Full House Resorts(US:FLL)2020-08-09 00:50Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of $2.7 million for June 2020, compared to $2.0 million in June 2019, despite two key properties being open for only half the month [51][52] - The EBITDA margin in June was up 9 points over the prior year, indicating improved efficiency [15] - The company maintained approximately $30 million in cash, with $10 million used for daily operations, reflecting a cautious approach to liquidity [30] Business Line Data and Key Metrics Changes - Silver Slipper achieved almost the same casino revenues as the prior year, down only 3% in June, with payroll reduced by 22% and marketing expenses down 13% [11][14] - Bronco Billy's casino revenues were 75% of the prior year's June despite being open only half the month, with payroll down about 11% and marketing expenses down 52% [13][14] - Rising Star's revenues were down 39%, but revenues per day were up, with payroll reduced to about half of last year [14] Market Data and Key Metrics Changes - The company noted a shift in customer demographics, with younger patrons gambling more frequently, offsetting a decline in revenue from older clientele [22] - The company observed that competition from other entertainment venues was minimal, benefiting casino attendance [19][56] Company Strategy and Development Direction - The company plans to remain cautious on expenses and payroll while focusing on targeted marketing strategies [26] - There are ongoing discussions about potential partnerships for financing new projects, particularly in Waukegan, to mitigate risks associated with large investments [59] - The company is exploring opportunities in mobile sports betting and online gaming, anticipating significant growth in this sector [32][70] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism that the worst of the pandemic's impact is behind them, with strong performance continuing into July and early August [8][15] - The company is cautious about potential future closures due to COVID-19 spikes but believes it can manage liquidity effectively [30][31] - Management highlighted the importance of adapting to changing customer preferences and the competitive landscape, particularly in light of reduced travel and entertainment options [18][56] Other Important Information - The company has written off certain capitalized costs related to projects that are no longer viable, cleaning up its balance sheet [38][39] - The company is negotiating with lenders regarding debt covenants due to the impact of the pandemic on operations [34][36] Q&A Session Summary Question: Can you provide insights on the sustainability of revenue trends observed in July and August? - Management indicated that July was strong, likely the best month in the company's history, and early August trends also looked positive, suggesting sustained demand [53][54] Question: What are the competitive dynamics in Illinois, particularly regarding Waukegan? - Management noted that legislative changes in Chicago could shift focus but remains confident in their proposal for Waukegan, which was rated highly by the city's consultant [67][70] Question: How does the company view the potential for online gaming and sports betting? - Management sees significant growth potential in online gaming and sports betting, with expectations for legislative changes to facilitate this expansion [72][74]