Nevada Gold & Casinos Reports Fiscal 2016 Results
LAS VEGAS, July 28, 2016 (GLOBE NEWSWIRE) -- Nevada Gold & Casinos, Inc. (NYSE MKT:UWN) today announced financial results for the fourth quarter and year ended April 30, 2016. The Company will host a conference call today at 4:30 PM ET (1:30 PM PT) to discuss these results and provide a corporate update.
For the fiscal year 2016, the Company reported net revenues of $70.3 million compared to $64.3 million in fiscal year 2015. The increase was primarily due to $6.1 million in revenue from Club Fortune which was acquired on December 1, 2015. Operating expenses increased $5.9 million primarily due to the addition of Club Fortune and impairment charges of $1.2 million. Net income was $1.3 million compared to $1.8 million in the prior year. Consolidated Adjusted EBITDA increased $2.2 million, or 38%, to $7.8 million, and Adjusted Net Income was $2.7, an increase of $0.9 million, or 48%.
| Adjusted Net Income reconciliation to Net Income (000): | ||||||||
| 2016 | 2015 | |||||||
| Net Income | $ | 1,301 | $ | 1,807 | ||||
| Adjustments (net of tax): | ||||||||
| Impairments | 1,066 | - | ||||||
| Acquisition expanses | 423 | - | ||||||
| Gain on asset sale | (110 | ) | - | |||||
| Adjusted Net Income | $ | 2,680 | $ | 1,807 | ||||
| Adjusted Earnings per share | $ | 0.16 | $ | 0.11 | ||||
Net revenues from Washington state gaming operations increased $0.8 million, or 1% to $56.7 million, while Adjusted EBITDA increased $1.7 million to a record $9.1 million. South Dakota route operation revenues decreased $0.9 million to $7.5 million while Adjusted EBITDA decreased $0.2 million to $0.4 million. Club Fortune net revenues were $6.1 million and Adjusted EBITDA was $.8 million. Corporate expenses, excluding acquisition costs, increased $0.2 million to $2.5 million.
During fiscal year 2016, the Company sold its Golden Nugget location in Washington recording a gain of $166,000 and also entered into an agreement to sell excess land in Colorado, recording an impairment charge of $350,000. On December 1, 2015, the Company acquired Club Fortune Casino in Henderson, Nevada. In the fourth quarter the Company evaluated the carrying value of the South Dakota route operation and recorded a goodwill impairment charge of $0.8 million.
“Fiscal 2016 reflected strong operating performance from our Washington portfolio while our South Dakota operations continue to be pressured by reduced units,” said President and CEO Michael Shaunnessy. “With the addition of Club Fortune we have strengthened and diversified our cash flow stream. Our conservative financing structure, low interest rates and substantial tax free cash flow, allow us to reduce debt and return capital to shareholders.”
During fiscal year 2016 the Company borrowed $15.5 million to fund the acquisition of Club Fortune, and repaid $5.7 million. As of April 30, 2016, the outstanding bank debt was $17.2 million and unrestricted cash on hand was $11.6 million.
In July 2016, the Board of Directors authorized a share repurchase program of $2.0 million, which at current trading levels, represents approximately 6% of the outstanding shares.
Fourth Quarter Results. For the fourth quarter of fiscal 2016, the Company reported net revenues of $19.9 million compared to $16.3 million in the fourth quarter of fiscal 2015. Consolidated Adjusted EBITDA was $2.5 million compared to $1.6 million in the prior year period.
During the fourth quarter, net revenues from Washington increased to $14.6 million from the $14.5 million in the prior year period, while EBITDA increased to $2.6 million compared to $2.1 million in the prior year period. South Dakota route operation revenues decreased $112,000 from the prior year period, primarily due to a reduction in units and EBITDA declined from $42,000 to $27,000 for the quarter. Club Fortune net revenues were $3.7 million while EBITDA was $0.5 million. Corporate expenses were unchanged at $0.6 million in both periods.
In April of 2106, the Company entered into an agreement to sell its excess Colorado land for $750,000 and recorded an impairment charge of $350,000 related to this transaction. The Company evaluated the carrying value of the South Dakota route operation and recorded a goodwill impairment charge of $0.8 million. Excluding these impairment charges, adjusted net income for the quarter was $0.8 million, or $.05 per share compared to $0.6 million or $0.04 per share in the prior year period.
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, 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 grants, non-cash employee stock purchase plan discounts, 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 fiscal years ended April 30, 2016 and April 30, 2015 are shown below.
| Adjusted EBITDA reconciliation to net income (loss): | ||||||||||
| For the three months ended | ||||||||||
| April 30, 2016 | April 30, 2015 | |||||||||
| Net income (loss) | $ | (241,290 | ) | $ | 588,872 | |||||
| Adjustments: | ||||||||||
| Net interest expense | 248,893 | 164,158 | ||||||||
| Income tax expense | 409,271 | 292,688 | ||||||||
| Depreciation and amortization | 869,414 | 524,438 | ||||||||
| (Gain) Loss on asset sales | 5,291 | (9,006 | ) | |||||||
| Write downs and other charges | 1,185,000 | - | ||||||||
| Deferred rent amortization | 14,430 | 19,677 | ||||||||
| Club Fortune acquisition expenses | 12,181 | - | ||||||||
| Stock option amortization | 28,675 | 29,943 | ||||||||
| Employee stock purchase discount | 25 | 1,977 | ||||||||
| Increase in swap fair value | (26,282 | ) | (27,129 | ) | ||||||
| Adjusted EBITDA | $ | 2,505,608 | $ | 1,585,618 | ||||||
| Adjusted EBITDA reconciliation to net income: | ||||||||
| For the fiscal year ended | ||||||||
| April 30, 2016 | April 30, 2015 | |||||||
| Net income | $ | 1,301,046 | $ | 1,807,077 | ||||
| Adjustments: | ||||||||
| Net interest expense | 628,315 | 587,872 | ||||||
| Income tax expense | 1,221,497 | 885,819 | ||||||
| Depreciation and amortization | 2,608,616 | 2,168,003 | ||||||
| (Gain) / Loss on asset sales | (158,411 | ) | 32,694 | |||||
| Write downs and other charges | 1,185,000 | - | ||||||
| Deferred rent amortization | 35,900 | 23,744 | ||||||
| Stock option amortization | 114,698 | 113,526 | ||||||
| Employee stock purchase discount | 4,671 | 7,331 | ||||||
| Decrease in swap fair value | 217,781 | 10,600 | ||||||
| Write off of marketable securities | - | 7,539 | ||||||
| Club Fortune acquisition expenses | 641,472 | - | ||||||
| Adjusted EBITDA | $ | 7,800,585 | $ | 5,644, 205 | ||||
Conference Call and Webcast
The Company will host a conference call at 4:30 PM ET (1:30 PM PT) on July 28, 2016 to discuss the financial results and provide a corporate update. The call can be accessed live by dialing (888) 715-1391. International callers can access the call by dialing (913) 312-1227. 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 3492194. The replay will be available through August 4, 2016. The archived webcast will also be available on the Company's website at http://ir.nevadagold.com/events.cfm.
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 (clubfortune.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 | |||||||
| April 30, | April 30, | ||||||
| 2016 | 2015 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 11,583,107 | $ | 8,541,670 | |||
| Restricted cash | 1,433,728 | 1,724,439 | |||||
| Accounts receivable, net of allowances | 665,549 | 297,316 | |||||
| Prepaid expenses | 1,206,825 | 845,505 | |||||
| Notes receivable, current portion | 208,294 | 384,464 | |||||
| Inventory and other current assets | 416,022 | 377,625 | |||||
| Total current assets | 15,513,525 | 12,171,019 | |||||
| Real estate held for sale | 750,000 | 1,100,000 | |||||
| Notes receivable, net of current portion | 900,775 | 1,314,467 | |||||
| Goodwill | 18,025,059 | 16,103,583 | |||||
| Identifiable intangible assets, net of accumulated | |||||||
| amortization of $7,997,790 and $6,811,799 at April 30, | |||||||
| 2016 and April 30, 2015, respectively | 5,003,981 | 4,561,377 | |||||
| Property and equipment, net of accumulated depreciation | |||||||
| of $5,641,733 and $4,451,553 at April 30, 2016 and | |||||||
| April 30, 2015, respectively | 15,147,061 | 3,990,791 | |||||
| Deferred tax asset | 2,348,299 | 3,569,796 | |||||
| Other assets | 70,000 | 70,657 | |||||
| Total assets | $ | 57,758,700 | $ | 42,881,690 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable and accrued liabilities | $ | 1,702,366 | $ | 1,222,139 | |||
| Accrued payroll and related | 2,094,250 | 1,581,557 | |||||
| Accrued player's club points and progressive jackpots | 1,872,566 | 1,993,537 | |||||
| Total current liabilities | 5,669,182 | 4,797,233 | |||||
| Long-term debt | 16,839,148 | 7,088,677 | |||||
| Other long-term liabilities | 881,426 | 570,717 | |||||
| Total liabilities | 23,389,756 | 12,456,627 | |||||
| Stockholders' equity: | |||||||
| Common stock, $0.12 par value per share; 50,000,000 | |||||||
| shares authorized; 18,571,693 and 17,134,928 shares issued and 17,788,856 and 16,352,091 shares outstanding at April 30, 2016, and April 30, 2015, respectively | 2,228,612 | 2,056,200 | |||||
| Additional paid-in capital | 27,315,517 | 24,845,094 | |||||
| Retained earnings | 11,756,850 | 10,455,804 | |||||
| Treasury stock, 782,837 shares at April 30, 2016 and April 30, 2015, at cost | (6,932,035 | ) | (6,932,035 | ) | |||
| Total stockholders' equity | 34,368,944 | 30,425,063 | |||||
| Total liabilities and stockholders' equity | $ | 57,758,700 | $ | 42,881,690 | |||
| Nevada Gold & Casinos, Inc. | ||||||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| April 30, | April 30, | April 30, | April 30, | |||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Casino | $ | 17,654,842 | $ | 14,309,932 | $ | 62,232,898 | $ | 56,710,812 | ||||||||||||
| Food and beverage | 3,581,609 | 2,623,876 | 11,797,939 | 10,225,484 | ||||||||||||||||
| Other | 605,067 | 447,798 | 2,042,519 | 1,782,013 | ||||||||||||||||
| Gross revenues | 21,841,518 | 17,381,606 | 76,073,356 | 68,718,309 | ||||||||||||||||
| Less promotional allowances | (1,938,249 | ) | (1,117,487 | ) | (5,732,351 | ) | (4,368,756 | ) | ||||||||||||
| Net revenues | 19,903,269 | 16,264,119 | 70,341,005 | 64,349,553 | ||||||||||||||||
| Expenses: | ||||||||||||||||||||
| Casino | 9,727,767 | 7,767,607 | 33,924,688 | 31,504,355 | ||||||||||||||||
| Food and beverage | 1,235,581 | 1,353,049 | 5,451,627 | 5,386,699 | ||||||||||||||||
| Other | 62,650 | 37,119 | 265,600 | 244,253 | ||||||||||||||||
| Marketing and administrative | 5,266,141 | 4,408,183 | 18,412,053 | 17,209,760 | ||||||||||||||||
| Facility | 514,894 | 533,493 | 2,025,007 | 2,059,730 | ||||||||||||||||
| Corporate | 645,939 | 630,648 | 3,258,187 | 2,445,152 | ||||||||||||||||
| Depreciation and amortization | 869,414 | 524,438 | 2,608,616 | 2,168,003 | ||||||||||||||||
| (Gain) loss on sale of assets | 5,291 | - | (158,411 | ) | 32,694 | |||||||||||||||
| Write downs and other charges | 1,185,000 | (9,006 | ) | 1,185,000 | - | |||||||||||||||
| Total operating expenses | 19,512,677 | 15,245,531 | 66,972,367 | 61,050,646 | ||||||||||||||||
| Operating income | 390,592 | 1,018,588 | 3,368,638 | 3,298,907 | ||||||||||||||||
| Non-operating income (expenses): | ||||||||||||||||||||
| Interest income | 21,165 | 27,056 | 94,589 | 117,639 | ||||||||||||||||
| Interest expense and amortization of loan costs | (270,058 | ) | (191,214 | ) | (722,903 | ) | (705,511 | ) | ||||||||||||
| Change in swap fair value | 26,282 | 27,129 | (217,781 | ) | (10,600 | ) | ||||||||||||||
| Write-off of marketable securities | - | - | - | (7,539 | ) | |||||||||||||||
| Income before income tax | 167,981 | 881,559 | 2,522,543 | 2,692,896 | ||||||||||||||||
| Income tax expense | (409,271 | ) | (292,688 | ) | (1,221,497 | ) | (885,819 | ) | ||||||||||||
| Net income (loss) | $ | (241,290 | ) | $ | 588,871 | $ | 1,301,046 | $ | 1,807,077 | |||||||||||
| Per share information: | ||||||||||||||||||||
| Net income (loss) per common share - basic and diluted | $ | (0.01 | ) | $ | 0.04 | $ | 0.08 | $ | 0.11 | |||||||||||
| Basic weighted average number of shares outstanding | 17,771,800 | 16,276,403 | 17,002,728 | 16,228,396 | ||||||||||||||||
| Diluted weighted average number of share outstanding | 17,771,800 | 16,478,445 | 17,298,373 | 16,345,795 | ||||||||||||||||
Contacts: Nevada Gold & Casinos, Inc. Michael P. Shaunnessy / James Meier (702) 685-1000 Casey Stegman Stonegate Capital Partners (214) 987-4121
