Greetings, and welcome to the Full House Resorts Fourth Quarter and Full Year 2024 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Lewis Fanger, Chief Financial Officer. Thank you, sir. You may begin.

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 are making under the Safe Harbor provision of federal security laws. I'd 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 website, as well as various press releases and education. 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, are you ready to go, Dan?

Okay. Lewis tells me to be briefer than usual because people want more time for questions. So but we had a lot of things going on. So American Place, I'll start with that. You know, it had another strong quarter. The revenues were up strongly every quarter of the year. Fourth quarter revenues are up 27%. Overall, it was up 42% for the year. EBITDA was up 60%. You know, so it just continues to mature as it has since shortly after it opened. It also, more important than the numbers sometimes, The Chicago Tribune does a survey of the best employers in the Chicago area and proud to say that we were on the list and we were the only casino on the list in Chicagoland. And that's important. We have, for a casino, relatively low turnover. We have great employees. We're providing great service, and that's the key to a great business. Equally important, the Illinois Supreme Court ruled in favor of the gaming commission, endorsing their selection of us for the Waukegan license, basically. So that puts it behind us. Had earlier lost in federal court as well. And so that opens the door to going and getting the financing to build permanent. You know, right now, we're doing very, very well. We're one of the better performing casinos in the state despite the fact that we're essentially in a tent. Like a sprung structure. It's like the sort of structure that your municipality uses to store salt for the winter. So it's not really a full-on casino, although we've dressed it up pretty well to make it look as good as we could. But our commitment to the state is to build the permanent one, which will cost about $325 million going forward. And in the…

Thank you. We will now be conducting a question and answer session. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question comes from Ryan Sigdahl with Craig Hallum Capital Group. Please proceed with your question.

Hey, good afternoon, guys. Wanna start with kind of a higher level question. I mean, given the challenges you've had at Chamonix thus far, I guess, does that change your plans for American Place whether it be the design, the gaming floor, the size, amenities, or even the overall minimum guaranteed spend that you guys have committed to there?

No. Not at all. I mean, the guaranteed minimum spend, if I recall correctly, and Alex is on the lending. Correct me. Yeah. I think it's $500 million of which we've already spent $175 million. And some of that is the temporary, but a big parts of it, like the $50 million license fee, the storm sewers and parking lots and so on that are being used for the temporary are also part of the permanent and $20 million of slot machines. So we're already kind of into it. Actually, it's the opposite. When you go to the heart The property that Hard Rock built in Rockford, did good job. They really did a good job. And they have the same sort of license we have, the same number of gaming positions and so on. And they spent in the ballpark at $300 million, which is what our going forward spend is in the next phase. And so I've kinda gone to town looking at that. No. You know, I will have a different theme than showing you know, Lady Gaga's underwear behind flexiglass. But that's the Hard Rock theme, and it works for them. We've also spent some time over Durango Station where I think stations did a really good job. And it's very successful. Now that was $700 million. We don't have that sort of budget. But it was funny. We were over there yesterday, and Lewis was freaking out because I brought with me a laser pointer that pointing it all over the place to measure different parts their casino. For our design and if anybody noticed it, it looked like there was a sniper in the room, and Lewis was afraid we were gonna get kicked out. But there's stuff they did there very well. That…

Very good. And you look at that heat map, it goes all the way out to Minneapolis. A couple of times. You may be the only one in Minneapolis. I will ask you a very short second question and then turn it over to the others. Your skins for your online sports betting license looks like you're down to one now just circa Is that correct? Five million the rate run rate. As we look to the next several years?

Yeah. There's a little bit of volatility in two q and three q because the existing skins that we had there that we got the that's gonna be discontinued. They're still around one in December. December. So there's a little volatility. But I would tell you as a kind of on a normal ongoing basis, it's if you include the amortization of the upfront market access fee for Illinois, just Illinois is $5.6 million. And so if you're looking at 2026 and beyond, $5.6 million is the right number to use. And Sherco seems pretty determined to hang in there. I mean, in other markets, DraftKings and FanDuel just so dominate and BetMGM, I guess, third And so they've kinda squeezed other people out, even including Wynn, who was our partner at one time in Churchill Downs. But circuits always operate a little differently, and their sports book here in Las Vegas does very well. And downtown Las Vegas, and of course, Illinois is a pretty big market. So it's not a small market for them. It's a big market. But I think our likelihood of finding other people to ride on our license is not high at this point because DraftKings and FanDuel so dominate the market. It's hard for anyone else to break in.

Yep. Thanks, guys. And I agree with the Vegas circuit as the best sports book there. So hopefully, they can replicate that in Illinois going forward. Thanks. Good luck, guys.

Thanks, Ron.

Our next question comes from Jordan Bender with Citizens. Please proceed with your question.

Good afternoon, everyone. Yep. This situation seems to be a moving target on an hourly basis here. But on the idea of tariffs, you know, if you start to look at construction for the permanent in Illinois, are you starting to see any changes in prices for material? And is there any way to kinda hedge yourself, given that you're gonna be starting construction here in the next couple months.

Oh, there are ways to hedge, but we haven't done it. I mean, you can go buy steel futures and stuff, but it I don't think it's pretty unknown what tariffs are gonna be out there. And I think we've somewhat dealt with that in Chamonix The Chamonix was my twelfth or thirteenth casino, and I and I will tell you the other ones, most of them either the steel came from China or the glass from China or the possibility of buying the steel or the glass from China held down prices from domestic manufacturers. And people forget there were already pretty significant tariffs plus the pandemic supply change issues as we were starting construction in Chamonix. And we got through it. I mean, it wasn't wasn't wasn't fun, but we got through it. So we're actually kind of assuming the worst as we design this place to build it for $325 million. In other words, we're assuming that that stuff will be expensive. And uses build it into it. But you have to kinda go ahead and, you know, take a guess. Otherwise, you would just freeze and not do anything.

And we're trying to be smart as well on the design. So know, we're going out of our way to make sure that, we don't put air conditioned air conditioner handling units where you might expand the casino later on as an example. So we, you know, we're trying to be thoughtful. We're gonna have different ways to help mitigate that issue should have popped up, but to Dan's point, we're also putting in some pretty extensive cost assumptions in this model as well.

Thanks, Louis. And then just on the second one here, there's some reports out there suggesting that you were looking to buy an asset. You know, outside of your mention there, are you actively looking for other M&A opportunities? And what are the guardrails we should be thinking about if you do go down that path.

You know, it's hard as most of you know, I had your job at one time. And you're always judged and focused by, you know, one quarter, one year, and looking and when you're in my position, I tend to look further out. And, you know, I'll get calls from my mom who's 95 years old and seems like all her mah jong playing partners own our stock, and she'll call me and say, you know, your stock was down ten cents today. Why was that? And I'm like, well, mom, I didn't even know that, and I'm focused on where the stock will be in 2030. And over the holidays, I sat and just played with a rough model myself, which I like to do sometimes now. You know, and so I just played with the model and said, okay. I'm pretty sure we're gonna get $50 million a year in Chamonix by 2030. Can be 2025, but give us until 2030. I think we can get there. And then I said and by then, we will have operated the permanent American place for two and a half years, and it could be $100 million. I plugged that in. And I said, well, let's suppose Angie gets the Silver Slipper from $13 million to, like, $20 million. Which is what it did two years ago. And I think that's entirely possible. And then I said, okay. And if we get to move to New Haven, with rising sun, and we invest in the first phase. I think it's $350 million in the first phase. The whole investment is, like, $500 million eventually. But the later phases, we built out cash flow. And let's say it's good gets reasonable return on investment. And then I worked into, okay, we produce…

Just to be very clear, Jordan, we are not actively looking at any acquisition, just so you know.

And I'll remind everybody what I said earlier in the call. There may be some forecast statements that we may not achieve or something. Right? It was a safe harbor thing. It's a safe harbor. Yeah. But that's the math we look at. And that's what we're focused on.

Thank you. I'm hoping this all works out and you can be playing Mahjong by 2030.

That was great.

Our next question comes from John DeCree with CBRE. Please proceed with your question.

Hi, Dan. Hi, Louis. Thanks for taking my questions. Maybe two on Chamonix, the first. You're curious if you could give us a little color on kind of what you're seeing on the casino floor. We look at the state reports, the same ones. Everyone else gets. And it looks like, you know, we could see the spot market growing nicely in Chamonix, but, you know, less so on the table side. So curious what you're what you're seeing and what your expectations are for table volumes, slot volumes for the upcoming spring season.

Well, we are we're actually 100% more than 100% sometimes with the growth in the entire state. But the growth should be more than it is. And tables is been one of our weak points. And so we have a new director of table games. We have a new director of casino operations. I forgot to mention, actually. We had a director of casino ops in rising sun who did a great job And earlier in his career, he had been in Colorado, so we relocated him. And He's been there two months. And there's stuff like we have not offered Baccarat. In fact, nobody in Cripple Creek offers baccarat. And as I speak, we have two baccarat table sitting on our loading dock and dealers going through dealer school to learn how to deal it. And Baccarat's a pretty significant game in Blackhawk. We also our table limits are lower than they are at our competition in Blackhawk. Well, I'm willing to let the table limits go up, but I wanna make sure that we have experienced supervision and experienced dealers and that we're doing so intelligently. And so we're trying to buttress that. We are trying to hire more dealers. We don't have enough dealers. We're running our own dealer school at the moment. And so there's a lot of stuff focusing on tables. And part of the reason we made the management changes we made was to help focus more on tables because that our table game should be maybe 20% of our revenues, and it's less than ten. And so that's a strong area of growth for us. We are about to put in new carpet and handicap ramps within Bronco Billies. Right now, it's pretty jarring when you go from Chamonix into Bronco Billies. And…

There there's one one other point I wanna make there, John. The you know, when if you look at market share, our market share in the fourth quarter was 26.9%. So we more than doubled our gaming market share year over year And you know, I don't maybe we don't stress this point enough, but, usually, what happens when you go and open a brand new big casino like this is everyone in the market is down. You know, 20, 30% as they absorb the capacity. And the reality is no one was hit. And we completely you know, we went from, you know, effectively 13% market share to 27% market share. Without hitting anyone in the market. It's you know, and a big part of that obviously was certainly on the slot side. We still have room to grow in the on the table game side, but we still more than tripled our gaming table or table games win per day for what it's worth. So kinda baby steps in year one. I think we're gonna have bigger steps in year two as that as this marketing campaign goes out and takes full effect. And you know, we are starting to get wealthier customers in the door. We have players in the door now that will gamble half a million bucks in a weekend. We never would have had any play like that in that whole market ever historically. And so this market's on the move. It's taking a little bit longer than what I think Dan and I would have hoped, but it is absolutely gonna do quite well.

Great. Thanks, Lois. Thanks, Dan. I think you answered my follow-up in there, so I'll pass it off to the next one. Thanks, gentlemen.

Thanks, John. Our next question comes from Chad Beynon with Macquarie Asset Management. Please proceed with your question.

Hi, Dana Lewis. Thanks for taking my question. Wanted to ask about the American Place margins. Good to see that the revenue is ramping and congrats on all the awards that you've received for service levels. It looks like, you know, revenues at this point Or in line or maybe even ahead of expectations compared to know, what we thought the property would be, you know, well over a hundred million I believe you guys talked about potentially 30% margins kinda moving even higher, so it's not at that level at this point. But can you talk about maybe where the expenses are here and if the revenues increase from these levels in 25, if a lot of that will push down to the bottom line, and meet some of the the margin targets. Thank you.

Yeah. I think it will. I mean, if you're looking at the results for this past year compared to the prior year, a little distorted because we opened the high end restaurant in February of last year, And that was pretty important at driving the casino revenue higher. And helping the EBITDA higher. But most restaurants operate at much lower margins. So the revenue of that restaurant And its income actually hurt margins a little bit. But helped income. And now going forward, I think we'll be able to keep expenses under control. And hopefully continue to grow revenues, and so margins will show very gradual improvement. Now we're also getting smarter with our marketing You know, for example, we have not sent out any physical mail since May of last year. And transition it all to email. And it's and, you know, you save a lot of money on postage and printing, if you can get the emails of your customers. And, you know, the percentage of Americans who have an email address is now about 95%. Very few people do not have an email address. And so And we're finding that the response rate to email is actually a little bit better than the response rate to physical mail. And so American Place kinda made that transition. Other casinos are doing it as well. And so now we're back at all of our other casinos saying, okay. You gotta you know, do special promotions to get people's email. And we're gonna get out of the physical mail business because it's expensive. I mean, if you send a flyer out with an ad in it, you know, come up and stay for a night for on us, And you send it out, you know, if it's a pretty basic flyer, by the time you print it and mail it, it's $2 a person. And the sort of response rate you get is about 5%. Put And so you're spending $60 to get somebody to your doorstep before they any money in a saw machine. And if you could do it through email, you're spending zero. And so it's that sort of you know, nuts and bolts that you start looking for that eventually result in better margins, better income.

Yeah. And keep in mind too, Chad, gaming revenue is obviously aren't done growing. You the January numbers are public. I know you saw those, and you were up 34% year over year. In the month of January. Not a surprise that you know, that's not a bad thing overall for margins. I think as we, you know, get that number higher, the push is to try and get that number in the mid tens per month. A year ago, we were in the mid sevens in a typical month. Right? So for us to be pretty reliably over $9 million these days is a nice move, and eventually, we'll get that over ten and a half. And as you do get it over ten and a half, I think that's when you approach that $40 million plus of EBITDA. That helps you. You know, I like the guys at Valley's, including Su Kim. It's brilliant guy. But I like our position in Chicago better because Our revenues are pretty much the same as theirs. We actually beat them a little bit in January. Generally, they've been a little bit ahead of us at their temporary casino in downtown. But they have a higher tax rate. The downtown license had a significantly higher tax rate than the other licenses. And then their reinvestment application for their permanent is measured in billions, and ours is $300 million. And so know, I like our position better than theirs. Now I wish them well, but I wish us better.

Thank you. Okay. And then from a housekeeping standpoint, I don't know if this was called out on the press release, but, Louis, the lower corporate expense for the quarter, could you flush that out? And then how should that look for 25? Should that revert to, you know, five or so million five to six million a year.

I think if you look at the annual run rate of corporate in 2025, 2024, it's like six six six million. There was some over accruals that got reversed in the fourth quarter. So that fourth quarter looked unusual.

Yep. Perfect. Thank you both. Appreciate it.

Thanks to you. You're hired as CFO.

Hey, Dan. We have time for maybe one or two questions depending on how quickly you get through So let's take at least one more.

Our next question comes from Ricardo Chinchilla with Deutsche Bank. Please proceed with your question.

Hey, guys. Thank you so much for taking my question. I was hoping we could dig a little bit more on, you know, the ramp up here at Chamonix. So can you guys provide a little bit of color on January I know that it stopped because of the water. And, you know, I know that you guys have been playing a little bit to modeling, so maybe you guys can help me out a little bit. I have you guys increasing your OPEX as likely on the fourth quarter based on my math. Can you give us, like, an idea of with your proposed savings and, you know, now that you guys have know, a new manager that's gonna focus on cost savings, like, what's the right OPEC per day the you know, to run that property? You know, Perhaps a little bit more of gaming volumes.

Well, it's look, it's hard to look at it on a month's The monster effects and different things are affecting or even on a quarterly basis. But to do Like, if your target is $50 million in 2030, we ought to be able to get to $10 or $15 million of EBITDA. And now it's summer seasonal, so a lot of that will be the third quarter. And then, you know, from there, it goes, you know, 20, 30, 40. The next few years, and that's how you get to 50. And You know, that's as good a guess as anybody. Now there's there's that we you know, there's some areas where we probably have too many employees, and there's other areas where we have too few. We don't have enough dealers. I already alluded to it. We don't have enough masseuses. I know we have seven treatment rooms and two other rooms we can use, so really nine treatment rooms. Two messages. And on weekends, they're totally filled. We could fill probably seven masseuses on weekends. It's a popular thing. And you know, we charge $130 or $150 for a treatment in the massage therapist gets twenty or thirty bucks. And so it's a nice profit center. We need more Mississauga's. We're trying to find them. We have a salon where people can get manicures, pedicures, get their hair cut or colored in so it's a beautiful salon. And we have one or two salon therapists. We probably need a dozen. And we are trying to find them. And that also is a profit center, but it's also a marketing tool. Because if a woman can use her slot points to get her haircut, and she likes her haircut. She's gonna come back every month to get her haircut.…

Yeah. I'm trying to think of what to add Dan's. You know, the look. We lost a little bit of money in four q there. We're likely gonna lose a little bit money here in one q. Tell you February is better than January. And you know, the big changes that we made we were making behind the scene scenes including bringing in a bunch of people from other properties to help shore things up and with some of the analytics. On the cost side, that really happened in full force now. So, you know, it takes a little bit of time to digest crunch numbers and digest things, but you know, in terms of when do you start seeing the benefits of those actions, I would not assume it happens right away in one queue. But on the flip side, we're gonna be going into spring and summer here relatively quickly. And to Dan's point, you know, it is a tends to be a spring and especially summer seasonal market, and we will make, I think, pretty decent money in those months. Yeah. And I don't mind telling you, those of you who have known him for a long time, I don't make management changes like this lightly. And we've pretty aggressively changed the management of this property in the last several weeks. And I think that reflects the fact that as we got into it after everything was open, And it's like, why are we not doing better? And you found stupid things like the buffet I cited. And it's like, stop doing stupid things. And so now I've hired and brought in a bunch of smart people, and hopefully, we'll start doing smart things. The sooner we do some things If I make a good offer, we'll be happy.

If I may follow-up with one really quick one. Can you remind us your CapEx plans for the year?

Well, other than Americana Place, it's, like, seven. Five of which is maintenance, and then I mentioned the Italian restaurant might be two. And American Place is not a big number because we'll just be starting. So do you remember what it is in the second half of the year?

Well, it's gonna be dependent on the financing, obviously, but it's not a big number. I'm hesitant to give one. Well, the architecture fees are probably gonna be ten, and that's largely this year. Yeah. And a couple of guys driving build those around. So you know, maybe twenty in the second half of this year That's right. On American Place. But most of that $325 million will end up being in the second half of 2026 and the first half of 2027. And then some spills over even after you open. Because construction bills are paid in arrears. Yeah.

Appreciate it. Thank you so much. Best of luck, guys.

Oh, thank you, Lee. Hey, Dan. We're gonna take one last question, and then we're gonna let's be quick and we'll round it out.

Okay. Our last question comes from Andrew Walker with Rangely Cap. Please proceed with your question.

Hey, guys. Thanks for the question. And just wanted to say how much I enjoyed and agreed with the conversation on the valuation and the opportunity costs on acquisitions. Just real quick, I think you mentioned the February results for Colorado. What is the February results for American Place look like?

You will we always hesitate to give them because the numbers that I always get behind seems differ from what actually gets reported. Well, that's because that the our we look at the numbers with free play in the Yeah. States report it different ways. There's always a little difference in the state numbers. But listen, it's been very consistent rising You know, for since it opened, opened. Right? And now I don't think it's gonna continue to be up 25, 30% over the prior year. Going forward, at some point, the growth will slow. But it's been pretty consistently up 20% over the prior year. Now the comparisons get more difficult in the middle of February because we opened the high end restaurant. Middle of February last year. And So I without even looking at the months, you know, looking out the year, know, I'd expect us to be running up 15, 20% And then gradually, maybe later this year, we're only up 10%. In revenue. But then bottom line would be up more than that because if you're up 10% of revenue, you might be up 20 So The and, you know, you did have some there are little pockets weather depending on where you look, Andrew. So I will I'll tell you this. What outside of the weather pockets, the customer is actually still pretty robust. If maybe that's the other angle of your question. It does especially in Colorado and especially in Waukegan, you know, we're seeing a very good robust customer. But I would tell you we would expect that as well because those are two underpenetrated markets. And so we expect them to be a little more robust anyway. There are two little things we're doing that help the numbers. Our larger restaurant was or one of our large restaurants was somewhat underutilized. And we're now we've set it up and are using it for entertainment events. So we bring in comedians and inexpensive entertainment to So be in front of 300 people. And that's worked pretty well. It at driving business when we do it. And we'll probably do more of that And we're also adding a small poker room Now in poker, you get a break, so it's not a lot of money. But it was a pretty slow corner of the casino. So we said, well, let's put in a poker room. So we have one. Our competition has poker. Coming soon. Yeah. And so that'll be open the next a few months?

Awesome. And then, just the bookings for Colorado over the couple months, I don't think you've really talked about them. How are kind of the hotel rooms looking so far?

I honestly don't know it off the top of my head. But Well, I was gonna say it is a it is a short booking window. It's not like Vegas. You know, in Vegas, you tend to get Yeah. Pretty advanced bookings. In our cases, we'll drop a mailer Actually, the mailer is going out now for the month of March for example, but those mailers will have you know, the room offers for the current month, and so our leads time isn't months and months and months. It tends to be days or weeks. I mean, we do fill on weekends. When you're looking at occupancy, it's all about And that's one of the other areas. We need to hire more sales and marketing people to help use the meeting room space to fill mid week. So we're working on that.

Hey. Most of my other questions have been answered. Again, I love how y'all touch off the opportunity cost and excited to get some new equity financing done.

We're not doing equity. I think you said no equity.

Oh, equity. You we agree, actually. We agree.

Yeah. So take care. From my son.

Alright. Thank you, Andrew.

Hey, Dion. You wanna just wrap it up real quick? I think we've covered it. So thank everybody for your support. And hang in there with us. And this is we're gonna have a great five years here.

Alright. Thank you, guys. K. Bye.

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