HOUSTON, Dec. 15, 2011 (GLOBE NEWSWIRE) -- Nevada Gold & Casinos, Inc. (NYSE Amex:UWN) today announced financial results for the second quarter ended October 31, 2011.
Second Quarter 2012 Financial Highlights included:
- Net revenues from continuing operations increased 4.6% to $12.8 million, compared to $12.3 million in the second quarter ended October 31, 2010;
- Operating loss from continuing operations of $(2.5) million compared to operating loss from continuing operations of $(0.3) million in the second quarter of fiscal 2011, operating expenses from continuing operations during the second quarter of 2012 include a $2.3 million non-cash impairment adjustment of the Colorado land, based on its estimated value of $1.1 million; the operating loss from continuing operations for the quarter ended October 31, 2011, without this impairment, was $(0.2) million;
- Net loss of $(2.1) million, or $(0.6) million excluding the impairment adjustment, compared to a net loss of $(0.4) million a year ago;
- Net loss per basic and diluted common share of $(0.16), or $(0.05) excluding the impairment adjustment, compared to a net loss per basic and diluted common share of $(0.03) in the year ago period;
- Adjusted EBITDA(1) of $0.3 million compared to $0.4 million in the second quarter of fiscal 2011.
"We are consistently trying to build value for our shareholders and believe that over the past few months we have positioned the Company for long term success. So far this fiscal year we have completed the acquisition of the Red Dragon mini-casino, we have refinanced our debt with Wells Fargo Gaming Capital, LLC, signed an agreement to purchase AG Trucano, Son & Grandsons, Inc., a slot route operator based in Deadwood, South Dakota, and announced the sale of the Colorado Grande Casino in Cripple Creek, Colorado," said Robert Sturges, CEO of Nevada Gold. "Although we are pleased with these recent developments, our second quarter financial performance was below our expectations, primarily due to a lower than expected hold percentage. While we are disappointed with our financial performance in the second quarter our November financial performance showed an improvement over the prior year period."
Financial Results
For the second quarter of fiscal 2012, net revenues from continuing operations increased to $12.8 million compared to $12.3 million in the second quarter of fiscal 2011. Operating expenses from continuing operations increased to $15.3 million from $12.5 million in the second quarter of 2011. Of the increase, $2.3 million is the result of an impairment of the Colorado land based on its estimated value of $1.1 million.
Net loss for the second quarter of fiscal 2012 was $(2.1) million, or $(0.6) million excluding the non-cash impairment adjustment, compared to a net loss of $(0.4) million in the second quarter of fiscal 2011. Net loss per diluted common share was $(0.16), or $(0.05) excluding the impairment adjustment, compared to a net loss per diluted common share of $(0.03) in the prior year period.
Basic and diluted weighted average common shares outstanding in the fiscal second quarter of 2012 were 13.2 million versus 12.8 million in the fiscal second quarter of 2011.
Outlook
The Company expects its normalized EBITDA to be in excess of $5.0 million annually post the closing of the purchase of AG Trucano, Son & Grandsons, Inc., and the pending sale of the Colorado Grande Casino. The Company expects EBITDA for the calendar year 2011 to be less than expected in a range of $3.3 million to $3.6 million primarily due to the lower than expected hold percentage in the second quarter and some softness in consumer demand.
Subsequent and Significant Events
On November 8, 2011 the Company announced that it has closed its registered direct offering for the sale of 2,625,652 shares of common stock at a price of $1.65 per share. In addition, for each share of common stock purchased by an investor, the Company issued to such investor a warrant to purchase 0.75 shares of common stock. The warrants have an exercise price of $2.18 per share and are exercisable for five years from the initial exercise date, which date is six months from the date of their issuance. Part of the proceeds of this offering will be used to assist the company in the $5.2 million acquisition of AG Trucano, Son & Grandsons, Inc. The acquisition is subject to licensing by the South Dakota gaming authorities and other customary closing conditions.
On November 30, 2011 the Company announced the sale of the Colorado Grande Casino in Cripple Creek, Colorado to G Investments, LLC ("Buyer"). Under the terms of the agreement, the Buyer has agreed to pay the Company $3.2 million of which $800,000 will be paid in cash and $2.4 million will be paid in the form of a promissory note. The proceeds will be used to pay down the Company's debt. Closing of the acquisition is expected to take place before the end of the Company's 2012 fiscal year and is subject to regulatory approval, no material change in gaming tax law and other customary closing conditions, including a lender's consent.
Earnings Conference Call and Webcast
The Company will host a conference call to discuss second quarter 2012 financial results today at 5:00 PM ET. The conference call can be accessed live over the phone by dialing (888) 690-2876, or, for international callers, (913) 312-1446. A replay will be available one hour after the call and can be accessed by dialing (877) 870-5176, or (858) 384-5517 for international callers; the conference ID is 1340484. The replay will be available until Thursday, December 22, 2011. The call will be webcast live from the Company's website at www.NevadaGold.com under the investor relations section.
(1) 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 foreign currency transaction gains and losses, 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 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 who also publicize this information.
Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as alternative to net income as an indicator of our operating performance or any other measure of performance derived in accordance with GAAP.
| Adjusted EBITDA reconciliation to net loss: | ||||||
| For the three months ended | ||||||
| October 31, 2011 | October 31, 2010 | |||||
| Net loss | $ (2,120,606) | $ (396,607) | ||||
| Add: | ||||||
| Income tax benefit | (1,040,324) | (222,733) | ||||
| Net interest expense | 369,971 | 361,610 | ||||
| Loss on extinguishment of debt | 154,270 | -- | ||||
| Impairment of assets | 2,273,966 | -- | ||||
| Loss on sale of assets | 22,340 | -- | ||||
| Depreciation and amortization | 464,541 | 468,156 | ||||
| Stock option grants | 20,780 | 32,468 | ||||
| Net (income) loss from operations held for sale | 97,924 | (12,984) | ||||
| Acquisition expenses | 13,721 | 206,689 | ||||
| Adjusted EBITDA | $ 256,583 | $ 436,599 | ||||
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
Nevada Gold & Casinos, Inc. (NYSE Amex:UWN) of Houston, Texas is a developer, owner and operator of 11 gaming facilities in Colorado and Washington. The following properties are wholly owned and operated by Nevada Gold: Colorado Grande Casino in Cripple Creek, Colorado, the Crazy Moose Casinos in Pasco and Mountlake Terrace, Washington, Coyote Bob's Roadhouse Casino in Kennewick, Washington, the Silver Dollar Casinos in Seatac, Bothell and Renton, Washington, the Club Hollywood Casino located in Shoreline, Washington, the Royal Casino located in Everett, Washington, the Red Dragon Casino in Mountlake Terrace, Washington and the Golden Nugget Casino located in Tukwila, Washington. The Company has an interest in Buena Vista Development Company, LLC which is working with the Buena Vista Rancheria of Me-Wuk Indians on a Native American casino project to be developed in the city of Ione, California. On October 18, 2011, the Company signed an agreement to acquire a slot route operation in Deadwood, South Dakota which is anticipated to close during the first calendar quarter of 2012. On November 23, 2011, the Company signed an agreement to sell the Colorado Grande Casino. Closing of the transaction is expected to take place before the end of the Company's 2012 fiscal year. For more information, visit www.nevadagold.com.
The Nevada Gold & Casinos, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=1552
| Nevada Gold & Casinos, Inc. | ||
| Consolidated Balance Sheets | ||
|
October 31, 2011 |
April 30, 2011 |
|
| (unaudited) | ||
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 3,743,434 | $ 5,656,110 |
| Restricted cash | 1,197,403 | 944,359 |
| Accounts receivable | 548,452 | 571,032 |
| Prepaid expenses | 1,182,920 | 785,975 |
| Income tax receivable | -- | 176,750 |
| Other current assets | 316,747 | 290,433 |
| Assets of operations held for sale | 36,992 | 36,187 |
| Total current assets | 7,025,948 | 8,460,846 |
| Investments in development projects | 686,668 | 189,692 |
| Real estate held for sale | 1,100,000 | 3,373,966 |
| Notes receivable - development projects, net of allowances | 1,700,000 | 1,700,000 |
| Goodwill | 14,167,113 | 13,474,980 |
| Identifiable intangible assets, net of accumulated amortization of $2,489,619 and $1,852,553 at October 31, 2011 and April 30, 2011, respectively | 7,143,702 | 7,361,298 |
| Property and equipment, net of accumulated depreciation of $1,421,382 and $1,1892,555 at October 31, 2011 and April 30, 2011, respectively | 3,952,948 | 3,909,157 |
| Deferred tax asset | 2,785,519 | 1,460,884 |
| BVO receivable | 4,000,000 | 4,000,000 |
| Other assets | 1,446,640 | 574,339 |
| Assets of operations held for sale | 4,327,414 | 4,514,715 |
| Total assets | $ 48,335,952 | $ 49,019,877 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable and accrued liabilities | $ 1,898,175 | $ 1,442,661 |
| Accrued interest payable | 73,879 | 118,024 |
| Other accrued liabilities | 1,656,064 | 1,518,315 |
| Other current liabilites | 25,000 | 100,000 |
| Long-term debt, current portion | 1,140,000 | -- |
| Liabilities of operations held for sale | 407,886 | 405,249 |
| Total current liabilities | 5,201,004 | 3,584,249 |
| Long-term debt, net of current portion | 14,200,000 | 15,070,000 |
| Total liabilities | 19,401,004 | 18,654,249 |
| Stockholders' equity: | ||
| Common stock, $0.12 par value per share; 50,000,000 shares authorized; 14,015,441 and 13,968,210 shares issued and 13,194,381 and 12,797,010 shares outstanding at October 31, 2011, and April 30, 2011, respectively | 1,681,853 | 1,676,185 |
| Additional paid-in capital | 20,462,353 | 20,086,236 |
| Retained earnings | 14,066,742 | 18,977,946 |
| Treasury stock, 821,060 and 1,171,200 shares at October 31, 2011 and April 30, 2011, respectively, at cost | (7,270,461) | (10,369,200) |
| Accumulated other comprehensive loss | (5,539) | (5,539) |
| Total stockholders' equity | 28,934,948 | 30,365,628 |
| Total liabilities and stockholders' equity | $ 48,335,952 | $ 49,019,877 |
| Nevada Gold & Casinos, Inc. | ||||
| Consolidated Statements of Operations | ||||
| (unaudited) | ||||
| Three Months Ended | Six Months Ended | |||
|
October 31, 2011 |
October 31, 2010 |
October 31, 2011 |
October 31, 2010 |
|
| Revenues: | ||||
| Casino | $ 10,896,447 | $ 10,359,632 | $ 21,817,723 | $ 14,638,844 |
| Food and beverage | 2,774,636 | 2,522,480 | 5,367,416 | 3,459,429 |
| Other | 554,114 | 530,418 | 1,069,601 | 746,417 |
| Gross revenues | 14,225,197 | 13,412,530 | 28,254,740 | 18,844,690 |
| Less promotional allowances | (1,392,611) | (1,149,845) | (2,671,683) | (1,541,458) |
| Net revenues | 12,832,586 | 12,262,685 | 25,583,057 | 17,303,232 |
| Expenses: | ||||
| Casino | 5,682,762 | 5,902,863 | 10,995,136 | 7,986,299 |
| Food and beverage | 1,031,703 | 1,051,423 | 2,009,082 | 1,566,346 |
| Marketing and administrative | 4,018,000 | 2,572,391 | 7,936,345 | 3,796,200 |
| Facility | 522,142 | 1,052,300 | 1,011,721 | 1,312,352 |
| Corporate expense | 891,423 | 894,012 | 1,974,187 | 1,882,506 |
| Legal expense | 20,658 | 64,863 | 27,591 | 65,763 |
| Depreciation and amortization | 464,541 | 468,156 | 903,204 | 732,247 |
| Acquisition costs | 13,721 | 206,689 | 65,666 | 782,629 |
| Impairment of assets | 2,273,966 | -- | 2,273,966 | -- |
| Excise taxes | 295,743 | 251,332 | 587,994 | 357,089 |
| Other | 134,352 | 69,370 | 237,172 | 120,827 |
| Total operating expenses | 15,349,011 | 12,533,399 | 28,022,064 | 18,602,258 |
| Operating loss | (2,516,425) | (270,714) | (2,439,007) | (1,299,026) |
| Non-operating income (expenses): | ||||
| Gain (loss) on sale of assets | (22,340) | -- | (22,654) | 392,243 |
| Interest income | 42,853 | 44,191 | 85,702 | 89,115 |
| Interest expense | (379,488) | (394,551) | (759,137) | (620,880) |
| Amortization of loan issue costs | (33,336) | (11,250) | (44,586) | (22,500) |
| Loss on extinguishment of debt | (154,270) | -- | (154,270) | -- |
| Loss before income tax benefit | (3,063,006) | (632,324) | (3,333,952) | (1,461,048) |
| Income tax benefit | 1,040,324 | 222,733 | 1,324,251 | 488,299 |
| Net loss from continuing operations | $ (2,022,682) | $ (409,591) | $ (2,009,701) | $ (972,749) |
| Net income (loss) from operations held for sale | (97,924) | 12,984 | (302,765) | 67,070 |
| Net Loss | (2,120,606) | (396,607) | (2,312,466) | (905,679) |
| Per share information: | ||||
| Net loss per common share - basic and diluted for continuing operations | $ (0.15) | $ (0.03) | $ (0.15) | $ (0.08) |
| Net loss per common share - basic and diluted for operations held for sale | $ (0.01) | $ 0.00 | $ (0.02) | $ 0.01 |
| Basic and diluted weighted average number of shares outstanding | 13,179,208 | 12,764,130 | 13,004,778 | 12,764,130 |