Debt refinancing and operating efficiencies helped Full House Resorts shrink its net loss and increase revenue for the third quarter. Earnings per share missed Wall Street forecasts, but revenue topped them.
In a statement, Las Vegas-based Full House, which has properties in Nevada, Mississippi, Colorado and Indiana, said its net loss was $1.6 million, or 6 cents per share, for the three months ended March 31, compared with a net loss of $4.3 million, or 20 cents per diluted share, a year earlier. Analysts polled by Yahoo Finance had expected break-even earnings per share.
Full House said accounting for the fair market value of outstanding warrants and a 2018 debt-refinancing charge figured in the net losses in the latest and year-earlier quarters.
Adjusted earnings before interest, taxes, depreciation and amortization, a cash flow measure that excludes nonrecurring costs, rose 20 percent to $3.6 million from $3 million. Operating efficiencies and improved weather at the Silver Slipper hotel-casino in Bay St. Louis, Mississippi, boosted results, the company said.
Quarterly revenue rose 6.8 percent to $40.5 million from $37.9 million. Yahoo-polled analysts had expected $40.1 million in revenue.
In a statement accompanying the results, Full House said work has started for the new parking garage at its Bronco Billy’s hotel-casino in Cripple Creek, Colorado, the centerpiece of first-phase renovations there estimated to cost $15.5 million. The first phase, expected to finish in 2020’s first quarter, will also include moving utilities and building pedestrian entrances from the garage to the casino.
Plans for the second phase of renovation, which will include a hotel tower, spa, convention-entertainment venue, restaurants and a casino upgrade, are underway, the company said.
“We have $20 million of cash on the balance sheet today roughly just under $20 million but $10 million is used in operations,” Full House CEO Dan Lee said during a conference call with analysts and journalists. “We will generate cash in the meantime but out of an abundance of caution to make sure that we have the money to do everything.”
Lee said Full House’s lending agreed to a $10 million increase in its $100 million credit facility to ensure the money is in place for the renovation.
Bronco Billy’s net revenue in the first quarter rose 3.2 percent to $6.4 million from $6.2 million.
First-quarter net revenue at the Silver Slipper rose 17 percent to $19.3 million from $16.5 million, Full House said, crediting 2018 operational improvements and a winter without abnormal freezing temperatures for the boost.
At Rising Star, a hotel-casino in Rising Sun, Indiana, net revenues fell 3.2 percent for the quarter to $10.9 million from $11.2 million. Flooding affected operations in both periods, the company said.
Roadwork may affect Rising Star’s second-quarter results, the company hinted. The Indiana Department of Transportation began repaving Highway 50 in March, sometimes causing traffic delays, the company said, adding that the disruptions are expected to end in May.
Full House said the Indiana Legislature approved cutting certain gambling taxes as of July 2021 and allowing sports betting and competitive bidding for a new casino in Terre Haute, pending voter approval. The measure has gone to Indiana Gov. Eric Holcomb to sign or veto.
“Interestingly, what may materialize in Indiana this week, in our view, could be an incremental positive to the company’s outlook that could result in roughly $1 million to $3 million of increased property (cash flow),” said Macquarie Securities gaming Chad Beynon.
In the company’s Northern Nevada segment, consisting of the Grand Lodge and Stockman’s casinos, net revenue fell 2.5 percent to $3.9 million from $4 million. Adverse table games hold at Grand Lodge dampened the segment’s revenue, the company said.
Beynon said Full House “remains a micro-cap gaming company with several ‘shots on goal,’ grand ambitions for a new development and average operational performance metrics.”
Full House shares rose 1 cent, or 0.4 percent, Monday to close at $2.53 on the Nasdaq. The share price has fallen 24 percent in the past 12 months.
Follow Matthew Crowley on Twitter @copyjockey
