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Jul 26, 2018

Nevada Gold & Casinos Reports Fourth Quarter and Fiscal Year 2018 Results

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LAS VEGAS, July 26, 2018 (GLOBE NEWSWIRE) -- Nevada Gold & Casinos, Inc. (NYSE MKT:UWN) today announced financial results for the fourth quarter and year ended April 30, 2018.  The Company will host a conference call today at 4:30 PM ET (1:30 PM PT) to discuss these results and provide a corporate update.

The financial results reflect an adjustment related to progressive liabilities for $0.6 million in fiscal 2018 and $0.2 million in the prior year which reduced casino revenue and marketing expense equally with no effect on operating income.  Of this adjustment, $0.1 million related to the fourth quarter of both 2018 and 2017.

FOURTH QUARTER
For the fourth quarter of fiscal 2018, the Company reported net revenues of $18.5 million compared to $19.8 million in the fourth quarter of fiscal 2017.  Operating income was $0.6 million compared to $1.9 million in the prior year.   Net income was $0.4 million, or $0.02 per share. Consolidated Adjusted EBITDA was $2.1 million compared to $2.6 million in the prior year period.    

During the fourth quarter, net revenues from Washington state gaming operations decreased to $13.7 million from the $14.8 million in the prior year period, while EBITDA decreased to $2.1 million compared to $2.5 million in the prior year period.  Club Fortune net revenues were $3.4 million compared to $3.7 million in the prior year period, while EBITDA decreased by $0.2 million to $0.5 million. South Dakota route operation revenues decreased $89,000 from the prior year period and EBITDA declined $11,000 for the quarter. Corporate expenses were approximately $0.6 million in both periods, excluding non-recurring sale transaction expenses. 

FISCAL YEAR
For the fiscal year 2018, the Company reported net revenues of $74.6 million compared to $74.5 million in fiscal year 2017.  Operating expenses were $72.0 million compared to $72.7 million in the prior year.  Net income was $1.3 million compared to $0.6 million in the prior year.

Net revenues for the fiscal year from Washington state gaming operations increased to $54.4 million from $54.3 million, primarily due to increased Poker revenue.  Higher wages and marketing expenses contributed to Adjusted EBITDA decreasing to $6.5 million from $7.0 million in the prior year.   Club Fortune net revenues were $13.6 million and Adjusted EBITDA was $1.7 million compared to revenues of $13.5 million and Adjusted EBITDA of $1.5 million in the prior year.  South Dakota route operation revenues decreased $0.1 million to $6.6 million while Adjusted EBITDA decreased to $0.1 million.  We recorded a write down and other charges related to South Dakota of $0.4 million in the current year, compared to $1.1 million in the prior year. Corporate adjusted EBITDA was negative $2.3 million compared to negative $2.5 million in the prior year. 

During the fiscal year the Company repaid $4.3 million in bank debt and as of April 30, 2018, the outstanding bank debt was $8.0 million and unrestricted cash on hand was $9.5 million.  During the year ended April 30, 2018, the Company repurchased 788,301 shares at a weighted average price of $2.16 per share, costing $1,700,291. As of April 30, 2018, $1.7 million remains available under the share repurchase authorization.

STRATEGIC REVIEW
The Company’s Strategic Review is ongoing and has resulted to date in significant steps to restructure the Company’s operations.  On June 30, 2018 the Company completed the sale of its South Dakota slot route operations and on June 27, 2018 executed a definitive agreement to sell the Club Fortune Casino in Henderson, Nevada for $14.6 million.  The Company has previously announced that effective upon closure of the sale of Club Fortune casino, its corporate headquarters will relocate from Las Vegas to the Seattle, Washington area reducing corporate overhead by $1.2 million.  At that time Victor Mena will succeed Michael Shaunnessy as President and Chief Executive Officer.  Mr. Mena has led the operations in Washington since 2009.

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.

Net income reconciliation to Adjusted EBITDA:

     
    For the three months ended
    April 30, 2018   April 30, 2017
             
Net income    $ 367,121      $ 1,196,560  
Adjustments:            
Net interest expense     158,955       149,772  
Income tax expense     134,930       578,237  
Depreciation and amortization     522,261       714,652  
Write downs and other charges      358,807        -  
Deferred rent amortization     3,868       5,168  
Stock compensation amortization     14,702       2,980  
Acquisition and sale related expenses     589,839       -  
Increase in swap fair value     (37,575 )     (23,865 )
Loss on disposal of assets     2,090       20,693  
Adjusted EBITDA    $ 2,114,998      $ 2,644,197  
             
             


    For the fiscal year ended
    April 30, 2018   April 30, 2017
             
Net income    $ 1,323,425      $ 563,964  
Adjustments:            
Net interest expense     591,146       666,543  
Income tax expense     853,426       790,829  
Depreciation and amortization     2,370,752       3,021,280  
Acquisition and sale related expenses     589,839       113,900  
Write downs and other charges      358,807        1,101,472  
Deferred rent amortization     9,943       36,068  
Stock compensation amortization     104,140       124,279  
Increase in swap fair value     (171,018 )      (250,385 )
Loss on disposal of assets     7,863       77,183  
Adjusted  EBITDA    $ 6,038,323      $ 6,245,133  
             
             

Conference Call and Webcast
The Company will host a conference call at 4:30 PM ET (1:30 PM PT) today to discuss the financial results and provide a corporate update. The call can be accessed live by dialing (888) 254-3590. International callers can access the call by dialing (323) 994-2093.

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 8454743. The replay will be available through August 2, 2018.

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 (clubfortune.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
         
    Three Months Ended   Twelve Months Ended
  April 30,   April 30,   April 30,   April 30,
  2018   2017   2018   2017
Revenues:                  
Casino $ 16,172,021     $ 17,607,040     $   65,767,827     $   65,838,576  
Food and beverage   3,435,099       3,424,377         13,252,982         13,439,326  
Other   494,052       517,842         1,978,619         2,140,113  
Gross revenues   20,101,172       21,549,259         80,999,428         81,418,015  
Less promotional allowances     (1,615,610 )       (1,707,086 )       (6,446,902 )       (6,959,066 )
Net revenues     18,485,562         19,842,173         74,552,526         74,458,949  
                       
 Expenses:                       
Casino   8,779,150       9,307,408         36,476,733         36,488,019  
Food and beverage   1,790,000       1,606,638         6,801,269         6,194,698  
Other   49,923       55,034         206,764         208,090  
Marketing and administrative   4,754,110       5,168,141         20,715,534         20,752,103  
Facility   505,787       498,322         2,008,090         2,126,150  
Corporate   1,100,004       570,581         3,009,735         2,719,003  
Depreciation and amortization     522,261         714,652         2,370,752         3,021,280  
Loss on sale of assets     2,090         20,693         7,863         77,183  
Write downs and other charges     358,807         -          358,807         1,101,472  
Total operating expenses     17,862,132         17,941,469         71,955,547         72,687,998  
Operating income from continuing operations     623,430         1,900,704         2,596,979         1,770,951  
Non-operating income (expenses):                      
Interest income     8,818         15,770         46,241         81,011  
Interest expense and amortization of loan costs     (167,772 )       (165,542 )       (637,387 )       (747,554 )
Change in swap fair value     37,575         23,865         171,018         250,385  
Income before income tax     502,051         1,774,797         2,176,851         1,354,793  
  Income tax expense      (134,930 )       (578,237 )       (853,426 )       (790,829 )
Net income  $   367,121     $   1,196,560     $   1,323,425     $   563,964  
Per share information:                      
Net income per common share - basic and diluted $   0.02     $   0.07     $   0.08     $   0.03  
                       
Basic weighted average number of shares outstanding   16,848,182       17,583,101       16,985,532       17,688,229  
                       
Diluted weighted average number of share outstanding   17,213,052       17,918,456       17,350,402       17,990,524  
                       



 
Nevada Gold & Casinos, Inc.
Consolidated Balance Sheets
       
  April 30,   April 30,
  2018    2017 
           
ASSETS 
Current assets:      
Cash and cash equivalents $   9,508,931     $   10,631,903  
Restricted cash     2,369,063         1,994,312  
Accounts receivable, net of allowances     485,774         808,484  
Prepaid expenses     1,436,538         1,209,507  
Notes receivable, current portion     -          383,093  
Inventory and other current assets     430,296         423,113  
Total current assets     14,230,602         15,450,412  
           
Real estate held for sale     750,000         750,000  
Goodwill     16,923,588         16,923,588  
Identifiable intangible assets, net of accumulated          
  amortization of $9,361,189 and $8,869,497 at April 30,          
  2018 and April 30, 2017, respectively     3,497,779         4,107,328  
Property and equipment, net of accumulated depreciation          
  of $9,260,152 and $7,635,620 at April 30, 2018 and          
  April 30, 2017, respectively     12,812,411         13,958,715  
Deferred tax asset     704,044         1,557,470  
Other assets     204,672         70,000  
Total assets $   49,123,096     $   52,817,513  
           
LIABILITIES AND STOCKHOLDERS’ EQUITY 
Current liabilities:          
Accounts payable and accrued liabilities $ 1,695,495     $ 1,303,571  
Accrued payroll and related     2,049,313         1,925,592  
Accrued player's club points and progressive jackpots     2,592,456         2,348,068  
Total current liabilities   6,337,264       5,577,231  
Long-term debt   7,895,240       12,061,411  
Other long-term  liabilities     637,207         667,110  
Total liabilities   14,869,711       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 April 30, 2018, and April 30, 2017, respectively 		   2,245,927       2,235,269  
Additional paid-in capital   27,557,151       27,449,319  
Retained earnings   13,644,239       12,320,814  
Treasury stock, 1,867,803 and 1,079,502 shares at
April 30, 2018 and April 30, 2017, at cost		     (9,193,932 )       (7,493,641 )
Total stockholders' equity   34,253,385       34,511,761  
Total liabilities and stockholders' equity $ 49,123,096     $ 52,817,513  
           

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Source: Nevada Gold & Casinos, Inc.

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