HOUSTON, March 23, 2021 /PRNewswire/ -- Golden Nugget
Online Gaming, Inc. (Nasdaq: GNOG) (the "Company") today reported
its financial results for the fourth quarter and for the year ended
December 31, 2020.
Fourth Quarter Highlights
- Revenues were $23.0 million,
representing an increase of 47.9% over the prior year.
- Operating income of $2.0 million
after acquisition transaction related expenses of $4.1 million.
- Net loss of $34.2 million after
acquisition transaction and debt extinguishment related expenses
totaling $37.8 million.
- Adjusted EBITDA of $6.2
million
Full Year Highlights
- Revenues were $91.1 million, an
increase of 64.4% over 2019.
- Operating income of $24.5 million
after acquisition transaction related expenses of $4.1 million.
- Net loss of $31.7 million after
acquisition transaction and debt extinguishment related expenses
totaling $37.8 million.
- Adjusted EBITDA of $28.9
million.
Revenues for the three months ended December 31, 2020, totaled $23.0 million, as compared to $15.6 million for the three months ended
December 31, 2019. Net loss was
$34.2 million, compared to net income
of $3.2 million in the prior year
comparable period. Adjusted EBITDA, as defined below, for the
three months ended December 31, 2020
was $6.2 million compared to
$4.8 million last year. Results
for the fourth quarter of 2020 reflect interest expense associated
with the term loan credit agreement entered into on April 28, 2020. Additionally, our fourth
quarter results reflect costs associated with the completion of the
acquisition transaction (the "Acquisition Transaction") with Golden
Nugget Online Gaming, LLC ("Old GNOG"), as well as debt
extinguishment costs associated with the repayment of $150.0 million of their term loan.
Acquisition transaction related expenses totaled $4.1 million, debt extinguishment expenses
totaled $25.4 million and the
accelerated amortization of deferred loan costs and debt premium
associated with the extinguishment totaled $8.3 million.
Revenues for the year ended December 31,
2020 were $91.1 million, as
compared to $55.4 million for the
year ended December 31, 2019.
Net loss for the year totaled $31.7
million, compared to net income in the prior year of
$11.7 million. Adjusted EBITDA,
as defined below, for the year ended December 31, 2020 was $28.9 million compared $17.8 million in the previous year. Results
for the year ended December 31, 2020
reflect interest expense associated with the term loan credit
agreement entered into on April 28,
2020. Additionally, results for the year ended December 31, 2020 reflect costs associated with
the completion of the Acquisition Transaction with Old GNOG, as
well as debt extinguishment costs associated with the repayment of
$150.0 million of their term
loan. Acquisition transaction related expenses totaled
$4.1 million, debt extinguishment
expenses totaled $25.4 million and
the accelerated amortization of deferred loan costs and debt
premium associated with the extinguishment totaled $8.3 million.
President, Thomas Winter
commented "We are extremely proud of everything achieved by Golden
Nugget Online Gaming in what was a challenging year for everyone.
We completed our public listing and our business grew faster than
ever before while maintaining high levels of profit margins. We
view 2020 as a year that validates our iGaming focused strategy
and, combined with our increasing market access footprint, gives us
conviction in our ability to take advantage of what we believe
could ultimately be a $30.0 billion
market opportunity."
Chairman and Chief Executive Officer, Tilman Fertitta added "The large and long-tailed
opportunity for iGaming paired with the strategic benefits GNOG has
within the Golden Nugget and Landry's network is a powerful
combination. I echo Thomas' enthusiasm and excitement for the
future and thank him and the entire Golden Nugget Online Gaming
team for an incredible 2020 and everything that lies ahead."
Business Update
- Completed our public listing on December
29, 2021.
- Launched our online casino and sportsbook in Michigan on January 22,
2021, in partnership with the Ojibwa casino.
- Launched a new version of our online sportsbook in New Jersey on March
4, powered by the award-winning OpenSports platform, from
Scientific Games Digital.
- Secured market access in Illinois to offer online sports betting and,
if permitted in the future, online casino wagering, subject to
regulatory approvals.
- Secured market access in West
Virginia to offer mobile sports and online casino wagering
through an agreement with the Greenbriar Hotel Corporation, subject
to regulatory approvals.
- Secured market access in New
York for online casino wagering, subject to legislation,
regulatory approval, license eligibility and availability.
- Secured an online sports betting temporary permit in
Virginia.
- Completed the redemption of our public warrants on March 8, 2021, which resulted in total cash
proceeds to the Company of $110.2
million.
Conference Call Details
A conference call for investors will be held Tuesday, March 23, 2021, at 4:00 p.m. Central Time to discuss the Company's
fourth quarter and full year end 2020 results.
The call can be accessed live over the telephone by dialing
(720) 452-9102 and reference confirmation code 8375099. A replay of
the call will be available on the Company's website
https://www.gnoginc.com
About GNOG
Golden Nugget Online Gaming, Inc. is a leading online gaming
company that is considered a market leader by its peers and was
first to bring Live Dealer and Live Casino Floor to the United States online gaming market. GNOG
was the recipient of 15 eGaming Review North America Awards,
including the coveted "Operator of the Year" award in 2017, 2018,
2019 and 2020.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, or the Securities Act, and Section 21E of the Securities
Exchange Act of 1934, as amended, or the Exchange Act, about us and
our industry that involve substantial risks and uncertainties. All
statements other than statements of historical facts contained in
this press release, including guidance, our expected results of
operations or financial condition, business strategy and plans,
user growth and engagement, product initiatives, and objectives of
management for future operations, and the impact of COVID-19 on our
business and the economy as a whole, are forward-looking
statements. In some cases, you can identify forward-looking
statements because they contain words such as "anticipate,"
"believe," "contemplate," "continue," "could,"
"estimate," "expect," "expectations," "forecast," "going to,"
"intend," "may," "plan," "potential," "predict,"
"project," "propose," "should," "target," "will," or
"would" or the negative of these words or other similar
terms or expressions. We caution you that the foregoing may not
include all of the forward-looking statements made in this press
release.
The financial results included in this press release are
preliminary, estimated and unaudited. The preliminary financial
results included in this press release reflect management's
estimates based solely upon information available to management as
of the date of this press release and are subject to change upon
the completion of GNOG's financial closing procedures, final
adjustments and other developments, including audit and review by
GNOG's independent registered public accounting firm, that may
arise between now and the time the financial results for the fourth
quarter and year-end are finalized. During the course of that
process, GNOG may identify items that would require it to make
adjustments, which may be material, to the information in this
press release. As a result, the preliminary unaudited financial
information included in this press release is forward-looking
information and is subject to risks and uncertainties, including
possible material adjustments to the preliminary financial
information and the other risks and uncertainties described below
under "Forward-Looking Statements." Accordingly, you should not
place undue reliance on these estimates. The information presented
herein should not be considered a substitute for the financial
information to be filed with the SEC in GNOG's Annual Report on
Form 10-K for the fiscal year ended December
31, 2020 once it becomes available.
You should not rely on forward-looking statements as predictions
of future events. We have based the forward-looking statements
contained in this press release primarily on our current
expectations and projections about future events and trends,
including the ongoing COVID-19 pandemic that we believe may affect
our business, financial condition, results of operations, and
prospects. These forward-looking statements are not guarantees of
future performance, conditions or results, and involve a number of
known and unknown risks, uncertainties, assumptions and other
important factors, many of which are outside GNOG's control, that
could cause actual results or outcomes to differ materially from
those discussed in the forward-looking statements. Important
factors, among others, that may affect actual results or
outcomes include the inability to recognize the anticipated
benefits of GNOG's acquisition transaction; costs related to
the acquisition transaction; the inability to maintain the
listing of GNOG's shares on Nasdaq; GNOG's ability to manage
growth; GNOG's ability to execute its business plan and meet
its projections; potential litigation involving GNOG; changes
in applicable laws or regulations, particularly with respect to
gaming; general economic and market conditions impacting
demand for GNOG's products and services, and in particular
economic and market conditions in the media / entertainment /
gaming / software industry in the markets in which GNOG's
operates; the potential adverse effects of the ongoing global
coronavirus (COVID-19) pandemic on capital markets, general
economic conditions, unemployment and GNOG's liquidity, operations
and personnel, as well as risks, uncertainties, and other
factors described in the section entitled "Risk Factors" in
GNOG's filings with the SEC, which are available on the SEC's
website at www.sec.gov. Additional information will be made
available in other filings that we make from time to time with the
SEC. In addition, any forward-looking statements contained in this
press release are based on assumptions that we believe to be
reasonable as of this date. We undertake no obligation to update
any forward-looking statements to reflect events or circumstances
after the date of this press release or to reflect new information
or the occurrence of unanticipated events, including future
developments related to the COVID-19 pandemic, except as required
by law.
Golden Nugget
Online Gaming, Inc.
|
Unaudited
|
Consolidated
Statement of Operations
|
(In
thousands)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
Gaming
|
$
20,029
|
|
$13,363
|
|
$
79,919
|
|
$ 47,694
|
Other
|
3,000
|
|
2,203
|
|
11,201
|
|
7,727
|
Total
revenue
|
23,029
|
|
15,566
|
|
91,120
|
|
55,421
|
Costs and
expenses
|
|
|
|
|
|
|
|
Labor
|
3,018
|
|
1,926
|
|
9,026
|
|
7,102
|
Gaming
taxes
|
4,395
|
|
2,807
|
|
17,238
|
|
9,985
|
Royalty and licenses
fees
|
2,501
|
|
1,754
|
|
10,128
|
|
5,875
|
Selling, general and
administrative expense
|
6,939
|
|
4,325
|
|
25,909
|
|
14,687
|
Acquisition Transaction related expenses
|
4,137
|
|
-
|
|
4,137
|
|
-
|
Depreciation and amortization
|
52
|
|
34
|
|
190
|
|
135
|
Total costs and
expenses
|
21,042
|
|
10,846
|
|
66,628
|
|
37,784
|
Operating
income
|
1,987
|
|
4,720
|
|
24,492
|
|
17,637
|
Other
expense
|
|
|
|
|
|
|
|
Interest expense,
net
|
19,415
|
|
1
|
|
38,492
|
|
6
|
Other
expense
|
25,384
|
|
-
|
|
25,384
|
|
-
|
Total other
expense
|
44,799
|
|
1
|
|
63,876
|
|
6
|
Income (loss) before
income taxes
|
(42,812)
|
|
4,719
|
|
(39,384)
|
|
17,631
|
Provision for income
taxes
|
(8,565)
|
|
1,525
|
|
(7,651)
|
|
5,960
|
Net income
(loss)
|
(34,247)
|
|
3,194
|
|
(31,733)
|
|
11,671
|
Net loss attributable
to non-controlling interests
|
17,350
|
|
-
|
|
17,350
|
|
-
|
Net income (loss)
attributable to GNOG
|
$ (16,897)
|
|
$
3,194
|
|
$ (14,383)
|
|
$ 11,671
|
Non-GAAP Financial Measures
EBITDA and adjusted EBITDA are supplemental non-GAAP financial
measures that are used by management and external users of our
financial statements, such as industry analysts, investors, lenders
and rating agencies. We define "EBITDA" as earnings (or loss)
before interest, taxes, depreciation, and amortization, and we
define "Adjusted EBITDA" as EBITDA before stock-based compensation,
acquisition transaction related expenses, debt extinguishment
expenses and other non-recurring items. Neither EBITDA nor Adjusted
EBITDA is a measure of net income as determined by U.S. generally
accepted accounting principles ("GAAP").
Management believes EBITDA and Adjusted EBITDA are useful
because they allow management to more effectively evaluate our
operating performance and compare the results of our operations
from period to period and against our peers without regard to our
financing methods or capital structure or non-recurring, non-cash
transactions. We exclude the items listed above in calculating
EBITDA and Adjusted EBITDA because these amounts can vary
substantially from company to company depending upon capital
structures and the method by which assets were acquired. None of
EBITDA or Adjusted EBITDA should be considered an alternative to,
or more meaningful than, net income (loss), the most closely
comparable financial measure calculated in accordance with GAAP.
Certain items excluded from EBITDA and Adjusted EBITDA are
significant components in understanding and assessing a company's
financial performance, such as a company's return on assets, cost
of capital and tax structure. Our presentation EBITDA and Adjusted
EBITDA should not be construed as an inference that our results
will be unaffected by unusual or non-recurring items. Our
computations of EBITDA and Adjusted EBITDA may not be comparable to
other similarly titled measures of other companies.
Reconciliation of
Net income (loss) to EBITDA and Adjusted EBITDA:
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$ (34,247)
|
|
$
3,194
|
|
$ (31,733)
|
|
$ 11,671
|
Add back:
|
|
|
|
|
|
|
|
Provision for income taxes
|
(8,565)
|
|
1,525
|
|
(7,651)
|
|
5,960
|
Interest
expense, net
|
19,415
|
|
1
|
|
38,492
|
|
6
|
Depreciation and amortization
|
52
|
|
34
|
|
190
|
|
135
|
EBITDA
|
$ (23,345)
|
|
$
4,754
|
|
$
(702)
|
|
$ 17,772
|
Add back:
|
|
|
|
|
|
|
|
Debt
extinguishment expenses
|
25,384
|
|
-
|
|
25,384
|
|
-
|
Acquisition Transaction related expenses
|
4,137
|
|
-
|
|
4,137
|
|
-
|
Stock-based compensation
|
35
|
|
-
|
|
35
|
|
-
|
Adjusted
EBITDA
|
$
6,211
|
|
$
4,754
|
|
$
28,854
|
|
$ 17,772
|
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SOURCE Golden Nugget Online Gaming, Inc.