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LAS VEGAS, Nov. 07, 2022 (GLOBE NEWSWIRE) -- Full House Resorts, Inc. (Nasdaq: FLL) today announced results for the third quarter ended September 30, 2022, including a construction update for its two major new casinos.
“We continue to make progress on our two new casinos, with the first of them on the verge of opening,” said Daniel R. Lee, President and Chief Executive Officer of Full House Resorts. “In Waukegan, Illinois, we are installing décor and are preparing for the installation of slot machines this week. We expect to have our entire slot floor installed and ready for testing before the end of November. The testing of the slot machines, surveillance systems and other technology is a complicated process. Imagine connecting 1,000 slot machines, from several different manufacturers, through many miles of low-voltage wiring to central servers — and ensuring that every machine operates flawlessly. This process usually takes several weeks and is the principal uncertainty in our opening date. Our hiring process is ramping up, with approximately 400 outstanding offers already made. As with all new casino openings, we have an extensive checklist to complete prior to welcoming our first customers. Therefore, while the Company expects to open the casino within the next three months, the precise opening date is still uncertain. When The Temporary opens, it will be the only casino in Lake County, Illinois, which has a population of approximately 700,000 and ranks as one of the wealthiest counties in the U.S.
“At our Chamonix project in Cripple Creek, Colorado, construction reached its ‘topping off’ milestone back in September,” continued Mr. Lee. “Chamonix’s construction continues at a meaningful pace, with glass now being installed on the façade and drywall within the building. When complete, Chamonix will be one of the larger casino hotels in Colorado and the largest and most luxurious casino hotel in Cripple Creek, which is the primary casino destination for the Colorado Springs market. Cripple Creek is approximately one hour from the roughly one million people who live in the Colorado Springs metropolitan area and two hours from the approximately four million people who reside in the Denver area.”
For project renderings and live construction webcams, please visit www.AmericanPlace.com and www.ChamonixCO.com.
“Our anticipated investments in both of these growth projects remain within budgets,” added Lewis Fanger, the Company’s Chief Financial Officer. “Importantly in these difficult capital markets, we remain confident that our cash balances, cash flows from operations, and credit line availability will be sufficient to complete both The Temporary and Chamonix. At September 30, 2022, we had $241.8 million of cash, including $156.1 million of cash that is reserved for the completion of Chamonix. We also have a $40 million credit facility, which remains undrawn.”
On a consolidated basis, revenues in the third quarter of 2022 were $41.4 million, a decrease from $47.2 million in the prior-year period. Net loss for the third quarter of 2022 was $3.6 million, or a loss of $0.10 per diluted common share, which includes $2.4 million of preopening and development costs. In the prior-year period, net income was $4.6 million, or $0.13 per diluted common share, including $335,000 of preopening and development costs. Adjusted EBITDA(a) in the 2022 third quarter was $7.8 million versus $13.6 million in the prior-year period. The change reflects timing differences for Rising Star’s $2.1 million sale of “free play” (which occurred in the third quarter of the prior year, but in the second quarter of 2022); the wide distribution of government stimulus checks in the prior year; construction disruptions at Bronco Billy’s; the launch of competing online sports wagering in Louisiana; and increases in certain expenses, notably for property insurance and food costs.
Third Quarter Highlights and Subsequent Events
Liquidity and Capital Resources
As of September 30, 2022, the Company had $241.8 million in cash and cash equivalents (including $156.1 million of cash reserved to complete the construction of Chamonix) and $410.0 million in outstanding senior secured notes due 2028. Additionally, there were no drawn amounts under the Company’s $40 million credit facility.
Conference Call Information
The Company will host a conference call for investors today, November 7, 2022, at 4:30 p.m. ET (1:30 p.m. PT) to discuss its 2022 third 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 (323) 794-2551.
A replay of the conference call will be available shortly after the conclusion of the call through November 21, 2022. To access the replay, please visit www.fullhouseresorts.com. Investors can also access the replay by dialing (412) 317-6671 and using the passcode 6821000.
(a) Reconciliation of Non-GAAP Financial Measure
The 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. 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 SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Revenues | |||||||||||||||
| Casino | $ | 29,721 | $ | 32,506 | $ | 88,293 | $ | 99,217 | |||||||
| Food and beverage | 6,811 | 7,092 | 20,255 | 20,633 | |||||||||||
| Hotel | 2,490 | 2,469 | 7,076 | 7,190 | |||||||||||
| Other operations, including contracted sports wagering | 2,371 | 5,171 | 11,575 | 9,848 | |||||||||||
| 41,393 | 47,238 | 127,199 | 136,888 | ||||||||||||
| Operating costs and expenses | |||||||||||||||
| Casino | 10,292 | 11,261 | 30,273 | 32,687 | |||||||||||
| Food and beverage | 6,814 | 6,199 | 20,134 | 17,487 | |||||||||||
| Hotel | 1,256 | 1,136 | 3,524 | 3,332 | |||||||||||
| Other operations | 587 | 576 | 1,594 | 1,522 | |||||||||||
| Selling, general and administrative | 15,218 | 14,791 | 44,795 | 43,211 | |||||||||||
| Project development costs, net | (149 | ) | 318 | 33 | 491 | ||||||||||
| Preopening costs | 2,594 | 17 | 4,914 | 17 | |||||||||||
| Depreciation and amortization | 2,386 | 1,819 | 6,012 | 5,448 | |||||||||||
| Loss on disposal of assets, net | — | 2 | 3 | 674 | |||||||||||
| 38,998 | 36,119 | 111,282 | 104,869 | ||||||||||||
| Operating income | 2,395 | 11,119 | 15,917 | 32,019 | |||||||||||
| Other expense | |||||||||||||||
| Interest expense, net | (5,838 | ) | (6,405 | ) | (19,225 | ) | (17,531 | ) | |||||||
| Loss on modification and extinguishment of debt, net | (105 | ) | — | (4,530 | ) | (6,104 | ) | ||||||||
| Adjustment to fair value of warrants | — | — | — | (1,347 | ) | ||||||||||
| (5,943 | ) | (6,405 | ) | (23,755 | ) | (24,982 | ) | ||||||||
| (Loss) income before income taxes | (3,548 | ) | 4,714 | (7,838 | ) | 7,037 | |||||||||
| Income tax provision (benefit) | 29 | 95 | (16 | ) | 379 | ||||||||||
| Net (loss) income | $ | (3,577 | ) | $ | 4,619 | $ | (7,822 | ) | $ | 6,658 | |||||
| Basic (loss) earnings per share | $ | (0.10 | ) | $ | 0.13 | $ | (0.23 | ) | $ | 0.21 | |||||
| Diluted (loss) earnings per share | $ | (0.10 | ) | $ | 0.13 | $ | (0.23 | ) | $ | 0.19 | |||||
| Basic weighted average number of common shares outstanding | 34,390 | 34,227 | 34,339 | 31,939 | |||||||||||
| Diluted weighted average number of common shares outstanding | 34,479 | 36,636 | 34,399 | 34,339 | |||||||||||
Full House Resorts, Inc.
Supplemental Information
Segment Revenues, Adjusted Segment EBITDA and Adjusted EBITDA
(In thousands, Unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Revenues | |||||||||||||||
| Mississippi | $ | 19,981 | $ | 21,538 | $ | 62,432 | $ | 68,133 | |||||||
| Indiana | 9,639 | 12,586 | 30,069 | 31,753 | |||||||||||
| Colorado | 4,385 | 6,340 | 12,732 | 18,626 | |||||||||||
| Nevada | 6,290 | 5,132 | 15,868 | 14,216 | |||||||||||
| Contracted Sports Wagering | 1,098 | 1,642 | 6,098 | 4,160 | |||||||||||
| $ | 41,393 | $ | 47,238 | $ | 127,199 | $ | 136,888 | ||||||||
| Adjusted Segment EBITDA(1) and Adjusted EBITDA | |||||||||||||||
| Mississippi | $ | 4,235 | $ | 6,485 | $ | 15,442 | $ | 23,097 | |||||||
| Indiana | 1,343 | 3,816 | 6,374 | 7,615 | |||||||||||
| Colorado | 36 | 1,543 | (49 | ) | 5,092 | ||||||||||
| Nevada | 2,280 | 1,537 | 4,557 | 4,173 | |||||||||||
| Contracted Sports Wagering | 1,083 | 1,645 | 6,047 | 4,122 | |||||||||||
| Adjusted Segment EBITDA | 8,977 | 15,026 | 32,371 | 44,099 | |||||||||||
| Corporate | (1,219 | ) | (1,427 | ) | (4,130 | ) | (4,803 | ) | |||||||
| Adjusted EBITDA | $ | 7,758 | $ | 13,599 | $ | 28,241 | $ | 39,296 | |||||||
__________
| (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 Information
Reconciliation of Net Income (Loss) and Operating Income to Adjusted EBITDA
(In Thousands, Unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||
| September 30, | September 30, | ||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||
| Net (loss) income | $ | (3,577 | ) | $ | 4,619 | $ | (7,822 | ) | $ | 6,658 | |||
| Income tax provision (benefit) | 29 | 95 | (16 | ) | 379 | ||||||||
| Interest expense, net | 5,838 | 6,405 | 19,225 | 17,531 | |||||||||
| Loss on modification and extinguishment of debt, net | 105 | — | 4,530 | 6,104 | |||||||||
| Adjustment to fair value of warrants | — | — | — | 1,347 | |||||||||
| Operating income | 2,395 | 11,119 | 15,917 | 32,019 | |||||||||
| Project development costs, net | (149 | ) | 318 | 33 | 491 | ||||||||
| Preopening costs | 2,594 | 17 | 4,914 | 17 | |||||||||
| Depreciation and amortization | 2,386 | 1,819 | 6,012 | 5,448 | |||||||||
| Loss on disposal of assets, net | — | 2 | 3 | 674 | |||||||||
| Stock-based compensation | 532 | 324 | 1,362 | 647 | |||||||||
| Adjusted EBITDA | $ | 7,758 | $ | 13,599 | $ | 28,241 | $ | 39,296 | |||||
Full House Resorts, Inc.
Supplemental Information
Reconciliation of Operating Income (Loss) to Adjusted Segment EBITDA and Adjusted EBITDA
(In Thousands, Unaudited)
| Three Months Ended September 30, 2022 | ||||||||||||||||||||
| Adjusted | ||||||||||||||||||||
| Segment | ||||||||||||||||||||
| Operating | Depreciation | Project | Stock- | EBITDA and | ||||||||||||||||
| Income | and | Development | Preopening | Based | Adjusted | |||||||||||||||
| (Loss) | Amortization | Costs | Costs | Compensation | EBITDA | |||||||||||||||
| Reporting segments | ||||||||||||||||||||
| Mississippi | $ | 3,546 | $ | 689 | $ | — | $ | — | $ | — | $ | 4,235 | ||||||||
| Indiana | 753 | 590 | — | — | — | 1,343 | ||||||||||||||
| Colorado | (682 | ) | 361 | — | 357 | — | 36 | |||||||||||||
| Nevada | 1,820 | 460 | — | — | — | 2,280 | ||||||||||||||
| Contracted Sports Wagering | 1,083 | — | — | — | — | 1,083 | ||||||||||||||
| 6,520 | 2,100 | — | 357 | — | 8,977 | |||||||||||||||
| Other operations | ||||||||||||||||||||
| Corporate | (4,125 | ) | 286 | (149 | ) | 2,237 | 532 | (1,219 | ) | |||||||||||
| $ | 2,395 | $ | 2,386 | $ | (149 | ) | $ | 2,594 | $ | 532 | $ | 7,758 | ||||||||
| Three Months Ended September 30, 2021 | ||||||||||||||||||||||
| 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 | ||||||||||||||||||||||
| Mississippi | $ | 5,794 | $ | 690 | $ | 1 | $ | — | $ | — | $ | — | $ | 6,485 | ||||||||
| Indiana | 3,247 | 569 | — | — | — | — | 3,816 | |||||||||||||||
| Colorado | 1,138 | 387 | 1 | — | 17 | — | 1,543 | |||||||||||||||
| Nevada | 1,402 | 135 | — | — | — | — | 1,537 | |||||||||||||||
| Contracted Sports Wagering | 1,645 | — | — | — | — | — | 1,645 | |||||||||||||||
| 13,226 | 1,781 | 2 | — | 17 | — | 15,026 | ||||||||||||||||
| Other operations | ||||||||||||||||||||||
| Corporate | (2,107 | ) | 38 | — | 318 | — | 324 | (1,427 | ) | |||||||||||||
| $ | 11,119 | $ | 1,819 | $ | 2 | $ | 318 | $ | 17 | $ | 324 | $ | 13,599 | |||||||||
Full House Resorts, Inc.
Supplemental Information
Reconciliation of Operating Income (Loss) to Adjusted Segment EBITDA and Adjusted EBITDA
(In Thousands, Unaudited)
| Nine Months Ended September 30, 2022 | |||||||||||||||||||||||
| Adjusted | |||||||||||||||||||||||
| Segment | |||||||||||||||||||||||
| Operating | Depreciation | Loss (gain) on | Project | Stock- | EBITDA and | ||||||||||||||||||
| Income | and | Disposal | Development | Preopening | Based | Adjusted | |||||||||||||||||
| (Loss) | Amortization | of Assets | Costs | Costs | Compensation | EBITDA | |||||||||||||||||
| Reporting segments | |||||||||||||||||||||||
| Mississippi | $ | 13,359 | $ | 2,075 | $ | 8 | $ | — | $ | — | $ | — | $ | 15,442 | |||||||||
| Indiana | 4,618 | 1,756 | — | — | — | — | 6,374 | ||||||||||||||||
| Colorado | (2,126 | ) | 1,057 | (5 | ) | — | 1,025 | — | (49 | ) | |||||||||||||
| Nevada | 3,781 | 776 | — | — | — | — | 4,557 | ||||||||||||||||
| Contracted Sports Wagering | 6,047 | — | — | — | — | — | 6,047 | ||||||||||||||||
| 25,679 | 5,664 | 3 | — | 1,025 | — | 32,371 | |||||||||||||||||
| Other operations | |||||||||||||||||||||||
| Corporate | (9,762 | ) | 348 | — | 33 | 3,889 | 1,362 | (4,130 | ) | ||||||||||||||
| $ | 15,917 | $ | 6,012 | $ | 3 | $ | 33 | $ | 4,914 | $ | 1,362 | $ | 28,241 | ||||||||||
| Nine Months Ended September 30, 2021 | ||||||||||||||||||||||
| 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 | ||||||||||||||||||||||
| Mississippi | $ | 20,484 | $ | 2,024 | $ | 589 | $ | — | $ | — | $ | — | $ | 23,097 | ||||||||
| Indiana | 5,837 | 1,778 | — | — | — | — | 7,615 | |||||||||||||||
| Colorado | 3,871 | 1,119 | 85 | — | 17 | — | 5,092 | |||||||||||||||
| Nevada | 3,761 | 412 | — | — | — | — | 4,173 | |||||||||||||||
| Contracted Sports Wagering | 4,122 | — | — | — | — | — | 4,122 | |||||||||||||||
| 38,075 | 5,333 | 674 | — | 17 | — | 44,099 | ||||||||||||||||
| Other operations | ||||||||||||||||||||||
| Corporate | (6,056 | ) | 115 | — | 491 | — | 647 | (4,803 | ) | |||||||||||||
| $ | 32,019 | $ | 5,448 | $ | 674 | $ | 491 | $ | 17 | $ | 647 | $ | 39,296 | |||||||||
Cautionary Note Regarding Forward-looking Statements
This 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; our expectations regarding our ability to receive regulatory approvals for American Place and The Temporary; and our expectations regarding our ability to replace any terminated sports wagering contracts in Colorado and Indiana, our ability to operate sports wagering contracts ourselves and the success 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 prices 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; the potential for additional adverse impacts from the COVID-19 pandemic, including the emergence of variants, on our business, construction projects, indebtedness, financial condition and operating results; potential actions by government officials at the federal, state or local level in connection with the COVID-19 pandemic, including, without limitation, additional shutdowns, travel restrictions, social distancing measures or shelter-in-place orders; our ability to effectively manage and control expenses as a result of the pandemic; our ability to complete Chamonix, American Place, and The Temporary on-time and on-budget; various approvals that are required to lease the primary American Place site from the City of Waukegan, including approvals from the Illinois Gaming Board; 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 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 The Temporary at American Place, a new casino in Waukegan, Illinois; and Chamonix Casino Hotel, a new luxury hotel and casino 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