Full House Resorts, Inc. (FLL) is a gaming and hospitality company that owns, leases, operates, develops, manages, and invests in casinos and related hospitality and entertainment facilities. The company currently operates seven casinos across the United States, with its most recent additions being the temporary American Place facility in Waukegan, Illinois, which opened in February 2023, and the phased opening of the Chamonix Casino Hotel in Cripple Creek, Colorado, which began in December 2023.
Financials
In the latest quarter, Full House Resorts reported strong financial results, with revenues increasing by 39.6% to $69.9 million compared to the prior-year period. This growth was primarily driven by the full quarter of operations at the American Place facility, as well as the phased opening of the Chamonix Casino Hotel. However, the company's net loss for the quarter widened to $11.3 million, compared to a net loss of $11.4 million in the same period last year.
For the full year 2023, Full House Resorts reported annual revenue of $241.1 million, up from $221.2 million in the prior year. The company's annual net loss for 2023 was $24.9 million, compared to a net loss of $11.4 million in 2022. Operating cash flow for the year was $22.3 million, while free cash flow was negative $176.8 million, as the company invested heavily in the construction of the American Place and Chamonix properties.
Segment Performance
The company's Midwest & South segment, which includes the Silver Slipper Casino and Hotel, Rising Star Casino Resort, and the American Place facility, saw a 33.9% increase in revenues for the quarter, primarily due to the full quarter of operations at American Place. Adjusted Segment EBITDA for the Midwest & South segment increased by 18.7% to $12.7 million.
The West segment, which includes the Bronco Billy's Casino and Hotel, Chamonix Casino Hotel, Grand Lodge Casino, and Stockman's Casino, reported a 60.4% increase in revenues for the quarter, driven by the phased opening of Chamonix. However, Adjusted Segment EBITDA for the West segment was negative $0.1 million, as the company incurred elevated expenses related to the opening of Chamonix.
The Contracted Sports Wagering segment, which includes the company's sports wagering agreements in Colorado, Indiana, and Illinois, saw a 91.5% increase in revenues for the quarter, with Adjusted Segment EBITDA rising 66.7% to $1.9 million.
Outlook
Looking ahead, Full House Resorts is optimistic about the future performance of its properties. The company expects the American Place facility to continue its strong momentum, with the permanent facility expected to further boost revenues and profitability. At Chamonix, the company is focused on completing the remaining amenities, such as the pool, spa, and additional dining options, which it believes will drive increased visitation and profitability.
Liquidity
In terms of liquidity, Full House Resorts had $46.3 million in cash and equivalents, including $20.6 million in restricted cash, as of March 31, 2024. The company believes that its current cash balances, combined with the available borrowing capacity under its revolving credit facility and cash flows from operating activities, will be sufficient to meet its liquidity and capital resource needs for the next 12 months of operations.
The company's long-term debt stood at $465.9 million as of March 31, 2024, with the majority of the debt maturing in 2028. Full House Resorts is committed to deleveraging its balance sheet as its newer properties, such as American Place and Chamonix, become more profitable and contribute to the company's overall cash flow.
Risks and Challenges
One of the key risks facing Full House Resorts is the potential impact of macroeconomic conditions on consumer spending and discretionary income. The company's operations are subject to financial, economic, competitive, regulatory, and other factors that are beyond its control. Additionally, the company's growth and development plans, such as the construction of the permanent American Place facility, are subject to various risks and uncertainties, including the ability to secure necessary financing and regulatory approvals.
Conclusion
Overall, Full House Resorts' recent financial performance and the successful openings of the American Place and Chamonix properties have positioned the company for continued growth and expansion. The company's focus on enhancing its existing properties, while also pursuing strategic development opportunities, suggests that the recent surge in the stock price may be an indication of further gains to come.