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Red Rock Resorts announces 4 percent growth for Q2 2018

Net revenues were $416.2 million for the second quarter of 2018, an increase of 1.5%, or $6.1 million, from $410.1 million for the same period of 2017. The increase in net revenues was primarily due to an increase in Las Vegas operations.

Net revenues were $416.2 million for the second quarter of 2018, an increase of 1.5%, or $6.1 million, from $410.1 million for the same period of 2017. The increase in net revenues was primarily due to an increase in Las Vegas operations, partially offset by a decrease in Native American management fees.

Red Rock Resorts, Inc. today reported financial results for the second quarter ended June 30, 2018. The Company has adopted FASB’s new revenue recognition standard, effective January 1, 2018. Certain prior period amounts have been adjusted to reflect the full retrospective adoption of ASC 606, with no material impact on operating income, net income or Adjusted EBITDA(1).

Net revenues were $416.2 million for the second quarter of 2018, an increase of 1.5%, or $6.1 million, from $410.1 million for the same period of 2017. The increase in net revenues was primarily due to an increase in Las Vegas operations, partially offset by a decrease in Native American management fees.

Net income was $99.1 million for the second quarter of 2018, an increase of $149.3 million from a net loss of $50.2 million for the same period of 2017. The increase in net income was primarily due to a $57.8 million after-tax gain associated with the extinguishment of a tax receivable liability, as well as a prior year after-tax loss of $78.1 million associated with the acquisition of the leases at Boulder Station and Texas Station.

Adjusted EBITDA(1) was $124.6 million for the second quarter of 2018, an increase of 4.0% from $119.9 million in the same period of 2017. The increase in Adjusted EBITDA was primarily due to an increase in Las Vegas operations, partially offset by a decrease in Native American management fees.

Las Vegas Operations

Net revenues from Las Vegas operations were $393.7 million for the second quarter of 2018, a 4.1% increase from $378.1 million in the same period of 2017. Adjusted EBITDA from Las Vegas operations was $112.6 million for the second quarter of 2018, a 7.1% increase from $105.1 million in the same period of 2017. The increase in both net revenues and Adjusted EBITDA was primarily due to solid performance in our non-disrupted Las Vegas operations, partially offset by construction disruption at Palace Station and the Palms.

Native American Management

Adjusted EBITDA from Native American operations was $19.8 million for the second quarter of 2018, a 12.8% decrease from $22.7 million in the same period of 2017, due to the expiration of the Gun Lake management agreement in February of 2018.

Palace Station and Palms Redevelopment Update

The Palace Station redevelopment project remains on schedule and the budget remains unchanged. The Palace Station project is expected to be completed in phases by the end of 2018. As of June 30, 2018, the Company has incurred $147.3 million in costs against that $191 million project.

The Palms redevelopment project also remains on schedule and the budget remains unchanged. The final elements of phase one of the project opened in May 2018, with components of phase two of the project expected to open through the second quarter of 2019, and phase three of the project expected to open by the third quarter of 2019. As of June 30, 2018, the Company has incurred $225.2 million in costs against that $620 million project.

Balance Sheet Highlights

The Company’s cash and cash equivalents at June 30, 2018 were $108.4 million and total principal amount of debt outstanding at the end of the second quarter was $2.67 billion. The Company’s debt to Adjusted EBITDA and interest coverage ratios, were 5.1x and 4.6x, respectively.

Quarterly Dividend

The Company’s Board of Directors has declared a cash dividend of $0.10 per Class A common share for the third quarter of 2018. The dividend will be payable on September 28, 2018 to all stockholders of record as of the close of business on September 14, 2018.

Prior to the payment of such dividend, Station Holdco LLC (“Station Holdco”) will make a cash distribution to all unitholders 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 unitholders of record of Station Holdco.

 

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