |
Reconciliation of Net (Loss) Income to
Adjusted EBITDA |
(amounts in thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
|
June 30, |
|
June 30, |
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
Net
revenues |
|
|
|
|
|
|
|
|
|
|
Las Vegas
operations |
|
|
|
$ |
371,492 |
|
|
$ |
322,876 |
|
|
$ |
757,730 |
|
|
$ |
654,334 |
|
Native
American management |
|
|
|
|
30,543 |
|
|
|
27,320 |
|
|
|
60,648 |
|
|
|
53,807 |
|
Reportable segment net revenues |
|
|
|
402,035 |
|
|
|
350,196 |
|
|
|
818,378 |
|
|
|
708,141 |
|
Corporate
and other |
|
|
|
|
1,458 |
|
|
|
1,290 |
|
|
|
2,847 |
|
|
|
2,592 |
|
Net revenues |
|
|
|
$ |
403,493 |
|
|
$ |
351,486 |
|
|
$ |
821,225 |
|
|
$ |
710,733 |
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
|
|
$ |
(50,494 |
) |
|
$ |
21,728 |
|
|
$ |
(5,280 |
) |
|
$ |
81,231 |
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
Preopening |
|
|
|
|
368 |
|
|
|
373 |
|
|
|
398 |
|
|
|
721 |
|
Depreciation and amortization |
|
|
|
46,807 |
|
|
|
38,436 |
|
|
|
92,060 |
|
|
|
77,863 |
|
Share-based compensation |
|
|
|
|
2,326 |
|
|
|
3,681 |
|
|
|
3,738 |
|
|
|
4,301 |
|
Write-downs and other charges, net |
|
|
|
8,826 |
|
|
|
10,966 |
|
|
|
9,850 |
|
|
|
13,334 |
|
Related party lease termination |
|
|
|
98,393 |
|
|
|
- |
|
|
|
98,393 |
|
|
|
- |
|
Interest
expense, net |
|
|
|
|
33,853 |
|
|
|
34,078 |
|
|
|
68,797 |
|
|
|
69,146 |
|
Loss on extinguishment/modification of debt, net |
|
|
975 |
|
|
|
7,084 |
|
|
|
2,994 |
|
|
|
7,084 |
|
Change in fair value of derivative instruments |
|
|
(3,330 |
) |
|
|
(90 |
) |
|
|
(3,369 |
) |
|
|
(87 |
) |
Adjusted EBITDA attributable to MPM noncontrolling
interest |
|
(6,418 |
) |
|
|
(5,211 |
) |
|
|
(11,056 |
) |
|
|
(9,332 |
) |
(Benefit) provision for income tax |
|
|
|
(11,813 |
) |
|
|
7,502 |
|
|
|
(1,134 |
) |
|
|
7,502 |
|
Other |
|
|
|
|
- |
|
|
|
(1,133 |
) |
|
|
- |
|
|
|
(1,133 |
) |
Adjusted
EBITDA |
|
|
|
$ |
119,493 |
|
|
$ |
117,414 |
|
|
$ |
255,391 |
|
|
$ |
250,630 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
|
|
|
|
|
|
|
|
|
|
Las Vegas
operations |
|
|
|
$ |
104,711 |
|
|
$ |
104,627 |
|
|
$ |
225,277 |
|
|
$ |
223,637 |
|
Native
American management |
|
|
|
|
22,695 |
|
|
|
20,096 |
|
|
|
46,012 |
|
|
|
40,528 |
|
Reportable segment Adjusted EBITDA |
|
|
127,406 |
|
|
|
124,723 |
|
|
|
271,289 |
|
|
|
264,165 |
|
Corporate
and other |
|
|
|
|
(7,913 |
) |
|
|
(7,309 |
) |
|
|
(15,898 |
) |
|
|
(13,535 |
) |
Adjusted EBITDA |
|
|
|
$ |
119,493 |
|
|
$ |
117,414 |
|
|
$ |
255,391 |
|
|
$ |
250,630 |
|
|
|
|
|
|
|
|
|
|
|
|
View source version on globenewswire.com:
http://globenewswire.com/Search?runSearchId=39933809
CONTACT:
Red Rock Resorts
Daniel Foley
Vice President, Finance & Investor Relations
(702) 495-3683
or
Lori Nelson
Vice President of Corporate Communications
(702) 495-4248
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