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| Coast Resorts Announces First Quarter Results of Coast Hotels And Casinos, Inc. |
LAS VEGAS, May 9 /PRNewswire/ -- Coast Resorts, Inc. today announced first
quarter results for its wholly owned operating subsidiary, Coast Hotels and
Casinos, Inc. For the quarter ended March 31, 1997, net operating revenues
increased 53% over the same period in 1996, due to the first full quarter of
operation of the Company's newest Las Vegas hotel-casino, The Orleans. EBITDA
(operating income plus depreciation, amortization and deferred rent) declined
$1.8 million from 1996 as a result of a lower win percentage at the Gold Coast
and Barbary Coast, and lower than expected results at The Orleans.
Net operating revenues were $72.4 million for the quarter compared with
$47.4 million in 1996. Gold Coast revenues were down 9.6% primarily as a
result of lower win percentages in keno, and the sports book, as well as lower
customer volume which management believes was a result of the openings of new
casinos (including The Orleans) and expanded capacity in others. Barbary
Coast revenues increased 4.7% in the first quarter, primarily due to higher
race book and slot revenues. The Orleans revenues were lower than expected in
its first full quarter of operations, primarily in the areas of slot machine
play, food patronage and showroom attendance.
EBITDA for Coast Hotels was $8.4 million in the first quarter compared to
$10.2 million in 1996. Gold Coast EBITDA was $7.5 million compared to
$9.7 million in 1996, primarily due to a lower win percentage in the sports
book and keno departments as well as lower revenues in most other areas.
Barbary Coast EBITDA was $1.2 million in the first quarter compared to $1.4
million in 1996 due to a lower win percentage in the sports book. The Orleans
EBITDA was below management expectations at $.9 million, due to the lower than
expected revenues and the high costs associated with opening a new property.
Chairman and CEO Michael Gaughan commented, "We are disappointed in the
first quarter results of The Orleans, but have developed several strategies
designed to increase revenues and reduce costs." Strategies include utilizing
slot database marketing for targeted promotions, switching to headliner
entertainment in The Orleans showroom, adjusting restaurant menus and prices,
and lowering expenses. While some departments have not met planned
performance, several areas have met or exceeded expectations including hotel
occupancy at 90.9% for the quarter and table games, poker, bowling, retail,
and banquet revenues.
Preliminary unaudited results for April indicate that The Orleans had
EBITDA of $2.1 million in the month. Results for the month were positively
impacted by increased slot play, a higher than normal table games win
percentage, higher hotel occupancy and average daily room rates and lower
expenses.
In the first quarter, the Company commenced an expansion of The Orleans
that will add more amenities designed to increase visitor volume. The
project, expected to cost $35 to $40 million, will include twelve movie
theaters, a child care facility, additional restaurants, gaming facilities and
space for live entertainment, within approximately 184,000 sq. ft. on two
levels. The Company expects to open the expansion in the fourth quarter of
1997, and anticipates that it will help to increase revenues by enhancing the
overall theme of the property and providing customers with additional
amenities. The project is expected to be financed with cash on hand and
anticipated cash flows from operations.
Coast Resorts, Inc. is a Nevada-based gaming company which, through its
wholly-owned operating subsidiary. Coast Hotels and Casinos, Inc. owns and
operates three Las Vegas hotel-casinos, the Gold Coast, the Barbary Coast and
its most recent addition, The Orleans. The Company was incorporated in
December 1995 to operate its existing Las Vegas gaming facilities and to
explore and develop new gaming opportunities.
Statements in this press release, other than those based on historical
fact, are intended to be forward looking statements that are made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. The statements are subject to risks and uncertainties, including
increased competition, both in Nevada and other jurisdictions, dependence on
the Las Vegas area and the Southern California region for a majority of the
Company's customers and the Company's ability to raise additional funds in the
capital markets. The historical results reported herein are not necessarily
an indication of future prospects for the Company. Actual results in future
periods may differ materially.
Coast Hotels And Casinos, Inc.
(A Wholly Owned Subsidiary Of Coast Resorts, Inc.)
Condensed Balance Sheets
March 31, 1996 And December 31, 1996
(Dollars In Thousands, Except Share Data)
(Unaudited)
Assets
March 31, December 31,
1997 1996
CURRENT ASSETS:
Cash and cash equivalents $38,233 $61,555
Accounts receivable, net 4,003 3,659
Other current assets 17,045 14,427
TOTAL CURRENT ASSETS 59,281 79,641
PROPERTY AND EQUIPMENT, Net 283,654 286,025
OTHER ASSETS 6,352 6,680
$349,287 $372,346
Liabilities And Stockholder's Equity
CURRENT LIABILITIES:
Accounts payable $24,265 $36,996
Accrued liabilities 16,387 23,864
Current portion of
long-term debt 7,639 6,781
TOTAL CURRENT LIABILITIES 48,291 67,641
LONG-TERM DEBT, less
current portion 193,107 195,764
DEFERRED INCOME TAXES 5,686 5,686
DEFERRED RENT 3,171 2,577
TOTAL LIABILITIES 250,255 271,668
STOCKHOLDER'S EQUITY:
Common Stock, $1.00
par value, 25,000 shares
authorized, 1,000 shares
issued and outstanding 1 1
Additional paid-in capital 95,858 95,858
Retained earnings 3,173 4,819
TOTAL STOCKHOLDER'S EQUITY 99,032 100,678
$349,287 $372,346
Coast Hotels And Casinos, Inc.
(A Wholly Owned Subsidiary Of Coast Resorts, Inc.)
Statements Of Operations For The Three Months Ended March 31, 1997 And 1996
(Dollars In Thousands)
(Unaudited)
Three Months Ended
March 31,
1997 1996
OPERATING REVENUES:
Casino $51,901 $35,919
Food and Beverage 15,279 9,880
Hotel 7,046 3,521
Other 4,473 2,451
GROSS OPERATING REVENUES 78,699 51,771
Less: promotional allowances(6,320) (4,359)
NET OPERATING REVENUES 72,379 47,412
OPERATING EXPENSES:
Casino 27,712 16,939
Food and beverage 12,817 7,404
Hotel 2,989 1,680
Other 3,717 1,871
General and administrative 16,772 9,279
Deferred (non-cash) rent 594 ---
Depreciation and amortization 4,719 1,760
TOTAL OPERATING EXPENSES 69,320 38,933
OPERATING INCOME 3,059 8,479
OTHER INCOME (EXPENSES):
Interest expense (6,480) (4,306)
Interest income 98 963
Interest capitalized --- 701
Gain on disposal of equipment 829 ---
TOTAL OTHER INCOME (EXPENSES)(5,553) (2,642)
NET INCOME (LOSS) BEFORE
INCOME TAXES (2,494) 5,837
INCOME TAX PROVISION (BENEFIT) (848) 4,543
NET INCOME(LOSS) $(1,646) $1,294
EBITDA (a) $8,372 $10,239
(a) EBITDA is operating income plus depreciation, amortization and
deferred rent.
SOURCE Coast Resorts Inc.
back to topCONTACT:
Gage Parrish, Vice President and Chief
Financial Officer, of Coast Resorts, Inc., 702-365-7111
