8-K
Red Rock Resorts, Inc. (RRR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 8-K
_____________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event Reported): July 28, 2021
RED ROCK RESORTS, INC.
(Exact Name of Registrant as Specified in Charter)
| Delaware | 001-37754 | 47-5081182 |
|---|---|---|
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
1505 South Pavilion Center Drive, Las Vegas, Nevada 89135
(Address of Principal Executive Offices) (Zip Code)
702-495-3000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br><br>Symbol(s) | Name of each exchange<br><br><br>on which registered |
|---|---|---|
| Class A Common Stock, $0.01 par value | RRR | NASDAQ Stock Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). 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. ☐
Item 2.02. Results of Operations and Financial Condition.
On July 28, 2021, the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press release dated July 28, 2021 |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| RED ROCK RESORTS, INC. | |
|---|---|
| Date: July 28, 2021 | By: /s/ Stephen L. Cootey |
| Stephen L. Cootey | |
| Executive Vice President, Chief Financial Officer and Treasurer |
Exhibit 99.1
Red Rock Resorts Announces Second Quarter 2021 Results
LAS VEGAS, July 28, 2021 /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, 2021.
During the second quarter the Company continued to operate its Red Rock, Green Valley Ranch, Santa Fe Station, Boulder Station, Palace Station and Sunset Station properties, together with its Wildfire Properties, while Palms Casino Resort, Texas Station, Fiesta Rancho and Fiesta Henderson remained closed during the quarter. While second quarter 2019 results are included below for comparative purposes, the 2019 results include, among other things, the results of our four currently closed properties in addition to the properties which operated in the second quarter 2021.
Second Quarter Results
- Net revenues were $428.2 million for the second quarter of 2021, an increase of 295%, or $319.7 million, from $108.5 million for the same period of 2020, primarily due to the closure of our properties during most of the second quarter in 2020 due to the COVID-19 pandemic. Compared to the same period of 2019, net revenues were down 11% or $54.7 million from net revenue of $482.9 million.
- Net income was $143.4 million for the second quarter of 2021, an improvement of $261.8 million, from a loss of $118.4 million for the same period of 2020. Compared to the same period of 2019, net income increased by $150.4 million from a loss of $7.1 million.
- Adjusted EBITDA^(1)^ was $210.2 million for the second quarter of 2021, an increase of $227.4 million from negative $17.3 million in the same period of 2020. Compared to the same period of 2019, Adjusted EBITDA increased 82% or $94.9 million from $115.2 million.
Las Vegas Operations
- Net revenues from Las Vegas operations were $426.4 million for the second quarter of 2021, an increase of 322%, or $325.4 million, from $101.0 million in the same period of 2020, primarily due to the closure of our properties during most of the second quarter in 2020 due to the COVID-19 pandemic. Compared to the same period of 2019, net revenues were down 7% or $31.3 million from net revenue of $457.8 million.
- Adjusted EBITDA from Las Vegas operations was $222.6 million for the second quarter of 2021, an increase of $234.7 million, from negative $12.1 million in the same period of 2020. Compared to the same period of 2019, Adjusted EBITDA increased 110% or $116.6 million from $106.0 million.
Balance Sheet Highlights
The Company's cash and cash equivalents at June 30, 2021 were $91.0 million and total principal amount of debt outstanding at the end of the second quarter was $2.7 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: 3945487. A replay of the call will be available from today through August 4, 2021 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, asset impairment, losses from assets held for sale, interest expense, net, (gain) loss on extinguishment/modification of debt, net, change in fair value of derivative instruments, provision (benefit) 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.
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, our ability to consummate the sale of the Palms, 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, 2020, 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. Cootey
Stephen.Cootey@redrockresorts.com
(702) 495-4214
MEDIA:
Michael J. Britt
Michael.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, | |||||
| 2021 | 2020 | 2019 | 2021 | 2020 | 2019 | |
| Operatingrevenues: | ||||||
| Casino | $ <br> 304,212 | $ 75,608 | $ 245,268 | $ 564,150 | $ 283,875 | $ 490,201 |
| Food<br>and beverage | 64,885 | 14,985 | 137,791 | 111,757 | 103,316 | 242,724 |
| Room | 39,150 | 5,491 | 49,311 | 61,094 | 45,567 | 97,386 |
| Other | 19,640 | 6,446 | 26,905 | 35,197 | 27,803 | 52,827 |
| Management fees | 270 | 5,940 | 23,593 | 8,578 | 25,297 | 46,752 |
| Net revenues | 428,157 | 108,470 | 482,868 | 780,776 | 485,858 | 929,890 |
| Operating costs andexpenses: | ||||||
| Casino | 70,400 | 31,625 | 87,716 | 133,516 | 114,900 | 170,656 |
| Food and beverage | 48,879 | 22,424 | 140,155 | 89,936 | 114,910 | 232,391 |
| Room | 14,650 | 6,402 | 20,559 | 25,741 | 27,075 | 40,755 |
| Other | 5,983 | 3,058 | 13,674 | 11,333 | 12,692 | 25,533 |
| Selling, general and<br>administrative | 84,090 | 65,232 | 110,602 | 163,000 | 166,505 | 209,667 |
| Depreciation and<br>amortization | 36,160 | 57,924 | 55,835 | 90,415 | 116,458 | 106,688 |
| Write-downs and other charges,<br>net | 1,435 | 15,466 | 8,846 | 1,695 | 24,273 | 32,574 |
| Asset impairment | (1,956) | - | - | 167,777 | - | - |
| 259,641 | 202,131 | 437,387 | 683,413 | 576,813 | 818,264 | |
| Operating income(loss) | 168,516 | (93,661) | 45,481 | 97,363 | (90,955) | 111,626 |
| Earnings (losses) from joint ventures | 1,233 | (572) | 521 | 1,623 | (370) | 1,026 |
| Operating income (loss) and earnings (losses) from jointventures | 169,749 | (94,233) | 46,002 | 98,986 | (91,325) | 112,652 |
| Other income (expense): | ||||||
| Interest expense, net | (25,614) | (33,980) | (40,981) | (52,881) | (70,038) | (78,419) |
| Gain (loss) on extinguishment/modification of debt, net | - | 11,164 | - | (8,140) | (247) | (302) |
| Change in fair value of derivative instruments | (86) | (1,250) | (12,958) | (214) | (21,260) | (19,596) |
| Other | (118) | (118) | (83) | (166) | (162) | (152) |
| (25,818) | (24,184) | (54,022) | (61,401) | (91,707) | (98,469) | |
| Income (loss) before incometax | 143,931 | (118,417) | (8,020) | 37,585 | (183,032) | 14,183 |
| (Provision) benefit for income tax | (581) | - | 953 | (798) | (113,185) | (966) |
| Net income (loss) | 143,350 | (118,417) | (7,067) | 36,787 | (296,217) | 13,217 |
| Less: net income (loss) attributable to noncontrolling<br>interests | 56,636 | (46,875) | (3,221) | 14,851 | (72,476) | 5,740 |
| Net income (loss) attributable to Red Rock Resorts,Inc. | $ 86,714 | $ (71,542) | $ (3,846) | $ 21,936 | $ (223,741) | $ 7,477 |
| Earnings (loss) per common share: | ||||||
| Earnings (loss) per share of Class A common stock, basic | $ <br> 1.24 | $ (1.01) | $ (0.06) | $ 0.31 | $ (3.19) | $ 0.11 |
| Earnings (loss) per<br>share of Class A common stock, diluted | $ 1.12 | $ (1.01) | $ (0.06) | $ 0.29 | $ (3.19) | $ 0.10 |
| Weighted-average common shares outstanding: | ||||||
| Basic | 70,212 | 70,518 | 69,556 | 70,469 | 70,240 | 69,477 |
| Diluted | 117,787 | 70,518 | 69,556 | 117,639 | 70,240 | 116,715 |
| Dividends declared per common share | $ <br> - | $ - | $ 0.10 | $ - | $ 0.10 | $ 0.20 |
| Red Rock Resorts, Inc. | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| Segment Information and Reconciliation of Net Income (Loss) to Adjusted EBITDA | ||||||
| (amounts in thousands) | ||||||
| (unaudited) | ||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||
| 2021 | 2020 | 2019 | 2021 | 2020 | 2019 | |
| Netrevenues | ||||||
| Las Vegas operations | $ <br> 426,410 | $ 101,020 | $ 457,753 | $ 769,227 | $ 457,485 | $ 880,123 |
| Native American management | - | 5,894 | 23,452 | 8,087 | 25,154 | 46,448 |
| Reportable segment netrevenues | 426,410 | 106,914 | 481,205 | 777,314 | 482,639 | 926,571 |
| Corporate and other | 1,747 | 1,556 | 1,663 | 3,462 | 3,219 | 3,319 |
| Netrevenues | $ 428,157 | $ 108,470 | $ 482,868 | $ 780,776 | $ 485,858 | $ 929,890 |
| Net income (loss) | $ <br> 143,350 | $ (118,417) | $ (7,067) | $ 36,787 | $ (296,217) | $ 13,217 |
| Adjustments | ||||||
| Depreciation and amortization | 36,160 | 57,924 | 55,835 | 90,415 | 116,458 | 106,688 |
| Share-based compensation | 3,373 | 3,589 | 4,532 | 6,114 | 7,642 | 8,385 |
| Write-downs and other charges, net | 1,435 | 15,466 | 8,846 | 1,695 | 24,273 | 32,574 |
| Asset impairment | (1,956) | - | - | 167,777 | - | - |
| Losses from assets held for sale | 1,441 | - | - | 1,441 | - | - |
| Interest expense, net | 25,614 | 33,980 | 40,981 | 52,881 | 70,038 | 78,419 |
| (Gain) loss on extinguishment/modification of debt, net | - | (11,164) | - | 8,140 | 247 | 302 |
| Change in fair value of derivative instruments | 86 | 1,250 | 12,958 | 214 | 21,260 | 19,596 |
| Provision (benefit) for income tax | 581 | - | (953) | 798 | 113,185 | 966 |
| Other | 73 | 121 | 83 | 544 | 163 | 152 |
| AdjustedEBITDA | $ 210,157 | $ (17,251) | $ 115,215 | $ 366,806 | $ 57,049 | $ 260,299 |
| Adjusted EBITDA | ||||||
| Las Vegas operations | $ <br> 222,589 | $ (12,095) | $ 105,995 | $ 383,269 | $ 56,390 | $ 240,749 |
| Native American management | - | 5,207 | 21,950 | 7,604 | 22,808 | 43,426 |
| Corporate and other | (12,432) | (10,363) | (12,730) | (24,067) | (22,149) | (23,876) |
| AdjustedEBITDA | $ 210,157 | $ (17,251) | $ 115,215 | $ 366,806 | $ 57,049 | $ 260,299 |