Full House Resorts, Inc. Q2 FY2025 earnings call

Management Statement and Operational Highlights

• American Place: Record revenue and adjusted EBITDA in Q2; customer database growing with over 107,000 people; amenities being fine-tuned, e.g., converting part of a restaurant to a comedy club and creating a poker room; expecting 20% full-year EBITDA growth.
• Chamonix: Hired new GM and CMO; achieved $5 million annual cost synergies by improving cost structures like labor controls; gaming revenue growing in July; working on marketing and sales team improvements to address hotel occupancy issues by hiring a sales force.
• Other Properties: Silver Slipper adjusting over-comping levels; Stockman's Casino sold; Grand Lodge new GM; Rising Star new GM making small improvements but challenged by competition; ongoing efforts to refinance debt for permanent American Place facility.

Segment Performance

• American Place: Second quarter revenue was $30.7 million, up about 13%, and record adjusted property EBITDA of $8.9 million, up 17%. Expected 20% growth in EBITDA for the full year 2025. Customer database has crossed 107,000 people, and amenities are being fine-tuned, including converting part of a restaurant to a comedy club and creating a poker room.
• Chamonix: Second quarter revenue was virtually flat at $11.6 million. Operating expenses were $1.2 million lower compared to the first quarter of 2025, implying nearly $5 million of annual cost synergies. Anticipated EBITDA positive in July 2025. New GM and CMO hired, working on marketing and sales team improvements to address hotel occupancy issues during off-seasons.
• Silver Slipper: Revenue down $1.6 million due to reined-in over-comping levels. Adjusted property EBITDA would have been flat except for a one-time noncash accounting item. Experienced a parking garage issue briefly closing the garage heading into a key holiday weekend.
• Stockman's Casino: Sold on April 1, so dropped out of consolidated financials in the second quarter of 2025.
• Grand Lodge (Lake Tahoe): New GM with experience in player development and casino operations hired.
• Rising Star: First year-over-year growth in a while under new GM, but challenged by competition from surrounding properties.

Guidance

• American Place expects 20% EBITDA growth for the full year 2025.
• Chamonix anticipates EBITDA positive in July 2025 and aims for continued cash flow positive thereafter, with efforts on marketing and sales to drive growth.
• Monitoring debt markets closely for refinancing of permanent American Place facility, hoping for bond market cooperation.

Risks

• Potential delays in debt financing for permanent American Place facility.
• Challenges in maintaining cash flow positive at Chamonix during off-seasons due to hotel occupancy issues.
• Uncertainty in relocating casino licenses, which could impact profitability of certain properties.
• Competition affecting legacy properties like Rising Star.

Question and Answer

Q: What are some early factors to determine success and earnings ramp at the Colorado property?

A: Cost reductions like changing pay week, improving laundry and housekeeping contracts; marketing and sales team improvements; underserved market with potential for growth.

Q: Update on potential impact of Big beautiful Bill on customers?

A: More money in customers' pockets is beneficial; NOLs and tax changes affecting the company's tax position.

Q: Changes to marketing strategy at Chamonix?

A: Transitioning from physical mail to email marketing for cost efficiency; new marketing team with experience; working on unifying TITO system for better customer experience.