Post Earnings Coverage as Red Rock Resorts Reported its First Annual Results

Upcoming AWS Coverage on Hertz Global Holdings Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 21, 2017 / Active Wall St. announces its post-earnings coverage on Red Rock Resorts, Inc. (NASDAQ: RRR). The Company disclosed its financial results for the fourth quarter fiscal 2016 (Q4 FY16) and full year fiscal 2016 (FY16) on March 07, 2017. The Las Vegas-based Company’s quarterly net revenues grew on a year-over-year basis, thus outperforming market consensus estimates. Register with us now for your free membership at:

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One of Red Rock Resorts’ competitors within the Rental & Leasing Services space, Hertz Global Holdings, Inc. (NYSE: HTZ), reported on February 27, 2017, its Q4 2016 and full year financial results. AWS will be initiating a research report on Hertz Global in the coming days.

Today, AWS is promoting its earnings coverage on RRR; touching on HTZ. Get our free coverage by signing up to:

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Earnings Reviewed

During the quarter ended on December 31, 2016, Red Rock Resorts’ net revenues were $394.55 million compared to $347.95 million recorded at the end of Q4 FY15. Net revenue numbers for Q4 FY16 topped market consensus estimates of $393.67 million. The Company’s Casino revenues rose during Q4 FY16 to $254.84 million from $238.56 in last year’s comparable quarter. Food and beverage revenues were also up to $74.04 million in Q4 FY16 from $63.67 million in the year ago same quarter. Furthermore, Room revenues grew to $43.30 million in the reported quarter from $30.58 million in Q4 FY15.

The hotel and casino operator reported net income attributable to Red Rock Resorts of $20.40 million, or $0.37 per diluted Class A share, in Q4 FY16, compared to $48.70 million, or $0.54 per diluted Class A share, in Q4 FY15. Wall Street had expected the Company to report net income attributable to Red Rock Resorts of $0.35 per diluted Class A share.

In FY16, Red Rock Resorts’ revenue came in at $1.45 billion compared to $1.35 billion in the previous year. The Company reported net income attributable to Red Rock Resorts of $91.97 million, or $1.03 per diluted share, in FY16 versus $137.66 million, or $1.53 per diluted sharein FY15.

Operational Metrics

For the reported quarter, the Company’s total operating costs and expenses were $322.29 million versus $263.68 million in the prior year’s corresponding quarter. The Company’s operating income for Q4 FY16 came in at $72.26 million compared to $84.28 million in Q4 FY15. The Company reported adjusted EBITDA of $124.79 million for Q4 FY16 versus $125.83 million in the last year’s comparable quarter.

Segment-Wise

Las Vegas Operations segment’s net revenues increased 13.0% in Q4 FY16 to $363.59 million from $321.62 million in Q4 FY15. However, the segment’s adjusted EBITDA decreased 3.9% in Q4 FY16 to $105.73 million from $110.04 million in the prior year’s same period. Furthermore, adjusted EBITDA margin fell 510 basis points to 29.1% in Q4 FY16.

The Company’s Native American segment contributed $29.56 million of net revenues in Q4 FY16 compared to $24.99 million in Q4 FY15. The segment’s adjusted EBITDA was $25.11 million in Q4 FY16, which rose 17.9% from $21.29 million in the prior year’s comparable period.

Red Rock Resorts’ Corporate and Other net revenues increased to $1.41 million in Q4 FY16 from $1.34 million in the previous year’s same period. Meanwhile, the Corporate and other segment reported negative adjusted EBITDA of $6.05 million in Q4 FY16 compared to negative adjusted EBITDA of $5.50 million in Q4 FY15.

Cash Flow and Balance Sheet

In the year ended December 31, 2016, net cash provided by operating activities was $346.21 million compared to $349.44 million in FY15. As on December 31, 2016, the Company had $133.78 million in cash compared to a cash balance of $116.43 million as on December 31, 2015. The Company reported long-term debt of $2.38 billion in its books of accounts as on December 31, 2016, rising from $2.07 billion as on December 31, 2015. Furthermore, as on December 31, 2016, debt (net of excess cash) to adjusted EBITDA ratio was 4.8 times and interest coverage was at 4.6 times.

Dividend

In a separate press release on March 01, 2017, Red Rock Resorts’ Board of Directors declared a cash dividend of $0.10 per Class A common share for Q1 FY17. The dividend will be payable on March 31, 2017, to all stockholders of record as of close of business on March 15, 2017.

IPO

The Company had announced the pricing of its initial public offering of 27.25 million Class A common stock at a price of $19.50 per diluted on April 26, 2016. The shares began trading on April 27, 2016, on the NASDAQ Stock Market, under the symbol “RRR.”

Acquisition

On May 10, 2016, Red Rock Resorts announced it has entered into a definitive agreement to acquire the Palms Casino Resort in Las Vegas, Nevada for total cash consideration of $312.5 million.

Stock Performance

At the close of trading session on Monday, March 20, 2017, Red Rock Resorts’ stock price ended the day flat at $22.19. A total volume of 331.86 thousand shares were exchanged during the session. The Company’s shares are trading at a PE ratio of 7.80 and have a dividend yield of 1.80%. The stock currently has a market cap of $2.57 billion.

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