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Full House Resorts Inc. Message Board

  • jimgray30 jimgray30 Nov 7, 2010 4:43 PM Flag

    Questions

    1) Is there any sense of estimate for EBITDA level of the new casino?

    Based on news articles, Grand recently had revenue of $7.5 million in a month (run rate of $90 m). In 2001-2003 Grand had revenue of $135m and EBITDA of ~$25m.

    (Source: http://www.fool.com/investing/small-cap/2006/05/05/the-casinos-of-southern-indiana-part-iii.aspx)

    Assuming most of the casinos costs are fixed and unvariable, it would make sense that the current costs are similar to 2001-2003 - which is around $100 million.

    It appears to me that this casino may not be profitable at all in the current condition.

    2) How much free cash flow does GED represent?

    From my research it seems about $4.5 million. Can someone confirm or challenge this number? This means $4.5 million disappears in the middle of next year.

    3) How can the new casino possibly compete with Hollywood? What makes Grand worth the extra 25 minute drive?

    Hollywood has tons of rooms available and parking.

    I'm trying to get on board with this but I'm not sure this casino is the best investment.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • current EBITDA for Grand Victoria is in the $8M range. Pritzkers were motivated sellers. They were trying to get rid of this casino for years. There is room for margin expansion. I could see the EBITDA getting up to $10M run rate within a year of closing the deal. This casino attracts a different customer then the other casinos. I think this was a good purchase for FLL.

    • Wow, appreciate the post.

      >> This means $4.5 million
      >> disappears in the middle
      >> of next year.

      How do you know that contract will not be extended past Aug 2011?

      • 1 Reply to raybiglow
      • I assume it disappears next year because of the lawsuit. I find it hard to believe they would renew it after that. And if it is renewed, it will have to be at a much lower rate.

        I don't believe EBITDA margins are that high. That is very hard to believe.

        Don't get me wrong, I am interested in investing in the company. I only started researching it two days ago.

        I will hopefully be on the call. I would like to hear management offer some sort of guidance regarding the new casino. The silence on valuation is in itself a bit off putting.

    • There is already a casino closer so they have already taken the hit. Management is comfortable the number will stay where they are and there is plenty of room to increase margins.

    • you can be sure its nit,,just mgt. doing a deal to hold their jobs for 3 - 4 more years and take huge pay, theybe old and dont talk english to shareholders,,iococca stays home and andre has no time to be in mich and help runs it

 
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