Full House Resorts, Inc. (Nasdaq: FLL) today announced preliminary
results for the fourth quarter ended December 31, 2020. The
preliminary results are subject to the completion of the final
financial statements, including the completion of the annual audit
by the Company’s independent registered public accounting firm,
Deloitte & Touche LLP. The Company’s actual
results may differ as a result of the Company’s financial closing
procedures, final adjustments and other developments that may arise
between now and the time that the Company’s results for the fourth
quarter and annual period are finalized.
For the fourth quarter of 2020, consolidated net revenues are
expected to be in the range of $37.8 million to
$38.5 million, compared to $39.0 million for the fourth
quarter of 2019. Consolidated operating income for the fourth
quarter of 2020 is expected to be in the range of $7.1 million
to $8.0 million, compared to an operating loss of
$0.4 million for the fourth quarter of 2019. Net income is
expected to be in the range of $1.2 million to
$4.0 million for the fourth quarter of 2020, an improvement
from a net loss of $4.1 million in the fourth quarter of 2019.
Adjusted EBITDA(a) is expected to be in the range of
$9.3 million to $10.0 million for the fourth quarter of
2020, versus $2.3 million for the fourth quarter of 2019. As
of December 31, 2020, the Company had approximately
$38 million of cash and equivalents.
Additionally, the Company announced today that its board of
directors has approved an increase to the size of its planned
expansion of Bronco Billy’s Casino and Hotel in Cripple Creek,
Colorado. As previously noted, in November 2020, Colorado
voters approved favorable changes to the state’s gaming laws,
including the elimination of betting limits and allowing Colorado
casinos to offer new table games, such as baccarat and pai gow
poker. To reflect the new opportunity created by those changes, the
Company has increased the size of its planned Cripple Creek
expansion by 67% to approximately 300 luxury guest rooms and
suites, from its previously planned 180 guest rooms. Such plans
were approved by the Cripple Creek Historic Preservation Commission
and Cripple Creek City Council. Final approval requires a second
reading by the Cripple Creek City Council, which is scheduled for
consideration on February 3. Other planned amenities for the
expansion – including a new parking garage, meeting and
entertainment space, outdoor rooftop pool, spa, and fine-dining
restaurant – remain largely unchanged. The expected investment to
complete the Cripple Creek expansion is $180 million, which
the Company believes can be financed with debt. Assuming timely
completion of such fundraising, the Company intends to build the
Cripple Creek expansion in one phase, with completion expected in
the fourth quarter of 2022.
(a) Reconciliation of Non-GAAP Financial
MeasureThe Company utilizes Adjusted Property EBITDA, a
financial measure in accordance with generally accepted accounting
principles (“GAAP”), as the measure of segment profit in assessing
performance and allocating resources at the reportable segment
level. Adjusted Property EBITDA is defined as earnings before
interest and other non-operating income (expense), taxes,
depreciation and amortization, preopening expenses, impairment
charges, asset write-offs, recoveries, gain (loss) from asset
disposals, project development and acquisition costs, non-cash
share-based compensation expense, and corporate-related costs and
expenses that are not allocated to each property. The Company also
utilizes Adjusted EBITDA (a non-GAAP measure), which is defined as
Adjusted Property EBITDA net of corporate-related costs and
expenses.
Although Adjusted EBITDA is not a measure of performance or
liquidity calculated in accordance with GAAP, the Company believes
this non-GAAP financial measure provides meaningful supplemental
information regarding our performance and liquidity. The Company
utilizes this measure internally to focus management on
year-over-year changes in core operating performance, which it
considers its ordinary, ongoing and customary operations and which
it believes is useful information to investors. Accordingly,
management excludes certain items when analyzing core operating
performance, such as the items mentioned above, that management
believes are not reflective of ordinary, ongoing and customary
operations. A version of Adjusted EBITDA (known as Consolidated
EBITDA, as defined in the indenture governing the Company’s senior
secured notes) is also used to determine compliance with certain
covenants.
A reconciliation of Adjusted EBITDA is presented below. However,
you should not consider this measure in isolation or as a
substitute for net income, cash flows from operating activities, or
any other measure for determining our operating performance or
liquidity that is calculated in accordance with GAAP. You are
encouraged to evaluate these adjustments and the reasons we
consider them appropriate for supplemental analysis. In evaluating
Adjusted EBITDA, you should be aware that, in the future, we may
incur expenses that are the same as or similar to some of the
adjustments in this presentation. Our presentation of Adjusted
EBITDA should not be construed as an inference that our future
results will be unaffected by unusual or non-recurring items.
Full House Resorts, Inc.Non-GAAP
Financial InformationReconciliation of Net Income
and Operating Income to Adjusted EBITDA(In
Millions, Unaudited)
|
|
|
|
|
|
|
|
|
Preliminary |
|
|
Estimated Results Range(1) |
|
|
Fourth Quarter 2020 |
|
|
Low End |
|
High End |
Net income |
|
$ |
1.2 |
|
|
$ |
4.0 |
|
Income tax benefit |
|
|
(0.2 |
) |
|
|
(0.1 |
) |
Interest expense, net of amounts capitalized |
|
|
2.5 |
|
|
|
2.4 |
|
Adjustment to fair value of warrants and other non-operating
items |
|
|
3.6 |
|
|
|
1.7 |
|
Operating
income |
|
|
7.1 |
|
|
|
8.0 |
|
Depreciation and amortization |
|
|
1.8 |
|
|
|
1.7 |
|
Loss on disposal of assets and other, net |
|
|
0.3 |
|
|
|
0.2 |
|
Stock-based compensation |
|
|
0.1 |
|
|
|
0.1 |
|
Adjusted
EBITDA |
|
$ |
9.3 |
|
|
$ |
10.0 |
|
(1) Figures
presented are projected estimates for the fourth quarter of
2020.
This press release contains preliminary unaudited and estimated
financial results which are subject to the completion of the final
financial statements, including the review of those financial
statements by the Company’s internal accounting professionals and
its audit committee, and the completion of the annual audit by the
Company’s independent registered public accounting firm. The
preliminary financial results included in the press release have
been prepared by, and are the responsibility of, the Company’s
management. The Company’s actual financial results for the fourth
quarter of 2020 have not yet been finalized by management. These
results are not a comprehensive statement of all financial results
for the fourth quarter of 2020. The Company is required to consider
all available information through the finalization of its financial
statements and their possible impact on its financial conditions
and results of operations for the period. As a result, subsequent
information or events may lead to material differences between the
information about the preliminary results of operations described
in this press release and the results of operations described in
the Company’s subsequent annual report. Accordingly, you should use
caution and not place undue reliance on the preliminary financial
results.
Forward-looking StatementsThis press release
contains statements by Full House and our officers that are
“forward-looking statements” within the meaning of the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995. Forward-looking statements are neither historical facts nor
assurances of future performance. Some forward-looking statements
in this press release include those regarding our expected results
of operations; our ability to finance the planned Cripple Creek
expansion in the debt capital markets; our ability to obtain final
city council approval for the planned Cripple Creek expansion; the
expected amenities of the planned Cripple Creek expansion; and the
expected construction budget and timeline for the planned Cripple
Creek expansion. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of the control of Full House. Such risks include,
without limitation, our ability to repay our substantial
indebtedness; the potential for additional adverse impacts from the
COVID-19 pandemic on our business, constructions projects,
indebtedness, financial condition and operating results; actions by
government officials at the federal, state or local level with
respect to steps to be taken, including, without limitation,
additional shutdowns, travel restrictions, social distancing
measures or shelter-in place orders, in connection with the
COVID-19 pandemic; our ability to effectively manage and control
expenses as a result of the pandemic; our ability to complete the
planned Cripple Creek expansion project on-time and on-budget;
changes in guest visitation or spending patterns due to COVID-19 or
other health or other concerns; a decrease in overall demand as
other competing entertainment venues re-open; the inability to
obtain financing upon reasonable terms or at all, including for
projects such as the planned Cripple Creek expansion project; the
potential increase in our indebtedness due to the planned Cripple
Creek expansion; construction risks and cost overruns; dependence
on existing management; competition; uncertainties over the
development and success of our expansion projects; the financial
performance of our finished projects and renovations; effectiveness
of expense and operating efficiencies; general macroeconomic
conditions; and regulatory and business conditions in the gaming
industry (including the possible authorization or expansion of
gaming in the states we operate or nearby states). Additional
information concerning potential factors that could affect our
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, our Form 10-K for the
most recently ended fiscal year and our other periodic reports
filed with the Securities and Exchange Commission. We are under no
obligation to (and expressly disclaims any such obligation to)
update or revise our forward-looking statements as a result of new
information, future events or otherwise. Actual results may differ
materially from those indicated in the forward-looking
statements.
About Full House Resorts, Inc.Full House
Resorts owns, leases, develops and operates gaming facilities
throughout the country. The Company’s properties include Silver
Slipper Casino and Hotel in Hancock County, Mississippi; Bronco
Billy’s Casino and Hotel in Cripple Creek, Colorado; Rising Star
Casino Resort in Rising Sun, Indiana; and Stockman’s Casino in
Fallon, Nevada. The Company also operates the Grand Lodge Casino at
the Hyatt Regency Lake Tahoe Resort, Spa and Casino in Incline
Village, Nevada under a lease agreement with the Hyatt
organization. For further information, please visit
www.fullhouseresorts.com.
Contact:
Lewis Fanger, Chief Financial Officer
Full House Resorts, Inc.
702-221-7800
www.fullhouseresorts.com
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