Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Full House Resorts Inc (NASDAQ:FLL) reported a 42% increase in overall revenue for the year, with a 27% rise in the fourth quarter alone.
• The company's EBDIT increased by 60%, indicating strong financial performance.
• Full House Resorts Inc (NASDAQ:FLL) was recognized as one of the best employers in the Chicago area by the Chicago Tribune, highlighting its positive work environment.
• The Illinois Supreme Court ruled in favor of Full House Resorts Inc (NASDAQ:FLL) regarding the Waukegan license, allowing the company to proceed with financing for a permanent casino.
• The company has plans to build a permanent casino in Waukegan, which is expected to significantly increase revenue and EBDIT based on comparable projects in other locations.

Negative Points

• The Chamonix casino experienced higher expenses and reported a loss in the fourth quarter, indicating challenges in reaching expected revenue levels.
• Full House Resorts Inc (NASDAQ:FLL) faces competition from newer and closer casinos, impacting revenue at some of its properties like Rising Sun, Indiana.
• The company has not yet secured financing for the permanent casino in Waukegan, which could delay construction plans.
• There are concerns about potential increases in construction material costs due to tariffs, which could impact future projects.
• Full House Resorts Inc (NASDAQ:FLL) is not actively pursuing acquisitions, which may limit growth opportunities compared to competitors.

Q & A Highlights

• Warning! GuruFocus has detected 5 Warning Signs with FLL.

Q: Given the challenges at Chamonix, has that changed your plans for American Place in terms of design, gaming floor, size, amenities, or the overall minimum guaranteed spend? A: No, it hasn't changed our plans. The guaranteed minimum spend is $500 million, of which $175 million has already been spent. We are confident in our approach and have been inspired by successful projects like Hard Rock in Rockford and Durango Station. Our focus is on creating a unique experience tailored to the Waukegan market, which is different from Chamonix's mountain location.

Q: Are you seeing any changes in prices for construction materials due to tariffs, and is there a way to hedge against these costs as you start construction in Illinois? A: While there are ways to hedge, such as buying steel futures, we haven't done so. We are assuming higher costs in our design to build within the $325 million budget. We are also being smart in our design to mitigate potential cost increases.

Q: Are you actively looking for other M&A opportunities, and what are the guardrails if you pursue this path? A: We are not actively looking for acquisitions. Our focus is on executing our current projects, which we believe will lead to significant growth. We are cautious about acquisitions as we want to ensure any deal is beneficial and doesn't disrupt our current trajectory.

Q: Can you provide more color on the ramp-up at Chamonix, particularly regarding operating expenses and gaming volumes? A: It's challenging to assess on a month-to-month basis, but we aim for $10 to $15 million in EBDIT this year. We are addressing staffing shortages in areas like dealers and masseuses, which are crucial for revenue growth. We are confident in reaching our targets as we refine operations and management.

Q: What are the February results for American Place, and how does the customer base look? A: While we hesitate to provide exact numbers, American Place has consistently shown revenue growth of around 20% year-over-year. The customer base remains robust, particularly in underpenetrated markets like Waukegan and Colorado, which bodes well for future performance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.