Nevada Gold & Casinos, Inc. Announces First Quarter Results
HOUSTON, Sept. 7, 2006 -- Nevada Gold & Casinos, Inc. (AMEX:UWN) today announced financial results for the first quarter ended July 30, 2006.
For the first quarter of fiscal 2007, net revenues decreased to $3.5 million compared to $3.7 million in the first quarter of fiscal 2006. The net loss for the first quarter of fiscal 2007 was $1.8 million compared to net income of $1.8 million in the first quarter of fiscal 2006. The net loss per diluted common share was $0.14, compared to net income per diluted common share of $0.13 in the prior year period. Financial results for the first quarter of fiscal 2007 include a $0.09 per diluted share loss due to $1.9 million in pre-opening costs at Tioga Downs and Vernon Downs. No gaming revenues are reflected in this number due to the fact that American Racing's quarter ended June 30, 2006.
Tioga Downs' racing facilities were opened on June 9, 2006 and the gaming area opened on July 4, 2006. Vernon Downs was in a pre-opening phase throughout the first quarter of fiscal 2007 and celebrated the grand opening of its racetrack on August 31, 2006.
H. Thomas Winn, Chairman and CEO of Nevada Gold & Casinos, Inc., commented, "We are very excited to have celebrated the grand opening of the Vernon Downs racetrack this past weekend, and believe the racing, lodging and entertainment facilities bring a new level of excitement to the Syracuse region. Tioga Downs has performed very well since it opened in July. We think the positive initial response to both of these projects reflects the success of our operational focus. Despite our short-term earnings challenges, we continue to feel confident that as we implement our growth and operating initiatives, both our existing projects and those in the pipeline leave the company well positioned to generate solid returns over the long term."
Financial Results
For the first quarter of fiscal 2007, net revenues decreased to $3.5 million compared to $3.7 million in the first quarter of fiscal 2006. The revenue decrease was primarily due to a $0.3 million decrease in net revenues from the Colorado Grande Casino-Cripple Creek during the first quarter.
Operating expenses increased to $4.2 million from $3.1 million primarily due to higher corporate expenses reflecting legal fees related to our successful litigation concerning Route 66 Casinos, LLC, as well as increased expenses related to expanded casino operations and the pursuit of additional gaming opportunities. Operating expenses before depreciation and amortization for Colorado Grande Casino decreased $0.2 million due to improved cost control which offset most of the revenue decrease.
The Company's equity in earnings from Isle of Capri-Black Hawk (IC-BH), the Company's joint venture with Isle of Capri Casinos, was $1.1 million for the first quarter ended July 30, 2006, compared to $2.3 million a year ago. The $1.2 million decrease in earnings year over year resulted in a $0.06 decrease in diluted earnings per share. IC-BH's first quarter adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA"), was $11.2 million in fiscal 2007 compared to $12.3 million in the prior year period. A reconciliation of EBITDA to operating income is provided in the attached financial statements.
The net loss for the first quarter of fiscal 2007 was $1.8 million compared to net income of $1.8 million in the first quarter of fiscal 2006. The net loss per diluted common share was $0.14, compared to net income per diluted common share of $0.13 in the prior year period. Diluted weighted average common shares outstanding in the first quarter were 12.9 million compared to 14.0 million in the prior year period.
During the first quarter of fiscal 2007, the Company repurchased 40,800 shares of common stock in the open market at an average price of $8.90 per share.
Earnings Conference Call and Webcast
The Company will discuss first quarter financial results via the earnings conference call to be held at 5:00 ET today via the Internet at www.nevadagold.com, Investor Relations, Events. If you are unable to participate during the live webcast, the conference call replay will be available by dialing 1-888-203-1112 or 1-719-457-0820 for international callers. The replay access code is 9426656. In addition, the call will be archived on the Company's website, http://www.nevadagold.com, through September 15, 2006.
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 Indian 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. (AMEX:UWN) of Houston, Texas is a developer, owner and operator of gaming facilities and lodging entertainment facilities in Colorado, California, and New York. The Company owns a 43% interest in the Isle of Capri-Black Hawk LLC, which owns Isle of Capri-Black Hawk and Colorado Central Station, both of which are in Black Hawk, Colorado. Colorado Grande Casino in Cripple Creek, Colorado is wholly owned and operated by Nevada Gold. The Company owns a 40% interest in the Tioga Downs Racetrack & Vernon Downs Racetrack in New York State and has a management contract for both facilities. The Company also works with Native American tribes in a variety of capacities. Native American projects consist of River Rock Casino in Sonoma County, California, a casino to be built in Tulsa, Oklahoma for the Muscogee (Creek) Nation, a casino to be built in Pauma Valley, California for the La Jolla Band of Luiseno Indians and a casino to be developed by Buena Vista Development Company, LLC in the city of Ione, California for Buena Vista Rancheria of Me-Wuk Indians. For more information, visit www.nevadagold.com.
Nevada Gold & Casinos, Inc.
Consolidated Statements of Operations
(unaudited)
Three Months Ended
----------------------------
July 30, July 24,
2006 2005
------------ ------------
Revenues:
Casino $ 1,446,143 $ 1,834,855
Food and beverage 375,733 500,890
Other 30,458 35,624
Credit enhancement fee 1,946,086 1,917,904
------------ ------------
Gross revenues 3,798,420 4,289,273
Less promotional allowances (306,761) (543,614)
------------ ------------
Net revenues 3,491,659 3,745,659
Casino 352,150 840,516
Food and beverage 232,593 225,265
Marketing and administrative 732,401 442,177
Facility 68,783 54,334
Corporate expense 1,775,638 1,302,965
Legal expense 805,870 134,361
Depreciation and amortization 262,152 89,095
Other 22,597 20,558
------------ ------------
Total operating expenses 4,252,184 3,109,271
------------ ------------
Operating income (loss) (760,525) 636,388
Non-operating income (expenses):
Earnings (loss) from unconsolidated
affiliates (815,556) 2,746,162
Interest expense, net (862,107) (342,144)
Minority interest (387,984) (290,412)
------------ ------------
Income (loss) before income
tax (expense) benefit (2,826,172) 2,749,994
Income tax (expense) benefit 991,109 (999,123)
------------ ------------
Net income (loss) $ (1,835,063) $ 1,750,871
============ ============
Per share information:
Net income (loss) per common share -
basic $ (0.14) $ 0.13
============ ============
Net income (loss) per common share -
diluted $ (0.14) $ 0.13
============ ============
Basic weighted average number of shares
outstanding 12,937,331 13,018,868
============ ============
Diluted weighted average number of
shares outstanding 12,937,331 13,990,573
============ ============
Isle of Capri Black Hawk, L.L.C.
Comparative Financial Highlights on Continuing
(In thousands)
Three Months Ended
----------------------------
July 30, July 24,
2006 2005
----------- -----------
Net Revenue (a) $ 39,615 $ 39,356
Adjusted EBITDA (b) 11,155 12,292
Adjusted EBITDA Margin % (c) 28.2% 31.2%
Isle of Capri Black Hawk, L.L.C.
Reconciliation of Adjusted EBITDA to Net Income
(In thousands)
Three Months Ended
----------------------------
July 30, July 24,
2006 2005
----------- -----------
Adjusted EBITDA $ 11,155 $ 12,292
Less:
Depreciation and amortization 3,921 3,056
Interest expense, net 3,670 2,740
Management fee 1,745 1,839
Add:
Other Income - 589
Income tax benefit 672 123
----------- -----------
Net income $ 2,491 $ 5,369
=========== ===========
(1) Net revenues are presented net of complimentaries, slot points
expense and cash coupon redemptions.
(2) EBITDA is "earnings before interest, income taxes, depreciation
and amortization." Adjusted EBITDA for each property was
calculated by adding preopening expense, management fees and
non-cash items to EBITDA. Adjusted EBITDA is presented solely as
a supplemental disclosure because management believes that it is
1) a widely used measure of operating performance in the gaming
industry, and 2) a principal basis for valuation of gaming
companies. Management uses property level Adjusted EBITDA as the
primary measure of the properties' performance. Adjusted EBITDA
should not be construed as an alternative to net income, as an
indicator of the Company's operating performance; or as an
alternative to any other measure determined in accordance with
accounting principles generally accepted in the United States.
The properties have significant uses of cash flows, including
capital expenditures, interest payments, taxes and debt principal
repayment, which are not reflected in Adjusted EBITDA. Also,
other gaming companies that report Adjusted EBITDA information
may calculate Adjusted EBITDA in a different manner than the
Company. Adjusted EBITDA Margin is calculated by dividing
Adjusted EBITDA by net revenue. Reconciliations of net income
(loss) to Adjusted EBITDA are included in the financial schedules
accompanying this release.
(3) Adjusted EBITDA margin was calculated by dividing adjusted EBITDA
by net revenue.
CONTACT: Nevada Gold & Casinos, Inc.
H. Thomas Winn
Alan Greenstein
(713) 621-2245
Integrated Corporate Relations
Don Duffy
(203) 682-8200
