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Nevada Gold & Casinos Reports Second Quarter 2018 Results

LAS VEGAS, Dec. 14, 2017 (GLOBE NEWSWIRE) -- Nevada Gold & Casinos, Inc. (NYSE MKT:UWN) today announced financial results for the second quarter ended October 31, 2017.

For the second quarter of fiscal 2018, the Company reported net revenues of $19.5 million compared to $18.5 million in the second quarter of fiscal 2017. Operating expenses were $18.5 million compared to $18.2 million in the prior year period.  Operating income increased to $1.0 million compared to $0.3 million, and net income was $0.6 million, or $0.04 per share, compared to net income of $0.2 million, or $0.01 per share, in the prior year period.

Net revenues from the Washington state gaming operations increased to $13.9 million, from $13.2 million in the prior year period, and adjusted EBITDA increased to $1.7 million compared to $1.5 million in the prior year. Although general business volumes were stable, a higher table games hold percentage, although in the normal range, was responsible for the majority of the revenue gain.  Operating cost increases were primarily attributable to the increased minimum wage.

Club Fortune revenues increased to $3.4 million from $3.1 million in the prior year period, and adjusted EBITDA increased to $0.4 million compared to $0.1 million in the prior year.

South Dakota slot route operations net revenue was relatively steady at $2.2 million in the current and prior-year period and adjusted EBITDA was $0.2 million for both periods, as well.

On a consolidated basis, adjusted EBITDA was $1.7 million, compared to $1.2 million in the prior-year period.  The Company paid down $1.7 million in debt during the quarter.  The unrestricted cash balance at October 31, 2017 was $9.6 million, and total outstanding borrowing was $10.6 million.

During the quarter the Company acquired 32,657 shares for $76,963 including commissions, an average cost of $2.32.  Approximately $1.7 million remains available under the share repurchase authorization.

“Our Washington operations benefited from a higher table games hold and despite the challenge of a higher minimum wage, adjusted EBITDA increased, while Club Fortune recovered nicely from prior year construction disruptions,” stated Michael P. Shaunnessy, President and CEO. “We continue to pay down debt and repurchase shares with our free cash flow.”

For the six month period, net revenues were $38.0 million compared to $36.7 million in fiscal year 2017. Operating expenses were $36.6 million compared to $36.4 million in the prior year. Operating income was $1.3 million compared to $0.4 million in fiscal 2017.  Net income was $0.8 million, or $0.04 per share, compared to $0.1 million, or $0.00 per share, in the prior year.

Conference Call
The Company will host a conference call at 4:30 PM ET (1:30 PM PT) today to discuss the financial results and provide a corporate update.  The call can be accessed live by dialing (800) 281-7973.  International callers can access the call by dialing (323) 794-2093. 

/EIN News/ -- A telephone replay of the conference call will be available after 7:30 PM ET and can be accessed by dialing (844) 512-2921.  International callers can access the replay by dialing (412) 317-6671; the pin number is 4365185.  The replay will be available through December 21, 2017.

Non-GAAP Information
The term "adjusted EBITDA" is used by us in presentations, quarterly earnings calls, and other instances as appropriate.  Adjusted EBITDA is defined as net income before interest, change in swap fair value, income taxes, depreciation and amortization, goodwill and other long-lived asset impairment charges, write-offs of project development costs and acquisition expenses, litigation charges, non-cash stock grants, non-cash employee stock purchase plan discounts, amortization of deferred rent, and net losses/gains from asset dispositions. Adjusted EBITDA does not take into account greater or less than expected hold percentages in the gaming operations. Adjusted EBITDA is presented because it is a required component of financial ratios reported by us to our lenders, and it is also frequently used by securities analysts, investors, and other interested parties, in addition to and not in lieu of, U.S. Generally Accepted Accounting Principles ("GAAP") results to compare to the performance of other companies that also publicize this information.  Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to net income as an indicator of our operating performance or any other measure of performance derived in accordance with GAAP.

Adjusted EBITDA reconciliations for the three months and six months ended October 31, 2017 and October 31, 2016 are shown below:

Net income reconciliation to Adjusted EBITDA:
  For the three months ended
  October 31, 2017   October 31, 2016
           
Net income $ 638,977     $ 150,022
Adjustments:          
Net interest expense and change in swap fair value   104,187       64,103
Income tax expense   260,303       70,842
Depreciation and amortization   598,148       773,510
Stock compensation   69,138       85,143
Loss on sale of assets   5,465       5,546
Amortization of deferred rent   (2,675 )     9,455
Adjusted EBITDA $ 1,673,543     $ 1,158,621
             


  For the six months ended
  October 31, 2017   October 31, 2016
           
Net income $ 762,978     $ 50,450
Adjustments:          
Net interest expense and change in swap fair value   256,202       281,833
Income tax expense   320,635       22,854
Depreciation and amortization   1,309,584       1,550,022
Acquisition expenses   -       113,900
Stock compensation   74,678       119,128
Loss on sale of assets   5,465       13,916
Amortization of deferred rent   (1,952 )     21,955
Adjusted EBITDA $ 2,727,590     $ 2,174,058
             

Forward-Looking Statements

This release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We use words such as "anticipate," "believe," "expect," "future," "intend," "plan," and similar expressions to identify forward-looking statements. Forward-looking statements include, without limitation, our ability to increase income streams, to grow revenue and earnings, and to obtain additional gaming and other projects. These statements are only predictions and are subject to certain risks, uncertainties and assumptions, which are identified and described in the Company's public filings with the Securities and Exchange Commission.

About Nevada Gold & Casinos

Nevada Gold & Casinos, Inc. (NYSE MKT:UWN) of Las Vegas, Nevada is a developer, owner and operator of 9 gaming operations in Washington (wagoldcasinos.com), a locals casino in Henderson, Nevada (clubfortunecasino.com) and a slot route operation in Deadwood, South Dakota (dakotaplayersclub.com). For more information, visit www.nevadagold.com.

Contacts:
Nevada Gold & Casinos, Inc.
Michael P. Shaunnessy / James Meier
(702) 685-1000
 
Stonegate Capital Partners
Preston Graham
(972) 850-2001


Nevada Gold & Casinos, Inc.
Consolidated Statements of Operations
(unaudited)
 
    Three Months Ended
  Six Months Ended
    October 31,   October 31,   October 31,   October 31,
    2017
  2016
  2017
  2016 
Revenues:                    
Casino   $ 17,366,692     $ 16,346,495     $ 33,773,298     $ 32,516,998  
Food and beverage     3,258,684       3,329,915       6,417,908       6,631,308  
Other     488,360       547,545       1,003,765       1,088,260  
Gross revenues     21,113,736       20,223,955       41,194,971       40,236,566  
Less promotional allowances     (1,633,513)       (1,747,069)       (3,226,224)       (3,529,902)  
Net revenues     19,480,223       18,476,886       37,968,747       36,706,664  
 Expenses:                        
Casino     9,650,614       9,442,917       19,065,548       18,630,015  
Food and beverage     1,664,613       1,482,778       3,245,061       3,015,120  
Other     51,922       51,786       105,359       106,724  
Marketing and administrative     5,295,763       5,163,876       10,582,485       10,434,156  
Facility     518,255       547,370       984,069       1,080,705  
Corporate     691,976       724,136       1,331,361       1,520,869  
Depreciation and amortization     598,148       773,510       1,309,584       1,550,022  
Loss on disposal of assets     5,465       5,546       5,465       13,916  
Total operating expenses     18,476,756       18,191,919       36,628,932       36,351,527  
Operating income     1,003,467       284,967       1,339,815       355,137  
Non-operating income (expenses):                        
Interest income     14,211       23,124       26,675       46,092  
Interest expense and amortization of loan issue costs     (163,820)       (184,403)       (324,335)       (374,387)  
Change in swap fair value     45,422       97,176       41,458       46,462  
Income before income tax expense     899,280       220,864       1,083,613       73,304  
Income tax expense     (260,303)       (70,842)       (320,635)       (22,854)  
Net income   $ 638,977     $ 150,022     $ 762,978     $ 50,450  
Per share information:                        
Net income per common share - basic and diluted   $ 0.04     $ 0.01     $ 0.04     $ 0.00  
                         


Nevada Gold & Casinos, Inc.
Consolidated Balance Sheets
    October 31,   April 30,
    2017
  2017 
         
      (unaudited)      
             
ASSETS
Current assets:        
Cash and cash equivalents   $ 9,559,370     $ 10,631,903  
Restricted cash     2,043,806       1,994,312  
Accounts receivable, net of allowances     398,102       808,484  
Prepaid expenses     1,614,893       1,209,507  
Notes receivable, current portion     191,757       383,093  
Inventory and other current assets     437,951       423,113  
Total current assets     14,245,879       15,450,412  
             
Real estate held for sale     750,000       750,000  
Goodwill     16,923,588       16,923,588  
Intangible assets, net of accumulated amortization     3,801,074       4,107,328  
Property and equipment, net of accumulated depreciation     13,513,526       13,958,715  
Deferred tax asset     1,236,835       1,557,470  
Other assets     75,111       70,000  
Total assets   $   50,546,013     $   52,817,513  
             
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:            
Accounts payable and accrued liabilities   $ 1,432,529     $ 1,303,571  
Accrued payroll and related     2,196,353       1,925,592  
Accrued player's club points and progressive jackpots     2,246,233       2,348,068  
Total current liabilities     5,875,115       5,577,231  
Long-term debt     10,410,310       12,061,411  
Other long-term liabilities     625,312       667,110  
Total liabilities     16,910,737       18,305,752  
             
             
Stockholders' equity:            
Common stock, $0.12 par value per share; 50,000,000 shares            
authorized; 18,693,175 and 18,627,167 shares issued and 16,825,372 and 17,547,665 shares outstanding at October 31, 2017, and April 30, 2017, respectively     2,243,189       2,235,269  
Additional paid-in capital     27,502,227       27,449,319  
Retained earnings     13,083,792       12,320,814  
Treasury stock, 1,867,803 and 1,079,502 shares at October 31,            
2017 and April 30, 2017, respectively, at cost     (9,193,932)       (7,493,641)  
Total stockholders' equity     33,635,276       34,511,761  
Total liabilities and stockholders' equity   $ 50,546,013     $ 52,817,513  
             

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