Well, ladies and gentlemen, good day. Welcome to the Full House Resorts Inc. Fourth Quarter 2011 Conference Call. Please note today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Bill Schmitt of ICR. Please go ahead.

Thank you, Peter, and good morning, everybody. By now, everyone should have access to our earnings announcement and Form 10-K, which was filed earlier today. These may also be found in our website at fullhouseresorts.com, under the Investor Relations section. Before we begin our formal remarks, I would like to remind everyone that part of our discussion today may include forward-looking statements. These statements are not guarantees of future performance and therefore, undue reliance should not be placed upon them. We refer all of you to our recent filings with the SEC for more detailed discussion of the risks that could impact the future operating results and financial condition of Full House Resorts. I would now like to introduce Andre Hilliou, Chairman and CEO of Full House Resorts. Andre?

Thank you, Bill, and good morning, everyone. With me today on the call is Mark Miller, our Chief Operating and Financial Officer, who will discuss the financial result for the fourth quarter. Overall, it was a great 2011 for Full House Resorts, as we significantly changed the operation of the company. At the beginning of last year, our operations consisted of a Stockman Casino, as well as 50% joint venture management agreement with FireKeepers Casino in Michigan and the Harrington Raceway in Delaware. Twelve months later, we now fully own the Rising Star Casino Resort in Indiana. We operate the Grand Lodge Casino in Incline Village near Lake Tahoe, and we have a new management agreement with the Pueblo Pojoaque for the Buffalo Thunder Casino in Santa Fe, New Mexico, while our agreement in Delaware has expired. And last week, we announced our intent to sell our interest in the management agreement with FireKeepers after what we believe is an optimal valuation. With the cash received from the sale, we will be able to pay down our entire debt from the purchase of Rising Star, which will leave us debt free with excess cash left over for use for potential acquisitions. We are very pleased with the entire Full House team for their effort and performance this year, and we believe we are on the right path going forward. For the first quarter of 2011, our Rising Star Resort continued to perform ahead of expectation, and we received our first full quarter of management and success fee from Buffalo Thunder. Furthermore, last week announcement of the letter of intent to sell GEM interest in the FireKeepers management agreement begins the closing of a very successful chapter in Full House history. For the quarter, we generated EBITDA of $4.5 million compared…

Thank you, Andre. I will review a few highlights of our fourth quarter 2011 financial performance and conditions before we respond to questions you may have. For the fourth quarter ended December 31, 2011, earnings per share was $0.03 compared to $0.11 in the prior-year period. Fourth quarter 2011 and 2010 results were based on weighted average common shares outstanding of 18.7 million and 18 million, respectively. Net income attributable to Full House was approximately $0.5 million compared to $2 million of net income in the fourth quarter of 2010. It should be noted that prior-year period results included $1.5 million in equity and net income from our Delaware management contract, which expired in August of 2011. For the year, EPS adjusted for unusual items, including impairment charges and acquisition-related expenses, was $0.31 versus $0.43 in 2010. Net income also adjusted was $5.8 million versus $7.6 million in the prior year. Our third full quarter of operations at Rising Star saw us generate revenue of $21.7 million and EBITDA of $2.2 million, inclusive of onetime outstanding chip liability and, of course, the maritime exemption, which was implemented in mid-October. As a result of the maritime exemption, Rising Star is now benefiting substantially from lower costs, notwithstanding the one time severance costs from the advent of the exemption. The property continues to run ahead of our internal forecasts and has generated EBITDA of approximately $7.8 million in the 9 months that we've owned the property. LTM EBITDA is now running approximately $10 million, well ahead of the $8.5 million we based our $43 million purchase price on. While we do expect future competition from Ohio to eat into this run rate, we are pleased with the progress that the management team has made in improving results and preparing for a more…

Thank you, Mark. 2011 was a historic year for Full House with the acquisition of Rising Star, as well as the operation of Grand Lodge and the new management agreement with Buffalo Thunder. We are pleased with the progress we have made in growing the company and improving our performance. With the anticipated sale of the GEM management agreement in the second quarter, we expect to have paid off our remaining debt and to be in a stronger position to pursue acquisition and management contract to further grow the company and its value. As a final comment, I'd like to thank our great Native American partners in Michigan, led by Homer Mandoka, the chair, and the entire Tribal Council during our more than 10 years partnership. In addition, I would like to thank our exceptional General Manager and friend in Michigan, Bruce McKee. Thank you. And I would now open up the call for questions.

[Operator Instructions] And our first question will come from Collin Stewart's Justin Sebastiano.

Can you give us an update on the hotel expansion at Rising Star?

Well, there hasn't been really any changes since we made the last announcement. We are still looking at where to locate the hotel, and we are working with the city to see if we can put it in the location that would not interfere with our existing operations.

Okay. And when you guys acquired the property, was it in your internal estimates to include more hotel rooms or the expansion that you're thinking about doing now?

No.

Okay. So this delay should -- doesn't hurt anything as far as what you guys are expecting when you took the property. Okay. And as far as -- you said Grand Lodge did not contribute to EBITDA in the quarter. But was it a drag on EBITDA, or there's a breakeven for you guys?

It was pretty much breakeven, Justin.

Okay. So, I guess, Fallon was a little bit -- compared to last year, I mean, it was down in the quarter versus, I guess, the past 2 quarter -- or in the third quarter, it was actually up. So I -- it was small -- I know it's a small piece, but what happened in the fourth quarter?

The fourth quarter was weak, Justin. And it's kind of been an up-and-down thing there for the last couple of quarters. And so we were down a little bit in the fourth quarter. We're up a little bit in the first quarter. So we're kind of just bumping along right now. We have seen some improvement recently that's been very encouraging. But as I said in my comments, it's a little bit early. It's been kind of a bumpy ride there. But generally speaking, performance at Stockman's has kind of evened out. It's -- one month, it's up and another month, it's down a little bit. But generally speaking, we're kind of just running about the same rate.

Okay. And then in your EBITDA reconciliation section of the release, you have corporate expense at about a little under $700,000. But the last fourth quarter of '10, it was a little under $1.2 million. Can you talk a little bit about why there's such a big decline and if that's the run rate we should be using, or if that's just historically what is going to happen in the fourth quarter and then what should the run rate be for that number?

I think the number that's in there for this quarter should be the run rate, Justin. I'd have to go back and look to see what was in there last year. We may have had some reclassifications with the development and management stuff. I'd have to go back to check that. So let me get back to you on that separately. But I think the number that's in there for this quarter ought to be pretty steady.

So we're looking at something like $2.7 million to $3 million on an annual basis for that line out of EBITDA?

Yes, you know, that number seems a little bit low, Justin. So let me get back to you on that. I think that SG&A -- corporate SG&A for the last couple of quarters ought to have been pretty steady. Again, it depends on whether you're looking at inclusive or exclusive of stock compensation expense. But generally speaking, the corporate SG&A ought to be pretty steady and has been for the last couple of quarters.

Okay. Then just lastly, I guess, on your acquisition strategy, who are your main competitors, I guess, for the deals you're looking at? I mean, we just saw Landry's purchased the Isle Biloxi. I think you guys have said in the past, you're probably not really going up against some of the bigger companies in the space. But if you could talk to maybe who your competitors are, and where maybe you stack up to them based on your cash structure. I mean, it seems like you guys have -- are pretty strong as far as what you can go out and take down with the dry powder you have, but kind of who do you bump up against when you're looking at these deals?

Justin, it changes since a lot of those properties that we are looking at, the local casinos, we go with the usual cast of companies. But mostly, we also run against local folks that have local talent. So it's kind of hard to do. But in that $10 million to $12 million neighborhood EBITDA, there are not that many players. There's 2 to 3 players, and they come and go. So it's kind of hard to define who they are.

Okay. And I know there's assets that you can still make money on in Northern Nevada. I mean, is that -- are you guys looking there as well, or are you sticking more to the Midwest and South kind of the heart of the riverboat regions?

You know, Justin, we look wherever we can find a good asset. We like the Midwest. We like the South. But if something exceptional will come in Nevada that we feel very comfortable with, as you know, some of the asset that we are looking at but that we have looked the past, we've looked at them for 2 to 3 years. So most of the asset that we look at, we have great knowledge. And I think location is important, but quality is probably more important.

[Operator Instructions] And next we'll go to Mark Argento, Craig-Hallum Capital Group.

If I think about -- you had mentioned that competition in Ohio is now kicking up. Could you maybe help us think about what you're doing to get ready for that competition? I don't know if you could quantify it at all, but just how you're thinking about next year and your property, the Rising Star?

Well, I think, Mark, the Ohio competition is -- has been developing more slowly than we originally anticipated. But I think it's pretty clear now that the casino in Cincinnati will open in the second quarter of 2013. It's not totally clear yet when the VLTs will arrive at the racetracks in Ohio. But it's pretty certain that they're going to show up at some point. So we have been working with the management team since before we acquired the property to significantly sort of prune and refine our marketing programs to be more focused on our profitable customers. And we have been looking at the overall cost structure with the management team and been making sort of gradual adjustments there. We haven't -- we certainly haven't made any substantial adjustments and we're not expecting to. But I think it's an ongoing process to continue to make the property more and more efficient and to refine and more focus the marketing programs in anticipation of Ohio. So I think a lot of the things that we thought we would put in place in anticipation of the Ohio competition might already be here. Those things are really working well, and we're getting greater benefit from them than we originally expected. And I think the property is well-positioned right now to compete when that competition starts to come on.

And remind me, I know you had mentioned CapEx, $2.3 million. I think about half of that was for facility upgrades. Could you quantify how much you guys are putting in the Rising Star when everything is said and done at least in this upgrade cycle?

Well, I think including the suite project, which is spanning Q4 and Q1, the sort of annual run rate there is about -- the maintenance CapEx, Mark, is probably right around $3 million to $3.5 million a year, and we're spending a little less than $2 million on the suite and room upgrade project.

Great, that's helpful. Then shifting gears to Grand Lodge. Could you maybe -- you said I know that the quarter really didn't contribute at all. But it sounded like you're pretty enthusiastic about the opportunity for it to actually start to contribute going forward. Could you talk a little bit about that in relationship with property?

When you go back and look at the historical trends the Grand Lodge, Mark, way more than 50% of the EBITDA comes in Q2 and Q3. And Q4 really depends on the ski season and how good the weather conditions are. Last year, they had -- we had exceptionally good snow and ski conditions, and the property produced a little bit of EBITDA. This year was pretty much breakeven, as I said before, with practically no snow through New Year's. So the fourth and first quarters I think are way more weather dependent, we will see -- we should see some positive EBITDA in Q2, and we'll see the bulk of the EBITDA come in Q3. And the other 2 quarters are just really dependent on weather conditions.

That's helpful. And then last question, I don't know if you touched on this earlier. But when -- after you pay down the debt or after your proceeds from the FireKeepers contract, you pay down debt. How much deployable capital will you have available?

Right now, we're forecasting that by time this deal closes, we pay off the debt. We're probably going to have somewhere between $8 million and $10 million of deployable cash and no debt. So I think in terms, Mark, of the things that we've talked about in the past, in terms of acquisition targets, looking for properties that are running sort of $8 million to $10 million to $12 million of EBITDA at the kind of multiples that we have historically looked at, that puts us in a really, really strong position to be able to execute that kind of transaction and to do it at a cost of debt that is reasonable and should be accretive.

And with no further questions, I would like to turn the conference back to Andre Hilliou for any additional or closing remarks.

Well, we'd like to thank everyone for being with us today. And with that, we will end the call and wish all of you a great rest of the week. Thank you.

Ladies and gentlemen, again, we concludes today's conference call. Thank you very much for your participation. Have a good day.