Nevada Gold & Casinos Reports Second Quarter 2018 Results

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

Source:Nevada Gold & Casinos, Inc.