Riviera Holdings Corporation
2901 Las Vegas Boulevard South
Las Vegas NV 89109
Investor Relations: (800) 362-1460
TRADED: AMEX - RIV
www.rivierahotel.com
FOR FURTHER INFORMATION:
AT THE COMPANY: INVESTOR RELATIONS
Mark Lefever, Treasurer and CFO Betsy Truax, Skorpus Consulting
(702) 794-9527 Voice (208) 241-3704 Voice
(702) 794-9442 Fax (208) 232-5317 Fax
Email: mlefever@theriviera.com Email: BetsyT@cableone.net
FOR IMMEDIATE RELEASE:
RIVIERA REPORTS RECORD RESULTS FOR THIRD QUARTER 2006
LAS VEGAS, NV - November 1, 2006 -- Riviera Holdings Corporation (AMEX:
RIV) today reported record financial results for the three-month and nine-month
periods ended September 30, 2006. Net revenues for the quarter were $50.3
million, consistent with the net revenues for third quarter of 2005. Income from
operations was $6.0 million, up $668,000 or 12.6 percent from the third quarter
of 2005. Included in income from operations in the third quarter of 2006 was
$281,000 in merger related costs compared to $126,000 in 2005. Net loss for the
quarter was $432,000 or $0.04 per share, an improvement of $841,000 from the
third quarter of 2005 when the Company had a net loss of $1.3 million. Adjusted
EBITDA (1) was $9.8 million in the third quarter of 2006 compared to $9.7
million in 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 with net income in the tables and notes of this
release.
Third Quarter 2006 Developments
- -------------------------------
o Riviera Las Vegas net revenue decreased $250,000 or less than 1.0 percent
o Riviera Las Vegas Adjusted EBITDA was $5.7 million compared to $5.8 million in
2005
o Riviera Black Hawk net revenue increased $300,000 or 2.0 percent
o Riviera Black Hawk Adjusted EBITDA was $4.9 million, an increase of 3.2
percent
o The Company has $32 million in cash plus a $30 million revolver which is fully
available as of September 30, 2006
Nine Months Ended September 30, 2006
- ------------------------------------
Net revenues for the nine months ended September 30, 2006 were $154.5
million, a decrease of $1.6 million or 1.0 percent from the same period in 2005.
The decrease in net revenue was related to the leasing of the gift shops at
Riviera Las Vegas to ABC Stores in February 2006. The gifts shops were
previously owned and operated by the Company. In addition, in 2005 Riviera Las
Vegas discontinued one show, which generated $1.2 million in revenue but
produced no profit during the year. Income from operations was $20.7 million, an
increase of $1.0 million or 5.0 percent from the 2005 nine month period.
Included in income from operations for the nine months ended September 30, 2006
and 2005 was an expense of $1.2 million and income of $400,000 respectively in
mergers, acquisitions and development costs, net of a non-refundable fee paid to
the Company in 2005. Adjusted EBITDA (1) was $32.4 million, an increase of
$600,000 or 1.9 percent from the same period in 2005.
Net income for the nine months ended September 30, 2006 was $1.3
million, or $0.10 per share, compared to net loss of $138,000, or $0.01 per
share, for the nine months ended September 30, 2005.
Nine Months of 2006 Developments
- --------------------------------
o Riviera Las Vegas net revenue decreased $2.0 million or 1.7 percent
o Riviera Las Vegas Adjusted EBITDA was $22.5 million an increase of 1.2 percent
o Riviera Black Hawk net revenue was $39.5 million an increase of 1.1 percent
o Riviera Black Hawk Adjusted EBITDA was $12.8 million and consistent with 2005
Riviera Las Vegas
- ------------------
"At the Riviera, we continue to focus on providing our customers great value for
their Las Vegas experience. We are investing in upgrades to our facility and
slot mix, as well as continuing to implement key marketing programs for
value-oriented customers," said Robert Vannucci, President of Riviera Las Vegas.
"Our occupancy for the three months ended September 30, 2006 increased to 94.9
percent compared to 93.8 percent for the same period in 2005. Additionally we
had an average daily room rate of $74.28 compared to $69.17 in 2005. We continue
to evaluate our revenue streams and focus our efforts on the revenues that add
increased profitability to the property," said Mr. Vannucci.
Riviera Black Hawk
- ------------------
William L. Westerman, the Company's Chief Executive Officer, said, "We
are pleased with the performance of our Black Hawk property given the increase
in competition and gaming capacity in the Black Hawk market. Our strong Adjusted
EBITDA margin and a fair share of over 130 percent for the quarter and nine
months, is a testament to our team and the quality of our property within the
Black Hawk market."
Consolidated Operations
- -----------------------
Mr. Westerman, said, "The Company is focused on increasing operating
margins, as evidenced by our recent results and current plans to have both slot
floors one hundred percent "ticket - in ticket - out" by February 2007. Both
markets have had challenges, including lower walk in traffic in Las Vegas, and
the competitive pressures in Black Hawk; however our teams have provided record
results for the third quarter and the first nine months of 2006. We are
currently evaluating our debt structure, given the call premiums on our bonds
and the current rate environment as a way to free up additional cash to reinvest
in our properties".
Conference Call Information
- ---------------------------
In conjunction with the release of third quarter 2006 financial
results, Riviera will broadcast a conference call at 2 p.m. Eastern Daylight
Time today, Wednesday, November 1, 2006. Investors can listen to the call via
the Internet at www.rivierahotel.com or
http://www.videonewswire.com/event.asp?id=36217 or by dialing (888) 889-5345.
The conference call rebroadcast will be available at (877) 519-4471, code
8001922.
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 hotel and casino market conditions, increases in energy
costs, general economic and political conditions, interest rates, financing
requirements, expansion and modernization objectives and timetables regulatory
requirements and other risks and uncertainties detailed from time to time in our
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 Corporation
- ----------------------------------
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 under the symbol RIV.
- Tables Follow -
Riviera Holdings Corporation and Subsidiaries
Financial Summary
(Amounts in thousands except per share amounts)
Three Months Ended September 30 Nine Months Ended September 30
------------------------------- ------------------------------
2006 2005 Var %Var 2006 2005 Var %Var
---- ---- --- ---- ---- ---- --- ----
Net Revenues:
Riviera Las Vegas $36,887 $37,143 $ (256) -0.7% $114,975 $116,991 $(2,016) -1.7%
Riviera Black Hawk 13,462 13,194 268 2.0% 39,500 39,067 433 1.1%
---------------------------- ----------------------------
Total Net Revenues 50,349 50,337 12 0.0% 154,475 156,058 (1,583) -1.0%
Operating Income:
Riviera Las Vegas 4,026 3,797 229 6.0% 17,235 16,552 683 4.1%
Riviera Black Hawk 3,521 3,097 424 13.7% 8,614 7,960 654 8.2%
Mergers, Acquisitions and
Development Costs, net (281) (126) (155) 123.0% (1,159) 376 (1,535) -408.2%
Sarbanes-Oxley Act Expenses (283) (371) 88 -23.7% (558) (641) 83 -12.9%
Equity Based Compensation (183) (222) 39 -17.6% (589) (1,207) 618 -51.2%
Asset Impairment 0 0 0 0.0% (16) (198) 182 -91.9%
Corporate Expenses (812) (855) 43 5.0% (2,855) (3,158) 303 9.6%
---------------------------- ----------------------------
Total Operating Income 5,988 5,320 668 12.6% 20,672 19,684 988 5.0%
Adjusted EBITDA (1):
Riviera Las Vegas 5,712 5,790 (78) -1.3% 22,529 22,259 270 1.2%
Riviera Black Hawk 4,870 4,721 149 3.2% 12,774 12,748 26 0.2%
Corporate Expenses (812) (855) 43 5.0% (2,855) (3,158) 303 9.6%
---------------------------- ----------------------------
Total Adjusted EBITDA 9,770 9,656 114 1.2% 32,448 31,849 599 1.9%
Adjusted EBITDA Margin (2):
Riviera Las Vegas 15.5% 15.6% -0.1% 19.6% 19.0% 0.6%
Riviera Black Hawk 36.2% 35.8% 0.4% 32.3% 32.6% -0.3%
Consolidated 19.4% 19.2% 0.2% 21.0% 20.4% 0.6%
Net income (loss) $ (432) $ (1,273) $ 841 $ 1,266 $ (138) $1,404
EARNINGS PER SHARE DATA:
Weighted average basic
shares outstanding 12,170 11,848 322 12,122 11,795 327
Basic earnings (loss)
per share $(0.04) $(0.11) $ 0.07 $ 0.10 $(0.01) $ 0.11
Weighted average
diluted shares outstanding 12,170 11,848 322 12,374 11,795 579
Diluted earnings (loss)
per share $(0.04) $(0.11) $ 0.07 $ 0.10 $(0.01) $ 0.11
(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 with net income (loss) in the tables
below in 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 nine months ended
September 30, 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 our business segment
properties' performance, including the evaluation of our 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 net income (loss) to
Adjusted EBITDA is included in the tables below in this release.
(2) Adjusted EBITDA margins represent Adjusted EBITDA divided by Net Revenues.
Mergers
Equity Acquistions Manage
Income Income Operating Depre- Asset Sarbanes Based Development ment Adjusted
(Loss) & (Exp) Income ciaiton Impairment Oxley Exp Comp &Costs, net Fee EBITDA
Third Quarter 2006:
Riviera Las Vegas $4,051 $ 25 $4,026 $2,231 (545) $5,712
Riviera Black Hawk 1,606 (1,915) 3,521 804 545 4,870
Corporate (6,089) (4,530) (1,559) - - 283 183 281 - (812)
------- ------- ------- ------ ------ -------- ------ ---------- ------- --------
$(432) $(6,420) $5,988 $3,035 $ - $283 $183 $281 $ - $9,770
Third Quarter 2005:
Riviera Las Vegas $3,807 $10 $3,797 $2,496 (503) $5,790
Riviera Black Hawk 1,171 (1,926) 3,097 1,121 503 4,721
Corporate (6,251) (4,677) (1,574) - - 371 222 126 - (855)
------- ------ ------- ------ ----- ------- ----- ----- ------ -------
$(1,273) $(6,593) $5,320 $3,617 $ - $371 $222 $126 $- $9,656
Nine Months Ended September 30, 2006:
Riviera Las Vegas $17,315 $80 $17,235 $6,772 $(1,478) $22,529
Riviera Black Hawk 2,867 (5,747) 8,614 2,682 1,478 12,774
Corporate (18,916) (13,739) (5,177) - 16 558 589 1,159 - (2,855)
-------- -------- ------- ------- ------ ------- ------ ----- ------- -------
$1,266 $(19,406) $20,672 $9,454 $16 $558 $589 $1,159 $ - $32,448
Nine Months Ended September 30, 2005:
Riviera Las Vegas $16,565 $13 $16,552 $7,233 $(1,526) $22,259
Riviera Black Hawk 2,167 (5,793) 7,960 3,262 1,526 12,748
Corporate (18,870) (14,042) (4,828) - 198 641 1,207 (376) - (3,158)
-------- -------- ------- ------ ------ ------- ------ ------- ------- -------
$(138)$(19,822) $19,684 $10,495 $198 $641 $1,207 $(376) $ - $31,849
Balance Sheet Summary
($ in 000's) Sept 30, Dec 31,
2006 2005
--------------------
Cash and short term investments $31,576 $20,571
Total current assets 41,278 30,797
Property and equipment, net 172,506 171,130
Total assets 222,358 211,769
Total current liabilities 30,894 25,305
Long-term debt, net of current portion 214,270 214,607
Total shareholders' (deficiency) equity (29,157) (31,269)
RIVIERA HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
------------------- -----------------------
REVENUES:
Casino $28,262 $26,695 $85,206 $82,755
Rooms 13,996 12,872 43,085 40,067
Food and beverage 8,110 8,434 25,754 26,645
Entertainment 3,625 4,470 11,166 13,582
Other 1,534 2,219 4,970 6,504
---------------- -----------------------
Total 55,527 54,690 170,181 169,553
Minus promotional allowances 5,178 4,353 15,706 13,495
---------------- -----------------------
Net revenues 50,349 50,337 154,475 156,058
---------------- -----------------------
COSTS AND EXPENSES:
Direct costs and expenses of
operating departments:
Casino 14,457 13,816 43,499 42,676
Rooms 7,003 7,056 20,687 20,810
Food and beverage 6,222 6,354 18,709 18,988
Entertainment 2,426 3,295 7,861 10,490
Other 338 774 1,137 2,267
Other operating expenses:
General and administrative 10,133 9,386 30,134 28,978
Mergers, acquisitions and
development costs, net 281 126 1,159 (376)
Sarbanes-Oxley act expenses 283 371 558 641
Equity based compensation 183 222 589 1,207
Asset impairment - - 16 198
Depreciation and amortization 3,035 3,617 9,454 10,495
---------------- -----------------------
Total costs and expenses 44,361 45,017 133,803 136,374
---------------- -----------------------
INCOME FROM OPERATIONS 5,988 5,320 20,672 19,684
Interest expense, net (6,420) (6,593) (19,406) (19,822)
---------------- -----------------------
NET INCOME (LOSS) $(432) $(1,273) $1,266 $(138)
================ =======================
Basic 12,170 11,848 12,122 11,795
Diluted 12,170 11,848 12,374 11,795
Net Income (loss) per common share
Basic $(0.04) $(0.11) $0.10 $(0.01)
Diluted $(0.04) $(0.11) $0.10 $(0.01)