Regional casino operator Full House Resorts has told investors that the company has “sufficient liquidity” to endure the shutdown of its five properties in four states due to the COVID-19 coronavirus pandemic.
Las Vegas-based Full House, in a statement released Friday afternoon, said the company has $21.4 million in cash on its balance sheet and estimated its “burn rate” of minimal expenses necessary to operate the closed properties will cost $3 million per month, including debt service.
Full House shuttered its casinos in mid-March, as nearly 1,000 gaming properties in 43 states were ordered closed by governors, gaming regulators, and tribal governments in an effort to slow the spread of the virus.
“These closures have been painful for everyone at our company. In response to those closures, we acted quickly to preserve liquidity,” Full House said in the statement.
The company reduced staff from 1,600 employees to just 30, which includes surveillance and security personnel. Full House deferred one-third of its management salaries until at least four of the company’s casinos, including the flagship Silver Slipper Casino in Bay St. Louis, Mississippi, have reopened.
Full House halted the first phase of the expansion at Bronco Billy’s Casino and Hotel in Cripple Creek, Colorado, which was in the early stages of constructing the venue’s parking garage.
In addition to the Mississippi and Colorado properties, Full House also operates the Rising Star in Rising Sun, Indiana, and Stockman’s Casino in Fallon, Nevada, and manages the Hyatt Casino in Incline Village, Nevada, under a lease agreement.
At the end of 2019, Full House has $102.9 million in total debt. For the full year, Full House grew net revenues 0.9% to $165.4 million. However, the net loss in 2019 was $5.8 million, up from $4.4 million in 2018.
“We believe that we have excellent relationships with our lenders. They recently agreed to waive the relevant March 31 covenants in our loan agreements in recognition of the circumstances,” the company said. “We expect to have that agreement executed imminently. We have also been discussing amended covenant levels for quarters beyond the first quarter.”
The company highlighted its six mobile sports betting agreements in Colorado and Indiana, which are expected to provide a combined $7 million annually in revenues.
Full House is preparing reopening plans for its properties that will include health and safety measures.
In March, shortly before the company’s casinos closed, Full House CEO Dan Lee addressed a 75% decline in the company’s stock price from its 52-week high.
“We’re determined to be a survivor,” Lee said. “We’re going to come out of this just fine. We just want to keep our customers and employees safe and weather the storm.”
Shares of Full House closed Friday at $1.20, up 12 cents or 11.11%.
Lee credited the Silver Slipper with having “the best year in its 13-year history.” The casino increased revenues by 5.6% to $73.2 million.
Full House also told the Securities and Exchange Commission Friday that company board member Ellis Landau, 76, had decided to retire and not run for re-election. Landau is a long-time gaming industry financial executive.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
