FULL HOUSE RESORTS INC Q4 FY2024 earnings call

Management Statement and Operational Highlights

• American Place: Strong performance, best employer recognition, Illinois Supreme Court ruling resolves license issue, moving towards $325M permanent casino with no equity, targeting August 2027 opening.
• Colorado (Chamonix): Completed but slow opening, management changes (new GM, HR, etc.), focus on table games, improving food and beverage, addressing inefficiencies like the buffet.
• Indiana: New GM at Rising Sun, Silver Slipper under new management expected to improve.
• Lake Tahoe: Lease extended, property owned by Larry Ellison, plans to refurbish beachfront.
• Fallon: Sold, awaiting buyers' license approval.

Segment Performance

• American Place: Fourth quarter revenues up 27%, full-year up 42%; EBITDA up 60%. Recognized as the only casino on the Chicago Tribune's best employers list in Chicagoland. Illinois Supreme Court ruled in favor of the gaming commission for the Waukegan license, enabling financing for the $325M permanent casino. Target to open permanent by August 2027.
• Colorado (Chamonix): Completed in October, grand opening in early November. Fourth quarter revenues doubled but expenses up, resulting in a small loss. Expect revenues to climb, aiming for $50M annually. Made management changes including new GM, HR, hotel, IT, and advertising directors. Focus on table games, food and beverage, and operational inefficiencies.
• Indiana (Rising Sun/Silver Slipper): Revenue still modest. New GM Jeff Mitchie (with tribal casino experience) at Rising Sun; Silver Slipper under new management expected to improve.
• Lake Tahoe: On short-term lease at Hyatt Tahoe, lease extended multiple times. Property owned by Larry Ellison, plans to refurbish beachfront; casino not affected yet.
• Fallon: Sold, real estate closed months ago; waiting for buyers to obtain license.

Guidance

• American Place: Target to open permanent casino by August 2027, revenues expected to grow, margins to improve as it matures.
• Colorado (Chamonix): Expect revenues to continue climbing, aiming for $50M annual income, management changes expected to drive better results.
• Indiana: Hopes license relocation study progresses, new GM at Rising Sun to help.
• Lake Tahoe: Hopes lease extension continues, property to be more valuable under refurbishment.

Risks

• American Place: Uncertainties in permanent casino financing, potential tariffs affecting construction costs.
• Colorado (Chamonix): Slow table games ramp-up, need to hire dealers, improve table limits, operational inefficiencies like the buffet initially.
• Indiana: Uncertainty in license relocation process, political/legislative risks.
• General: Market competition, regulatory changes, tariffs impact on construction costs.

Question and Answer

Q: Ryan Sigdahl on American Place plans and online sports betting skins A: Dan Lee says no changes to American Place plans, Lewis Fanger talks about online sports betting skins volatility and dominance of DraftKings, FanDuel.

Q: Jordan Bender on construction tariffs and M&A A: Dan Lee discusses dealing with tariffs, no active M&A, model shows potential for stock value growth.

Q: John DeCree on Chamonix casino floor performance A: Dan Lee talks about management changes for tables, hiring dealers, improving transitions, and food and beverage offerings.

Q: Chad Beynon on American Place margins A: Dan Lee says margins will improve as revenues grow and expenses are controlled.

Q: Ricardo Chinchilla on Chamonix CapEx and OPEX A: Dan Lee and Lewis Fanger discuss CapEx plans, OPEX improvements with new management, and plans to address inefficiencies.

Q: Andrew Walker on Colorado bookings and American Place February results A: Lewis Fanger talks about Colorado bookings, American Place entertainment events and poker room plans.