Riviera Holdings Corporation
2901 Las Vegas Boulevard South
Las Vegas, NV 89109
Investor Relations: (800) 362-1460
TRADED: AMEX - RIV
www.theriviera.com
FOR FURTHER INFORMATION:
AT THE COMPANY: INVESTOR RELATIONS CONTACT:
William L. Westerman, CEO Betsy Truax, Skorpus Consulting
(702) 794-9237 Voice (208) 241-3704 Voice
(702) 794-9277 Fax (208) 232-5317 Fax
Email: wwesterman@theriviera.com Email: BetsyT@cableone.net
FOR IMMEDIATE RELEASE:
RIVIERA REPORTS RESULTS FOR FIRST QUARTER 2006
LAS VEGAS, NV - May 2, 2006 -- Riviera Holdings Corporation (AMEX: RIV)
today reported financial results for the first quarter ended March 31, 2006. Net
revenues for the quarter were $51.7 million, down $775,000 or 1.5 percent from
the first quarter of 2006. Income from operations was $7.8 million, down
$968,000 or 11.1 percent from the first quarter of 2005. Included in operating
income in the first quarter of 2005 was a $1.0 million exclusivity fee from a
prospective purchaser of the Company. Adjusted EBITDA (1) was $11.6 million, in
the first quarter of both 2006 and 2005. Adjusted EBITDA consists of earnings
before interest, income taxes, depreciation, amortization, equity-based
compensation, asset impairments, Sarbanes-Oxley Act expenses and mergers,
acquisitions and development costs, as shown in the reconciliation to net income
in the tables of this release (See Notes 1 and 2 to the Financial Summary
table). Net income for the quarter was $1.3 million, or $0.11 per share, down
$858,000 or 40 percent from the first quarter of 2005 when net income was $2.1
million, or $0.18 per share.
First Quarter 2006 Highlights
|*| Riviera Black Hawk Revenue was up $146,000 or 1.1 percent
|*| Riviera Black Hawk EBITDA was up $249,000 or 6.3 percent
|*| Riviera Las Vegas RevPar (Revenue Per Available Room) increased
$7.55 to $76
|*| Riviera Las Vegas Revenue was down $921,000 or 2.3 percent
|*| Riviera Las Vegas EBITDA was down $386,000 or 4.4 percent
|*| The Company has $29 million in cash plus a $30 million revolver
Riviera Las Vegas
Robert Vannucci, President of Riviera Las Vegas, said, " Although our
first quarter EBITDA was slightly below the prior year's first quarter, it was
our second best first quarter since 2000. The slight decline can be attributed
to a soft Super Bowl week. NFL restrictions, imposed over the past several
years, have limited the activities we can offer which impacted the repeat
business we typically experience during that week.
Gaming revenues in Las Vegas were down $565,000 in the quarter. This
can be attributed to a soft Super bowl, an increase in convention room nights
mix, a decline in leisure room nights, as well as fewer entertainment covers
(tickets sold).
"Total room revenues were $14.1 million up $1.4 million, or 11percent
over the same quarter of the prior year. ADR for the quarter was $83.60, an
increase of $10.77 or 15 percent compared to a year ago. Convention room nights
comprised over 37 percent of the total rooms sold in the quarter, an increase of
11.5 percent. Convention room revenue increased by $1.2 million or 21percent
over the first quarter last year and accounted for 47 percent of total room
revenue. We continue to see strong demand for our rooms.
"The initial gaming revenue results generated by our Westward Ho
marketing agreement, signed in December of last year, have been favorable. We
expect to see this part of our gaming business continue to develop and grow into
the future.
"The Las Vegas market remains strong. Through February of this year, visitor
volumes increased 2.6 percent over last year to 6.1 million visitors. Citywide
occupancy increased 1.7 points to 88.2 percent. Rooms occupied by conventioneers
increased by 4.2 percent to over 3.4 million room nights. Total airline
passengers increased 6.1 percent to over 6.8 million. We believe the market has
fully absorbed the increase in room inventory created by new property openings
and hotel additions."
Riviera Black Hawk
Ron Johnson, President of Riviera Black Hawk, said, "We are pleased
with first quarter results in Black Hawk. Net revenue, EBITDA and EBITDA margin
were all up over the same period last year. We are particularly pleased that our
EBITDA margin of 31.6 percent grew by 1.6 percentage points during the quarter
compared to the first quarter 2005. Our management team in Black Hawk has done
an excellent job of raising revenues while continuing to effectively manage
marketing expenses.
"The Black Hawk/Central City market showed gaming revenue growth of 2.8
percent in the first quarter. Black Hawk itself experienced a healthy 4.1
percent growth in gaming revenue. It appears that Black Hawk is showing signs of
recovering some of the market share it lost to Central City after the opening of
Central City Parkway in November 2004."
Consolidated Operations
William L. Westerman, Chief Executive Officer, said, "I am pleased at the way
management responded to the merger negotiations and overcame the distractions
created by the speculative activity in our stock. EBITDA in this year's first
quarter was consistent with that for the 2005. In the first quarter of 2005, we
reported a negative expense of $667,000, resulting from the failure of a
prospective purchaser to make a bid for the Company at the expiration of an
exclusivity period, which he had been granted in exchange for a $1 million
non-refundable deposit.
"On April 21, we announced that Duane Krohn, our Chief Financial
Officer, would be retiring effective today. I want to thank Duane for all his
hard work and contributions to the Company over the past 16 years. When I first
came to Las Vegas in 1991 with no experience in the gaming industry, Duane
helped me understand the complexity of the business. He played a major role in
our reorganization in 1993 and our several successful debt offerings. He also
has patiently responded to the many parties who, over the years, have indicated
an interest in acquiring the Company. We wish him good luck and a happy
retirement. Until we find a successor for Duane, the Board of Directors has
appointed me to act as Interim Chief Financial Officer, in addition to my other
duties.
"We will continue to focus our efforts on operating your Company
effectively to maintain our competitive position and maximize cash flow."
Conference Call Information
In conjunction with the release of first quarter 2006 financial
results, Riviera will broadcast a conference call at 2 p.m. Eastern Daylight
Time on Tuesday, May 2, 2006. Investors can listen to the call via the Internet
at http//www.videonewswire.com/event.asp?id=33616 or www.theriviera.com or by
dialing (888) 889-5602. The conference call rebroadcast is available at (877)
519-4471, code 7327369.
Forward -Looking Statements
The forward-looking statements in this news release, which reflect our
best judgment based on factors currently known to us, involve significant risks
and uncertainties including expansion and modernization objectives and
timetables, hotel and casino market conditions, financing requirements, interest
rates, regulatory requirements and other risks and uncertainties detailed from
time to time in filings with the Securities and Exchange Commission. Our actual
results may differ materially from what is expressed or implied in our
forward-looking statements. We do not plan to update our forward-looking
statements even though our situation or plans may change in the future, unless
applicable law requires us to do so.
About Riviera Holdings
Riviera Holdings Corporation owns and operates the Riviera Hotel and Casino
on the Las Vegas Strip and the Riviera Black Hawk Casino in Black Hawk,
Colorado. Riviera's stock is listed on the American Stock Exchange ("AMEX")
under the symbol RIV.
- Tables Follow -
Riviera Holdings Corporation
Financial Summary
Three Months Ended March 31
($ in 000s) 2006 2005 Var %Var
---- ---- --- ----
Net Revenues:
Riviera Las Vegas $ 38,426 $ 39,347 $ (921) -2.3%
Riviera Black Hawk 13,263 13,117 146 1.1%
----------------------------------------
Total Net Revenues 51,689 52,464 (775) -1.5%
Operating Income:
Riviera Las Vegas 6,642 7,108 (466) -6.6%
Riviera Black Hawk 2,753 2,390 363 15.2%
Mergers, acquisitions and
development costs, net (117) 667 (784) -117.5%
Equity-based Compensation -
Restricted Stock (216) (53) (163) 307.5%
Sarbanes-Oxley Act costs (228) 0 (228) #DIV/0!
Asset Impairment (13) (198) 185 -93.4%
Corporate Expenses (1,032) (1,157) 125 10.8%
----------------------------------------
Total Operating Income 7,789 8,757 (968) -11.1%
Adjusted EBITDA (1):
Riviera Las Vegas 8,467 8,853 (386) -4.4%
Riviera Black Hawk 4,188 3,939 249 6.3%
Corporate Expenses (1,032) (1,157) 125 10.8%
----------------------------------------
Total EBITDA 11,623 11,635 (12) -0.1%
Adjusted EBITDA Margins(2):
Riviera Las Vegas 22.0% 22.5% -0.5%
Riviera Black Hawk 31.6% 30.0% 1.5%
Consolidated 22.5% 22.2% 0.3%
Net income $ 1,280 $ 2,138 (858) -40%
Weighted average basic shares
outstanding (3) 11,997 11,781 216 2%
Basic earnings per share $ 0.11 $ 0.18 $ (0.07) -41%
Weighted average diluted shares
outstanding (3) 12,258 12,070 188 2%
Diluted earnings per share $ 0.10 $ 0.18 $ (0.07) -40%
(1) Adjusted EBITDA consists of earnings before interest, income taxes,
depreciation, amortization, equity-based compensation, asset
impairment, Sarbanes-Oxley Act expenses and mergers, acquisitions and
development costs, net, as shown in the reconciliation to net income
(loss) in the tables of this release. In 2004, we entered into
confidential discussions regarding a potential sale of our company.
Discussions with one potential buyer, which commenced in 2004, ended in
2005, and we retained a $1 million fee paid to us by that party. Such
amount is reflected in mergers, acquisitions and developments costs,
net, for the first quarter of 2005. Adjusted EBITDA is presented solely
as a supplemental disclosure because we believe that it is 1) a widely
used measure of operating performance in the gaming industry, and 2) a
principal basis for valuation of gaming companies by certain investors.
We use property-level EBITDA (earnings before interest, income taxes,
depreciation, amortization and corporate expense) as the primary
measure of the Company's business segment properties' performance,
including the evaluation of operating personnel. Adjusted EBITDA should
not be construed as an alternative to operating income, as an indicator
of our operating performance, as an alternative to cash flows from
operating activities, as a measure of liquidity, or as any other
measure determined in accordance with generally accepted accounting
principles. We have significant uses of cash flows, including capital
expenditures, interest payments and debt principal repayments, which
are not reflected in Adjusted EBITDA. Also, other gaming companies that
report EBITDA or Adjusted EBITDA information may calculate it in a
different manner than we do. A reconciliation of Adjusted EBITDA to net
income (loss) is included in the financial schedules accompanying this
release.
(2) Adjusted EBITDA margins represent Adjusted EBITDA divided by Net
Revenues
(3) These amounts have been adjusted to reflect our three-for-one common
stock split on March 11, 2005.
Riviera Holdings Corporation
Reconciliation of Operating Income (Loss) to Adjusted Mergers,
EBITDA: Sarbanes Equity - Acquisitions
($ In 000's) Net Interest Operating Asset Oxley based Develop- Manage-
Income Income & Income Depr- Impair- Act Comp- ment ment Adjusted
(Loss) Expenses (Loss) Expenses ment Costs, EBITDA Costs, net Fee EBITDA
------ -------------- ------ -------- ------- ------- ------ ---------- ----- --------
First Quarter 2006:
Riviera Las Vegas $6,656 $14 $6,642 $2,332 $(507) $8,467
Riviera Black Hawk 841 (1,912) 2,753 928 507 4,188
Corporate (6,217) (4,611) (1,606) - 13 228 216 117 - (1,032)
------- ------- ------- ---- --- ---- ---- ---- ---- -------
$1,280 $(6,509) 7,789 $3,260 13 $228 216 117 $ - $ 11,623
First Quarter 2005:
Riviera Las Vegas $7,109 $ 1 $7,108 $2,256 $(511) $ 8,853
Riviera Black Hawk 453 (1,937) 2,390 1,038 511 3,939
Corporate (5,424) (4,683) (741) - 198 - 53 (667) - (1,157)
------- ------- ----- ---- ---- ---- --- ----- ---- -------
$2,138 $(6,619) $8,757 $3,294 $198 $- $53 (667) - $ 11,635
Balance Sheet Summary
($ in 000's) March 31 December 31,
2006 2005
----- ----
Cash and short term investments $ 28,651 $ 20,571
Total current assets 38,857 30,797
Property and equipment, net 171,126 171,130
Total assets 219,403 211,769
Total current liabilities 31,744 25,305
Long-term debt, net of current portion 214,454 214,607
Total shareholders' (deficiency) equity (29,658) (31,269)
RIVIERA HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
March 31
($ In 000's) 2006 2005
-------------------------
Revenues:
Casino $ 27,082 $ 27,483
Rooms 14,843 13,425
Food and beverage 8,898 8,843
Entertainment 3,681 4,882
Other 1,703 2,037
-------------------------
Total 56,207 56,670
-------------------------
Less promotional allowances 4,518 4,206
-------------------------
Net revenues 51,689 52,464
-------------------------
COSTS AND EXPENSES:
Direct costs and expenses of operating departments:
Casino 13,820 13,864
Rooms 6,789 6,558
Food and beverage 6,332 6,053
Entertainment 2,642 3,669
Other 466 680
Other operating expenses:
General and administrative
Equity-based Compensation - Restricted Stock 216 53
Sarbanes-Oxley Act costs 228
Other general and administrative 10,017 10,005
Mergers, acquisitions and development costs, net 117 (667)
Asset Impairment - Monorail 13 198
Depreciation and amortization 3,260 3,294
-------------------------
Total costs and expenses 43,900 43,707
-------------------------
INCOME FROM OPERATIONS 7,789 8,757
-------------------------
OTHER INCOME (EXPENSE):
Interest expense (6,590) (6,659)
Interest income 81 40
Total other income (expense) (6,509) (6,619)
-------------------------
NET INCOME (LOSS) $1,280 $2,138
=========================
EARNINGS PER SHARE DATA:
Weighted average common shares 11,997 11,781
-------------------------
Basic earnings per share $ 0.11 $ 0.18
=========================
Weighted average common & common equivalent shares 12,258 12,070
-------------------------
Diluted earnings per share $ 0.10 $ 0.18
=========================
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