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Red Rock Resorts, Inc. (RRR) SEC Filing 10-Q Quarterly report for the period ending Monday, September 30, 2019

Red Rock Resorts, Inc.

CIK: 1653653 Ticker: RRR

Red Rock Resorts Announces Third Quarter 2019 Results

LAS VEGAS, Nov. 5, 2019 /PRNewswire/ -- Red Rock Resorts, Inc. ("Red Rock Resorts", "we" or the "Company") (NASDAQ: RRR) today reported financial results for the third quarter ended September 30, 2019.

Net revenues were $465.9 million for the third quarter of 2019, an increase of 13.0%, or $53.6 million, from $412.3 million in 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 (the "Palms").

Net loss was $26.8 million for the third quarter of 2019, a decrease of $51.9 million, from net income of $25.1 million in the same period of 2018. The decrease in net income was primarily due to one-time charges relating to the termination of certain artist performance agreements and employment arrangements at the Palms, as well as higher depreciation and amortization relating to the Palms redevelopment project.

Adjusted EBITDA(1) was $111.1 million for the third quarter of 2019, an increase of 1.8%, or $2.0 million, from $109.1 million in the same period of 2018. The increase in Adjusted EBITDA was primarily due to an increase in Las Vegas operations excluding the Palms and management fees generated under the Graton Resort management agreement, partially offset by a decrease in Adjusted EBITDA at the Palms.

Las Vegas Operations

Net revenues from Las Vegas operations were $440.7 million for the third quarter of 2019, an increase of 13.1%, or $51.0 million, from $389.7 million in the same period of 2018. Adjusted EBITDA from Las Vegas operations was $97.2 million for the third quarter of 2019, a decrease of 0.8%, or $0.7 million, from $97.9 million in the same period of 2018. The increase in net revenues from Las Vegas operations was primarily due to an increase in net revenues at the Palms, and the decrease in Adjusted EBITDA from Las Vegas operations was primarily due to a decrease in Adjusted EBITDA at the Palms.

Native American Management

Adjusted EBITDA from Native American operations was $22.3 million for the third quarter of 2019, an increase of 12.6% from $19.8 million in the same period of 2018 due to increased management fees generated under the Graton Resort management agreement.

Palms Redevelopment Update

The Palms redevelopment project is now complete with the final component of phase three of the project, Michelin-starred dim sum restaurant Tim Ho Wan, having opened in late September 2019. As of September 30, 2019, the Company has incurred approximately $679 million in costs against the $690 million project.

Balance Sheet Highlights

The Company's cash and cash equivalents at September 30, 2019 were $106.4 million and total principal amount of debt outstanding at the end of the third quarter was $3.095 billion. The Company's debt to Adjusted EBITDA and interest coverage ratios were 5.5x and 4.1x, respectively.

Quarterly Dividend

On October 28, 2019, the Company's Board of Directors declared a cash dividend of $0.10 per Class A common share for the fourth quarter of 2019. The dividend will be payable on December 27, 2019 to all stockholders of record as of the close of business on December 13, 2019.

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.


Conference Call Information

The Company will host a conference call today at 4:30 p.m. Eastern Time to discuss its financial results. The conference call will consist of prepared remarks from the Company and include a question and answer session. Those interested in participating in the call should dial (888) 317-6003, or (412) 317-6061 for international callers, approximately 15 minutes before the call start time. Please use the passcode: 3154733. A replay of the call will be available from today through November 12, 2019 at www.redrockresorts.com. A live audio webcast of the call will also be available at www.redrockresorts.com.

Presentation of Financial Information

(1) Adjusted EBITDA is a non-GAAP measure that is presented solely as a supplemental disclosure. We believe that Adjusted EBITDA is a widely used measure of operating performance in our industry and is a principal basis for valuation of gaming companies. We believe that in addition to net (loss) income, Adjusted EBITDA is a useful financial performance measurement for assessing our operating performance because it provides information about the performance of our ongoing core operations. Adjusted EBITDA includes net (loss) income plus depreciation and amortization, share-based compensation, write-downs and other charges, net (including Palms redevelopment and preopening expenses, loss on artist performance contract termination at Palms' nightclub and dayclub, severance, business innovation and technology enhancements), tax receivable agreement liability adjustment, interest expense, net, loss on modification of debt, change in fair value of derivative instruments, (benefit) provision for income tax and other.

Company Information and Forward Looking Statements

Red Rock Resorts owns a majority indirect equity interest in and manages Station Casinos LLC ("Station Casinos"). Station Casinos is the leading provider of gaming and entertainment to the residents of Las Vegas, Nevada. Station Casinos' properties, which are located throughout the Las Vegas valley, are regional entertainment destinations and include various amenities, including numerous restaurants, entertainment venues, movie theaters, bowling and convention/banquet space, as well as traditional casino gaming offerings such as video poker, slot machines, table games, bingo and race and sports wagering. Station Casinos owns and operates Red Rock Casino Resort Spa, Green Valley Ranch Resort Spa Casino, Palms Casino Resort, Palace Station Hotel & Casino, Boulder Station Hotel & Casino, Sunset Station Hotel & Casino, Santa Fe Station Hotel & Casino, Texas Station Gambling Hall & Hotel, Fiesta Rancho Casino Hotel, Fiesta Henderson Casino Hotel, Wildfire Rancho, Wildfire Boulder, Wild Wild West Gambling Hall & Hotel, Wildfire Sunset, Wildfire Valley View, Wildfire Anthem and Wildfire Lake Mead. Station Casinos also owns a 50% interest in Barley's Casino & Brewing Company, Wildfire Casino & Lanes and The Greens. In addition, Station Casinos is the manager of Graton Resort & Casino in northern California.

This press release contains certain forward-looking statements with respect to the Company and its subsidiaries which involve risks and uncertainties that cannot be predicted or quantified, and consequently, actual results may differ materially from those expressed or implied herein. Such risks and uncertainties include, but are not limited to the effects of the economy and business conditions on consumer spending and our business; competition, including the risk that new gaming licenses or gaming activities are approved; our substantial outstanding indebtedness and the effect of our significant debt service requirements; our ability to refinance our outstanding indebtedness and obtain necessary capital; the impact of extensive regulation; risks associated with changes to applicable gaming and tax laws; risks associated with development, construction and management of new projects or the redevelopment or expansion of existing facilities; and other risks described in the filings of the Company with the Securities and Exchange Commission. In providing forward-looking statements, the Company is not undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise, except as required by law. If the Company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those other forward-looking statements.

View source version on http://redrockresorts.investorroom.com/:

CONTACT:

Stephen L. Cootey
Stephen.Cootey@redrockresorts.com
(702) 495-4214

Rodney S. Atamian
Rod.Atamian@redrockresorts.com
(702) 495-3411

Red Rock Resorts, Inc.

Condensed Consolidated Statements of Operations

(amounts in thousands, except per share data)

(unaudited)










Three Months Ended September 30,


Nine Months Ended September 30,


2019


2018


2019


2018

Operating revenues:








Casino

$             238,269


$             230,723


$             728,470


$             699,726

Food and beverage

128,016


94,666


370,740


280,226

Room

48,169


39,306


145,555


128,655

Other

27,823


26,385


80,650


73,858

Management fees

23,581


21,252


70,333


67,094

Net revenues

465,858


412,332


1,395,748


1,249,559

Operating costs and expenses:








Casino

89,205


82,772


259,861


242,126

Food and beverage

128,376


87,097


360,767


252,320

Room

20,279


19,595


61,034


59,126

Other

14,077


13,216


39,610


34,111

Selling, general and administrative

107,756


104,360


317,423


297,540

Depreciation and amortization

57,925


44,235


164,613


133,391

Write-downs and other charges, net

34,094


6,439


66,668


21,070

Tax receivable agreement liability adjustment

(97)


-


(97)


(90,375)


451,615


357,714


1,269,879


949,309

Operating income

14,243


54,618


125,869


300,250

Earnings from joint ventures

455


499


1,481


1,606

Operating income and earnings from joint ventures

14,698


55,117


127,350


301,856









Other (expense) income:








Interest expense, net

(40,517)


(33,590)


(118,936)


(96,299)

Loss on modification of debt

-


-


(302)


-

Change in fair value of derivative instruments

(1,739)


4,229


(21,335)


27,353

Other

(82)


(66)


(234)


(287)


(42,338)


(29,427)


(140,807)


(69,233)

(Loss) income before income tax

(27,640)


25,690


(13,457)


232,623

Benefit (provision) for income tax

842


(623)


(124)


(26,324)

Net (loss) income

(26,798)


25,067


(13,581)


206,299

Less: net (loss) income attributable to noncontrolling interests

(11,141)


10,387


(5,401)


57,704

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

$               (15,657)


$                14,680


$                 (8,180)


$              148,595









(Loss) earnings per common share:








(Loss) earnings per share of Class A common stock, basic

$                   (0.22)


$                    0.21


$                   (0.12)


$                    2.15

(Loss) earnings per share of Class A common stock, diluted

$                   (0.22)


$                    0.20


$                   (0.12)


$                    1.66









Weighted-average common shares outstanding:








Basic

69,618


69,250


69,525


69,059

Diluted

69,618


117,074


69,525


117,006









Dividends declared per common share

$                    0.10


$                    0.10


$                    0.30


$                    0.30

Red Rock Resorts, Inc.

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

(amounts in thousands)

(unaudited)










Three Months Ended September 30,


Nine Months Ended September 30,


2019


2018


2019


2018

Net revenues








Las Vegas operations

$              440,695


$              389,668


$           1,320,818


$           1,178,520

Native American management

23,453


21,119


69,901


66,644

Reportable segment net revenues

464,148


410,787


1,390,719


1,245,164

Corporate and other

1,710


1,545


5,029


4,395

Net revenues

$             465,858


$             412,332


$          1,395,748


$          1,249,559









Net (loss) income

$               (26,798)


$                25,067


$               (13,581)


$              206,299

Adjustments








Depreciation and amortization

57,925


44,235


164,613


133,391

Share-based compensation

4,464


3,315


12,849


8,872

Write-downs and other charges, net

34,094


6,439


66,668


21,070

Tax receivable agreement liability adjustment

(97)


-


(97)


(90,375)

Interest expense, net

40,517


33,590


118,936


96,299

Loss on modification of debt

-


-


302


-

Change in fair value of derivative instruments

1,739


(4,229)


21,335


(27,353)

(Benefit) provision for income tax

(842)


623


124


26,324

Other

82


66


234


(700)

Adjusted EBITDA

$             111,084


$             109,106


$             371,383


$             373,827









Adjusted EBITDA








Las Vegas operations

$                97,168


$                97,942


$              329,338


$              336,408

Native American management

22,273


19,787


65,699


61,671

Reportable segment Adjusted EBITDA

119,441


117,729


395,037


398,079

Corporate and other

(8,357)


(8,623)


(23,654)


(24,252)

Adjusted EBITDA

$             111,084


$             109,106


$             371,383


$             373,827




The following information was filed by Red Rock Resorts, Inc. (RRR) on Tuesday, November 5, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Red Rock Resorts, Inc.'s 10-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Document And Entity Information
Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets (Parenthetical)
Condensed Consolidated Statements Of Cash Flows
Condensed Consolidated Statements Of Cash Flows (Parenthetical)
Condensed Consolidated Statements Of Operations And Comprehensive (Loss) Income
Condensed Consolidated Statements Of Stockholders' Equity
(Loss) Earnings Per Share
(Loss) Earnings Per Share Antidilutive Shares Excluded From Computation Of Diluted Earnings Per Share (Details)
(Loss) Earnings Per Share Reconciliation Of Numerators And Denominators Of Basic And Diluted Earnings Per Share (Details)
Commitments And Contingencies
Derivative Instruments
Derivative Instruments (Details)
Derivative Instruments (Tables)
Earnings Per Share (Tables)
Fair Value Measurements
Fair Value Measurements (Details)
Fair Value Measurements (Tables)
Income Taxes
Income Taxes (Details)
Income Taxes (Policies)
Leases
Leases (Details)
Leases (Policies)
Leases (Tables)
Long-Term Debt
Long-Term Debt (Tables)
Long-Term Debt - Narrative (Details)
Long-Term Debt - Schedule Of Long-Term Instruments (Details)
Native American Development
Native American Development (Tables)
Native American Development - North Fork (Details)
Noncontrolling Interest In Station Holdco
Noncontrolling Interest In Station Holdco (Details)
Noncontrolling Interest In Station Holdco (Tables)
Organization, Basis Of Presentation And Significant Accounting Policies
Organization, Basis Of Presentation And Significant Accounting Policies (Details)
Organization, Basis Of Presentation And Significant Accounting Policies (Policies)
Other Accrued Liabilities
Other Accrued Liabilities (Details)
Other Accrued Liabilities (Tables)
Segment Reporting (Details)
Segment Reporting (Tables)
Segments
Share-Based Compensation
Share-Based Compensation (Tables)
Share-Based Compensation Awards Under Equity Incentive Plan (Details)
Share-Based Compensation Narrative (Details)
Stockholders' Equity
Stockholders' Equity (Tables)
Stockholders' Equity - Aoci (Details)
Stockholders' Equity - Changes In Ownership Of Station Holdco Llc (Details)
Stockholders' Equity Narrative (Details)
Write-Downs And Other Charges, Net
Write-Downs And Other Charges, Net (Details)

Material Contracts, Statements, Certifications & more

Red Rock Resorts, Inc. provided additional information to their SEC Filing as exhibits

Ticker: RRR
CIK: 1653653
Form Type: 10-Q Quarterly Report
Accession Number: 0001653653-19-000023
Submitted to the SEC: Thu Nov 07 2019 10:59:08 AM EST
Accepted by the SEC: Thu Nov 07 2019
Period: Monday, September 30, 2019
Industry: Hotels And Motels

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