Nevada Gold & Casinos Reports Third Quarter Results

LAS VEGAS, March 19, 2018 (GLOBE NEWSWIRE) -- Nevada Gold & Casinos, Inc. (NYSE MKT:UWN) today announced financial results for the third quarter ended January 31, 2018. 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 2018, net revenue increased to $18.1 million compared to $17.9 million in the third quarter of fiscal 2017. This increase was primarily driven by a $0.4 million increase in Washington, partially offset by a $0.2 million decrease from Club Fortune Casino. Operating expenses were $17.5 million compared to $18.4 million in the prior year period, which included a $1.1 million impairment loss. Operating income was $0.6 million compared to an operating loss of $0.5 million in the prior year period. The Company recorded a non-cash tax expense adjustment of $0.3 million as a result of the new corporate tax rate. Net income was $0.2 million compared to net loss of $0.7 million in the prior year period.

Net revenues from the Washington state gaming operations were $13.6 million compared to $13.2 million in the prior year. This increase was primarily due to repositioning one location as a poker only operation. Poker revenues increased $0.3 million while other gaming revenue was unchanged for the period, despite removing 10 tables as a result of the poker move. Marketing expenses increased $0.2 million in the quarter related to the repositioning, and coupled with increased wages, caused Adjusted EBITDA to decrease to $1.5 million compared to $1.6 million in the prior year period.

Club Fortune net revenues were $3.3 million compared to $3.5 million in the prior year. A slot hold variance of approximately 50 basis points was the primary reason for both the revenue and EBITDA declines. Adjusted EBITDA was $0.4 million compared to $0.6 million in the prior year.

South Dakota revenues were $1.2 million in both periods, and Adjusted EBITDA was unchanged at $0.1 million.

Corporate expenses were $0.6 million, comparable to the prior year. On a consolidated basis, adjusted EBITDA was $1.2 million compared to $1.4 million in the prior year period.

"Our strategic poker repositioning in Washington has performed well, and as we reduce our target marketing in support of this move, we expect increased EBITDA contributions from the Washington portfolio,” stated President and CEO Michael Shaunnessy. “Club Fortune was up against a strong prior year comparable, and a lower slot hold hampered the current year’s performance.”

The Company paid down $1.3 million in debt during the quarter. The unrestricted cash balance at January 31, 2018 was $8.6 million, and total outstanding borrowing was $9.3 million.

During the third quarter the Company did not purchase any shares. Since inception of the share repurchase program, approximately 1,085,000 shares have been acquired at a cost of approximately $2.3 million.

For the nine month period of fiscal 2018, net revenues were $56.1 million compared to $54.6 million in fiscal year 2017. Operating expenses were $54.1 million, compared to $54.7 million in the prior period, which included the $1.1 million impairment charge. Operating income was $2.0 million compared to an operating loss of $0.1 million in fiscal 2017. Net income was $1.0 million compared to net loss of $0.6 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 (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 3589855. The replay will be available through March 26, 2018.

(1) 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 nine months ended January 31, 2018 and January 31, 2017 are shown below:

Reconciliation of net income (loss) to Adjusted EBITDA:
For the three months ended
January 31, 2018 January 31, 2017
Net income (loss) $193,327 $(683,046)
Adjustments:
Net interest expense and change in swap fair value 42,545 8,418
Income tax expense 397,861 189,738
Depreciation and amortization 538,907 756,606
Stock compensation 14,760 1,787
Loss on disposal of assets 308 42,574
Impairment of goodwill - 1,101,471
Amortization of deferred rent 8,027 8,946
Adjusted EBITDA$1,195,735 $1,426,494


Reconciliation of net income (loss) to Adjusted EBITDA:
For the nine months ended
January 31, 2018 January 31, 2017
Net income (loss) $956,305 $(636,596)
Adjustments:
Net interest expense and change in swap fair value 298,747 290,253
Income tax expense 718,496 212,592
Depreciation and amortization 1,848,490 2,306,628
Acquisition expenses- 113,900
Stock compensation 89,438 117,363
Loss on disposal of assets 5,773 56,490
Impairment of goodwill - 1,101,471
Amortization of deferred rent 6,076 30,899
Adjusted EBITDA$3,923,325 $3,597,030

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.

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)
January 31, April 30,
2018 2017
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents$ 8,598,633 $ 10,631,903
Restricted cash 2,058,849 1,994,312
Accounts receivable, net of allowances 362,770 808,484
Prepaid expenses 1,669,377 1,209,507
Notes receivable, current portion 35,205 383,093
Inventory and other current assets 444,319 423,113
Total current assets 13,169,153 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 3,708,355 4,107,328
Property and equipment, net of accumulated depreciation 13,261,285 13,958,715
Deferred tax asset 838,974 1,557,470
Other assets 167,097 70,000
Total assets$48,818,452 $ 52,817,513
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities$1,470,127 $1,303,571
Accrued payroll and related 1,407,486 1,925,592
Accrued player's club points and progressive jackpots 2,301,566 2,348,068
Total current liabilities 5,179,179 5,577,231
Long-term debt 9,134,370 12,061,411
Other long-term liabilities 633,340 667,110
Total liabilities 14,946,889 18,305,752
Stockholders' equity:
Common stock, $0.12 par value per share; 50,000,000 shares
authorized; 18,715,985 and 18,627,167 shares issued and
16,848,182 and 17,547,665 shares outstanding at January 31, 2018,
and April 30, 2017, respectively 2,245,927 2,235,269
Additional paid-in capital 27,542,449 27,449,319
Retained earnings 13,277,119 12,320,814
Treasury stock, 1,867,803 and 1,079,502 shares at January 31, 2018,
and April 30, 2017, respectively, at cost (9,193,932) (7,493,641)
Total stockholders' equity 33,871,563 34,511,761
Total liabilities and stockholders' equity$48,818,452 $52,817,513

Three Months Ended
Nine Months Ended
January 31,
January 31,
January 31,
January 31,
2018
2017
2018
2017
Revenues:
Casino$15,822,508 $15,714,538 $49,595,806 $48,231,536
Food and beverage 3,399,975 3,383,641 9,817,883 10,014,949
Other 480,802 534,011 1,484,566 1,622,271
Gross revenues 19,703,285 19,632,190 60,898,255 59,868,756
Less promotional allowances (1,605,069) (1,722,078) (4,831,292) (5,251,980)
Net revenues 18,098,216 17,910,112 56,066,963 54,616,776
Expenses:
Casino 8,631,595 8,550,102 27,697,584 27,180,611
Food and beverage 1,766,663 1,573,445 5,011,269 4,588,060
Other 51,467 46,321 156,841 153,055
Marketing and administrative 5,378,939 5,149,807 15,961,424 15,583,962
Facility 518,234 547,123 1,502,303 1,627,828
Corporate 578,370 627,553 1,909,731 2,148,422
Depreciation and amortization 538,907 756,606 1,848,490 2,306,628
Loss on disposal of assets 308 42,574 5,773 56,490
Impairment of goodwill - 1,101,471 - 1,101,471
Total operating expenses 17,464,483 18,395,002 54,093,415 54,746,527
Operating income (loss) 633,733 (484,890) 1,973,548 (129,751)
Non-operating income (expenses):
Interest income 10,749 19,149 37,424 65,241
Interest expense and amortization of loan issue costs (145,280) (207,626) (469,615) (582,014)
Change in swap fair value 91,986 180,059 133,444 226,520
Income (loss) before income tax expense 591,188 (493,308) 1,674,801 (420,004)
Income tax expense (397,861) (189,738) (718,496) (212,592)
Net income (loss) $ 193,327 $ (683,046) $ 956,305 $ (632,596)
Per share information:
Net income (loss) per common share - basic$ 0.01 $ (0.04) $ 0.06 $ (0.04)
Net income (loss) per common share - diluted$ 0.01 $ (0.04) $ 0.05 $ (0.04)

Source:Nevada Gold & Casinos, Inc.