Nevada Gold & Casinos Reports First Quarter 2019 Financial Results
New Revenue Recognition Standard
On
The new revenue standard also resulted in reclassifications to and from revenues, promotional allowances and operating expenses. Pursuant to ASC 606, food and beverage and other complimentaries are now included as revenues within their respective categories, with a corresponding decrease in casino revenues, as the offsetting amount historically included in promotional allowances has been eliminated. In addition, the cost of providing these complimentary goods and services are now included as expenses within their respective categories.
Financial results for the three months ended
In addition, with the sale of the
For the first quarter of fiscal 2019, the Company reported net revenues of
Net revenues from the
Club Fortune revenues were
“Last year our
The Company’s outstanding bank debt was
The exclusive negotiations for the sale of the Company are ongoing.
Conference Call and Webcast
The Company will host a conference call at
A telephone replay of the conference call will be available after
(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, income taxes, depreciation and amortization, non-cash goodwill and other long-lived asset impairment charges, write-offs of project development costs, litigation charges, non-cash stock grants, non-cash employee stock purchase plan discounts, exclusion of net income or loss from operations held for sale, 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.
The following table reconciles net income from continuing operations to Adjusted EBITDA from continuing operations for the three months ended
For the three months ended | ||||||||||
July 31, 2018 | July 31, 2017 | |||||||||
Net income from continuing operations | $ | 85,594 | $ | 73,015 | ||||||
Adjustments: | ||||||||||
Net interest expense and change in swap fair value | 107,226 | 152,015 | ||||||||
Income tax expense | 24,207 | 35,918 | ||||||||
Depreciation and amortization | 130,439 | 337,938 | ||||||||
Sale related expenses | 482,202 | - | ||||||||
Stock compensation | 12,570 | 58,537 | ||||||||
Gain on sale of assets | (57,692 | ) | - | |||||||
Amortization of deferred rent | (14,883 | ) | 724 | |||||||
Adjusted EBITDA from continuing operations | $ | 769,663 | $ | 658,147 | ||||||
Adjusted EBITDA from discontinued operations was
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
About
Contacts: |
Nevada Gold & Casinos, Inc. Michael P. Shaunnessy / James Meier (702) 685-1000 |
Stonegate Capital Partners Preston Graham (972) 850-2001 |
Consolidated Balance Sheets
July 31, | April 30, | |||||||
2018 | 2018 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 8,423,498 | $ | 9,508,931 | ||||
Restricted cash | 2,517,272 | 2,369,063 | ||||||
Accounts receivable, net of allowances | 297,858 | 345,403 | ||||||
Prepaid expenses | 1,015,129 | 1,058,726 | ||||||
Inventory and other current assets | 344,096 | 341,299 | ||||||
Assets held for sale | 13,791,349 | 607,180 | ||||||
Total current assets | 26,389,202 | 14,230,602 | ||||||
Real estate held for sale | 750,000 | 750,000 | ||||||
Goodwill | 14,092,154 | 14,092,154 | ||||||
Intangible assets, net of accumulated amortization | 2,274,504 | 2,289,485 | ||||||
Property and equipment, net of accumulated depreciation | 3,215,451 | 3,254,367 | ||||||
Deferred tax asset | 718,495 | 704,044 | ||||||
Assets held for sale | - | 13,597,772 | ||||||
Other assets | 208,861 | 204,672 | ||||||
Total assets | $ | 47,648,667 | $ | 49,123,096 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 1,410,571 | $ | 1,350,263 | ||||
Accrued payroll and related | 1,302,381 | 1,810,626 | ||||||
Accrued player's club points and progressive jackpots | 2,461,002 | 2,273,655 | ||||||
Liabilities held for sale | 853,721 | 902,720 | ||||||
Total current liabilities | 6,027,675 | 6,337,264 | ||||||
Long-term debt | 6,817,794 | 7,895,240 | ||||||
Other long-term liabilities | 622,322 | 637,207 | ||||||
Total liabilities | 13,467,791 | 14,869,711 | ||||||
Stockholders' equity: | ||||||||
Common stock, $0.12 par value per share; 50,000,000 shares | ||||||||
authorized; 18,715,985 shares issued and 16,848,182 shares outstanding at July 31, 2018, and April 30, 2018. | 2,245,927 | 2,245,927 | ||||||
Additional paid-in capital | 27,571,911 | 27,557,151 | ||||||
Retained earnings | 13,556,970 | 13,644,239 | ||||||
Treasury stock, 1,867,803 and 1,867,803 shares at July 31, 2018, | ||||||||
and April 30, 2018, respectively, at cost | (9,193,932 | ) | (9,193,932 | ) | ||||
Total stockholders' equity | 34,180,876 | 34,253,385 | ||||||
Total liabilities and stockholders' equity | $ | 47,648,667 | $ | 49,123,096 | ||||
Consolidated Statements of Operations
(unaudited)
Three Months Ended | ||||||||
July 31, | July 31, | |||||||
2018 | 2017 | |||||||
Revenues: | ||||||||
Casino | $ | 12,012,719 | $ | 13,251,312 | ||||
Food and beverage | 2,489,377 | 2,360,414 | ||||||
Other | 378,073 | 411,596 | ||||||
Gross revenues | 14,880,169 | 16,023,322 | ||||||
Less promotional allowances | - | (1,021,392 | ) | |||||
Net revenues | 14,880,169 | 15,001,930 | ||||||
Expenses: | ||||||||
Casino | 6,172,939 | 7,717,485 | ||||||
Food and beverage | 2,203,490 | 1,241,092 | ||||||
Other | 58,779 | 25,869 | ||||||
Marketing and administrative | 4,474,984 | 4,359,431 | ||||||
Facility | 448,474 | 419,783 | ||||||
Corporate | 1,231,729 | 639,384 | ||||||
Depreciation and amortization | 130,439 | 337,938 | ||||||
Gain on sale of assets | (57,692 | ) | - | |||||
Total operating expenses | 14,663,142 | 14,740,982 | ||||||
Operating income | 217,027 | 260,948 | ||||||
Non-operating income (expenses): | ||||||||
Interest income | 8,438 | 12,465 | ||||||
Interest expense and amortization of loan issue costs | (119,853 | ) | (160,515 | ) | ||||
Change in swap fair value | 4,189 | (3,965 | ) | |||||
Income from continuing operations before income tax expense | 109,801 | 108,933 | ||||||
Income tax expense | (24,207 | ) | (35,918 | ) | ||||
Income from continuing operations | $ | 85,594 | $ | 73,015 | ||||
(Loss) Income from discontinued operations, net of taxes | (137,438 | ) | 50,987 | |||||
Net (loss) income | $ | (51,844 | ) | $ | 124,002 | |||
Per share information: | ||||||||
Income from continuing operations per common share - basic | $ | 0.01 | $ | 0.01 | ||||
Income from continuing operations per common share - diluted | $ | - | $ | - | ||||
Income from discontinued operations per common share - basic and diluted | $ | (0.01 | ) | $ | - | |||
Net income per common share - basic and diluted | $ | - | $ | 0.01 | ||||
The amount by which each line item in continuing operations in our unaudited Condensed Consolidated Statement of Operations for the three months ended
For the three months ended July 31, 2018 | |||||||||||||
As Reported - With Adoption of ASC 606 |
As Adjusted - Without Adoption of ASC 606 |
Effect of Accounting Change Increase/(Decrease) |
|||||||||||
Revenues: | |||||||||||||
Casino | $ | 12,012,719 | $ | 12,985,848 | $ | (973,129 | ) | ||||||
Food and beverage | 2,489,377 | 2,489,377 | - | ||||||||||
Other | 378,073 | 378,073 | - | ||||||||||
Gross revenues | 14,880,169 | 15,853,298 | (973,129 | ) | |||||||||
Less promotional allowances | - | (976,807 | ) | 976,807 | |||||||||
Net revenues | 14,880,169 | 14,876,491 | 3,678 | ||||||||||
Expenses: | |||||||||||||
Casino | 6,172,939 | 6,986,273 | (813,334 | ) | |||||||||
Food and beverage | 2,203,490 | 1,417,389 | 786,101 | ||||||||||
Other | 58,779 | 27,868 | 30,911 | ||||||||||
Marketing and administrative | 4,474,984 | 4,474,984 | - | ||||||||||
Facility | 448,474 | 448,474 | - | ||||||||||
Corporate | 1,231,729 | 1,231,729 | - | ||||||||||
Depreciation and amortization | 130,439 | 130,439 | - | ||||||||||
Gain on sale of assets | (57,692 | ) | (57,692 | ) | - | ||||||||
Total operating expenses | 14,663,142 | 14,659,464 | 3,678 | ||||||||||
Operating income | $ | 217,027 | $ | 217,027 | $ | - | |||||||
Net loss | $ | (51,844 | ) | $ | (51,844 | ) | $ | - |
Source: Nevada Gold & Casinos, Inc.