SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT
Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the quarter ended June 30, 1996 Commission File Number 0-20648
BOOMTOWN, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 94-3044204
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 399, Verdi, Nevada 89439-0399
(Addressed of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 345-8643
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (of for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
---- ----
On August 14, 1996, the registrant had outstanding shares of its
common stock, $.01 par value.
BOOMTOWN, INC.
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited)
Consolidated Balance Sheets, September 30, 1995
and June 30,1996. . . . . . . . . . . . . . . . . . . . . . . . . .3
Consolidated Statements of Operations For the Three and
Nine Months Ended June 30, 1995 and 1996. . . . . . . . . . . . . .4
Consolidated Condensed Statements of Cash Flows For the
Nine Months Ended June 30, 1995 and 1996. . . . . . . . . . . . . .5
Notes to Consolidated Financial Statements. . . . . . . . . . . . .6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 18
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . . 18
Item 3. Defaults upon Senior Securities . . . . . . . . . . . . . . . . . 18
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . 18
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . 18
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . 18
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SCHEDULE OF EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2
PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS.
BOOMTOWN, INC.
CONSOLIDATED BALANCE SHEETS
September 30, June 30,
1995 1996
------------ ------------
ASSETS: (unaudited)
Current assets:
Cash and cash equivalents (including restricted cash of
approximately $2,400,000 at September 30, 1995) $ 20,775,459 $ 21,587,485
Accounts receivable, net 924,135 921,487
Income taxes receivable, net 1,507,900 3,112,389
Inventories 2,715,305 1,596,055
Prepaid expenses 7,025,438 5,706,850
Other current assets 765,465 583,346
------------ ------------
Total current assets 33,713,702 33,507,612
Property, plant and equipment, at cost, net 150,955,320 146,413,148
Goodwill, less accumulated amortization 6,643,522 6,361,485
Investment in lease, net 13,077,084 --
Notes receivable from a related party 27,293,713 8,464,772
Other assets 7,514,789 9,439,329
------------ ------------
Total assets $239,198,130 $204,186,346
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $3,746,862 $4,107,916
Accrued compensation 2,929,761 4,458,060
Other accrued liabilities 9,740,297 9,747,332
Accrued interest payable 4,959,375 2,033,980
Income taxes payable 506,408 115,999
Long-term debt due within one year (Note 2) 2,948,479 4,794,933
------------ ------------
Total current liabilities 24,831,182 25,258,220
Long-term debt due after one year (net of unamortized discount
of approximately $2,657,000 and $2,502,000 at September 30,
1995 and June 30, 1996, respectively) 106,547,154 104,731,559
Deferred income taxes 1,621,088 2,606,945
Deferred gain on sale leaseback 212,720 124,087
Minority interest 740,849 1,362,770
Commitments and contingencies (Notes 3 and 6)
Stockholders' equity:
Common stock, $.01 par value, 20,000,000 shares
authorized, 9,233,074 and 9,255,915 issued and outstanding,
at September 30,1995 and June 30,1996, respectively,
net of note receivable from stockholder of $221,000 103,452,520 103,593,432
Retained earnings (deficit) 1,792,617 (33,490,667)
------------ ------------
Total stockholders' equity 105,245,137 70,102,765
------------ ------------
Total liabilities and Stockholders' equity $239,198,130 $204,186,346
------------ ------------
------------ ------------
See accompanying notes.
3
BOOMTOWN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
1995 1996 1995 1996
------------- ------------- ------------- -------------
REVENUES:
Gaming/hotel operations:
Gaming $ 48,681,692 $ 47,980,825 $139,831,881 $139,350,417
Family entertainment center 1,704,907 1,721,889 4,370,190 4,428,318
Food and beverage 4,313,586 4,318,386 11,372,951 12,293,436
Hotel and recreational vehicle park 1,671,035 1,878,753 4,857,709 5,478,989
Truckstop, service station and mini-mart 2,803,941 4,316,465 7,404,902 9,815,480
Other income 770,266 627,370 1,863,551 1,989,750
------------- ------------ ------------ ------------
59,945,427 60,843,688 169,701,184 173,356,390
COSTS AND EXPENSES:
Gaming/hotel operations:
Gaming 17,874,722 18,227,679 54,085,530 54,608,601
Gaming equipment leases 1,666,245 1,647,575 4,138,744 5,040,693
Family entertainment center 842,894 863,960 2,259,944 2,390,459
Food and beverage 4,677,599 5,235,080 12,655,648 14,568,934
Hotel and recreational vehicle park 808,728 760,853 2,316,510 2,211,201
Truckstop, service station and mini-mart 2,518,525 3,957,024 6,618,761 8,869,149
Marketing 4,803,439 5,776,685 14,511,597 16,555,660
General and administrative 19,043,346 17,422,913 54,248,275 52,750,954
Depreciation and amortization 2,499,983 2,836,898 7,635,374 8,135,045
Loss on sale of Blue Diamond -- 36,562,612 -- 36,562,612
Discontinued projects/Future development 5,719,952 760,959 6,054,069 920,496
------------- ------------ ------------ ------------
60,455,433 94,052,238 164,524,452 202,613,804
------------- ------------ ------------ ------------
Income (loss) from operations ( 510,006) ( 33,208,550) 5,176,732 ( 29,257,414)
Interest expense,
net of capitalized interest ( 3,479,435) ( 3,529,084) ( 9,805,938) ( 10,361,738)
Interest income 796,346 789,164 2,272,264 2,341,599
Other income -- 826,990 -- 826,990
Gain (loss) on sale of assets ( 11,136) 169,355 173,020 239,655
------------- ------------ ------------ ------------
Loss before minority interest
in consolidated partnerships
and income taxes ( 3,204,231) ( 34,952,125) ( 2,183,922) ( 36,210,908)
Minority interest in operations
of consolidated partnerships 43,055 253,004 111,999 878,080
------------- ------------ ------------ ------------
Loss before income taxes ( 3,161,176) ( 34,699,121) ( 2,071,923) ( 35,332,828)
Provision (benefit) for income taxes ( 1,311,957) 275,548 ( 859,917) ( 49,544)
------------- ------------ ------------ ------------
Net loss ($ 1,849,219) ($ 34,974,669) ($ 1,212,066) ($ 35,283,284)
------------- ------------ ------------ ------------
------------- ------------ ------------ ------------
Net loss per share
of Common Stock ($ .20) ($ 3.78) ($ .13) ($ 3.82)
------------- ------------ ------------ ------------
------------- ------------ ------------ ------------
Shares used in calculating net
loss per share of Common Stock 9,228,726 9,251,482 9,226,643 9,243,243
------------- ------------ ------------ ------------
------------- ------------ ------------ ------------
See accompanying notes.
4
BOOMTOWN, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Increase (decrease) in cash and cash equivalents
(unaudited)
Nine Months Ended
June 30,
1995 1996
------------ ------------
Cash flows from operating activities:
Net loss ($ 1,212,006) ($ 35,283,284)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Lease expense recorded in exchange
for limited partnership interest 1,500,000 1,500,000
Depreciation and amortization 7,635,374 8,135,045
Loss on sale of Blue Diamond -- 36,562,612
Income taxes receivable ( 1,108,453) ( 1,604,489)
Inventories ( 161,945) 275,464
Prepaid expenses 2,109,293 1,318,588
Accounts payable ( 5,056,202) 377,253
Income taxes payable 11,654 1,096,212
Accrued compensation 1,703,800 1,528,299
Other accrued liabilities 2,035,777 57,262
Accrued interest payable ( 2,975,625) ( 2,925,395)
Deferred income taxes 962,222 1,199,140
Minority interest ( 111,999) ( 878,080)
Other adjustments, net ( 956,318) ( 1,163,287)
------------ ------------
Net cash provided by operating activities 4,375,572 10,195,340
------------ ------------
Cash flows from investing activities:
Proceeds from sale of property and equipment 7,788,973 405,647
Payments for purchases of property and equipment ( 13,362,783) ( 7,168,174)
Payments for pre-opening and future development costs 1,870,749 --
Decrease in construction related payables ( 1,456,238) ( 16,198)
------------ ------------
Net cash used in investing activities ( 5,159,299) ( 6,778,725)
------------ ------------
Cash flows from financing activities:
Proceeds from additions to short-term borrowings 5,000,000 --
Pre-payment of property lease -- ( 2,480,387)
Net proceeds from additions to long-term debt 9,036,044 2,457,154
Principal payments on short-term borrowings ( 5,000,000) --
Principal payments on long-term debt ( 1,685,562) ( 2,581,356)
Distribution to limited partner ( 241,952) --
------------ ------------
Net cash provided by (used in) financing activities 7,108,530 ( 2,604,589)
------------ ------------
Net increase in cash and cash equivalents 6,324,803 812,026
Cash and cash equivalents:
Beginning of period 11,390,554 20,775,459
------------ ------------
End of period $ 17,715,357 $ 21,587,485
------------ ------------
------------ ------------
See accompanying notes.
5
BOOMTOWN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICES
BASIS OF PRESENTATION AND NATURE OF BUSINESS - The accompanying unaudited
consolidated financial statements have been prepared in accordance with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles and should be read in connection with the 1995
Annual Report filed with the Securities and Exchange Commission on the
Registrant's Form 10-K for the fiscal year ended September 30, 1995. The
accounting polices utilized in the preparation of the consolidated financial
information herein are the same as set forth in such annual report except as
modified for interim accounting policies which are within the guidelines
established in Accounting Principles Board Opinion No. 28.
INTERIM FINANCIAL INFORMATION - The Consolidated Balance Sheet at September
30, 1995 has been taken from the audited financial statements at that date. The
interim financial information is unaudited. In the opinion of management, all
adjustments considered necessary for a fair presentation of its financial
position at June 30, 1996, the results of operations for the three and nine
months ended June 30, 1996 and 1995 and the cash flows for the nine months ended
June 30, 1996 and 1995 have been included. The Company's operations are
seasonal and thus operating results for the three and nine months ended June 30,
1996 should not be considered indicative of the results that may be expected for
the fiscal year ending September 30, 1996.
RECLASSIFICATIONS - Certain reclassifications have been made to the 1995
financial statements to conform to the 1996 presentation.
The accompanying consolidated financial statements include the accounts of
the Company and all of its subsidiary companies. All significant intercompany
accounts and transactions have been eliminated.
2. LONG-TERM DEBT
Long-term debt consists of the following (in thousands):
SEPTEMBER 30, 1995 JUNE 30, 1996
------------------ ------------------
11.5% First Mortgage Notes (net of unamortized
discount of $2.7 million and $2.5 million as
of September 30, 1995 and June 30,1996,
respectively) $100,842 $100,998
13% note payable 4,336 3,519
11.5% notes payable 2,431 1,568
Capital lease obligations 1,126 2,911
12.25% note payable 760 530
--------- ---------
109,495 109,526
Less amounts due within one year 2,948 4,794
--------- ---------
$106,547 $104,732
--------- ---------
--------- ---------
6
BOOMTOWN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The Company's 13%, 11.5% and 12.25% notes payable are secured by certain
furniture, fixtures and equipment of the Company's subsidiaries. The notes
mature in January 1999, September 1997 and January 1998, respectively.
The capital lease obligations are secured by equipment and mature between
September 1997 and August 1998.
3. COMMITMENTS AND CONTINGENCIES
On November 24, 1993, Boomtown completed the private placement of $103.5
million of 11.5% First Mortgage Notes due November 2003 (the "Notes") with
detachable warrants to purchase 472,000 shares of the Company's Common Stock at
$21.19 per share. The warrants expire in November 1998. Interest on the Notes
is payable semi-annually. The Notes will be redeemable at the option of the
Company, in whole or in part, on or after November 1, 1998, at a premium to the
face amount ($103.5 million) which decreases on each subsequent anniversary
date, plus accrued interest to the date of redemption. The Notes are secured by
substantially all of the Company's assets.
The Indenture governing the Notes places certain business, financial and
operating restrictions on the Company and its subsidiaries including, among
other things, the incurrence of additional indebtedness, issuance of preferred
equity interests and entering into operating leases; limitations on dividends,
repurchase of capital stock of the Company and redemption's of subordinated
debt; limitations on transactions with affiliates; limitations on mergers,
consolidations and sale of assets; limitations on amending existing partnership
and facility construction agreements; and the use of proceeds from the issuance
of Notes. The Company will solicit consent of the Noteholders in connection
with the proposed merger with Hollywood Park and intends to solicit consent of
the Noteholders in connection with the termination of the Las Vegas lease (See
Note 6.)
In October 1994, the Mississippi Gaming Commission adopted a regulation
which requires, as a condition of license or license renewal, for a gaming
establishment's plan to include various expenditures including parking
facilities and infrastructure facilities amounting to at least 25% of the casino
cost. Although the Company believes it has satisfied this requirement at the
Mississippi property, there can be no assurance the Mississippi Gaming
Commission will not require further development on the casino site including
hotel rooms and additional parking facilities. Additionally, there can be no
assurance that the Company will be successful in completing such a project or
that the Company would be able to obtain a waiver if the Company decides not to
build.
A demand for arbitration has been filed by Eric Skrmetta, a limited
partner, with the American Arbitration Association, alleging that Boomtown
breached the Louisiana Partnership Agreement and its fiduciary duty to limited
partners resulting in a substantial tax liability to Mr. Skrmetta. Boomtown
disputes this claim and is contesting it vigorously.
7
BOOMTOWN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(unaudited)
4. COMMON STOCK OUTSTANDING AND NET LOSS PER SHARE
Net income per share of Common Stock is computed based on the weighted
average number of shares of Common Stock and dilutive Common Stock
equivalents outstanding during the period. Net loss per share is computed
using the weighted average number of shares of Common Stock outstanding and
common equivalent shares from stock options and warrants are excluded from
the computation because their effect is antidilutive. Fully diluted per
share amounts are the same as primary per share amounts for the periods
presented. (Also see Part II, Item 6, Exhibit 11.1 of this document).
5. SUMMARIZED CONSOLIDATING FINANCIAL INFORMATION
In connection with the First Mortgage Notes issued in November, 1993, the
subsidiaries of the Company (guarantor entities) have guaranteed the Notes.
Summarized consolidating financial information is as follows:
SUMMARIZED CONSOLIDATING FINANCIAL INFORMATION
As of and for the nine months ended June 30, 1996
(in thousands, unaudited)
GUARANTOR ENTITIES
----------------------------------------------
Blue Diamond Boomtown Non-wholly Elimination's &
Boomtown, Inc. Hotel & Casino Hotel & Casino Owned Reclassifications Boomtown, Inc.
(parent co.) Inc. Inc. Subsidiaries Dr (Cr) (consolidated)
(1) (2) (3) (4)
-----------------------------------------------------------------------------------------------
Current assets $11,701 $11,537 $5,552 $10,158 ($5,440) $33,508
Advances to affiliates 120,616 -- -- -- (120,616) --
Non-current assets 46,575 1,290 59,959 96,951 (34,097) 170,678
-----------------------------------------------------------------------------------------------
$178,892 $12,827 $65,511 $107,109 ($160,153) $204,186
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
Current liabilities $7,039 $4,472 $5,663 $13,524 ($5,440) $25,258
Non-current liabilities 101,176 233 5,848 3,272 (1,704) 108,825
Advances from parent -- 45,505 4,986 70,125 (120,616) --
Equity 70,677 (37,383) 49,014 20,188 (32,393) 70,103
-----------------------------------------------------------------------------------------------
$178,892 $12,827 $65,511 $107,109 ($160,153) $204,186
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
Revenues $2,250 $34,480 $47,602 $91,274 ($2,250) $173,356
Income (loss) from operation ($20,443) ($23,521) $1,333 $13,374 $-- ($29,257)
Equity in earnings (loss) of
consolidated subsidiaries ($17,222) $-- $-- $-- $17,222 $--
Net income (loss) ($18,427) ($24,574) $366 $6,474 $878 ($35,283)
Net cash provided by (used in)
operating activities ($3,561) ($4,594) $4,884 $13,466 $-- $10,195
Net cash provided by (used in)
investing activities 1,810 (511) (1,378) (4,885) (1,815) (6,779)
Net cash provided by (used in)
financing activities (119) 5,572 (1,936) (7,936) 1,815 (2,604)
-----------------------------------------------------------------------------------------------
Net increase (decrease) in cash
and cash equivalents (1,870) 467 1,570 645 -- 812
Cash and cash equivalents:
8
GUARANTOR ENTITIES
----------------------------------------------
Blue Diamond Boomtown Non-wholly Elimination's &
Boomtown, Inc. Hotel & Casino Hotel & Casino Owned Reclassifications Boomtown, Inc.
(parent co.) Inc. Inc. Subsidiaries Dr (Cr) (consolidated)
(1) (2) (3) (4)
-----------------------------------------------------------------------------------------------
Beginning of year 10,811 2,630 1,334 6,000 -- 20,775
-----------------------------------------------------------------------------------------------
End of period $8,941 $3,097 $2,904 $6,645 $-- $21,587
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
5. SUMMARIZED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)
(1) Blue Diamond Hotel & Casino, Inc. is a wholly-owned subsidiary that is
consolidated in the accompanying consolidated financial statements.
(2) Boomtown Hotel & Casino, Inc. is a wholly-owned subsidiary that is
consolidated in the accompanying consolidated financial statements. These
amounts do not include the operations of the Company's wholly-owned subsidiaries
which are general partners of the Company's non-wholly-owned subsidiaries. The
operations of such wholly-owned subsidiaries are insignificant and have been
included in the column "Non-wholly Owned Subsidiaries".
(3) Non-wholly Owned Subsidiaries include Boomtown, Inc.'s subsidiaries in
Mississippi and Louisiana and 100% of the assets, liabilities and equity of the
limited partnerships formed to operate the gaming facilities in those states.
(4) Eliminations consist of Boomtown, Inc.'s (a) investment in the
guarantor entities, (b) advances to the guarantor and non-guarantor subsidiaries
and (c) equity earnings (loss) of consolidated subsidiaries and partnerships.
The advances are subordinated in right of payment to the guarantees of the
Notes.
6. OTHER EVENTS
AMENDMENT OF LEASE AGREEMENT - Upon commencement of operations at Boomtown
Biloxi, the Company entered into an agreement with Hospitality Franchise
Systems, Inc. ("HFS") whereby HFS advanced the Company $11 million in return for
ownership of the Biloxi barge and shell building. Also under this agreement,
HFS was to receive 20% of the adjusted earnings before interest, taxes,
depreciation, and amortization ("EBTIDA") as defined in the related contract.
HFS was also to provide marketing services to Boomtown Biloxi. The assets under
this agreement, as well as the related contractual arrangements, were
subsequently transferred to National Gaming Corporation, Inc., which
subsequently changed its name to National Lodging Corp. ("NGC"). Boomtown
Biloxi leases the assets from NGC under a 25 year lease with a 25 year renewal
option.
In November, 1995, the Company executed an agreement with NGC whereby $2.4
million was returned to NGC in return for a reduction of the EBITDA
distributions from 20% to 16%. Additionally, for $100,000 the Company secured
an option to buy the barge from NGC as well as to buy out the EBITDA
participation at a cost approximating the original investment made by HFS less
the $2.4 million that was paid. The option terminates on March 31, 1997 but is
renewable for an additional two years for $100,000 a year.
PROPOSED MERGER WITH HOLLYWOOD PARK, INC. ("HOLLYWOOD PARK") - On April 23,
1996, the Company entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Hollywood Park relating to the strategic combination of
Hollywood Park and the Company. Pursuant to the Merger Agreement and subject to
the terms and conditions set forth therein, the Company would become a
wholly-owned subsidiary of Hollywood Park (the "Merger"). Pursuant to the
Merger Agreement, at the effective date of the Merger (the "Effective Date"),
each issued and outstanding share of Boomtown Common Stock will be converted
into the right
9
to receive 0.625 (the "Exchange Ratio"), of a share of Hollywood Park Common
Stock. The Merger is intended to be structured as a tax-free reorganization.
6. OTHER EVENTS (CONTINUED)
As of April 23, 1996, the Company had approximately 11,602,432 shares of
Common Stock outstanding and Hollywood Park had approximately 21,093,957 shares
of Common Stock outstanding (in each case assuming the exercise of all
outstanding options, warrants, rights or conversion privileges relating to
Common Stock). Upon the consummation of the Merger, it is expected that former
Boomtown stockholders will own approximately 25.6% of the outstanding shares of
Hollywood Park Common Stock (assuming the exercise of all outstanding options,
warrants, rights or conversion privileges relating to the Company's Common
Stock).
At the Effective Date, Hollywood Park's Board of Directors will be expanded
from seven (7) to eleven (11) members and will be comprised of seven (7)
directors selected by Hollywood Park (the "Hollywood Park Directors") and four
(4) directors selected by the Company (the Boomtown Directors"). Hollywood Park
will nominate the initial Company Directors (or replacements elected by a
majority of the Boomtown Directors) for re-election at the first three annual
stockholder meetings following the Effective Date. Upon the Effective Date and
for a period of three years thereafter the Executive Committee of Hollywood
Park's Board of Directors will consist of four (4) Hollywood Park Directors and
two (2) Boomtown Directors, including R.D. Hubbard, Chief Executive Officer of
Hollywood Park, Timothy J. Parrott, Chairman of the Board and Chief Executive
Officer of Boomtown, Richard J. Goeglein, a current member of the Board of
Directors of Boomtown and three designees of Hollywood Park. In addition,
Hollywood Park will establish a three (3) person Office of the Chairman
comprised of Hollywood Park's and Boomtown's Chief Executive Officers and
Hollywood Park's President of Sports and Entertainment.
The closing of the Merger is subject to numerous conditions precedent,
including (i) the approval of the stockholders of the Company and Hollywood
Park, (ii) the approval of requisite governmental authorities, including the
necessary gaming authorities in the jurisdictions in which the parties conduct
business, and the expiration or termination of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(completed on June 20, 1996), (iii) the availability of sufficient financing of
up to $163.5 million to fund up to $60 million of future gaming projects and to
fund the repurchase of Boomtown's outstanding 11-1/2% First Mortgage Notes (the
"Notes") if put to Boomtown by the holders of the Notes as a consequence of the
Merger and (iv) the consent to the Merger by the holders of a majority of the
outstanding principal amount of the Notes. There can be no assurance that any
or all of these conditions precedent, will be satisfied or that the proposed
merger with Hollywood Park will be consummated.
Certain additional matters relating to the signing of the Merger
Agreement and a complete description of the Merger Agreement are more fully
described in the Company's Form 8-K dated April 23, 1996, including the
Agreement and Plan of Merger file as exhibit 2.1 thereto, and filed with the
Securities and Exchange Commission on May 3, 1996.
LOUISIANA DEVELOPMENTS - In a recent development potentially affecting
Boomtown's Harvey, Louisiana riverboat gaming operations, the State of Louisiana
adopted a statute pursuant to which voter referendums on the continuation of
gaming will be held locally (on a parish-by-
10
parish basis) where gaming operations are conducted. The vote is scheduled for
November 5, 1996. While Boomtown has no reason at this time to believe that the
voters of Jefferson Parish
6. OTHER EVENTS (CONTINUED)
(where Boomtown's Louisiana riverboat operations are located) will vote against
riverboat gaming, in the event they were to do so, Boomtown would have to
discontinue its riverboat gaming operation in that parish upon the expiration of
its license in June 1999 and this occurrence would cause a material adverse
effect on the Company's results of operations.
TERMINATION OF AGREEMENT WITH SES GAMING, INC. - In April 1996, Boomtown
and related entities (the "Boomtown Group") entered into a termination agreement
with SES Gaming, Inc. and related entities (the "SES Group") terminating that
certain Master Agreement by and between the Boomtown Group and the SES Group
dated February 1, 1994 relating to a proposed gaming project in Lawrenceburg,
Indiana (the "Lawrenceburg Project"). The parties were denied a license for the
Lawrenceburg Project in July 1994. The Termination Agreement provided that,
among other things, (i) the Boomtown Group transferred to the SES Facilities all
of the Boomtown Group's rights, title and interest in and to the Lawrenceburg
Project, (ii) the SES Group waived any rights it might have to Boomtown's
potential project with Hilton Gaming Corporation in Switzerland County, Indiana,
(iii) the SES group agreed not to use the Boomtown name in any way and (iv) the
parties mutually released one another from all claims that might arise out of
the Master Agreement.
TERMINATION OF LAS VEGAS PROPERTY LEASE - On August 12, 1996, Boomtown,
Blue Diamond, Hollywood Park, Roski, IVAC and Majestic Realty entered into
the Blue Diamond Swap Agreement (the "Swap Agreement") pursuant to which the
parties agreed that, upon consummation of the Merger, and contingent upon the
closing of the Merger, Boomtown and Blue Diamond (or any transferee thereof
as set forth in the Swap Agreement) would exchange their entire interest in
the Blue Diamond Resort (the "Resort") (including the IVAC Loans), and
effectively transfer all interest in the Resort to Roski, in exchange for a
$5.0 million unsecured promissory note (the "First Note") and an unsecured
promissory note (the "Second Note") valued at approximately $3.5 million and
assumption by Roski, IVAC or an affiliate of certain liabilities (the
"Swap"). The First Note has an interest rate equal to the prime rate plus
one and one half percent (1.5%) per annum and provides for annual principal
payments of one million dollars ($1,000,000) plus accrued interest and
maturing on the date that is five years after the Exchange Date (as such term
is defined in the Swap Agreement). The Second Note has an interest rate
equal to the prime rate plus one-half percent (5%) per annum and provides for
a payment of all principal plus accrued interest on the date that is three
(3) years after the Exchange Date. Consummation of the Swap is subject to
obtaining all necessary Governmental approvals, including gaming approval.
In exchange for its interest in the Resort, Boomtown will receive notes
payable to Boomtown with an approximate value totaling $8.5 million, an
estimated cash payment of $2.1 million, release from lease obligations under the
resort lease, Roski's assumption of certain liabilities and note obligations
totaling approximately $3.8 million and the ongoing expenses of the Resort.
Additionally, Roski will assume all operating leases including any residual
balances due under such leases. The Swap Agreement requires approvals from
applicable gaming authorities and Boomtown intends to seek the consent of the
holders of a majority of the
11
outstanding principal amount on the Notes (see Note 3). The Swap would be
effected immediately following the Company's Merger with Hollywood Park which is
expected to be completed by the end of the 1996 calendar year or during the
first quarter of calendar 1997.
6. OTHER EVENTS (CONTINUED)
In accordance with the terms of the Swap Agreement, with certain exceptions
set forth in the Swap Agreement, the Company will continue to operate the
property until consummation of the Merger. Boomtown and Blue Diamond will be
responsible for the liabilities of the Resort accruing prior to the Swap and
Roski will be responsible for the liabilities of the Resort accruing subsequent
to the Swap. In addition, Roski will resign from Boomtown's Board of Directors,
effective as of the Exchange Date. Subject to certain conditions set forth in
the Swap Agreement, the Swap may be effectuated through any structure agreed
upon by Boomtown and Hollywood Park. If the Swap were not consummated for any
reason, Boomtown would continue to operate the property through the expiration
of the lease term in July 1999, and the IVAC Notes would be required to be
repaid to Boomtown at such time.
On August 12, 1996, Hollywood Park and Roski further entered into a Stock
Purchase Agreement (the "Stock Purchase Agreement") pursuant to which Hollywood
Park will, concurrently with the Swap, purchase the stock in Boomtown held by
Roski ("the Roski Stock") for a purchase price of approximately $3.5 million
paid for by an unsecured promissory note having an interest rate equal to the
prime rate plus one percent (1%) per annum and providing for four equal annual
principal payments plus accrued interest and maturing on the date that is four
years after the Exchange Date. The Stock Purchase Agreement may also be
terminated by Hollywood Park in the event that Boomtown and Hollywood Park, in
accordance with the provisions set forth in the Swap Agreement, elect to utilize
a structure to effect the Swap which would require Roski to retain the Roski
Stock.
12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
During the quarter and nine month period ended June 30, 1996 revenues
were $60.8 million and $173.4 million respectively, compared to $59.9 million
and $169.7 million in the prior year commensurate period. The improvement in
revenues resulted from higher gaming revenues at the Company's Reno, Nevada and
Biloxi, Mississippi casinos, offset by lower gaming revenues at its Las Vegas,
Nevada and New Orleans, Louisiana gaming properties. Reno revenues grew 4% and
8.1% over the prior year three and nine month periods primarily as a result of
higher traffic volume on Interstate 80, where the casino receives the majority
of its customer volume. Boomtown Biloxi's revenues have improved due to
expansion of the gaming market in the Gulf Coast region combined with higher
marketing and promotional efforts at the Boomtown property. Biloxi revenues
were up 8.2% and 9.2% for the three and nine month periods over the prior year.
Gaming revenues at the Company's Las Vegas property continued to be less than
expected and lower than the prior year resulting from increased competition with
other casino operators for the local customer market in the Las Vegas area. In
New Orleans revenues have been negatively affected by additional cruising of its
riverboat casino as mandated by law.
Non-gaming revenues for the three and nine months ended June 30, 1996
were $12.9 million and $34.0 million respectively, compared to $11.3 million and
$29.9 million recorded during the prior year nine month period. Non-gaming
revenues are generated from the Company's family entertainment centers, food and
beverage sales, cabaret show, hotel room sales, recreational vehicle park and
other entertainment amenities. Increases in non-gaming revenues were recorded
at all four of the Boomtown casinos, with the majority of the consolidated
improvement due from higher fuel sales at the Reno truckstop as well as the
expansion of the cabaret show at the New Orleans casino property.
The consolidated gaming margin was 62% for the third quarter, compared
to 63.3% in the prior year same quarter. Additionally, gaming margin decreased
$1.0 million to 60.8% compared to 61.3% during the prior year nine month period.
The decline is primarily a result of a change in the calculation of gaming taxes
at Boomtown New Orleans resulting in the taxes being reclassified and charged as
a gaming expense in the current year period. During the prior year, the taxes
were calculated based on a flat charge per admission and recorded as general
administrative expenses. Additionally, the Company's consolidated gaming margin
was negatively effected by gaming leases entered into in April 1995 resulting in
higher gaming equipment lease expense during the period. The decline in the
consolidated gaming margin was offset by improvements from Boomtown Biloxi
resulting from the discontinuance of the property's Fun Flight program in
October 1995.
Marketing expenses were $5.8 million and $16.6 million for the three
and nine months ended June 30, 1996, respectively, 20% and 14% higher than $4.8
million and $14.5 million recorded during the prior year. Marketing expenses
consist of costs associated with printed
13
advertising, outdoor signs, media advertising, promotional events, the Company's
bus tour and Fun Flight programs and other administrative expenses. The
increase in marketing expenses during fiscal 1996 resulted from additional
advertising in Biloxi and Las Vegas in order to promote the Boomtown brand and
compete with the local customer market in those areas. Higher promotional
events and player's club redemption costs at all of the Boomtown casinos also
contributed to the increase.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
General and administrative ("G&A") expenses were $17.4 million for the
three months ended June 30, 1996, an 8% decline from the $19.0 million recorded
during the same prior year period. Additionally, G&A expenses were $52.8
million for the nine months ending June 30, 1996, 2.8% lower than $54.2 million
in the prior nine month period. G&A expenses were less at the Company's Las
Vegas and New Orleans properties offset by higher expenses in Biloxi. The
reduction at Boomtown New Orleans primarily resulted from a reclassification of
gaming taxes from G&A to gaming operating expenses during the current year
period. Lower expenses at Boomtown Las Vegas resulted from a reduction of
overhead costs in most casino departments due to cost control efforts. The
increase in Boomtown Biloxi's G&A expenses was attributable to higher property
rent and building and grounds maintenance associated with the aging of the
building and barge. The Company continues to concentrate on aggressive cost
reduction programs for all of its properties.
During the nine months ended June 30, 1996 the Company incurred
charges of $683,000 related to its pending merger with Hollywood Park, as well
as $237,000 associated with its license application in the state of Indiana as
reflected in "Discontinued Projects/Future Development".
Depreciation and amortization expenses rose 13% and 6.5% to $2.8
million and $8.1 million during the three and nine month period ended June 30,
1996, respectively resulting from property and equipment purchases at the
Boomtown properties. Additionally, the increase is partially attributable to
restructuring certain operating leases to capital leases at the Company's Biloxi
and New Orleans properties, capitalizing the equipment and depreciating the
costs over the remaining estimated useful lives.
During the quarter ended June 30, 1996, the Company took a non-cash
charge of $36.6 million related to an agreement between the Company, the owner
and lessor ("Roski") of the Boomtown Las Vegas property ("Resort") and Hollywood
Park ("Blue Diamond Swap Agreement") which would effectively provide for an
early termination of the existing property lease between Boomtown and IVAC (a
California general partnership owned by Roski). The agreement promises that
upon consummation of the Company's proposed merger with Hollywood Park Boomtown
would transfer its entire interest in the Resort to Roski in exchange of certain
assets and assumption by Roski, IVAC or an affiliate of certain liabilities.
The charge included the write-off of the Company's investment in lease of $12.7
million, a write-down of the related party notes receivable to $8.5 million, the
write-off of the remaining net assets less the liabilities assumed by Roski of
$5.0 million (approximate value at June 30, 1996). The after-tax loss amounted
to $35.7 million, or $3.86 per share. Consummation of the Swap is subject to
obtaining all necessary Governmental approvals, including gaming approval. In
addition the Company intends to solicit the consent of the holders of a majority
amount of the principal amount of the Notes to effect the Swap.
14
The recorded provision and benefit for income taxes for the three
and nine months ended June 30, 1996, respectively does not necessarily
reflect the anticipated benefit in both periods from the write-off associated
with the Swap Agreement. The write-off of the $12.7 million investment in
lease, is not tax deductible for income tax purposes, however the remaining
income tax benefit arising from the Swap Agreement has been offset by a
valuation allowance because of the uncertainty regarding future realization
of the related deferred tax asset.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
Interest expense for the three and nine months ended June 30, 1996 was
$3.5 million and $10.4 million compared to $3.5 million and $9.8 million
recorded during the prior year period, respectively. Additionally, the Company
recorded interest income of $2.3 million, 3% higher than during the prior year.
Interest income is primarily generated from the IVAC notes receivable, which
will be canceled in connection with the Las Vegas lease termination as described
above. During the three months ended June 30, 1996 the Company also recorded
other income of $827,000 consisting of sales tax recoveries from double taxation
on certain equipment operating leases.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal source of liquidity at June 30, 1996 was cash
and cash equivalents of approximately $21.6 million, an increase of
approximately $800,000 from September 30, 1995. For the first nine months of
fiscal 1996, the Company generated cash from operating activities of $10.2
million as compared to $4.4 million a year ago. This higher operating cash flow
resulted primarily from the pay down of accounts payable during the prior year
period. The net cash provided from operating activities during the first nine
months of the current fiscal year were derived from a net loss of $31.1 million,
primarily related to the write off of Blue Diamond of $31.6 million, net
increases in accounts payable, accrued liabilities and accrued compensation of
$2.0 million, a decrease in prepaid expenses of $1.3 million, depreciation and
amortization expense of $8.1 million and other uses of $1.7 million.
The Company used net cash of $6.8 million, in investing activities
during the first nine months of fiscal 1996, primarily related to the purchases
of property and equipment, offset by proceeds of $406,000 from the sale of
equipment.
Net cash used in financing activities for the nine months ended June
30, 1996 were $2.6 million, primarily related to the payment to $2.5 million to
the lessor of the Boomtown Biloxi barge. Under the agreement, the Company
returned the $2.4 million to NGC in return for a reduction of the distributions
from 20% to 16% of operating cash flow, as defined. Additionally, for $100,000,
the Company secured an option to buy the barge back from NCG as well as to buy
out the EBITDA participation at a cost approximating the original investment
made by HFS less the $2.4 million that was paid back. The option terminates on
March 31, 1997 but is renewable for an additional two years for $100,000 a year.
At June 30, 1996, the Company's debt was comprised principally of the
$103.5 million principal amount of 11.5% First Mortgage Notes due 2003.
Interest on the notes is payable semiannually in arrears each May 1 and November
1. The Company has five notes payable in
15
the aggregate amount of $5.6 million. Three of the notes totaling $1.6 million
are secured by equipment, furniture and fixtures, bears interest at 11.5% and
mature in September 1997. The fourth note, with a balance of $3.5 million at
June 30, 1996, is secured by the gaming vessel in Harvey, Louisiana, bears
interest at 13% and matures in January 1999. The fifth note, with a balance of
$530,000 at June 30, 1996, is secured by gaming equipment, bears interest at
12.25% and matures in December 1997. The Company also has six capital lease
obligations for equipment with a balance of $2.9 million at June 30, 1996.
During March 1996, the Company converted an
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES
operating lease on certain furniture, fixtures and equipment to a note
obligation whereby the residual balance on the operating lease was funded and
the remaining outstanding balance was converted to a capital lease. As of June
30, 1996 the outstanding balance on the lease was $756,000 and matures in August
1998.
The Company believes that its current available cash and cash
equivalents and anticipated cash flow from operations will be sufficient to fund
the Company's working capital and normal recurring capital expenditures through
the end of calendar 1996. The Company does not believe such sources of
liquidity will be sufficient to fund any of its proposed expansion projects at
its current gaming facilities or in any new gaming jurisdiction. The Company
believes that such expansion of its existing facilities is important for
continued growth. If any of the Company's current proposed expansion projects
were to proceed, the Company anticipates that such financing subject to certain
restrictions set forth in the First Mortgage Notes, would come from one or more
of a number of sources, including cash flow from operations, bank financing,
vendor financing or debt, joint ventures, equity financing or other long-term
debt. Alternatively, in the event the Hollywood Park merger were to be
consummated, the Company believes that additional sources of financing will
become available. However, there can be no assurance that such financing will
be available, or available on terms acceptable to the Company or that any
proposed expansion projects by the Company will ever be completed. Further,
given the rapidly changing national competitive and legal environments related
to gaming, the Company's future operating results are highly conditional and
could fluctuate significantly. Should cash flow from the Company's operations
in all locations be below expectations, the Company may have difficulty in
satisfying capital requirements.
The statements set forth above regarding the Company's estimates of
its liquidity and capital expenditure requirements, the sufficiency of its
resources and , any expectation that the Swap would be consummated are
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, and are subject to the safe harbors created thereby. Future
operating results of the Company may be adversely affected as a result of a
number of factors, including without limitation, seasonality (historically, the
Company's operating results have been strongest in the summer months, and
weakest in the winter months), weather conditions (severe winter storms have in
the past had a significant adverse effect on the Company's operating results),
the general level of demand for casino gaming and entertainment facilities,
competition in the gaming industry and uncertainties in general economic,
regulatory and political conditions affecting the gaming industry, difficulties
in integrating the businesses of the Company and
16
Hollywood Park following the proposed merger and lack of financing following the
proposed merger with Hollywood Park and failure to satisfy any conditions to the
Swap. Any of the above factors, among others, could cause the Company's
operating results to be weaker than expected, and could cause the Company's cash
requirements to differ materially from the Company's current estimates.
FACTOR AFFECTING FUTURE OPERATING RESULTS - In a recent development
potentially affecting Boomtown's Harvey, Louisiana riverboat gaming operations,
the State of Louisiana adopted a statute pursuant to which voter referendums on
the continuation of gaming will be held locally (on
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES
a parish-by-parish basis) where gaming operations are conducted. While Boomtown
has no reason at this time to believe that the voters of Jefferson Parish (where
Boomtown's Louisiana riverboat operations are located) will vote against
riverboat gaming, in the event they were to do so, Boomtown would have to
discontinue its riverboat gaming operation in that parish upon the expiration of
its license in June 1999 and this occurrence would cause a material adverse
effect on the Company's results of operations.
17
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Boomtown is named defendant in a class action suit in the United States
District Court in New Jersey in which the plaintiffs have alleged that
numerous companies operating casinos in the United States have conspired to
exclude card counters from their establishments. (HYLAND V. GRIFFIN
INVESTIGATIONS, ET.AL.) A class has not yet been certified in the action.
Motions to dismiss are in the process of being filed by the Company and
other defendants.
A demand for arbitration has been filed by Eric Skrmetta with the American
Arbitration Association, alleging that Boomtown breached Louisiana
Partnership Agreement and its fiduciary duty to limited partners resulting
in a substantial tax liability to Mr. Skrmetta. Boomtown disputes this
claim and is contesting it vigorously.
ITEM 2. CHANGES IN SECURITIES.
NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
NONE
ITEM 5. OTHER INFORMATION.
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibits enclosed herein are detailed on the Schedule of Exhibits on page
18.
18
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunder duly authorized.
Boomtown, Inc.
Registrant
Date: August 14, 1996 /s/ Phil Bryan
----------------------------------------------
Phil Bryan, President; Chief Operating Officer
Date: August 14, 1996 /s/ Jon Whipple
----------------------------------------------
Jon Whipple, Corporate Controller; Principal
Accounting and Financial Officer
19
SCHEDULE OF EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
3.1(5) Amended and Restated Certificate of Incorporation of Registrant.
3.2(11) Amended and Restated Bylaws of Registrant.
3.3(10) Amended and Restated Articles of Incorporation of Boomtown Hotel
& Casino, Inc.
3.4(10) Revised and Restated Bylaws of Boomtown Hotel & Casino, Inc.
3.5(10) Articles of Incorporation of Blue Diamond Hotel & Casino, Inc.
3.6(10) Bylaws of Blue Diamond Hotel & Casino, Inc.
3.7(10) Articles of Incorporation of Louisiana Gaming Enterprises, Inc.
3.8(10) Articles of Incorporation of Bayview Yacht Club, Inc.
3.9(10) Bylaws of Bayview Yacht Club, Inc.
3.10(11) Articles of Organization of Boomtown Iowa, L.C.
3.11(11) Articles of Incorporation of Boomtown Council Bluffs, Inc.
3.12(11) Bylaws of Boomtown Council Bluffs, Inc.
3.13(11) Articles of Incorporation of Boomtown Indiana, Inc.
3.14(11) Bylaws of Boomtown Indiana, Inc.
3.15(11) Articles of Incorporation of Boomtown Riverboat, Inc.
20
3.16(11) Articles of Incorporation of Boomtown Missouri, Inc.
3.17(11) Bylaws of Boomtown Missouri, Inc.
4.1(1) Form of Warrant issued to the lead Underwriters of Boomtown,
Inc.'s initial public offering.
4.2(7) Form of Private Placement Note.
4.3(7) Form of Exchange Note.
SCHEDULE OF EXHIBITS (CONTINUED)
EXHIBIT
NUMBER DESCRIPTION
4.4(7) Form of Subsidiary Guaranty.
4.5(7) Form of Addendum to Subsidiary Guaranty.
4.6(9) Registration Rights Agreement dated November 10, 1993, by and
among the Company and the Initial Purchases named herein.
4.7(7) Warrant Agreement dated as of November 10, 1993 between Boomtown,
Inc. and First Trust National Association, including Form of
Warrant Certificate.
10.1(11) Amended and Restated 1990 Stock Option Plan.
10.2(11) 1992 Director's Stock Option Plan.
10.3(5) 1993 Stock Bonus Plan.
10.4(1) Standard Form of Indemnification Agreement between Boomtown,
Inc.and its officers and directors.
10.5(1) Exercise of Option of Purchase and Agreement of Sale of Real
Property dated October 29, 1986 between Boomtown, Inc. and S.
Ross Mortensen and Irene Mortensen (the "Option Exercise
Agreements").
10.6(1) Note dated October 29, 1986 payable to Boomtown, Inc. to S. Ross
Mortensen and Irene Mortensen in the principal amount of $823,000
and accompanying Deed of Trust, issued pursuant to the Option
Exercise Agreement.
10.7(1) Agreement of Sale and Purchase and accompanying Agreement, each
dated November 1, 1982 ( the "Purchase Agreement"), between
Boomtown, Inc. and Chris Garson, Ruth R. Garson, George Garson,
George Garson as
21
Guardian of the Person and Estate of Agnes M. Garson, and
Beatrice Garson (collectively the "Garsons").
10.8(1) Registration Agreement dated May 6, 1988 between Boomtown, Inc.,
MLIF, Kenneth Rainin and Timothy J. Parrott.
10.9(11) Promissory Note dated September 10, 1992, payable by Timothy J.
Parrott to Boomtown, Inc. in the principal amount of $221,000.
10.10(1) Agreement dated January 1, 1989 between Boomtown, Inc., Nevada
Fun Flight Tours and Val Ruggerio.
SCHEDULE OF EXHIBITS (CONTINUED)
EXHIBIT
NUMBER DESCRIPTION
10.11(1) Memorandum of Understanding dated February 13, 1992 between
Boomtown, Inc. and the Internal Revenue Service.
10.12(1) Termination Agreement and Mutual Release dated April 24,1992
between Registrant, Boomtown, Inc., Frank Gianopolus and Delores
Gianopolus.
10.13(3) Letter of Intent dated as of March 26, 1993 among Boomtown, Inc.,
The Skrmetta Group, Inc. and Skrmetta Machinery Corporation,
relating to the property in Harvey, Louisiana.
10.14(3) Letter of Intent dated as of March 26,1993 among Boomtown, Inc.
and Raphael Skrmetta, relating to the property in Biloxi,
Mississippi.
10.15(11) Amended and Restated Agreement to Lease Real Property in Biloxi,
Mississippi dated September 12,1993 by and between Boomtown, Inc.
and Raphael Skrmetta.
10.16(4) Agreement to Lease Real Property in Harvey, Louisiana by and
between Boomtown, Inc., The Skrmetta Group, Inc. and Skrmetta
Machinery Corporation.
10.17(4) Letter Agreement dated April 16, 1993 among Boomtown, Inc.,
Raphael Skrmetta, The Skrmetta Group, Inc., and Skrmetta
Machinery Corporation.
10.18(4) Loan Agreement dated April 23, 1993 by and between Boomtown,
Inc., First Interstate Bank of Nevada, N.A., First Interstate
Bank of Arizona, N.A. and the Diawa Bank, Limited.
10. (2) Memorandum of Understanding dated March 15, 1993 among Boomtown,
Inc., Industry Hills Visitor Accommodations Center, Blue Diamond
Hotel &
22
Casino, Inc. ("Blue Diamond"), Majestic Realty Co. ("Majestic"),
and Edward P. Roski, Jr. ("Roski").
10.20(5) Stockholders and Affiliates Agreement dated as of June 30, 1993
by and among Blue Diamond, Edward P. Roski, Sr., Roski, Boomtown,
Inc., IVAC, a California general partnership formerly known as
Industry Hills Visitor Accommodations Center, a California
general partnership ("IVAC") and Majestic.
10.21(11) First Amendment to and Clarification of Stockholders and
Affiliates Agreement dated as of November 10, 1993 between Blue
Diamond, Edward P. Roski, the Roski Community Property Trust, the
Roski Senior Revocable Trust, the Registrant, IVAC and Majestic.
SCHEDULE OF EXHIBITS (CONTINUED)
EXHIBIT
NUMBER DESCRIPTION
10.22(5) Lease dated as of June 30, 1993 between IVAC and Blue Diamond.
10.23(11) Lease Amendment to Lease dated as of November 10, 1993 between
IVAC and Blue Diamond.
10.24(5) Purchase Option Agreement dated as of June 30, 1993 by and among
IVAC, Boomtown, Inc., and Blue Diamond.
10.25(11) Amendment to Purchase Option Agreement; Consent to Assignment
dated as of November 10, 1993 between IVAC, the Registrant and
Blue Diamond.
10.26(5) Development and Pre-Opening Services Agreement dated as of June
30, 1993 between Boomtown, Inc., Blue Diamond and IVAC.
10.27(5) Management Agreement dated as of June 30, 1993 between Boomtown,
Inc. and Blue Diamond.
10.28(5) Affiliate Loan Agreement dated as of June 30, 1993 by and among
IVAC, Majestic and Boomtown, Inc.
10.29(5) Bridge Loan Agreement dated as of June 30, 1993 by and between
IVAC and Boomtown, Inc.
10.30(11) Amendment No. 1 to Bridge Loan Agreement dated as of November 10,
1993 between IVAC and the Registrant.
10.31(5) Trademark License Agreement dated as of June 30, 1993 by and
between Boomtown, Inc. and Blue Diamond.
23
10.32(5) Boomtown Stockholders Agreement dated as of June 30, 1993 by and
among Boomtown, Inc., IVAC and Roski.
10.33(5) Standard Form Agreement Between Owner and Designer/Builder, Part
1 Agreement Preliminary Design and Budgeting, dated as of May 10,
1993 between IVAC and Commerce Construction Co., Inc. and
Standard Form Agreement Between Owner and Designer/Builder, Part
2 Agreement - Final Design and Construction dated as of May 17,
1993 between IVAC and Commerce Construction Co., Inc. and related
documents.
10.34(11) Subordination Agreement dated as of November 10, 1993 between
Majestic, IVAC and the Registrant.
SCHEDULE OF EXHIBITS (CONTINUED)
EXHIBIT
NUMBER DESCRIPTION
10.35(11) Omnibus Consent Agreement dated as of November 10, 1993 between
Blue Diamond, Edward P. Roski, Sr., Roski, the Roski Community
Property Trust, the Roski Senior Revocable Trust, the Registrant,
IVAC and Majestic.
10.36(6) Indenture dated as of November 1, 1993 by and among the
Registrant, Boomtown Casino, Blue Diamond, Louisiana - I Gaming,
a Louisiana Partnership in Commendam (the "Louisiana
Partnership"), Louisiana Gaming Enterprises, Inc. ("LGE"),
Mississippi - I Gaming, L.P. (the Mississippi Partnership"),
Bayview Yacht Club, Inc. ("Bayview") and First Trust National
Association.
10.37(7) Purchase Agreement dated as of November 3, 1993 among Boomtown,
Inc., Boomtown Casino, Blue Diamond, the Louisiana Partnership,
LGE, the Mississippi Partnership, Bayview, Oppenheimer & Co.,
Inc. and Sutro & Co. Incorporated.
10.38(8) Master Agreement dated as of February 1, 1994 by and between
Boomtown Indiana, Inc., Boomtown Riverboat, Inc., Boomtown, Inc.,
SES Indiana, L.L.C., First SES Indiana, Inc., SES Facilities,
Inc., SES Gaming, Inc. and Sheldon E. Stunkel.
10.39(8) Agreement of Limited Partnership of Boomtown Landing, L.P., and
Indiana Partnership.
10.40(8) Agreement of Limited Partnership of SES Boat, L.P., an Indiana
limited partnership.
10.41(8) Development and Pre-Opening Services Agreement between Boomtown
Indiana, Inc., and SES Boat, L.P.
10.42(8) Management Agreement between Boomtown Indiana, Inc. and SES Boat,
L.P.
24
10.43(8) Agreement of Limited Partnership of Boomtown Belle II, L.P., and
Indiana limited partnership.
10.44(8) Agreement of Limited Partnership of Single Riverboat, L.P., and
Indiana limited partnership.
10.45(9) Asset Purchase Sale Agreement dated as of April 27, 1994 by and
between HFS Gaming Corp. and Mississippi - I Gaming, L.P.
10.47(9) Marketing Services Agreement dated as of April 27, 1994 by and
among Boomtown, Inc. and HFS Gaming Corp.
SCHEDULE OF EXHIBITS (CONTINUED)
EXHIBIT
NUMBER DESCRIPTION
10.48(10) Stock Acquisition Agreement and Plan of Reorganization dated
June 30, 1994 by and between Boomtown, Inc. and Roski.
10.49(11) Master Agreement dated as of September 19, 1994, as amended
September 19, 1994, by and between Boomtown Council Bluffs, Inc.
("BCB"), the Registrant and Iowa Gaming Associates, Inc. ("IGA").
10.50(11) Operating Agreement dated September 19, 1994 between BCB and IGA.
10.51(11) Management Agreement dated September 19, 1994 between BCB and
IGA.
10.52(11) Development and Pre-Opening Services Agreement dated September
19, 1994 between BCB and Boomtown Iowa, L.C.
10.53(12) Agreement and Plan of Merger and Reorganization dated January 17,
1995, by and among Boomtown, Inc., Tweety Sub., Inc. and National
Gaming Corp.
10.54(12) Guarantee letter dated January 17, 1995 between Hospitality
Franchise Services, Inc., National Gaming Corp. and Boomtown,
Inc.
10.55(13) Letter agreement dated March 31, 1995 between Boomtown, Inc.,
Tweety Sub., Inc., National Gaming Corp., Hospitality Franchise
Systems., Inc. and HFS Gaming Corp.
10.56(14) Promissory Note dated December 1, 1994 by and between Boomtown,
Inc. and First National Bank of Commerce.
10.57(14) Promissory Note dated December 30, 1994 by and between the
Louisiana Partnership and PDS Financial.
25
10.58(15) Lease Agreement dated as of March 29, 1995 by and between Marquis
Leasing Company, a Louisiana Corporation and Louisiana-I Gaming,
L.P.
10.59(16) Option Agreement dated as of November 6, 1995 by and between
National Gaming Mississippi, Inc. and Mississippi - I Gaming,
L.P.
10.60(16) Marketing Services Agreement Amendment dated as of November 6,
1995 to Marketing Services Agreement dated as of April 27, 1994
by and among oomtown, Inc. and HFS Gaming Corporation.
10.61(16) Lease Amendment dated November 6, 1995 to the Lease Agreement
dated as of April 27, 1994 by and among National Gaming
Mississippi, Inc. and Mississippi - I Gaming, L.P.
SCHEDULE OF EXHIBITS (CONTINUED)
EXHIBIT
NUMBER DESCRIPTION
10.62(16) Articles of Organization Indiana Ventures, LLC
10.63(16) Operations Agreement Indiana Ventures, LLC.
10.64(16) Stock Purchase Agreement for all shares of Pinnacle Gaming
Development Corp. between Switzerland County Development Corp.
(Buyer) and Century Casinos Management, Inc. and Cimarrron
Investment Properties Corp. (Sellers).
10.65(16) Option Agreement to lease real property (Parcel I) in Switzerland
County, ndiana, between Daniel Webster, et al (Landlord) and
Indiana Ventures,LLC (Tenant).
10.66(16) Option Agreement to lease real property (Expansion Parcel) in
Switzerland County, Indiana, between Daniel Webster, et al
(Landlord) and Indiana Ventures, LLC (Tenant).
10.67(17) Agreement and Plan of Merger dated as of April 23, 1996, among
Hollywood Park, Inc., HP Acquisition, Inc. and Boomtown, Inc.
10.68(17) Voting Agreement dated as of April 23, 1996, by and between
Hollywood Park, Inc., a Delaware corporation, and Timothy J.
Parrott, in his capacity as a stockholder of Boomtown, Inc.
10.69(17) Voting Agreement dated as of April 23, 1996, by and between
Boomtown, Inc., a Delaware corporation, and R.D. Hubbard, in his
capacity as a stockholder of Hollywood Park, Inc.
26
10.70(17) Joint Press Release issued on April 24, 1996 by Hollywood Park,
Inc. and Boomtown, Inc.
10.71(18) Agreement between Boomtown and related entities ("Boomtown
Group") and SES Gaming, Inc. and related entities ("SES Group")
terminating the Master Agreement by and between the Boomtown
Group and the SES Group dated February 1, 1994 relating to the
proposed gaming project in Lawrenceburg, Indiana.
10.72 Agreement between Boomtown, Hollywood Park and Edward P. Roski,
Jr. ("Swap Agreement") effectively terminating the lease of the
Blue Diamond Property and selling virtually all assets and
liabilities effective with the close of Boomtown's merger with
Hollywood Park.
11.1 Computation of per share earnings.
SCHEDULE OF EXHIBITS (CONTINUED)
EXHIBIT
NUMBER DESCRIPTION
(1) Incorporated by reference to the exhibit filed with the Company's
Registration Statement on Form S-1 (File No. 33-51968), effective
October 22, 1992.
(2) Incorporated by reference to the exhibit filed with the Company's
Current Report on Form 8-K, filed with the SEC on March 18, 1993.
(3) Incorporated by reference to the exhibit filed with the Company's
Current Report on Form 8-K, filed with the SEC on April 1, 1993.
(4) Incorporated by reference to the exhibit filed with the Company's
Registration Statement on Form S-1 (File No. 33-61198), effective May
24, 1993.
(5) Incorporated by reference to the exhibit filed with the Company's
Current Report on Form 8-K, filed with the SEC on July 28, 1993.
(6) Incorporated by reference to the exhibit filed with the Company's
Current Report on Form 8-K, filed with the SEC on December 23, 1993.
(7) Incorporated by reference to the exhibit filed with the Company's Form
10-K for the fiscal year ended September 30, 1993.
(8) Incorporated by reference to the exhibit filed with the Company's Form
10-Q for the quarter ended December 31, 1993.
(9) Incorporated by reference to the exhibit filed with the Company's
Registration Statement on Form S-4 (File No. 33-70350), effective
May 6, 1994.
27
(10) Incorporated by reference to the exhibit filed with the Company's Form
10-Q for the quarter ended June 30, 1994.
(11) Incorporated by reference to the exhibit filed with the Company's Form
10-K for the fiscal year September 30, 1994.
(12) Incorporated by reference to the exhibit filed with the Company's
Current Report on Form 8-K, filed with the SEC on January 25, 1995.
(13) Incorporated by reference to the exhibit filed with the Company's
Current Report on Form 8-K, filed with the SEC on April 14, 1995.
(14) Incorporated by reference to the exhibit filed with the Company's Form
10-Q for the quarter ended March 31, 1995.
(15) Incorporated by reference to the exhibit filed with the Company's Form
10-Q for the quarter June 30, 1995.
SCHEDULE OF EXHIBITS (CONTINUED)
EXHIBIT
NUMBER DESCRIPTION
(16) Incorporated by reference to the exhibit filed with the Company's Form
10-K for the fiscal year September 30, 1995.
(17) Incorporated by reference to the exhibit filed with the Company's
Current Report on Form 8-K, filed with the SEC on April 23, 1996.
(18) Incorporated by reference to the exhibit filed with the Company's Form
10-Q for the quarter ended March 31, 1996.
28
BOOMTOWN, INC.
EXHIBIT 11.1 - STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
(LOSS) OF THE COMPANY
Three Months Ended Nine Months Ended
June 30, June 30,
1995 1996 1995 1996
----------- ----------- ----------- -----------
Net income (loss) applicable to Common Stock ($1,849,219) ($34,974,699) ($ 1,212,066) ($35,283,284)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Weighted average shares outstanding 9,228,726 9,251,482 9,226,643 9,243,243
Net effect of dilutive stock options based
on the treasury stock method using
the average market price -- -- -- --
----------- ----------- ----------- -----------
Total weighted average shares outstanding 9,228,726 9,251,482 9,226,643 9,243,243
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Net income (loss) per share of Common Stock ($ 0.20) ($ 3.78) ($ 0.13) ($ 3.82)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
28