Regional casino operator Full House Resorts said the Las Vegas-based company hasn’t seen any impacts from the coronavirus. However, CEO Dan Lee cautioned events could change at any time.
At the outset of the company’s fourth-quarter conference call Thursday, Lee said Full House’s five properties didn’t experience a drop-off in business during January or February over concerns from the virus.
Lee referenced the massive stock market sell-off and canceled convention business in many destination gaming markets. But those events had little impact at Full House’s casinos, which rely on more local-oriented customer traffic.
“Our properties have very little meetings and convention space,” Lee said. “Very few of our customers fly to get there. It’s much easier to come by car. But I’m not sure if people will still stay home anyway.”
The company said it was implementing additional cleaning and disinfection procedures at its properties. It also began testing employee temperatures with infrared monitors as they arrive for work. Any employee registering greater than 100°F is told to return home and contact a health care provider.
Lee said on the first day of screening yesterday, not one employee registered a fever.
Lee, a former gaming analyst, and CFO and CEO of much larger casino companies addressed Full House’s falling stock price. The company was down another 38.33% Thursday to close at $1.07 on the Nasdaq. The stock price actually fell to 99 cents per share during the market’s worst day since 1987.
He likened the current events to the 1987 stock market crash, the terrorist attacks of 9/11, the 2005 impact of Hurricane Katrina, and the 2008 recession, all of which caused tremendous declines in companies’ market capitalization figures.
Full House shares have fallen roughly 75% from its 52-week high.
“We’re determined to be a survivor,” Lee said. “We’re going to come out of this just fine. We just want to keep our customers and employees said and weather the storm.”
Full House operates five casinos in four states: Silver Slipper on the Mississippi Gulf Coast, Bronco Billy’s in Cripple Creek, Colorado, Rising Star in Indiana, and Stockman’s Casino in Fallon and the Grand Lodge Casino in Lake Tahoe, both in Nevada.
In the quarter that ended Dec. 31, Full House net revenues declined 4.1% to $39 million. The company’s net loss was reduced to $4.1 million from $10 million in the same quarter of 2018. The net loss in both periods was affected by the accounting for the fair market value of outstanding warrants.
Cash flow in the fourth quarter was $2.3 million versus $3.8 million a year earlier. The decline reflected casino downtime during the installation of new slot systems at Bronco Billy’s and Rising Star, as well as a temporary increase in marketing expenses at Rising Star.
For the full year, Full House grew net revenues 0.9% to $165.4 million. However, the net loss in 2019 was $5.8 million, an increase from $4.4 million in 2018.
Lee credited the Silver Slipper with having “the best year in its 13-year history.” The casino increased revenues by 5.6% to $73.2 million.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
