Eldorado Resorts, Inc
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SECURITIES AND EXCHANGE COMMISSION FORM 10-Q Quarterly report pursuant to sections 13 or 15(d) Filing Date: 2019-05-07 | Period of Report: 2019-03-31 SEC Accession No. 0001564590-19-016607 (HTML Version on secdatabase.com) FILER Eldorado Resorts, Inc. Mailing Address Business Address 100 WEST LIBERTY STREET,100 WEST LIBERTY STREET, CIK:1590895| IRS No.: 463657681 | State of Incorp.:NV | Fiscal Year End: 1231 SUITE 1150 SUITE 1150 Type: 10-Q | Act: 34 | File No.: 001-36629 | Film No.: 19804038 RENO NV 89501 RENO NV 89501 SIC: 7011 Hotels & motels 775-328-0100 Copyright © 2019 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10‑Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period to Commission File No. 001‑36629 ELDORADO RESORTS, INC. (Exact name of registrant as specified in its charter) Nevada 46‑3657681 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 100 West Liberty Street, Suite 1150, Reno, Nevada 89501 (Address and zip code of principal executive offices) (775) 328‑0100 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non‑accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes ☐ No ☒ Title of each class Trading Symbol Name of each exchange on which registered Copyright © 2019 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Common Stock, $.00001, par value ERI NASDAQ Stock Market The number of shares of the Registrant’s Common Stock, $0.00001 par value per share, outstanding as of May 3, 2019 was 77,472,148. Copyright © 2019 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ELDORADO RESORTS, INC. QUARTERLY REPORT FOR THE THREE MONTHS ENDED MARCH 31, 2019 TABLE OF CONTENTS Page PART I. FINANCIAL INFORMATION 2 Item 1. FINANCIAL STATEMENTS 2 Consolidated Balance Sheets at March 31, 2019 (unaudited) and December 31, 2018 2 Consolidated Statements of Income for the Three Months Ended March 31, 2019 and 2018 (unaudited) 3 Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2019 and 2018 (unaudited) 4 Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2019 and 2018 (unaudited) 5 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018 (unaudited) 6 Condensed Notes to Unaudited Consolidated Financial Statements (unaudited) 7 Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 38 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 56 Item 4. CONTROLS AND PROCEDURES 56 PART II. OTHER INFORMATION 57 Item 1. LEGAL PROCEEDINGS 57 Item 1A. RISK FACTORS 57 Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 57 Item 3. DEFAULTS UPON SENIOR SECURITIES 57 Item 4. MINE SAFETY DISCLOSURES 57 Item 5. OTHER INFORMATION 57 Item 6. EXHIBITS 58 SIGNATURES 59 1 Copyright © 2019 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document PART I-FINANCIAL INFORMATION Item 1. Financial Statements. ELDORADO RESORTS, INC. CONSOLIDATED BALANCE SHEETS (dollars in thousands) March 31, December 31, 2019 2018 (unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 216,883 $ 230,752 Restricted cash and investments 25,236 24,892 Marketable securities 16,899 16,957 Accounts receivable, net 65,604 60,169 Due from affiliates 3,130 327 Inventories 20,775 20,595 Income taxes receivable 2,009 15,731 Prepaid expenses 32,454 48,002 Assets held for sale — 155,771 Total current assets 382,990 573,196 Investment in and advances to unconsolidated affiliates 132,240 1,892 Property and equipment, net 2,870,120 2,882,606 Gaming licenses and other intangibles, net 1,354,364 1,362,006 Goodwill 1,008,316 1,008,316 Other assets, net 366,488 83,446 Total assets $ 6,114,518 $ 5,911,462 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 415 $ 462 Accounts payable 89,932 58,524 Accrued property, gaming and other taxes 53,847 51,931 Accrued payroll and related 70,501 87,332 Accrued interest 39,052 42,780 Income taxes payable 12 47,475 Accrued other liabilities 135,585 102,982 Liabilities related to assets held for sale — 10,691 Total current liabilities 389,344 402,177 Long-term financing obligation to GLPI 962,505 959,835 Long-term debt, less current portion 3,057,151 3,261,273 Deferred income taxes 204,022 200,010 Other long-term liabilities 438,232 59,014 Total liabilities 5,051,254 4,882,309 Commitments and contingencies (Note 14) STOCKHOLDERS' EQUITY: Common stock, 200,000,000 shares authorized, 77,439,165 and 77,215,066 issued and outstanding, net of treasury shares, par value $0.00001 as of March 31, 2019 and December 31, 2018, respectively 1 1 Paid-in capital 748,702 748,076 Retained earnings 323,691 290,206 Treasury stock at cost, 223,823 shares held at March 31, 2019 and December 31, 2018 (9,131) (9,131) Accumulated other comprehensive income 1 1 Total stockholders’ equity 1,063,264 1,029,153 Copyright © 2019 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Total liabilities and stockholders’ equity $ 6,114,518 $ 5,911,462 The accompanying condensed notes are an integral part of these consolidated financial statements. 2 Copyright © 2019 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ELDORADO RESORTS, INC. CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except per share data) (unaudited) Three Months Ended March 31, 2019 2018 REVENUES: Casino and pari-mutuel commissions $ 470,851 $ 343,528 Food and beverage 75,209 52,198 Hotel 64,691 30,741 Other 25,072 13,725 Net revenues 635,823 440,192 EXPENSES: Casino and pari-mutuel commissions 210,306 169,551 Food and beverage 60,385 44,776 Hotel 23,650 12,506 Other 11,249 7,405 Marketing and promotions 32,301 21,301 General and administrative 119,888 74,202 Corporate 16,754 11,569 Impairment charges 958 9,815 Depreciation and amortization 57,757 31,534 Total operating expenses 533,248 382,659 Gain (loss) on sale or disposal of property and equipment 22,318 (706) Transaction expenses (1,894) (2,548) Income (loss) from unconsolidated affiliates 605 (85) Operating income 123,604 54,194 OTHER EXPENSE: Interest expense, net (73,510) (31,251) Unrealized loss on restricted investments (1,460) — Total other expense (74,970) (31,251) Income before income taxes 48,634 22,943 Provision for income taxes (10,405) (2,088) Net income $ 38,229 $ 20,855 Net income per share of common stock: Basic $ 0.49 $ 0.27 Diluted $ 0.49 $ 0.27 Weighted average basic shares outstanding 77,567,147 77,353,730 Weighted average diluted shares outstanding 78,589,110 78,080,049 The accompanying condensed notes are an integral part of these consolidated financial statements. 3 Copyright © 2019 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ELDORADO RESORTS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (dollars in thousands) (unaudited) For the Three Months Ended March 31, 2019 2018 Net income $ 38,229 $ 20,855 Other comprehensive income, net of tax: Other comprehensive income — — Comprehensive income, net of tax $ 38,229 $ 20,855 The accompanying condensed notes are an integral part of these consolidated financial statements. 4 Copyright © 2019 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ELDORADO RESORTS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (dollars in thousands) (unaudited) Common Stock Treasury Stock Accumulated Other Paid-in Retained Comprehensive Shares