Full House Resorts, Inc.

Greetings. Welcome to Full House Resorts third quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A 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. Please note this conference is being recorded. I will now turn the conference over to Adam Campbell, corporate controller. Thank you. You may begin.

Thank you. Good afternoon, everyone. Welcome to our third 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 security 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 reconciliation of these measures, please see our website, as well as the various press releases that we issue. Lastly, we are also broadcasting this conference call at fullhouseresorts.com, where you can find today's earnings release, as well as all of our SEC filings. That said, we're ready to go, Lewis.

Thank you, Adam. We had a very strong quarter. Revenues rose to $78 million from $75.7 million in last year's third quarter. Keep in mind that last year's financials include $1.5 million of revenue from Stockman's, which was sold in April of this year, so revenue growth on an apples-to-apples basis was 5%. Adjusted EBITDA rose 26% to $14.8 million. That number would have been closer to $15.2 million, except for several unusual items. Our strong growth in the quarter was led by American Place in Illinois. and Chamonix in Colorado, both of which are still in the ramp-up phases and should continue to see their profits grow. Specifically at American Place, our temporary casino continues to fire on all cylinders. We had record revenue and record profitability at American Place. Revenues there increased by 14% to $32 million in the third quarter. Adjusted property EBITDA rose 16% to $9 million. We continue to have large numbers of guests discover American Place for the first time, and that's helped our database grow to more than 115,000 people. The pace of new database signups really hasn't slowed down in recent memory, which is great to see. That broadening awareness should continue to propel our temporary American Place facility to new levels of profitability in 2026 and 2027. We have long said that the temporary American Place should be able to achieve $50 million of run rate EBITDA and that it's much larger permanent facility to earn double that amount or $100 million. Our conviction in those figures remains as high as ever. Regarding the permanent American Place facility, we continue to make progress. We recently received unanimous site approval from the Waukegan City Council. Behind the scenes, we also continue to refine the project, resulting in a reduction of the project's total budget. down from $325 million to $302 million, excluding capitalized interest. Our permanent casino project is an exciting one with total square footage more than doubling, the number of slots increasing by about 40%, and the number of table games increasing by about 90%. It's the closest casino to more than 1 million people, sandwiched between two of the major north-south traffic arteries in northern Chicagoland. To put that in perspective, the equivalent would be like if the Las Vegas locals market only had two casinos, and think about how much those two casinos would earn. Within Lake County alone, American Place will be the only full-service casino to more than 700,000 people, and Lake County is one of the wealthiest counties in the entire country, so we have great demographics. permanent American Place project is a phenomenal opportunity that should earn a very high ROI and so we look forward to when we can begin its construction. Tangentially related, we've seen some uninformed opinions recently about the potential for a new casino in Kenosha, Wisconsin. To be clear, these efforts go back some 30 years to the 1990s. The principal opponent is the large Native American casino in downtown Milwaukee and which would be much closer to it than us. That project is far from certain with several hurdles. It still requires federal approval as well as state approval, and we believe there will likely be lengthy legal challenges to the project along the way. Beyond that, the project, which has gotten significantly smaller over the years, and at this point we believe is sized for the local Kenosha market, still needs to be built. Even assuming full approvals today, the project still has several years before it would ever open. The reality is, assuming it ever receives all of the necessary approvals, it is likely many years down the line. More importantly, the vast, vast majority of our guests at American Place aren't coming from Wisconsin. They're coming from immediately around our site. Our target markets follow the population density around us. That's to the south, going towards O'Hare Airport, to the east, going towards the lake, and certainly going to the west where there is no nearby full-service casino. As you head up north to the Wisconsin population density thins out until you hit Milwaukee. And so as a result, most of our guests aren't coming from the Wisconsin area. They're typically coming from locations that would require passing by our casino before they ever reach Kenosha. Our geography in a very wealthy county is an extremely large benefit. When you have proximity and quality on your side, as we will with our permanent American Place Casino, You win that competitive battle nearly every time. Turning to Chamonix, we made great strides under our still new management team, which began arriving in April. Revenues rose by more than 7%. Adjusted property EBITDA rose by $2.8 million from last year's third quarter, rising to positive $2.1 million from negative $0.7 million last year. Our table games business is starting to thrive. Table game revenues were up 53% versus last year's third quarter and up 296% versus the third quarter of 2023. Helping drive that growth is our highest tier of rated players. Slot revenues were up 6% and 161% over those same time periods. Our marketing programs also continue to improve as we use more targeted ways to advertise and improve the way we test various promotions for their effectiveness. We also have a large ballroom that we can use for entertainment, a new amenity to Cripple Creek, and we continue to discover what types of entertainment works best in attracting our ideal guest. Those efforts are helping us achieve new property records, including a new property record that we hit in September for slot coin in in a single day. Our high frequency guests are coming more often. In the month of September, the number of visits from high frequency guests were up more than 33% from the prior year. Slot revenues from those high-frequency guests more than doubled. Rated slot play as a whole was up 4.5%. The database, also showing decent growth. In a typical month, we're adding about 3,000 new customers into our database. Chamonix is a property that Colorado players are slowly discovering and are returning to enjoy. Regarding our group business, that's starting to pick up steam, too. We have a verbal agreement for a group in the state. We're in the process of inking it now, so we won't give you the name of it quite yet. They hold an annual event every year around this time, and so this would be for next year's conference. In their ideal scenario, that group would take up 1,200 room nights over three days, where every single room in our hotel plus spillover into the rest of the city. Their guarantee will be for a smaller figure than that, but it's still a very important group for us to host. The group is made up of important political and business leaders from throughout the region, We're of course thrilled to welcome them in a year. Our ideal group size is smaller than that, between 100 and 150 attendees. Within 500 miles of us, we estimate there are up to 4,000 conferences that fit that profile. We are starting small with our expectations, targeting 25 events of that size next year. Over the next three years, we think we can have a pretty full group business of about 55 events per year, or about one per week. On the cost side, we meaningfully improved efficiency in the building. We reduced the average number of FTEs from 373 in the first quarter of this year to 325 during the third quarter. That's a reduction of 13% despite being in the busier summer season in the third quarter. We have targeted additional areas for efficiency and expect to see those benefits in the upcoming winter season. Ultimately, our greatest opportunity remains under-penetrated Colorado Springs market. We estimate that between 12% and 15% of Colorado Springs residents visited us or any casino at all in Cripple Creek in the last year. That is an extremely low number. In the last year we had about 51,000 unique guests at our own property. That is a number that can easily double. A pleasant surprise to us is the number of guests coming from the Denver market. 30% of our guests in the last year are coming from the Denver area. When we originally underwrote the investment in Chamonix, we focused largely on the 1 million people that live in Colorado Springs, Pueblo, and Canyon City. We viewed Denver largely as gravy. The reality is that Douglas County in South Denver is as close or closer to us than Black Hawk. It's one of the fastest growing counties in the state. It's quite wealthy with median household incomes of about $145,000. and it has 400,000 people. With Douglas County, our feeder market is effectively 40% larger than what we underwrote to. 15% of our guests aren't coming from Colorado Springs or Denver at all. They're coming from places like Texas, which has nonstop flights and is viewed as a Texas heat. Chamonix is the 13th project that we've worked on in our careers, and every single one has exceeded the run rate EBIT does that we promised investors. Casino ramps are always difficult to predict. Casino run rates tend to not be. We believe that Chamonix will continue our streak of successful projects. It's only been fully open for about a year and we're beginning to make great strides. The green shoots are pretty abundant. Looking at the other properties, Rising Star and Silver Slipper were essentially flat on a combined basis. Grand Lodge, which is a pretty small part of the company at this point, was affected by renovation disruption at the Hyatt Lake Tahoe that houses our casino. And then on the balance sheet side, we had about $40 million of liquidity at the end of the quarter. At this point, there's extremely little CapEx for us until we start construction on our permanent American Place casino. Our Illinois operations alone pay for the interest expense and our current debt. And of course, those Illinois operations continue to ramp. I went through a lot, Dan. You want to? Anything else there? I think you covered it pretty well. Let's take questions. All right, let's do Q&A.