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Red Rock Resorts Announces Second Quarter 2017 Results

LAS VEGAS, Aug. 08, 2017 (GLOBE NEWSWIRE) -- Red Rock Resorts, Inc. ("Red Rock Resorts" "we" or the "Company") (NASDAQ:RRR) today reported financial results for the second quarter ended June 30, 2017.

/EIN News/ -- Net revenues were $403.5 million for the second quarter of 2017, an increase of 14.8%, or $52.0 million, from $351.5 million for the same period of 2016.  The increase was primarily the result of the addition of $39.8 million of net revenues from the Palms Casino Resort (the "Palms"), an $8.8 million increase from same-store Las Vegas Operations and a $3.2 million increase from Native American Operations.

Net loss attributable to Red Rock Resorts was $25.9 million, or $0.39 per diluted share, for the second quarter of 2017, a decrease of $31.6 million, from net income of $5.7 million, or $0.01 per diluted share, for the same period of 2016.  The decrease in net income was primarily attributable to the acquisition of the leases at Boulder Station and Texas Station, partially offset by lower income tax.

Adjusted EBITDA(1) was $119.5 million for the second quarter of 2017, a 1.8% increase from $117.4 million in the same period of 2016.  The increase was the result of the addition of the Palms in operating results and continued strength in Native American Operations.

Red Rock Resorts also announced on August 4, 2017 that the Company had approved a cash dividend of $0.10 per share, payable on August 31, 2017 to shareholders of record as of August 15, 2017. 

Las Vegas Operations

Net revenues from Las Vegas Operations were $371.5 million for the second quarter of 2017, a 15.1% increase from $322.9 million in the same period of 2016, primarily due to the addition of the Palms.  Adjusted EBITDA(1) from Las Vegas Operations was $104.7 million for the second quarter of 2017, a 0.1% increase from $104.6 million in the same period of 2016, primarily due to the addition of the Palms and partially offset by continued construction disruption at Palace Station.

Native American Operations

Adjusted EBITDA(1) from Native American Operations was $22.7 million for the second quarter of 2017, a 12.9% increase from $20.1 million in the same period of 2016 due to continued strength at both Graton and Gun Lake. 

Balance Sheet Highlights

The Company’s cash and cash equivalents at June 30, 2017 were $125.3 million and total principal amount of debt outstanding at the end of the quarter was $2.57 billion. As of June 30, 2017, debt (net of cash) to Adjusted EBITDA(1) ratio was 4.96 times and interest coverage was at 4.58 times, proforma for the acquisition of the Palms. 

Conference Call Information

The Company will host a conference call today at 4:30 p.m. Eastern Time to discuss its financial results. The conference call will consist of prepared remarks from the Company and will include a question and answer session. Those interested in participating in the call should dial (877) 793-4361 or (615) 247-0185 for international callers, approximately 15 minutes before the call start time. A replay of the call will be available from today through August 15, 2017 at www.redrockresorts.com. A live audio webcast of the call will also be available at www.redrockresorts.com.

Presentation of Financial Information

(1) Adjusted EBITDA is not a generally accepted accounting principle (“GAAP”) measurement and is presented solely as a supplemental disclosure because the Company believes that it is a widely used measure of operating performance in the gaming industry and is a principal basis for valuation of gaming companies. We believe that in addition to net (loss) income, Adjusted EBITDA is a useful financial performance measurement for assessing our operating performance because it provides information about the performance of our ongoing core operations excluding non-cash expenses, financing costs, and other non-operational items. Adjusted EBITDA includes net (loss) income plus preopening, depreciation and amortization, share-based compensation, write-downs and other charges, net, related party lease termination, interest expense, net, loss on extinguishment/modification of debt, net, change in fair value of derivative instruments and income taxes, and excludes Adjusted EBITDA attributable to the noncontrolling interests of MPM.

Company Information and Forward Looking Statements

Red Rock Resorts manages and owns a majority indirect equity interest in Station Casinos. Station Casinos is the leading provider of gaming and entertainment to the residents of Las Vegas, Nevada. Station Casinos’ properties, which are located throughout the Las Vegas valley, are regional entertainment destinations and include various amenities, including numerous restaurants, entertainment venues, movie theaters, bowling and convention/banquet space, as well as traditional casino gaming offerings such as video poker, slot machines, table games, bingo and race and sports wagering. Station Casinos owns and operates Red Rock Casino Resort Spa, Green Valley Ranch Resort Spa Casino, Palms Casino Resort, Palace Station Hotel & Casino, Boulder Station Hotel & Casino, Sunset Station Hotel & Casino, Santa Fe Station Hotel & Casino, Texas Station Gambling Hall & Hotel, Fiesta Rancho Casino Hotel, Fiesta Henderson Casino Hotel, Wildfire Rancho, Wildfire Boulder, Wild Wild West Gambling Hall & Hotel, Wildfire Sunset, Wildfire Valley View, Wildfire Anthem and Wildfire Lake Mead. Station Casinos also owns a 50% interest in Barley’s Casino & Brewing Company, Wildfire Casino & Lanes and The Greens. In addition, Station Casinos is the manager of Graton Resort & Casino in northern California and owns a 50% interest in MPM Enterprises, L.L.C., which is the manager of Gun Lake Casino in southwestern Michigan.

This press release contains certain forward-looking statements with respect to the Company and its subsidiaries which involve risks and uncertainties that cannot be predicted or quantified, and consequently, actual results may differ materially from those expressed or implied herein. Such risks and uncertainties include, but are not limited to the Company’s ability to successfully integrate the Palms or realize expected synergies; the effects of the economy and business conditions on consumer spending and our business; competition, including  the risk that new gaming licenses or gaming activities  are approved; our substantial outstanding indebtedness and the effect of our significant debt service requirements; our ability to refinance our outstanding indebtedness and obtain necessary capital; the impact of extensive regulation; risks associated with changes to applicable gaming and tax laws; risks associated with development, construction and management of new projects or the expansion of existing facilities; and other risks described in the filings of the Company with the Securities and Exchange Commission.  In providing forward-looking statements, the Company is not undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise, except as required by law. If the Company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those other forward-looking statements.


Red Rock Resorts, Inc.
Condensed Consolidated Statements of Operations
(amounts in thousands, except per share data)
(unaudited)
                   
      Three Months Ended   Six Months Ended
      June 30,   June 30,
        2017       2016       2017       2016  
Operating revenues:              
  Casino $   258,396     $   233,796     $   521,368     $   473,567  
  Food and beverage     75,303         66,408         155,418         133,028  
  Room     44,641         32,979         94,405         67,363  
  Other     23,699         17,705         46,519         34,887  
  Management fees     30,676         27,455         60,903         54,104  
    Gross revenues     432,715         378,343         878,613         762,949  
  Promotional allowances     (29,222 )       (26,857 )       (57,388 )       (52,216 )
    Net revenues     403,493         351,486         821,225         710,733  
                   
Operating costs and expenses:              
  Casino     103,170         88,986         204,824         176,407  
  Food and beverage     55,059         44,501         110,105         87,025  
  Room     18,239         11,893         38,306         24,278  
  Other     9,079         6,305         16,912         12,027  
  Selling, general and administrative     94,781         80,152         189,204         155,242  
  Preopening     368         373         398         721  
  Depreciation and amortization     46,807         38,436         92,060         77,863  
  Write-downs and other charges, net     8,826         10,966         9,850         13,334  
  Related party lease termination     98,393         -         98,393         -  
          434,722         281,612         760,052         546,897  
                   
Operating (loss) income     (31,229 )       69,874         61,173         163,836  
  Earnings from joint ventures     420         428         835         1,040  
Operating (loss) income and earnings from joint ventures     (30,809 )       70,302         62,008         164,876  
                   
Other (expense) income:              
  Interest expense, net     (33,853 )       (34,078 )       (68,797 )       (69,146 )
  Loss on extinguishment/modification of debt, net     (975 )       (7,084 )       (2,994 )       (7,084 )
  Change in fair value of derivative instruments     3,330         90         3,369         87  
          (31,498 )       (41,072 )       (68,422 )       (76,143 )
(Loss) income before income tax     (62,307 )       29,230         (6,414 )       88,733  
  Benefit (provision) for income tax     11,813         (7,502 )       1,134         (7,502 )
Net (loss) income     (50,494 )       21,728         (5,280 )       81,231  
  Less: net (loss) income attributable to noncontrolling interests     (24,574 )       16,075         857         17,939  
Net (loss) income attributable to Red Rock Resorts, Inc. $   (25,920 )   $   5,653     $   (6,137 )   $   63,292  
                   
  (Loss) earnings per common share:              
    (Loss) earnings per share of Class A common stock, basic and diluted $   (0.39 )   $   0.01     $   (0.09 )   $   0.33  
                   
  Weighted average common shares outstanding:              
    Basic     67,311         30,031         66,506         19,960  
    Diluted     67,311         30,193         66,506         20,041  
                   
  Dividends declared per common share $   0.10     $   -      $   0.20     $   -   

 


Red Rock Resorts, Inc.
Segment Information and
Reconciliation of Net (Loss) Income to Adjusted EBITDA
(amounts in thousands)
(unaudited)
                     
                     
        Three Months Ended   Six Months Ended
        June 30,   June 30,
          2017       2016       2017       2016  
Net revenues                    
Las Vegas operations       $   371,492     $   322,876     $   757,730     $   654,334  
Native American management           30,543         27,320         60,648         53,807  
Reportable segment net revenues         402,035         350,196         818,378         708,141  
Corporate and other           1,458         1,290         2,847         2,592  
Net revenues       $   403,493     $   351,486     $   821,225     $   710,733  
                     
Net (loss) income       $   (50,494 )   $   21,728     $   (5,280 )   $   81,231  
Adjustments                    
Preopening           368         373         398         721  
Depreciation and amortization         46,807         38,436         92,060         77,863  
Share-based compensation           2,326         3,681         3,738         4,301  
Write-downs and other charges, net         8,826         10,966         9,850         13,334  
Related party lease termination         98,393         -         98,393         -  
Interest expense, net           33,853         34,078         68,797         69,146  
Loss on extinguishment/modification of debt, net       975         7,084         2,994         7,084  
Change in fair value of derivative instruments       (3,330 )       (90 )       (3,369 )       (87 )
Adjusted EBITDA attributable to MPM noncontrolling interest     (6,418 )       (5,211 )       (11,056 )       (9,332 )
(Benefit) provision for income tax         (11,813 )       7,502         (1,134 )       7,502  
Other           -         (1,133 )       -         (1,133 )
Adjusted EBITDA       $   119,493     $   117,414     $   255,391     $   250,630  
                     
Adjusted EBITDA                    
Las Vegas operations       $   104,711     $   104,627     $   225,277     $   223,637  
Native American management           22,695         20,096         46,012         40,528  
Reportable segment Adjusted EBITDA       127,406         124,723         271,289         264,165  
Corporate and other           (7,913 )       (7,309 )       (15,898 )       (13,535 )
Adjusted EBITDA       $   119,493     $   117,414     $   255,391     $   250,630  
                     

 

View source version on globenewswire.com: http://globenewswire.com/Search?runSearchId=39933809 

CONTACT:
                    
                    Red Rock Resorts 
                    Daniel Foley
                    Vice President, Finance & Investor Relations
                    (702) 495-3683
                    or
                    Lori Nelson
                    Vice President of Corporate Communications
                    (702) 495-4248

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