Lewis Fanger – Senior Vice President, Chief Financial Officer and Treasurer Daniel Lee – President and Chief Executive Officer.

Chad Beynon – Macquari Marc Franklin – Wells Fargo Advisors.

Good day, and welcome to the Full House Resorts Fourth Quarter 2014 Earnings Call. Today's conference is being recorded. And at this time, I would like to turn the conference over to Lewis Fanger, Chief Financial Officer of Full House Resorts. You may begin..

Well, hello, everyone. Welcome to the Full House Resorts fourth quarter 2014 earnings call. Just really quick, we may make some forward-looking statements on this call related to our estimated future results and other market, business, and property trends and information.

We undertake no obligation to update or revise any forward-looking statements that are made today.

Actual results may differ materially from those projected in any forward-looking statement as a result of certain risks and uncertainties, including, but not limited to those noted in our earnings release, our periodic reports and our other filings with the SEC. During our call today, we also may make reference to non-GAAP financial measures.

For a reconciliation of historical non-GAAP to GAAP financial measures, please refer to our earnings press release and our Form 8-K furnished with the SEC today. Both of those are available under the Investors Section of our corporate website at fullhouseresorts.com. Just really quick, I’ll give you a snapshot of the quarter.

Revenues, you likely saw, declined 15%, that was about $4.7 million to $26.7 million. The bulk of the decline was at Rising Star where revenues were off $3.8 million from last year. A lot of that, as you know, is due to new competition from Ohio casinos.

In May of this year, we will lap the opening of Belterra Park; August of this year, we will lap the opening of Hollywood, Dayton and then we are done lapping all the openings that we expect under Ohio. Adjusted EBITDA was also down. We were at $266,000 for the year versus $1.6 million last year in the fourth quarter.

A big part of that decline again is related to the expiration of the management contract that was $550,000. There was another $602,000 that was due to the write-off of some stock offering costs in the fourth quarter. Absent those costs, the quarter would have actually been down about $69,000 or so from the fourth quarter of 2013.

So, our EBITDA was down about $200,000; Northern Nevada actually increased about $140,000 to $619,000 and then Rising Star was at negative $322,000 of EBITDA for the quarter. That’s a quick highlight for you. I am looking over at Dan, who is itching and ready to go..

That’s fine. I wasn’t a year and I guess that’s why we are here actually. Three of the four people here in the room are totally new to the company and even Adams has been promoted and largely new. But that’s also why the stock is down 50% from where it was last year.

Last year, it traded at about $2.80 a share and had been there for a while, got down as low as I think $0.87 and it’s back a little to $1.40. But even with the recent rise, it’s still half at where it was a year ago.

So if you are looking at it for the year, I mean Silver Slipper for a long time did $9 million and $10 million a year of EBITDA, ended this year at $7.5 million. Rising Star has been a falling star for quite some time and for the year was at $2.2 million, down from $5.4 million.

Even that is a little understated because there is a new hotel there and I’ll mention more about it later, but that hotel was leased. It opened in November of 2013 and there is $800,000 of rent, which ends up on our interest expense line. So if you backup that rent, it was really like $1.4 million versus $5.4 million.

Northern Nevada was down some $1 million down to $4.7 million. Within that, the Hyatt at Lake Tahoe where we lease and operate the casino did well and Fallon did poorly continuing the trend that Fallon’s had for a while. Management fee income was $1.1 million versus $1.7 million.

The contract expired with the tribe in New Mexico chose not to renew it before we got here, so we don’t know why. And corporate was flat at $4.7 million both years, while there was unusual stuff in that both ways.

So bottom line for the year looks like $10.5 million versus $17.5 million, although bear in mind even that includes $1.1 million in management fees, it also includes a few hundred thousand of unusual charges. So some of the discovers we found, Lewis mentioned $600,000 charge related to an aborted equity offering.

That equity offering was actually back in the first quarter when they filed an S-1 trying to raise a lot of money, which is the first thing that caused the stock to fall because it was dilutive. The cost of preparing that had been capitalized, we are still on the books when we got here. I don’t think it’s got any ongoing value at all.

So we wrote it off. This stuff gets stale over time. I suppose if we’re not framing that today and we have no plans to, but if we did we could dust it off and somewhat use it, but it’s pretty debatable what the value is, so we wrote it off. Then there was, as I am sure most of you aware, an attempt to acquire the Fitz Tunica during the year.

Just to give you the full numbers, the company actually spent about $400,000 on due diligence on that and then they had a deposit, which they lost almost all of which is about $1.7 million.

Just before we got here, the company signed a settlement with one of the advisers of that deal where that advisor kicked in $250,000; and $109,000 of that ended up as a credit to project development, $140,000 ended up as a credit to corporate.

So the total net cost of the Fitz excretion was about $1.750 million, if you will, and it ended up in different places on the income statement. So that was just trying to straighten out part of what was going on last year.

And then there was the proxy battle that resulted in the change of management and a large-scale change of the board and it was fairly expensive. Biggest part of that was severance for the former CEO and COO in accordance with their contract that was about $1.5 million.

It could have been worse On a change of control, it would have been something north of $2 million, but it ended up being treated as termination without cause and that was $1.5 million.

There is legal fees that the company incurred of about $0.5 million and then the proxy group, which is myself and Brad Tirpak and Craig Thomas, had incurred about $200,000 of legal fees that were reimbursed as part of the settlement. There was accelerated vesting on some restricted shares that the former CEO and COO had that was $280,000.

And then there was the write-off of capitalized licensing costs for those two individuals that was about $160,000. So there is $2.7 million of which about $2.3 million or so was cash related to the transition. So in effect, shareholders paid a lot of money to have Lewis and I here, so we have to live up to that and make sure it's worth it.

Operationally, some surprises we found. And just before we got here, again, the company reached a settlement with the Keeneland Group and got back its deposit plus about $50,000 for expenses and released each other. So, the company had an agreement to manage slot machines at the Keeneland racetrack in Lexington if it ever came to be.

I don't know if that it's ever going to come to be, it's very complicated in Kentucky at this point. But one way or another, that deal was cancelled and released just before we got here. In New York State, just after we got here, selected their licensees and it did not include the two proposals from Full House.

I guess I'm not surprised, most of the news reports or analyst reports I saw didn't expect Full House to be chosen. I don't think the change of management had anything to do with that, but it's kind of irrelevant we weren’t chosen. The Indiana legislature, which has taken quite a bit amount of time right after we got here.

A bill was introduced that would allow tracks to have tables. There are two tracks on the east side of Indianapolis that we compete with. When those tracks got slot machines, it affected us and now they are trying to get tables.

There is another small casino, very similar situation that was called French Lick, it was able to get an amendment onto the bill in effect. They could start their own bill where they get a pretty big reduction in their taxes if the tracks get tables.

So we’ve been spending time back there with our advisors trying to get the bill further amended to give us a similar tax break or in the absence of having that tax break hoping to kill the bill.

Don’t know if we can kill it, the tracks are very powerful, they are both owned by the same company and it’s Indiana-based, even though most of the money comes from a Canadian hedge fund. They probably spend more on lobbyists than we earn. So it’s a little bit of an outlaw battle.

On the positive note, though the Governor has indicated he is opposed to the expansion of gaming, this sure looks like expansion to gaming. So it’s quite possible that this whole brouhaha will end up being beat out anyway.

But I just mentioned it, we are watching it, it would turn out to be a negative to neutral or even a slight positive depending on what the tax break is kind of important for us. So we are paying attention to it. We found a pleasant surprise that company had large tax credits from the sales of FireKeepers two years ago.

And those tax credits actually allow us to get a $3 million tax refund that we expect to get in the next couple of months – could of weeks hopefully, and that’s material. It would have been much larger because the tax paid on the buyout of the FireKeepers management contract was actually quite a bit higher.

We had a complete change in fire drill in the last week of the year, because we could have triggered $30 million in tax losses, we could again $10 million check from the IRS. Just couldn't find a way to move that fast. Mostly because of the regulators who said they could move that fast and it would clearly take regulatory approval.

Frankly, I wish we had had a proxy battle six months sooner. With a few months, we could have done that and got an $10 million check from the Federal government, which would have moved the needle in addition to this $3 million we are getting. So a little bit of a missed opportunity there.

We are exploring other methods to try to get some of that tax refund, don't think we can get all of it, but we might be able to get some of it. Frankly, when I came in as CEO, I didn't know it excited, it was manna from heaven and then when we couldn't get it, it was kind of like, well, we tried.

In effect, the company overpaid for a series of casinos and the results of those casinos are all down.

What we are looking and trying to do is a sale leaseback transaction of some of the key properties where we would have kept control of the properties, leased them back from a REIT, and triggered large tax losses on the sale because the impairment charges you take for GAAP does not result in anything for tax purposes, you have to actually sell something to get the tax loss.

So we figured out a way to sell some stuff, get a tax loss, get a big tax refund, just couldn't get all the approvals fast enough. If you recall the change of management happened, I think the second week of December, and by the time we discovered it, it was just about Christmas and you had to get it done by year-end, it just was impossible.

Macquarie, so you all know we cancelled the agreement with them. They were hired by the previous board to advise them on strategic alternatives and that was kind of publicized as being the potential sale of the company. They are a good firm and we have good relationship with them, we hope to continue to work with them.

But as we looked at doing a quick sale leaseback transaction, we discovered that their retention agreement was written so broadly that they might have been able to claim a fee on just, but anything we did. And so talking with them, we agreed to remain friends, but to stop the agreement, now it still has a one-year tail.

So if we were to sell the company or a major part of it by next year, they would still get the fee. But the agreement was one of the broadest investment banking retention agreement I've ever seen and so we cancelled it.

But we remain on good terms with them, hope to continue to work with them, and they give us their thoughts as to what we should do and we hope to continue to keep that relationship, and happy to pay them for deals that they might bring to us that make sense.

But in the case with the sale leaseback, they weren't really involved in it at all and it was a little bit of a shock to find out they might have then do a fee. And so, now in terms of the sale, we are a public company and any public company is always for sale.

But you don't really want to try to sell a company when you are backs to the wall and your earnings are down and the debt is maturing and we recognized all of those debt is maturing in 2016, which means it becomes a current liability in 2015, if it becomes a current liability than the auditors have problems with giving you a clean opinion, which then gives you additional problems.

So really the debt has to be refinanced this year. If you are trying to refinance your debt at the same time you are trying to sell the company, it's awfully hard to keep the bank’s attention on getting the debt refinanced.

So we are working to refinance the debt and we think we can do so on a blended interest rate lower than where it is now and have a five-year maturity, which gives us the breathing room to do what we need to do.

Recognized even on a poor year, we had $10 million of EBITDA, which is about twice our interest expense, twice what it should be given current interest rates. And if we can rebound our earnings to where we were in the prior year, which we think we can over a couple of years then we're probably at three times our interest expense.

Caesars and MGM and Pinnacle, wish they had ratios like that. So we may be a tiny company and we may have a debt coming due shortly and stuff, we are actually financially relatively strong for a small company and so we want to refinance the debt. We want to fix operations.

Frankly, if you look at Lewis and my contracts, which are filed with the SEC, you can see we are actually kind of incentivized if the company were sold, but we are also incentivized to fix and operate the company.

So we will take it one day at a time, fix it, refinance the debt, get the stock back up and look from there, rather than be trying to sell the company and trying to do it. Property by property, pleasant surprise with the Silver Slipper. John Ferrucci is running it.

John used to work with me at Casino Magic before Hurricane Katrina, eliminated Katrina, but John ended up with the Silver Slipper. He is one of the best marketers on the Gulf Coast. And frankly, I had a quick conversation with him and said, John what marketing programs did you scale back, [indiscernible] you shouldn't have scaled back on it.

I think the first word out of his mouth was Dungeness crab, which I kind of laughed at because that's indigenous to [indiscernible] at the Gulf of Mexico, but we reintroduced Dungeness crab and some other marketing programs he had. And I am happy to say that Silver Slipper, which is our key property is actually having a very nice first quarter.

Hotel is coming along. We did change the top floor, it had no suites in at all. For a casino, the suites are perhaps the most important rooms in the building. When a high roller has his birthday, you want him at our place instead of Bellag or Paradise or one of our competitors.

And of course a high roller in that part of the world is somebody might lose $10,000 or $20,000 in a weekend. And unfortunately the sixth floor wasn’t done yet, the interior walls were not up, the building is a type of building where the – mostly the interior walls are not structural. So we had time to convert the sixth floor into suites.

So it was going to be 140 rooms and they are very standard rooms. And it’s a $20 million hotel with 140 rooms is basically a Fairfield Inn, that’s just not – it’s just not St. Louis versus a comfortable little hotel. And that’s important. We have no hotel and it will be a plus – plus to the EBITDA.

And I will be honest, I’m not sure I would have built it, we have $20 million of debt at 14.25%, might have been a better use with the money to payoff that debt, but the fact the hotel is almost done and it will be a plus to the property. Property is doing well even before it opens and we are going to be happy to have it.

So we’ve been struggling with rain if you’ve been watching whether lately, all that snow that people got [indiscernible] it’s been rain down in Mississippi along the Gulf Coast and that’s important because you are going to get the building enclosed and get it dehumidified and conditioned air, because if you – in that humid climate if you try to hang a wallpaper, put down carpet, paint the walls and so on without the building being dehumidified, then you have all sorts of problems with mold and so on and so forth.

So we’ve been struggling to get it enclosed, not quite there yet, we have air conditioners and fans running in the lower levels, and – but we have a spell here of some quieter weather, so hopefully we can get it enclosed.

We were also struggling with the furniture, some of the furniture was made in China got caught up in that Port dispute, now it's off the ships and non-real car has headed to base Saint Louis. We think we will have the bulk of the Hotel opened by the end of April and we are scrambling to try to get those six suites open from Memorial Day weekend.

And it's possible we could miss either of those days by a few days, but that's the timeframe at the moment and we are doing our best to get there. With that hotel, if you just run the numbers and say, well Silver Slipper used to do $9 million, $10 million a year, it slipped to $7.5 million.

I think the $7.5 million is more of a aberration, little bit of construction disruption but a lot of it was just eliminating marketing programs that had worked for John for many years and unleashing John and let him do what he does well will probably get us back to $9 million or $10 million a year and you lay the hotel on top of that, we probably pick up another couple of million a year of income.

That hotel even if it runs let’s say around 50% occupancy which should be a terrible number and $100 a night of incremental either room revenue or casino revenue, I don’t really care which – both have about same profit margin. The flow through on that incremental revenue will be about 50%.

So even at 50% occupancy at $100, it would $1 million a year of income to us. If it’s 85% occupancy which will be more typical for casino and $200 a night, which should be more typical in a regional market it would be $4 million. We are not anywhere near the freeway. We are like miles off the freeway, so I don’t know that 85% occupancy is realistic.

It’s going to be very popular on weekends, we’re going to scramble a little bit midweek. We also don’t have any meeting space in that hotel at all, not even a boardroom. So I think the high end is unlikely, but can it be can incremental $2 million or $3 million a year. Yeah, it really could be.

So our key property is probably going to be up significantly this year and next year because we will have the full year of the hotel next year and that’s probably the most variable in the whole company. The Hyatt Tahoe continues to do well.

They have the summer is very important for them and then they have a secondary season which is the ski season and then they hang on by their fingernails in the spring and fall. I will tell you the skiing year has been absolutely awful at Lake Tahoe. The property is actually doing fine.

So I think we’re going to be okay despite a terrible ski season and we are looking forward to get some – very nice property. We lease and operate the casino there from Hyatt. It’s got about three and a half years to go on the lease, but Hyatt made a decision a few years ago to try to get out of the casino industry.

So they don’t have to deal with the licensing and everything else. We own the mailing list, we own the gaming equipment, so I actually think it’s likely that the lease gets extended and renewed. There would probably just be a negotiation over whether we fix it up or not.

So while technically it’s a three and a half year lease, I am hopeful that it’s longer than that. Hyatt as a policy does not do leases with [indiscernible] and their hotels longer than five years, but I [indiscernible]. But I think that’s the reality it’s a nice property, we have to have it and it makes good money for us.

Fallon is off sharply since we purchased it five years ago. We used to make $3 million and $4 million a year, now it makes like $1 million. We’ve made some management changes there. We’ve had focus groups with our customers. I think we can improve it significantly from where it was last year.

It’s pretty beta, the good news is not very big, so it doesn’t take very much money to change the curve and stuff like that which we are doing. So I am pretty optimistic about Fallon. It’s in the middle of the state.

It’s near the Naval aerostation where the top gun school is now and just 25,000 people there who are mostly helpful farmers, retired military people and people work at the base. We are about 40 minutes east of the new Tesla battery factory that’s going to be built.

I don’t think it’s going to be a big plus for us but it certainly not a negative, it’s going to help the region. You are kind of be good. Rising Star, which has been the challenge.

This property was the first casino in the whole region when it opened about 20 years and the initial cost was about $200,000 and even that was probably understated because they brought in a river boat from New Orleans that spend a lot of money on and I think they bought it for less than [indiscernible].

So it’s really – it’s actually pretty nice River it’s got bigger [indiscernible] and so on, albeit it’s 20 years old. And then there is a hotel with 200 rooms that hired Belton and convention space and so on. When it opened, it was a huge homerun.

It was doing $150 million a year in revenue and $40 million a year of income, even $50 million a couple of years. So the Hyatt group got their profit out to get their cost out. And by then other casinos had opened, now Rising Sun it sounds like an Indian drive, it’s not. It’s a town in Indiana and it’s on the Ohio river.

And in that area, Indiana is pretty real. Most of the people live in Southern Ohio and Northern Kentucky which is basically the Cincinnati metropolitan area. There is about 2 million in the Cincinnati metropolitan area, but most of them are on the other side of the river. We don’t have a bridge where we are.

There is a bridge 10 miles north of us and there is a bridge 10 miles south of us, and since this property opened, other casinos have opened at those bridges. So the Hollywood casino is northwest, the [indiscernible] casino is southwest, they use to run when I was at Pinnacle.

So we are kind of the step child in the middle without a bridge and now there are a bunch of casinos in Ohio itself. Somewhere five, six years ago, the race tracks and [indiscernible] as I mentioned were [indiscernible] soft machines which affects us from the back.

We are now or away from those, but they kind of block people coming to us from Indianapolis. And so the property’s earnings fell and fell and fell, and get them to about $12 million a year when Full House required it. And at that time, Ohio had legalized step but had not yet opened.

The company paid about $50 million for including working capital on stuff. And I think the thought was and I wasn’t here, but I am guessing the thought was that they’ve got achieved enough to discount the competitive impact from Ohio, turn out not to the case. So at this point, it earns very little.

We win-win and got a hotel bill by a local municipal agency that is leased to us. It’s going to affect off balance sheet the risk is really on us. Although that lease was not guaranteed by the parent, it’s only a lease to the Rising Star, Casino.

And in this hotel, Bill opened a year and a half ago, I was down prouded when I went to the property, the hotel was 700 feet from the rest of the property. And there is two simple fields, not sure where they put it.

But the customers don’t like it when you check somebody in and say you’re in the new tower, and then you have to explain to them that they’ve depart way and walk.

And so we’re going to rename that hotel or lodge at Rising Star, so at least we get out of that confusion of the thing, part of the same hotel and we can charge lower prices and fewer points if you are one of the players have been count and which is the bulk of our business actually. And suddenly, a negative becomes a plus.

I have to walk, but I saved $20, so I will walk. And we can turn that around. We are talking with a celebrity rest on tour, well I’m hoping to get to move into the property, he will be a big plus for it, good guy, good restaurant tour in a well now.

The board had been neglected because there was this hope of going land [ph] based and building casino in the existing pavilion. Frankly it’s not viable on the idea. The cost of doing that is at least $5 million to $10 million.

Please [indiscernible] that’s what I was told, the people who are here and you are competing with casinos that cause $300,000 million and $400,000 million. We don’t have the $10 million. But even if we had the $10 million you would be pretty not competitive.

The boat we have is a pretty good boat, it’s just been neglected and so we need to grind and fix something and put we historical example to board, maybe casual [indiscernible] and doesn’t take a lot of money, but takes some money. And so we’ve got some plans there.

We are also looking at trying to get a ferryboat started, there was very load for 100 years, so we’re trying to reinstitute historical ferryboat. That would give us access to people in Kentucky, there is a lot more people in Northean Kentucky than there are in Indiana. And we would certainly be the closest casino to a lot more than we are today.

And I don’t mean a little ferryboat, I a little ferryboat like the one that Anderson Ferry that they have on the west side of Cincinnati which privately run ferryboat carries 10 times at a time, but it only take three minutes to go across the river.

So we are exploring that at some length, doesn’t take a lot of money if you just goggle Anderson ferry and look at the pictures you will see what I mean, it’s a small branch with little tuck boat. So we’ve got some ideas for Rising Star. Frankly some of it is little bit while watching let’s going on in Indianapolis.

If we can get a tax break, then we will be a lot more optimistic about putting money. If we don’t, we’ll figure out something else but I kind of view Rising Stars only upside at this point. It’s add about breakeven. I think it’s already discounted in our stock.

If it turns negative, well you close it, or you try to sell, I don't think you can sell it, but we can't support loses of any magnitude for any period of time.

So, you just run it to not have loses while you try to figure out how to get profit out of - no I think, if the legislature treats us fairly and we put some very modest sums in, we can get this thing nicely profitable, again probably never $50 million a year, but can we get back to $5 million or $10 million a year, yeah we probably can.

So, I view Silver Slipper as our bedrock [indiscernible] is also a nice part of the portfolio, Fallon has some good upside, and small and Rising Star is kind of four warrant, you know it says something I think we can do something with them – but that's the challenge in the company if you will.

Corporate expense is less than the $4.6 million shown last year, remember that includes the $600,000 charge for that as one, I think our real corporate expense is somewhere between $3 million and $4 million, we are trying to get it down, Lewis is shaking his head, he thinks it is closer to $4 million, but there were stuff like we let our IR firm go.

They are frankly good firm good people, but Lewis and I didn't need to pay somebody 100,000 a year to write a script for a phone call like this.

So, we are doing everything we can to try to reduce the cost, there are certain costs involved being a public company in terms of Sarbens-Oaxley and all the other stuff so there's only so much we can do, but we are doing our best. If he sold that together, I think the bottom line is we think it is going to be a pretty good year.

I think last year was more of the aberration, I don't know if we can get back to the $17 million that we had two years ago, but I think we can make some good progress back that direction and then we will grow from there.

And then we have started talking to our banks and refinancing, I think across the board they've said they are interested in just rolling their debt into a new deal, so we are working on that and hope to have that done on the first half of the year and I guess that's it. And I don't know where we will go from there, we will go one step at a time.

So – and any questions?.

[Operator Instructions] And we will take a question at this time from Chad Beynon from Macquari. Please go ahead..

Hi, guys, good afternoon. Hi, Dan, Lewis that was a great recap on the Full House story over the past couple of years and some detail around where the company can go from here. You both obviously bring a lot of credibility to shareholders and from obviously the buy and sell side community.

But I was just kind of wondering what the major reasons were for you taking this job, had you looked at it before you were approached and what can the company look like few years from now just kind of big picture? Thanks..

Okay. Well I was aware that for a while, you may recall Lewis and I worked together on Mojito Pointe project in Lake Charles, which I own most of and we sold it to Ameristar and then it was sold to Golden Nugget and now it is open and it is great to see it's doing really well. Frankly, I sold it at a nice profit for us. I have mixed feelings about it.

If I had kept it, I would probably be even happier, but I'm not unhappy. One of the big backers we had in that were the individuals in PENN Capital. And PENN Capital as a firm was I think at the time the largest shareholder of Full House.

And so almost as soon as we sold that, they brought it up and said they were concerned about this whole company, would I take a look at it, what can we do and all this stuff. And I looked at it and the stock is about $3 a share and they had a pretty entrenched board and I said, I just don’t know what I could really do.

I agreed that it was a problem and the liquidity and the stock wasn't good and so on. And then the whole Fitz Tunica thing happened, then the stock fell more. And when they got down below the $1, I said, well, at least I should buy some shares and I just bought some in my account and started looking at it.

And then PENN Capital frankly sold the piece of their position to Brad Tirpak and Craig Thomas, who called me up and said we should work together on this, we can make change happen and it's something they frankly know better than I do. I know how to run casino companies, but they know how to make change happen.

And so we kind of paired up and became the "concerned shareholders". And then when the company ran out and said they were going to sell themselves that actually made me even more nervous because if you try to sell something and you have your back to the wall, you usually get a terrible price.

And you can go look at what happened to Miami Highlight [ph] where frankly I was on the board until last week of the company, they got themselves in a position where they had to sell a division at a terrible price and I was like the one director who said, do we really need to sell this, and they went ahead and sold it and I left.

And in this case, it was like there is opportunity here and at the end of the day we are in this to make money and we got stock options at a good price and I think we can fix it. It’s easy for us. We live in Las Vegas. The headquarters is here. I enjoy travelling.

There is four properties, it’s easy to go visit and you start looking at and say there is nothing critically wrong here. There is challenges, but there is nothing fatal. And I said, we can fix this.

And where do you go from here and I would say, this was a more elongated process that you may recall at Pinnacle they had a problem, they were going to lose their gaming license in Indiana, this was ten years ago.

The CEO had inappropriate party and thrown in hookers and all those stuff and I got a very quick phone call from the outside legal counsel asking if I would meet with them and they gave me three hours to decide whether to be the CEO and I took it.

I remember a couple of days ago, a friend of mine, who is a big money manager called me up and said why did you do it? And I said, well, it’s the own story of the little boy who came in down for Christmas and there was a big pile of crap in the corner and he got all gleeful and his father said, why are you happy, it’s just a big pile of crap.

And he said, there is such a big pile of horse shit, there’s got to be a pony in here somewhere, right? And in Pinnacle it was kind of a mess, it was in default on it’s bank deal, and its results were trending down and those are kind of nice situations because no downside.

It’s like man, if he can’t fix this, it was kind of Andre’s fault, but if we can fix it we are the heroes. And it was the same thing at Pinnacle and we stabilized operations, we got the debt refinanced, we started looking for other opportunities.

I think the first thing we did was expanded the Belterra property, took it from unprofitable to profitable and then we got the thing going in Lake Charles, which is a home run and then later we built a couple of places in St. Louis.

And it was like, you got to work every day and you try to make smart decisions and damned, if we didn't quadruple the size of the company in about eight years. And frankly, it was the same back with Steve Wynn at Mirage when I was the Chief Financial Officer.

So he looked here and said, here is a troubled little company, nothing inherently wrong, it’s tiny, but that’s okay, you know it’s – the value of the stock option is based on the improvement, you can create the growth, you can create not the size of the company, stock options in our company are probably worth a hell of lot more than stock options in Caesars at this point.

And so I took the job and Lewis can speak for himself, but you know we are kind of a casual attitude here, we'll make it work somehow..

Hi, Chad, it’s Lewis. I will tell you day one when I started I kind of saw some of the opportunity for things that changed around here, but now that I have been here five or six weeks and I keep pulling up the cushions on the various sofas around here and finding a $100,000 there, $10,000 there at a company that’s smallest quite joyous to find.

And these are little things that don't affect the customer, they don't affect the employees at all, it’s just from the shier fact that we were over paying for some of our services.

And so – just in the past month there is easily $0.5 million of stuff that you will see start to roll forward, you won’t necessarily see in the first of the year, but as contracts roll off, you will start to see that from a corporate perspective. Little things like that are exciting.

I’ll tell you I am much more optimistic now than I was on day one and I was obviously more than on-board on day one, it's fun..

Got you. Thank you, guys. And then I will just kind of dive into maybe operationally. So you talked about Silver Slipper, obviously, the number one property, getting that back to $9 million or $10 million of EBITDA, hopefully will hang on a couple more million when the hotel comes on.

I mean is there an opportunity once you potentially fix the balance sheet, you know you talked about a sale leaseback and potentially paying down some debt, is there an opportunity to bring on another property similar to Silver Slipper in terms of profitability to give you guys two major properties to kind of weigh out the balance?.

Yes, but I don't feel an urgent need to like run for scale because I think if you have an urgent need to run for scale, you’ll make mistakes and overpay for stuff. First, we got to fix what we have. Now fixing what we have means getting Rising Sun to be a meaningful contributor again, getting Fallon up, getting the lease extended at the Hyatt.

And if all that happens, Silver Slipper will be half or less of our EBITDA even with its growth. So we won’t – if we could just play with what we have and do it right, we won’t be a single property company.

Now at some point, you find an opportunity to go do another Silver Slipper of course and they come along frankly once a week now I get overture from one thing or another and there will be something. But I don’t know where it is at this point and we are pretty focused on fixing what we have.

Because you got to fix what we have before you can figure out how to finance something new or acquire something new. So we are focused on fixing what we have, moving the debt maturity back, a year from now we might have a different focus..

Okay, thanks. And then, Lewis, just on the cash flow statement. The K hasn’t been released yet, but do you have the number for annual cash flow from operations and then I guess for both of you may be a CapEx number for 2015, just kind of thinking about maintenance and the rest of the cost for Silver Slipper would be helpful. Thanks..

Yes. So we will file the K relatively shortly likely in the next 10 days or so. My guys are pulling up to [carry] not to give me a figure. But for last year for what it’s worth, CapEx was about $2.5 million that’s for 2014. For 2015, we are kind of plugging through some various things right now.

The Dan has some ideas for Rising Star, but you could see a number in the ballpark of $4 million or $5 million..

I think what we told our banks were very preliminary discussion in refinancing was to think of maintenance CapEx of being about $3 million a year company-wide. There is about $2 million that we’d like to put into Rising Star, but that’s little bit contingent on the legislature not giving us a real raw deal.

But assuming that either the table games don’t happen or there is an accompanying tax break, there is $2 million – some of that is just fixing what I would call – they didn’t spend CapEx before. So some of it is going in and trying to make it more presentable now.

And then we have to complete the hotel and I think of the $20 million like $12 million of the hotel ends up in the [indiscernible] because most of the spending is backend loaded..

Yes, it is, that’s right. So to give you a little more to chat, cash from operating activities was about well over $7.5 million in ’14 and then if you actually include the construction contracts for the hotel, CapEx spend would have been around $9.5 million, $9.6 million..

Then completing with the suites at the hotel, it ends up being including capitalized interest and everything, it’s about $20 million project which has been $1 million more than it was. All but $1 million of that is being financed through the bank deal. We have the other million and then the tax refund also gives us some extra money.

So we think actually apart from the money being drawn down to pay for the hotel, we will generate more cash this year than we will spend on CapEx. That’s what your question is, where we have a need for cash, no we will probably start paying down debt this year after the hotels open..

Yes, that’s what I was getting up. Thank you and best of luck to both of you..

Thank you..

Thanks, Chad..

[Operator Instructions].

Oh, we answered everyone’s questions, alright? Thank you very much and we’re working hard in doing our best..

One more in the queue..

Is it one more in that Matt?.

We have one more question that queued up. This will be from Marc Franklin with Wells Fargo Advisors..

Yes, sorry guys.

I was at the dentist and just tuned in and I am probably – you’ve answered this question, but I have to be at Silver Slipper day before yesterday, noticed the roads getting there were pretty bad especially that coast road with 25 miles an hour, is it county or city or whoever is in-charge going to help you out to get to the place leisure?.

I honestly don’t know the answer. It’s not easy to get to we’re like 8 miles off the freeway. There is one area where you pass a school and you have to slowdown quite a bit. Most of that 8 miles though is a four-lane road. It’s when you turn off under a two-lane road and you got like three miles or four miles. And I don’t know of anything to widen that.

I guess it’s kind of – if we have a good enough care at the end of the road people get there and we’re trying to improve the care. I know at Belterra, we had a very difficult road to get there and eventually we did get Kentucky to build the better road, but it took years. And I think in this case, the road is what it is..

Okay..

Frankly, I am more focused on Rising Star getting a ferryboat in really moves the needle because that takes us from a geographically challenged place to being the closest casino to something like 60,000 people. Whereas today, we are probably the closest casino at about 6,000 people.

And a ferryboat is pretty easy to get in, you can have a privately run ferryboat whereas I can’t build a private road across the swamps in Southwest Mississippi. So I think the roads are kind of what they are.

The good news is the property – I mean before we acquired it, this property made $11 million a year for several years even with those roads and without a hotel..

Okay, very good.

And your annual meeting will be announced I guess at some point?.

It’s May 5..

May 5, yes..

Okay..

We are going to have it at our law firm’s offices in Las Vegas because they have a big conference room and they have given to us for free..

Okay. Well, goo luck..

I might dream about Krispy Kreme Doughnuts or something..

Anything else?.

No, thank you very much..

Okay, thanks everybody. Take care..

Ladies and gentlemen, this does conclude today’s conference call. Thank you all for your participation..