Red Rock Resorts Announces First Quarter 2021 Results

Red Rock Resorts, Inc. (NASDAQ: RRR) yesterday reported financial results for the first quarter ended March 31, 2021.

During the first 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. 

First Quarter Results

  • Net revenues were $352.6 million for the first quarter of 2021, a decrease of 6.6%, or $24.8 million, from $377.4 million for the same period of 2020, primarily due to the on-going impacts of the COVID-19 pandemic. Compared to the same period of 2019, net revenues were down 21.1% or $94.4 million from net revenue of $447.0 million.
  • Net loss was $106.6 million for the first quarter of 2021, an improvement of $71.2 million, from a loss of $177.8 million for the same period of 2020. Compared to the same period of 2019, the net loss is a decrease of $126.8 million from net income of $20.3 million.
  • Adjusted EBITDA(1) was $156.6 million for the first quarter of 2021, an increase of 110.8%, or $82.3 million, from $74.3 million in the same period of 2020. Compared to the same period of 2019, Adjusted EBITDA is up 8.0% or $11.6 million from $145.1 million.

Las Vegas Operations

  • Net revenues from Las Vegas operations were $342.8 million for the first quarter of 2021, a decrease of 3.8%, or $13.6 million, from $356.5 million in the same period of 2020, primarily due to the ongoing impacts of the COVID-19 pandemic. Compared to the same period of 2019, net revenues were down 18.8% or $79.6 million from net revenue of $422.4 million.
  • Adjusted EBITDA from Las Vegas operations was $160.7 million for the first quarter of 2021, an increase of 134.6%, or $92.2 million, from $68.5 million in the same period of 2020. Compared to the same period of 2019, Adjusted EBITDA is up 19.2% or $25.9 million from $134.8 million.

Native American Management

Adjusted EBITDA from Native American operations was $7.6 million for the first quarter of 2021, a 56.8% decrease from $17.6 million in the same period of 2020 due to the termination of the management contract of Graton Resort and Casino on February 5, 2021.

Balance Sheet Highlights

The Company’s cash and cash equivalents at March 31, 2021 were $117.9 million and total principal amount of debt outstanding at the end of the first quarter was $2.9 billion.

Sale of Palms Casino Resort

The Company today announced a definitive agreement between its subsidiary Station Casinos LLC and a subsidiary of the San Manuel Band of Mission Indians (“San Manuel”) to sell the Palms Casinos Resort for $650 million in cash, subject to customary adjustments. 

The transaction is subject to regulatory approvals and other customary closing conditions. 

Milbank LLP represented Red Rock and Deutsche Bank Securities Inc. is acting as financial advisor to Red Rock on the transaction.  Latham & Watkins LLP represented San Manuel and Jefferies LLC is acting as financial advisor to San Manuel on the transaction. 

Red Rock Resorts, Inc.

Condensed Consolidated Statements of Operations

(amounts in thousands, except per share data)

(unaudited)

Three Months Ended March 31,

2021

2020

2019

Operating revenues:

Casino

$             259,938

$             208,267

$             244,933

Food and beverage

46,872

88,331

104,933

Room

21,944

40,076

48,075

Other

15,557

21,357

25,922

Management fees

8,308

19,357

23,159

Net revenues

352,619

377,388

447,022

Operating costs and expenses:

Casino

63,116

83,275

82,940

Food and beverage

41,057

92,486

92,236

Room

11,091

20,673

20,196

Other

5,350

9,634

11,859

Selling, general and administrative

78,910

101,273

99,065

Depreciation and amortization

54,255

58,534

50,853

Write-downs and other charges, net

260

8,807

23,728

Asset impairment

169,733

423,772

374,682

380,877

Operating (loss) income

(71,153)

2,706

66,145

Earnings from joint ventures

390

202

505

Operating (loss) income and earnings from joint ventures

(70,763)

2,908

66,650

Other expense:

Interest expense, net

(27,267)

(36,058)

(37,438)

Loss on extinguishment/modification of debt, net

(8,140)

(11,411)

(302)

Change in fair value of derivative instruments

(128)

(20,010)

(6,638)

Other

(48)

(44)

(69)

(35,583)

(67,523)

(44,447)

(Loss) income before income tax

(106,346)

(64,615)

22,203

Provision for income tax

(217)

(113,185)

(1,919)

Net (loss) income

(106,563)

(177,800)

20,284

Less: net (loss) income attributable to noncontrolling interests

(41,785)

(25,601)

8,961

Net (loss) income attributable to Red Rock Resorts, Inc.

$              (64,778)

$            (152,199)

$               11,323

(Loss) earnings per common share:

(Loss) earnings per share of Class A common stock, basic

$                 (0.92)

$                 (2.18)

$                   0.16

(Loss) earnings per share of Class A common stock, diluted

$                 (0.92)

$                 (2.18)

$                   0.16

Weighted-average common shares outstanding:

Basic

70,728

69,962

69,397

Diluted

70,728

69,962

116,693

Dividends declared per common share

$                      –

$                   0.10

$                   0.10

Red Rock Resorts, Inc.

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

(amounts in thousands)

(unaudited)

Three Months Ended March 31,

2021

2020

2019

Net revenues

Las Vegas operations

$             342,817

$             356,465

$             422,370

Native American management

8,087

19,260

22,996

Reportable segment net revenues

350,904

375,725

445,366

Corporate and other

1,715

1,663

1,656

Net revenues

$             352,619

$             377,388

$             447,022

Net (loss) income

$            (106,563)

$            (177,800)

$               20,284

Adjustments

Depreciation and amortization

54,255

58,534

50,853

Share-based compensation

2,741

4,053

3,853

Write-downs and other charges, net

260

8,807

23,728

Asset impairment

169,733

Interest expense, net

27,267

36,058

37,438

Loss on extinguishment/modification of debt, net

8,140

11,411

302

Change in fair value of derivative instruments

128

20,010

6,638

Provision for income tax

217

113,185

1,919

Other

471

42

69

Adjusted EBITDA

$            156,649

$              74,300

$            145,084

Adjusted EBITDA

Las Vegas operations

$            160,680

$              68,485

$            134,754

Native American management

7,604

17,601

21,476

Corporate and other

(11,635)

(11,786)

(11,146)

Adjusted EBITDA

$             156,649

$               74,300

$             145,084

SOURCE Red Rock Resorts, Inc.