Company Operations - Full House Resorts operates five casinos and is constructing two additional properties: Chamonix Casino Hotel in Colorado and The Temporary in Illinois[120]. - The company has seven permitted sports wagering "skins," with five contracted and four currently operational as of September 30, 2022[120]. - An agreement with Circa Sports was established to develop and manage on-site sportsbooks at The Temporary and American Place, with a non-refundable market access fee of $5 million received[133]. Financial Performance - Consolidated total revenues decreased by $5.8 million (12.4%) for the three months ended September 30, 2022, and by $9.7 million (7.1%) for the nine months ended September 30, 2022, primarily due to the absence of government stimulus programs and competitive pressures from online sports wagering[144]. - Operating expenses increased by $2.9 million (8.0%) for the three months and by $6.4 million (6.1%) for the nine months ended September 30, 2022, mainly due to preopening costs for new projects and higher insurance and food costs[145]. - Net loss for the three months ended September 30, 2022, was $(3,577) thousand compared to a net income of $4,619 thousand in the prior year, representing a decrease of 177.4%[144]. - Adjusted EBITDA for the three months ended September 30, 2022, was $7.8 million, compared to $13.6 million in the prior-year period[182]. - The company experienced a net loss of $3.6 million for the three months ended September 30, 2022, compared to a net income of $4.6 million in the prior-year period[182]. Revenue Breakdown - The company’s revenues are primarily derived from slot machines, table games, keno, sports betting, hotels, and food and beverage outlets[124]. - Casino revenues from slots decreased by $2,839 thousand (9.9%) for the three months and by $9,092 thousand (10.5%) for the nine months ended September 30, 2022[144]. - Non-casino revenues, net of food and beverage, decreased by $1,281 thousand (4.0%) for the three months and remained relatively stable with a decrease of $378 thousand (1.8%) for the nine months[144]. - Total revenues for the Mississippi segment decreased by 7.2% to $19,981,000 for the three months ended September 30, 2022, and by 8.4% to $62,432,000 for the nine months ended September 30, 2022, primarily due to declines in casino revenue[158]. - Total revenues for the Indiana segment decreased by 23.4% to $9,639,000 for the three months ended September 30, 2022, and by 5.3% to $30,069,000 for the nine months ended September 30, 2022[161]. - Total revenues for the Colorado segment decreased by 30.8% to $4,385,000 for the three months ended September 30, 2022, and by 31.6% to $12,732,000 for the nine months ended September 30, 2022, due to construction disruptions[166]. - Total revenues for the Nevada segment increased by 22.6% to $6,290,000 for the three months ended September 30, 2022, and by 11.6% to $15,868,000 for the nine months ended September 30, 2022[158]. Segment Performance - Adjusted Segment EBITDA for the Mississippi segment decreased by 34.7% to $4,235,000 for the three months ended September 30, 2022, and by 33.1% to $15,442,000 for the nine months ended September 30, 2022[160]. - Adjusted Segment EBITDA for the Indiana segment decreased by 64.8% to $1,343,000 for the three months ended September 30, 2022, and by 16.3% to $6,374,000 for the nine months ended September 30, 2022[165]. - Adjusted Segment EBITDA for the Colorado segment decreased by 97.7% to $36,000 for the three months ended September 30, 2022, and by 101.0% to $(49,000) for the nine months ended September 30, 2022[169]. - Adjusted Segment EBITDA for the Nevada segment increased by 48.3% to $2,280,000 for the three months ended September 30, 2022, and by 9.2% to $4,557,000 for the nine months ended September 30, 2022[160]. Costs and Expenses - Interest expense increased to $8,682 thousand for the three months ended September 30, 2022, compared to $6,557 thousand in the prior year, reflecting higher costs associated with new debt issuance[149]. - The effective income tax rate for the three months ended September 30, 2022, was (0.8%), compared to 2.0% in the prior year, primarily due to tax amortization effects and valuation allowances[152]. - Corporate expenses declined by 14.6% (or $0.2 million) and 14.0% (or $0.7 million) for the three and nine months ended September 30, 2022, primarily due to a decrease in accrued bonus compensation[179]. Future Outlook - The Temporary project is expected to open within the next three months, while the Chamonix project is anticipated to open in mid-2023, contributing to future revenue growth[145]. - The Illinois sports operations are anticipated to begin in Spring 2023, with a minimum expected revenue contribution of $5 million annually from a third-party agreement[178]. - The company plans to invest approximately $100 million in Chamonix for 2022 and $125 million in 2023, with an expected opening in mid-2023[197]. - The company plans to invest approximately $40 million in 2022 and $60 million in 2023 for The Temporary, including significant upfront gaming license payments[198]. Cash Flow and Debt - As of September 30, 2022, the company had $241.8 million in cash and equivalents, including $156.1 million in restricted cash for Chamonix's construction[188]. - Cash provided by operations during the nine months ended September 30, 2022, was $40,000, a decrease from $19.3 million in the prior-year period, primarily due to reduced revenues and income[189]. - Cash used in investing activities during the nine months ended September 30, 2022, was $117.2 million, mainly for capital expenditures related to Chamonix and The Temporary/American Place[190]. - Cash provided by financing activities during the nine months ended September 30, 2022, was $93.7 million, compared to $235.5 million in the prior-year period[191]. - Long-term debt as of September 30, 2022, was $410.0 million, with no drawn amounts under the Credit Facility[193]. - The company has significant outstanding debt and contractual obligations, with principal debt maturing in February 2028[192]. - The company expects current cash balances and available borrowing capacity to meet liquidity needs for the next 12 months[188]. Operational Challenges - The company faces significant fluctuations in quarterly operating results due to seasonality and variations in gaming hold percentages[125]. - Economic uncertainty from the COVID-19 pandemic has led to increased costs, labor shortages, and supply chain disruptions impacting operations and construction projects[128]. - The construction budget for Chamonix was revised from $180 million to approximately $250 million due to supply chain issues and inflation[197]. Internal Controls and Legal Matters - The company completed an evaluation of its disclosure controls and procedures as of September 30, 2022, concluding they are effective at a reasonable assurance level[210]. - There have been no changes in internal control over financial reporting that materially affected the company during the last fiscal quarter[212]. - The company is subject to various legal and administrative proceedings but does not expect these to have a material adverse effect on its consolidated financial position or results of operations[213].

Financial Performance - Consolidated total revenues decreased by 1.9% (or $0.8 million) to $41.423 million, primarily due to the absence of government stimulus programs and adverse hold percentages at two properties[137] - Operating expenses increased by 7.8% (or $2.6 million) to $36.120 million, driven by higher food and beverage costs and preopening costs for The Temporary[139] - Casino revenues decreased by 9.3% to $29.084 million, with slot revenues down 5.7% to $25.527 million and table game revenues down 15.3% to $3.275 million[137] - Non-casino revenues increased by 21.6% to $12.339 million, with "Other" revenues rising significantly by 99.2% to $3.649 million[137] - The company reported a net income of $110, compared to a net loss of $3,445 in the prior year, marking a 103.2% increase[137] - Adjusted EBITDA for the same period was $8,397 million, down from $10,769 million in the prior year, reflecting a decrease of approximately 22%[172] - Cash used in operations during the three months ended March 31, 2022, was $8.0 million, compared to cash provided by operations of $8.3 million in the prior-year period[177] Segment Performance - Total revenues for the Mississippi segment decreased by 4.7% to $21.3 million, with casino revenue declining by 8.5% or $1.4 million[151] - Adjusted Segment EBITDA for the Mississippi segment decreased to $6.0 million from $7.6 million in the prior year, impacted by competition from online sports wagering in Louisiana[153] - Total revenues for the Colorado segment decreased by 28.3% to $4.2 million, largely due to planned business disruptions for the Chamonix construction project[157] - Adjusted Segment EBITDA for the Colorado segment decreased by 118.7% to ($0.3 million) due to construction disruptions and increased operating expenses[161] - Total revenues for the Nevada segment increased by 1.0% to $4.4 million, driven by a 6.9% increase in slot revenue[164] - Adjusted Segment EBITDA for the Nevada segment decreased to $0.8 million from $1.2 million in the prior year, reflecting adverse table games hold and increased labor costs[165] - Contracted Sports Wagering segment revenues increased to $2.8 million from $1.0 million in the prior year, reflecting the addition of a new skin and acceleration of deferred revenue[167] Construction and Development - The company is constructing two additional properties: Chamonix Casino Hotel in Colorado and The Temporary in Illinois, expected to open in Fall 2022[117] - The construction budget for Chamonix was revised to approximately $250 million, up from $180 million, due to supply chain issues and inflation[185] - The company plans to invest approximately $125 million in Chamonix in 2022 and $100 million in 2023, with an expected opening in Q2 2023[185] - The company is expected to invest approximately $100 million throughout 2022 for The Temporary, pending regulatory approvals[186] Financing and Cash Flow - The company closed a private offering of $100 million in additional 8.25% Senior Secured Notes due 2028 to fund development and general corporate purposes[129] - Cash used in investing activities was $31.9 million, primarily for capital expenditures related to Chamonix and The Temporary, compared to $3.4 million in the prior-year period[178] - Cash provided by financing activities was $94.1 million, a decrease from $235.4 million in the prior-year period, largely due to different financing activities undertaken[179] - As of March 31, 2022, the company had $319.5 million in cash and equivalents, including $210.5 million of restricted cash for Chamonix construction[176] - Long-term debt as of March 31, 2022, was $410.0 million, with no drawn amounts under the credit facility[181] Corporate Governance and Compliance - The company completed an evaluation of its disclosure controls and procedures as of March 31, 2022, concluding they are effective at a reasonable assurance level[198] - There have been no changes in internal control over financial reporting that materially affected the company during the last fiscal quarter[200] - The company is subject to various legal and administrative proceedings but does not believe these will have a material adverse effect on its consolidated financial position[201] Economic and Market Conditions - The company anticipates ongoing impacts from COVID-19, including supply chain disruptions and inflationary pressures affecting operations and construction projects[125] - Interest expense increased to $6.4 million for the three months ended March 31, 2022, compared to $4.5 million in the prior year, primarily due to the issuance of Additional Notes in February 2022[142] - The company expects to reverse the tax benefit recognized as of March 31, 2022, in future periods as pre-tax book income offsets the year-to-date pre-tax loss[144]

Financial Performance - Casino revenues increased to $130,431,000 in 2021, up 43.7% from $90,812,000 in 2020[358] - Net income for 2021 was $11,706,000, compared to a net income of $147,000 in 2020, representing a significant increase[358] - Basic earnings per share rose to $0.36 in 2021, compared to $0.01 in 2020[358] - The company reported operating income of $37,554,000 in 2021, a substantial increase from $10,476,000 in 2020[358] - Total revenues for the Company in 2021 reached $180.159 million, with casino revenues contributing $130.431 million[515] - Adjusted Segment EBITDA for 2021 was $54.947 million, reflecting strong operational performance across segments[515] - The Company reported a net income of $11.706 million for the year, with income before income taxes at $12.141 million[515] - The Company incurred total depreciation and amortization expenses of $7.219 million in 2021[515] - Interest expense for the year was reported at $23.657 million, impacting overall profitability[515] Financial Position - Total assets increased to $473,842,000 in December 2021, up from $212,616,000 in December 2020[360] - Cash and equivalents grew to $88,721,000 in December 2021, compared to $37,698,000 in December 2020[360] - Long-term debt increased to $301,619,000 in December 2021, up from $106,832,000 in December 2020[360] - Total cash and cash equivalents as of December 31, 2021, amounted to $265.3 million, including $176.6 million of restricted cash for the Chamonix project[374] - The balance of accounts receivable reserves at the end of 2021 was $257,000, up from $176,000 in 2020, indicating a cautious approach to credit risk[522] Internal Controls and Audit - The Company maintained effective internal control over financial reporting as of December 31, 2021, based on criteria established in the Internal Control — Integrated Framework (2013) issued by COSO[338] - The audit opinion expressed by Deloitte & Touche LLP on the financial statements was unqualified, indicating no material misstatements were found[339] - The Company’s management is responsible for maintaining effective internal control over financial reporting and assessing its effectiveness[340] - The audit included evaluating the accounting principles used and significant estimates made by management, ensuring the financial statements are free of material misstatement[349] - The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting[342] Tax and Deferred Assets - The Company reported a valuation allowance for its US federal and certain state deferred tax assets amounting to $9.9 million as of December 31, 2021[352] - As of December 31, 2021, the Company had federal net operating loss carryforwards totaling $14.1 million and state tax carryforwards of $86.3 million[481] - The Company recorded a valuation allowance against its deferred tax assets (DTAs) as it has not met the "more likely than not" threshold for realization[483] - The Company has $1.1 million and $0.6 million of deferred tax liabilities relating to goodwill and other indefinite-lived intangibles as of December 31, 2021, and 2020, respectively[484] - Deferred income tax asset valuation allowance decreased to $9,866,000, down from $11,108,000 in 2020, reflecting improved tax asset management[523] Strategic Initiatives and Expansion - The company plans to continue expanding its market presence and investing in new projects to drive future growth[361] - The company is developing the Chamonix Casino Hotel in Cripple Creek, Colorado, which is expected to expand its operational footprint[365] - The company plans to open a temporary casino facility named The Temporary by American Place in Waukegan, Illinois, in Summer 2022[366] - The company is focusing on market expansion and new product development as part of its strategic initiatives moving forward[517] Debt and Financing - The company raised $310 million from Senior Secured Notes due 2028 and $42.9 million from an equity offering, enhancing its liquidity position[363] - The Company issued $310 million aggregate principal amount of 8.25% Senior Secured Notes due 2028, refinancing prior notes and adding approximately $8 million to unrestricted cash[434] - The Company closed a private offering of $100 million aggregate principal amount of additional 8.25% Senior Secured Notes due 2028, sold at a price of 102.0% of the principal amount[435] - The Company entered into a First Amendment to Credit Agreement, increasing the borrowing capacity from $15.0 million to $40.0 million, maturing on March 31, 2026[444] - The Company has no drawn amounts under the Credit Facility as of December 31, 2021[447] Lease and Property Management - The company recognized total lease costs of $6.808 million for 2021, an increase from $5.840 million in 2020[472] - The company purchased Carr Manor for $2.8 million, adding approximately 1.6 acres to its land ownership in Cripple Creek[476] - The company has future minimum lease payments totaling $41.625 million for operating leases and $3.748 million for financing leases[474] - The company has a finance lease for a hotel at Rising Star Casino Resort, with a purchase option based on the original cost of $7.7 million, currently netting $3.3 million[469] Stock Options and Compensation - As of December 31, 2021, the Company had 3,221,956 stock options outstanding with a weighted average exercise price of $2.19[500] - The Company recognized compensation expense of $966,000 for stock options in 2021, up from $405,000 in 2020[500] - The weighted-average grant date fair value of options granted in 2021 was $5.68, significantly up from $0.95 in 2020 and $0.94 in 2019[504] - Expected volatility for 2021 was 65.99%, an increase from 60.78% in 2020 and 46.17% in 2019[503]

Financial Data and Key Metrics Changes - Consolidated revenues for Q1 2021 increased by approximately 37% to $42 million compared to the same quarter last year, with a 4% increase compared to Q1 2019 [5] - Adjusted EBITDA improved to $10.8 million, an increase of over $12 million compared to Q1 2019, attributed to labor efficiencies and refined operating hours [5][6] - On a trailing 9-month basis, adjusted EBITDA is over $33 million, indicating a strong position as the company moves into typically stronger quarters [6] Business Line Data and Key Metrics Changes - The newly created segment for contracted sports wagering generated nearly $1 million in Q1 2021, up from about $400,000 in the same period last year, due to more skins being live [8][24] - Mississippi operations performed well, benefiting from a refurbished casino and the absence of Mardi Gras in New Orleans, which typically draws visitors away [14] - Indiana reported $1.1 million in income for Q1 2021, a significant improvement from a loss in the same quarter last year [19] Market Data and Key Metrics Changes - The company noted strong performance in Mississippi and Indiana, while Colorado faced parking challenges due to ongoing construction [34] - Northern Nevada showed resilience despite COVID-related restrictions, with expectations for improved performance as restrictions ease [23] Company Strategy and Development Direction - The company is focused on the Chamonix growth project in Cripple Creek, Colorado, with $180 million remaining to complete the project [10] - Future projects are being considered in Waukegan, Illinois, and at the existing Silver Slipper property, with a commitment letter signed with a private equity firm for the Waukegan project [11][26] - The company aims to maintain a clean balance sheet and has issued new equity to strengthen its financial position for upcoming projects [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the return of older clientele as vaccination rates increase, which is crucial for business recovery [36][54] - The company anticipates that the strong performance seen in Q1 2021 may not be sustainable without ongoing stimulus checks, but remains focused on maintaining operational efficiencies [31][33] - Management highlighted the importance of adapting to changing consumer behaviors post-pandemic, including the potential for increased regional casino visits as people seek entertainment options [59] Other Important Information - The company has $278 million in cash at the end of the quarter, including $180 million in a restricted account for the Chamonix project, marking a historical high for cash reserves [13][29] - The company is actively managing construction costs for the Chamonix project amid inflation and material cost challenges, with contingency plans in place [41][42] Q&A Session Summary Question: How have trends been in April and May on gaming revenue and margins? - Management reported strong performance continuing into April, with expectations for a return to more normal revenue levels as stimulus checks are not expected to continue indefinitely [31][32] Question: Have you seen a change in traffic at the Silver Slipper post-restrictions lifting? - Management noted a positive trend in older clientele returning, which is crucial for business, while efforts are being made to retain younger customers [36][54] Question: Can you elaborate on the construction costs for Chamonix given inflation? - Management confirmed that the project is fully pre-funded, with contingency plans in place to address potential cost overruns [41][42] Question: What are the expectations for sports betting and iGaming revenues? - Management indicated that while current revenues are guaranteed at $7 million, there is potential for higher earnings as market shares increase and new opportunities arise [46][49]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☑ Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended: December 31, 2019 ☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | --- | --- | --- | --- | |---------------------------------------------------------------------------------------|------------------------------------------------------------------------|- ...

Full House Resorts, Inc. (NASDAQ:FLL) Q4 2019 Results Conference Call March 12, 2020 11:00 AM ET Company Participants Lewis Fanger - Chief Financial Officer Daniel Lee - Chief Executive Officer Conference Call Participants Chad Beynon - Macquarie Gary Ribe - Accretive Wealth Operator Good day, everyone. Welcome to the Full House Resorts Fourth Quarter Earnings Call. Today's conference is being recorded. At this time, I'd like to turn things over to Mr. Lewis Fanger, Chief Financial Officer of Full House Res ...