Full House Resorts Announces Three Month and Full Year Results for the Period Ended December 31, 201

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Full House Resorts Announces Three Month and Full Year Results for the Period Ended December 31, 2012

LAS VEGAS--(BUSINESS WIRE)-- Full House Resorts (NAS: FLL) today announced results for the full year ended December 31, 2012 with net income of $27.8 million or $1.49 per common share compared with net income of $2.3 million or $0.13 per common share for the same period in 2011. Net loss attributable to the Company for the three months ended December 31, 2012 was $0.8 million, or $0.04 per common share, compared to net income of $0.5 million, or $0.03 per common share, in the prior-year period. Excluding acquisition-related costs of $1.4 million and severance expenses of approximately $0.3 million in the fourth quarter of 2012, net income attributable to the Company per common share in the fourth quarter of 2012 would have been $0.02.


Fourth Quarter 2012 Highlights and Subsequent Events

  • Adjusted EBITDA, as defined below, for the fourth quarter of 2012 was $3.1 million versus $4.8 million in the prior-year period. Prior-year period adjusted EBITDA results include $2.4 million from the Company's FireKeepers Casino management agreement ("GEM"), which was sold at the end of March 2012; excluding GEM, adjusted EBITDA in the fourth quarter of 2011 would have been $2.4 million.
  • On October 1, 2012, the Company closed on the acquisition of the Silver Slipper Casino in Hancock County, Mississippi. For the fourth quarter 2012, the Company recorded Silver Slipper Casino revenue of $12.9 million and adjusted EBITDA for the same quarter was $1.9 million.
  • On February 26, 2013, the Company successfully amended the Silver Slipper Casino land lease to extend its term to 2058 and extend the Option to purchase to 2027, providing additional flexibility to the Company.
  • At its Rising Star Casino Resort for the fourth quarter 2012, the Company recorded revenue of $19.1 million compared to revenue of $21.7 million in the prior-year quarter. Rising Star adjusted EBITDA for the fourth quarter 2012 was $1.3 million versus $2.2 million in the prior-year quarter due to increased competition from Ohio and severe weather in December 2012 compared to December 2011.
  • Northern Nevada casino revenue for the fourth quarter of 2012 was $4.8 million compared to $5.0 million in the prior-year period. Adjusted EBITDA for the fourth quarter 2012 was $0.6 million, an increase from $0.5 million in the prior-year period.
  • As of December 31, 2012, Full House Resorts had $20.6 million in cash and $68.8 million in outstanding debt on its balance sheet.

"Our fourth quarter was challenging on many levels as we were impacted by increased competition, difficult weather conditions compared with last year and continued consumer weakness," said Andre Hilliou, Chairman and Chief Executive Officer of Full House. "Despite these challenges, we were pleased with our overall operations. We completed our first quarter of operations at the Silver Slipper and thus far we are impressed with the team there. Although results for the quarter were below our internal expectations, due to a weak overall economic environment and increased promotional activity by our Gulf Coast competitors, we are working with our Silver Slipper team to implement operating efficiencies and improve performance in the near-term. We are excited about the new hotel at Rising Star and expect it to greatly enhance the overall profitability of the property when it is expected to open during Q4 this year. Further, we continue to evaluate the opportunity to put a much-needed hotel at our Silver Slipper property and hope to have some news on that in the near future."

Fourth Quarter 2012 Results

For the quarter ended December 31, 2012, the Company reported casino, food and beverage, and other revenue (other than management fees) of $36.8 million, up from $26.7 million in the prior-year period, primarily due to the addition of the Silver Slipper Casino on October 1, 2012 and partially offset by a $2.6 million decline in revenue from the Rising Star Casino Resort.

Last year's fourth quarter included approximately $5.0 million in management fees from GEM, which the Company sold in March 2012, resulting in no contribution to revenue or income from GEM in the fourth quarter of 2012.

Operating expenses for the fourth quarter 2012 were $38.6 million compared to $27.6 million in the prior-year period, primarily due to the addition of the Silver Slipper Casino, acquisition-related costs of $1.4 million and severance costs of $0.3 million. The Company also recorded $0.3 million of stock compensation expense during the fourth quarter of 2012 and the prior-year period.

Adjusted EBITDA, as defined below, was $3.1 million for the fourth quarter of 2012 versus $4.8 million in the prior-year period; excluding GEM, adjusted EBITDA in the prior-year period would have been $2.4 million.

Net loss for the fourth quarter 2012 was $0.8 million, or $0.04 per share, compared to net income of $0.5 million, or $0.03 per common share, in the prior-year period. The decline in the fourth quarter 2012 was primarily due to lack of contributions from GEM due to its sale in March 2012 and acquisition-related costs, partially offset by the addition of operating profits from the Silver Slipper Casino. Excluding Silver Slipper Casino acquisition-related costs of $1.4 million and severance expenses of approximately $0.3 million in the fourth quarter of 2012, net income attributable to the Company per common share in the fourth quarter of 2012 would have been $0.02.

Full Year 2012 Results

For the full year ended December 31, 2012, the Company reported casino, food and beverage, and other revenue (other than management fees) of $121.6 million, an increase from $81.3 million in the prior year, primarily due to a full year contribution from Rising Star Casino Resort and the Grand Lodge Casino and the addition of the Silver Slipper on October 1, 2012. In addition, during the full year ended December 31, 2012, the Company recorded GEM management fees of $5.3 million for FireKeepers Casino, compared to management fees of $23.3 million for the prior year. The Company also recorded equity in net income in the prior year from its Delaware management agreement, which expired in August 2011, of $3.3 million.

Operating expenses for the full year ended December 31, 2012 were $120.3 million compared to $84.7 million in the prior year, primarily due to the addition of the Rising Star Casino Resort, Grand Lodge Casino and Silver Slipper Casino. The Company also recorded $1.2 million of stock compensation expense for the full year ended December 31, 2012, compared to $0.7 million in the prior year.

Operating income for the full year ended December 31, 2012 was $49.6 million, compared to operating income of $19.2 million in the prior year, due to a $41.2 million gain on sale of joint venture related to the sale of the Company's interest in GEM. Excluding the gain on sale, operating income for the full year ended December 31, 2012 was $8.4 million. Adjusted EBITDA, as defined below, was $15.9 million for the full year ended December 31, 2012, versus $21.2 million in the prior year.

The Company reported net income attributable to the Company per common share of $1.49 and $0.13 for the full years ended December 31, 2012 and 2011, respectively. Excluding the $41.2 million gain on sale of joint venture, a $1.7 million pre-tax loss on debt extinguishment, $1.8 million of Silver Slipper Casino transaction-related costs, $0.3 million of severance costs for the full year ended December 31, 2012, $4.9 million in non-cash impairment charges, and $0.7 million in acquisition costs and other one-time expenses for the full year ended December 31, 2011, net income attributable to the Company per common share would have been $0.19 and $0.31 for the full years ended December 31, 2012 and 2011, respectively.

Liquidity and Capital Resources

As of December 31, 2012, Full House had $20.6 million in cash and $68.8 million in outstanding debt on its balance sheet.

Conference Call Information

The Company will host a conference call and webcast today at 11:00 AM EST. Both the call and webcast are open to the general public.

The conference call can be accessed live over the phone by dialing 888-244-2414 or for international callers by dialing 1-913-312-0733. A replay will be available two hours after the call and can be accessed by dialing 877-870-5176 or for international callers by dialing 1-858-384-5517; the passcode is 6452562. The replay will be available until Wednesday, March 13, 2013. The conference call can also be accessed live by webcast from the Company's website at www.fullhouseresorts.com under the investor relations section.

 

Selected unaudited Statements of Operations data for the three months ended
December 31 (in thousands),

         
Casino Operations
2012    Nevada Midwest Gulf Coast  

Development/

Management

  Corporate  Consolidated
Revenues$4,805 $19,147 $12,861$646$-$37,459
Selling, general & administrative expense1,6314,6514,669-1,88812,839
Depreciation & amortization2027331,211-22,148
Operating gains (losses)*---(11)-(11)
Operating income (loss)388555663(790)(1,949)(1,133)
Net income (loss) attributable to the Company256245456185(1,973)(831)
 
Casino Operations
2011    Nevada Midwest Gulf Coast  

Development/

Management

  Corporate  Consolidated
Revenues$4,971$21,706$-$5,843$-$32,520
Selling, general & administrative expense1,6995,326-1641,3508,539
Depreciation & amortization3271,092-59332,015
Operating gains------
Operating income (loss)1751,091-4,356(690)4,932
Net income (loss) attributable to the Company11637-1,534(1,208)479
 
 

Selected unaudited Statements of Operations data for the full year ended
December 31 (in thousands),

     
Casino Operations
2012   Nevada Midwest Gulf Coast 

Development/

Management

 Corporate Consolidated
Revenues$22,313 $86,291 $12,861$7,295$-$128,760
Selling, general & administrative expense6,29219,3984,6701366,50737,003
Depreciation & amortization9094,1631,21159296,884
Operating gains*---41,189-41,189
Operating income (loss)3,8515,74666346,196(6,818)49,638
Net income (loss) attributable to the Company2,5392,15845630,108(7,427)27,834
 
Casino Operations
2011   Nevada Midwest Gulf Coast 

Development/

Management

 Corporate Consolidated
Revenues$12,313$68,957$-$24,186$5$105,461
Selling, general & administrative expense3,54116,378-6104,90025,429
Depreciation & amortization1,0513,550-2,372287,001
Operating gains (losses)*(4,500)--2,878-(1,622)
Operating income (loss)(3,433)4,240-23,556(5,190)19,173
Net income (loss) attributable to the Company(2,266)1,250-9,079(5,720)2,343
 
*Operating gains (losses) include impairment losses.
 
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Reconciliation of adjusted EBITDA before unrealized gains/losses on notes receivable from tribal
governments, and other items for the three months ended December 31 (in thousands),

          

(in thousands)

 

Net of Non-Controlling Interest

   2012

 

Casino Operations

Nevada

 

Casino Operations

Midwest

 

Casino Operations

Gulf Coast

 

Development/

Management

 Corporate ConsolidatedGEM 50% 

Development/

Management

 Consolidated
 
Operating income (loss)$388$555$663$(790)$(1,949)$(1,133)$-$-$(790)$(1,133)
 
Add Back:
Stock Compensation----310310---310
Severance----330330---330
Silver Slipper acquisition costs expensed---1,425-1,425--1,4251,425
Depreciation and amortization2027331,211-22,148---2,148
Gain (Loss) on sale of joint venture -  -   -  11   -