Full House Resorts(US:FLL)2024-08-07 11:13Financial Data and Key Metrics Changes - The company reported positive EBITDA of approximately $600,000 for the Chamonix property in the recent quarter, with expectations for significant growth in the future [4] - Year-to-date gaming revenues from table games were only 5% to 6% of total gaming revenues, which is below the target of 20% or higher [7] - For American Place, revenues were up about 34% and EBITDA increased by 84% in the second quarter compared to the previous year [8] Business Line Data and Key Metrics Changes - Chamonix's gaming revenues more than doubled compared to the previous year, with room sales increasing from 2,100 in January to over 6,500 in July [5][10] - American Place has seen revenues running 30% to 40% above the prior year since it opened, indicating strong growth [11][30] - The Silver Slipper had a rough first quarter but showed improvement in the second quarter, although it was still slightly behind the strong results of the prior year [14][56] Market Data and Key Metrics Changes - The market share in Cripple Creek increased from about 21% in January to almost 26% in June [5] - The company generated significant new sign-ups, with 4,000 in June and over 5,000 in July, indicating a growing customer base [5] - 21% of new sign-ups at Chamonix are coming from the Denver market, which is seen as a promising sign for future growth [6] Company Strategy and Development Direction - The company is focused on improving table game revenues and overcoming historical branding challenges in Cripple Creek [7] - There is a strategic push to fill mid-week occupancy at Chamonix through targeted promotions and marketing efforts [10][21] - The company plans to break ground on the permanent American Place casino in approximately one year, with financing expected to be in place [12][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term success of Chamonix, comparing it to successful casinos like the Mirage and Bellagio [26] - The company is optimistic about the growth potential in the Denver market and the overall improvement in customer perception of Cripple Creek [6][24] - Management noted that while the current operating costs are high, most are already incurred, and revenues are expected to continue to grow significantly [29] Other Important Information - The company extended its lease at Grand Lodge for an additional 10 years, indicating stability in that asset [9] - The company is exploring various financing options for the $325 million permanent American Place casino, with a focus on maintaining flexibility [49][50] Q&A Session Summary Question: Can you walk through the monthly progression on EBITDA for Chamonix? - Management indicated that EBITDA has improved every month since opening, with preliminary estimates for July around $1 million, which is an increase from June [20] Question: What is the new run rate for sports skins? - The annual run rate is approximately $5.6 million, which is expected to increase in the coming years [32][34] Question: What are you seeing in terms of group and convention mix for midweek rooms? - Management acknowledged they are behind on their target and are in the process of hiring additional sales staff to improve midweek occupancy [35][36] Question: Are there still cost levers to pull at American Place to increase margins? - Management confirmed that there are opportunities to improve marketing efficiency and drive revenue growth, which could help achieve margins over 30% [42][44] Question: How much of the $325 million for American Place do you anticipate financing through new bonds? - Management indicated that they expect to need only about half to 75% of the total financing, relying on internal cash flow as well [47]