PR Newswire | Oct 27, 2020 04:01PM EDT

10/27 15:01 CDT

Red Rock Resorts Announces Third Quarter 2020 Results LAS VEGAS, Oct. 27, 2020

LAS VEGAS, Oct. 27, 2020 /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, 2020.

During the third quarter the Company continued to execute on its phased reopening program, and operated its first-to-reopen properties of Red Rock, Green Valley Ranch, Santa Fe Station, Boulder Station, Palace Station and Sunset Station, together with its Wildfire properties and the Graton Casino Resort.

Third Quarter Results:

* Net revenues were $353.2 million for the third quarter of 2020, a decrease of 24.2%, or $112.7 million, from $465.9 million for the same period of 2019, primarily due to the ongoing impacts of the COVID-19 pandemic. * Net income was $72.0 million for the third quarter of 2020, an increase of $98.8 million, from a net loss of $26.8 million for the same period of 2019. * Adjusted EBITDA(1) was $160.9 million for the third quarter of 2020, an increase of 44.8%, or $49.8 million, from $111.1 million in the same period of 2019.

Las Vegas Operations

* Net revenues from Las Vegas operations were $320.8 million for the third quarter of 2020, a decrease of 27.2%, or $119.9 million, from $440.7 million in the same period of 2019, primarily due to the ongoing impacts of the COVID-19 pandemic. * Adjusted EBITDA from Las Vegas operations was $141.7 million for the third quarter of 2020, an increase of 38.6%, or $39.4 million, from $102.2 million in the same period of 2019.

Native American Management

Adjusted EBITDA from Native American operations was $29.8 million for the third quarter of 2020, a 33.9% increase from $22.3 million in the same period of 2019.

Balance Sheet Highlights

The Company's cash and cash equivalents at September 30, 2020 were $108.9 million and total principal amount of debt outstanding at the end of the third quarter was $3 billion.

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: 5184573. A replay of the call will be available from today through November 3, 2020 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 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 excluding non-cash expenses, financing costs, and other non-operational or non-recurring items. Adjusted EBITDA includes net income (loss) plus depreciation and amortization, share-based compensation, write-downs and other charges, net (including net losses on asset disposals, severance, incremental expenses related to the COVID-19 pandemic, redevelopment and preopening expenses, business innovation and technology enhancements), interest expense, net, (gain) loss on extinguishment/modification of debt, net, 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 forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include, without limitation, statements regarding our expectations, hopes or intentions regarding the future. These forward looking statements can often be identified by their use of words such as "will", "might", "predict", "continue", "forecast", "expect", "believe", "anticipate", "outlook", "could", "would", "target", "project", "intend", "plan", "seek", "estimate", "pursue", "should", "may" and "assume", or the negative thereof, as well as variations of such words and similar expressions referring to the future. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. Certain important factors, including but not limited to, financial market risks, could cause our actual results to differ materially from those expressed in our forward-looking statements. Further information on potential factors which could affect our financial condition, results of operations and business includes, without limitation, the extent and duration of the impact of the COVID-19 pandemic on the Company's business, financial results and liquidity; the duration of the closure of the Company's properties that have not yet reopened; the impact and cost of new operating procedures implemented at the Company's properties in response to the COVID-19 pandemic; the impact of actions that the Company has undertaken to reduce costs and improve efficiencies to mitigate losses as a result of the COVID-19 pandemic; the impact of the COVID-19 pandemic, and resulting unemployment and changes in general economic conditions on discretionary spending and consumer demand; the impact of our substantial indebtedness; the effects of local and national economic, credit and capital market conditions on consumer spending and the economy in general, and on the gaming and hotel industries in particular; the effects of competition, including locations of competitors and operating and market competition; changes in laws, including increased tax rates, regulations or accounting standards, third-party relations and approvals, and decisions of courts, regulators and governmental bodies (including the current government-mandated operational restrictions); risks associated with construction projects, including disruption of our operations, shortages of materials or labor, unexpected costs, unforeseen permitting or regulatory issues and weather; litigation outcomes and judicial actions, including gaming legislative action, referenda and taxation; acts of war or terrorist incidents, natural disasters or civil unrest; risks associated with the collection and retention of data about our customers, employees, suppliers and business partners; and other risks discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and in the Company's other current and periodic reports filed from time to time with the Securities and Exchange Commission. All forward-looking statements in this document are made based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement.

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

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

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

MEDIA:Michael J. BrittMichael.Britt@redrockresorts.com(702) 495-3693

Red Rock Resorts, Inc.

Condensed Consolidated Statements of Operations

(amounts in thousands, except per share data)

(unaudited)

Three Months Ended Nine Months Ended September 30, September 30,

2020 2019 2020 2019

Operating revenues:

Casino $239,866 $238,269 $ 523,741 $ 728,470

Food and beverage 45,855 128,016 149,171 370,740

Room 22,068 48,169 67,635 145,555

Other 14,487 27,823 42,290 80,650

Management fees 30,902 23,581 56,199 70,333

Net revenues 353,178 465,858 839,036 1,395,748

Operating costs and expenses:

Casino 57,659 89,205 172,559 259,861

Food and beverage 40,356 128,376 155,266 360,767

Room 11,147 20,279 38,222 61,034

Other 4,918 14,077 17,610 39,610

Selling, general and administrative 79,491 107,756 245,996 317,423

Depreciation and amortization 57,297 57,925 173,755 164,613

Write-downs and other charges, net 1,400 34,094 25,673 66,668

Tax receivable agreement liability - (97) - (97)adjustment

252,268 451,615 829,081 1,269,879

Operating income 100,910 14,243 9,955 125,869

Earnings from joint ventures 658 455 288 1,481

Operating income and earnings from 101,568 14,698 10,243 127,350joint ventures

Other (expense) income:

Interest expense, net (29,798) (40,517) (99,836) (118,936)

Gain (loss) on extinguishment/ 482 - 235 (302)modification of debt, net

Change in fair value of derivative (108) (1,739) (21,368) (21,335)instruments

Other (100) (82) (262) (234)

(29,524) (42,338) (121,231) (140,807)

Income (loss) before income tax 72,044 (27,640) (110,988) (13,457)

Benefit (provision) for income tax - 842 (113,185) (124)

Net income (loss) 72,044 (26,798) (224,173) (13,581)

Less: net income (loss) attributable 28,410 (11,141) (44,066) (5,401)to noncontrolling interests

Net income (loss) attributable to Red $ $ $ $ Rock Resorts, Inc. 43,634 (15,657) (180,107) (8,180)

Earnings (loss) per common share:

Earnings (loss) per share of Class A $ $ $ $ common stock, basic 0.62 (0.22) (2.56) (0.12)

Earnings (loss) per share of Class A $ $ $ $ common stock, diluted 0.56 (0.22) (2.56) (0.12)

Weighted-average common sharesoutstanding:

Basic 70,824 69,618 70,436 69,525

Diluted 117,044 69,618 70,436 69,525

Dividends declared per common share $ $ $ $ - 0.10 0.10 0.30

Red Rock Resorts, Inc.

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

(amounts in thousands)

(unaudited)

Three Months Ended Nine Months Ended September 30, September 30,

2020 2019 2020 2019

Net revenues

Las Vegas operations $320,765 $440,695 $ 778,250 $1,320,818

Native American management 30,718 23,453 55,872 69,901

Reportable segment net revenues 351,483 464,148 834,122 1,390,719

Corporate and other 1,695 1,710 4,914 5,029

Net revenues $353,178 $465,858 $ 839,036 $1,395,748

Net income (loss) $ 72,044 $ (26,798) $ $ (224,173) (13,581)

Adjustments

Depreciation and amortization 57,297 57,925 173,755 164,613

Share-based compensation 633 4,464 8,275 12,849

Write-downs and other charges, net 1,400 34,094 25,673 66,668

Tax receivable agreement liability - (97) - (97)adjustment

Interest expense, net 29,798 40,517 99,836 118,936

(Gain) loss on extinguishment/ (482) - (235) 302modification of debt, net

Change in fair value of derivative 108 1,739 21,368 21,335instruments

(Benefit) provision for income tax - (842) 113,185 124

Other 99 82 262 234

Adjusted EBITDA $160,897 $111,084 $ 217,946 $ 371,383

Adjusted EBITDA

Las Vegas operations $141,670 $102,226 $ 198,060 $ 342,975

Native American management 29,826 22,273 52,634 65,699

Reportable segment Adjusted EBITDA 171,496 124,499 250,694 408,674

Corporate and other (10,599) (13,415) (32,748) (37,291)

Adjusted EBITDA $160,897 $111,084 $ 217,946 $ 371,383

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SOURCE Red Rock Resorts, Inc.