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.
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 | ||||