Full House Forecasts Q4 Revenue Increase, Ups Colorado Construction Spend to $250M

Posted on: January 19, 2022, 11:08h. 

Last updated on: January 19, 2022, 12:30h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Full House Resorts (NASDAQ:FLL) announced preliminary fourth-quarter results today. The company indicatedrevenue for the final three months of 2021 should easily top what was reported in the year-earlier period. The company also said it’s significantly increasing the construction budget for its Chamonix project in Colorado.

Full House
Full House Resorts CEO Daniel Lee, seen in a 2018 interview. The company delivered an upbeat view on its fourth-quarter results. (Image: Las Vegas Review-Journal)

The Silver Slipper operator is forecasting fourth-quarter revenue of $43 million to $43.5 million, up from $38.3 million in the last three months of 2020. Net income is expected to be $4.2 million to $5.9 million, up from $3.5 million.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) is expected to be in the range of $7.3 million to $8.5 million for the fourth quarter of 2021, which reflects adverse hold in the Company’s Nevada and Indiana segments and approximately $1.7 million of expenses related to corporate initiatives that are not expected to recur in future periods,” said the company in a statement.

Adjusted EBITDA for the fourth quarter of 2020 was $9.8 million. Accounting for the preliminary fourth-quarter results, Full House is living up to analysts’ expectations that the operator could become one of the next gaming growth stories. The Bronco Billy’s operator is estimating 2021 revenue will be $179.9 million to $180.4 million — well ahead of $125.6 million in 2020.

“Adjusted EBITDA in 2021 is expected to be in the range of $46.6 million to $47.8 million, including approximately $2.1 million of expenses related to corporate initiatives that are not expected to recur in future years. Adjusted EBITDA in 2020 was $19.7 million,” according to the statement.

Macro Issues Take Hold in Colorado

In addition to Bronco Billy’s in Cripple Creek, Colo., and the Silver Slipper in Mississippi, Full House runs a pair of gaming properties in Nevada and one in Indiana. The company is also in the process of completing the Chamonix Casino Hotel, which will be located adjacent to Bronco Billy’s.

Citing a tough construction environment, inflation, and supply chain issues, Full House is upping the Chamonix budget to $250 million. Last March, the operator said it had a remaining investment of $180 million on the luxury gaming venue.  But as is the case across a variety of industries, inflation and a tight labor market is making it difficult to efficiently complete large-scale real estate projects.

At the end of last year, Full House had $265 million in cash and cash equivalents, “including approximately $177 million of restricted cash dedicated to the construction of its Chamonix Casino Hotel project.”

The investment in Colorado could pay dividends over the long term because the state’s gaming market is rapidly growing. From July 2021 through November 2021, statewide gaming revenue there surged 42 percent.

Full House Illinois Update

Last month, Full House won a preliminary gaming license to open a casino resort in Waukegan, Ill., which analysts view as potentially transformative for the stock.

In advance of the permanent venue opening, Full House is targeting a mid-2022 launch of The Temporary by American Place.

The $100 million temporary venue will be financed with new corporate debt and will feature approximately 1,000 slot machines and 50 table games. They will be transferred to the permanent American Place when it opens.

Full House “has agreed to purchase approximately ten acres of strategically-important land adjoining the 29-acre casino site to be leased from the City of Waukegan,” according to the operator.