Nevada Gold & Casinos Announces Second Quarter Results
HOUSTON, Dec. 7, 2007 -- Nevada Gold & Casinos, Inc. (AMEX:UWN) today announced financial results for the second quarter ended October 28, 2007.
For the second quarter of fiscal 2008 the Company recorded a net loss of $0.6 million compared to a net loss of $3.8 million in the second quarter of fiscal 2007. The Company recorded a net loss per diluted common share of $0.05, compared to net loss per diluted common share of $0.29 in the prior year period. Net revenues decreased to $1.9 million compared to $4.1 million in the second quarter ended October 29, 2006. The loss before income tax expense for the second quarter of fiscal 2008 was $0.6 million compared to a loss before income tax expense of $6.0 million in the second quarter of fiscal 2007.
Year-over-year comparisons of second quarter results were impacted by the following significant items:
* No credit enhancement fees in the second quarter of fiscal 2008 due
to the River Rock Entertainment Authority ("RREA") buy-out
transaction which closed during January 2007, compared to $2.2
million in the second quarter of fiscal 2007;
* Equity in earnings pertaining to the Isle of Capri-Black Hawk,
L.L.C. was $2.0 million compared to $0.5 million in the second
quarter of fiscal 2007;
* No equity in losses from American Racing in the second quarter of
fiscal 2008 due to its sale in June 2007, compared to a $2.1
million equity in loss a year ago;
* Write-offs of $3.5 million of notes receivable and project
development costs related to Native American gaming projects in the
second quarter of last year; and
* Recording of $134,000 in the second quarter of fiscal 2008 of a
non-recurring expense pertaining to grants of employee stock
options.
Robert Sturges, CEO of Nevada Gold & Casinos, Inc., commented, "Second quarter results reflect our ongoing progress of improving the performance of our existing projects, as well as continued expense control. We are pleased with the recently announced sale of our membership interest in Isle of Capri-Black Hawk, which furthers our efforts to move ahead with a streamlined business focused on growth through acquisition opportunities. The closing of this transaction, coupled with the restructuring of our debt, leaves us very well positioned from a financial perspective to complete the recently announced proposed acquisition of the Horizon Casino Hotel for a very favorable multiple and pursue similarly attractive acquisitions in the future. We look forward to continuing to build a strong portfolio of projects, which in turn will drive growth and shareholder value over the long term."
Financial Results
For the second quarter of fiscal 2008, net revenues decreased to $1.9 million compared to $4.1 million in the second quarter of fiscal 2007. The revenue decrease is attributable to the elimination of credit enhancement fees during January 2007 as the result of the RREA buyout of future credit enhancement fees from the Dry Creek Casino, LLC of which the Company was a 69% owner.
Operating expenses decreased to $3.6 million from $7.2 million. The decrease is primarily the result of $3.5 million write-off of notes receivable and project development costs related to Native American gaming projects during the three months ended October 29, 2006.
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 $2.0 million for the second quarter ended October 28, 2007, compared to $0.5 million for the same period a year ago. The Company's did not record equity in earnings from American Racing during the second quarter of fiscal 2008 compared to a loss of $2.1 million a year ago. The sale of American Racing was completed during June 2007.
The net loss for the second quarter of fiscal 2008 was $0.6 million compared to a net loss of $3.8 million in the second quarter of fiscal 2007. The net loss per diluted common share was $0.05, compared to a net loss per diluted common share of $0.29 in the comparable prior year period.
Diluted weighted average common shares outstanding in the second quarter were 12.9 million compared to 12.9 million in the prior year period.
Recent Events
On November 13, the Company announced it reached an agreement to acquire Horizon Casino Hotel in Vicksburg, Mississippi, for approximately $35 million. The Horizon Casino Hotel is owned by Columbia Properties Vicksburg, LLC, an affiliate of Tropicana Entertainment, LLC.
The Horizon Casino Hotel is a 297 foot-long, 36,000 square foot riverboat designed in the spirit of the traditional 1800s riverboats, historically found on the Mississippi River and includes a 117 room hotel. The casino provides approximately 700 slot and video poker machines. The casino also offers a variety of table games such as black jack, roulette, craps, and three card poker.
Separately, the Company announced that, subject to shareholder approval, it will sell its 43% membership interest in the Isle of Capri-Black Hawk LLC to Isle of Capri Casinos, which currently owns the remaining 57% interest. Under the terms of the agreement, Isle of Capri has agreed to pay Nevada Gold $64.6 million. Isle of Capri-Black Hawk, LLC owns Isle of Capri-Black Hawk and Colorado Central Station, both of which are in Black Hawk, Colorado.
The Company also announced that it has entered into an agreement with its senior lender to restructure its credit facility. Pursuant to the agreement, and contingent upon Nevada Gold selling its 43% interest in the Isle of Capri-Black Hawk LLC, the Company will pay down approximately $39 million of its credit facility once the transaction closes, leaving a balance of approximately of $15.5 million. In addition, $13 million of the proceeds will be segregated and restricted for use by Nevada Gold exclusively for future acquisitions. The restructuring will also extend the term of the credit facility to June 30, 2010.
Earnings Conference Call and Webcast
The Company will discuss second quarter financial results via the earnings conference call to be held today at 9:00 a.m. ET at www.nevadagold.com, Investor Relations, Events or by dialing (888) 820-9416 or (913) 312-1424 for international callers. If you are unable to participate, the conference call replay will be available by dialing (888) 203-1112 or 719-457-0820 for international callers. The replay access code is 4861622. In addition, the call will be archived on the Company's website through December 17, 2007.
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 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 and California. 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 also works with Native American tribes in a variety of capacities. Native American projects consist of 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 the 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 Six Months Ended
------------------------ ------------------------
October 28, October 29, October 28, October 29,
2007 2006 2007 2006
----------- ----------- ----------- -----------
Revenues:
Casino $ 1,801,832 $ 1,744,965 $ 3,695,073 $ 3,191,108
Food and beverage 416,816 378,585 829,011 754,318
Other 35,055 39,940 69,306 70,398
Management fee -- 97,144 40,174 97,144
Credit
enhancement fee -- 2,207,460 -- 4,153,546
----------- ----------- ----------- -----------
Gross revenues 2,253,703 4,468,094 4,633,564 8,266,514
Less promotional
allowances (390,057) (373,780) (789,540) (680,541)
----------- ----------- ----------- -----------
Net revenues 1,863,646 4,094,314 3,844,024 7,585,973
Expenses:
Casino 476,641 457,827 960,185 809,976
Food and beverage 210,642 248,378 405,363 480,971
Marketing and
administrative 798,898 862,466 1,500,068 1,594,867
Facility 89,635 102,728 183,621 171,511
Corporate expense 1,499,424 1,512,288 2,749,728 3,287,926
Legal expense 317,804 147,346 439,061 953,216
Depreciation and
amortization 201,967 274,350 404,380 536,502
Impairment of
unconsolidated
affiliate -- -- 100,000 --
Write-off of
notes receivable
related to
Native American
gaming projects -- 3,171,958 -- 3,171,958
Write-off of
project
development cost -- 373,100 -- 373,100
Other 18,244 29,812 24,323 52,409
----------- ----------- ----------- -----------
Total operating
expenses 3,613,255 7,180,253 6,766,729 11,432,436
----------- ----------- ----------- -----------
Operating loss (1,749,609) (3,085,939) (2,922,705) (3,846,463)
Non-operating
income
(expenses):
Earnings (loss)
from
unconsolidated
affiliates 1,953,578 (1,585,305) 3,143,468 (2,400,861)
Gain on sale of
unconsolidated
affiliate -- -- 1,296,423 --
Gain on sale of
marketable
securities -- 36,797 -- 36,797
Gain on sale of
assets 18,986 -- 18,986 --
Gain on
settlement of
development
project -- -- 14,500 --
Interest expense,
net (827,095) (910,146) (1,574,410) (1,772,253)
Minority
interest -- (438,754) -- (826,738)
----------- ----------- ----------- -----------
Loss before income
tax (expense)
benefit (604,140) (5,983,347) (23,738) (8,809,518)
Income tax
(expense)
benefit -- 2,209,216 (37,916) 3,200,325
----------- ----------- ----------- -----------
Net loss $ (604,140) $(3,774,131) $ (61,654) $(5,609,193)
=========== =========== =========== ===========
Per share
information:
Net income (loss)
per common
share - basic $ (0.05) $ (0.29) $ (0.00) $ (0.43)
=========== =========== =========== ===========
Net income (loss)
per common
share - diluted $ (0.05) $ (0.29) $ (0.00) $ (0.43)
=========== =========== =========== ===========
Basic weighted
average
number of common
shares
outstanding 12,939,130 12,934,998 12,939,130 12,936,792
=========== =========== =========== ===========
Diluted weighted
average number of
common shares
outstanding 12,939,130 12,934,998 12,939,130 12,936,792
=========== =========== =========== ===========
Nevada Gold & Casinos, Inc.
Consolidated Balance Sheets
October 28, April 29,
2007 2007
------------ ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 1,584,571 $ 2,803,560
Restricted cash -- 1,050,000
Accounts receivable 83,502 397,145
Accounts receivable - affiliates 60,006 124,685
Prepaid expenses 576,721 474,933
Notes receivable, current portion 1,100,000 --
Notes receivable - development projects,
current portion -- 1,357,904
Other current assets 48,468 55,055
------------ ------------
Total current assets 3,453,268 6,263,282
------------ ------------
Investments in unconsolidated affiliates 29,221,049 35,201,419
Investments in unconsolidated affiliates
held for sale 347,653 400,489
Investments in development projects 398,202 323,202
Investments in development projects held
for sale 3,437,931 3,914,765
Notes receivable 1,100,000 --
Notes receivable - affiliates 3,521,066 3,521,066
Notes receivable - development projects,
net of current portion 19,370,641 18,012,737
Goodwill 5,462,918 5,462,918
Property and equipment, net of accumulated
depreciation of $1,683,244 and $1,281,191
at October 28, 2007 and April 29, 2007,
respectively 1,777,957 2,063,026
Other assets 5,889,636 4,868,442
------------ ------------
Total assets $ 73,980,321 $ 80,031,346
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 1,644,452 $ 1,540,781
Accrued interest payable 670,056 21,211
Other accrued liabilities 145,464 378,937
Guaranty liabilities -- 4,610,000
Long-term debt, current maturities 54,544,141 2,066,518
------------ ------------
Total current liabilities 57,004,113 8,617,447
------------ ------------
Long-term debt, net of current maturities 17,714 55,021,031
Deferred income 159,688 8,591
Other liabilities 792,551 742,991
------------ ------------
Total liabilities 57,974,066 64,390,060
------------ ------------
Commitments and contingencies -- --
Stockholders' equity:
Common stock, $0.12 par value per share;
25,000,000 shares authorized; 13,935,330
shares issued and 12,939,130 outstanding
at October 28, 2007 and April 29, 2007 1,672,240 1,672,240
Additional paid-in capital 18,909,071 18,484,448
Retained earnings 5,632,434 5,694,088
Treasury stock, 996,200 shares at October
28, 2007 and April 29, 2007, at cost (10,216,950) (10,216,950)
Accumulated other comprehensive income 9,460 7,460
------------ ------------
Total stockholders' equity 16,006,255 15,641,286
------------ ------------
Total liabilities and stockholders'
equity $ 73,980,321 $ 80,031,346
============ ============
CONTACT: Nevada Gold & Casinos, Inc.
Robert B. Sturges
(713) 621-2245
Integrated Corporate Relations
Don Duffy
(203) 682-8200
