Riviera Reports Record Results for First Quarter 2007
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Riviera Reports Record Results for First Quarter 2007
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Category: Worldwide -
This is a press release selected by our editorial committee and published online for free on 2007-05-08
Riviera Reports Record Results for First Quarter 2007
Riviera Holdings Corporation
(Amex: RIV) today reported financial results for the three-month period
ended March 31, 2007. The Company reported record net income, adjusted
EBITDA, as defined below, and operating income for the first quarter of
2007.
First Quarter 2007
Net revenues for the three months ended March 31, 2007 were $52.0
million, an increase of approximately $340,000 over the first quarter of
2006. The increase in net revenues was generated from increased casino
revenues in both Las Vegas and Black Hawk and increased room revenues in
Las Vegas. The increases in casino revenues of $690,000 in Las Vegas and
$340,000 in Black Hawk were primarily a result of the positive effects of a
new slot product installed in 2006 and of targeted marketing efforts at
both locations. Additionally, room revenue increased $1.5 million in Las
Vegas primarily from increases in both occupancy and average daily rate
(ADR) to 93.2 percent and $89.70, from 90.9 percent and $83.60,
respectively. These increases were offset by a $1.3 million decrease in
entertainment revenues in Las Vegas as a result of two shows that were
closed in 2006, and a $700,000 decrease in food and beverage revenues,
primarily in Las Vegas due to lower banquet revenues.
Income from operations was $9.0 million for the first quarter of 2007,
an increase of $1.2 million or 15 percent from the first quarter of 2006.
Net income for the quarter of $2.6 million, or $0.20 on a diluted per share
basis, was an improvement of $1.3 million and a 100 percent increase from
the first quarter of 2006, when the Company reported net income of $1.3
million.
Adjusted EBITDA(1) was $12.5 million in the first quarter of 2007
compared to $11.4 million in the first quarter of 2006, an improvement of
9.4 percent, and attributable to favorable operating results at both
properties and a $300,000 decrease in corporate expenses, primarily from
the reduction of direct costs associated with Sarbanes-Oxley Act expenses.
Adjusted EBITDA consists of earnings before interest, income taxes,
depreciation, amortization, equity-based compensation, asset impairments,
and mergers, acquisitions and development costs, as shown in the
reconciliation to net income in the tables and notes of this release. As of
the first quarter of 2007, the Company no longer excludes Sarbanes-Oxley
Act expenses in calculating Adjusted EBITDA. The 2006 period has been
adjusted to correspond with this presentation.
Debt Refinancing
Earlier this week, Wachovia and Company representatives met with
Moody's, Standard and Poor's, and over 50 potential investors to review the
new proposed $245 million Senior Secured Financing. "We are very encouraged
by both the presentations and the interest level," commented William L.
Westerman, the Company's Chief Executive Officer. "If we are successful in
our refinancing efforts, we plan on calling our Senior Secured Notes in
June of this year, which would free up approximately $7 million in cash per
year."
First Quarter 2007 Developments
* Riviera Las Vegas net revenue was $38.5 million, a slight increase over
2006 levels
* Riviera Las Vegas property EBITDA was $8.6 million compared to
$8.5 million in 2006
* Riviera Black Hawk net revenue increased $290,000 or 2.2 percent
* Riviera Black Hawk property EBITDA was $4.8 million, an increase of
15.0 percent
* The Company has $34 million in cash plus a $30 million revolver, which
was fully available as of March 31, 2007, compared to $28.7 million in
cash at March 31, 2006
Riviera Las Vegas
"At the Riviera, we continue to focus on providing our customers great
value for their Las Vegas Strip experience. We are very excited to welcome
a new show, 'ICE: Direct from Russia' to the Riviera. The show opened last
week and is the new must-see attraction at the Riviera. ICE is providing
another quality entertainment option to the Riviera family," said Robert
Vannucci, President of Riviera Las Vegas.
"All our volume indicators continue to remain strong as evidenced by
our occupancy for the first quarter of 2007 which was 93.2 percent compared
to 90.9 percent from the same period in 2006. In addition, our revenue per
available room rate (RevPar) for the first quarter 2007 was $83.61 compared
to $75.99 in 2006, a 10 percent increase. Our average daily win per slot
unit continues to increase and was $144.63 compared to $107.98 in the first
quarter of last year," he said.
Riviera Black Hawk
Mr. Westerman said, "We are extremely pleased with the performance of
our Black Hawk property in the first quarter. EBITDA increased 15 percent
compared to a year ago in spite of the highly competitive environment. Our
strong EBITDA margin of 35.5 percent continues to be 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 in Adjusted
EBITDA(1), operating income and net income for the first quarter 2007. The
100 percent increase in net income from the first quarter of 2006 to the
first quarter of 2007 is a testament to the management team's focus on
continually improving operations at both properties. Despite the
distractions related to the possible purchase of the Company, we continue
to improve our results and make strategic improvements to both Las Vegas
and Black Hawk."
Conference Call Information
In conjunction with the release of first quarter 2007 financial
results, Riviera will broadcast a conference call at 2 p.m. Eastern
Daylight Time today, Friday, May 4, 2007. Investors can listen to the call
via the Internet at http://www.rivierahotel.com or by dialing (888) 889-5345. The
conference call rebroadcast will be available at (877) 519-4471, pass code
8691148.
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,
refinancing opportunities and interest rates, increases in energy costs,
general economic and political conditions, 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.
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