Full House Resorts, Inc. (NASDAQ:FLL) Q4 2023 Earnings Conference Call March 5, 2024 4:30 PM ET

Company Participants

Lewis Fanger - Chief Financial Officer

Dan Lee - Chief Executive Officer

Jeff Babinski - Director of Table Games & Sportsbook at American Place Casino

Conference Call Participants

Jordan Bender - Citizens JMP

Ryan Sigdahl - Craig Hallum

Ricardo Chinchilla - Deutsche Bank

Chad Beynon - Macquarie

John DeCree - CBRE Securities

Operator

Greetings, and welcome to the Full House Resorts Fourth Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to Lewis Fanger, CFO. Thank you. You may begin.

Lewis Fanger

Thank you, and good afternoon, everyone. Welcome to our fourth quarter earnings call. As always, before we begin, we remind you that today's conference call may contain forward-looking statements that we're making under the Safe Harbor provision of federal securities laws. I would also like to remind you that the Company's actual results could differ materially from the anticipated results in these forward-looking statements. Please see today's press release under the caption Forward-Looking Statements for the discussion of risks that may affect our results.

Also, we may make reference to non-GAAP measures such as adjusted EBITDA. For a reconciliation of those measures, please see our Web site as well as the various press releases that we issue. And lastly, we're also broadcasting this conference call at fullhouseresorts.com, where you can find today's earnings release as well as all of our SEC filings.

And with that said, I'll give a few comments, and then Dan will chip in with any clean-up here. But as we said in our earnings release, we're at a transition point now with our company. We borrowed in large part to fund two large casino projects. Our legacy properties have historically carried the burden of that debt, largely covering interest expense on their own. Post-COVID, business at our legacy properties feels like it has largely settled down to around $30 million or $35 million or so of adjusted EBITDA per year, again, largely covering our annual interest expense. With American Place and Chamonix both now opened, and construction CapEx winding down, we are now set up for significant free cash flow generation.

We have long said we expect $100 million of incremental earnings in total from our temporary American Place facility and Chamonix after they have ramped up. And we continue to believe strongly in those figures. Those amounts are on top of the $30 million-plus generated by our legacy properties. And so, when you start looking at those figures, hopefully you also see that our company is transitioning now into a large free cash flow generator. Somewhat related, we recently received all of the necessary approvals to operate our temporary American Place facility until August, 2027. That is an important development that many have missed. For casino construction projects, you'll typically spend 40% to 50% of your project budget in the six months before opening.