Full House Resorts Announces Second Quarter Results and Provides Construction Updates for Its Growth Projects
(Las Vegas).- Full House Resorts, Inc. announced results for the second quarter ended June 30, 2022, including a construction update for its two major new casinos.
“We made significant progress on our growth projects during the second quarter,” said Daniel R. Lee, President and Chief Executive Officer of Full House Resorts. “Our casino site in Waukegan, Illinois, has been transformed, with the Sprung structure now nearly complete. We are now installing utilities within the structure for items like bathrooms, bars, and slot machines, and expect to pour the floor slab within the next month. We have identified and are placing orders for The Temporary’s approximately 1,000 slot machines, have hired much of the management team for the property, and have begun hosting job fairs for positions throughout the casino. When The Temporary opens, as anticipated, in the fourth quarter of 2022, it will be the only casino in Lake County, Illinois, which has a population of approximately 700,000 and ranks as one of the wealthiest counties in the U.S.
“At our Chamonix project in Cripple Creek, Colorado, construction also continues at a swift pace,” continued Mr. Lee. “The central tower, which anchors the casino and includes the spa, has topped out. The parking garage is complete, and the guest rooms above the garage are starting to take shape. Foundations for the final guest room tower are currently being completed. Brick and glass are now being installed on the facade. When complete, Chamonix will be one of the larger casino hotels in Colorado and easily the largest and most luxurious casino hotel in Cripple Creek, which is the primary casino destination for the Colorado Springs market. Cripple Creek is approximately one hour from the roughly one million people who live in the Colorado Springs MSA and two hours from the approximately four million people who reside in the Denver area. Chamonix is currently anticipated to open in mid-2023.”
For project renderings and live construction webcams, please visit www.AmericanPlace.com and www.ChamonixCO.com.
“Our anticipated opening dates have slipped a few weeks, reflecting supply issues and normal construction challenges. Our anticipated investment in each project, however, remains within budgets,” added Lewis Fanger, the Company’s Chief Financial Officer.
“The Temporary is expected to cost in the neighborhood of $100 million, which consists largely of the Sprung structure; slot machines, decor and facilities within the Sprung structure; surrounding site work; preopening costs; and an estimated $33 million of upfront license fees. A significant portion of the $100 million budget, including payments for the purchase of slot machines, will not be due until after the opening of The Temporary. We anticipate some additional investments for storm sewers and other site infrastructure that is required for construction of the permanent casino, which is planned to be built on land adjoining The Temporary. The permanent American Place casino is anticipated to open by late 2025, within three years of the opening of The Temporary.”
Continued Mr. Fanger, “The construction cost of Chamonix is still estimated to be within its budget of $250 million, including contingencies. This does not include refurbishment of the adjoining, existing Bronco Billy’s casino. We are currently doing a light remodel of certain portions of Bronco Billy’s, estimated to cost approximately $2 million. While we have plans for a more extensive refurbishment of Bronco Billy’s, we have decided to defer such potential project until after the opening of Chamonix.
“At June 30, 2022, we had $298.4 million of cash and equivalents, including $190.2 million of cash that is reserved for the completion of Chamonix. We also have a $40 million credit facility, which is currently unutilized except for a $1 million standby letter of credit. We are confident that our existing cash, credit line availability and cash flows from operations will be sufficient to complete both The Temporary and Chamonix.
“Eventually, we anticipate requiring additional financing for construction of the permanent American Place facility,” concluded Mr. Fanger. “The costs of planning and construction for the early stages of that project are relatively modest. Some of those costs are being incurred now, with the construction of The Temporary, as mentioned previously. Management does not anticipate needing to arrange the balance of the financing for the permanent American Place until 2024, after both The Temporary and Chamonix have been open for some period of time. At that point, we anticipate that our leverage will be lower than historical leverage ratios in the gaming industry. With our existing bonds, which have a fixed rate and comprise most of our debt, becoming callable in February 2024, we anticipate arranging the additional debt financing needed for construction of the permanent American Place as part of the refinancing of those bonds. Finally, note that if the financial markets at that time are unfavorable, we still have in place a back-up financing arrangement with a major financial institution.”
On a consolidated basis, revenues in the second quarter of 2022 were $44.4 million, a decrease from $47.4 million in the prior-year period. Net loss for the second quarter of 2022 was $(4.4) million, or $(0.13) per diluted common share, which includes $1.6 million of preopening and development costs related to the Company’s growth projects. In the prior-year period, net income was $5.5 million, or $0.15 per diluted common share, including $126,000 of project development costs. Adjusted EBITDA(a) in the 2022 second quarter was $12.1 million versus $14.9 million in the prior-year period, largely due to planned construction disruptions at Bronco Billy’s; the launch of online sports wagering in Louisiana, which adversely affected Silver Slipper’s sports wagering revenues; and increases in certain costs. The prior-year’s second quarter was the Company’s strongest in recent years, having benefited from customers receiving government subsidy payments due to the COVID-19 pandemic.