Red Rock Resorts Announces First Quarter 2017 Results
Financial Highlights:
- Consolidated net revenues increased 16.3% to
$417.7 million as compared to$359.2 million in the prior year quarter, the sixteenth consecutive quarter of year-over-year consolidated net revenue growth. - Consolidated net income decreased 24.0% to
$45.2 million as compared to$59.5 million in the prior year quarter, primarily attributable to the inclusion of the provision for income tax. - Consolidated Adjusted EBITDA increased 2.0% to
$135.9 million as compared to$133.2 million in the prior year quarter, the highest first quarter Consolidated Adjusted EBITDA in nine years. Las Vegas net revenues increased 16.5% to$386.2 million as compared to$331.5 million in the prior year quarter.- Las Vegas Adjusted EBITDA increased 1.3% to
$120.6 million as compared to$119.0 million in the prior year quarter. - Completed a series of opportunistic debt transactions that enhanced our balance sheet and reduced our annual interest expense by approximately
$22.8 million .
“During the first quarter, we continued to see solid results in our
Las Vegas Operations Segment
Net revenues from our
“We continue to make significant progress on our numerous technology and development initiatives, as well as the finalization of our future development plans for the Palms,” added Mr. Falcone. “We believe these initiatives and our substantial prior investments in our market-leading properties, combined with the solid outlook for the
Native American Segment
The Company’s Native American segment produced Adjusted EBITDA of
Corporate and other was
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. Adjusted EBITDA is further defined under the heading “Presentation of Financial Information” and a reconciliation of net income to Adjusted EBITDA is included in the financial information attached hereto.
Balance Sheet Highlights
As of
“Over the past few months, we have entered into several balance sheet transactions to opportunistically improve our financial position. The net effect has resulted in significantly lower borrowing costs and increased flexibility in our overall capital structure,” said Mr. Falcone.
Second Quarter Dividend
On
Conference Call Information
The Company will host a conference call today at
Presentation of Financial Information
Adjusted EBITDA is a non-GAAP measure that is presented solely as a supplemental disclosure. We believe that Adjusted EBITDA is a widely used measure of operating performance in our industry and is a principal basis for valuation of gaming companies. We believe that in addition to net 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 income plus preopening, depreciation and amortization, share-based compensation, write-downs and other charges, net, interest expense, net, loss on extinguishment/modification of debt, change in fair value of derivative instruments and provision for income tax, and excludes Adjusted EBITDA attributable to the noncontrolling interests of MPM.
Company Information and Forward Looking Statements
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 with our existing properties or realize expected synergies; the strength and sustainability of the recovery from the recent economic downturn, and the effects of the economy generally, and in particular in
| Red Rock Resorts, Inc. | ||||||||||
| Consolidated Statements of Income | ||||||||||
| (amounts in thousands, except per share data) | ||||||||||
| (unaudited) | ||||||||||
| Three Months Ended |
||||||||||
| March 31, | ||||||||||
| 2017 | 2016 | |||||||||
| Operating revenues: | ||||||||||
| Casino | $ | 262,972 | $ | 239,771 | ||||||
| Food and beverage | 80,115 | 66,620 | ||||||||
| Room | 49,764 | 34,384 | ||||||||
| Other | 22,820 | 17,182 | ||||||||
| Management fees | 30,227 | 26,649 | ||||||||
| Gross revenues | 445,898 | 384,606 | ||||||||
| Promotional allowances | (28,166 | ) | (25,359 | ) | ||||||
| Net revenues | 417,732 | 359,247 | ||||||||
| Operating costs and expenses: | ||||||||||
| Casino | 101,654 | 87,421 | ||||||||
| Food and beverage | 55,046 | 42,524 | ||||||||
| Room | 20,067 | 12,385 | ||||||||
| Other | 7,833 | 5,722 | ||||||||
| Selling, general and administrative | 94,423 | 75,090 | ||||||||
| Preopening | 30 | 348 | ||||||||
| Depreciation and amortization | 45,253 | 39,427 | ||||||||
| Write-downs and other charges, net | 1,024 | 2,368 | ||||||||
| 325,330 | 265,285 | |||||||||
| Operating income | 92,402 | 93,962 | ||||||||
| Earnings from joint ventures | 415 | 612 | ||||||||
| Operating income and earnings from joint ventures | 92,817 | 94,574 | ||||||||
| Other (expense) income: | ||||||||||
| Interest expense, net | (34,944 | ) | (35,068 | ) | ||||||
| Loss on extinguishment/modification of debt | (2,019 | ) | - | |||||||
| Change in fair value of derivative instruments | 39 | (3 | ) | |||||||
| (36,924 | ) | (35,071 | ) | |||||||
| Income before income tax | 55,893 | 59,503 | ||||||||
| Provision for income tax | (10,679 | ) | - | |||||||
| Net income | 45,214 | 59,503 | ||||||||
| Less net income attributable to noncontrolling interests | 25,431 | 1,864 | ||||||||
| Net income attributable to Red Rock Resorts, Inc. | $ | 19,783 | $ | 57,639 | ||||||
| Earnings per common share: | ||||||||||
| Net earnings per share of Class A common stock, basic and diluted | $ | 0.30 | $ | 0.64 | ||||||
| Weighted average common shares outstanding: | ||||||||||
| Basic | 65,692 | 9,888 | ||||||||
| Diluted | 65,837 | 9,888 | ||||||||
| Dividends declared per common share | $ | 0.10 | $ | - | ||||||
| Red Rock Resorts, Inc. | |||||||||||
| Segment Information and | |||||||||||
| Reconciliation of Net Income to Adjusted EBITDA | |||||||||||
| (amounts in thousands) | |||||||||||
| (unaudited) | |||||||||||
| Three Months Ended |
|||||||||||
| March 31, | |||||||||||
| 2017 | 2016 | ||||||||||
| Net Revenues | |||||||||||
| Las Vegas operations | $ | 386,238 | $ | 331,458 | |||||||
| Native American management | 30,105 | 26,487 | |||||||||
| Reportable segment net revenues | 416,343 | 357,945 | |||||||||
| Corporate and other | 1,389 | 1,302 | |||||||||
| Net revenues | $ | 417,732 | $ | 359,247 | |||||||
| Net income | $ | 45,214 | $ | 59,503 | |||||||
| Adjustments: | |||||||||||
| Preopening | 30 | 348 | |||||||||
| Depreciation and amortization | 45,253 | 39,427 | |||||||||
| Share-based compensation | 1,412 | 620 | |||||||||
| Write-downs and other charges, net | 1,024 | 2,368 | |||||||||
| Interest expense, net | 34,944 | 35,068 | |||||||||
| Loss on extinguishment/modification of debt | 2,019 | - | |||||||||
| Change in fair value of derivative instruments | (39 | ) | 3 | ||||||||
| Adjusted EBITDA attributable to MPM noncontrolling interest | (4,638 | ) | (4,121 | ) | |||||||
| Provision for income tax | 10,679 | - | |||||||||
| Adjusted EBITDA | $ | 135,898 | $ | 133,216 | |||||||
| Adjusted EBITDA | |||||||||||
| Las Vegas operations | $ | 120,566 | $ | 119,010 | |||||||
| Native American management | 23,317 | 20,432 | |||||||||
| Reportable segment Adjusted EBITDA | 143,883 | 139,442 | |||||||||
| Corporate and other | (7,985 | ) | (6,226 | ) | |||||||
| Adjusted EBITDA | $ | 135,898 | $ | 133,216 | |||||||
CONTACT:Red Rock Resorts Daniel Foley Vice President, Finance & Investor Relations (702) 495-3683 orLori Nelson Vice President of Corporate Communications (702) 495-4248