Good day ladies and gentlemen and welcome to the Q4 2014 Lakes Entertainment Inc. Earnings Conference Call. My name is Whitley and I'll be your operator for today. At this time all participants are in listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] As a reminder this call is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Tim Cope, President and Chief Financial Officer. Please proceed.

Thank you, Whitley. Good afternoon and welcome to Lakes Entertainment's fourth quarter 2014 earnings conference call. On the call with me is Lyle Berman, Lakes' Chairman of the Board and Chief Executive Officer. As we begin our prepared remarks, I would like to remind everyone that this call is being recorded and that the call contains forward-looking statements, including statements concerning business strategies and their intended results, statements related to the pending merger with Sartini Gaming, Inc. and other statements concerning anticipated future events. These statements are subject to risks and uncertainties, including those factors described in the press release we issued this morning and in our filings with the SEC and actual results may differ materially. Lyle will begin our discussion today with a general overview and update on our casino projects. I will then discuss the fourth quarter financial results and recent business events and then we'll conduct a question-and-answer session. Now I will turn the call over to Lyle Berman.

Thank you Tim and welcome everyone to Lakes' fourth quarter 2014 earnings call. During January of 2015, we announced that we had entered into a merger agreement with Sartini Gaming Inc. which owns and operates Golden Gaming, LLC which is a leading owner and operator of distributed gaming, taverns and casinos all of which are focused on the Nevada local gaming market. Under the terms of the merger agreement, Lakes' current shareholders on a fully diluted basis are estimated to retain approximately 64.3% of the total post-merger shares of Lakes' common stock with the legacy Golden Gaming shareholder been issued approximately 35.7% of the total fully diluted post-merger shares of Lakes' common stock. These percentages are subject to adjustments for actual results at the time the merger closes, which is expected to occur later this year. This deal values Lakes at approximately $0.957 per share. Together the combined company will operate approximately 9,250 slot machines and video lottery terminals in Nevada and Maryland across four casino properties, 48 taverns and over 600 route locations. Lakes and Golden Gaming estimate that on a combined pro forma basis 2015 annual net revenues and adjusted EBITDA will be approximately 348.1 million and 42.1 million respectively, including 3 million of anticipated cost synergies. Additionally, it is estimated that the combined pro forma 2015 operating free cash flow and adjusted net income will be 33.7 million and 13.0 million respectively, including a full year of the anticipated benefits of refinancing Lakes and Golden Gaming indebtedness. Although previously written off our books, Lakes fares a $60 million note receivable from the Jamul Indian Village, provided that the combined enters into an agreement to monetize the note within three years after the merger closes and receives any amounts due there under no later than three years after…

Thank you Lyle. Lakes Entertainment reported fourth quarter 2014 net revenues of $12.8 million compared to prior year fourth quarter net revenue of $11.4 million. Net revenues were related to the operation of Rocky Gap Casino Resort in Maryland. The increase in net revenues was primarily related to an increase in gaming revenues during the fourth quarter of 2014 compared to the fourth quarter of 2013. Net losses for the fourth quarter of 2014 were less than $0.1 million compared to net losses of $0.9 million for the fourth quarter of 2013. Earnings from operations were $0.2 for the fourth quarter of 2014 compared to the losses from operations of $2.2 million for the fourth quarter of 2013. Basic and diluted losses per share were less than $0.011 for the fourth quarter of 2014 compared to basic and diluted losses per share of $0.06 for the fourth quarter of 2013. During the fourth quarter of 2014 and 2013 property operating expenses for Rock Gap was $7.5 million and $7.3 million respectively and primarily related to gaming operations rooms, food and beverage and gold. The increase in property operating expenses resulted primarily from an increase in gaming related expenses most notably gaming taxes, due to increase in gaming related revenue in the current year quarter. For the fourth quarters of 2014 and 2013 selling general and administrative expenses were $5.6 million, included in these amounts were Lakes corporate selling general and administrative expenses of $2 million and $1.6 million during the fourth quarter of 2014 and 2013 respectively. Lakes Corporate selling general and administrative expenses consists primarily a payroll related expenses and professional fees as well as $0.5 million of business development costs in the fourth quarter of 2014. Rock Gap selling general and administrative expenses were $3.6 million and $4…

[Operator Instructions] Your first question comes from the line of [indiscernible]. Please proceed.

First I have just a technical question then a business question. At the close, what would be the approximate debt level and number of shares outstanding?

So the approximate number of shares would be 22 million.

All right.

Roughly and as far as the debt outstanding it's going to be subject to the refinancing activities we undertake.

Well, what would be your…

It would be approximately 140 million, I believe – in that range.

And then the business question is, which are the divisions that Golden Gaming is presently engaged in? Which would you expect to be the emphasis for the combined company going forward?

I think the emphasis really is going to be on all three. The distributed gaming platform certainly we see other states legalizing it and other states have already legalized this, so we now in casino, we could acquire other distributed gaming companies, but in addition we could go into new jurisdictions as they legalize distributed gaming. Taverns, I think we represent something like 15% or so of the Taverns in Nevada alone, so we certainly have expansion there. And of course gaming can be expanded wherever we find a great opportunity. So I think we see the focus on all three. And we'll take the best opportunity, the best return on investment as they occur.

And if I could I've got one more follow up. Given the high return on investment on the Taverns that's depicted in your merger slides, why have they not expanded the Taverns over the last few years, the number of Taverns that is.

Well I think that they have expanded somewhat in the Taverns, but of course they have been restrained by capital. Golden Gaming was built -- I think it started in 2002 with Lake and a lot of it was expanded with debt and they had certain limitations on expanding and of course now it's a combined company and a much stronger balance sheet will be able to do a much better job.

Your next question comes from the line of David Dishneau with The Associated Press. Please proceed.

My question's regarding the pending merger with Sartini. Can you please comment on the allegations in the lawsuit that's been filed [rejecting] to the deal and also say how this dispute could affect the timing of the proposed transaction? And finally, how this transaction would affect operations of Rocky Gap?

I'll answer, this is Lyle Berman. I think the lawsuits to begin with are totally meritless. I think as you will know, whenever there is an announced merger, there are groups of attorneys that specialize in doing nothing but filing lawsuits and going on I would call it a witch hunt to see if there is any merit to their arguments. We consider it meritless, they will not affect our merger, they will not affect any of our businesses going forward.

And how this transaction could affect operations of Rocky Gap?

It will not affect at Rocky Gap, it will be Golden Gaming and currently has three casinos on top and now they'll have four casinos, three in [indiscernible] and one in Maryland.

Your next question comes from the line of Tizen [indiscernible] private investor. Please proceed. There are no further questions. Thank you.

Operator did you say there is no further question.

We have Mr. [indiscernible] but I believe his phone maybe muted.

Operator, did you take the next one then?

There are no further questions.

Well again this is Lyle Berman talking thank you very much operator for all of your questions. We will focus on continuing to execute on our strategy of generating shareholder value and thank you once again for your interest in Lakes and we will speak with you again on our next earnings call. Thank you. Bye now.

Ladies and gentlemen that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.