Nevada Gold & Casinos Reports Third Quarter Results

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| Source: Nevada Gold & Casinos, Inc.

LAS VEGAS, March 18, 2014 (GLOBE NEWSWIRE) -- Nevada Gold & Casinos, Inc. (NYSE MKT: UWN) today announced financial results for the third quarter ended January 31, 2014. The company will host a conference call at 4:30PM EDT today to discuss the financial results and to provide a corporate update. The new dial-in numbers for the conference call will be released on the newswire at 2:30PM EDT.

For the third quarter of fiscal 2014, the company reported net revenues of $14.8 million compared to $16.2 million in the third quarter of fiscal 2013. Net revenues from Washington decreased 8% to $13.3 million, while South Dakota net revenues declined 17% to $1.5 million. Operating expenses were $14.5 million compared to $15.3 million in the prior year period. Operating income from continuing operations was $0.3 million compared to $0.9 million in the prior year period. The net loss from continuing operations was $203,000, which included a $284,000 pre-tax loss on the extinguishment of debt.

During the third quarter, our Washington casino operations produced EBITDA of $1.5 million compared to $2.4 million in the prior year period. Table game drop (amount wagered) was down approximately 4%, while the win percentage, although within the normal range, was at the lower end, while the prior year hold was at the higher end. This spread contributed approximately $0.8 million to the year over year EBITDA decline. Our South Dakota route operation lost $40,000 in EBITDA for the quarter, compared to a $5,000 EBITDA loss in the prior year, reflecting the weather related market softness.  Corporate expenses were $0.6 million compared to $0.8 million in the prior year period. On a consolidated basis, adjusted EBITDA was $0.9 million compared to $1.6 million in the prior year period.

"During the third quarter, our table win percentage was at the low end of the normal range and was the significant driver of our year over year performance," said President and CEO Michael Shaunnessy. "We also recorded a $284,000 write-off of deferred financing costs related to our refinancing which closed December 18th. We will see the first full quarter benefit of the reduced interest rates in the coming quarter." 

"We continue to focus on the cost side of our business to maintain margins. We are actively searching for new opportunities that fit Nevada Gold & Casinos' investment parameters and enhance shareholder value."

For the nine month period of fiscal 2014, net revenues were $46.8 million compared to $49.4 million in fiscal year 2013. Operating expenses were $45.8 million compared to $48.1 million in the prior year.  Operating income from continuing operations was $1.1 million compared to $1.3 million in fiscal 2013. Net loss from continuing operations was $198,000 compared to a loss of $324,000 in the prior year.

(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 option grants, 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.

Adjusted EBITDA reconciliations for the three months and nine months ended January 31, 2014 and January 31, 2013 are shown below:

Adjusted EBITDA reconciliation to net income (loss):
  For the three months ended
   January 31, 2014 January 31, 2013
     
Net income (loss) $ (203,038) $ 235,356
Add:    
Income tax expense (benefit) (72,643) 368,673
Net interest expense (income) 270,077 370,981
Impairments/Write offs 283,550  -- 
Loss on sale of assets 7,412 2,132
Depreciation and amortization 565,030 550,609
Deferred rent 3,632 19,034
Stock option and ESPP grants 15,282 54,479
(Income) on operations held for sale -- (47,190)
Adjusted EBITDA $ 869,302 $ 1,554,074
 
Adjusted EBITDA reconciliation to net loss:
  For the nine months ended
   January 31, 2014 January 31, 2013
     
Net income (loss) $ (198,108) $ (415,527)
Add:    
Income tax expense (benefit) (116,480) 348,987
Net interest expense (income) 1,066,234 1,311,270
Impairments/Write offs 340,509 257,733
Loss on sale of assets 15,929 5,095
Depreciation and amortization 1,692,254 1,628,124
Deferred rent 18,072 57,101
Stock option and ESPP grants 46,301 124,238
Severance expense -- 725,877
Loss on operations held for sale -- 91,603
Adjusted EBITDA $ 2,864,711 $ 4,134,501

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 10 gaming operations in Washington (wagoldcasinos.com) and a slot route operation in Deadwood, South Dakota (dakotaplayersclub.com). The Company also has a social gaming application, Gold Star Slots, available on Facebook and in the Apple store.  For more information, visit www.nevadagold.com.

Nevada Gold & Casinos, Inc. 
Consolidated Balance Sheets 
     
   January 31, April 30,
  2014 2013
  (unaudited)  
ASSETS    
Current assets:    
Cash and cash equivalents  $ 5,686,817  $ 6,723,919
Restricted cash  1,325,924  1,306,487
Accounts receivable, net  367,780  445,481
Prepaid expenses  1,050,304  854,092
Notes receivable, current portion  298,911  216,596
Other current assets  345,724  373,923
Total current assets  9,075,460  9,920,498
     
Real estate held for sale  1,100,000  1,100,000
Investments in development projects  --   56,959
Notes receivable, net of current portion   1,823,272  2,082,853
Goodwill  16,103,583  16,103,583
Identifiable intangible assets, net of accumulated amortization of $5,317,616 and $4,413,439 at January 31, 2014 and April 30, 2013, respectively  6,055,560  6,959,737
Property and equipment, net of accumulated depreciation of $3,385,318 and $2,599,940 at January 31, 2014 and April 30, 2013, respectively  4,498,675  5,028,122
Deferred tax asset, net  4,854,853  4,738,373
Other assets  510,222  533,861
Total assets  $ 44,021,625  $ 46,523,986
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable and accrued liabilities  $ 1,100,449  $ 2,024,465
Accrued interest payable  39,930  34,393
Other accrued liabilities  2,084,632  2,127,140
Long-term debt, current portion  1,600,000  1,280,000
Total current liabilities 4,825,011 5,465,998
Long-term debt, net of current portion  11,150,000  12,930,000
Other long-term liabilities  432,055  421,253
Total liabilities 16,407,066 18,817,251
     
Stockholders' equity:    
Common stock, $0.12 par value per share; 50,000,000 shares authorized; 16,929,085 and 16,864,122 shares issued and 16,146,248 and 16,081,285 shares outstanding at January 31, 2014, and April 30, 2013, respectively  2,031,499 2,023,705
Additional paid-in capital 24,517,996 24,419,858
Retained earnings 8,002,638 8,200,746
Treasury stock, 782,837 shares at January 31, 2014 and April 30, 2013, respectively, at cost  (6,932,035)  (6,932,035)
Accumulated other comprehensive loss  (5,539)  (5,539)
Total stockholders' equity 27,614,559 27,706,735
Total liabilities and stockholders' equity  $ 44,021,625  $ 46,523,986
 
Nevada Gold & Casinos, Inc. 
Consolidated Statements of Operations
         
  Three Months Ended Nine Months Ended
  January 31, January 31, January 31, January 31,
  2014 2013 2014 2013
Revenues:        
Casino  $ 12,810,554  $ 14,290,483  $ 41,239,008  $ 43,741,630
Food and beverage 2,606,048 2,527,607  7,476,123  7,593,374
Other 432,150 436,812  1,295,549  1,364,932
Gross revenues 15,848,752 17,254,902  50,010,680  52,699,936
Less promotional allowances  (1,087,885)  (1,044,757)  (3,194,646)  (3,295,399)
Net revenues 14,760,867 16,210,145  46,816,034  49,404,537
         
Expenses:         
Casino 7,379,668 7,880,140  24,286,561  24,853,463
Food and beverage 1,322,877 1,206,390  3,821,637  3,569,639
Other 62,053 77,591  187,101  233,254
Marketing and administrative 4,017,777 4,121,894  12,419,561  12,557,581
Facility 489,927 592,905  1,460,408  1,706,704
Corporate expense 638,177 850,664  1,840,428  3,256,611
Depreciation and amortization  565,030  550,609  1,692,254  1,628,124
Write-off of investments in development projects  --   --   56,959  257,733
Total operating expenses  14,475,509  15,280,193  45,764,909  48,063,109
Operating income  285,358  929,952  1,051,125  1,341,428
Non-operating income (expenses):        
Loss on sale of assets  (7,412)  (2,132)  (15,929)  (5,095)
Interest income  33,241  85,051  101,727  85,951
Interest expense  (255,393)  (370,913)  (954,456)  (1,149,477)
Interest rate swap expense  (3,620)  --   (3,620)  -- 
Amortization of loan issue costs  (44,305)  (85,119)  (209,885)  (247,744)
Loss on extinguishment of debt  (283,550)  --   (283,550)  -- 
Income (loss) before income tax benefit (expense)  (275,681)  556,839  (314,588)  25,063
Income tax benefit (expense)  72,643  (368,673)  116,480  (348,987)
Net income (loss) from continuing operations  $ (203,038)  $ 188,166  $ (198,108)  $ (323,924)
Net income (loss) from discontinued operations, net of taxes  --   47,190  --   (91,603)
Net income (loss)  $ (203,038)  $ 235,356  $ (198,108)  $ (415,527)
Per share information:        
Net income (loss) per common share - basic and diluted for continuing operations  $ (0.01)  $ 0.01  $ (0.01)  $ (0.02)
         
Net income (loss) per common share - basic and diluted for discontinued operations in fiscal year 2013    $ 0.00    $ (0.01)
         
Basic weighted average number of shares outstanding 16,136,485 16,028,191 16,115,311 15,975,576
         
Diluted weighted average number of shares outstanding 16,325,594 16,029,921 16,271,238 15,975,576
Nevada Gold & Casinos, Inc.
Michael P. Shaunnessy / James Kohn
(702) 685-1000