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 |