Full House Resorts(US:FLL)2022-11-08 01:12Financial Data and Key Metrics Changes - The company reported a significant improvement in property margins, increasing from approximately 13.5% in 2019 to about 25.5% year-to-date [29] - The company experienced a net income impact due to pre-opening costs of about $2.5 million, which is considered an investment for future net income [19] Business Line Data and Key Metrics Changes - The company is preparing to open the Waukegan casino, which is expected to significantly increase revenue, as existing casinos in the area generate substantial revenue [6][7] - The Bronco Billy's property has been operating with reduced gaming capacity due to refurbishments, impacting its financial performance [17] Market Data and Key Metrics Changes - The company noted that existing casinos in the vicinity of Waukegan are generating approximately $1.2 billion in revenue, indicating a strong market potential [6][7] - The company is facing competition from new entrants in the market, particularly in Mississippi and Louisiana, which has affected some of its gaming win [25][26] Company Strategy and Development Direction - The company is focused on opening the Waukegan casino and the Chamonix project, which are seen as critical to future growth [5][28] - The company is also exploring opportunities in online sports betting and online gambling, anticipating future legalization in their operating states [35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming openings and the potential for growth, citing strong local demographics and market conditions [48][49] - The company is preparing for potential challenges in the macroeconomic environment, including inflation and competition, but remains confident in its growth trajectory [54][55] Other Important Information - The company has a strong financial position with fixed-rate debt and does not require immediate financing, allowing it to focus on its upcoming projects [58][59] - The company is actively hiring for the Waukegan casino, facing challenges in staffing due to the number of table games [11] Q&A Session Summary Question: What are the major items determining the Waukegan opening timeline? - Management emphasized the importance of ensuring all systems and staffing are ready before opening, with a likely opening in January [38][41] Question: Are there any macroeconomic factors affecting the return calculus? - Management expressed increased optimism based on local market performance and population growth, indicating a favorable outlook for both Waukegan and Chamonix [48][49] Question: Can you provide insights on CapEx for the quarter? - The company reported spending approximately $34 million at Chamonix and $15 million at Waukegan, with significant expenditures expected in the upcoming quarter [61][62] Question: What trends are observed in the current business? - Management noted a slight decline in lower-tier customer play but emphasized that higher-tier customers are spending similarly, with operational costs impacting margins [65][66]