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4-Traders Homepage  >  Equities  >  Nyse MKT  >  Nevada Gold & Casinos    UWN

Delayed Quote. Delayed  - 07/29 10:02:25 pm
1.93 USD   -1.03%
07/28 NEVADA GOLD & C : Reports Fiscal 2016 Results Jul 28, 2016
07/28 Nevada Gold & Casinos Reports Fiscal 2016 Results
07/21 Nevada Gold & Casinos to Report Fourth Quarter and Year End Finan..
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NEVADA GOLD & CASINOS : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-K)

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07/29/2016 | 09:02pm CEST
The following discussion and analysis ("MD&A") should be read in conjunction
with our consolidated financial statements and Notes thereto contained in Item 8
herein. Management is of the opinion that inflation and changing prices will
have little, if any, effect on our consolidated financial position or results of
our operations.



                   Critical Accounting Policies and Estimates



Our critical accounting policies and estimates involve the use of assumptions,
estimates and/or judgments in the preparation of our consolidated financial
statements. An accounting estimate is an approximation made by management of a
financial statement element, item or account in the consolidated financial
statements. Accounting estimates in our historical consolidated financial
statements measure the effects of past business transactions or events, or the
present status of an asset or liability. The accounting estimates described
below require us to make assumptions about matters that are uncertain at the
time the estimate is made. Additionally, different estimates that we could have
used or changes in an accounting estimate that are reasonably likely to occur
could have a material impact on the presentation of our consolidated financial
condition or results of operations. We base our estimates on historical
experience and on various other assumptions that we believe are reasonable in
the circumstances, the results of which form the basis for making judgments.
These estimates may change as new events occur, as more experience is acquired,
as additional information is obtained and as our operating environment changes.
Our significant accounting policies are discussed in Note 2 to our consolidated
financial statements included in Item 8 of this report. We have discussed the
development and selection of our critical accounting policies and related
disclosures with the Audit Committee of the Board of Directors and have
identified the following critical accounting policies for the current fiscal
year.



Principles of Consolidation



We consolidate entities when we have the ability to control the operating and
financial decisions and policies of that entity and record the portion we do not
own as non-controlling interest. The determination of our ability to control, or
exert significant influence over, an entity involves the use of judgment. We
apply the equity method of accounting if we can exert significant influence
over, but do not control the policies and decisions of an entity. We use the
cost method of accounting if we are unable to exert significant influence over
the entity.



                                       10




Goodwill, Other Intangible Assets, and Other Long-Lived Assets




In connection with our acquisitions of the nine Washington mini-casinos from May
12, 2009 to July 18, 2011, the acquisition of the South Dakota slot route
operation in South Dakota on January 27, 2012, and the acquisition of Club
Fortune Casino on December 1, 2015, we have goodwill and identifiable intangible
assets of $23.0 million, net of amortization. Goodwill represents a significant
portion of our total assets. We review goodwill for impairment annually or more
frequently if certain impairment indicators arise under the provisions of
authoritative guidance. We review goodwill at the reporting unit level, which is
the same as our operating segments. We compare the carrying value of the net
assets of each reporting unit to the estimated fair value of the reporting unit,
based upon a multiple of estimated earnings and on a discounted cash flow
method. If the carrying value exceeds the estimated fair value of the reporting
unit, an impairment indicator exists and an estimate of the impairment loss is
calculated. The fair value calculation includes multiple assumptions and
estimates, including the projected cash flows and discount rates. Changes in
these assumptions and estimates could result in goodwill impairment that could
materially adversely impact our financial position or results of operations. All
of our goodwill is attributable to reporting units within our gaming operations.



Goodwill represents the excess of the purchase price over the fair market value
of net assets acquired. The Company acquired the South Dakota route in January
of 2012 for approximately $5.1 million. Goodwill for our South Dakota operations
was $1.1 million and $1.9 million as of April 30, 2016 and 2015, respectively.
The Company's review of goodwill associated with the South Dakota operations as
of April 30, 2016, resulted in a $0.8 million impairment of goodwill using
market and income valuations. The calculations and key assumptions, contemplate
changes for both current year and future year estimates in earnings and the
impact of these changes to the fair value of the route.



Long-lived assets, including property, plant and equipment and amortizable
intangible assets also comprise a significant portion of our total assets. We
evaluate the carrying value of long-lived assets if impairment indicators are
present or if other circumstances indicate that impairment may exist under
authoritative guidance. When management believes impairment indicators may
exist, projections of the undiscounted future cash flows associated with the use
of and eventual disposition of long-lived assets held for use are prepared. If
the projections indicate that the carrying value of the long-lived assets are
not recoverable, we reduce the carrying values to fair value. For property held
for sale, we compare the carrying values to an estimate of fair value less
selling costs to determine potential impairment. We test for impairment of
long-lived assets at the lowest level for which cash flows are measurable. These
impairment tests are heavily influenced by assumptions and estimates that are
subject to change as additional information becomes available.



Allowance for Doubtful Accounts




We establish provisions for losses on accounts and notes receivable if we
determine that we will not collect all or part of the outstanding balance. We
regularly review collectability and establish or adjust our allowance as
necessary using the specific identification method. We make advances to third
parties under executed promissory notes for project costs related to the
development of gaming and entertainment properties. Due diligence is conducted
by our management with the assistance of legal counsel prior to entering into
arrangements with third parties to provide financing in connection with their
efforts to secure and develop the properties. Repayment terms are largely
dependent upon the operating performance of each opportunity for which the funds
have been loaned. Interest income is not accrued until it is reasonably assured
that the project will be completed and that there will be sufficient profits
from the facility to cover the interest to be earned under the respective note.
If projected cash flows are not sufficient to recover amounts due, the note is
evaluated to determine the appropriate discount to be recorded on the note for
it to be considered a performing note. If the note is performing, interest is
recorded using the effective interest method based on the value of the
discounted note balance. See the Notes Receivable footnote in our consolidated
financial statements.



We review on an annual basis, or more frequently, each of our notes receivable
to evaluate whether the collection of such note receivable is still probable. In
our analysis, we review the economic feasibility and the current financial,
legislative and development status of the project. If our analysis indicates
that the project is no longer economically feasible, the note receivable would
be written down to its estimated fair value.



Revenue Recognition



We record revenues from casino operations. The retail value of food and beverage
and other services furnished to guests without charge is included in gross
revenue and deducted as promotional allowances. Net revenues do not include the
retail amount of food, beverage and other items provided gratuitously to
customers. We record the redemption of coupons and points for cash as a
reduction of revenue. These amounts are included in promotional allowances in
the accompanying consolidated statements of operations. The estimated cost of
providing such complimentary services that is included in casino expense in the
consolidated statements of operations was as follows:



                                                      Fiscal Year Ended
                                             April 30, 2016       April 30, 2015
     Food and beverage                      $      4,477,148     $      3,198,214
     Other                                           171,187              146,148
     Total cost of complimentary services   $      4,648,335     $      3,344,362




                                       11





Accrued Jackpot Liability


We accrue slot jackpot liability as games are played under a matching concept of coin-in. In addition, as of April 30, 2016 and April 30, 2015, we also maintained approximately $1,460,000 and $1,755,000, respectively, in player-supported jackpot accrued liability. Player-supported jackpot is a progressive game of chance directly related to the play or outcome of an authorized non-house-banked card game separately funded by our patrons. Any jackpots hit in these card games are paid from such reserved funds.



Income Taxes



Income taxes are accounted for using an asset and liability approach for
financial accounting and reporting for income taxes. Under this approach,
deferred tax assets and liabilities are recognized based on anticipated future
tax consequences, using currently enacted tax laws, attributable to differences
between financial statement carrying amounts of assets and liabilities and their
respective tax basis. We record current income taxes based on our current
taxable income, and we provide for deferred income taxes to reflect estimated
future tax payments and receipts. We account for tax credits under the
flow-through method, which reduces the provision for income taxes in the year
the tax credits first become available. We reduce deferred tax assets by a
valuation allowance when, based on our estimates, it is more likely than not
that a portion of those assets will not be realized in a future period.



We recognize the impact of uncertain tax positions in our financial statements
only if that position is more likely than not of not being sustained upon
examination by the taxing authority. Should interest and penalty be incurred as
a result of a review of our income tax returns, we will record the interest and
penalty in accordance with applicable guidance.



Accrued Contingent Liability


We assess our exposure to loss contingencies including legal matters. If a
potential loss is justified, probable, and able to be quantified, we will
provide for the exposure. If the actual loss from a contingency differs from
management's estimate, operating results could be impacted. As of April 30, 2016
and 2015, we did not record any accrued litigation liability.



Fair Value



United States generally accepted accounting principles defines fair value as the
price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date and
establishes a three-level valuation hierarchy for disclosure of fair value
measurements. The valuation hierarchy categorizes assets and liabilities
measured at fair value into one of three different levels depending on the
observability of the inputs employed in the measurement. The three levels are as
follows:


Level 1 - Observable inputs such as quoted prices in active markets at the measurement date for identical, unrestricted assets or liabilities.




Level 2 - Other inputs that are observable directly or indirectly such as quoted
prices in markets that are not active, or inputs which are observable, either
directly or indirectly, for substantially the full term of the asset or
liability.



Level 3 - Unobservable inputs for which there is little or no market data and
which we make our own assumptions about how market participants would price
the
assets and liabilities.


The following describes the valuation methodologies used by us to measure fair value:

Real estate held for sale is recorded at fair value less selling costs.




Goodwill and indefinite lived intangible assets are recorded at carrying value
and tested for impairment annually, or more frequently, using projections of
undiscounted future cash flows.



Interest rate swaps are adjusted on a recurring basis pursuant to accounting
standards for fair value measurements. We categorize our interest rate swap as
Level 2 for fair value measurement.



The recorded value of cash, accounts receivable, notes receivable and payable
approximate carrying value based on their short term nature. The recorded value
of long term debt approximates carrying value as interest rates approximate
market rates.



                                       12





Financial instruments that potentially subject us to concentrations of credit
risk are primarily notes receivable, cash and cash equivalents, accounts
receivable and payable, and long term debt. As of April 30, 2016 we had three
notes receivable outstanding. Two of these notes were issued in connection with
a potential gaming project and one is for the sale of the Colorado Grande
Casino. Management performs periodic evaluations of the collectability of these
notes. Our cash deposits are held with large, well-known financial institutions,
and, at times, such deposits may be in excess of the federally insured limit.
The recorded value of cash, accounts receivable and payable, approximate fair
value based on their short term nature; the recorded value of long term debt
approximates fair value as interest rates approximate current market rates.


Stock-Based Compensation


Compensation cost for stock options granted are based on the fair value of each
award, measured by applying the Black-Scholes model on the date of grant and
using the weighted-average assumptions of (i) expected volatility, (ii) expected
term, (iii) expected dividend yield, (iv) risk-free interest rate and (v)
forfeiture rate. Expected volatility is based on historical volatility of our
stock. The expected term considers the contractual term of the option as well as
historical exercise and forfeiture behavior. The risk-free interest rate is
based on the rates in effect on the grant date for U.S. Treasury instruments
with maturities matching the relevant expected term of the award.



The compensation cost related to these share-based awards is recognized over the
requisite service period. The requisite service period is generally the period
during which an employee is required to provide service in exchange for the
award.



                               Executive Overview



We were formed in 1977 and, since 1994, have primarily been a gaming company
involved in financing, developing, owning and operating gaming facilities. Our
gaming facility operations are located in the United States of America (the
"U.S."), specifically in the states of Nevada, Washington and South Dakota. We
own nine mini-casinos in Washington State, which were acquired in three separate
purchases between May of 2009 and July of 2011. On January 27, 2012, we acquired
all of the shares of A.G. Trucano, Son & Grandsons, Inc., a slot machine route
operation in Deadwood, South Dakota. On December 1, 2015, we acquired the assets
of Club Fortune Casino in Henderson, NV. Our business strategy will continue to
focus on gaming projects with a continued emphasis on owning and operating
gaming establishments. If we are successful, both our future revenues and
profitability can be expected to increase.



       Comparison of Fiscal Years Ended April 30, 2016 and April 30, 2015



Net revenues. Net revenues increased 9.3%, to $70.3 million from $64.3 million,
for the fiscal year ended April 30, 2016 compared to the fiscal year ended April
30, 2015. The increase was primarily due to the December 1, 2015 acquisition of
Club Fortune which contributed $6.1 million of net revenues after the
acquisition. Washington net revenues were $56.7 million this year compared to
$56.0 million in the prior year. Two of our locations benefited from the closure
of a competitor. South Dakota revenues decreased $0.9 million as a result of the
July 2015 closure of one of the businesses that had 45 units in operation.
Overall, casino revenues increased 9.7%, or $5.5 million, primarily due to Club
Fortune's $5.5 million of casino revenue. Food and beverage, net of promotional
allowances, increased by $0.2 million, or 3.6%, also due to the addition of
Club
Fortune.


Total operating expenses. Total operating expenses increased 9.7% to $67.0
million from $61.1 million, for the fiscal year ended April 30, 2016, compared
to the fiscal ended April 30, 2015. The increase was primarily due to Club
Fortune operating expenses, which were $5.8 million. Excluding Club Fortune's
expenses, casino expenses decreased $0.7 million, or 2.3%, primarily resulting
from the sale of our Washington Golden Nugget property and lower revenue driven
commissions and gaming taxes at our South Dakota slot route. Exclusive of Club
Fortune's expenses, food and beverage expenses decreased $0.2 million, or 3.2%,
and marketing and administrative expenses decreased $0.5 million, or 3.2%, both
primarily from the sale of the Golden Nugget property. Corporate expenses
increased $0.8 million when compared to the prior year primarily due to
acquisition related expenses of $0.6 million. Facilities, other, and
depreciation and amortization expenses remained relatively steady compared to
the prior fiscal year on a same property basis. The net gain on the sale of
assets is primarily from the $0.2 million gain on the sale of the Golden Nugget
property. The write down of $1.2 million is the result of the $0.8 million South
Dakota impairment charge and the $0.4 million carrying value adjustment of the
Colorado land to the sales contract price.



Non-operating expenses. Interest expense and amortization of loan costs increased slightly over the prior fiscal year. Interest expense increased as a result of the increased debt but was partially offset by reduced loan cost amortization. We recorded a $0.2 million change in the fair value of the interest rate swap primarily as a result of refinancing.




Income taxes. The effective tax rates for the years ended April 30, 2016 and
April 30, 2015, were 48.4% and 32.9%, respectively. The increase in the tax rate
as of April 30, 2016, as compared to the same period of the prior year is
primarily due to the impairment of the nondeductible South Dakota goodwill,
changes in the valuation of deferred tax assets related to accrued expenses,
higher non-deductible expenses and prior year tax return to provision
adjustments.



                                       13





                          Non-GAAP Financial Measures



The term "adjusted EBITDA" is used by us in presentations, quarterly earnings
calls, and other instances as appropriate. Adjusted EBITDA is defined as net
income before interest, income taxes, depreciation and amortization, non-cash
goodwill and other long-lived asset impairment charges, write-offs of project
development costs, acquisition costs, litigation charges, non-cash stock grants,
non-cash employee stock purchase plan discounts, exclusion of income or loss
from assets held for sale, and net losses/gains from asset dispositions.
Adjusted EBITDA is presented because it is a required component of financial
ratios reported by us to our lenders, and it is also frequently used by
securities analysts, investors, and other interested parties, in addition to and
not in lieu of GAAP results, to compare to the performance of other companies
that also publicize this information.



Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to net income or cash flow as an indicator of our operating performance or any other measure of performance derived in accordance with GAAP.

The following table shows adjusted EBITDA by operating unit:



                                                            Adjusted EBITDA
                                                                              Corporate -
For the fiscal year ended:   Washington       South Dakota       Nevada          Other            Total
Ápril 30, 2016               $ 9,091,898     $      374,025     $ 832,006     $ (2,497,344 )   $ 7,800,585

Ápril 30, 2015               $ 7,361,164     $      615,192     $       - 
   $ (2,332,151 )   $ 5,644,205



Adjusted EBITDA reconciliation to net income:



                                               Fiscal year ended
                                      April 30, 2016       April 30, 2015

Net income                           $      1,301,046     $      1,807,077
Adjustments:
Net interest expense                          628,315              587,872
Income tax expense                          1,221,497              885,819
Depreciation and amortization               2,608,616            2,168,003
Club Fortune acquisition expenses             641,472                    -
Write downs and other charges               1,185,000                    -
Deferred rent amortization                     35,900               23,744
Stock option amortization                     114,698              113,526
Employee stock purchase discount                4,671                7,331
Decrease in swap fair value                   217,781               10,600
Write off of marketable securities                  -                7,539
(Gain) loss on disposal of assets            (158,411 )             32,694
Adjusted EBITDA                      $      7,800,585     $      5,644,205




                        Liquidity and Capital Resources



Historical Cash Flows


The following table sets forth our consolidated net cash provided by (used in)
operating, investing and financing activities for the fiscal years ended April
30, 2016 and April 30, 2015:



                                    Fiscal Year Ended
                                April 30,        April 30,
                                  2016              2015
Cash provided by (used in):
Operating activities          $   6,371,227     $  5,951,452
Investing activities          $ (13,059,923 )   $   (306,950 )
Financing activities          $   9,730,133     $ (4,841,817 )




                                       14




Operating activities. Net cash provided by operating activities during the
fiscal year ended April 30, 2016 increased $0.4 million compared to the same
period in the fiscal year ended April 30, 2015. This increase resulted primarily
from the addition of Club Fortune and the improved operating income from our
Washington segment, partially offset by the increase in working capital.



Investing activities. Net cash used in investing activities during the fiscal
year ended April 30, 2016 increased $12.8 million compared to the same period in
the fiscal year ended April 30, 2015. The increase resulted from $13.3 million
used to acquire Club Fortune.



Financing activities. Financing activities provided $9.7 million and used $4.8
million for fiscal years ended April 30, 2016 and April 30, 2015, respectively.
The activity for the year ended April 30, 2016 is primarily attributable to the
increase in our credit facility, partially offset by principal payments.



Future Sources and Uses of Cash

We expect that our future liquidity and capital requirements will be affected by:

- capital requirements related to future acquisitions;

- cash flow from operations;

- working capital requirements;

- obtaining debt financing; and

- debt service requirements.





On June 29, 2015, the Company sold its Golden Nugget casino in Tukwila,
Washington for $0.3 million in cash. A gain on the sale of assets of $0.2
million was recorded in the first quarter of fiscal year ending April 30, 2016.
Net proceeds from the sale were used to further reduce the Company's debt. The
Golden Nugget generated a $0.3 million operating loss for the year ended April
30, 2015.


At April 30, 2016, outstanding indebtedness was $17,172,777 and scheduled principal payments on the Credit Facility are as follows:



May 1, 2016 - April 30, 2017      $          -
May 1, 2017 - April 30, 2018      $    490,000
May 1, 2018 - April 30, 2019      $  2,500,000
May 1, 2019 - April 30, 2020      $  2,500,000
May 1, 2020 - November 30, 2020   $ 11,682,777




On April 30, 2016, excluding restricted cash of $1,433,728, we had cash and cash equivalents of $11,583,107. The restricted cash consists of progressive liabilities and player supported jackpots.




Our consolidated financial statements have been prepared assuming that we will
have adequate availability of cash resources to satisfy our liabilities in the
normal course of business. We have made arrangements to ensure that we have
sufficient working capital to fund our obligations as they come due. We believe
that funds from operations will provide sufficient working capital for us to
meet our obligations as they come due; however, there can be no assurance that
we will be successful. Should cash resources not be sufficient to meet our
current obligations as they come due, repay or refinance our long-term debt, and
acquire operations that generate positive cash flow, we would be required to
curtail our activities and maintain, or grow, at a pace that cash resources
could support.



Liquidity



The current ratio is an indication of a company's market liquidity and ability
to meet creditor's demands. Acceptable current ratios vary from industry to
industry and are generally between 1.25 and 3 for healthy businesses. If a
company's current ratio is in this range, then it generally indicates good
short-term financial strength. If current liabilities exceed current assets (the
current ratio is below 1), then a company may have problems meeting its
short-term obligations. As of April 30, 2016, we have a 2.74 current ratio,
sufficient to service debt and maintain operations.



Indebtedness



On November 30, 2015, the Company amended its existing credit agreement with
Mutual of Omaha Bank to increase the lending commitment to $23 million.  The
Amended and Restated Credit Agreement ("Credit Facility") matures on
November 30, 2020, and is secured by liens on substantially all of the real and
personal property of the Company and its subsidiaries. The interest rate on the
borrowing is based on LIBOR plus an Applicable Margin, determined quarterly
beginning April 1, 2016, based on the total leverage ratio for the trailing
twelve month period. The initial Applicable Margin was 4.00% until April 1,
2016, when the first quarterly pricing change took effect, and decreased to
3.00%. As of July 1, the Applicable Margin is 2.50%. In addition, the Company
was required to fix the interest rate on at least 50% of the credit facility
through a swap agreement.



                                       15





The Credit Facility contains customary covenants for a facility of this nature,
including, but not limited to, covenants requiring the preservation and
maintenance of the Company's assets and covenants restricting our ability to
merge, transfer ownership, incur additional indebtedness, encumber assets and
make certain investments.  The Credit Facility also contains covenants requiring
the Company to maintain certain financial ratios including a maximum total
leverage ratio ranging from 3.00 to 1.00 through January 31, 2017, 2.75 to 1.00
from February 1, 2017 through January 31, 2018, and 2.50 to 1.00 from February
1, 2018 until maturity; and lease adjusted fixed charge coverage ratio of no
less than 1.15 to 1.00. We are in compliance with the covenant requirements of
the Credit Facility as of April 30, 2016.



We are required by the Credit Facility to have a secured interest rate swap for
at least 50% of the Credit Facility commitment. On December 28, 2015, the
Company entered into a swap transaction with Mutual of Omaha Bank ("MOOB"),
which has a calculation period as of the tenth day of each month through the
maturity date of the Credit Facility. As of April 30, 2016, the Company had one
outstanding interest rate swap with MOOB with a notional amount of $10,875,000
at a swap rate of 1.77%, which as of April 30, 2016, effectively converts
$10,875,000 of our floating-rate debt to a synthetic fixed rate of 4.77%. Under
the terms of the swap agreement, the Company pays a fixed rate of 1.77% and
receives variable rate based on one-month LIBOR as of the first day of each
floating-rate calculation period. Under the International Swap Dealers
Association, Inc. ("ISDA") confirmation, the floating index as of April 30,
2016
is set at 0.4347%.



The Company did not designate the interest rate swap as a cash flow hedge and
the interest rate swap did not qualify for hedge accounting under ASC Topic 815.
Changes in our interest rate swap fair value are recorded in our consolidated
statements of operations. Each quarter, the Company receives fair value
statements from the counterparty, MOOB. The fair value of the interest rate swap
is determined using widely accepted valuation techniques including discounted
cash flow analysis on the expected cash flows of the derivative. This analysis
reflects the contractual terms of the derivatives, including the period to
maturity, and uses observable market-based inputs, including forward interest
rate curves. To comply with the provisions of ASC Topic 820, Fair Value
Measurements and Disclosures, the Company incorporates credit valuation
adjustments to appropriately reflect both its own nonperformance risk and the
respective counterparty's nonperformance risk in the fair value measurements. As
a result of our evaluation of our interest rate swap, we recorded a $217,781
decrease in our interest rate swap fair value for the year ended April 30, 2016.
As of April 30, 2016, our interest rate swap fair value is a $286,731 liability
which is included in other long-term liabilities on the consolidated balance
sheet.


Off-Balance Sheet Arrangements



None.


New Accounting Pronouncements and Legislation Issued

In February 2016, the Financial Accounting Standards Board ("FASB") issued
amended accounting guidance that changes the accounting for leases and requires
expanded disclosures about leasing activities. Under the new guidance, lessees
will be required to recognize a right-of-use asset and a lease liability,
measured on a discounted basis, at the commencement date for all leases with
terms greater than twelve months. Lessor accounting will remain largely
unchanged, other than certain targeted improvements intended to align lessor
accounting with the lessee accounting model and with the updated revenue
recognition guidance issued in 2014. Lessees and lessors must apply a modified
retrospective transition approach for leases existing at, or entered into after,
the beginning of the earliest comparative period presented in the financial
statements. The amended guidance is effective for annual reporting periods
(including interim periods within those periods) beginning after December 15,
2018, and early application is permitted. The Company is currently evaluating
the impact this guidance will have on its financial position and results of
operations.



In November 2015, the FASB issued final guidance that requires companies to
classify all deferred tax assets and liabilities as noncurrent on the balance
sheet instead of separating deferred taxes into current and noncurrent amounts.
The guidance is effective for financial statements issued for annual periods
beginning after December 15, 2016. Early adoption is permitted. The Company
adopted this guidance in the fourth quarter of fiscal 2016. The adoption had no
effect on the Company's results of operations.



In April 2015, the FASB issued amended accounting guidance that changes the
balance sheet presentation of debt issuance costs. Under the amended guidance,
debt issuance costs will be presented on the balance sheet as a direct deduction
from the related debt liability rather than as an asset. In August 2015, the
FASB issued Update 2015-15, which further clarifies the presentation and
subsequent measurement of debt issuance costs related to line-of-credit
arrangements. Debt issuance costs related to line-of-credit of arrangements can
be recorded as an asset and subsequently amortized ratably over the term of the
line-of-credit arrangement, regardless of whether there are any outstanding
borrowings on the line-of-credit arrangement. For public companies, the new
guidance is effective for financial statements issued for fiscal years beginning
after December 15, 2015 (including interim periods within those fiscal years),
and is required to be applied on a retrospective basis. Early adoption is
permitted. The Company adopted this guidance in the third quarter of fiscal
2016. The adoption had no effect on the Company's results of operations.



                                       16





In May 2014, the FASB issued a new accounting standard for revenue recognition
which requires entities to recognize revenue when it transfers promised goods or
services to customers, in an amount that reflects the consideration to which the
entity expects to be entitled in exchange for those goods or services. The new
standard supersedes the existing accounting guidance for revenue recognition,
including industry-specific guidance, and amends certain accounting guidance for
recognition of gains and losses on the transfer of non-financial assets. For
public companies, the new guidance is effective for annual reporting periods
(including interim periods within those periods) beginning after December 15,
2017. Early application is permitted for annual reporting periods beginning
after December 15, 2016 (including interim periods within those periods). Upon
adoption, financial statement issuers may elect to apply the new standard either
retrospectively to each prior reporting period presented, or using a modified
retrospective approach by recognizing the cumulative effect of initial
application and providing certain additional disclosures. The Company will adopt
this guidance in the first quarter of 2018. The Company is currently evaluating
the impact this guidance will have on its financial position and results of
operations, and has not yet determined which adoption method it will elect.



In April 2014, the FASB issued amended accounting guidance that changes the
criteria for reporting discontinued operations and expands the related
disclosure requirements. This guidance is effective in the first quarter of our
fiscal year 2016. The Company adopted this guidance during the first quarter of
fiscal year 2016 with no material impact on our financial position or results of
operations. The Golden Nugget casino was not considered a significant component
of the Company and therefore the sale was not treated as discontinued
operations. See Goodwill and Intangible Assets footnote.



In August 2014, the FASB issued amended accounting guidance that defines
management's responsibility to evaluate a company's ability to continue as a
going concern and to provide related footnote disclosures.  For each reporting
period, management will be required to evaluate whether there are conditions or
events that raise substantial doubt about a company's ability to continue as a
going concern within one year from the date the financial statements are issued.
The amendments are effective for annual reporting periods (including interim
periods within those periods) beginning after December 15, 2016. Early
application is permitted.  The Company will adopt this guidance in the first
quarter of fiscal 2018 and does not expect the adoption to have a material
impact on its financial position or results of operations.



A variety of proposed or otherwise potential accounting guidance is currently
under study by standard-setting organizations and certain regulatory agencies.
Due to the tentative and preliminary nature of such proposed accounting
guidance, the Company has not yet determined the effect, if any, that the
implementation of such proposed accounting guidance would have on its
consolidated financial statements.

© Edgar Online, source Glimpses

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Managers
NameTitle
Michael P. Shaunnessy President & Chief Executive Officer
William J. Sherlock Chairman
James D. Meier Chief Financial Officer, Secretary & VP
Francis Michael Ricci Independent Director
Wayne H. White Independent Director
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