Nevada Gold & Casinos Announces Second Quarter Results HOUSTON,
Nov. 9 /PRNewswire-FirstCall/ -- Nevada Gold & Casinos, Inc.
(AMEX:UWN) today announced financial results for the second quarter
of fiscal 2005 ended September 30, 2004. For the second quarter of
fiscal 2005, revenues decreased to $1.5 million compared to $2.7
million in the second quarter of fiscal 2004. The revenue decrease
was primarily due to a $785,000 decrease in interest income related
to a lower balance in outstanding notes receivable from the River
Rock project, as well as a $343,000 decrease in credit enhancement
fee income from River Rock, most of which was due to a one-time
audit adjustment to River Rock's financial statements resulting in
a decrease of $320,000 in Nevada Gold's credit enhancement fee
income. The Company's equity in earnings from Isle of Capri-Black
Hawk (IC-BH), the company's joint venture with Isle of Capri
Casinos, decreased to $1.7 million from $2.7 million in the prior
year period. IC-BH's second quarter earnings before interest,
taxes, depreciation and amortization ("EBITDA"), was $9.6 million
compared to $13.3 million in the prior year period. A
reconciliation of EBITDA to operating income is provided in the
attached financial statements. The decrease in earnings and EBITDA
is primarily attributable to the construction disruption related to
the expansion project at the joint venture's two properties in
Black Hawk. Net income for the second quarter was $1.1 million
compared to $1.8 in the second quarter of fiscal 2003. Net income
per diluted common share was $0.08, compared to $0.15 in the prior
year period. Diluted weighted average common shares outstanding in
the second quarter were 14.7 million compared to 15.6 million in
the prior year period. H. Thomas Winn, Chairman, President &
CEO of Nevada Gold & Casinos, Inc. commented, "While our second
quarter was less than we had hoped for, we are excited about the
current status of the Company. With a number of new projects in the
pipeline, the expansion project at River Rock nearly completed and
major enhancements to the Black Hawk properties on their way, we
are very enthusiastic about the future." Forward-Looking Statements
This 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 Indian 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. NEVADA GOLD & CASINOS, INC. Consolidated Statements
of Operations (Unaudited) Three Months Ended September 30, 2004
2003 Revenues Gaming asset participation income: Dry Creek Casino,
L.L.C. $1,065,868 $1,408,750 Other income: Interest income 460,836
1,245,651 Royalty income 16,903 15,134 Miscellaneous income ---
19,330 Total Revenues 1,543,607 2,688,865 Expenses General and
administrative 231,617 211,621 Interest expense 378,471 1,044,487
Salaries 555,137 286,551 Legal and professional fees 375,052
528,291 Amortization of deferred loan issue cost 53,265 (149,663)
Write-off of project development costs --- 23,403 Other 71,710
46,678 Total Expenses 1,665,252 1,991,368 Equity in earnings of
Isle of Capri-Black Hawk 1,650,838 2,657,101 Equity in earnings of
Route 66 Casinos, L.L.C. 414,537 192,300 Minority interest - Dry
Creek Casino, L.L.C. (158,881) (215,632) Income before income tax
provision 1,784,849 3,331,266 Federal income tax provision -
deferred (678,242) (1,147,355) Net Income $1,106,607 $2,183,911 Per
Share Information Net income per common share - basic $ 0.08 $ 0.19
Net income per common share - diluted $ 0.08 $ 0.15 Basic weighted
average number of common shares outstanding 13,038,239 11,251,185
Fully diluted weighted average number of common shares outstanding
14,664,122 15,628,252 NEVADA GOLD & CASINOS, INC. Consolidated
Statements of Operations (Unaudited) Six Months Ended September 30,
2004 2003 Revenues Gaming asset participation income: Dry Creek
Casino, L.L.C. $2,417,135 $1,709,208 Other income: Interest income
926,401 2,553,300 Royalty income 33,805 28,634 Miscellaneous income
--- 34,975 Total Revenues 3,377,341 4,326,117 Expenses General and
administrative 491,361 371,426 Interest expense 818,399 2,061,906
Salaries 956,457 560,155 Legal and professional fees 681,047
842,317 Amortization of deferred loan issue cost 228,989 (7,040)
Write-off of project development costs 180,850 23,403 Other 98,846
68,886 Total Expenses 3,455,949 3,921,053 Equity in earnings of
Isle of Capri-Black Hawk 4,039,218 5,490,448 Equity in earnings of
Route 66 Casinos, L.L.C. 846,142 218,274 Minority interest - Dry
Creek Casino, L.L.C. (361,825) (268,924) Income before income tax
provision 4,444,927 5,844,862 Federal income tax provision -
deferred (1,614,326) (1,987,078) Net Income $2,830,601 $3,857,784
Per Share Information Net income per common share - basic $ 0.22 $
0.34 Net income per common share - diluted $ 0.20 $ 0.26 Basic
weighted average number of common shares outstanding 12,780,421
11,211,676 Fully diluted weighted average number of common shares
outstanding 14,930,353 15,465,796 Isle of Capri Black Hawk L.L.C.
Comparative Financial Highlights by Casino Property (In thousands)
Three Months Ended October 24, 2004 October 26, 2003 Adjusted
Adjusted Net Adjusted EBITDA Net Adjusted EBITDA Revenues EBITDA
Margin Revenues EBITDA Margin % (A) (B) % (B) (C) (B) % (B)
Isle-Black Hawk (C) 25,548 8,852 34.6% 27,473 9,900 6.0% Colorado
Central Station (C) (D) 8,073 409 5.1% 11,641 2,684 23.1% Colorado
Grande (C) (D) 1,951 365 18.7% 2,281 687 30.1% Colorado Total
35,572 9,626 27.1% 41,395 13,271 32.1% Six Months Ended October 24,
2004 October 26, 2003 Adjusted Adjusted Net Adjusted EBITDA Net
Adjusted EBITDA Revenues EBITDA Margin Revenues EBITDA Margin % (A)
(B) % (B) (A) (B) (B) Isle-Black Hawk (C) 51,845 19,038 36.7%
55,553 20,549 37.0% Colorado Central Station (C) (D) 16,416 930
5.7% 23,660 5,244 22.2% Colorado Grande (C) (D) 4,103 878 21.4%
4,318 1,201 27.8% Colorado Total 72,364 20,846 28.8% 83,531 26,994
32.3% Isle of Capri Black Hawk L.L.C. Reconciliation of Operating
Income (Loss) to Adjusted EBITDA by Casino Property (In thousands)
Three Months Ended October 24, 2004 Depreciation Operating Adjusted
& Operating Income (Loss) EBITDA (B) Amortization Income Margin
% (E) Isle-Black Hawk (C) 8,852 1,758 7,094 27.8% Colorado Central
Station (C) (D) 409 661 (252) -3.1% Colorado Grande (C) (D) 365 109
256 13.1% Colorado Total 9,626 2,528 7,098 20.0% Three Months Ended
October 26, 2003 Depreciation Operating Adjusted & Operating
Income (Loss) EBITDA (B) Amortization Income Margin % (E)
Isle-Black Hawk (C) 9,900 1,709 8,191 29.8% Colorado Central
Station (C) (D) 2,684 332 2,352 20.2% Colorado Grande (C) (D) 687
71 616 27.0% Colorado Total 13,271 2,112 11,159 27.0% Isle of Capri
Black Hawk L.L.C. Reconciliation of Operating Income (Loss) to
Adjusted EBITDA by Casino Property (In thousands) Six Months Ended
October 24, 2004 Depreciation Operating Adjusted & Operating
Income (Loss) EBITDA (B) Amortization Income Margin % (E)
Isle-Black Hawk (C) 19,038 3,474 15,564 30.0% Colorado Central
Station (C) (D) 930 1,228 (298) -1.8% Colorado Grande (C) (D) 878
210 668 16.3% Colorado Total 20,846 4,912 15,934 22.0% Six Months
Ended October 26, 2003 Depreciation Operating Adjusted &
Operating Income (Loss) EBITDA (B) Amortization Income Margin % (E)
Isle-Black Hawk (C) 20,549 3,443 17,106 30.8% Colorado Central
Station (C) (D) 5,244 701 4,543 19.2% Colorado Grande (C) (D) 1,201
141 1,060 24.5% Colorado Total 26,994 4,285 22,709 27.2% (A) Net
revenues are presented net of complimentaries, slot points expense
and cash coupon redemptions. (B) EBITDA is "earnings before
interest, income taxes, depreciation and amortization." Adjusted
EBITDA for each property was calculated by adding preopening
expense, management fees and non-cash items to EBITDA. Adjusted
EBITDA is presented solely as a supplemental disclosure because
management believes that it is 1) a widely used measure of
operating performance in the gaming industry, and 2) a principal
basis for valuation of gaming companies. Management uses property
level Adjusted EBITDA (Adjusted EBITDA before corporate expense) as
the primary measure of the properties' performance. Adjusted EBITDA
should not be construed as an alternative to operating income, as
an indicator of the Company's operating performance; or as an
alternative to any other measure determined in accordance with
accounting principles generally accepted in the United States. The
properties have significant uses of cash flows, including capital
expenditures, interest payments, taxes and debt principal
repayment, which are not reflected in Adjusted EBITDA. Also, other
gaming companies that report Adjusted EBITDA information may
calculate Adjusted EBITDA in a different manner than the Company.
Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by
net revenue. Reconciliations of operating income to Adjusted EBITDA
are included in the financial schedules accompanying this release.
(C) The Adjusted EBITDA for the Isle-Black Hawk, the Colorado
Central Station-Black Hawk and the Colorado Grande-Cripple Creek,
does not include management fees. The following table shows
management fees and Adjusted EBITDA inclusive of management fees
for the three months and six months ended October 24, 2004, and
October 26, 2003: Three Months Ended Six Months Ended October 24,
October 26, October 24, October 26, 2004 2003 2004 2003 (In
thousands) Management Fees Isle - Black Hawk $ 1,204 $ 1,244 $
2,472 $ 2,508 Colorado Central Station 255 358 519 901 Colorado
Grande 89 110 190 212 Adjusted EBITDA with Management Fees Isle -
Black Hawk 7,648 8,656 16,566 18,041 Colorado Central Station 154
2,326 411 4,343 Colorado Grande 276 577 688 989 (D) The Isle of
Capri Black Hawk L.L.C. acquired these properties on April 22,
2003. (E) Operating income margin was calculated by dividing
operating income by net revenue. NEVADA GOLD & CASINOS, INC.
Consolidated Balance Sheets September 30, March 31, 2004 2004
Assets (Unaudited) (Audited) Current Assets Cash and cash
equivalents $3,743,344 $3,528,631 Accounts receivable 461,858
216,322 Income tax receivable 2,522,000 2,522,000 Notes receivable
from affiliates, current portion 1,500,000 1,200,000 Other assets
326,497 79,272 Total Current Assets 8,553,699 7,546,225 Joint
ventures in equity investees: Isle of Capri Black Hawk, L.L.C.
17,666,772 15,708,324 Route 66 Casinos, L.L.C. 2,689,310 1,852,828
Sunrise Land and Mineral Corporation 371,750 371,750 Investments in
development and operating projects: Dry Creek Casino, L.L.C.,
gaming 1,218,115 1,264,164 Nevada Gold Tulsa, Inc., gaming
1,060,929 744,617 Gold River, L.L.C., gaming 315,748 19,770 Gold
Mountain Development, L.L.C., real estate 3,355,600 3,342,207
Goldfield Resources, Inc., mining 480,812 480,812 Other assets -
gaming 429,055 414,571 Notes receivable from Dry Creek Rancheria
10,000,000 10,000,000 Notes receivable from affiliates 3,351,459
3,839,586 Notes receivable - gaming projects 3,592,423 --- Deferred
loan issue cost, net 383,933 285,450 Deferred tax asset 1,407,340
--- Furniture, fixtures and equipment, net of accumulated
depreciation of $133,372 at September 30, 2004 and $124,609 at
March 31, 2004 100,202 80,753 Total Assets $54,977,147 $45,951,057
Liabilities and Stockholders' Equity Current Liabilities Accounts
payable and accrued liabilities $861,555 $1,205,241 Deferred tax
liability --- 2,517,678 Current portion of long-term debt 3,272,500
--- Total Current Liabilities 4,134,055 3,722,919 Long-Term Debt
Deferred income 71,111 145,833 Convertible Note, net of discount
3,225,169 11,029,266 Term Note payable, net of current portion
3,272,500 --- Note payable on credit facility 10,915,671 --- Total
Long-Term Debt 17,484,451 11,175,099 Total Liabilities 21,618,506
14,898,018 Commitments and Contingencies --- --- Minority interest
- Dry Creek Casino, L.L.C. 284,619 253,719 Stockholders' Equity
Common stock, $0.12 par value, 20,000,000 shares authorized,
13,342,103 and 12,279,352 shares outstanding at September 30, 2004,
and March 31, 2004, respectively 1,601,052 1,473,522 Additional
paid in capital 20,788,588 19,256,200 Treasury Stock, 214,900
shares, at cost (2,366,449) --- Retained earnings 13,092,056
10,261,455 Accumulated other comprehensive loss (41,225) (191,857)
Total Stockholders' Equity 33,074,022 30,799,320 Total Liabilities
and Stockholders' Equity $54,977,147 $45,951,057 About Nevada Gold
& Casinos Nevada Gold & Casinos, Inc. of Houston, is a
developer of gaming properties, and has real estate interests in
Colorado, California, and Nevada. UWN owns a 43% interest in The
Isle of Capri-Black Hawk LLC, which owns Isle of Capri Casino, a
237-room hotel/casino and Colorado Central Station Casino (both
located in Black Hawk, Colorado, about 35 miles west of Denver) and
Colorado Grande Casino, located in Cripple Creek, Colorado. The LLC
is a joint venture with Isle of Capri Casinos, Inc. (NASDAQ:ISLE).
UWN has 69% ownership of Dry Creek Casino, LLC, which is assisting
the Dry Creek Rancheria Band of Pomo Indians with their River Rock
Casino, Alexander Valley, Sonoma County, California (about 75 miles
north of San Francisco in the California wine country). UWN has 51%
ownership of Route 66 Casinos, LLC, which has the right to lease
gaming equipment to the Pueblo of Laguna in their Route 66 Casino
11 miles west of Albuquerque, N.M., which opened in September 2003.
Nevada Gold Tulsa, Inc., a wholly-owned subsidiary, has entered
into a contract to develop and manage a casino for the Muscogee
(Creek) Nation in Tulsa, Oklahoma. Also, Gold River, LLC, a
wholly-owned subsidiary of UWN, has entered into a development
agreement for a gaming resort in Pauma Valley, California for the
La Jolla Band of Luiseno Indians. The management agreement for La
Jolla is currently being finalized and is expected to be completed
in the near future. Nevada Gold recently signed a Memorandum of
Agreement with the Timbisha Shoshone Tribe to manage a proposed
casino in Hesperia, California. For more information, visit
http://www.nevadagold.com/ ./ CONTACT: Nevada Gold & Casinos,
Inc., Houston H. Thomas Winn or Christopher Domijan, 713-621-2245
or Integrated Corporate Relations Don Duffy 203-222-9013
DATASOURCE: Nevada Gold & Casinos, Inc. CONTACT: H. Thomas Winn
or Christopher Domijan, both of Nevada Gold & Casinos, Inc.,
+1-713-621-2245; or Don Duffy of Integrated Corporate Relations,
+1-203-222-9013 Web site: http://www.nevadagold.com/
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