PR Newswire | Aug 4, 2020 04:01PM EDT

08/04 15:01 CDT

Red Rock Resorts Announces Second Quarter 2020 Results LAS VEGAS, Aug. 4, 2020

LAS VEGAS, Aug. 4, 2020 /PRNewswire/ -- Red Rock Resorts, Inc. ("Red Rock Resorts," "we" or the "Company") (NASDAQ: RRR) today reported financial results for the second quarter ended June 30, 2020.

The unprecedented challenges presented by the COVID-19 pandemic have significantly impacted the Company's business operations.

On March 17, 2020, the Governor of Nevada ordered a statewide shutdown of all nonessential businesses, including casinos, in an effort to reduce the spread of COVID-19. Similarly, the Graton Casino Resort, which is managed by the Company, closed on March 17th. What originally began as a thirty day shutdown in Nevada ended seventy-nine days later.

On June 4, 2020, the Company reopened its Red Rock, Green Valley Ranch, Santa Fe Station, Boulder Station, Palace Station and Sunset Station properties, together with its Wildfire properties. The Graton Casino Resort also partially reopened on June 18, 2020.

Second Quarter Results:

* Net revenues were $108.5 million for the second quarter of 2020, a decrease of 77.5%, or $374.4 million, from $482.9 million for the same period of 2019, due to the closure of all of the Company's properties, as explained above. * Net loss was $118.4 million for the second quarter of 2020, a decrease of $111.4 million, from a net loss of $7.1 million for the same period of 2019, due to the closure of all of the Company's properties, as explained above. * Adjusted EBITDA(1) was negative $17.3 million for the second quarter of 2020, a decrease of 115.0%, or $132.5 million, from $115.2 million in the same period of 2019, primarily due to the closure of all of the Company's properties, as explained above.

Las Vegas Operations

* Net revenues from Las Vegas operations were $101.0 million for the second quarter of 2020, a decrease of 77.9%, or $356.7 million, from $457.8 million in the same period of 2019, due to the closure of all of the Company's Las Vegas properties, as explained above. * Adjusted EBITDA from Las Vegas operations was negative $12.1 million for the second quarter of 2020, a decrease of 111.4%, or $118.1 million, from $106.0 million in the same period of 2019, primarily due to the closure of all of the Company's Las Vegas properties, as explained above.

Despite the severe impact of the COVID-19 pandemic on our operating results for the three and six months ended June 30, 2020, our Las Vegas properties showed strong performance for the post-reopening period from June 4 through June 30, 2020. As compared to the same period in the prior year, net revenues decreased 23.3%, Adjusted EBITDA increased 46.8% and Adjusted EBITDA margin increased 2,192 basis points to 45.9%, yielding our highest June EBITDA margin ever. The improved operating results were due in large part to our streamlined cost structure. However, these operating trends are based on the limited period that the properties were open in June and there can be no assurance that these trends will continue at our properties that have reopened or recur at our other properties when or if they reopen.

Native American Management

Adjusted EBITDA from Native American operations was $5.2 million for the second quarter of 2020, a 76.3% decrease from $22.0 million in the same period of 2019, primarily due to the temporary closure of Graton Casino Resort.

Balance Sheet Highlights

The Company's cash and cash equivalents at June 30, 2020 were $270.1 million and total principal amount of debt outstanding at the end of the second quarter was $3.3 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: 5694391. A replay of the call will be available from today through August 11, 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 (loss) income 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 June 30, Six Months Ended June 30,

2020 2019 2020 2019

Operating revenues:

Casino $ 75,608 $245,268 $ 283,875 $490,201

Food and beverage 14,985 137,791 103,316 242,724

Room 5,491 49,311 45,567 97,386

Other 6,446 26,905 27,803 52,827

Management fees 5,940 23,593 25,297 46,752

Net revenues 108,470 482,868 485,858 929,890

Operating costs andexpenses:

Casino 31,625 87,716 114,900 170,656

Food and beverage 22,424 140,155 114,910 232,391

Room 6,402 20,559 27,075 40,755

Other 3,058 13,674 12,692 25,533

Selling, general and 65,232 110,602 166,505 209,667administrative

Depreciation and 57,924 55,835 116,458 106,688amortization

Write-downs and other 15,466 8,846 24,273 32,574charges, net

202,131 437,387 576,813 818,264

Operating (loss) income (93,661) 45,481 (90,955) 111,626

(Losses) earnings from (572) 521 (370) 1,026joint ventures

Operating (loss) incomeand (losses) earnings (94,233) 46,002 (91,325) 112,652from joint ventures

Other (expense) income:

Interest expense, net (33,980) (40,981) (70,038) (78,419)

Gain (loss) onextinguishment/ 11,164 - (247) (302)modification of debt,net

Change in fair value of (1,250) (12,958) (21,260) (19,596)derivative instruments

Other (118) (83) (162) (152)

(24,184) (54,022) (91,707) (98,469)

(Loss) income before (118,417) (8,020) (183,032) 14,183income tax

Benefit (provision) for - 953 (113,185) (966)income tax

Net (loss) income (118,417) (7,067) (296,217) 13,217

Less: net (loss) incomeattributable to (46,875) (3,221) (72,476) 5,740noncontrolling interests

Net (loss) incomeattributable to Red Rock $(71,542) $ (3,846) $(223,741) $ 7,477Resorts, Inc.

(Loss) earnings percommon share:

(Loss) earnings pershare of Class A common $ (1.01) $ (0.06) $ (3.19) $ 0.11stock, basic

(Loss) earnings pershare of Class A common $ (1.01) $ (0.06) $ (3.19) $ 0.10stock, diluted

Weighted-average commonshares outstanding:

Basic 70,518 69,556 70,240 69,477

Diluted 70,518 69,556 70,240 116,715

Dividends declared per $ - $ 0.10 $ 0.10 $ 0.20common share

Red Rock Resorts, Inc.

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

(amounts in thousands)

(unaudited)

Three Months Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

Net revenues

Las Vegas operations $ 101,020 $457,753 $ 457,485 $880,123

Native American 5,894 23,452 25,154 46,448management

Reportable segment net 106,914 481,205 482,639 926,571revenues

Corporate and other 1,556 1,663 3,219 3,319

Net revenues $ 108,470 $482,868 $ 485,858 $929,890

Net (loss) income $(118,417) $ (7,067) $(296,217) $ 13,217

Adjustments

Depreciation and 57,924 55,835 116,458 106,688amortization

Share-based compensation 3,589 4,532 7,642 8,385

Write-downs and other 15,466 8,846 24,273 32,574charges, net

Interest expense, net 33,980 40,981 70,038 78,419

(Gain) loss onextinguishment/ (11,164) - 247 302modification of debt,net

Change in fair value of 1,250 12,958 21,260 19,596derivative instruments

(Benefit) provision for - (953) 113,185 966income tax

Other 121 83 163 152

Adjusted EBITDA $ (17,251) $115,215 $ 57,049 $260,299

Adjusted EBITDA

Las Vegas operations $ (12,095) $105,995 $ 56,390 $240,749

Native American 5,207 21,950 22,808 43,426management

Reportable segment (6,888) 127,945 79,198 284,175Adjusted EBITDA

Corporate and other (10,363) (12,730) (22,149) (23,876)

Adjusted EBITDA $ (17,251) $115,215 $ 57,049 $260,299

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SOURCE Red Rock Resorts, Inc.