Nevada Gold & Casinos reports third quarter results

Nevada Gold & Casinos, Inc. today announced financial results for the third quarter ended January 31, 2018. The company will host a conference call at 4:30 PM ET today to discuss these results and provide a corporate update.

For the third quarter of fiscal 2018, net revenue increased to $18.1 million compared to $17.9 million in the third quarter of fiscal 2017. This increase was primarily driven by a $0.4 million increase in Washington, partially offset by a $0.2 million decrease from Club Fortune Casino. Operating expenses were $17.5 million compared to $18.4 million in the prior year period, which included a $1.1 million impairment loss. Operating income was $0.6 million compared to an operating loss of $0.5 million in the prior year period. The Company recorded a non-cash tax expense adjustment of $0.3 million as a result of the new corporate tax rate. Net income was $0.2 million compared to net loss of $0.7 million in the prior year period.

Net revenues from the Washington state gaming operations were $13.6 million compared to $13.2 million in the prior year. This increase was primarily due to repositioning one location as a poker only operation. Poker revenues increased $0.3 million while other gaming revenue was unchanged for the period, despite removing 10 tables as a result of the poker move. Marketing expenses increased $0.2 million in the quarter related to the repositioning, and coupled with increased wages, caused Adjusted EBITDA to decrease to $1.5 million compared to $1.6 million in the prior year period.

Club Fortune net revenues were $3.3 million compared to $3.5 million in the prior year. A slot hold variance of approximately 50 basis points was the primary reason for both the revenue and EBITDA declines. Adjusted EBITDA was $0.4 million compared to $0.6 million in the prior year.

South Dakota revenues were $1.2 million in both periods, and Adjusted EBITDA was unchanged at $0.1 million.

Corporate expenses were $0.6 million, comparable to the prior year. On a consolidated basis, adjusted EBITDA was $1.2 million compared to $1.4 million in the prior year period.

"Our strategic poker repositioning in Washington has performed well, and as we reduce our target marketing in support of this move, we expect increased EBITDA contributions from the Washington portfolio," stated President and CEO Michael Shaunnessy. "Club Fortune was up against a strong prior year comparable, and a lower slot hold hampered the current year's performance."

The company paid down $1.3 million in debt during the quarter. The unrestricted cash balance at January 31, 2018 was $8.6 million, and total outstanding borrowing was $9.3 million.

During the third quarter the Company did not purchase any shares. Since inception of the share repurchase program, approximately 1,085,000 shares have been acquired at a cost of approximately $2.3 million.

For the nine month period of fiscal 2018, net revenues were $56.1 million compared to $54.6 million in fiscal year 2017. Operating expenses were $54.1 million, compared to $54.7 million in the prior period, which included the $1.1 million impairment charge. Operating income was $2.0 million compared to an operating loss of $0.1 million in fiscal 2017. Net income was $1.0 million compared to net loss of $0.6 million in the prior year.