LAS VEGAS, March 16, 2016 (GLOBE NEWSWIRE) -- Nevada Gold & Casinos, Inc. (NYSE MKT:UWN) today announced financial results for the third quarter ended January 31, 2016. 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 2016, net revenue increased to $18.4 million compared to $15.8 million in the third quarter of fiscal 2015. This increase was primarily driven by $2.4 million in revenue from Club Fortune Casino which was acquired on December 1, 2015. Operating expenses were $17.2 million compared to $15.0 million in the prior year period. Operating income improved to $1.2 million compared to $0.8 million in the prior year period. Net income was $0.5 million compared $0.4 million in the prior year period.
For the third quarter of fiscal 2016, the Company reported adjusted EBITDA of $2.3 million compared to $1.5 million in the prior year quarter. This improvement was due to continued strong performance in the Washington portfolio, aided by two months of operations of Club Fortune Casino.
Third quarter results were impacted by the non-recurring Club Fortune transaction costs of $0.4 million, and the initial swap valuation non-cash charge of $0.2 million related to the amended bank financing. Adjusting for these items, Adjusted Net Income was $0.9 million, or $.05 per share, compared to $0.4 million or $.03 per share in the prior year period.
"During the third quarter, our Washington portfolio continued the growth we had seen in the first two quarters, and with the addition of Club Fortune, we generated significant year-over-year improvement,” said President and CEO Michael Shaunnessy. “We are quickly integrating the Club Fortune acquisition and are pleased with the early performance and its expected future contribution to earnings and cash flow.”
Net revenues from the Washington state gaming operations increased slightly to $14.6 million, but on a comparable unit basis, Washington revenues increased $0.9 million, or 6.5%. This revenue increase was primarily driven by an increase in table game drop (amount wagered). EBITDA increased to $2.8 million compared to $2.1 million in the prior year period.
Club Fortune net revenues were $2.4 million for the first two months of operations, and EBITDA was $327,000.
South Dakota net revenues declined $112,000 to $1.3 million, which was partially offset by operating expense reductions leading to a $63,000 EBITDA loss compared to EBITDA of $10,000 in the prior year.
Corporate expenses, net of acquisition expenses, were $0.8 million compared to $0.7 million in the prior period. On a consolidated basis, adjusted EBITDA was $2.3 million compared to $1.5 million in the prior year period.
The Company borrowed $14.0 million during the quarter to close the Club Fortune acquisition and has since repaid $2.0 million. The current outstanding bank debt is $18.7 million, which coupled with strong operating performance, has reduced the pro forma leverage ratio below 2.0 times. Accordingly, the interest rate at the first adjustment date of April 1, 2016 should decrease by 100 basis points.
For the nine month period of fiscal 2016, net revenues were $50.4 million compared to $48.1 million in fiscal year 2015. Operating expenses were $47.5 million compared to $45.8 million in the prior period. Operating income increased to $3.0 million compared to $2.3 million in fiscal 2015. Net income increased to $1.5 million compared to $1.2 million in the prior year. Adjusted EBITDA increased to $5.3 million from $4.1 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 (888) 428-9473. International callers can access the call by dialing (719) 457-2664. A simultaneous webcast of the call will be available by visiting http://www.nevadagold.com/.
A telephone replay of the conference call will be available after 7:30 pm ET and can be accessed by dialing (877) 870-5176. International callers can access the replay by dialing (858) 384-5517; the pin number is 9043234. The replay will be available through March 23, 2016. The archived webcast will also be available on the company’s website.
(1) Non-GAAP Information
The term "adjusted EBITDA" is used by the company in presentations, quarterly earnings calls, and other instances as appropriate. Adjusted EBITDA is defined as net income before interest, income taxes, depreciation and amortization, non-cash goodwill and other long-lived asset impairment charges, write-offs of project development costs, litigation charges, non-cash stock option grants, exclusion of net income or loss from operations held for sale, 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, 2016 and January 31, 2015 are shown below:
| Adjusted EBITDA reconciliation to net income: | ||||||||||||||
| For the three months ended | ||||||||||||||
| January 31, 2016 | January 31, 2015 | |||||||||||||
| Net income | $ | 466,351 | $ | 448,108 | ||||||||||
| Adjustments: | ||||||||||||||
| Net interest expense and change in swap fair value | 432,252 | 152,847 | ||||||||||||
| Income tax expense | 283,592 | 240,301 | ||||||||||||
| Depreciation and amortization | 739,699 | 553,910 | ||||||||||||
| Acquisition expenses | 368,824 | - | ||||||||||||
| Stock options amortization and employee stock purchases | 30,177 | 43,794 | ||||||||||||
| (Gain) Loss on sale of assets | (2,271 | ) | 24,613 | |||||||||||
| Deferred rent amortization | 11,639 | 1,870 | ||||||||||||
| Adjusted EBITDA | $ | 2,330,263 | $ | 1,465,443 | ||||||||||
| Adjusted EBITDA reconciliation to net income: | ||||||||||||||
| For the nine months ended | ||||||||||||||
| January 31, 2016 | January 31, 2015 | |||||||||||||
| Net income | $ | 1,542,338 | $ | 1,218,205 | ||||||||||
| Adjustments: | ||||||||||||||
| Net interest expense and change in swap fair value | 623,484 | 461,443 | ||||||||||||
| Income tax expense | 812,226 | 593,131 | ||||||||||||
| Depreciation and amortization | 1,739,202 | 1,643,565 | ||||||||||||
| Acquisition expenses | 629,603 | - | ||||||||||||
| Stock options amortization and employee stock purchases | 90,672 | 88,937 | ||||||||||||
| (Gain) Loss on sale of assets | (163,702 | ) | 41,700 | |||||||||||
| Deferred rent amortization | 24,502 | 4,067 | ||||||||||||
| Write off of marketable securities | - | 7,539 | ||||||||||||
| Adjusted EBITDA | $ | 5,298,325 | $ | 4,058,587 | ||||||||||
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.
Nevada Gold & Casinos, Inc.
Consolidated Balance Sheets
| January 31, | April 30, | |||||||||
| 2016 | 2015 | |||||||||
| (unaudited) | ||||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 8,822,156 | $ | 8,541,670 | ||||||
| Restricted cash | 1,525,803 | 1,724,439 | ||||||||
| Accounts receivable, net of allowances | 768,163 | 297,316 | ||||||||
| Prepaid expenses | 1,603,449 | 845,505 | ||||||||
| Deferred tax asset, current portion | 882,394 | 863,366 | ||||||||
| Notes receivable, current portion | 411,370 | 384,464 | ||||||||
| Inventory and other current assets | 1,027,181 | 377,625 | ||||||||
| Total current assets | 15,040,516 | 13,034,385 | ||||||||
| Real estate held for sale | 1,100,000 | 1,100,000 | ||||||||
| Notes receivable, net of current portion | 849,059 | 1,314,467 | ||||||||
| Goodwill | 18,860,059 | 16,103,583 | ||||||||
| Intangible assets, net of accumulated amortization of $7,678,862 and $6,811,799 at January 31, 2016 and April 30, 2015, respectively | 5,316,520 | 4,561,377 | ||||||||
| Property and equipment, net of accumulated depreciation of $5,143,361 and $4,451,553 at January 31, 2016 and April 30, 2015, respectively | 15,431,612 | 3,990,791 | ||||||||
| Deferred tax asset, net of current portion | 1,875,176 | 2,706,430 | ||||||||
| Other assets | 267,567 | 331,980 | ||||||||
| Total assets | $ | 58,740,509 | $ | 43,143,013 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable and accrued liabilities | $ | 1,478,394 | $ | 1,222,139 | ||||||
| Accrued payroll and related | 1,365,751 | 1,581,557 | ||||||||
| Accrued player's club points and progressive jackpots | 1,945,031 | 1,993,537 | ||||||||
| Total current liabilities | 4,789,176 | 4,797,233 | ||||||||
| Long-term debt | 18,594,044 | 7,350,000 | ||||||||
| Other long-term liabilities | 814,777 | 570,717 | ||||||||
| Total liabilities | 24,197,997 | 12,717,950 | ||||||||
| Stockholders' equity: | ||||||||||
| Common stock, $0.12 par value per share; 50,000,000 shares authorized; 18,526,693 and 17,134,928 shares issued and 17,743,856 and 16,352,091 shares outstanding at January 31, 2016, and April 30, 2015, respectively | 2,223,212 | 2,056,200 | ||||||||
| Additional paid-in capital | 27,253,193 | 24,845,094 | ||||||||
| Retained earnings | 11,998,142 | 10,455,804 | ||||||||
| Treasury stock, 782,837 shares at January 31, 2016 and April 30, 2015, respectively, at cost | (6,932,035 | ) | (6,932,035 | ) | ||||||
| Total stockholders' equity | 34,542,512 | 30,425,063 | ||||||||
| Total liabilities and stockholders' equity | $ | 58,740,509 | $ | 43,143,013 | ||||||
Nevada Gold & Casinos, Inc.
Consolidated Statements of Operations
(unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| January 31, | January 31, | January 31, | January 31, | |||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Casino | $ | 16,217,164 | $ | 13,821,745 | $ | 44,578,057 | $ | 42,400,880 | ||||||||||||
| Food and beverage | 3,294,142 | 2,672,738 | 8,216,330 | 7,601,608 | ||||||||||||||||
| Other | 529,568 | 432,329 | 1,437,452 | 1,334,215 | ||||||||||||||||
| Gross revenues | 20,040,874 | 16,926,812 | 54,231,839 | 51,336,703 | ||||||||||||||||
| Less promotional allowances | (1,680,127 | ) | (1,122,522 | ) | (3,794,103 | ) | (3,251,269 | ) | ||||||||||||
| Net revenues | 18,360,747 | 15,804,290 | 50,437,736 | 48,085,434 | ||||||||||||||||
| Expenses: | ||||||||||||||||||||
| Casino | 8,166,630 | 7,338,366 | 24,074,390 | 23,733,827 | ||||||||||||||||
| Food and beverage | 1,710,461 | 1,391,532 | 4,318,491 | 4,033,675 | ||||||||||||||||
| Other | 94,500 | 72,804 | 223,035 | 210,032 | ||||||||||||||||
| Marketing and administrative | 4,823,503 | 4,396,240 | 13,145,912 | 12,801,575 | ||||||||||||||||
| Facility | 524,892 | 509,723 | 1,510,113 | 1,526,237 | ||||||||||||||||
| Corporate | 1,121,138 | 675,846 | 2,612,247 | 1,814,505 | ||||||||||||||||
| Depreciation and amortization | 739,699 | 553,910 | 1,739,202 | 1,643,565 | ||||||||||||||||
| (Gain) loss on sale of assets | (2,271 | ) | 24,613 | (163,702 | ) | 41,700 | ||||||||||||||
| Total operating expenses | 17,178,552 | 14,963,034 | 47,459,688 | 45,805,116 | ||||||||||||||||
| Operating income | 1,182,195 | 841,256 | 2,978,048 | 2,280,318 | ||||||||||||||||
| Non-operating income (expenses): | ||||||||||||||||||||
| Interest income | 22,794 | 29,066 | 73,424 | 90,583 | ||||||||||||||||
| Interest expense and amortization of loan issue costs | (187,894 | ) | (127,035 | ) | (401,514 | ) | (453,337 | ) | ||||||||||||
| Interest rate swap expense | (21,006 | ) | (19,495 | ) | (51,332 | ) | (60,960 | ) | ||||||||||||
| Change in swap fair value | (246,146 | ) | (35,383 | ) | (244,062 | ) | (37,729 | ) | ||||||||||||
| Write-off of marketable securities | - | - | - | (7,539 | ) | |||||||||||||||
| Income before income tax expense | 749,943 | 688,409 | 2,354,564 | 1,811,336 | ||||||||||||||||
| Income tax expense | (283,592 | ) | (240,301 | ) | (812,226 | ) | (593,131 | ) | ||||||||||||
| Net income | $ | 466,351 | $ | 448,108 | $ | 1,542,338 | $ | 1,218,205 | ||||||||||||
| Per share information: | ||||||||||||||||||||
| Net income per common share - basic | $ | 0.03 | $ | 0.03 | $ | 0.09 | $ | 0.08 | ||||||||||||
| Net income per common share - diluted | $ | 0.03 | $ | 0.03 | $ | 0.09 | $ | 0.07 | ||||||||||||