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: betsytruax_hartman@msn.com
FOR IMMEDIATE RELEASE
RIVIERA REPORTS RECORD RESULTS FOR 2006
LAS VEGAS, NV - March 2, 2007 -- Riviera Holdings Corporation (AMEX:
RIV) today reported financial results for the three-month and the twelve-month
periods ended December 31, 2006. The Company reported record Adjusted EBITDA, as
defined below, and operating income for 2006.
Consolidated 2006 Results
Net revenues for the year ended December 31, 2006 were $200.9 million,
a decrease of $1.3 million or less than one percent from the same period in
2005. The decrease in net revenue was primarily 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, Riviera Las
Vegas discontinued two shows, in late 2005 and in the fall of 2006. These
revenue declines in Las Vegas were offset by a $2.8 million increase in Las
Vegas gaming revenues and a $1.5 million increase in cash room revenues.
Improvements in the average daily rate and targeted slot marketing efforts
contributed to these increases.
Income from operations was $25.4 million, an increase of $3.0 million
or 13.5 percent from 2005, and a record for the Company. Included in income from
operations for the years ended December 31, 2006 and 2005 was an expense of $1.3
million and income of $65,000 respectively in mergers, acquisitions and
development costs, net of a non-refundable fee paid to the Company in 2005.
Adjusted EBITDA(1) was $41.1 million, an increase of $1.0 million or 2.6 percent
from the same period in 2005, and a record for the Company.
The net loss for the year ended December 31, 2006 was $335,000, or
$0.03 per share, compared with a net loss of $4.0 million, or $0.34 per share,
for the year ended December 31, 2005.
2006 Developments
o Riviera Las Vegas net revenue decreased $1.5 million or 1.0 percent
o Riviera Las Vegas Property EBITDA was $28.1 million, an increase of 4.8
percent
o Riviera Black Hawk net revenue was $51.7 million, an increase of 0.4 percent
o Riviera Black Hawk Property EBITDA was $16.8 million, a decrease of 2.6
percent
Fourth Quarter 2006
Net revenues for the three months ended December 31, 2006 were $46.5
million, an increase of $300,000 over the fourth quarter of 2005. The increase
in net revenues were generated from increased casino and room revenues in Las
Vegas offset by decreases in the entertainment and other revenues in Las Vegas
and a decrease in casino revenues in Black Hawk, as a result of the effects of
the snow storms in the Denver area during December 2006. The Colorado snow
storms resulted in approximately $1.0 million in lost casino revenues; however,
this loss in Black Hawk was offset by the favorable effects of a new slot
product and upgrades to the casino floor in 2006.
Income from operations was $4.7 million for the fourth quarter of 2006,
an increase of $2.0 million or 75.4 percent from the fourth quarter of 2005.
Included in income from operations in the fourth quarter of 2006 was $3,000 in
asset impairment costs compared to $579,000 in 2005, which was related to a
write off associated with a proposed walkway to a competitor's property. Net
loss for the quarter of $1.6 million, or $0.13 per share, was an improvement of
$2.3 million from the fourth quarter of 2005 when the Company reported a net
loss of $3.9 million.
Adjusted EBITDA, as defined below, was $8.6 million in the fourth
quarter of 2006 compared to $8.2 million in 2005, an improvement of 5.5 percent.
Adjusted EBITDA (1) 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 and notes of this
release.
Fourth Quarter 2006 Developments
o Riviera Las Vegas net revenue increased $530,000 or 1.6 percent
o Riviera Las Vegas Property EBITDA was $5.5 million compared to $4.5 million
in 2005
o Riviera Black Hawk net revenue decreased $230,000 or 1.8 percent
o Riviera Black Hawk Property EBITDA was $4.1 million, a decrease of 10.7
percent
o The Company has $25.3 million in cash plus a $30 million revolver which was
fully available as of December 31, 2006 compared to $20.6 million at December
31, 2005
Riviera Las Vegas
"At the Riviera, we continue to focus on providing our customers great
value for their Las Vegas Strip experience. We have invested and will continue
to invest in upgrades to our facility and slot mix, as well as continuing to
implement key marketing programs for the value-oriented Las Vegas Strip
customer," said Robert Vannucci, President of Riviera Las Vegas.
"Our occupancy for the year ended December 31, 2006 was 92.2 percent
and consistent with the same period in 2005. However, our revenue per available
room rate (RevPar) for 2006 was $72.37 compared to $66.51 in 2005, an 8.8
percent increase. Our average daily win per slot unit increased for the fourth
quarter of 2006 to $131.67 compared to $97.48 in the fourth quarter of 2005. We
have upgraded our slot mix and reengineered the slot floor to cater to the
demands of our customers. These changes have been very favorably received, and
we will continue to provide capital for upgrades 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
significant weather issues encountered during the fourth quarter of 2006. Our
strong EBITDA margin and a fair share of over 142 percent for the quarter and
134 percent for the year, are a testament to our team and the quality of our
property within the Black Hawk market."
Consolidated Operations
Mr. Westerman said, "The Company recorded record results for 2006 as
evidenced by our operating income and Adjusted EBITDA, which we believe are a
result of capital improvements and targeted marketing efforts at both locations.
We continue to evaluate our debt structure, and given the call premium reduction
on our Senior Secured Notes in June of this year and the current rate
environment, we believe that conditions may be favorable for a refinancing of
our notes as a means to free up additional cash for the continued reinvestment
in our properties. Our results for 2006 generated an all-time record for the
Company. In light of the number of distractions during the past year related to
the potential sale of the Company, I am very pleased with our team members and
their performance."
Conference Call Information
In conjunction with the release of fourth quarter 2006 financial
results, Riviera will broadcast a conference call at 2 p.m. Eastern Standard
Time today, Friday, March 2, 2007. Investors can listen to the call via the
Internet at www.rivierahotel.com or by dialing (888) 889-5345. The conference
call rebroadcast will be available at (877) 519-4471, pass code 8426065.
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, financing requirements,
refinancing opportunities and investment rates expansion and modernization
objectives and timetables regulatory requirements and other risks and
uncertainties detailed from time to time in our filing's 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 December 31 Twelve Months Ended December 31
------------------------------ -------------------------------
2006 2005 Var %Var 2006 2005 Var %Var
---- ---- --- ---- ---- ---- --- ----
Net Revenues
$
Riviera Las Vegas $34,227 $33,697 $530 1.6% $149,202 150,688 $(1,486) -1.0%
Riviera Black Hawk 12,242 12,472 (230) -1.8% 51,742 51,539 203 0.4%
-------------------------- -----------------------------
Total Net Revenues 46,469 46,169 300 0.6% 200,944 202,227 (1,283) -0.6%
Operating Income
Riviera Las Vegas 3,765 2,513 1,252 49.8% 21,000 19,065 1,935 10.1%
Riviera Black Hawk 2,595 2,981 (386) -13.0% 11,209 10,941 268 2.4%
Mergers, Acquisitions and
Development Costs, net (159) (311) 152 48.9% (1,318) 65 (1,383) -21.3%
Sarbanes-Oxley Act Expenses (262) (591) 329 55.7% (820) (1,233) 413 33.5%
Equity-Based Compensation (224) (421) 197 46.8% (813) (1,627) 814 50.0%
Asset Impairment (3) (579) 576 99.5% (19) (777) 758 97.6%
Corporate Expenses (968) (887) (81) -9.1% (3,823) (4,045) 222 5.5%
-------------------------- -----------------------------
Total Operating Income 4,744 2,705 2,039 75.4% 25,416 22,389 3,027 13.5%
Adjusted EBITDA (1)
Riviera Las Vegas 5,546 4,530 1,016 22.4% 28,075 26,789 1,286 4.8%
Riviera Black Hawk 4,051 4,534 (483) -10.7% 16,825 17,282 (457) -2.6%
Corporate Expenses (968) (887) (81) -9.1% (3,823) (4,045) 222 5.5%
-------------------------- -----------------------------
Total Adjusted EBITDA 8,629 8,177 452 5.5% 41,077 40,026 1,051 2.6%
Adjusted EBITDA Margins (2)
Riviera Las Vegas 16.2% 13.4% 2.8% 18.8% 17.8% 1.0%
Riviera Black Hawk 33.1% 36.4% -3.3% 32.5% 33.5% -1.0%
Consolidated 18.6% 17.7% 0.9% 20.4% 19.8% 0.6%
-------- ------ ------ ----- ---- ----
Net loss $(1,601) $(3,861) $2,260 $ (335) (3,999) $3,664
EARNINGS PER SHARE DATA
Weighted average basic
shares outstanding 12,170 11,914 256 12,134 11,833 301
Basic loss per share $(0.13) $(0.32) $ 0.19 $(0.03) $(0.34) $ 0.31
Weighted average diluted
shares outstanding 12,170 11,914 256 12,134 11,833 301
Diluted loss per share $(0.13) $(0.32) $ 0.19 $(0.03) $(0.34) $ 0.31
(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, 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 twelve months ended December 31, 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
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.
Riviera Holdings Corporation and Subsidiaries
Reconciliation of Net Income to Adjusted EBITDA:
(Amounts in thousands) Mergers,
Net Interest Equity Acquisitions,
Income Income Operating Depre- Asset Sarbanes Based Development Management Adjusted
(Loss) & (Exp.) Income ciation Impairment Oxley Exp Comp. &Costs, net Fee EBITDA
-------- --------- --------- -------- --------- ------- ----- ------------ ------ ------
Fourth Quarter 2006:
Riviera Las Vegas $3,803 $38 $3,765 $2,260 $- $- $- $- $(479) $5,546
Riviera Black Hawk 697 (1,898) 2,595 977 - - - - 479 4,051
Corporate (6,101) (4,485) (1,616) - 3 262 224 159 - (968)
------- ------- ------- ---- ---- ---- ---- ---- ------ -----
$(1,601) $(6,345) $4,744 $3,237 $3 $262 $224 $159 $ - $8,629
Fourth Quarter 2005:
Riviera Las Vegas $2,532 $19 $2,513 $2,479 $- $- $- $- $(462) $4,530
Riviera Black Hawk 597 (1,917) 2,514 1,091 467 - - - 462 4,534
Corporate (6,990) (4,668) (2,322) - 112 591 421 311 - (887)
------- ------- ------- ---- ------ ---- ---- ---- ---- -----
$(3,861) $(6,566) $2,705 $3,570 $579 $591 $421 $311 $ - $8,177
Twelve Months Ended
December 31, 2006:
Riviera Las Vegas $21,118 $118 $21,000 $9,032 $ - $ - $ - $ - $(1,957) $28,075
Riviera Black Hawk 3,564 (7,645) 11,209 3,659 - - - - 1,957 16,825
Corporate (25,017) (18,224) (6,793) - 19 820 813 1,318 - (3,823)
-------- -------- ------- ---- --- ---- ---- ------ ---- -------
$(335)$(25,751) $25,416 $12,691 $19 $820 $813 $1,318 $ - $41,077
Twelve Months Ended
December 31, 2005:
Riviera Las Vegas $19,097 $32 $19,065 $9,712 $ - $ - $ - $ - $(1,988) $26,789
Riviera Black Hawk 2,764 (7,710) 10,474 4,353 467 - - - 1,988 17,282
Corporate (25,860)(18,710) (7,150) - 310 1,233 1,627 (65) - (4,045)
-------- -------- ------- ---- ---- ------ ------ ---- ---- -------
$(3,999)$(26,388) $22,389 $14,065 $777 $1,233 $1,627 $(65) $ - $ 40,026
Balance Sheet
Summary
December 31 December 31
2006 2005
----------------------
Cash and short term investments $25,285 $20,571
Total current assets 34,142 30,797
Property and equipment, net 171,320 171,130
Total assets 213,682 211,769
Total current liabilities 25,235 25,305
Long-term debt, net of current portion 214,124 214,607
Total shareholders' deficiency (30,534) (31,269)
RIVIERA HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2006 2005 2006 2005
---------------------- -----------------------
REVENUES
Casino $26,253 $25,375 $111,459 $108,130
Rooms 13,615 11,954 56,700 52,021
Food and beverage 7,371 7,487 33,125 34,132
Entertainment 2,506 3,789 13,672 17,371
Other 1,461 1,808 6,431 8,312
-----------------------------------------------
Total Revenues 51,206 50,413 221,387 219,966
Less - promotional allowance 4,737 4,244 20,443 17,739
---------------------- -----------------------
Net revenues 46,469 46,169 200,944 202,227
---------------------- -----------------------
COSTS AND EXPENSES
Direct costs and expenses of
operating departments
Casino 14,501 13,416 58,000 56,092
Rooms 6,498 6,323 27,185 27,133
Food and beverage 5,515 5,657 24,224 24,645
Entertainment 1,675 2,724 9,536 13,214
Other 300 639 1,437 2,906
Other operating expenses
General and administrative 9,351 9,233 39,485 38,211
Mergers, acquisitions and
development costs, net 159 311 1,318 (65)
Sarbanes-Oxley Act expenses 262 591 820 1,233
Equity-based compensation 224 421 813 1,627
Asset impairment 3 579 19 777
Depreciation and amortization 3,237 3,570 12,691 14,065
---------------------- -----------------------
Total costs and expenses 41,725 43,464 175,528 179,838
---------------------- -----------------------
INCOME FROM OPERATIONS 4,744 2,705 25,416 22,389
Interest expense, net (6,345) (6,566) (25,751) (26,388)
---------------------- -----------------------
NET LOSS $(1,601) $(3,861) $(335) $(3,999)
====================== =======================
Shares Outstanding
Basic 12,170 11,914 12,134 11,833
Diluted 12,170 11,914 12,134 11,833
Net loss per common share
Basic $(0.13) $(0.32) $(0.03) $(0.34)
Diluted $(0.13) $(0.32) $(0.03) $(0.34)