Nevada Gold & Casinos Reports Third Quarter Results

LAS VEGAS, March 19, 2018 (GLOBE NEWSWIRE) -- Nevada Gold & Casinos, Inc. (NYSE MKT:UWN) today announced financial results for the third quarter ended January 31, 2018. The Company will host a conference call at 4:30 PM ET (1:30 PM PT) today to discuss these results and provide a corporate update.

For the third quarter of fiscal 2018, net revenue increased to $18.1 million compared to $17.9 million in the third quarter of fiscal 2017. This increase was primarily driven by a $0.4 million increase in Washington, partially offset by a $0.2 million decrease from Club Fortune Casino. Operating expenses were $17.5 million compared to $18.4 million in the prior year period, which included a $1.1 million impairment loss. Operating income was $0.6 million compared to an operating loss of $0.5 million in the prior year period. The Company recorded a non-cash tax expense adjustment of $0.3 million as a result of the new corporate tax rate. Net income was $0.2 million compared to net loss of $0.7 million in the prior year period.

Net revenues from the Washington state gaming operations were $13.6 million compared to $13.2 million in the prior year. This increase was primarily due to repositioning one location as a poker only operation. Poker revenues increased $0.3 million while other gaming revenue was unchanged for the period, despite removing 10 tables as a result of the poker move. Marketing expenses increased $0.2 million in the quarter related to the repositioning, and coupled with increased wages, caused Adjusted EBITDA to decrease to $1.5 million compared to $1.6 million in the prior year period.

Club Fortune net revenues were $3.3 million compared to $3.5 million in the prior year. A slot hold variance of approximately 50 basis points was the primary reason for both the revenue and EBITDA declines. Adjusted EBITDA was $0.4 million compared to $0.6 million in the prior year.

South Dakota revenues were $1.2 million in both periods, and Adjusted EBITDA was unchanged at $0.1 million.

Corporate expenses were $0.6 million, comparable to the prior year. On a consolidated basis, adjusted EBITDA was $1.2 million compared to $1.4 million in the prior year period.

"Our strategic poker repositioning in Washington has performed well, and as we reduce our target marketing in support of this move, we expect increased EBITDA contributions from the Washington portfolio,” stated President and CEO Michael Shaunnessy. “Club Fortune was up against a strong prior year comparable, and a lower slot hold hampered the current year’s performance.”

The Company paid down $1.3 million in debt during the quarter. The unrestricted cash balance at January 31, 2018 was $8.6 million, and total outstanding borrowing was $9.3 million.

During the third quarter the Company did not purchase any shares. Since inception of the share repurchase program, approximately 1,085,000 shares have been acquired at a cost of approximately $2.3 million.

For the nine month period of fiscal 2018, net revenues were $56.1 million compared to $54.6 million in fiscal year 2017. Operating expenses were $54.1 million, compared to $54.7 million in the prior period, which included the $1.1 million impairment charge. Operating income was $2.0 million compared to an operating loss of $0.1 million in fiscal 2017. Net income was $1.0 million compared to net loss of $0.6 million in the prior year.

Conference Call and Webcast

The Company will host a conference call today at 4:30 PM ET (1:30 PM PT). The call can be accessed live by dialing (800) 281-7973. International callers can access the call by dialing (323) 794-2093.

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 3589855. The replay will be available through March 26, 2018.

(1) 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 nine months ended January 31, 2018 and January 31, 2017 are shown below:

Reconciliation of net income (loss) to Adjusted EBITDA:
	For the three months ended
	January 31, 2018		January 31, 2017

Net income (loss)	$	193,327	$	(683,046	)
Adjustments:
Net interest expense and change in swap fair value		42,545		8,418
Income tax expense		397,861		189,738
Depreciation and amortization		538,907		756,606
Stock compensation		14,760		1,787
Loss on disposal of assets		308		42,574
Impairment of goodwill		-		1,101,471
Amortization of deferred rent		8,027		8,946
Adjusted EBITDA	$	1,195,735	$	1,426,494

Reconciliation of net income (loss) to Adjusted EBITDA:
	For the nine months ended
	January 31, 2018		January 31, 2017

Net income (loss)	$	956,305	$	(636,596	)
Adjustments:
Net interest expense and change in swap fair value		298,747		290,253
Income tax expense		718,496		212,592
Depreciation and amortization		1,848,490		2,306,628
Acquisition expenses		-		113,900
Stock compensation		89,438		117,363
Loss on disposal of assets		5,773		56,490
Impairment of goodwill		-		1,101,471
Amortization of deferred rent		6,076		30,899
Adjusted EBITDA	$	3,923,325	$	3,597,030

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 local 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)

	January 31,			April 30,
	2018			2017
	(unaudited)

ASSETS
Current assets:
Cash and cash equivalents	$	8,598,633		$	10,631,903
Restricted cash		2,058,849			1,994,312
Accounts receivable, net of allowances		362,770			808,484
Prepaid expenses		1,669,377			1,209,507
Notes receivable, current portion		35,205			383,093
Inventory and other current assets		444,319			423,113
Total current assets		13,169,153			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		3,708,355			4,107,328
Property and equipment, net of accumulated depreciation		13,261,285			13,958,715
Deferred tax asset		838,974			1,557,470
Other assets		167,097			70,000
Total assets	$	48,818,452		$	52,817,513

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	1,470,127		$	1,303,571
Accrued payroll and related		1,407,486			1,925,592
Accrued player's club points and progressive jackpots		2,301,566			2,348,068
Total current liabilities		5,179,179			5,577,231
Long-term debt		9,134,370			12,061,411
Other long-term liabilities		633,340			667,110
Total liabilities		14,946,889			18,305,752

Stockholders' equity:
Common stock, $0.12 par value per share; 50,000,000 shares
authorized; 18,715,985 and 18,627,167 shares issued and
16,848,182 and 17,547,665 shares outstanding at January 31, 2018,
and April 30, 2017, respectively		2,245,927			2,235,269
Additional paid-in capital		27,542,449			27,449,319
Retained earnings		13,277,119			12,320,814
Treasury stock, 1,867,803 and 1,079,502 shares at January 31, 2018,
and April 30, 2017, respectively, at cost		(9,193,932	)		(7,493,641	)
Total stockholders' equity		33,871,563			34,511,761
Total liabilities and stockholders' equity	$	48,818,452		$	52,817,513


		Three Months Ended					Nine Months Ended
	January 31,			January 31,			January 31,			January 31,
	2018			2017			2018			2017
Revenues:
Casino	$	15,822,508		$	15,714,538		$	49,595,806		$	48,231,536
Food and beverage		3,399,975			3,383,641			9,817,883			10,014,949
Other		480,802			534,011			1,484,566			1,622,271
Gross revenues		19,703,285			19,632,190			60,898,255			59,868,756
Less promotional allowances		(1,605,069	)		(1,722,078	)		(4,831,292	)		(5,251,980	)
Net revenues		18,098,216			17,910,112			56,066,963			54,616,776

Expenses:
Casino		8,631,595			8,550,102			27,697,584			27,180,611
Food and beverage		1,766,663			1,573,445			5,011,269			4,588,060
Other		51,467			46,321			156,841			153,055
Marketing and administrative		5,378,939			5,149,807			15,961,424			15,583,962
Facility		518,234			547,123			1,502,303			1,627,828
Corporate		578,370			627,553			1,909,731			2,148,422
Depreciation and amortization		538,907			756,606			1,848,490			2,306,628
Loss on disposal of assets		308			42,574			5,773			56,490
Impairment of goodwill		-			1,101,471			-			1,101,471
Total operating expenses		17,464,483			18,395,002			54,093,415			54,746,527
Operating income (loss)		633,733			(484,890	)		1,973,548			(129,751	)
Non-operating income (expenses):
Interest income		10,749			19,149			37,424			65,241
Interest expense and amortization of loan issue costs		(145,280	)		(207,626	)		(469,615	)		(582,014	)
Change in swap fair value		91,986			180,059			133,444			226,520
Income (loss) before income tax expense		591,188			(493,308	)		1,674,801			(420,004	)
Income tax expense		(397,861	)		(189,738	)		(718,496	)		(212,592	)
Net income (loss)	$	193,327		$	(683,046	)	$	956,305		$	(632,596	)
Per share information:
Net income (loss) per common share - basic	$	0.01		$	(0.04	)	$	0.06		$	(0.04	)

Net income (loss) per common share - diluted	$	0.01		$	(0.04	)	$	0.05		$	(0.04	)