Delaware
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1-32583
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13-3391527
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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4670 S. Fort Apache Road, Suite 190
Las Vegas, Nevada
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89147
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(Address of principal executive offices)
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(Zip Code)
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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2 |
Full House Resorts, Inc.
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Date: March 17, 2015
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/s/ Lewis A. Fanger
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Lewis A. Fanger
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Senior Vice President, Chief Financial Officer & Treasurer
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3 |
Exhibit No.
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Description
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99.1
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Press Release of the Company dated March 17, 2015*
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4 |
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In February 2015, the Company filed its federal income tax return for the 2014 tax year. Our return resulted in a tax loss during 2014, which we elected to carry back to taxable income earned during 2012 in accordance with IRS rules. This carryback resulted in an income tax receivable of $3.1 million as of December 31, 2014, which the Company expects to receive during 2015.
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The Company recently began preliminary discussions to refinance its first and second lien credit facilities, in part to extend debt maturities beyond their current maturity dates in June 2016 and April 2017, respectively.
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Net revenues at the Silver Slipper property decreased 3.8% in the fourth quarter of 2014 to $11.1 million from $11.6 million in the prior-year quarter. Adjusted EBITDA also declined to $1.5 million in the 2014 fourth quarter from $1.7 million in the 2013 period.
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Construction work continues on the hotel tower at Silver Slipper Casino. In December 2014, prior to the completion of interior work, we improved the design of the hotel’s top floor to provide suites for high-end guests of our property. In total, the hotel will feature 129 rooms, including these nine luxury suites. The prior design had 142 guest rooms, some of which were a couple of feet wider than the standard rooms and two of which were combined with an adjacent room, but no real suites that could be used for VIP casino customers. The total budget for the construction project, including capitalized interest, is approximately $20 million, of which $9.3 million was invested as of December 31, 2014. We expect to open a majority of the hotel in late-April, followed shortly thereafter by the remaining rooms and suites.
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At Rising Star, net revenues declined to $10.9 million in the 2014 fourth quarter from $14.7 million in the 2013 period. Adjusted EBITDA loss of $322,000 in the fourth quarter of 2014 compares to an Adjusted EBITDA loss of $155,000 in the 2013 fourth quarter. The property was adversely affected by new competition from casinos in Ohio, including new racinos that opened in May and August 2014 in Cincinnati and Dayton, Ohio, respectively.
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The Northern Nevada segment, which consists of Grand Lodge Casino and Stockman’s Casino, saw increases to both revenues and Adjusted EBITDA in the fourth quarter of 2014. Revenues rose to $4.7 million from $4.6 million in the 2013 period. Adjusted EBITDA increased 29.2% to $619,000 from $479,000 in the 2013 fourth quarter.
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Inclusive of a $602,000 write-off related to the Company’s cancelled 2014 stock offering, corporate expense increased to $1.5 million in the 2014 fourth quarter from $1.0 million in the prior-year period. Adjusting for the withdrawn stock offering costs, corporate expense improved by 6.9% from the 2013 fourth quarter due to a leaner corporate structure and the executive changes mentioned below.
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The Company recently made several changes to its management team and board of directors. In November 2014, Daniel R. Lee joined the Company as its Chief Executive Officer and as a member of its board of directors. Mr. Lee was previously the Chairman and Chief Executive Officer of Pinnacle Entertainment, a large regional casino company. In that role, he oversaw successful properties in each of the principal markets where Full House operates. During the 1990s, he was the Chief Financial Officer and Senior Vice President of Finance and Development of Mirage Resorts. In various roles, he has participated in the development of numerous major casinos throughout his career, all of which have been successful. These include L’Auberge and the recently-opened Golden Nugget in Lake Charles, Louisiana; River City and Lumiere Place in St. Louis, Missouri; Bellagio, Treasure Island and Monte Carlo in Las Vegas, Nevada; and The Borgata in Atlantic City, New Jersey.
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In connection with Mr. Lee’s hiring, Andre Hilliou and Mark Miller both resigned from the Company in November 2014. Mr. Hilliou had been the Company’s Chief Executive Officer, Mr. Miller was its Chief Operating Officer, and both individuals were on its board of directors. These management and board changes were related to a settlement agreement reached with a shareholder group to withdraw its proxy solicitation statement to nominate members to the board. Other items from the agreement include an increase in the size of the Company’s board of directors from five to its current size of eight members and reimbursement of up to $215,000 of the shareholder group’s proxy solicitation costs. The Company incurred approximately $518,000 for its own legal and advisory costs related to that proxy solicitation. Total board and management transition costs in the fourth quarter of 2014 were $2.7 million, including $1.5 million of severance, benefits, and related payments to Messrs. Hilliou and Miller and $280,000 of non-cash share compensation expense related to the accelerated vesting of previous stock grants.
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In late January 2015, Lewis Fanger joined the Company as Senior Vice President, Chief Financial Officer and Treasurer. Mr. Fanger replaced Deborah Pierce, who resigned from the Company in December 2014. Mr. Fanger joined the Company from Wynn Resorts, where he oversaw the investor relations functions for the company’s two publicly-traded stocks and assisted with its development efforts. Mr. Fanger also served in various roles at Pinnacle Entertainment, including Vice President of Finance, where he oversaw the treasury and investor relations functions of the company.
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For the Three Months
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For the Year
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|||||||||||||||
Ended December 31,
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Ended December 31,
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|||||||||||||||
2014
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2013
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2014
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2013
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Revenues
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Casino
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$ | 24,430 | $ | 28,376 | $ | 109,566 | $ | 131,581 | ||||||||
Food and Beverage
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4,476 | 4,958 | 20,083 | 22,700 | ||||||||||||
Hotel
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1,173 | 1,092 | 5,002 | 4,219 | ||||||||||||
Management Fees
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- | 555 | 1,066 | 1,678 | ||||||||||||
Other Operations
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797 | 1,002 | 3,535 | 4,182 | ||||||||||||
Gross Revenues
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30,876 | 35,983 | 139,252 | 164,360 | ||||||||||||
Less: Promotional Allowances
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(4,131 | ) | (4,528 | ) | (17,831 | ) | (19,633 | ) | ||||||||
Net Revenues
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26,745 | 31,455 | 121,421 | 144,727 | ||||||||||||
Operating Costs & Expenses
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Casino
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13,104 | 15,363 | 56,867 | 67,779 | ||||||||||||
Food and Beverage
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1,823 | 1,806 | 8,315 | 7,847 | ||||||||||||
Hotel
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177 | 199 | 713 | 656 | ||||||||||||
Other Operations
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286 | 369 | 1,283 | 1,583 | ||||||||||||
Project Development and Acquisition Costs
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(112 | ) | 6 | 296 | 67 | |||||||||||
Board and Executive Transition Costs
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2,741 | - | 2,741 | - | ||||||||||||
Selling, General and Administrative
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11,118 | 12,183 | 43,942 | 50,447 | ||||||||||||
Depreciation and Amortization
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2,019 | 2,482 | 9,183 | 9,388 | ||||||||||||
Loss on Disposal of Assets, Net
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366 | - | 372 | 24 | ||||||||||||
Impairment Charges
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- | - | 11,547 | 4,000 | ||||||||||||
31,522 | 32,408 | 135,259 | 141,791 | |||||||||||||
Operating Income (Loss)
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(4,777 | ) | (953 | ) | (13,838 | ) | 2,936 | |||||||||
Other Expense
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Interest Expense, Net
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(1,571 | ) | (1,653 | ) | (6,272 | ) | (7,268 | ) | ||||||||
Settlement Loss
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- | - | (1,700 | ) | - | |||||||||||
Other Expense, Net
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41 | (9 | ) | (23 | ) | 9 | ||||||||||
(1,530 | ) | (1,662 | ) | (7,995 | ) | (7,259 | ) | |||||||||
Loss Before Income Taxes
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(6,307 | ) | (2,615 | ) | (21,833 | ) | (4,323 | ) | ||||||||
Income Tax (Expense) Benefit
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(4,198 | ) | 270 | 988 | 361 | |||||||||||
Net Loss
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($ | 10,505 | ) | ($ | 2,345 | ) | ($ | 20,845 | ) | ($ | 3,962 | ) | ||||
Loss Per Share:
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Basic
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($ | 0.56 | ) | ($ | 0.13 | ) | ($ | 1.10 | ) | ($ | 0.21 | ) | ||||
Diluted
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($ | 0.56 | ) | ($ | 0.13 | ) | ($ | 1.10 | ) | ($ | 0.21 | ) | ||||
Weighted Average Common Shares Outstanding:
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Basic
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18,877 | 18,751 | 18,874 | 18,740 | ||||||||||||
Diluted
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18,877 | 18,751 | 18,874 | 18,740 |
For the Three Months
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For the Year
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Ended December 31,
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Ended December 31,
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2014
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2013
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2014
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2013
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Net Revenues
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Silver Slipper
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$ | 11,144 | $ | 11,585 | $ | 48,023 | $ | 51,629 | ||||||||
Rising Star
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10,922 | 14,734 | 51,110 | 69,147 | ||||||||||||
Northern Nevada
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4,679 | 4,581 | 21,222 | 22,273 | ||||||||||||
Corporate & Other
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- | 555 | 1,066 | 1,678 | ||||||||||||
Total Net Revenues
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26,745 | 31,455 | 121,421 | 144,727 | ||||||||||||
Adjusted EBITDA (a)
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Silver Slipper
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1,505 | 1,701 | 7,501 | 9,555 | ||||||||||||
Rising Star
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(322 | ) | (155 | ) | 2,174 | 5,425 | ||||||||||
Northern Nevada Casinos
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619 | 479 | 4,466 | 5,082 | ||||||||||||
Management Fees
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- | 550 | 1,066 | 1,678 | ||||||||||||
Corporate
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(1,536 | ) | (1,003 | ) | (4,658 | ) | (4,682 | ) | ||||||||
Total Adjusted EBITDA (a)
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266 | 1,572 | 10,549 | 17,058 | ||||||||||||
Depreciation and Amortization
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(2,019 | ) | (2,482 | ) | (9,183 | ) | (9,388 | ) | ||||||||
Impairment Charges
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- | - | (11,547 | ) | (4,000 | ) | ||||||||||
Loss on Disposal of Assets, Net
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(366 | ) | - | (372 | ) | (24 | ) | |||||||||
Board and Executive Transition Costs
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(2,741 | ) | - | (2,741 | ) | - | ||||||||||
Project Development and Acquisition Costs
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112 | (6 | ) | (296 | ) | (67 | ) | |||||||||
Stock Compensation
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(29 | ) | (37 | ) | (248 | ) | (643 | ) | ||||||||
Operating Income (Loss)
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(4,777 | ) | (953 | ) | (13,838 | ) | 2,936 | |||||||||
Interest Expense, Net of Capitalized Interest
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(1,571 | ) | (1,653 | ) | (6,272 | ) | (7,268 | ) | ||||||||
Settlement Loss and Other
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41 | (9 | ) | (1,723 | ) | 9 | ||||||||||
Income Tax (Expense) Benefit
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(4,198 | ) | 270 | 988 | 361 | |||||||||||
Net Loss
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($ | 10,505 | ) | ($ | 2,345 | ) | ($ | 20,845 | ) | ($ | 3,962 | ) |
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