Delaware | 1-32583 | 13-3391527 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
4670 S. Fort Apache Road, Suite 190 Las Vegas, Nevada | 89147 | |
(Address of principal executive offices) | (Zip Code) |
N/A | ||
(Former name or former address, if changed since last report) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
(d) | Exhibits | |
Exhibit 99.1 | Press Release of the Company dated August 15, 2016* |
Full House Resorts, Inc. | ||
Date: August 15, 2016 | /s/ Lewis A. Fanger | |
Lewis A. Fanger, Senior Vice President, Chief Financial Officer & Treasurer |
Exhibit No. | Description | |
99.1 | Press Release of the Company dated August 15, 2016* |
• | Net revenues at the Silver Slipper Casino and Hotel rose modestly in the second quarter of 2016 to $14.5 million from $14.4 million in the prior-year quarter. This was despite a table games hold percentage in this year's second quarter of 16.7%, versus 18.7% in the prior-year period and a 17.4% average over the past three years. Adjusted Property EBITDA declined to $2.4 million in the second quarter of 2016 from $2.7 million in the prior-year period. Results in the 2016 period were affected by that adverse hold in the quarter, as well as by heightened competition and promotional activities in the Gulf Coast region. Hotel occupancy improved throughout the quarter, rising to 93% in June 2016. The Company continues to analyze ways to improve its midweek business in both the hotel and the casino. |
• | At the Rising Star Casino Resort, net revenues improved to $12.1 million in the 2016 second quarter from $11.8 million in the second quarter of 2015. Adjusted Property EBITDA of $432,000 in this year's second quarter compares to $592,000 in the second quarter of 2015, reflecting promotional activities that did not yield the expected benefits in the recent quarter. |
• | On July 13, 2016, we received a conditional use permit from the Boone County Board of Adjustment for a ferry landing on land that the Company owns in Rabbit Hash, Kentucky. We intend to operate a 10-vehicle ferry boat to significantly shorten the distance for customers traveling from Kentucky to Rising Star, located across the river. Commencement of ferry boat operations remains subject to additional approvals, including from the Army Corps of Engineers and the U.S. Coast Guard. |
• | As discussed below, the Company acquired the assets and certain liabilities of Bronco Billy's Casino and Hotel on May 13, 2016. From the acquisition date through the end of the second quarter, Bronco Billy's had net revenues of $3.6 million and Adjusted Property EBITDA of $1.1 million. Its Adjusted Property EBITDA margin of 30.4% for the stub period is higher than the Company expects over the longer-term due to a graduated gaming tax structure in Colorado, which has lower gaming tax rates for lower revenue levels. Full House Resorts, as a new gaming licensee in the state, was taxed at these lower revenue levels from May 13 through June 30. On July 1, all gaming license holders in the state reset to the lower revenue levels due to the start of a new fiscal year for the State of Colorado. |
• | The Northern Nevada segment consists of the Grand Lodge and Stockman’s casinos. The Grand Lodge Casino was also adversely impacted by a table games hold percentage that was 12.1% in the recent quarter, versus 18.0% in the prior-year period and a three-year average of 15.8%. Stockman's Casino continued to benefit from casino layout and other physical improvements made in late 2015. Combined, Northern Nevada net revenues rose 2.3% to $4.7 million from $4.6 million in the 2015 second quarter. Adjusted Property EBITDA for the Northern Nevada segment was $624,000 in the second quarter of 2016 and $679,000 in the 2015 period. |
• | The Company has been working with its landlord, the Hyatt organization, and the well-known design firm of TAL Studios on a planned $5.0 million renovation of the Grand Lodge Casino over the coming year, $1.5 million of which will be funded by Full House Resorts. The renovation is being carefully planned for the off-season between mid-March and mid-June 2017 and will be implemented without closing the casino. Additionally, the Company has developed plans for the redesign of the main entrances and significant parking access improvements at Stockman's Casino. We expect to begin construction at Stockman's in the third quarter and complete the construction near the end of 2016. For both projects, the Company expects minimal construction disruption. |
• | On May 13, 2016, the Company completed its purchase of the assets and certain liabilities of Bronco Billy's Casino and Hotel in Cripple Creek, Colorado for $31.1 million, inclusive of an estimate for working capital. Targeting the approximately 700,000 people in the Colorado Springs metropolitan area, Bronco Billy's has approximately 803 slot and video poker machines, 13 table games, a 24-room hotel, a steakhouse, four casual dining outlets, and an outdoor amphitheater. It also controls adjacent land where the Company could eventually build a significantly larger hotel. |
• | On May 13, 2016, concurrent with its acquisition of Bronco Billy's, the Company successfully amended and restated its first and second lien credit facilities. The new first lien credit facility matures in May 2019, and the new second lien credit facility matures six months after the first lien facility's maturity date or in May 2022, whichever occurs sooner. In addition to extending the maturity dates, the interest rate on the second lien facility was reduced from 14.25% to 13.5%. |
• | In connection with the amended and restated second lien credit facility, the Company issued warrants to its second lien lenders representing 5% of the outstanding common equity of the Company, as determined on a fully-diluted basis. The warrants have an exercise price of $1.67 (the volume-weighted average trading price of the Company's common stock during a 60-day period bracketing the completion of the financing) and expire May 13, 2026. The warrants also provide the second lien lenders with certain redemption rights, pre-emptive rights to maintain their 5% ownership interest in the Company, piggyback registration rights, and mandatory registration rights after two years. The Company valued the warrants as of the closing date, May 13, 2016, and will continue to value the warrants at the end of every quarterly period. On June 30, 2016, due to the increase in the Company's stock price, the fair value of the warrants increased by $0.2 million. This change in fair value was reflected as part of "Other" non-operating expense on the consolidated statements of operations. |
• | The Company incurred approximately $485,000 of project development, acquisition, and other expenses during the second quarter of 2016. This amount primarily consists of costs related to the Company's acquisition of Bronco Billy's Casino and Hotel. |
FULL HOUSE RESORTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues | |||||||||||||||
Casino | $ | 31,307 | $ | 27,442 | $ | 60,437 | $ | 53,797 | |||||||
Food and beverage | 6,926 | 6,313 | 13,154 | 12,162 | |||||||||||
Hotel | 2,161 | 1,537 | 4,126 | 2,816 | |||||||||||
Other operations | 1,105 | 1,045 | 1,845 | 1,682 | |||||||||||
Gross revenues | 41,499 | 36,337 | 79,562 | 70,457 | |||||||||||
Less promotional allowances | (6,652 | ) | (5,611 | ) | (12,708 | ) | (10,647 | ) | |||||||
Net revenues | 34,847 | 30,726 | 66,854 | 59,810 | |||||||||||
Operating costs and expenses | |||||||||||||||
Casino | 16,074 | 14,237 | 30,759 | 27,969 | |||||||||||
Food and beverage | 2,308 | 2,250 | 4,274 | 4,350 | |||||||||||
Hotel | 268 | 238 | 471 | 430 | |||||||||||
Other operations | 459 | 382 | 762 | 650 | |||||||||||
Selling, general and administrative | 12,502 | 10,419 | 23,842 | 21,193 | |||||||||||
Project development and acquisition costs | 485 | 123 | 772 | 164 | |||||||||||
Depreciation and amortization | 1,899 | 2,030 | 3,591 | 4,022 | |||||||||||
33,995 | 29,679 | 64,471 | 58,778 | ||||||||||||
Operating income | 852 | 1,047 | 2,383 | 1,032 | |||||||||||
Other expense, net | |||||||||||||||
Interest expense, net of capitalized interest | (2,230 | ) | (1,523 | ) | (3,992 | ) | (3,047 | ) | |||||||
Debt modification costs | (601 | ) | — | (601 | ) | — | |||||||||
Adjustment to fair value of warrants and other | (241 | ) | — | (241 | ) | 12 | |||||||||
(3,072 | ) | (1,523 | ) | (4,834 | ) | (3,035 | ) | ||||||||
Loss before income taxes | (2,220 | ) | (476 | ) | (2,451 | ) | (2,003 | ) | |||||||
Provision (benefit) for income taxes | 180 | (49 | ) | 280 | 179 | ||||||||||
Net loss | $ | (2,400 | ) | $ | (427 | ) | $ | (2,731 | ) | $ | (2,182 | ) | |||
Basic and diluted loss per share | $ | (0.13 | ) | $ | (0.02 | ) | $ | (0.14 | ) | $ | (0.12 | ) | |||
Basic and diluted weighted average number of common shares outstanding | 18,997 | 18,934 | 18,983 | 18,906 |
Three months ended | Six months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net Revenues | |||||||||||||||
Silver Slipper Casino and Hotel | $ | 14,494 | $ | 14,350 | $ | 29,339 | $ | 28,074 | |||||||
Rising Star Casino Resort | 12,053 | 11,766 | 24,299 | 22,881 | |||||||||||
Bronco Billy's Casino and Hotel | 3,584 | — | 3,584 | — | |||||||||||
Northern Nevada Casinos | 4,716 | 4,610 | 9,632 | 8,855 | |||||||||||
$ | 34,847 | $ | 30,726 | $ | 66,854 | $ | 59,810 | ||||||||
Adjusted EBITDA | |||||||||||||||
Silver Slipper Casino and Hotel | $ | 2,369 | $ | 2,665 | $ | 5,030 | $ | 5,362 | |||||||
Rising Star Casino Resort | 432 | 592 | 1,733 | 797 | |||||||||||
Bronco Billy's Casino and Hotel | 1,088 | — | 1,088 | — | |||||||||||
Northern Nevada Casinos | 624 | 679 | 1,390 | 1,042 | |||||||||||
Corporate | (1,113 | ) | (995 | ) | (2,275 | ) | (2,121 | ) | |||||||
3,400 | 2,941 | 6,966 | 5,080 | ||||||||||||
Depreciation and amortization | (1,899 | ) | (2,030 | ) | (3,591 | ) | (4,022 | ) | |||||||
Write-offs, recoveries and asset disposals | — | 450 | — | 366 | |||||||||||
Pre-opening | — | (75 | ) | — | (113 | ) | |||||||||
Project development and acquisition costs | (485 | ) | (48 | ) | (772 | ) | (51 | ) | |||||||
Stock compensation | (164 | ) | (191 | ) | (220 | ) | (228 | ) | |||||||
Operating income | 852 | 1,047 | 2,383 | 1,032 | |||||||||||
Non-operating expense, net | |||||||||||||||
Interest expense, net of capitalized interest | (2,230 | ) | (1,523 | ) | (3,992 | ) | (3,047 | ) | |||||||
Debt modification costs | (601 | ) | — | (601 | ) | — | |||||||||
Adjustment to fair value of warrants and other | (241 | ) | — | (241 | ) | 12 | |||||||||
(3,072 | ) | (1,523 | ) | (4,834 | ) | (3,035 | ) | ||||||||
Loss before income taxes | (2,220 | ) | (476 | ) | (2,451 | ) | (2,003 | ) | |||||||
Provision (benefit) for income taxes | 180 | (49 | ) | 280 | 179 | ||||||||||
Net loss | $ | (2,400 | ) | $ | (427 | ) | $ | (2,731 | ) | $ | (2,182 | ) |
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