Red Rock Resorts Results

Red Rock Resorts Announces Fourth Quarter and Year End 2019 Results

Red Rock Resorts, Inc. (NASDAQ: RRR) today reported financial results for the fourth quarter and year ended December 31, 2019.

Net revenues were $460.8 million for the fourth quarter of 2019, an increase of 6.8%, or $29.3 million, from $431.5 million for the same period of 2018. The increase in net revenues was primarily due to an increase in Las Vegas operations, led by an increase in net revenues at the Palms Casino Resort.

Net income was $6.8 million for the fourth quarter of 2019, a decrease of 48.1%, or $6.3 million, from $13.2 million for the same period of 2018. The decrease in net income was primarily due to a one-time charge related to Company's purchase of its formerly leased corporate office building and the extinguishment of the lease financing obligation related thereto.

Adjusted EBITDA(1) was $137.6 million for the fourth quarter of 2019, an increase of 1.8%, or $2.5 million, from $135.1 million in the same period of 2018. The increase in Adjusted EBITDA was primarily due to an increase in Las Vegas operations other than the Palms, partially offset by a decrease in Adjusted EBITDA at the Palms.

For the full year, net revenues were $1.86 billion in 2019, an increase of 10.4%, or $175.5 million, from $1.68 billion for the same period of 2018.  The increase in net revenues was primarily due to a $170.8 million increase in Las Vegas operations, led by an increase in net revenues at the Palms.

For the full year, net loss was $6.7 million in 2019, compared to net income of $219.5 million in 2018. The decrease in net income was primarily due to (i) a decrease in the fair value of derivative instruments, (ii) an increase in write downs and other charges including the termination of certain artist performance agreements and employment arrangements at the Palms and (iii) higher depreciation and amortization relating to the Palms redevelopment project.  The change from the prior year was also impacted by a gain recognized in 2018 associated with the extinguishment of a tax receivable liability.

For the full year, Adjusted EBITDA was flat at $509.0 million in 2019 when compared to 2018. The flat year-over-year Adjusted EBITDA was primarily the result of an increase in Las Vegas operations other than the Palms, offset by a decrease in Adjusted EBITDA at the Palms.

Las Vegas Operations

Net revenues from Las Vegas operations were $437.9 million for the fourth quarter of 2019, an increase of 6.9%, or $28.5 million, from $409.5 million in the same period of 2018.  Adjusted EBITDA from Las Vegas operations was $125.5 million for the fourth quarter of 2019, an increase of 3.7%, or $4.5 million, from $121.0 million in the same period of 2018.

Native American Management

Adjusted EBITDA from Native American operations was $19.9 million for the fourth quarter of 2019, a 3.9% increase from $19.1 million in the same period of 2018 due to increased management fees generated under the Graton Resort management agreement.    

Balance Sheet Highlights

The Company's cash and cash equivalents at December 31, 2019 were $128.8 million and total principal amount of debt outstanding at the end of the fourth quarter was $3.076 billion. The Company's debt to Adjusted EBITDA and interest coverage ratios at December 31. 2019 were 4.96x and 4.37x, respectively.

Quarterly Dividend

The Company's Board of Directors has declared a cash dividend of $0.10 per Class A common share for the first quarter of 2020. The dividend will be payable on March 27, 2020 to all stockholders of record as of the close of business on March 13, 2020. 

Prior to the payment of such dividend, Station Holdco LLC ("Station Holdco") will make a cash distribution to all unit holders of record, including the Company, of $0.10 per unit for a total distribution of approximately $11.7 million, approximately $7.0 million of which is expected to be distributed to the Company and approximately $4.7 million of which is expected to be distributed to the other unit holders of record of Station Holdco.

Red Rock Resorts, Inc.

Consolidated Statements of Operations

(amounts in thousands, except per share data)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2019

2018

2019

2018

Operating revenues:

Casino

$       255,783

$       240,757

$       984,253

$       940,483

Food and beverage

110,818

100,971

481,558

381,197

Room

46,750

42,169

192,305

170,824

Other

26,123

27,054

106,773

100,912

Management fees

21,312

20,520

91,645

87,614

Net revenues

460,786

431,471

1,856,534

1,681,030

Operating costs and expenses:

Casino

91,182

84,854

351,043

326,980

Food and beverage

104,738

87,892

465,505

340,212

Room

20,030

19,314

81,064

78,440

Other

12,719

14,320

52,329

48,431

Selling, general and administrative

98,932

92,952

416,355

390,492

Depreciation and amortization

57,598

46,864

222,211

180,255

Write-downs and other charges, net

15,455

13,580

82,123

34,650

Tax receivable agreement liability adjustment

-

(263)

(97)

(90,638)

400,654

359,513

1,670,533

1,308,822

Operating income

60,132

71,958

186,001

372,208

Earnings from joint ventures

447

579

1,928

2,185

Operating income and earnings from joint ventures

60,579

72,537

187,929

374,393

Other (expense) income:

Interest expense, net

(37,743)

(46,800)

(156,679)

(143,099)

Loss on extinguishment/modification of debt, net

(19,637)

-

(19,939)

-

Change in fair value of derivative instruments

1,868

(14,938)

(19,467)

12,415

Other

(81)

(67)

(315)

(354)

(55,593)

(61,805)

(196,400)

(131,038)

Income (loss) before income tax

4,986

10,732

(8,471)

243,355

Benefit (provision) for income tax

1,858

2,449

1,734

(23,875)

Net income (loss)

6,844

13,181

(6,737)

219,480

Less: net income (loss) attributable to noncontrolling interests

2,015

4,235

(3,386)

61,939

Net income (loss) attributable to Red Rock Resorts, Inc.

$           4,829

$           8,946

$          (3,351)

$       157,541

Earnings (loss) per common share:

Earnings (loss) per share of Class A common stock, basic

$            0.07

$            0.13

$           (0.05)

$            2.28

Earnings (loss) per share of Class A common stock, diluted

$            0.05

$            0.11

$           (0.05)

$            1.77

Weighted-average common shares outstanding:

Basic

69,685

69,283

69,565

69,115

Diluted

116,778

116,414

69,565

116,859

Dividends declared per common share

$            0.10

$            0.10

$            0.40

$            0.40

Red Rock Resorts, Inc.

Segment Information and Reconciliation of Net Income (Loss) to Adjusted EBITDA

(amounts in thousands)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2019

2018

2019

2018

Net revenues

Las Vegas operations

$       437,942

$       409,483

$    1,758,760

$    1,588,003

Native American management

21,173

20,365

91,074

87,009

Reportable segment net revenues

459,115

429,848

1,849,834

1,675,012

Corporate and other

1,671

1,623

6,700

6,018

Net revenues

$       460,786

$       431,471

$    1,856,534

$    1,681,030

Net income (loss)

$           6,844

$         13,181

$          (6,737)

$       219,480

Adjustments

Depreciation and amortization

57,598

46,864

222,211

180,255

Share-based compensation

3,999

2,417

16,848

11,289

Write-downs and other charges, net

15,455

13,580

82,123

34,650

Tax receivable agreement liability adjustment

-

(263)

(97)

(90,638)

Interest expense, net

37,743

46,800

156,679

143,099

Loss on extinguishment/modification of debt, net

19,637

-

19,939

-

Change in fair value of derivative instruments

(1,868)

14,938

19,467

(12,415)

(Benefit) provision for income tax

(1,858)

(2,449)

(1,734)

23,875

Other

82

67

316

(633)

Adjusted EBITDA

$       137,632

$       135,135

$       509,015

$       508,962

Adjusted EBITDA

Las Vegas operations

$       125,467

$       120,971

$       454,805

$       457,379

Native American management

19,863

19,124

85,562

80,795

Reportable segment Adjusted EBITDA

145,330

140,095

540,367

538,174

Corporate and other

(7,698)

(4,960)

(31,352)

(29,212)

Adjusted EBITDA

$       137,632

$       135,135

$       509,015

$       508,962

SOURCE Red Rock Resorts, Inc.



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