EXHIBIT 99.1
Selected Financial Results
Cash and cash equivalents
As of July 31, 2016, cash and cash equivalents were $82.2 million, of which $32 million is not used in day to day operations. The remaining cash and cash equivalents at our properties includes $30 million in cage cash and $20 million at local operating accounts.
Reconciliation of Non-GAAP Financial Measures (1)
The following tables reconcile Operating Income from Continuing Operations to Adjusted EBITDA and Covenant EBITDA (in thousands):
|
| | | | | | | | | | | | | | | | | | | |
| Last Twelve Months Ended July 31, 2016 |
| | Nevada | | Midwest | | Colorado | | Corporate and Other | | Total |
| Operating Income from Continuing Operations | $ | 30,304 |
| | $ | 32,221 |
| | $ | (20,836 | ) | | $ | (22,621 | ) | | $ | 19,068 |
|
| Add back: | | | | | | | | | |
| Depreciation and Amortization | 14,778 |
| | 7,970 |
| | 5,619 |
| | 1,025 |
| | 29,392 |
|
| Share-Based Compensation | — |
| | — |
| | — |
| | 1,188 |
| | 1,188 |
|
| Write-Downs, Reserves and Recoveries | 38 |
| | 7 |
| | (4 | ) | | 286 |
| | 327 |
|
| Goodwill and Other Impairments | — |
| | — |
| | 20,229 |
| | — |
| | 20,229 |
|
| Adjusted EBITDA | 45,120 |
| | 40,198 |
| | 5,008 |
| | (20,122 | ) | | 70,204 |
|
| Add back: Non-Recurring Expenses | — |
| | — |
| | — |
| | 3,399 |
| | 3,399 |
|
| Covenant EBITDA | $ | 45,120 |
| | $ | 40,198 |
| | $ | 5,008 |
| | $ | (16,723 | ) | | $ | 73,603 |
|
| | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
| Last Twelve Months Ended July 31, 2015 |
| | Nevada | | Midwest | | Colorado | | Corporate and Other | | Total |
| Operating Income from Continuing Operations | $ | 20,938 |
| | $ | 29,662 |
| | $ | (55 | ) | | $ | (18,948 | ) | | $ | 31,597 |
|
| Add back: | | | | | | | | | |
| Depreciation and Amortization | 14,757 |
| | 7,670 |
| | 5,129 |
| | 1,258 |
| | 28,814 |
|
| Share-Based Compensation | — |
| | — |
| | — |
| | 1,135 |
| | 1,135 |
|
| Write-Downs, Reserves and Recoveries | (126 | ) | | — |
| | 58 |
| | 17 |
| | (51 | ) |
| Adjusted EBITDA | 35,569 |
| | 37,332 |
| | 5,132 |
| | (16,538 | ) | | 61,495 |
|
| Add back: Non-Recurring Expenses | — |
| | — |
| | — |
| | 3,717 |
| | 3,717 |
|
| Covenant EBITDA | $ | 35,569 |
| | $ | 37,332 |
| | $ | 5,132 |
| | $ | (12,821 | ) | | $ | 65,212 |
|
| | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, 2015 |
| | Nevada | | Midwest | | Colorado | | Corporate and Other | | Total |
| Operating Income from Continuing Operations | $ | 25,378 |
| | $ | 31,056 |
| | $ | (20,272 | ) | | $ | (21,341 | ) | | $ | 14,821 |
|
| Add back: | | | | | | | | | |
| Depreciation and Amortization | 14,883 |
| | 7,682 |
| | 5,264 |
| | 1,199 |
| | 29,028 |
|
| Share-Based Compensation | — |
| | — |
| | — |
| | 1,206 |
| | 1,206 |
|
| Write-Downs, Reserves and Recoveries | (12 | ) | | — |
| | 58 |
| | 255 |
| | 301 |
|
| Goodwill and Other Impairments | — |
| | — |
| | 20,229 |
| | — |
| | 20,229 |
|
| Adjusted EBITDA | 40,249 |
| | 38,738 |
| | 5,279 |
| | (18,681 | ) | | 65,585 |
|
| Add back: Non-Recurring Expenses | — |
| | — |
| | — |
| | 2,956 |
| | 2,956 |
|
| Covenant EBITDA | $ | 40,249 |
| | $ | 38,738 |
| | $ | 5,279 |
| | $ | (15,725 | ) | | $ | 68,541 |
|
| | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, 2014 |
| | Nevada | | Midwest | | Colorado | | Corporate and Other | | Total |
| Operating Income from Continuing Operations | $ | 11,980 |
| | $ | 26,548 |
| | $ | (531 | ) | | $ | (16,061 | ) | | $ | 21,936 |
|
| Add back: | | | | | | | | | |
| Depreciation and Amortization | 14,650 |
| | 7,582 |
| | 5,124 |
| | 1,223 |
| | 28,579 |
|
| Share-Based Compensation | — |
| | — |
| | — |
| | 455 |
| | 455 |
|
| Write-Downs, Reserves and Recoveries | (448 | ) | | — |
| | — |
| | 24 |
| | (424 | ) |
| Adjusted EBITDA | 26,182 |
| | 34,130 |
| | 4,593 |
| | (14,359 | ) | | 50,546 |
|
| Add back: Non-Recurring Expenses | — |
| | — |
| | — |
| | 4,108 |
| | 4,108 |
|
| Covenant EBITDA | $ | 26,182 |
| | $ | 34,130 |
| | $ | 4,593 |
| | $ | (10,251 | ) | | $ | 54,654 |
|
| | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, 2013 |
| | Nevada | | Midwest | | Colorado | | Corporate and Other | | Total |
| Operating Income from Continuing Operations | $ | 10,590 |
| | $ | 26,918 |
| | $ | 3,264 |
| | $ | (11,773 | ) | | $ | 28,999 |
|
| Add back: | | | | | | | | | |
| Depreciation and Amortization | 14,729 |
| | 7,023 |
| | 5,058 |
| | 999 |
| | 27,809 |
|
| Share-Based Compensation | — |
| | — |
| | — |
| | 1,169 |
| | 1,169 |
|
| Write-Downs, Reserves and Recoveries | 3,125 |
| | 3,100 |
| | — |
| | (1,459 | ) | | 4,766 |
|
| Goodwill and Other Impairments | 165 |
| | — |
| | — |
| | — |
| | 165 |
|
| Adjusted EBITDA | 28,609 |
| | 37,041 |
| | 8,322 |
| | (11,064 | ) | | 62,908 |
|
| Add back: Non-Recurring Expenses | — |
| | — |
| | — |
| | 1,138 |
| | 1,138 |
|
| Covenant EBITDA | $ | 28,609 |
| | $ | 37,041 |
| | $ | 8,322 |
| | $ | (9,926 | ) | | $ | 64,046 |
|
| | | | | | | | | | |
(1) The Company uses certain non-GAAP financial measures to evaluate various aspects of its business. Adjusted EBITDA and Covenant EBITDA are non-GAAP financial measures and should be considered in addition to, not as a substitute for, net income reported in accordance with GAAP. These terms, as defined by Affinity Gaming, may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA is earnings before interest expense, net; income tax; depreciation and amortization; share-based compensation expense; pre-opening costs; write downs, reserves and recoveries; loss on extinguishment or modification of debt; loss on impairment of assets; gains or losses on the disposition
of assets; and restructuring and reorganization costs. Covenant EBITDA is Adjusted EBITDA before non-recurring expenses. The Company uses these non-GAAP financial measures of profit and loss to manage the operational performance of each geographical region in which it operates, to analyze corporate expenses, and to discuss its results with the investment community. The Company has chosen to provide this information to investors to enable them to perform more meaningful comparisons of past, present and future operating results and as a means to evaluate the results of core on-going operations. The Company has historically reported Adjusted EBITDA to its investors and believes that the continued inclusion of Adjusted EBITDA as well as Covenant EBITDA provides consistency in its financial reporting. The Company uses these Non-GAAP financial measures because it believes the metrics are useful to investors in allowing greater transparency related to a significant measure used by management in their financial and operational decision-making. Adjusted EBITDA and Covenant EBITDA are among the more significant factors in management’s internal evaluation of total company and individual property performance, the evaluation of incentive compensation related to property management, and the annual budget process. Management also uses these non-GAAP financial measures in the evaluation of potential acquisitions and dispositions. Externally, the Company believes these measures continue to be used by investors in their assessment of the Company’s operating performance and the valuation of the Company. In future periods, the calculation of Adjusted EBITDA may be different than above.
