Yahoo Finance Full House Resorts Inc (FLL) Q1 2024 Earnings Call Transcript Highlights: Navigating Challenges ...
EBITDA: Consistently generating about $3 million per month, with a current annual run rate of $36 million.
Year-over-Year Revenue Growth: April gaming revenues increased by 39% compared to April 2023.
Adjusted Property EBITDA: Recorded a loss of approximately $400,000 in Q1; April expected to break even.
Insurance Cost Savings: Property insurance costs to decrease by 19%, saving about $900,000 over the next 12 months.
Revenue Growth Expectation: Revenues up by 40% for two consecutive months, with strong growth anticipated to continue.
Operating Margins: Running margins above 30%.
Future Commitments: Approximately $325 million planned for building the permanent facility at American Place.
Interest Expense: Annual interest expense around $35-36 million.
Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Full House Resorts Inc (NASDAQ:FLL) reported a significant increase in gaming revenues at American Place, with a 39% rise compared to April 2023.
The company's EBITDA performance has improved, with American Place generating approximately $3 million per month, doubling the EBITDA from the previous year.
Full House Resorts Inc (NASDAQ:FLL) successfully reduced property insurance costs at Silver Slipper by 19%, saving about $900,000 over the next 12 months.
The opening of new amenities such as the 980 Prime steakhouse and the upcoming pool and spa are expected to draw more visitors and enhance guest experience.
The company has a strategic plan in place for the construction and financing of the permanent facility at American Place, ensuring continued operation and growth.
Negative Points
Full House Resorts Inc (NASDAQ:FLL) faced challenges due to severe winter weather, which impacted key weekend revenues and caused power outages affecting operations.
The company reported an adjusted property EBITDA loss of $400,000 in the first quarter due to excess costs in the early stages of new openings.
There were operational challenges in staffing, particularly in Waukegan, where licensing requirements and language barriers complicated the hiring process.
The company's properties in Northern Nevada and other locations experienced a downturn due to weather impacts and competitive pressures.
Full House Resorts Inc (NASDAQ:FLL) is still in the early stages of raising funds for the construction of the permanent facility at American Place, with significant financial planning and execution pending.
Q & A Highlights
Q: How do you think you've shifted share in the overall Cripple Creek market? A: Daniel Lee, President and CEO of Full House Resorts, explained that the company's strategy is focused on growing the overall market rather than just shifting shares within Cripple Creek. He highlighted the company's competitive edge in terms of quality and location, suggesting that these factors will help attract more visitors from the broader Colorado area, ultimately growing the market.
Q: Can you discuss the challenges and progress at the Waukegan property in terms of customer acquisition and market impact? A: Daniel Lee discussed the challenges in Waukegan, particularly with the licensing process for employees and the impact of local regulations on hiring. Despite these challenges, he noted that the property is gradually building a stable workforce and management team, which is crucial for long-term success.
Q: What are the marketing plans for Germany as we head into the summer months, and what is the potential for increasing group hotel revenue? A: Daniel Lee outlined the marketing strategies for the upcoming summer months, focusing on attracting both gamblers and retail customers. He also mentioned efforts to book groups for the fall and winter, emphasizing the importance of filling midweek vacancies to optimize revenue.
Q: What further steps are required at the temporary Waukegan property to increase monthly GGR into the $11 million range? A: Lewis Fanger, CFO of Full House Resorts, mentioned that time and continued learning about effective marketing strategies are key. He highlighted the importance of growing the customer database and tailoring promotions to optimize revenue, particularly on weekends.
Q: How has the external environment, particularly weather conditions, impacted the operations and financial performance in the quarter? A: Lewis Fanger discussed how severe winter weather adversely affected weekend revenues, a critical time for the casino. However, he remains optimistic that as weather improves and the company adjusts its operations, the impact will be mitigated in future quarters.
Q: Regarding the labor market, especially at new properties, how has Full House Resorts managed staffing challenges? A: Daniel Lee elaborated on the labor challenges, particularly in Waukegan, where regulatory hurdles have complicated the hiring process. He also mentioned strategies like outsourcing certain services to manage staffing needs effectively at the new properties.
These insights provide a comprehensive view of Full House Resorts' strategic initiatives, operational challenges, and market positioning as they navigate through various external and internal factors impacting their business.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
