EVITTS RESORT, LLC (dba ROCKY GAP CASINO & RESORT)
BALANCE SHEETS
(In thousands)
| | | | | | |
| | | | | | |
| | March 31, | | December 31, |
| | 2023 | | 2022 |
ASSETS | | | | | | |
Current assets | | | | | | |
Cash and cash equivalents | | $ | 6,389 | | $ | 5,145 |
Accounts receivable, net | | | 1,929 | | | 2,354 |
Prepaid expenses | | | 431 | | | 539 |
Inventories | | | 642 | | | 548 |
Other | | | 169 | | | 46 |
Total current assets | | | 9,560 | | | 8,632 |
Property and equipment, net | | | 22,219 | | | 22,925 |
Operating lease right-of-use assets, net | | | 5,916 | | | 5,943 |
Intangible assets, net | | | 972 | | | 1,011 |
Other assets | | | 5 | | | 9 |
Total assets | | | 38,672 | | | 38,520 |
LIABILITIES AND MEMBER'S EQUITY | | | | | | |
Current liabilities | | | | | | |
Current portion of finance leases | | $ | 103 | | $ | 103 |
Current potion of operating leases | | | 437 | | | 437 |
Accounts payable | | | 1,293 | | | 1,195 |
Accrued payroll and related | | | 1,090 | | | 1,071 |
Accrued liabilities | | | 2,414 | | | 1,972 |
Total current liabilities | | | 5,337 | | | 4,778 |
Non-current finance leases | | | 193 | | | 204 |
Non-current operating leases | | | 5,388 | | | 5,310 |
Total liabilities | | | 10,918 | | | 10,292 |
Commitments and contingencies (Note 6) | | | | | | |
Member's equity | | | | | | |
Member's equity | | | 992 | | | 992 |
Retained earnings | | | 26,762 | | | 27,236 |
Total member's equity | | | 27,754 | | | 28,228 |
Total liabilities and member's equity | | $ | 38,672 | | $ | 38,520 |
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The accompanying notes are an integral part of these financial statements. |
EVITTS RESORT, LLC (dba ROCKY GAP CASINO & RESORT)
STATEMENTS OF OPERATIONS
(In thousands)
| | | | | | |
| | | | | | |
| | Three Months Ended March 31, |
| | 2023 | | 2022 |
Revenues | | | | | | |
Gaming | | $ | 14,514 | | $ | 14,457 |
Food and beverage | | | 1,866 | | | 1,647 |
Rooms | | | 1,545 | | | 1,474 |
Other | | | 203 | | | 314 |
Total revenues | | | 18,128 | | | 17,892 |
Expenses | | | | | | |
Gaming | | | 7,665 | | | 7,350 |
Food and beverage | | | 1,217 | | | 1,051 |
Rooms | | | 722 | | | 699 |
Other | | | 141 | | | 158 |
Selling, general and administrative | | | 3,369 | | | 3,172 |
Depreciation and amortization | | | 745 | | | 970 |
Total expenses | | | 13,859 | | | 13,400 |
Operating income | | | 4,269 | | | 4,492 |
Non-operating expenses | | | | | | |
Interest expense | | | 3 | | | 4 |
Net income | | $ | 4,266 | | $ | 4,488 |
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The accompanying notes are an integral part of these financial statements. |
EVITTS RESORT, LLC (dba ROCKY GAP CASINO & RESORT)
STATEMENTS OF MEMBER’S EQUITY
(In thousands)
| | | |
| | | |
| | Member's
Equity |
Balance, January 1, 2022 | | $ | 30,264 |
Net income | | | 4,488 |
Distributions | | | (4,510) |
Balance, March 31, 2022 | | $ | 30,242 |
| | | |
Balance, January 1, 2023 | | $ | 28,228 |
Net income | | | 4,266 |
Distributions | | | (4,740) |
Balance, March 31, 2023 | | $ | 27,754 |
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The accompanying notes are an integral part of these financial statements. |
EVITTS RESORT, LLC (dba ROCKY GAP CASINO & RESORT)
STATEMENTS OF CASH FLOWS
(In thousands)
| | | | | | |
| | | | | | |
| | Three Months Ended March 31, |
| | 2023 | | 2022 |
Cash flows from operating activities | | | | | | |
Net income | | $ | 4,266 | | $ | 4,488 |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | |
Depreciation and amortization | | | 745 | | | 970 |
Non-cash lease expense | | | 106 | | | 106 |
Provision for credit losses | | | 25 | | | 2 |
Changes in operating assets and liabilities: | | | | | | |
Accounts receivable | | | 401 | | | 73 |
Prepaid expenses, inventories and other current assets | | | (109) | | | (200) |
Other assets | | | 3 | | | 3 |
Accounts payable and other accrued expenses | | | 579 | | | (102) |
Net cash provided by operating activities | | | 6,016 | | | 5,340 |
Cash flows from investing activities | | | | | | |
Purchases of property and equipment, net change in construction payables | | | (21) | | | (370) |
Net cash used in investing activities | | | (21) | | | (370) |
Cash flows from financing activities | | | | | | |
Distribution to Parent | | | (4,740) | | | (4,510) |
Principal payments under finance leases | | | (11) | | | (9) |
Net cash used in financing activities | | | (4,751) | | | (4,519) |
Cash and cash equivalents | | | | | | |
Change in cash and cash equivalents | | | 1,244 | | | 451 |
Balance, beginning of period | | | 5,145 | | | 6,987 |
Balance, end of period | | $ | 6,389 | | $ | 7,438 |
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Supplemental cash flow disclosures | | | | | | |
Cash paid for interest | | $ | 3 | | $ | 4 |
Non-cash investing and financing activities | | | | | | |
Payables incurred for capital expenditures | | | — | | | 271 |
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The accompanying notes are an integral part of this financial statement. |
EVITTS RESORT, LLC (dba ROCKY GAP CASINO & RESORT)
NOTES TO FINANCIAL STATEMENTS
Note 1 – Nature of Business and Basis of Presentation
Overview
The accompanying financial statements include the accounts of Evitts Resort, LLC, dba Rocky Gap Casino & Resort (the “Company” or “Rocky Gap”), a wholly owned subsidiary of Golden Entertainment, Inc. (the “Parent” or “Member”). The Company’s casino resort is situated on approximately 270 acres in the Rocky Gap State Park, which are leased from the Maryland Department of Natural Resources (the “Maryland DNR”) under a 40-year ground lease expiring in 2052 with an option to review for an additional 20 years. As of March 31, 2023, Rocky Gap offered 630 video lottery terminals, 16 table games, two casino bars, three restaurants, a spa and the only Jack Nicklaus signature golf course in Maryland. Rocky Gap is a AAA Four Diamond Award® winning resort with 198 hotel rooms and includes an event and conference center. The Parent owns and operates a diversified entertainment platform, consisting of a portfolio of gaming assets that focus on casino and distributed gaming operations (including gaming in its branded taverns).
On August 24, 2022, the Parent entered into definitive agreements to sell Rocky Gap to Century Casinos, Inc. (“Century”) and VICI Properties, L.P. (“VICI”), an affiliate of VICI Properties Inc., for aggregate consideration of $260.0 million (the “Rocky Gap Transactions”). Specifically, Century agreed to acquire the operations of Rocky Gap from the Parent for $56.1 million in cash (subject to adjustment based on Rocky Gap’s working capital and cage cash at closing), subject to the conditions and terms set forth therein, and VICI agreed to acquire the real estate assets relating to Rocky Gap from the Parent for $203.9 million in cash, subject to the conditions and terms set forth therein. The Rocky Gap Transactions are required by their terms to close concurrently and are expected to close during the second quarter of 2023, subject to the satisfaction or waiver of customary regulatory approvals and closing conditions.
Basis of Presentation
The accompanying financial statements have been prepared from the Company’s financial records and may not necessarily be indicative of the conditions that would have existed, or indicative of the results of operations, if Rocky Gap had operated as an independent entity unaffiliated with the Parent.
Significant Accounting Policies
There have been no changes to the significant accounting policies disclosed in the Company’s Annual Report.
Recent Accounting Pronouncements
Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”), in the form of Accounting Standards Updates (“ASUs”), to the FASB’s ASC. The Company considers the applicability and impact of all ASUs. While management continues to assess the possible impact of the adoption of new accounting standards and the future adoption of the new accounting standards that are not yet effective on the Company’s financial statements, management does not believe that any of the recently issued accounting standards are likely to have a material impact on the Company’s financial statements.
Note 2 – Distributions to Parent
The Company distributed cash of $4.7 million and $4.5 million to its Parent for the three months ended March 31, 2023 and 2022, respectively.
Note 3 – Property and Equipment
Property and equipment, net, consisted of the following:
| | | | | | |
| | March 31, | | December 31, |
(In thousands) | | 2023 | | 2022 |
Building and land improvements | | $ | 28,948 | | $ | 28,948 |
Furniture and equipment | | | 24,996 | | | 24,996 |
Construction in progress | | | 20 | | | 20 |
Property and equipment | | | 53,964 | | | 53,964 |
Accumulated depreciation | | | (31,745) | | | (31,039) |
Property and equipment, net | | $ | 22,219 | | $ | 22,925 |
| | | | | | |
Depreciation expense was $0.7 million and $1.0 million for the months ended March 31, 2023 and 2022, respectively. Furniture and equipment includes $0.6 million of assets under finance lease obligations at March 31, 2023 and 2022. Accumulated depreciation associated with these assets was less than $0.1 million at March 31, 2023 and 2022.
Note 4 – Intangible Assets
Intangible assets, net, consisted of the following:
| | | | | | | | | | | |
| | March 31, 2023 |
(In thousands) | | Useful Life
(Years) | | Gross
Carrying
Value | | Cumulative
Amortization | | Intangible
Assets, Net |
Gaming license | | 15 | | $ | 2,100 | | $ | (1,385) | | $ | 715 |
Other intangible assets | | 25 | | | 448 | | | (191) | | | 257 |
Total intangible assets | | | | $ | 2,548 | | $ | (1,576) | | $ | 972 |
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| | December 31, 2022 |
(In thousands) | | Useful Life
(Years) | | Gross
Carrying
Value | | Cumulative
Amortization | | Intangible
Assets, Net |
Gaming license | | 15 | | $ | 2,100 | | $ | (1,350) | | $ | 750 |
Other intangible assets | | 25 | | | 448 | | | (187) | | | 261 |
Total intangible assets | | | | $ | 2,548 | | $ | (1,537) | | $ | 1,011 |
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Amortization expense was less than $0.1 million for each of the three months ended March 31, 2023 and 2022.
Note 5 – Accrued Liabilities
Accrued liabilities consisted of the following:
| | | | | | |
| | March 31, | | December 31, |
(In thousands) | | 2023 | | 2022 |
Gaming liabilities | | $ | 895 | | $ | 884 |
Accrued taxes, other than income taxes | | | 440 | | | 559 |
Player loyalty program liabilities | | | 322 | | | 304 |
Deposits | | | 757 | | | 225 |
Total current accrued liabilities | | $ | 2,414 | | $ | 1,972 |
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Note 6 – Commitments and Contingencies
Miscellaneous Legal Matters
The Company is subject to various claims and litigation in the normal course of business. In management’s opinion, all pending legal matters are either adequately covered by insurance or, if not insured, will not have a material adverse effect on the financial statements.
