Nevada Gold & Casinos Reports Fourth Quarter and Fiscal Year 2017 Results
LAS VEGAS, July 27, 2017 (GLOBE NEWSWIRE) -- Nevada Gold & Casinos, Inc. (NYSE MKT:UWN) today announced financial results for the fourth quarter and year ended April 30, 2017. 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 fourth quarter of fiscal 2017, the Company reported net revenues of $19.8 million compared to $19.9 million in the fourth quarter of fiscal 2016. Operating income was $1.9 million compared to $0.4 million in the prior year which was impacted by impairment charges of $1.2 million. Net income was $1.2 million, or $0.07 per share. Consolidated Adjusted EBITDA was $2.6 million compared to $2.5 million in the prior year period.
During the fourth quarter, net revenues from Washington state gaming operations increased to $14.9 million from the $14.6 million in the prior year period, while EBITDA decreased slightly to $2.5 million compared to $2.6 million in the prior year period. Club Fortune net revenues were $3.5 million compared to $3.7 million in the prior year period, while EBITDA increased to a quarterly record of $0.8 million from $0.5 million in the prior period due to improved operating and marketing efficiencies. South Dakota route operation revenues decreased $214,000 from the prior year period, primarily reflecting 47 fewer units in operation, and EBITDA declined $61,000 for the quarter. Corporate expenses were $0.6 million in both periods.
“The fourth quarter saw our luck change in Washington as the table hold percentage improved, and at Club Fortune, our operating and marketing initiatives contributed to significant EBITDA improvement on slightly lower revenues,” said President and CEO, Michael Shaunnessy.
For the fiscal year 2017, the Company reported net revenues of $74.6 million compared to $70.2 million in fiscal year 2016. This increase was due to a full year of operations at Club Fortune which was acquired December 1, 2015, which more than offset the decrease in revenues from our Washington segment. Operating expenses increased $6.0 million primarily due to a full year of Club Fortune operations. Net income was $0.6 million compared to $1.3 million in the prior year.
“Fiscal 2017 was challenging due to lower table hold percentages in Washington and major road construction at Club Fortune,” said President and CEO Michael Shaunnessy. “With the construction behind us and hold percentages returning to normal, we had a strong fourth quarter to finish out the year and set the stage for 2018.”
Net revenues for the fiscal year from Washington state gaming operations decreased $2.3 million to $54.4 million, while Adjusted EBITDA decreased $2.1 million from a record $9.1 million in the prior year. Revenues were impacted by approximately $0.8 million due to a lower than expected table games hold percentage. Club Fortune net revenues were $13.5 million and Adjusted EBITDA was $1.5 million in its first full year of operation. South Dakota route operation revenues decreased $0.8 million to $6.7 million while Adjusted EBITDA decreased $0.2 million to $0.2 million. Corporate adjusted EBITDA was negative $2.5 million compared to negative $2.4 million in the prior year.
During the fiscal year the Company repaid $4.9 million in bank debt and as of April 30, 2017, the outstanding bank debt was $12.3 million and unrestricted cash on hand was $10.6 million. In July 2016, the Board of Directors authorized a share repurchase program of $2.0 million and during the year we purchased 296,665 shares at an average cost of $1.89. On July 12, 2017 we announced the purchase of 755,644 shares at a price of $2.15 per share completing this authorization. The Board has approved an additional $2.0 million share buyback.
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.
Net income (loss) reconciliation to Adjusted EBITDA:
| For the three months ended | ||||||||
| April 30, 2017 | April 30, 2016 | |||||||
| Net income (loss) | $ | 1,196,560 | $ | (241,290 | ) | |||
| Adjustments: | ||||||||
| Net interest expense | 149,772 | 248,893 | ||||||
| Income tax expense | 578,237 | 409,271 | ||||||
| Depreciation and amortization | 714,652 | 869,414 | ||||||
| Club Fortune acquisition expenses | - | 12,181 | ||||||
| Write downs and other charges | - | 1,185,000 | ||||||
| Deferred rent amortization | 5,168 | 14,430 | ||||||
| Stock compensation amortization | 2,980 | 28,675 | ||||||
| Employee stock purchase discount | - | 25 | ||||||
| (Gain) decrease in swap fair value | (23,865 | ) | (26,282 | ) | ||||
| Loss (gain) on disposal of assets | 20,693 | 5,291 | ||||||
| Adjusted EBITDA | $ | 2,644,197 | $ | 2,505,608 | ||||
| For the fiscal year ended | ||||||||
| April 30, 2017 | April 30, 2016 | |||||||
| Net income | $ | 563,964 | $ | 1,301,046 | ||||
| Adjustments: | ||||||||
| Net interest expense | 666,543 | 628,315 | ||||||
| Income tax expense | 790,829 | 1,221,497 | ||||||
| Depreciation and amortization | 3,021,280 | 2,608,616 | ||||||
| Club Fortune acquisition expenses | 113,900 | 641,472 | ||||||
| Write downs and other charges | 1,101,472 | 1,185,000 | ||||||
| Deferred rent amortization | 36,068 | 35,900 | ||||||
| Stock compensation amortization | 124,279 | 164,698 | ||||||
| Employee stock purchase discount | - | 4,671 | ||||||
| (Gain) decrease in swap fair value | (250,385 | ) | 217,781 | |||||
| Loss (gain) on disposal of assets | 77,183 | (158,411 | ) | |||||
| Adjusted EBITDA | $ | 6,245,133 | $ | 7,850,585 | ||||
Conference Call and Webcast
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 (877) 780-3379. International callers can access the call by dialing (719) 457-2631.
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 3065863. The replay will be available through August 3, 2017.
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 Statements of Operations | ||||||||||||||||
|
Three Months Ended |
Twelve Months Ended | |||||||||||||||
| April 30, | April 30, | April 30, | April 30, | |||||||||||||
|
2017 |
2016 |
2017 |
2016 |
|||||||||||||
| Revenues: | ||||||||||||||||
| Casino | $ | 17,564,894 | $ | 17,625,233 | $ | 66,006,576 | $ | 62,122,367 | ||||||||
| Food and beverage | 3,424,377 | 3,581,609 | 13,439,326 | 11,797,939 | ||||||||||||
| Other | 517,843 | 605,067 | 2,140,113 | 2,042,519 | ||||||||||||
| Gross revenues | 21,507,114 | 21,811,909 | 81,586,015 | 75,962,825 | ||||||||||||
| Less promotional allowances | (1,707,086 | ) | (1,947,459 | ) | (6,959,066 | ) | (5,728,469 | ) | ||||||||
| Net revenues | 19,800,028 | 19,864,450 | 74,626,949 | 70,234,356 | ||||||||||||
| Expenses: | ||||||||||||||||
| Casino | 9,076,452 | 9,374,581 | 36,404,244 | 33,421,887 | ||||||||||||
| Food and beverage | 1,606,638 | 1,553,769 | 6,195,203 | 5,671,376 | ||||||||||||
| Other | 75,845 | 58,829 | 291,360 | 238,794 | ||||||||||||
| Marketing and administrative | 5,336,141 | 5,266,141 | 20,920,103 | 18,615,262 | ||||||||||||
| Facility | 498,322 | 514,894 | 2,126,150 | 2,025,007 | ||||||||||||
| Corporate | 570,581 | 645,939 | 2,719,003 | 3,258,187 | ||||||||||||
| Depreciation and amortization | 714,652 | 869,414 | 3,021,280 | 2,608,616 | ||||||||||||
| Loss (gain) on sale of assets | 20,693 | 5,291 | 77,183 | (158,411 | ) | |||||||||||
| Write downs and other charges | - | 1,185,000 | 1,101,472 | 1,185,000 | ||||||||||||
| Total operating expenses | 17,899,324 | 19,473,858 | 72,855,998 | 66,865,718 | ||||||||||||
| Operating income from continuing operations | 1,900,704 | 390,592 | 1,770,951 | 3,368,638 | ||||||||||||
| Non-operating income (expenses): | ||||||||||||||||
| Interest income | 15,770 | 19,350 | 81,011 | 94,589 | ||||||||||||
| Interest expense and amortization of loan costs | (165,542 | ) | (268,243 | ) | (747,554 | ) | (722,903 | ) | ||||||||
| Change in swap fair value | 23,865 | 26,282 | 250,385 | (217,781 | ) | |||||||||||
| Income before income tax | 1,774,797 | 167,981 | 1,354,793 | 2,522,543 | ||||||||||||
| Income tax expense | (578,237 | ) | (409,271 | ) | (790,829 | ) | (1,221,497 | ) | ||||||||
| Net income (loss) | $ | 1,196,560 | $ | (241,290 | ) | $ | 563,964 | $ | 1,301,046 | |||||||
| Per share information: | ||||||||||||||||
| Net income (loss) per common share - basic and diluted | $ | 0.07 | $ | (0.01 | ) | $ | 0.03 | $ | 0.08 | |||||||
| Basic weighted average number of shares outstanding | 17,583,101 | 17,771,800 | 17,688,229 | 17,002,728 | ||||||||||||
| Diluted weighted average number of share outstanding | 17,918,456 | 17,771,800 | 17,990,524 | 17,298,373 | ||||||||||||
| Nevada Gold & Casinos, Inc. | ||||||||
| Consolidated Balance Sheets | ||||||||
| April 30, | April 30, | |||||||
|
2017 |
2016 |
|||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 10,631,903 | $ | 11,583,107 | ||||
| Restricted cash | 1,994,312 | 1,433,728 | ||||||
| Accounts receivable, net of allowances | 808,484 | 665,549 | ||||||
| Prepaid expenses | 1,209,507 | 1,206,825 | ||||||
| Notes receivable, current portion | 383,093 | 208,294 | ||||||
| Inventory and other current assets | 423,113 | 416,022 | ||||||
| Total current assets | 15,450,412 | 15,513,525 | ||||||
| Real estate held for sale | 750,000 | 750,000 | ||||||
| Notes receivable, net of current portion | - | 900,775 | ||||||
| Goodwill | 16,923,588 | 18,025,059 | ||||||
| Identifiable intangible assets, net of accumulated | ||||||||
| amortization of $8,869,497 and $7,997,790 at April 30, | ||||||||
| 2017 and April 30, 2016, respectively | 4,107,328 | 5,003,981 | ||||||
| Property and equipment, net of accumulated depreciation | ||||||||
| of $7,635,620 and $5,641,733 at April 30, 2017 and | ||||||||
| April 30, 2016, respectively | 13,958,715 | 15,147,061 | ||||||
| Deferred tax asset | 1,557,470 | 2,348,299 | ||||||
| Other assets | 70,000 | 70,000 | ||||||
| Total assets | $ | 52,817,513 | $ | 57,758,700 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 1,303,571 | $ | 1,702,366 | ||||
| Accrued payroll and related | 1,925,592 | 2,094,250 | ||||||
| Accrued player's club points and progressive jackpots | 2,348,068 | 1,872,566 | ||||||
| Total current liabilities | 5,577,231 | 5,669,182 | ||||||
| Long-term debt | 12,061,411 | 16,839,148 | ||||||
| Other long-term liabilities | 667,110 | 881,426 | ||||||
| Total liabilities | 18,305,752 | 23,389,756 | ||||||
| Stockholders' equity: | ||||||||
| Common stock, $0.12 par value per share; 50,000,000 | ||||||||
| shares authorized; 18,627,167 and 18,571,693 shares issued and 17,547,665 and 17,788,856 shares outstanding at April 30, 2017, and April 30, 2016, respectively |
2,235,269 | 2,228,612 | ||||||
| Additional paid-in capital | 27,449,319 | 27,315,517 | ||||||
| Retained earnings | 12,320,814 | 11,756,850 | ||||||
| Treasury stock, 1,079,502 and 782,837 shares at April 30, 2017 and April 30, 2016, at cost |
(7,493,641 | ) | (6,932,035 | ) | ||||
| Total stockholders' equity | 34,511,761 | 34,368,944 | ||||||
| Total liabilities and stockholders' equity | $ | 52,817,513 | $ | 57,758,700 | ||||
Contacts: Nevada Gold & Casinos, Inc. Michael P. Shaunnessy / James Meier (702) 685-1000 Stonegate Capital Partners Preston Graham (972) 850-2001
