Third Quarter 2011 Results
For the quarter ended September 30, 2011, Full House reported casino, food and beverage, hotel and other revenue of $27.4 million, up from $2.1 million in the prior-year period, primarily due to the addition of the Rising Star Casino Resort during the second quarter of this year. In addition, during the third quarter of 2011, Full House recorded GEM management fees of $6.0 million for FireKeepers Casino, compared to management fees of $6.5 million for the third quarter of 2010.
Full House recorded equity in net income and related guaranteed payments from its Delaware operation of $1.1 million, a decrease of 27% from the prior-year period, which included all three months of the quarter compared to only two this year, as the agreement between the Company and Harrington Raceway, Inc. terminated at the end of August 2011.
Operating expenses for the third quarter 2011 were $28.1 million compared to $3.6 million in the prior-year period, primarily due to the addition of the Rising Star Casino Resort. The Company also recorded $0.3 million of stock compensation expense during the third quarter of 2011, while there was no stock compensation expense during the prior-year period.Operating income for the third quarter 2011 was $1.6 million, compared to operating income of $6.6 million in the prior-year period. For the third quarter 2011, the Company recorded a non-cash goodwill impairment charge of $4.5 million ($2.7 million on an after-tax basis) related to its Stockman’s Casino due to a decline of operating results at Stockman’s resulting from the ongoing weak economic conditions in Northern Nevada and slower than expected improvement from changes made in marketing programs. In addition, the Company recorded a valuation charge against its remaining tribal receivables in the amount of $0.4 million ($0.3 million on an after-tax basis) as a result of slower than expected progress by the Nambe Pueblo in securing financing for its proposed casino facility amid a weak credit environment. Exclusive of the impairment charges and $0.2 million in other one-time charges, operating income for the third quarter 2011 would have been $6.7 million. EBITDA and other items, as defined below, was $5.9 million versus $4.3 million in the prior-year period, notwithstanding the Delaware management contract terminating in August 2011.