Full House Resorts, Inc. (Nasdaq: FLL) today announced results for
the first quarter ended March 31, 2023, including updates
regarding its growth pipeline.
On a consolidated basis, revenues in the first quarter of 2023
were $50.1 million, a 21.0% increase from $41.4 million
in the prior-year period. Net loss for the first quarter of 2023
was $11.4 million, or $(0.33) per diluted common share, which
includes $10.5 million of preopening and development costs,
primarily related to the February 2023 opening of The Temporary and
the Company’s Chamonix construction project. In the prior-year
period, net income was $0.1 million, or $0 per diluted common
share, reflecting $4.4 million of debt modification costs
related to the Company’s offering of additional notes in February
2022, and $1.0 million of preopening and development costs.
Adjusted EBITDA(a) rose 20.6% to $10.1 million in the 2023
first quarter, versus $8.4 million in the prior-year period,
reflecting the opening of The Temporary in February 2023 and Rising
Star’s sale of “free play” (which also occurred in the prior year,
though not until the second quarter of 2022).
“This was a transformational quarter for our company, with the
first phase of our American Place project now open and already
contributing meaningfully to our financial results,” said Daniel R.
Lee, President and Chief Executive Officer of Full House Resorts.
“In its first 1.5 months of operations, The Temporary by American
Place generated $10.4 million of revenue and $3.6 million of
Adjusted Property EBITDA, resulting in an Adjusted Property EBITDA
margin of 34.3%. Its marketing database currently consists of
approximately 25,000 people and continues to grow steadily. As The
Temporary’s database continues to expand and its remaining
amenities come online, we expect continued growth in the property’s
revenue and profit contributions.
“Since our soft opening of The Temporary on February 17th, we
have continued to ramp up operations. In early April, our second
restaurant — Asia-Azteca, serving a fusion of Mexican and Asian
cuisines — began welcoming guests. On May 12th, we expect to begin
24-hour casino operations on weekends, as well as the removal of
all restrictions on table game limits and table game operating
hours. We expect to complete our opening of The Temporary with the
addition of 22 more table games by June, followed by the opening of
our fine-dining restaurant and an on-site sportsbook. In contrast,
we have generally operated only 28 table games since
opening.
“We also continue to make substantial progress at our Chamonix
project in Cripple Creek, Colorado,” continued Mr. Lee.
“Barry Dakake, a celebrated chef known for leading Barry’s
Downtown Prime and N9NE Steakhouse in Las Vegas, Nevada, recently
agreed to operate our fine dining restaurant at Chamonix. Barry and
his team are known for creating restaurants with amazing guest
service and equally amazing cuisine. He began his career with Chef
Charlie Palmer at the Aureole restaurants in New York and on the
Las Vegas Strip, which earned numerous Michelin stars and James
Beard Awards. He was also a part of the opening team of
N9NE Steakhouse, which was named a “Top 100 Restaurant in the
World” by Condé Nast Traveler, “Best Steakhouse” by
Vegas Magazine, “Hottest New Restaurant” by Wine Spectator,
and one of “America’s Best Restaurants” by Gourmet Magazine. We
look forward to vying to be one of the state’s leading restaurants
with Barry at our Chamonix Casino Hotel.
“We also have finalized an opening day for Chamonix: December
26, 2023. On that day, we expect to open with a near-complete
experience, with all three of our hotel towers, our new casino,
fine dining restaurant, and parking garage. We look forward to
welcoming our first guests to what we believe will be the most
unique casino destination in Colorado.”
For project renderings and live construction webcams, please
visit www.AmericanPlace.com and www.ChamonixCO.com.
First Quarter Highlights and Subsequent
Events
During the first quarter of 2023, the Company updated its
reportable segments to Midwest & South, West, and Contracted
Sports Wagering, reflecting a realignment within the Company as a
result of our continued growth.
- Midwest &
South. This segment includes Silver Slipper Casino and
Hotel, Rising Star Casino Resort, and The Temporary by American
Place, which opened on February 17, 2023. Revenues for the segment
were $40.8 million in the first quarter of 2023, a 36.2% increase
from $29.9 million in the prior-year period. Adjusted Segment
EBITDA rose to $10.7 million, a 50.8% increase from $7.1 million in
the prior-year period. These results reflect approximately 1.5
months of operations at The Temporary, the Company’s newest casino
located in Waukegan, Illinois. In the first quarter of 2023, The
Temporary generated $10.4 million of revenue and $3.6 million of
Adjusted Property EBITDA, resulting in an Adjusted Property EBITDA
margin of 34.3%. Additionally, the current-period results include
Rising Star’s sale of “free play,” which resulted in $2.1 million
of revenue and income in the first quarter of 2023. Rising Star
also sold its “free play” for $2.1 million during 2022, although
not until the second quarter.Excluding results from The Temporary,
same-store revenues rose by $0.4 million due to the sale of “free
play” at Rising Star, as noted above. This helped to offset a
revenue decline at Silver Slipper, due in part to declines in the
slot and table games hold percentages. Same-store Adjusted Segment
EBITDA was flat at $7.1 million.
- West. This segment includes Grand Lodge Casino
(located within the Hyatt Regency Lake Tahoe luxury resort in
Incline Village), Stockman’s Casino, Bronco Billy’s Casino and
Hotel and, upon its expected opening in December 2023, will include
Chamonix Casino Hotel. Revenues for the segment were $8.1 million
in the first quarter of 2023 versus $8.6 million in the prior-year
period. Adjusted Segment EBITDA was $56,000 versus $0.5 million.
Results in both periods reflect the temporary loss of all on-site
parking and on-site hotel rooms at Bronco Billy’s to accommodate
the construction of neighboring Chamonix. Additionally, the current
period reflects significant snowfall near Lake Tahoe and in
Colorado, adversely impacting guest traffic at our Grand Lodge and
Bronco Billy’s properties.
- Contracted Sports Wagering. This segment
consists of the Company’s on-site and online sports wagering
“skins” (akin to websites) in Colorado, Indiana and, upon launch,
Illinois. Revenues and Adjusted Segment EBITDA were both
$1.2 million in the first quarter of 2023, reflecting all
three of our permitted skins now contractually live in Colorado and
two of our three skins live in Indiana. Revenues and Adjusted
EBITDA were both $2.8 million in the prior-year period, reflecting
an acceleration of deferred revenue for two agreements that ceased
operations in May 2022, when one of the Company’s contracted
parties ended its online operations.The results of this segment do
not yet include income contribution from the Company’s Illinois
sports skin. Similar to the Company’s other sports wagering
agreements, the Company will receive a percentage of revenues, as
defined in the contract, with minimal expected expenses. The total
annualized minimum amount for all six of the Company’s sports
wagering agreements will be $10 million once this Illinois
skin is live. The Company believes that its Illinois sports skin
will begin operations by August 2023, pending customary regulatory
approvals.
Liquidity and Capital ResourcesAs of
March 31, 2023, the Company had $142.4 million in
cash and cash equivalents, including $101.6 million of cash
reserved under its bond indentures to complete the construction of
Chamonix. Its debt consisted primarily of $450.0 million in
outstanding senior secured notes due 2028, which become callable at
specified premiums beginning in February 2024, and
$27.0 million outstanding under its revolving credit
facility.
Conference Call InformationThe Company will
host a conference call for investors today, May 8, 2023, at
4:30 p.m. ET (1:30 p.m. PT) to discuss its 2023
first quarter results. Investors can access the live audio
webcast from the Company’s website at www.fullhouseresorts.com
under the investor relations section. The conference call can also
be accessed by dialing (201) 689-8470.
A replay of the conference call will be available shortly after
the conclusion of the call through May 22, 2023. To access the
replay, please visit www.fullhouseresorts.com. Investors can also
access the replay by dialing (412) 317-6671 and using the
passcode 13738611.
(a) Reconciliation of Non-GAAP Financial
MeasureThe Company utilizes Adjusted Segment EBITDA, a
financial measure in accordance with generally accepted accounting
principles (“GAAP”), as the measure of segment profitability in
assessing performance and allocating resources at the reportable
segment level. Adjusted Segment 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 segment.
Same-store Adjusted Segment EBITDA is Adjusted Segment EBITDA
further adjusted to exclude the Adjusted Property EBITDA of
properties that have not been in operation for a full year.
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 Segment 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 metric or 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 reconciliation of Adjusted EBITDA is presented below. However,
you should not consider this measure in isolation or as a
substitute for operating 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. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited)(In thousands, except per
share data) |
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2023 |
|
2022 |
Revenues |
|
|
|
|
|
|
Casino |
|
$ |
35,987 |
|
|
$ |
29,084 |
|
Food and beverage |
|
|
7,660 |
|
|
|
6,511 |
|
Hotel |
|
|
2,144 |
|
|
|
2,179 |
|
Other operations, including contracted sports wagering |
|
|
4,315 |
|
|
|
3,649 |
|
|
|
|
50,106 |
|
|
|
41,423 |
|
Operating costs and
expenses |
|
|
|
|
|
|
Casino |
|
|
13,344 |
|
|
|
9,875 |
|
Food and beverage |
|
|
7,455 |
|
|
|
6,568 |
|
Hotel |
|
|
1,219 |
|
|
|
1,071 |
|
Other operations |
|
|
482 |
|
|
|
462 |
|
Selling, general and administrative |
|
|
18,229 |
|
|
|
15,393 |
|
Project development costs |
|
|
7 |
|
|
|
165 |
|
Preopening costs |
|
|
10,497 |
|
|
|
786 |
|
Depreciation and amortization |
|
|
5,859 |
|
|
|
1,792 |
|
Loss on disposal of assets |
|
|
— |
|
|
|
8 |
|
|
|
|
57,092 |
|
|
|
36,120 |
|
Operating (loss)
income |
|
|
(6,986 |
) |
|
|
5,303 |
|
Other (expense)
income |
|
|
|
|
|
|
Interest expense, net |
|
|
(4,819 |
) |
|
|
(6,399 |
) |
Loss on modification of debt |
|
|
— |
|
|
|
(4,406 |
) |
Gain on insurance settlement |
|
|
355 |
|
|
|
— |
|
|
|
|
(4,464 |
) |
|
|
(10,805 |
) |
Loss before income
taxes |
|
|
(11,450 |
) |
|
|
(5,502 |
) |
Income tax benefit |
|
|
(35 |
) |
|
|
(5,612 |
) |
Net (loss)
income |
|
$ |
(11,415 |
) |
|
$ |
110 |
|
|
|
|
|
|
|
|
Basic loss per
share |
|
$ |
(0.33 |
) |
|
$ |
— |
|
Diluted loss per
share |
|
$ |
(0.33 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
Basic weighted average number of
common shares outstanding |
|
|
34,410 |
|
|
|
34,262 |
|
Diluted weighted average number
of common shares outstanding |
|
|
34,410 |
|
|
|
36,623 |
|
Full House Resorts,
Inc.Supplemental
InformationSegment Revenues, Adjusted Segment
EBITDA and Adjusted EBITDA(In thousands,
Unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2023 |
|
2022 |
Revenues |
|
|
|
|
|
|
Midwest & South |
|
$ |
40,802 |
|
|
$ |
29,949 |
|
West |
|
|
8,124 |
|
|
|
8,644 |
|
Contracted Sports Wagering |
|
|
1,180 |
|
|
|
2,830 |
|
|
|
$ |
50,106 |
|
|
$ |
41,423 |
|
Adjusted Segment
EBITDA(1) and Adjusted
EBITDA |
|
|
|
|
|
|
Midwest & South |
|
$ |
10,687 |
|
|
$ |
7,088 |
|
West |
|
|
56 |
|
|
|
509 |
|
Contracted Sports Wagering |
|
|
1,161 |
|
|
|
2,767 |
|
Adjusted Segment EBITDA |
|
|
11,904 |
|
|
|
10,364 |
|
Corporate |
|
|
(1,779 |
) |
|
|
(1,967 |
) |
Adjusted EBITDA |
|
$ |
10,125 |
|
|
$ |
8,397 |
|
__________(1) The Company utilizes Adjusted
Segment EBITDA as the measure of segment operating profitability in
assessing performance and allocating resources at the reportable
segment level.
Full House Resorts,
Inc.Supplemental
InformationSame-store Revenues and Adjusted
Segment EBITDA(In thousands,
Unaudited) |
|
|
|
|
Three Months Ended |
|
March 31, |
|
2023 |
|
2022 |
Midwest & South same-store total revenues(1) |
$ |
30,382 |
|
|
$ |
29,949 |
|
The Temporary by American
Place |
|
10,420 |
|
|
|
— |
|
Midwest & South total
revenues |
$ |
40,802 |
|
|
$ |
29,949 |
|
|
|
|
|
|
|
|
|
Midwest & South same-store
Adjusted Segment EBITDA(1) |
$ |
7,114 |
|
|
$ |
7,088 |
|
The Temporary by American
Place |
|
3,573 |
|
|
|
— |
|
Midwest & South Adjusted
Segment EBITDA |
$ |
10,687 |
|
|
$ |
7,088 |
|
__________ (1) Same-store
operations exclude results from The Temporary by American Place,
which opened on February 17, 2023.
Full House Resorts,
Inc.Supplemental
InformationReconciliation of Net Income (Loss) and
Operating Income (Loss) to Adjusted EBITDA(In
thousands, Unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2023 |
|
2022 |
Net (loss) income |
|
$ |
(11,415 |
) |
|
$ |
110 |
|
Income tax benefit |
|
|
(35 |
) |
|
|
(5,612 |
) |
Interest expense, net |
|
|
4,819 |
|
|
|
6,399 |
|
Loss on modification of debt |
|
|
— |
|
|
|
4,406 |
|
Gain on insurance settlement |
|
|
(355 |
) |
|
|
— |
|
Operating (loss)
income |
|
|
(6,986 |
) |
|
|
5,303 |
|
Project development costs |
|
|
7 |
|
|
|
165 |
|
Preopening costs |
|
|
10,497 |
|
|
|
786 |
|
Depreciation and amortization |
|
|
5,859 |
|
|
|
1,792 |
|
Loss on disposal of assets |
|
|
— |
|
|
|
8 |
|
Stock-based compensation |
|
|
748 |
|
|
|
343 |
|
Adjusted
EBITDA |
|
$ |
10,125 |
|
|
$ |
8,397 |
|
Full
House Resorts, Inc.Supplemental
InformationReconciliation of Operating Income
(Loss) to Adjusted Segment EBITDA and Adjusted
EBITDA(In thousands, Unaudited) |
|
Three
Months Ended March 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment |
|
|
Operating |
|
Depreciation |
|
Project |
|
|
|
Stock- |
|
EBITDA and |
|
|
Income |
|
and |
|
Development |
|
Preopening |
|
Based |
|
Adjusted |
|
|
(Loss) |
|
Amortization |
|
Costs |
|
Costs |
|
Compensation |
|
EBITDA |
Reporting
segments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Midwest & South |
|
$ |
(4,666 |
) |
|
$ |
5,256 |
|
$ |
— |
|
$ |
10,097 |
|
$ |
— |
|
$ |
10,687 |
|
West |
|
|
(916 |
) |
|
|
572 |
|
|
— |
|
|
400 |
|
|
— |
|
|
56 |
|
Contracted Sports Wagering |
|
|
1,161 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,161 |
|
|
|
|
(4,421 |
) |
|
|
5,828 |
|
|
— |
|
|
10,497 |
|
|
— |
|
|
11,904 |
|
Other
operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
|
(2,565 |
) |
|
|
31 |
|
|
7 |
|
|
— |
|
|
748 |
|
|
(1,779 |
) |
|
|
$ |
(6,986 |
) |
|
$ |
5,859 |
|
$ |
7 |
|
$ |
10,497 |
|
$ |
748 |
|
$ |
10,125 |
|
Three
Months Ended March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment |
|
|
Operating |
|
Depreciation |
|
Loss on |
|
Project |
|
|
|
Stock- |
|
EBITDA and |
|
|
Income |
|
and |
|
Disposal |
|
Development |
|
Preopening |
|
Based |
|
Adjusted |
|
|
(Loss) |
|
Amortization |
|
of Assets |
|
Costs |
|
Costs |
|
Compensation |
|
EBITDA |
Reporting
segments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Midwest & South |
|
$ |
5,023 |
|
|
$ |
1,272 |
|
$ |
7 |
|
$ |
— |
|
$ |
786 |
|
$ |
— |
|
$ |
7,088 |
|
West |
|
|
21 |
|
|
|
487 |
|
|
1 |
|
|
— |
|
|
— |
|
|
— |
|
|
509 |
|
Contracted Sports Wagering |
|
|
2,767 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
2,767 |
|
|
|
|
7,811 |
|
|
|
1,759 |
|
|
8 |
|
|
— |
|
|
786 |
|
|
— |
|
|
10,364 |
|
Other
operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
|
(2,508 |
) |
|
|
33 |
|
|
— |
|
|
165 |
|
|
— |
|
|
343 |
|
|
(1,967 |
) |
|
|
$ |
5,303 |
|
|
$ |
1,792 |
|
$ |
8 |
|
$ |
165 |
|
$ |
786 |
|
$ |
343 |
|
$ |
8,397 |
|
Cautionary Note Regarding 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 can be identified by words such as: “anticipate,”
“intend,” “plan,” “believe,” “project,” “expect,” “future,”
“should,” “will” and similar references to future periods. Some
forward-looking statements in this press release include those
regarding our expected construction budgets, estimated commencement
and completion dates, expected amenities, and our expected
operational performance for Chamonix and American Place,
including The Temporary; and our expectations regarding the success
and commencement dates of any new sports wagering contracts or
operations in Colorado, Indiana or Illinois. Forward-looking
statements are neither historical facts nor assurances of future
performance. 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 our control. Such risks include, without
limitation, our ability to repay our substantial indebtedness;
inflation and its potential impacts on labor costs and the price of
food, construction, and other materials; the effects of potential
disruptions in the supply chains for goods, such as food, lumber,
and other materials; general macroeconomic conditions; our ability
to effectively manage and control expenses; our ability to complete
Chamonix and American Place on-time and on-budget; changes in guest
visitation or spending patterns due to COVID-19 or other health or
other concerns; construction risks, disputes 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; 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 we file with the
Securities and Exchange Commission, including, but not limited to,
Part I, Item 1A. Risk Factors and Part II,
Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations of our Annual Report on 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 disclaim 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. Therefore, you should not rely on any of these
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 The
Temporary by American Place in Waukegan, Illinois; 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; Stockman’s Casino
in Fallon, Nevada; and Grand Lodge Casino, located within the Hyatt
Regency Lake Tahoe Resort, Spa and Casino in Incline Village,
Nevada. The Company is currently constructing Chamonix Casino
Hotel, a new luxury hotel and casino expected to open in December
2023 in Cripple Creek, Colorado. 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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