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Full House Resorts Inc. Message Board

  • jtyler2030 jtyler2030 Mar 10, 2013 9:16 PM Flag

    How Full House Resorts changed for the better in Q4

    Much of the attention to the Q4 numbers has been very negative, however most people I see here did not see what happened or they would have reacted differently. The company basically only reported an operational net income (profit) of $200,000... But the story changed forever.

    Silver Slipper reported Q4 which as disclosed was reporting in the worst seasonal quarter with only a 14% margin. If you listened to the call, or would like to go back and read the transcript by SeekingAlpha you will see a very important tid-bit. The actual full year margins of Silver Slipper are in the low 20's as was the case in 2012. Q4 is the weakest quarter in the whole year.

    Why is this significant? The rest of the portfolio has EBITDA margins of around 6-8%. Casino operator's should be running margins in the mid 20's if they want to have a very profitable business.

    While most of the attention is being given to new competition in Cincinnati and revenues of the Rising Star, people are missing the on-going story. This is a company looking to grow. Rising Star was purchased for a measly $40 million and is now paid off. Revenues if you wanna harp on that were $19 million in a 90 day period. Not bad to have revenues hit 50% of the purchase price in 90 days.

    You can discuss whatever you like, but the future of this company is not in the properties of the past. But the properties and the higher margins in the future. Management is also going to add a hotel at Silver Slipper casino. This will only help the property even more. The numbers tell you a story if you want to listen. This company has a strong track record managing casino's. This will translate nicely into higher margin properties it acquires in the future.

    I can't wait to see what the next numbers are with Silver Slipper always having it's best quarter in Q1.

    Sentiment: Strong Buy

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