Nevada Gold & Casinos, Inc. (NYSE MKT:UWN) today announced
financial results for the fourth quarter and year ended April 30,
2018. The Company will host a conference call today at 4:30
PM ET (1:30 PM PT) to discuss these results and provide a corporate
update.
The financial results reflect an adjustment
related to progressive liabilities for $0.6 million in fiscal 2018
and $0.2 million in the prior year which reduced casino revenue and
marketing expense equally with no effect on operating income.
Of this adjustment, $0.1 million related to the fourth quarter of
both 2018 and 2017.
FOURTH QUARTERFor the fourth quarter of fiscal
2018, the Company reported net revenues of $18.5 million compared
to $19.8 million in the fourth quarter of fiscal 2017.
Operating income was $0.6 million compared to $1.9 million in the
prior year. Net income was $0.4 million, or $0.02 per
share. Consolidated Adjusted EBITDA was $2.1 million compared to
$2.6 million in the prior year period.
During the fourth quarter, net revenues from
Washington state gaming operations decreased to $13.7 million from
the $14.8 million in the prior year period, while EBITDA decreased
to $2.1 million compared to $2.5 million in the prior year period.
Club Fortune net revenues were $3.4 million compared to $3.7
million in the prior year period, while EBITDA decreased by $0.2
million to $0.5 million. South Dakota route operation revenues
decreased $89,000 from the prior year period and EBITDA declined
$11,000 for the quarter. Corporate expenses were approximately $0.6
million in both periods, excluding non-recurring sale transaction
expenses.
FISCAL YEARFor the fiscal year
2018, the Company reported net revenues of $74.6 million compared
to $74.5 million in fiscal year 2017. Operating expenses were
$72.0 million compared to $72.7 million in the prior year.
Net income was $1.3 million compared to $0.6 million in the prior
year.
Net revenues for the fiscal year from Washington
state gaming operations increased to $54.4 million from $54.3
million, primarily due to increased Poker revenue. Higher
wages and marketing expenses contributed to Adjusted EBITDA
decreasing to $6.5 million from $7.0 million in the prior
year. Club Fortune net revenues were $13.6 million and
Adjusted EBITDA was $1.7 million compared to revenues of $13.5
million and Adjusted EBITDA of $1.5 million in the prior
year. South Dakota route operation revenues decreased $0.1
million to $6.6 million while Adjusted EBITDA decreased to $0.1
million. We recorded a write down and other charges related
to South Dakota of $0.4 million in the current year, compared to
$1.1 million in the prior year. Corporate adjusted EBITDA was
negative $2.3 million compared to negative $2.5 million in the
prior year.
During the fiscal year the Company repaid $4.3
million in bank debt and as of April 30, 2018, the outstanding bank
debt was $8.0 million and unrestricted cash on hand was $9.5
million. During the year ended April 30, 2018, the
Company repurchased 788,301 shares at a weighted average price of
$2.16 per share, costing $1,700,291. As of April 30, 2018, $1.7
million remains available under the share repurchase
authorization.
STRATEGIC REVIEWThe Company’s
Strategic Review is ongoing and has resulted to date in significant
steps to restructure the Company’s operations. On June 30,
2018 the Company completed the sale of its South Dakota slot route
operations and on June 27, 2018 executed a definitive agreement to
sell the Club Fortune Casino in Henderson, Nevada for $14.6
million. The Company has previously announced that effective
upon closure of the sale of Club Fortune casino, its corporate
headquarters will relocate from Las Vegas to the Seattle,
Washington area reducing corporate overhead by $1.2 million.
At that time Victor Mena will succeed Michael Shaunnessy as
President and Chief Executive Officer. Mr. Mena has led the
operations in Washington since 2009.
Non-GAAP InformationThe term
"adjusted EBITDA" is used by us in presentations, quarterly
earnings calls, and other instances as appropriate. Adjusted
EBITDA is defined as net income before interest, income taxes,
depreciation and amortization, non-cash goodwill and other
long-lived asset impairment charges, write-offs of project
development costs, litigation charges, non-cash stock grants,
non-cash employee stock purchase plan discounts, exclusion of net
income or loss from operations held for sale, and net losses/gains
from asset dispositions. Adjusted EBITDA does not take into account
greater or less than expected hold percentages in the gaming
operations. Adjusted EBITDA is presented because it is a required
component of financial ratios reported by us to our lenders, and it
is also frequently used by securities analysts, investors, and
other interested parties, in addition to and not in lieu of, U.S.
Generally Accepted Accounting Principles ("GAAP") results to
compare to the performance of other companies that also publicize
this information. Adjusted EBITDA is not a measurement of
financial performance under GAAP and should not be considered as an
alternative to net income as an indicator of our operating
performance or any other measure of performance derived in
accordance with GAAP.
Net income reconciliation to Adjusted
EBITDA:
|
|
|
|
|
For the three months ended |
|
|
April 30, 2018 |
|
April 30, 2017 |
|
|
|
|
|
|
|
Net
income |
|
$ |
367,121 |
|
|
$ |
1,196,560 |
|
Adjustments: |
|
|
|
|
|
|
Net interest expense |
|
|
158,955 |
|
|
|
149,772 |
|
Income tax expense |
|
|
134,930 |
|
|
|
578,237 |
|
Depreciation and amortization |
|
|
522,261 |
|
|
|
714,652 |
|
Write downs and other charges |
|
|
358,807 |
|
|
|
- |
|
Deferred rent amortization |
|
|
3,868 |
|
|
|
5,168 |
|
Stock compensation amortization |
|
|
14,702 |
|
|
|
2,980 |
|
Acquisition and sale related expenses |
|
|
589,839 |
|
|
|
- |
|
Increase in swap fair value |
|
|
(37,575 |
) |
|
|
(23,865 |
) |
Loss on disposal of assets |
|
|
2,090 |
|
|
|
20,693 |
|
Adjusted EBITDA |
|
$ |
2,114,998 |
|
|
$ |
2,644,197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the fiscal year ended |
|
|
April 30, 2018 |
|
April 30, 2017 |
|
|
|
|
|
|
|
Net
income |
|
$ |
1,323,425 |
|
|
$ |
563,964 |
|
Adjustments: |
|
|
|
|
|
|
Net interest expense |
|
|
591,146 |
|
|
|
666,543 |
|
Income tax expense |
|
|
853,426 |
|
|
|
790,829 |
|
Depreciation and amortization |
|
|
2,370,752 |
|
|
|
3,021,280 |
|
Acquisition and sale related expenses |
|
|
589,839 |
|
|
|
113,900 |
|
Write downs and other charges |
|
|
358,807 |
|
|
|
1,101,472 |
|
Deferred rent amortization |
|
|
9,943 |
|
|
|
36,068 |
|
Stock compensation amortization |
|
|
104,140 |
|
|
|
124,279 |
|
Increase in swap fair value |
|
|
(171,018 |
) |
|
|
(250,385 |
) |
Loss on disposal of assets |
|
|
7,863 |
|
|
|
77,183 |
|
Adjusted EBITDA |
|
$ |
6,038,323 |
|
|
$ |
6,245,133 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conference Call and WebcastThe
Company will host a conference call at 4:30 PM ET (1:30 PM PT)
today to discuss the financial results and provide a corporate
update. The call can be accessed live by dialing (888) 254-3590.
International callers can access the call by dialing (323)
994-2093.
A telephone replay of the conference call will
be available after 7:30 PM ET and can be accessed by dialing (844)
512-2921. International callers can access the replay by dialing
(412) 317-6671; the pin number is 8454743. The replay will be
available through August 2, 2018.
Forward-Looking StatementsThis
release contains forward-looking statements, which are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. We use words such as "anticipate,"
"believe," "expect," "future," "intend," "plan," and similar
expressions to identify forward-looking statements. Forward-looking
statements include, without limitation, our ability to increase
income streams, to grow revenue and earnings, and to obtain
additional gaming and other projects. These statements are only
predictions and are subject to certain risks, uncertainties and
assumptions, which are identified and described in the Company's
public filings with the Securities and Exchange Commission.
About Nevada Gold & CasinosNevada Gold
& Casinos, Inc. (NYSE MKT:UWN) of Las Vegas, Nevada is a
developer, owner and operator of 9 gaming operations in Washington
(wagoldcasinos.com), a local casino in Henderson, Nevada
(clubfortune.com).
Contacts: Nevada Gold & Casinos,
Inc.Michael P. Shaunnessy / James Meier(702) 685-1000Stonegate
Capital PartnersPreston Graham(972) 850-2001
|
Nevada Gold & Casinos, Inc. |
Consolidated Statements of
Operations |
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
April 30, |
|
April 30, |
|
April 30, |
|
April 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenues: |
|
|
|
|
|
|
|
|
|
Casino |
$ |
16,172,021 |
|
|
$ |
17,607,040 |
|
|
$ |
65,767,827 |
|
|
$ |
65,838,576 |
|
Food and
beverage |
|
3,435,099 |
|
|
|
3,424,377 |
|
|
|
13,252,982 |
|
|
|
13,439,326 |
|
Other |
|
494,052 |
|
|
|
517,842 |
|
|
|
1,978,619 |
|
|
|
2,140,113 |
|
Gross revenues |
|
20,101,172 |
|
|
|
21,549,259 |
|
|
|
80,999,428 |
|
|
|
81,418,015 |
|
Less
promotional allowances |
|
(1,615,610 |
) |
|
|
(1,707,086 |
) |
|
|
(6,446,902 |
) |
|
|
(6,959,066 |
) |
Net revenues |
|
18,485,562 |
|
|
|
19,842,173 |
|
|
|
74,552,526 |
|
|
|
74,458,949 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
Casino |
|
8,779,150 |
|
|
|
9,307,408 |
|
|
|
36,476,733 |
|
|
|
36,488,019 |
|
Food and
beverage |
|
1,790,000 |
|
|
|
1,606,638 |
|
|
|
6,801,269 |
|
|
|
6,194,698 |
|
Other |
|
49,923 |
|
|
|
55,034 |
|
|
|
206,764 |
|
|
|
208,090 |
|
Marketing
and administrative |
|
4,754,110 |
|
|
|
5,168,141 |
|
|
|
20,715,534 |
|
|
|
20,752,103 |
|
Facility |
|
505,787 |
|
|
|
498,322 |
|
|
|
2,008,090 |
|
|
|
2,126,150 |
|
Corporate |
|
1,100,004 |
|
|
|
570,581 |
|
|
|
3,009,735 |
|
|
|
2,719,003 |
|
Depreciation and amortization |
|
522,261 |
|
|
|
714,652 |
|
|
|
2,370,752 |
|
|
|
3,021,280 |
|
Loss on
sale of assets |
|
2,090 |
|
|
|
20,693 |
|
|
|
7,863 |
|
|
|
77,183 |
|
Write
downs and other charges |
|
358,807 |
|
|
|
- |
|
|
|
358,807 |
|
|
|
1,101,472 |
|
Total
operating expenses |
|
17,862,132 |
|
|
|
17,941,469 |
|
|
|
71,955,547 |
|
|
|
72,687,998 |
|
Operating
income from continuing operations |
|
623,430 |
|
|
|
1,900,704 |
|
|
|
2,596,979 |
|
|
|
1,770,951 |
|
Non-operating
income (expenses): |
|
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
8,818 |
|
|
|
15,770 |
|
|
|
46,241 |
|
|
|
81,011 |
|
Interest
expense and amortization of loan costs |
|
(167,772 |
) |
|
|
(165,542 |
) |
|
|
(637,387 |
) |
|
|
(747,554 |
) |
Change in
swap fair value |
|
37,575 |
|
|
|
23,865 |
|
|
|
171,018 |
|
|
|
250,385 |
|
Income before
income tax |
|
502,051 |
|
|
|
1,774,797 |
|
|
|
2,176,851 |
|
|
|
1,354,793 |
|
Income tax
expense |
|
(134,930 |
) |
|
|
(578,237 |
) |
|
|
(853,426 |
) |
|
|
(790,829 |
) |
Net
income |
$ |
367,121 |
|
|
$ |
1,196,560 |
|
|
$ |
1,323,425 |
|
|
$ |
563,964 |
|
Per share
information: |
|
|
|
|
|
|
|
|
|
|
|
Net income per common
share - basic and diluted |
$ |
0.02 |
|
|
$ |
0.07 |
|
|
$ |
0.08 |
|
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average
number of shares outstanding |
|
16,848,182 |
|
|
|
17,583,101 |
|
|
|
16,985,532 |
|
|
|
17,688,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average number of share outstanding |
|
17,213,052 |
|
|
|
17,918,456 |
|
|
|
17,350,402 |
|
|
|
17,990,524 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nevada Gold & Casinos, Inc. |
Consolidated Balance Sheets |
|
|
|
|
|
April 30, |
|
April 30, |
|
2018 |
|
2017 |
|
|
|
|
|
|
ASSETS |
Current
assets: |
|
|
|
Cash and cash
equivalents |
$ |
9,508,931 |
|
|
$ |
10,631,903 |
|
Restricted cash |
|
2,369,063 |
|
|
|
1,994,312 |
|
Accounts receivable,
net of allowances |
|
485,774 |
|
|
|
808,484 |
|
Prepaid expenses |
|
1,436,538 |
|
|
|
1,209,507 |
|
Notes receivable,
current portion |
|
- |
|
|
|
383,093 |
|
Inventory and other
current assets |
|
430,296 |
|
|
|
423,113 |
|
Total current assets |
|
14,230,602 |
|
|
|
15,450,412 |
|
|
|
|
|
|
|
Real estate held for
sale |
|
750,000 |
|
|
|
750,000 |
|
Goodwill |
|
16,923,588 |
|
|
|
16,923,588 |
|
Identifiable intangible
assets, net of accumulated |
|
|
|
|
|
amortization of $9,361,189 and $8,869,497 at April 30, |
|
|
|
|
|
2018 and April 30, 2017, respectively |
|
3,497,779 |
|
|
|
4,107,328 |
|
Property and equipment,
net of accumulated depreciation |
|
|
|
|
|
of $9,260,152
and $7,635,620 at April 30, 2018 and |
|
|
|
|
|
April 30, 2017,
respectively |
|
12,812,411 |
|
|
|
13,958,715 |
|
Deferred tax asset |
|
704,044 |
|
|
|
1,557,470 |
|
Other assets |
|
204,672 |
|
|
|
70,000 |
|
Total
assets |
$ |
49,123,096 |
|
|
$ |
52,817,513 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
Current
liabilities: |
|
|
|
|
|
Accounts payable and
accrued liabilities |
$ |
1,695,495 |
|
|
$ |
1,303,571 |
|
Accrued payroll and
related |
|
2,049,313 |
|
|
|
1,925,592 |
|
Accrued player's club
points and progressive jackpots |
|
2,592,456 |
|
|
|
2,348,068 |
|
Total current liabilities |
|
6,337,264 |
|
|
|
5,577,231 |
|
Long-term debt |
|
7,895,240 |
|
|
|
12,061,411 |
|
Other long-term
liabilities |
|
637,207 |
|
|
|
667,110 |
|
Total liabilities |
|
14,869,711 |
|
|
|
18,305,752 |
|
Stockholders'
equity: |
|
|
|
|
|
Common stock, $0.12 par
value per share; 50,000,000 |
|
|
|
|
|
shares
authorized; 18,715,985 and 18,627,167 shares issued and 16,848,182
and 17,547,665 shares outstanding at April 30, 2018, and April 30,
2017, respectively |
|
2,245,927 |
|
|
|
2,235,269 |
|
Additional paid-in
capital |
|
27,557,151 |
|
|
|
27,449,319 |
|
Retained earnings |
|
13,644,239 |
|
|
|
12,320,814 |
|
Treasury stock,
1,867,803 and 1,079,502 shares at April 30, 2018 and April 30,
2017, at cost |
|
(9,193,932 |
) |
|
|
(7,493,641 |
) |
Total
stockholders' equity |
|
34,253,385 |
|
|
|
34,511,761 |
|
Total
liabilities and stockholders' equity |
$ |
49,123,096 |
|
|
$ |
52,817,513 |
|
|
|
|
|
|
|
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