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


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