Full House Resorts narrows loss and tops Street forecasts, looks to expand

August 10, 2018 2:45 PM
  • Matthew Crowley, CDC Gaming Reports
August 10, 2018 2:45 PM
  • Matthew Crowley, CDC Gaming Reports

Full House Resorts narrowed its loss and boosted revenue for the second quarter, helped by improved performance at its casinos in Nevada and Mississippi. The company also said it’s looking to expand, perhaps into the Pacific Northwest.

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In a statement Thursday, Las Vegas-based Full House, which has casinos in Nevada, Mississippi, Colorado and Indiana, said its net loss was $661,000, or 2 cents per diluted share, for the three months ended June 30, compared with a net loss of $1.5 million, or 7 cents per diluted share, a year earlier.

The most recent result topped the 1 cent per share in earnings forecast by Yahoo Finance-polled analysts and snapped a two-quarter streak of missed forecasts.

Revenue rose 2.7 percent to $41.2 million, missing the $342.6 million forecast of Yahoo Finance-polled analysts. A year earlier, Full House had $40.1 million in second-quarter revenue.

Operating income rose 53.8 percent to $2 million from $1.3 million. Adjusted earnings before interest, taxes, depreciation and amortization, a measure of cash flow, rose 18.9 percent to $4.4 million from $3.7 million.

Revenue in Full House’s Northern Nevada segment, consisting of the Grand Lodge in Lake Tahoe and Stockman’s in Fallon, rose 2.2 percent to $4.4 million from $4.3 million a year earlier. Revenue at the company’s Silver Slipper hotel-casino in Bay St. Louis, Miss., rose 6.7 percent to $17.5 million from $16.4 million.

Full House reported progress with its projects. Access roads are nearly done for its ferryboat to Kentucky, across the river from its Rising Star hotel-casino in Indiana, the company said.

Meanwhile, in Cripple Creek, Colo., Full House said it agreed to lease or buy the closed Imperial Casino near the company’s Bronco Billy’s hotel-casino and reopen it in the fourth quarter. The company didn’t disclose the price.

Full House said its negotiating contracts to build a new parking garage as part of a two-phase expansion of Bronco Billy’s, a project for which it has disclosed neither cost estimates nor construction dates. CEO Dan Lee has previously said he expects completion in 2020.

Full House in May said the Creek Historic Preservation Commission and Cripple Creek City Council had unanimously approved the expansion. But a rival challenged the historic preservation guidelines exemption Full House received.

Meanwhile, Full House said it has explored expansion.

The company said it will write to the New Mexico Racing Commission this month to announce its intention to bid for a racing license, the state’s sixth, and has entered option agreements for a potential casino site in New Mexico. The company didn’t identify the site.

Also, Full House said it has analyzed expanding in Washington state, where small table games-only casinos are allowed in tavern settings. The company has deemed the Tri-Cities area in the state’s southeastern region, which includes Kennewick, Pasco and Richland, as underserved and said it may buy or lease a site there.

“We are now on the verge of another moment in our company’s growth,” Lee said in a statement accompanying the earnings results.

Macquarie Securities gaming analyst Chad Beynon told investors in a research note that an expansion into Washington would be like operating taverns in the Nevada, which allow a limited number of video gaming slot machines.

“Management continues to demonstrate a focus towards growth, with progress from both ongoing projects as well potential new projects that would drive value to the stock,” Beynon said. Certainly, management bandwidth remains limited given a small team and a slew of projects already underway across the portfolio, but Full House is looking years down the road to make sure developments are always in the pipeline.”

Full House shares rose 1 cent, or 0.34 percent, Thursday to close at $2.99 on the Nasdaq.

Follow Matthew Crowley on Twitter @copyjockey