EXHIBIT 99.01
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For information contactMary Beth Higgins Herbst Gaming (702) 740-4576
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HERBST GAMING REPORTS FIRST QUARTER EARNINGS
LAS VEGAS, May 5, 2004 — Herbst Gaming, Inc. (“HGI” or “Company”) today announced its results for the three months ended March 31, 2004.
The Company reported net revenues of $89.6 million for the three months ended March 31, 2004, an increase of 26 percent, or $18.3 million, compared with $71.3 million for the three months ended March 31, 2003. Net income was $5.5 million for the three months ended March 31, 2004, an increase of $2.2 million or 67 percent, compared with net income of $3.3 million for the same period last year.
Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 29 percent or $4.0 million to $17.9 million for the three months ended March 31, 2004, compared with $13.9 million for the three months ended March 31, 2003.
See footnote (3) to the Selected Financial Information below for a discussion of the reasons the Company uses EBITDA as a performance measure. Included in the Selected Financial Information is a reconciliation of consolidated EBITDA, a non-GAAP measure, to net income.
The results for the three months ended March 31, 2004 and 2003 include the performance of the slot route assets acquired from Anchor Coin, Inc., a subsidiary of International Game Technology, in February 2003.
Conference Call Information
The Company will host a conference call to discuss its first quarter financial results on Wednesday, May 5, 2004 beginning at 1 p.m. Eastern Standard Time. Interested participants may access the call by dialing into our conference operator at (800) 299-0433 (Interested participants from outside of the United States may access the call by dialing (617) 801-9712) Passcode 96552697 or may login to the webcast of the conference call at www.herbstgaming.com. A replay of the call will be available
beginning one hour after the completion of the call and until Wednesday, May 12, 2004 at 5 p.m. Pacific Time. To access the replay, call (888) 286-8010 (Interested participants from outside of the United States may access the call by dialing (617) 801-6888), Passcode 22106806. Additional information including a replay of this call is available in the “Investors Relations” section of the Company’s website at www.herbstgaming.com.
This press release may be deemed to contain certain forward-looking statements with respect to the business, financial condition, results of operations, dispositions, and acquisitions, of the Company and its subsidiaries which involve risks and uncertainties including, but not limited to, financial market risks, economic conditions, regulatory matters and litigation and other risks described in the filings of the Company with the Securities and Exchange Commission.
HERBST GAMING
SELECTED FINANCIAL INFORMATION
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| Three months ended March 31, |
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| 2003 |
| 2004 |
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| (dollars in thousands) |
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Income Statement Data |
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Revenues |
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Route operations |
| $ | 53,783 |
| $ | 68,951 |
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Casino operations |
| 19,521 |
| 22,826 |
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Other |
| 728 |
| 823 |
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Total revenues |
| 74,032 |
| 92,600 |
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Promotional allowances — route |
| (103 | ) | (116 | ) | ||
Promotional allowances — casino |
| (2,636 | ) | (2,841 | ) | ||
Net revenues |
| 71,293 |
| 89,643 |
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Cost of revenues |
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Route operations |
| 42,610 |
| 54,526 |
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Casino operations |
| 12,121 |
| 13,811 |
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General and administrative |
| 2,766 |
| 3,445 |
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Depreciation and amortization |
| 5,217 |
| 6,634 |
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Total costs and expenses |
| 62,714 |
| 78,416 |
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Income from operations |
| 8,579 |
| 11,227 |
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Interest income |
| 80 |
| 51 |
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Interest expense |
| (5,323 | ) | (5,792 | ) | ||
Net income |
| $ | 3,336 |
| $ | 5,486 |
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| March 31, |
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| 2003 |
| 2004 |
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Balance Sheet Data |
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Cash and cash equivalents |
| $ | 45,530 |
| $ | 55,932 |
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Total assets |
| 233,042 |
| 235,833 |
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Total debt (1) |
| 217,065 |
| 215,237 |
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Stockholders’ equity |
| $ | 1,201 |
| $ | 4,790 |
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1
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| Three Months ended March 31, |
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| 2003 |
| 2004 |
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Other data: |
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Ratio of earnings to fixed charges (2) |
| 1.6x |
| 1.9x |
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Net cash provided by operating activities |
| $ | 5,151 |
| $ | 8,102 |
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Net cash used in investing activities |
| (60,356 | ) | (3,869 | ) | ||
Net cash provided by (used in) financing activities |
| 45,700 |
| (2,331 | ) | ||
Capital expenditures |
| 2,942 |
| 3,567 |
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Route EBITDA (3) |
| 11,070 |
| 14,309 |
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Casino EBITDA (3) |
| 4,764 |
| 6,174 |
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Consolidated EBITDA (3) |
| $ | 13,876 |
| $ | 17,912 |
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(1) Total debt consists of the current and long-term portions of long-term debt for all periods presented. |
(2) For purposes of determining the ratio of earnings to fixed charges, earnings are defined as earnings before fixed charges and extraordinary items (other than capitalized interest). Fixed charges consist of interest expensed and capitalized. |
(3) Consolidated EBITDA consists of net income plus depreciation and amortization and interest expense, net of capitalized interest. Segment EBITDA for route and casino is calculated before allocation of overhead. EBITDA is presented because it is used as a performance measure to analyze the performance of our business segments and because it is frequently used by securities analysts, investors and others in the evaluation of companies in our industry. However, other companies in our industry may calculate EBITDA differently. EBITDA is not a measurement of financial performance under generally accepted accounting principles and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or as an alternative to net income or as an indicator of operating performance or any other measure of performance derived in accordance with generally accepted accounting principles. |
The following table is a reconciliation of net income to EDITDA.
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| Three months ended March 31, |
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| 2003 |
| 2004 |
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| (dollars in thousands) |
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Net income |
| $ | 3,336 |
| $ | 5,486 |
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Interest |
| 5,323 |
| 5,792 |
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Depreciation and amortization |
| 5,217 |
| 6,634 |
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Consolidated EBITDA (3) |
| $ | 13,876 |
| $ | 17,912 |
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