Full House Resorts (NYSE Amex US: FLL) today announced results for the three-month and full year periods ended December 31, 2010. Net income attributable to the Company for the three months ended December 31, 2010 was $2.0 million, or $0.11 per common share, compared to $1.0 million, or $0.06 per common share, in the prior-year period. Excluding a $0.7 million impairment charge in the fourth quarter of 2009, net income per common share in the fourth quarter of 2009 was $0.08.

Fourth Quarter 2010 Highlights
  • Management fees for Gaming Entertainment (Michigan), LLC (“GEM”), a 50%-owned joint venture that manages FireKeepers Casino, were $5.8 million in the fourth quarter of 2010, compared to management fees of $4.2 million for fourth quarter 2009.
  • EBITDA, before unrealized gains on notes receivable, tribal governments and other items net of RAM Entertainment, LLC’s (“RAM”) share of GEM results, was $3.8 million versus $2.9 million in the prior-year period.
  • As of December 31, 2010, Full House Resorts had $13.3 million in cash, no outstanding debt and approximately $7.9 million of availability on its revolving credit facility.

“2010 was a banner year for Full House with record revenues and earnings per share, as well as the announcement of our pending acquisition of the Grand Victoria Casino and Resort,” said Andre Hilliou, Chairman and Chief Executive Officer of Full House. “FireKeepers continues to perform admirably, with the casino generating approximately $24.5 million in management fees in 2010, and seeing a 37% year-over-year increase in management fees in the fourth quarter alone. In addition, we are within a few weeks, pending final regulatory approvals, of officially adding the Grand Victoria to the Full House family, which we believe will be a significant driver of long-term value for our shareholders.”

Fourth Quarter 2010 Results

For the quarter ended December 31, 2010, Full House reported casino, food and beverage, and other revenue of $2.1 million, a decline of 4% from the prior-year period, primarily caused by lower casino revenue at Stockman’s Casino due to a lower slot hold percentage and general economic weakness. In addition, during the fourth quarter of 2010, Full House recorded GEM management fees of $5.8 million for FireKeepers Casino, compared to management fees of $4.2 million for the fourth quarter 2009.

Full House recorded equity in net income of unconsolidated joint venture and related guaranteed payments of $1.5 million, an increase of 7% from the prior-year period, slightly above the guaranteed annual increase provided in the Company’s agreement with Harrington Raceway, Inc. The equity in net income of unconsolidated joint venture represents Full House’s 50% ownership interest in Gaming Entertainment (Delaware), LLC (“GED”), a joint venture between the Company and Harrington Raceway, Inc.

Operating expenses for fourth quarter 2010 were $3.6 million, a decrease of 1% from the prior-year period. The Company expensed $0.08 million of costs related to the announced acquisition of the Grand Victoria Casino & Resort during the quarter.

Operating income for fourth quarter 2010 was $5.8 million, compared to operating income of $3.4 million in the prior-year period. EBITDA, before unrealized gains on notes receivable, tribal governments and other items net of RAM’s share of GEM results, was $3.8 million versus $2.9 million in the prior-year period.

Full House reported fourth quarter net income attributable to the Company per common share of $0.11 for the three months ended December 31, 2010, as compared to $0.06 for the three months ended December 30, 2009. Exclusive of a $0.7 million impairment charge, net income per common share in the fourth quarter 2009 would have been $0.08.

Full Year 2010 Results

For the full year ended December 31, 2010, Full House reported casino, food and beverage, and other revenue of $8.4 million, compared to revenue of $9.1 million in the prior year, primarily as a result of lower casino revenue at Stockman’s Casino due to a lower slot hold percentage and general weakness in the economy. In addition, during the year ended December 31, 2010, Full House recorded GEM management fees of $24.5 million for FireKeepers Casino, compared to management fees of $10.0 million for approximately five months in 2009.

The Company recorded equity in net income of unconsolidated joint venture and related guaranteed payments of $5.1 million, an increase of 3% from the prior year.

Operating expenses for the full year ended December 31, 2010 were $14.4 million compared to $13.0 million in the prior year, primarily due to increased amortization of FireKeepers-related contract rights, which was the result of the casino opening in August 2009.

Operating income for the full year ended December 31, 2010 was $23.5 million, compared to operating income of $8.6 million in the prior year. EBITDA, before unrealized gains on notes receivable, tribal governments and other items net of RAM’s share of GEM results, was $15.2 million versus $8.3 million in the prior year. The 2009 results include a GEM member agreement resulting in the recognition of a one-time member agreement modification charge of $2.1 million.

The Company reported net income attributable to the Company per common share of $0.43 and $0.26 for the full years ended December 31, 2010 and 2009, respectively. Full year 2009 results included impairment charges of $0.8 million, as well as a member agreement modification resulting in the recognition of a one-time net pre-tax gain of $1.4 million consisting of the member agreement modification charge of $2.1 million, offset by a $3.5 million credit attributable to the non-controlling interest in GEM. Excluding these unusual charges in 2009, net income attributable to the Company per common share was $0.24 for the full year ended December 31, 2009.

Liquidity and Capital Resources

As of December 31, 2010, Full House had $13.3 million in cash and approximately $7.9 million of availability on its revolving credit line with Nevada State Bank. There was no debt outstanding as of December 31, 2010.

In December 2010, the Company executed a revised credit agreement and obtained financing commitments for a $33.0 million term loan and $5.0 million revolving line of credit to fund the Grand Victoria acquisition. The term loan’s interest rate is expected to be LIBOR plus 550 (with a 150 floor) and it will fully amortize over the five-year term of the facility. The Company anticipates applying approximately $19.0 million of cash on hand and $33.0 million of debt to fund the acquisition, which is subject to the customary regulatory approvals. Of the $19.0 million the Company plans to fund from cash, it has made total purchase price deposits of $5.0 million and paid fees related to the acquisition of approximately $2.3 million, including financing costs of approximately $2.0 million which were capitalized as deferred financing fees in the fourth quarter. The Company believes regulatory approvals will be obtained to accommodate a closing early in the second quarter of 2011.

In May 2010, Full House Resorts announced that its Board of Directors authorized a program to repurchase up to $1.0 million worth of shares of the Company's common stock. The plan expired on December 31, 2010, and the Company did not repurchase any shares.

2011 Guidance

For 2011, Full House is providing the following guidance:

For the full year 2011, we expect the combined SG&A expense for Stockman’s and corporate to be consistent with 2010 at approximately $6.5 to $6.8 million. Depreciation and amortization, including the Grand Victoria, for the final three quarters of the year is expected to be between $5.0 and $5.5 million. Interest expense for the full year 2011 is expected to be between $2.3 and $2.5 million, which includes the amortization of deferred loan fees. Income tax rate for the full year 2011 is expected to be between 44 and 46 percent.

The Company has provided this guidance for fiscal 2011 to give investors general information on the specific metrics of its business that it has a reasonable control over at this time. The guidance provided is subject to numerous uncertainties including, among others, overall economic and capital markets conditions, changes in gaming legislation, increased competition generally and in particular, the impact of the Gun Lake Casino on the FireKeepers Casino, the ability to obtain an Indiana gaming license and the close on the acquisition of the Grand Victoria early in the second quarter of 2011. The Company does not intend, and undertakes no obligation, to update its forward-looking statements, including forecasts and potential opportunities for growth in new and existing markets. Accordingly, the Company does not intend to update guidance during the quarter. Additional information about the factors that could potentially affect the Company's financial results included in today's press release can be found in the Company's Annual Report on Form 10-K and quarterly reports on Form 10-Q.

Conference Call Information

The Company will host a conference call and webcast on Tuesday, March 8 at 11:00 AM EST. Both the call and webcast are open to the general public.

The conference call number is 877-941-2322; international callers can access the call by dialing 1-480-629-9715. Please call five minutes in advance to ensure that you are connected prior to the presentation. Interested parties may also access the live call on the Internet at www.fullhouseresorts.com (select Investors and then Upcoming Events). Please log-on fifteen minutes in advance to ensure that you are connected prior to the call's initiation. Questions and answers will be reserved for call-in analysts and institutional investors. Following its completion, a replay of the call can be accessed for one week on the Internet at the above link or by calling either 800-406-7325 or 1-303-590-3030 and providing passcode 4415847.
           

Selected unaudited Statements of Operations data for the three months ended December 31,
 
 
2010       Casino Operations  

Development/ Management
  Corporate   Consolidated
Revenues $ 2,117,708 $ 5,773,464 $ - $ 7,891,172
Selling, general and administrative expense 439,791 136,835 1,023,309 1,599,935
Depreciation and amortization 237,300 593,195 13,912 844,407
Operating gains -- 1,499,432 -- 1,499,432
Operating income (loss) 387,460 6,542,866 (1,176,658 ) 5,753,668
Net income (loss) attributable to Company 257,228 2,502,933 (807,608 ) 1,952,553
 
 
 
2009       Casino Operations  

Development/ Management
  Corporate   Consolidated
Revenues $ 2,199,630 $ 4,199,842 $ 10,988 $ 6,410,460
Selling, general and administrative expense 472,917 191,418 1,003,623 1,667,958
Depreciation and amortization 241,122 593,084 22,145 856,351
Operating gains -- 674,656 -- 674,656
Operating income (loss) 398,551 4,089,477 (1,093,475 ) 3,394,553
Net income (loss) attributable to Company 266,405 1,450,534 (699,873 ) 1,017,066
 
           

Selected unaudited Statements of Operations data for the full year ended December 31,
 
 
2010       Casino Operations  

Development/ Management
  Corporate   Consolidated
Revenues $ 8,338,757 $ 24,558,372 $ - $ 32,897,129
Selling, general and administrative expense 1,729,554 730,035 3,970,256 6,429,845
Depreciation and amortization 960,675 2,372,781 87,800 3,421,256
Operating gains -- 5,091,764 -- 5,091,764
Operating income (loss) 1,472,935 26,545,979 (4,479,875 ) 23,539,039
Net income (loss) attributable to Company 976,664 9,680,712 (2,988,129 ) 7,669,247
 
 
 
2009       Casino Operations  

Development/ Management
  Corporate   Consolidated
Revenues $ 9,048,686 $ 9,953,009 $ 10,988 $ 19,012,683
Selling, general and administrative expense 1,757,923 586,291 4,128,903 6,473,117
Depreciation and amortization 984,824 1,019,919 85,351 2,090,094
Operating gains -- 2,596,459 -- 2,596,459
Operating income (loss) 2,064,293 10,892,130 (4,370,491 ) 8,585,932
Net income (loss) attributable to Company 1,365,673 6,301,194 (2,898,628 ) 4,768,239
 
                   

Reconciliation of EBITDA before unrealized gains on notes receivable, tribal governments, and other items for the three months ended December 31,
 
 
Net of Non-Controlling Interest
Quarter ended December 31, 2010       Casino Operations  

Development / Management
  Corporate   Consolidated GEM     50%  

Development / Management
  Consolidated
 
Operating income (loss) $ 387,460 $ 6,542,866 $ (1,176,658 ) $ 5,753,668 $ 5,205,548 $ 2,602,774 $ 3,940,092 $ 3,150,894
 
Add Back:
Grand Victoria expenses - - 79,133 79,133 - - - 79,133
Depreciation and amortization 237,300 593,195 13,912 844,407 431,169 215,585 377,610 628,822
 
Deduct:
Unrealized gain on notes receivable, tribal governments   -     28,218     -       28,218   -     -       28,218     28,218
$ 624,760   $ 7,107,843   $ (1,083,613 )   $ 6,648,990 $ 5,636,717   $ 2,818,359     $ 4,289,484   $ 3,830,631
 
 
     
Net of Non-Controlling Interest
Quarter ended December 31, 2009       Casino Operations  

Development / Management
  Corporate   Consolidated GEM     50%  

Development / Management
  Consolidated
 
Operating income (loss) $ 398,551 $ 4,089,477 $ (1,093,475 ) $ 3,394,553 $ 3,614,325 $ 1,807,163 $ 2,282,314 $ 1,587,390
 
Add Back:
Impairment - 727,567 - 727,567 - - 727,567 727,567
Depreciation and amortization 241,122 593,084 22,145 856,351 431,169 215,585 377,499 640,766
 
Deduct:
Unrealized gain on notes receivable, tribal governments   -     24,738     -       24,738   -     -       24,738     24,738
$ 639,673   $ 5,385,390   $ (1,071,330 )   $ 4,953,733 $ 4,045,494   $ 2,022,748     $ 3,362,642   $ 2,930,985
 
                   

Reconciliation of EBITDA before unrealized gains on notes receivable, tribal governments, and other items for the full year ended December 31,
 
 
Net of Non-Controlling Interest
Year ended December 31, 2010       Casino Operations  

Development / Management
  Corporate   Consolidated GEM     50%  

Development / Management
  Consolidated
 
Operating income (loss) $ 1,472,935 $ 26,545,979 $ (4,479,875 ) $ 23,539,039 $ 22,200,684 $ 11,100,342 $ 15,445,637 $ 12,438,697
 
Add Back:
Grand Victoria expenses - - 163,205 163,205 - - - 163,205
Unrealized loss on notes receivable, tribal governments - 2,900 - 2,900 - - 2,900 2,900
Depreciation and amortization   960,675     2,372,781     87,800       3,421,256   1,724,675     862,338       1,510,443       2,558,918  
$ 2,433,610 $ 28,921,660 $ (4,228,870 ) $ 27,126,400 $ 23,925,359 $ 11,962,680 $ 16,958,980 $ 15,163,720
 
 
     
Net of Non-Controlling Interest
Year ended December 31, 2009       Casino Operations  

Development / Management
  Corporate   Consolidated GEM     50%  

Development / Management
  Consolidated
 
Operating income (loss) $ 2,064,293 $ 10,892,130 $ (4,370,491 ) $ 8,585,932 $ 2,185,635 $ 1,092,818 $ 9,799,312 $ 7,493,114
 
Add Back:
Impairment - 752,899 - 752,899 - - 752,899 752,899
Member Modification - 2,147,327 - 2,147,327 7,046,833 3,523,417 (1,376,090 ) (1,376,090 )
Depreciation and amortization 984,824 1,019,919 85,351 2,090,094 718,952 359,476 660,443 1,730,618
 
Deduct:
Unrealized gain on notes receivable, tribal governments   -     567,348     -       567,348   585,418     292,709       274,639       274,639  
$ 3,049,117   $ 14,244,927   $ (4,285,140 )   $ 13,008,904 $ 9,366,002   $ 4,683,002     $ 9,561,925     $ 8,325,902  
 
     
FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
 
Three months

ended December 31,
Twelve months

ended December 31,
2010   2009   2010   2009
Revenues
Casino $ 1,665,994 $ 1,735,956 $ 6,529,773 $ 7,194,476
Food and beverage 428,866 443,775 1,728,879 1,775,623
Management fees 5,773,464 4,199,842 24,473,066 9,953,009
Other 22,848   30,887   165,411   89,575
7,891,172   6,410,460   32,897,129   19,012,683
Operating costs and expenses

Casino
538,098 573,241 2,159,199 2,271,337
Food and beverage 515,058 513,798 2,016,394 1,970,309
Project development costs 139,438 79,215 423,160 218,353
Selling, general and administrative 1,599,935 1,667,958 6,429,845 6,473,117
Depreciation and amortization 844,407   856,351   3,421,256   2,090,094
3,636,936   3,690,563   14,449,854   13,023,210
Operating gains (losses)
Equity in net income of unconsolidated joint venture, and related guaranteed payments

1,471,214

1,377,485
5,094,664 4,929,337
 
Unrealized gains (loss) on notes receivable, tribal governments

28,218

 
24,738 (2,900 ) 567,348
 
Member agreement modification -- -- -- (2,147,327 )
Impairment gain (loss) --   (727,567 )   --   (752,899 )
1,499,432   674,656   5,091,764   2,596,459
Operating income 5,753,668 3,394,553 23,539,039 8,585,932
Other income (expense)
Interest and other income 2,689 240,570 120,750 389,008
Interest expense (47,402 )   21,751   (58,368 )   (173,819 )
Income before income taxes 5,708,955 3,656,874 23,601,421 8,801,121
Income taxes   (1,371,409 )   (857,933 )   (5,739,430 )   (3,184,955 )
Net income 4,337,546 2,798,941 17,861,991 5,616,166
Income attributable to noncontrolling interest in consolidated joint venture   (2,384,993 )   (1,781,875 )   (10,192,744 )   (847,927 )
Net income attributable to the Company $ 1,952,553 $ 1,017,066 $ 7,669,247 $ 4,768,239
 

Net income attributable to the Company per common share
$ 0.11 $ 0.06 $ 0.43 $ 0.26
 
Weighted-average number of common shares outstanding   18,007,681   18,001,681   18,005,390   18,025,326
 

Disclosures necessary to conform to GAAP and SEC Regulations S-X have been omitted.

About Full House Resorts, Inc.

Full House owns, develops and manages gaming facilities. The Company has a management agreement with the Nottawaseppi Huron Band of Potawatomi Indians for FireKeepers Casino in Battle Creek, Michigan with approximately 2,700 gaming devices, 78 table games and a 120-seat poker room. The FireKeepers Development Authority recently announced the development of a 242-room resort-style hotel including a special events center, a full service restaurant and an expanded bingo facility. For further information, go to www.FireKeepersCasino.com. Full House also receives a guaranteed fee from the operation of Harrington Raceway and Casino at the Delaware State Fairgrounds in Harrington, Delaware. Harrington Raceway and Casino has a total of approximately 1,800 gaming devices, 40 table games, 10 poker tables, a 450-seat buffet, a fine dining restaurant, a 50-seat diner, a sports book and an entertainment lounge. For more information, go to www.harringtonraceway.com. In addition, Full House owns Stockman’s Casino in Fallon, Nevada which has 8,400 square feet of gaming space with approximately 260 gaming machines, four table games and a keno game. The casino has a bar, a fine dining restaurant and a coffee shop. For more information, please visit www.StockmansCasino.com.

Full House has entered into a contract to acquire the assets of the Grand Victoria Casino and Resort in Rising Sun, Indiana, subject to financing, regulatory approval and other standard conditions. The Grand Victoria has 40,000 square feet of gaming space with almost 1,400 slot and video poker machines and 37 table games. The property includes a 201-room hotel with spa, pool, meeting space and a pavilion with five food and beverage outlets, including a fine dining restaurant, buffet, sports bar, quick service restaurant and coffee shop and a large, multi-purpose Grand Theater for concerts and performance events as well as meetings and conventions. The 300-acre grounds also contain an 18-hole Scottish links golf course with full-service clubhouse. The property is conveniently located within driving distance of Indianapolis and Cincinnati, Ohio and near Lexington and Louisville, Kentucky. For more information on the Grand Victoria, please visit www.grandvictoria.com. Further information about Full House Resorts can be viewed on its website at www.fullhouseresorts.com.

Forward-looking Statements

Some of the statements made in this release are forward-looking statements. These forward-looking statements are based upon Full House’s current expectations and projections about future events and generally relate to Full House’s plans, objectives and expectations for Full House’s business. Although Full House’s management believes that the plans and objectives expressed in these forward-looking statements are reasonable, the outcome of such plans, objectives and expectations involve risks and uncertainties including without limitation, regulatory approvals, including the ability to obtain and maintain a gaming license in Indiana, financing sources and terms, including receipt of funding under the Wells Fargo credit facility, integration of acquisitions, including the successful and timely closing of the Grand Victoria acquisition, competition and business conditions in the gaming industry, including the opening of the Gun Lake casino in Michigan, plans for other and new competition in Michigan, competition from Ohio casinos and any possible authorization of gaming in Kentucky. Additional information concerning potential factors that could affect Full House’s financial condition and results of operations is included in the reports Full House files with the Securities and Exchange Commission, including, but not limited to, its Form 10-K for the most recently ended fiscal year.

Copyright Business Wire 2010

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