Full House Comes Up Aces on Q4 Results Reveal, Colorado Expansion Plans

Posted on: January 25, 2021, 09:50h. 

Last updated on: January 25, 2021, 11:16h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

On what’s shaping to be a mostly bleak day for gaming equities, Full House Resorts (NASDAQ:FLL) is one of the positive standouts. That’s after delivering a strong preliminary look at its fourth-quarter results.

Full House
The exterior of Full House’s Bronco Billy’s in Colorado. The stock is soaring today on expansion plans and a strong financial update. (Image: Uncover Colorado)

The regional gaming company forecast revenue of $37.8 million to $38.5 million for the December quarter. That’s down from $39 million a year earlier, but impressive when considering the various coronavirus restrictions operators are contending with across the country.

In midday trading, shares of Full House are higher by 7.30 percent on volume that’s already eclipsed the daily average, as the stock is trading around all-time highs.

That move is likely being fueled by the company’s profit outlook. The Silver Slipper operator said it expects operating income of $7.1 million to $8.0 million for the last three months of 2020, compared with an operating loss of $400,000 a year earlier. Full House forecast net income of $1.2 million to $4.0 million, a vast improvement from the $4.1 million lost in the same period in 2019.

Full House, which runs five gaming venues, is projecting adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $9.3 million to $10 million. Even at the low end of that range, the estimate is more than quadruple the adjusted EBITDA of $2.3 million notched in the fourth quarter of 2019.

The company said it had $38 million in cash on hand at the end of 2020, a healthy percentage of its market capitalization of $141 million.

Colorado Callin

Full House runs Bronco Billy’s in Cripple Creek, Colo. Here, the company is planning to expand that venue.

To reflect the new opportunity created by those changes, the company has increased the size of its planned Cripple Creek expansion by 67 percent to approximately 300 luxury guest rooms and suites, from its previously planned 180 guest rooms,” according to a statement.

Full House says the effort was approved by the Cripple Creek Historic Preservation Commission, and the Cripple Creek City Council Final approval requires another reading at the city council’s Feb. 3 meeting.

Increasing the size of the Bronco Billy’s enhancement comes after Colorado voters last November signed off on higher wager limits and the addition of new table games. Analysts believe that’s a boon for the state’s gaming market, as it could draw a more affluent clientele that stays in the area longer.

Full House estimates the Colorado project will cost $180 million, which it believes can be financed via debt. Assuming funding can be swiftly raised, the company could complete the project by late 2022.

More to Come for Full House

Shares of Full House are up a jaw-dropping 36 percent over the past week, and nearly quadrupled in just six months. But there’s potential for more upside.

Entering 2020, analysts speculated that if the company wins a license to develop a gaming property in Waukegan, Ill., the stock would jump to double-digit territory. It trades below $6 today. One analyst said last year that the project would be worth $4.81 to Full House’s share price.

Last October, the Illinois Gaming Board (IGB), citing coronavirus delays, said its decision on the three contenders to operate the Waukegan casino will take at least six months.