Nevada Gold & Casinos : Reports Third Quarter Results Mar 16, 2017

March 16, 2017

LAS VEGAS, March 16, 2017 (GLOBE NEWSWIRE) -- Nevada Gold & Casinos, Inc. (NYSE MKT:UWN) today announced financial results for the third quarter ended January 31, 2017. The company will host a conference call at 4:30 PM ET (1:30 PM PT) today to discuss these results and provide a corporate update.

For the third quarter of fiscal 2017, net revenue decreased to $18.0 million compared to $18.4 million in the third quarter of fiscal 2016. This decrease was primarily driven by a $1.4 million decline in Washington, partially offset by a $1.2 million increase from Club Fortune Casino, which was acquired on December 1, 2015. Operating expenses were $18.5 million compared to $17.2 million in the prior year period. The Company recorded an impairment loss of $1.1 million, writing off the remaining goodwill associated with its South Dakota operation. Operating loss was $0.5 million compared to $1.2 million in the prior year period. Net loss was $0.7 million compared to net income of $0.5 million in the prior year period.

For the third quarter of fiscal 2017, the Company reported adjusted EBITDA of $1.4 million compared to a record $2.3 million in the prior year quarter. This decrease was due to a challenging environment in the Washington portfolio, but was aided by three full months of operations of Club Fortune Casino, compared to two months for the third quarter of 2016.

'Our Washington portfolio endured harsh weather conditions beginning in mid-December and continued into mid-February,' stated President and CEO Michael Shaunnessy. 'The growth in volumes we had seen in the first two quarters stalled, and we continued to be plagued by a softer than normal hold percentage, particularly compared to the prior year. On a more positive note, Club Fortune generated its highest quarterly revenue and EBITDA since acquisition.'

Net revenues from the Washington state gaming operations decreased to $13.2 million compared to $14.6 million in the prior year. Of the $1.4 million revenue decline, lower table drop was responsible for $0.5 million, lower hold percentage for $0.6 million and poker for $0.3 million. Adjusted EBITDA decreased to $1.6 million compared to a record $2.8 million in the prior year period.

Club Fortune net revenues were $3.6 million and adjusted EBITDA was $0.6 million compared to prior year's first two months of operations which yielded $2.4 million in revenues and adjusted EBITDA of $0.3 million

South Dakota revenues declined $174,000 to $1.2 million, which was partially offset by operating expense reductions leading to a $48,000 decrease in EBITDA compared to the prior year.

Corporate expenses were $0.6 million compared to $0.8 million, net of acquisition expenses in the prior period. On a consolidated basis, adjusted EBITDA was $1.4 million compared to $2.3 million in the prior year period.

The Company paid down $1.5 million in debt during the quarter. The unrestricted cash balance at January 31, 2017 was $9.6 million, and total outstanding borrowing was $14.0 million.

In July 2016, the Board authorized a $2.0 million stock repurchase program. During the quarter the Company acquired 68,188 shares for $132,443, an average cost of $1.94. Since inception approximately 258,000 shares have been acquired at a cost of approximately $477,000, leaving $1.5 million available under this authorization.

For the nine month period of fiscal 2017, net revenues were $54.8 million compared to $50.4 million in fiscal year 2016. Operating expenses were $55.0 million, which includes the $1.1 million impairment charge, compared to $47.5 million in the prior period. Operating income decreased to $0.1 million compared to $3.0 million in fiscal 2016. Net loss was $0.6 million compared to net income of $1.5 million in the prior year.

Conference Call and Webcast

The company will host a conference call today at 4:30 PM ET (1:30 PM PT). The call can be accessed live by dialing [phone]. International callers can access the call by dialing [phone].

A telephone replay of the conference call will be available after 7:30 pm ET and can be accessed by dialing [phone]. International callers can access the replay by dialing [phone]; the pin number is 8993337. The replay will be available through March 23, 2017. The archived webcast will also be available on the company's website.

(1) Non-GAAP Information
The term 'adjusted EBITDA' is used by us in presentations, quarterly earnings calls, and other instances as appropriate. Adjusted EBITDA is defined as net income before interest, change in swap fair value, income taxes, depreciation and amortization, goodwill and other long-lived asset impairment charges, write-offs of project development costs and acquisition expenses, litigation charges, non-cash stock grants, non-cash employee stock purchase plan discounts, amortization of deferred rent, and net losses/gains from asset dispositions. Adjusted EBITDA does not take into account greater or less than expected hold percentages in the gaming operations. Adjusted EBITDA is presented because it is a required component of financial ratios reported by us to our lenders, and it is also frequently used by securities analysts, investors, and other interested parties, in addition to and not in lieu of, U.S. Generally Accepted Accounting Principles ('GAAP') results to compare to the performance of other companies that also publicize this information. Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to net income as an indicator of our operating performance or any other measure of performance derived in accordance with GAAP.

Adjusted EBITDA reconciliations for the three months and nine months ended January 31, 2017 and January 31, 2016 are shown below:

Reconciliation of net (loss) income to Adjusted EBITDA:
		For the three months ended
		January 31, 2017				January 31, 2016
Net (loss) income		$	(683,046	)		$	466,351
Adjustments:
Net interest expense and change in swap fair value			8,418				432,252
Income tax expense			189,738				283,592
Depreciation and amortization			756,606				739,699
Acquisition expenses			-				368,824
Stock compensation and employee stock purchases			1,787				30,177
Loss (gain) on disposal of assets			42,574				(2,271	)
Impairment of goodwill			1,101,471				-
Amortization of deferred rent			8,946				11,639
Adjusted EBITDA		$	1,426,494			$	2,330,263

Reconciliation of net (loss) income to Adjusted EBITDA:
		For the nine months ended
		January 31, 2017				January 31, 2016
Net (loss) income		$	(632,596	)		$	1,542,338
Adjustments:
Net interest expense and change in swap fair value			290,253				623,484
Income tax expense			212,592				812,226
Depreciation and amortization			2,306,628				1,739,902
Acquisition expenses			113,900				629,603
Stock compensation and employee stock purchases			117,393				90,672
Loss (gain) on disposal of assets			56,490				(163,702	)
Impairment of goodwill			1,101,471				-
Amortization of deferred rent			30,899				24,502
Adjusted EBITDA		$	3,597,030			$	5,298,325

Forward-Looking Statements
This release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We use words such as 'anticipate,' 'believe,' 'expect,' 'future,' 'intend,' 'plan,' and similar expressions to identify forward-looking statements. Forward-looking statements include, without limitation, our ability to increase income streams, to grow revenue and earnings, and to obtain additional gaming and other projects. These statements are only predictions and are subject to certain risks, uncertainties and assumptions, which are identified and described in the Company's public filings with the Securities and Exchange Commission.

About Nevada Gold & Casinos
Nevada Gold & Casinos, Inc. (NYSE MKT:UWN) of Las Vegas, Nevada is a developer, owner and operator of 9 gaming operations in Washington (wagoldcasinos.com), a local casino in Henderson, Nevada (clubfortunecasino.com) and a slot route operation in Deadwood, South Dakota (dakotaplayersclub.com). For more information, visit www.nevadagold.com.

Nevada Gold & Casinos, Inc.
Consolidated Balance Sheets
		January 31,				April 30,
		2017				2016
			(unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	9,583,671			$	11,583,107
Restricted cash			1,722,247				1,433,728
Accounts receivable, net of allowances			362,644				665,549
Prepaid expenses			1,338,878				1,206,825
Notes receivable, current portion			499,361				208,294
Inventory and other current assets			415,773				416,022
Total current assets			13,922,574				15,513,525
Real estate held for sale			750,000				750,000
Notes receivable, net of current portion			4,650				900,775
Goodwill			16,923,588				18,025,059
Intangible assets, net of accumulated amortization			4,320,863				5,003,981
Property and equipment, net of accumulated depreciation			14,384,547				15,147,061
Deferred tax asset			2,135,707				2,348,299
Other assets			70,000				70,000
Total assets		$	52,511,929			$	57,758,700
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	1,361,973			$	1,702,366
Accrued payroll and related			1,250,576				2,094,250
Accrued player's club points and progressive jackpots			2,085,896				1,872,566
Total current liabilities			4,698,445				5,669,182
Long-term debt			13,735,976				16,839,148
Other long-term liabilities			685,807				881,426
Total liabilities			19,120,228				23,389,756
Stockholders' equity:
Common stock, $0.12 par value per share; 50,000,000 shares
authorized; 18,625,167 and 18,571,693 shares issued and 17,584,354 and 17,788,856 shares outstanding at January 31, 2017, and April 30, 2016, respectively			2,235,028				2,228,612
Additional paid-in capital			27,441,270				27,315,517
Retained earnings			11,124,254				11,756,850
Treasury stock, 1,040,813 and 782,837 shares at January 31, 2017 and
April 30, 2016, respectively, at cost			(7,408,851	)			(6,932,035	)
Total stockholders' equity			33,391,701				34,368,944
Total liabilities and stockholders' equity		$	52,511,929			$	57,758,700

Nevada Gold & Casinos, Inc.
Consolidated Statements of Operations
(unaudited)
			Three Months Ended							Nine Months Ended
		January 31,				January 31,				January 31,				January 31,
		2017				2016				2017				2016
Revenues:
Casino		$	15,791,598			$	16,217,164			$	48,441,682			$	44,578,057
Food and beverage			3,383,641				3,294,142				10,014,949				8,216,330
Other			534,011				529,568				1,622,271				1,437,452
Gross revenues			19,709,250				20,040,874				60,078,902				54,231,839
Less promotional allowances			(1,722,078	)			(1,680,127	)			(5,251,980	)			(3,794,103	)
Net revenues			17,987,172				18,360,747				54,826,922				50,437,736
Expenses:
Casino			8,612,371				8,323,508				27,327,792				24,128,321
Food and beverage			1,573,445				1,508,918				4,588,565				4,117,607
Other			61,112				76,050				215,515				179,965
Marketing and administrative			5,149,807				4,886,618				15,583,962				13,335,935
Facility			547,123				524,892				1,627,828				1,510,113
Corporate			627,553				1,121,138				2,148,422				2,612,247
Depreciation and amortization			756,606				739,699				2,306,628				1,739,202
Loss (gain) on disposal of assets			42,574				(2,271	)			56,490				(163,702	)
Impairment of goodwill			1,101,471				-				1,101,471				-
Total operating expenses			18,472,062				17,178,552				54,956,673				47,459,688
Operating (loss) income			(484,890	)			1,182,195				(129,751	)			2,978,048
Non-operating income (expenses):
Interest income			19,149				22,794				65,241				73,424
Interest expense and amortization of loan issue costs			(178,100	)			(187,894	)			(482,432	)			(401,514	)
Interest rate swap expense			(29,526	)			(21,006	)			(99,582	)			(51,332	)
Change in swap fair value			180,059				(246,146	)			226,520				(244,062	)
(Loss) income before income tax expense			(493,308	)			749,943				(420,004	)			2,354,564
Income tax expense			(189,738	)			(283,592	)			(212,592	)			(812,226	)
Net (loss) income		$	(683,046	)		$	466,351			$	(632,596	)		$	1,542,338
Per share information:
Net (loss) income per common share - basic and diluted		$	(0.04	)		$	0.03			$	(0.04	)		$	0.09

Contacts:

Nevada Gold & Casinos, Inc.Michael P. Shaunnessy / James Meier

[phone]



Stonegate Capital PartnersCasey Stegman

[phone]

Source: Nevada Gold & Casinos, Inc.

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