NEVADA GOLD & CASINOS ANNOUNCES
THIRD QUARTER RESULTS
Houston, TX - February 8, 2005 - Nevada Gold & Casinos, Inc. (AMEX: UWN) today
announced financial results for the third quarter of fiscal 2005 ended December
31, 2004.
As expected, due to construction disruption related to the expansion at both of
the Isle of Capri-Black Hawk joint venture properties in Black Hawk, Colorado,
net income for the third quarter was $828,000 compared to $1.8 million in the
third quarter of fiscal 2004. Net income per diluted common share was $0.06,
compared to $0.12 in the prior year period. Diluted weighted average common
shares outstanding in the third quarter were 14.3 million compared to 15.2
million in the prior year period. During the three months ended December 31,
2004, the Company repurchased 390,000 shares of its common stock in the open
market at an average price of $10.88 per share.
For the third quarter of fiscal 2005, revenues decreased to $1.7 million
compared to $2.7 million in the third quarter of fiscal 2004. The revenue
decrease was primarily due to a $1.4 million decrease in interest income related
to a lower balance in outstanding notes receivable from the River Rock project.
The Company's equity in earnings from Isle of Capri-Black Hawk (IC-BH), the
company's joint venture with Isle of Capri Casinos, decreased to $1.5 million
from $2.5 million in the prior year period. IC-BH's third quarter EBITDA before
management fees ("Adjusted EBITDA"), was $8.8 million compared to $12.3 million
in the prior year period. A reconciliation of adjusted EBITDA to net income is
provided in the attached financial statements. The decrease in earnings and
adjusted EBITDA is attributable to the construction disruption related to the
expansion project at the joint venture's two properties in Black Hawk.
Subsequent to the end of the third quarter, River Rock Casino repaid $5.0
million of the remaining $10.0 million outstanding loan and the Company received
a $2.3 million income tax refund, both of which were used to reduce outstanding
indebtedness.
H. Thomas Winn, Chairman, President & CEO of Nevada Gold & Casinos, Inc.
commented, "Our third quarter financial results were impacted by construction
disruptions at Black Hawk. That said, we believe these issues are almost behind
us as we near the completion of the casino and parking expansion. In addition,
River Rock's parking projects are substantially complete which leaves the
property well positioned to benefit from its large target market and increased
marketing efforts in calendar 2005."
NINE-MONTH RESULTS
Net income for the nine month period ended December 31, 2004 was $3.7 million
compared to $5.7 million in the prior year period. Net income per diluted common
share was $0.26, compared to $0.39 in the prior year period. Diluted weighted
average common shares outstanding in the nine months ended December 31, 2004
were 14.8 million compared to 15.4 million in the prior year period.
For the nine months ended December 31, 2004, revenues decreased to $5.1 million
compared to $7.0 million for the nine months ended December 31, 2003. The
revenue decrease was primarily due to a $1.6 million decrease in interest income
related to a lower balance in outstanding notes receivable from the River Rock
project.
The Company's equity in earnings from Isle of Capri-Black Hawk (IC-BH), the
Company's joint venture with Isle of Capri Casinos, decreased to $5.5 million
for the nine months ended December 31, 2004 compared to $7.9 million in the
prior year period. IC-BH's adjusted EBITDA for the nine-month period
was $29.6 million compared to $39.3 million in the prior year period.
Reconciliations of adjusted EBITDA to net income are provided in the attached
financial statements. The decrease in earnings and adjusted EBITDA is
attributable to the construction disruption related to the expansion project at
the joint venture's two properties in Black Hawk.
FINANCIAL GUIDANCE
The Company expects net income per diluted common share of $0.12 to $0.14 for
the fourth quarter ending March 31, 2005 and $0.38 to $0.40 for the 2005 fiscal
year ending March 31, 2005.
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. of Houston, Texas is a developer of gaming
properties and has real estate interests in Colorado, California, and Nevada.
UWN owns a 43% interest in The Isle of Capri-Black Hawk LLC, which owns Isle of
Capri Casino, a 237-room hotel/casino and Colorado Central Station Casino (both
located in Black Hawk, Colorado, about 35 miles west of Denver) and Colorado
Grande Casino, located in Cripple Creek, Colorado. The LLC is a joint venture
with Isle of Capri Casinos, Inc. (Nasdaq: ISLE). UWN has 69% ownership of Dry
Creek Casino, LLC, which is assisting the Dry Creek Rancheria Band of Pomo
Indians with their River Rock Casino, Alexander Valley, Sonoma County,
California (about 75 miles north of San Francisco in the California wine
country). UWN has 51% ownership of Route 66 Casinos, LLC, which has the right to
lease gaming equipment to the Pueblo of Laguna in their Route 66 Casino 11 miles
west of Albuquerque, N.M., which opened in September 2003. Nevada Gold Tulsa,
Inc., a wholly-owned subsidiary, has entered into a contract to develop and
manage a casino for the Muscogee (Creek) Nation in Tulsa, Oklahoma. Also, Gold
River, LLC, a wholly-owned subsidiary of UWN, has entered into a development
agreement for a gaming resort in Pauma Valley, California for the La Jolla Band
of Luiseno Indians. The management agreement for La Jolla is currently being
finalized and is expected to be completed in the near future. For more
information, visit http://www.nevadagold.com.
CONTACT: Nevada Gold & Casinos, Inc., Houston
H. Thomas Winn or Christopher Domijan, 713-621-2245
or
Integrated Corporate Relations
Don Duffy 203-222-9013
ISLE OF CAPRI BLACK HAWK L.L.C.
COMPARATIVE FINANCIAL HIGHLIGHTS BY CASINO PROPERTY
(IN THOUSANDS)
THREE MONTHS ENDED
-------------------------------------------------------------------
JANUARY 23, 2005 JANUARY 25, 2004
-------------------------------------------------------------------
ADJUSTED ADJUSTED
EBITDA NET ADJUSTED EBITDA
NET REVENUES ADJUSTED MARGIN % REVENUES EBITDA MARGIN %
(1) EBITDA (2) (2) (3) (2) (2)
------------- ---------- --------- --------- -------- --------
Isle-Black Hawk (3) 24,760 8,526 34.4% 25,148 9,870 39.2%
Colorado Central
Station (3) (4) 7,228 282 3.9% 10,243 2,192 21.4%
Colorado Grande (3) (4) 1,409 (5) (0.4%) 1,677 287 17.1%
- ----------------------- ------------- ---------- --------- --------- -------- --------
COLORADO TOTAL 33,397 8,803 26.4% 37,068 12,349 33.3%
NINE MONTHS ENDED
-------------------------------------------------------------------
JANUARY 23, 2005 JANUARY 25, 2004
-------------------------------------------------------------------
ADJUSTED ADJUSTED
EBITDA NET ADJUSTED EBITDA
NET REVENUES ADJUSTED MARGIN % REVENUES EBITDA MARGIN %
(1) EBITDA (2) (2) (1) (2) (2)
------------- ---------- --------- --------- -------- --------
Isle-Black Hawk (3) 76,605 27,564 36.0% 80,701 30,419 37.0%
Colorado Central
Station (3) (4) 23,644 1,212 5.1% 33,903 7,436 22.2%
Colorado Grande (3) (4) 5,512 873 15.8% 5,995 1,488 27.8%
- ----------------------- ------------- ---------- --------- --------- -------- --------
COLORADO TOTAL 105,761 29,649 28.0% 120,599 39,343 32.6%
ISLE OF CAPRI BLACK HAWK L.L.C.
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED EBITDA BY CASINO PROPERTY
(IN THOUSANDS)
THREE MONTHS ENDED JANUARY 23, 2005
------------------------------------------------------
OPERATING
ADJUSTED DEPRECIATION INCOME
EBITDA & OPERATING (LOSS)MARGIN %
(2) AMORTIZATION INCOME(LOSS) (5)
---------- ------------ ------------ --------------
Isle-Black Hawk (3) 8,526 1,802 6,724 27.2%
Colorado Central
Station (3) (4) 282 636 (354) (4.9%)
Colorado Grande (3) (4) (5) 115 (120) (8.5%)
- ------------------------- ---------- ------------ ------------ --------------
COLORADO TOTAL 8,803 2,553 6,250 18.7%
THREE MONTHS ENDED JANUARY 25, 2004
---------------------------------------------------
OPERATING
ADJUSTED DEPRECIATION INCOME
EBITDA & OPERATING (LOSS)MARGIN %
(2) AMORTIZATION INCOME (5)
---------- ------------ --------- --------------
Isle-Black Hawk (3) 9,870 1,650 8,220 32.7%
Colorado Central
Station (3) (4) 2,192 405 1,787 17.4%
Colorado Grande (3) (4) 287 72 215 12.8%
- ------------------------- ---------- ------------ --------- --------------
COLORADO TOTAL 12,349 2,127 10,222 27.6%
ISLE OF CAPRI BLACK HAWK L.L.C.
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED EBITDA BY CASINO PROPERTY
(IN THOUSANDS)
NINE MONTHS ENDED JANUARY 23, 2005
------------------------------------------------------
OPERATING
ADJUSTED DEPRECIATION INCOME
EBITDA & OPERATING (LOSS)MARGIN %
(2) AMORTIZATION INCOME(LOSS) (5)
---------- ------------ ------------ --------------
Isle-Black Hawk (3) 27,564 5,276 22,288 29.1%
Colorado Central
Station (3) (4) 1,212 1,864 (652) (2.8%)
Colorado Grande (3) (4) 873 325 548 9.9%
- ------------------------- ---------- ------------ ------------ --------------
COLORADO TOTAL 29,649 7,465 22,184 21.0%
NINE MONTHS ENDED JANUARY 25, 2004
---------------------------------------------------
OPERATING
ADJUSTED DEPRECIATION INCOME
EBITDA & OPERATING (LOSS)MARGIN %
(2) AMORTIZATION INCOME (5)
---------- ------------ --------- --------------
Isle-Black Hawk (3) 30,419 5,093 25,326 31.4%
Colorado Central
Station (3) (4) 7,436 1,106 6,330 18.7%
Colorado Grande (3) (4) 1,488 213 1,275 21.3%
- ------------------------- ---------- ------------ --------- --------------
COLORADO TOTAL 39,343 6,412 32,931 27.3%
ISLE OF CAPRI BLACK HAWK L.L.C.
RECONCILIATION OF NET INCOME (LOSS) TO OPERATING INCOME (LOSS) BY CASINO PROPERTY
(IN THOUSANDS)
THREE MONTHS ENDED JANUARY 23, 2005
-------------------------------------------------------------------------
INCOME TAX
OPERATING INTEREST INTEREST MANAGEMENT (PROVISION) NET
INCOME(LOSS) EXPENSE INCOME FEE BENEFIT INCOME(LOSS)
------------ --------- -------- ----------- ----------- ------------
Isle-Black Hawk (3) 6,724 (700) 5 (1,211) - 4,818
Colorado Central
Station (3) (4) (354) (1,368) 3 (215) 747 (1,187)
Colorado Grande (3) (4) (120) (185) 2 (45) 153 (195)
- ------------------------- ------------ --------- -------- ----------- ----------- ------------
COLORADO TOTAL 6,250 (2,253) 10 (1,471) 900 3,436
THREE MONTHS ENDED JANUARY 25, 2004
-----------------------------------------------------------------------
INCOME TAX
OPERATING INTEREST INTEREST MANAGEMENT (PROVISION) NET
INCOME EXPENSE INCOME FEE BENEFIT INCOME(LOSS)
---------- --------- -------- ----------- ----------- ------------
Isle-Black Hawk (3) 8,220 (1,252) 34 (1,136) - 5,866
Colorado Central
Station (3) (4) 1,787 (1,368) 1 (662) 119 (123)
Colorado Grande (3) (4) 215 (186) (71) 15 (27)
- ------------------------- ---------- --------- -------- ----------- ----------- ------------
COLORADO TOTAL 10,222 (2,806) 35 (1,869) 134 5,716
ISLE OF CAPRI BLACK HAWK L.L.C.
RECONCILIATION OF NET INCOME (LOSS) TO OPERATING INCOME (LOSS) BY CASINO PROPERTY
(IN THOUSANDS)
NINE MONTHS ENDED JANUARY 23, 2005
-------------------------------------------------------------------------
INCOME TAX
OPERATING INTEREST INTEREST MANAGEMENT (PROVISION) NET
INCOME(LOSS) EXPENSE INCOME FEE BENEFIT INCOME(LOSS)
------------ --------- -------- ----------- ----------- ------------
Isle-Black Hawk (3) 22,288 (2,309) 53 (3,683) - 16,349
Colorado Central
Station (3) (4) (652) (4,105) 5 (734) 2,097 (3,389)
Colorado Grande (3) (4) 548 (556) 4 (235) 109 (130)
- ------------------------- ------------ --------- -------- ----------- ----------- ------------
COLORADO TOTAL 22,184 (6,970) 62 (4,652) 2,206 12,830
NINE MONTHS ENDED JANUARY 25, 2004
---------------------------------------------------------------------
INCOME TAX
OPERATING INTEREST INTEREST MANAGEMENT (PROVISION)
INCOME EXPENSE INCOME FEE BENEFIT NET INCOME
---------- --------- -------- ----------- ----------- ----------
Isle-Black Hawk (3) 25,326 (3,909) 94 (3,644) - 17,867
Colorado Central
Station (3) (4) 6,330 (4,092) 2 (1,563) (332) 345
Colorado Grande (3) (4) 1,275 (552) 2 (283) (170) 272
- ------------------------- ---------- --------- -------- ----------- ----------- ----------
COLORADO TOTAL 32,931 (8,553) 98 (5,490) (502) 18,484
(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 (Adjusted EBITDA
before corporate expense) as the primary measure of the properties'
performance. Adjusted EBITDA should not be construed as an alternative to
operating 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 operating income to Adjusted EBITDA are
included in the financial schedules accompanying this release.
(3) The Adjusted EBITDA for the Isle-Black Hawk, the Colorado Central
Station-Black Hawk and the Colorado Grande-Cripple Creek, does not include
management fees. The following table shows Adjusted EBITDA inclusive of
management fees for the three months and nine months ended January 23,
2005, and January 25, 2004:
THREE MONTHS ENDED NINE MONTHS ENDED
JANUARY 23, JANUARY 25, JANUARY 23, JANUARY 25,
2005 2004 2005 2004
------------ ----------- ----------- -----------
(IN THOUSANDS)
ADJUSTED EBITDA WITH MANAGEMENT FEES
Isle - Black Hawk 7,315 8,734 23,881 26,775
Colorado Central
Station 67 1,530 478 5,873
Colorado Grande (50) 216 638 1,205
(4) The Isle of Capri Black Hawk L.L.C. acquired these properties on April 22,
2003.
(5) Operating income margin was calculated by dividing operating income by net
revenue.
NEVADA GOLD & CASINOS, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, MARCH 31,
-------------- ------------
2004 2004
ASSETS (Unaudited) (Audited)
CURRENT ASSETS
Cash and cash equivalents $ 2,886,522 $ 3,528,631
Accounts receivable 455,984 216,322
Income tax receivable 2,510,000 2,522,000
Notes receivable from affiliates, current portion 1,200,000 1,200,000
Other assets 195,921 79,272
-------------- ------------
TOTAL CURRENT ASSETS 7,248,427 7,546,225
-------------- ------------
Joint ventures in equity investees:
Isle of Capri Black Hawk, L.L.C. 17,957,858 15,708,324
Route 66 Casinos, L.L.C. 3,085,236 1,852,828
Sunrise Land and Mineral Corporation 371,750 371,750
Investments in development and operating projects:
Dry Creek Casino, L.L.C., gaming 1,194,520 1,264,164
Nevada Gold Tulsa, Inc., gaming 1,201,035 744,617
Gold River, L.L.C., gaming 123,358 19,770
Gold Mountain Development, L.L.C., real estate 3,356,958 3,342,207
Goldfield Resources, Inc., mining 480,812 480,812
Other assets, gaming 519,235 414,571
Notes receivable from Dry Creek Rancheria 10,000,000 10,000,000
Notes receivable - gaming projects 5,214,071 -
Notes receivable from affiliates 3,052,121 3,839,586
Deferred loan issue cost, net 410,008 285,450
Deferred tax asset 870,187 -
Furniture, fixtures and equipment, net of accumulated depreciation
of $153,931 at December 31, 2004 and $124,609 at March 31, 2004 100,739 80,753
-------------- ------------
TOTAL ASSETS $ 55,186,315 $45,951,057
============== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 1,215,087 $ 1,205,241
Deferred tax liability - 2,517,678
Current portion of long-term debt, net of discount 6,516,134 -
-------------- ------------
TOTAL CURRENT LIABILITIES 7,731,221 3,722,919
-------------- ------------
LONG-TERM LIABILITIES
Deferred income 101,995 145,833
Convertible note, net of discount and current portion - 11,029,266
Term note payable, net of current portion 3,272,500 -
Note payable on credit facility 13,915,671 -
-------------- ------------
TOTAL LONG-TERM LIABILITIES 17,290,166 11,175,099
-------------- ------------
TOTAL LIABILITIES 25,021,387 14,898,018
-------------- ------------
COMMITMENTS AND CONTINGENCIES - -
MINORITY INTEREST - DRY CREEK CASINO, L.L.C. 263,382 253,719
STOCKHOLDERS' EQUITY
Common stock, $0.12 par value, 20,000,000 shares authorized, 13,343,603 and
12,279,352 shares issued at December 31, 2004, and March 31, 2004, respectively 1,601,232 1,473,522
Additional paid in capital 20,961,697 19,256,200
Treasury stock, 604,900 shares, at cost (6,608,955) -
Retained earnings 13,920,028 10,261,455
Accumulated other comprehensive income (loss) 27,544 (191,857)
-------------- ------------
TOTAL STOCKHOLDERS' EQUITY 29,901,546 30,799,320
-------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 55,186,315 $45,951,057
============== ============
NEVADA GOLD & CASINOS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
December 31,
2004 2003
------------ ------------
REVENUES
Gaming asset participation income:
Dry Creek Casino, L.L.C. $ 1,238,520 $ 867,718
Other income:
Interest income 444,060 1,795,659
Royalty income 16,903 16,903
------------ ------------
TOTAL REVENUES 1,699,483 2,680,280
------------ ------------
EXPENSES
General and administrative 270,552 295,602
Interest expense 512,355 747,775
Salaries 599,589 333,263
Legal and professional fees 567,788 239,720
Amortization of deferred loan issue cost 63,926 967,124
Other 44,032 50,789
------------ ------------
TOTAL EXPENSES 2,058,242 2,634,273
------------ ------------
EQUITY IN EARNINGS OF ISLE OF CAPRI-BLACK HAWK 1,477,890 2,457,760
EQUITY IN EARNINGS OF ROUTE 66 CASINOS, L.L.C. 400,755 418,351
MINORITY INTEREST - DRY CREEK CASINO, L.L.C. (184,448) (127,156)
------------ ------------
Income before income tax provision 1,335,438 2,794,962
Federal income tax provision - deferred (507,466) (986,675)
------------ ------------
NET INCOME $ 827,972 $ 1,808,287
============ ============
PER SHARE INFORMATION
Net income per common share - basic $ 0.06 $ 0.16
============ ============
Net income per common share - diluted $ 0.06 $ 0.12
============ ============
Basic weighted average number of
common shares outstanding 12,837,107 11,660,023
============ ============
Fully diluted weighted average number of
common shares outstanding 14,286,637 15,189,664
============ ============
NEVADA GOLD & CASINOS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Nine Months Ended
December 31,
2004 2003
------------ ------------
REVENUES
Gaming asset participation income:
Dry Creek Casino, L.L.C. $ 3,655,655 $ 2,576,926
Other income:
Interest income 1,370,461 4,348,959
Royalty income 50,708 45,537
Miscellaneous income - 34,975
------------ ------------
TOTAL REVENUES 5,076,824 7,006,397
------------ ------------
EXPENSES
General and administrative 761,913 667,028
Interest expense 1,330,755 2,809,681
Salaries 1,556,046 893,418
Legal and professional fees 1,248,834 1,082,037
Amortization of deferred loan issue cost 292,915 960,084
Write-off of project development costs 180,850 23,403
Other 142,879 119,675
------------ ------------
TOTAL EXPENSES 5,514,192 6,555,326
------------ ------------
EQUITY IN EARNINGS OF ISLE OF CAPRI-BLACK HAWK 5,517,108 7,948,208
EQUITY IN EARNINGS OF ROUTE 66 CASINOS, L.L.C. 1,246,897 636,625
MINORITY INTEREST - DRY CREEK CASINO, L.L.C. (546,272) (396,080)
------------ ------------
Income before income tax provision 5,780,365 8,639,824
Federal income tax provision - deferred (2,121,792) (2,973,753)
------------ ------------
NET INCOME $ 3,658,573 $ 5,666,071
============ ============
PER SHARE INFORMATION
Net income per common share - basic $ 0.29 $ 0.50
============ ============
Net income per common share - diluted $ 0.26 $ 0.39
============ ============
Basic weighted average number of
common shares outstanding 12,799,385 11,361,669
============ ============
Fully diluted weighted average number of
common shares outstanding 14,793,284 15,403,212
============ ============