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Mar 16, 2017

Nevada Gold & Casinos Reports Third Quarter Results

LAS VEGAS, March 16, 2017 (GLOBE NEWSWIRE) -- Nevada Gold & Casinos, Inc. (NYSE MKT:UWN) today announced financial results for the third quarter ended January 31, 2017. 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 2017, net revenue decreased to $18.0 million compared to $18.4 million in the third quarter of fiscal 2016.  This decrease was primarily driven by a $1.4 million decline in Washington, partially offset by a $1.2 million increase from Club Fortune Casino, which was acquired on December 1, 2015.  Operating expenses were $18.5 million compared to $17.2 million in the prior year period.  The Company recorded an impairment loss of $1.1 million, writing off the remaining goodwill associated with its South Dakota operation. Operating loss was $0.5 million compared to $1.2 million in the prior year period.  Net loss was $0.7 million compared to net income of $0.5 million in the prior year period. 

For the third quarter of fiscal 2017, the Company reported adjusted EBITDA of $1.4 million compared to a record $2.3 million in the prior year quarter.  This decrease was due to a challenging environment in the Washington portfolio, but was aided by three full months of operations of Club Fortune Casino, compared to two months for the third quarter of 2016.

"Our Washington portfolio endured harsh weather conditions beginning in mid-December and continued into mid-February," stated President and CEO Michael Shaunnessy.  "The growth in volumes we had seen in the first two quarters stalled, and we continued to be plagued by a softer than normal hold percentage, particularly compared to the prior year. On a more positive note, Club Fortune generated its highest quarterly revenue and EBITDA since acquisition."

Net revenues from the Washington state gaming operations decreased to $13.2 million compared to $14.6 million in the prior year.  Of the $1.4 million revenue decline, lower table drop was responsible for $0.5 million, lower hold percentage for $0.6 million and poker for $0.3 million.  Adjusted EBITDA decreased to $1.6 million compared to a record $2.8 million in the prior year period. 

Club Fortune net revenues were $3.6 million and adjusted EBITDA was $0.6 million compared to prior year's first two months of operations which yielded $2.4 million in revenues and adjusted EBITDA of $0.3 million

South Dakota revenues declined $174,000 to $1.2 million, which was partially offset by operating expense reductions leading to a $48,000 decrease in EBITDA compared to the prior year.

Corporate expenses were $0.6 million compared to $0.8 million, net of acquisition expenses in the prior period.  On a consolidated basis, adjusted EBITDA was $1.4 million compared to $2.3 million in the prior year period.

The Company paid down $1.5 million in debt during the quarter.  The unrestricted cash balance at January 31, 2017 was $9.6 million, and total outstanding borrowing was $14.0 million.

In July 2016, the Board authorized a $2.0 million stock repurchase program.  During the quarter the Company acquired 68,188 shares for $132,443, an average cost of $1.94.  Since inception approximately 258,000 shares have been acquired at a cost of approximately $477,000, leaving $1.5 million available under this authorization.

For the nine month period of fiscal 2017, net revenues were $54.8 million compared to $50.4 million in fiscal year 2016. Operating expenses were $55.0 million, which includes the $1.1 million impairment charge, compared to $47.5 million in the prior period. Operating income decreased to $0.1 million compared to $3.0 million in fiscal 2016.  Net loss was $0.6 million compared to net income of $1.5 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 (888) 724-9513.  International callers can access the call by dialing (913) 312-1500.

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 8993337. The replay will be available through March 23, 2017.  The archived webcast will also be available on the company's website.

(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, 2017 and January 31, 2016 are shown below:

Reconciliation of net (loss) income to Adjusted EBITDA:
 For the three months ended
 January 31, 2017 January 31, 2016
      
Net (loss) income$(683,046)  $466,351 
Adjustments:     
Net interest expense and change in swap fair value 8,418   432,252 
Income tax expense 189,738   283,592 
Depreciation and amortization 756,606   739,699 
Acquisition expenses -   368,824 
Stock compensation and employee stock purchases 1,787   30,177 
Loss (gain) on disposal of assets 42,574   (2,271)
Impairment of goodwill 1,101,471   - 
Amortization of deferred rent 8,946   11,639 
Adjusted  EBITDA$1,426,494  $2,330,263 
      


Reconciliation of net (loss) income to Adjusted EBITDA:
 For the nine months ended
 January 31, 2017 January 31, 2016
      
Net (loss) income$(632,596) $1,542,338 
Adjustments:     
Net interest expense and change in swap fair value 290,253   623,484 
Income tax expense 212,592   812,226 
Depreciation and amortization 2,306,628   1,739,902 
Acquisition expenses113,900   629,603 
Stock compensation and employee stock purchases117,393   90,672 
Loss (gain) on disposal of assets 56,490   (163,702)
Impairment of goodwill 1,101,471   - 
Amortization of deferred rent 30,899    24,502 
Adjusted  EBITDA$3,597,030  $5,298,325 
      

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.

 
Nevada Gold & Casinos, Inc.
Consolidated Balance Sheets
     
  January 31, April 30,
  2017
 2016
   (unaudited)   
       
ASSETS
Current assets:    
Cash and cash equivalents $9,583,671  $11,583,107 
Restricted cash  1,722,247   1,433,728 
Accounts receivable, net of allowances  362,644   665,549 
Prepaid expenses  1,338,878   1,206,825 
Notes receivable, current portion  499,361   208,294 
Inventory and other current assets  415,773   416,022 
Total current assets  13,922,574   15,513,525 
       
Real estate held for sale  750,000   750,000 
Notes receivable, net of current portion  4,650    900,775 
Goodwill  16,923,588   18,025,059 
Intangible assets, net of accumulated amortization  4,320,863   5,003,981 
Property and equipment, net of accumulated depreciation  14,384,547   15,147,061 
Deferred tax asset  2,135,707   2,348,299 
Other assets  70,000   70,000 
Total assets  $  52,511,929   $  57,758,700  
       
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:      
Accounts payable and accrued liabilities $1,361,973  $1,702,366 
Accrued payroll and related  1,250,576   2,094,250 
Accrued player's club points and progressive jackpots  2,085,896   1,872,566 
Total current liabilities  4,698,445   5,669,182 
Long-term debt  13,735,976   16,839,148 
Other long-term liabilities  685,807   881,426 
Total liabilities  19,120,228   23,389,756 
       
       
Stockholders' equity:      
Common stock, $0.12 par value per share; 50,000,000 shares      
authorized; 18,625,167 and 18,571,693 shares issued and
17,584,354 and 17,788,856 shares outstanding at January 31, 2017,
and April 30, 2016, respectively
  2,235,028   2,228,612 
Additional paid-in capital  27,441,270   27,315,517 
Retained earnings  11,124,254   11,756,850 
Treasury stock, 1,040,813 and 782,837 shares at January 31, 2017 and      
April 30, 2016, respectively, at cost  (7,408,851)  (6,932,035)
Total stockholders' equity  33,391,701   34,368,944 
Total liabilities and stockholders' equity $52,511,929   $57,758,700 
       


Nevada Gold & Casinos, Inc.
Consolidated Statements of Operations
(unaudited)
      
   Three Months Ended Nine Months Ended
  January 31, January 31, January 31, January 31,
  2017
 2016
 2017
 2016
Revenues:            
Casino $15,791,598  $16,217,164  $48,441,682  $44,578,057 
Food and beverage  3,383,641   3,294,142   10,014,949   8,216,330 
Other  534,011   529,568   1,622,271   1,437,452 
Gross revenues   19,709,250   20,040,874   60,078,902   54,231,839 
Less promotional allowances  (1,722,078)  (1,680,127)  (5,251,980)  (3,794,103)
Net revenues  17,987,172   18,360,747   54,826,922   50,437,736 
 Expenses:             
Casino  8,612,371   8,323,508   27,327,792   24,128,321 
Food and beverage  1,573,445   1,508,918   4,588,565   4,117,607 
Other  61,112   76,050   215,515   179,965 
Marketing and administrative  5,149,807   4,886,618   15,583,962   13,335,935 
Facility  547,123   524,892   1,627,828   1,510,113 
Corporate  627,553   1,121,138   2,148,422   2,612,247 
Depreciation and amortization  756,606   739,699   2,306,628   1,739,202  
Loss (gain) on disposal of assets  42,574   (2,271)  56,490   (163,702)
Impairment of goodwill  1,101,471   -   1,101,471   - 
Total operating expenses  18,472,062   17,178,552   54,956,673   47,459,688 
Operating (loss) income  (484,890)  1,182,195   (129,751)  2,978,048 
Non-operating income (expenses):            
Interest income  19,149   22,794   65,241   73,424 
Interest expense and amortization of loan issue costs  (178,100)  (187,894)  (482,432)  (401,514)
Interest rate swap expense  (29,526)  (21,006)  (99,582)  (51,332)
Change in swap fair value  180,059   (246,146)  226,520   (244,062)
(Loss) income before income tax expense  (493,308)  749,943    (420,004)  2,354,564 
Income tax expense  (189,738)  (283,592)  (212,592)  (812,226)
Net (loss) income $(683,046) $466,351  $(632,596) $1,542,338 
Per share information:            
Net (loss) income per common share - basic and diluted $(0.04) $0.03  $(0.04) $0.09 
             


Contacts:

Nevada Gold & Casinos, Inc.Michael P. Shaunnessy / James Meier

(702) 685-1000



Stonegate Capital PartnersCasey Stegman

(214) 987-4121

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Source: Nevada Gold & Casinos, Inc.

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NEVADA GOLD & CASINOS, INC.

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