EXHIBIT 99.1
[LOGO OF STATION CASINOS INC.-Registered Trademark-]
CONTACT: GLENN C. CHRISTENSON, (800) 544-2411
EXECUTIVE VICE PRESIDENT/CHIEF FINANCIAL OFFICER/
CHIEF ADMINISTRATIVE OFFICER
STATION CASINOS, INC.
ROD S. ATAMIAN, (800) 544-2411
VICE PRESIDENT OF FINANCIAL SERVICES
STATION CASINOS, INC.
JACK TAYLOR, (702) 221-6900
DIRECTOR OF CORPORATE PUBLIC RELATIONS
STATION CASINOS, INC.
FOR IMMEDIATE RELEASE: JULY 20, 2000
STATION REPORTS EPS OF $0.33 POST-SPLIT;
PROVIDES UPDATE ON RECENT DEVELOPMENTS
LAS VEGAS---Station Casinos, Inc. (NYSE: STN) today announced the
results of its operations for the second quarter ended June 30, 2000.
Highlights for the second quarter included the following:
Record second quarter cash flow of $71.3 million, up 16 percent
year-over-year;
Record second quarter earnings per share of $0.33 (adjusted for a
3-for-2 stock split, effective July 17, 2000);
Eight percent increase in Nevada cash flow to $53.2 million on a
same-store basis;
32 percent increase in Missouri cash flow to $22.6 million on a
same-store basis;
Agreement to acquire the Santa Fe Hotel & Casino in northwest Las
Vegas.
Station Casinos, Inc. ("Station" or "the Company") reported net
revenues for the second quarter ended June 30, 2000, of $244.3 million, a
four percent increase over the prior year's quarter. Earnings before
interest, taxes, depreciation and amortization (EBITDA), adjusted for the
Sunset equipment lease, increased 16 percent to $71.3 million compared to
$61.6 million in the prior year. Earnings applicable to common stock
increased to $20.7 million, or $0.33 per share, from $12.8 million, or $0.20
per share. The prior year's earnings per share exclude the effect on net
income of $8.8 million related to a litigation settlement with Crescent Real
Estate Equities, Inc. (NYSE: CEI). Including the litigation settlement, the
Company reported earnings of $21.6 million, or $0.33 per share in the prior
year's quarter.
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BALANCE SHEET ITEMS
The Company's balance sheet reflected a decrease in total long-term debt
(including construction payables) to $937.3 million, a $14.6 million decline
from the period ended March 31, 2000. In addition to reducing borrowings
under its bank revolver, the Company utilized its free cash flow from
operations to fund $21.7 million in capital expenditures. The Company's
trailing 12-month debt to EBITDA ratio (per the Company's Amended Bank
Facility) continued its decline to 3.5. The Company recently completed a
$375 million 9 7/8 percent senior subordinated notes offering. Proceeds from
this offering reduced all amounts outstanding under the Company's Term Loan
Agreement and the balance was used to reduce the Company's revolving credit
facility.
NEVADA OPERATIONS
Combined net revenues for the Company's Nevada operations increased
three percent to $152.2 million, while EBITDA, adjusted for the Sunset
equipment lease, increased eight percent to $53.2 million. Cash flow margins
for the quarter increased to 35 percent from 33 percent in the prior year's
quarter. The strong results for the quarter were largely due to a four
percent increase in gaming revenue, and continued reduction in operating
costs. "We continue to see the benefits of our brand strategy in appealing
to Las Vegas residents. We expect our recent acquisitions to further
strengthen our brand and afford our customers even greater convenience and
choice," said Glenn C. Christenson, executive vice president and chief
financial officer.
MISSOURI OPERATIONS
The Company's Missouri operations reported an increase in combined net
revenues of four percent from the prior year's quarter to $80.1 million,
while EBITDA increased 32 percent to $22.6 million. The increase in EBITDA
is primarily attributable to continued improvement in operating margins at
both Station Casino Kansas City (SCKC) and Station Casino St. Charles (SCSC).
The margin improvement at SCSC is primarily related to the consolidation and
streamlining of operations onto a single gaming barge. Net revenues at SCKC
increased four percent to $50.1 million for the quarter while EBITDA
increased 22 percent to $14.9 million. At SCSC, net revenues increased three
percent from the prior year's quarter to $30.0 million, while EBITDA
increased 57 percent to $7.7 million.
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RECENT DEVELOPMENTS
The Company announced a repositioning strategy that will focus on the
Las Vegas locals' market. (See accompanying release.) Highlights of the
repositioning include:
A definitive agreement to acquire the Fiesta Casino Hotel in North Las
Vegas, Nevada, from the Fiesta Hotel Corporation, a subsidiary of Joe G.
Maloof & Company, Inc. ("Maloof"). The purchase price of $185 million
includes a non-compete agreement with Maloof, Fiesta and certain members of
the Maloof family. The transaction is expected to close by January 31, 2001.
A definitive agreement to acquire the Santa Fe Hotel & Casino in Las
Vegas, Nevada, from Santa Fe Hotel, Inc. (SFHI), a subsidiary of Santa Fe
Gaming Corporation (SFGC). The purchase price of $205 million includes
substantially all of the assets of the Santa Fe Hotel & Casino, an option to
acquire an adjacent 21-acre parcel of real property, and a non-compete
agreement with SFGC and SFHI. The transaction is expected to close in the
fourth quarter of 2000.
A definitive agreement to sell Station Casino St. Charles and Station
Casino Kansas City to a group led by John Finamore, president of Station's
Midwest operations, and William W. Warner, the company's vice president of
finance.
The appointment of Lorenzo J. Fertitta as president of Station Casinos,
Inc. Lorenzo Fertitta has been a member of the board of directors since 1991.
The appointment of Don Marrandino as president of East Las Vegas
operations and Kevin Kelley as president of West Las Vegas operations.
Completion of all acquisitions and dispositions is subject to regulatory
approvals in Nevada and Missouri.
On July 7, 2000, the board of directors of the Company established a
special committee of independent members of the board to monitor the ongoing
Missouri investigations of matters relating to Michael Lazaroff. Lazaroff
recently pled guilty to three felonies, including defrauding his law firm by
withholding bonus payments from his partners, defrauding clients -- including
Station Casinos -- through improper billing, and federal election law
violations. In connection with the ongoing investigations related to certain
bonus payments made between 1994 and 1996 to Lazaroff, Frank J. Fertitta III,
chairman and chief executive officer, and Glenn C. Christenson, executive
vice president and chief financial officer, recently received subpoenas to
testify before a federal grand jury in the western district of Missouri. No
date for the testimony is presently scheduled.
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STOCK SPLIT
On July 17, 2000 the Company's previously announced three-for-two stock
split became effective. Adjusted for the stock split, the Company has been
authorized to purchase 9,482,484 shares of common stock (of which 3,268,110
have already been purchased) under its stock buy-back program.
Station Casinos, Inc. is a multi-jurisdictional gaming company that owns
and operates the Palace Station Hotel & Casino, the Boulder Station Hotel &
Casino, the Texas Station Gambling Hall & Hotel, and the Wild Wild West
Gambling Hall & Hotel in Las Vegas, Nev., Sunset Station Hotel & Casino in
Henderson, Nev., as well as slot machine route management services in Clark
County, Nev. Station Casinos, Inc. also owns and operates Station Casino St.
Charles, a gaming and entertainment facility in St. Charles, Mo., and Station
Casino Kansas City, a gaming and entertainment facility in Kansas City, Mo.
This press release may be deemed to contain certain forward-looking
statements with respect to the business, financial condition, and results of
operations of the Company and its subsidiaries which involve risks and
uncertainties including, but not limited to, changes in the financial
markets, licensing and other regulatory risks, competition from other gaming
operations, and construction risks. Further information on potential factors
which could affect the business, financial condition, and results of
operations of the Company and its subsidiaries, are included in the filings
of the Company with the Securities and Exchange Commission, including, but
not limited to the Company's Annual Report on Form 10-K for the year ended
December 31, 1999, and its Registration Statement on Form S-4 File No.
333-71227. The Company's 1999 Annual Report is available to view on its
website at http://www.stationcasinos.com.
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