LAS VEGAS, March 7 /PRNewswire-FirstCall/ -- Riviera Holdings Corporation (AMEX:RIV) today reported financial results for the three-month and the twelve-month periods ended December 31, 2007. The Company reported record Adjusted EBITDA, as defined below, and operating income for 2007.
Consolidated 2007 Results Net revenues for the year ended December 31, 2007 were $205.5 million, an increase of $4.6 million or 2.3 percent from the same period in 2006. The increase in net revenues was primarily related to a $3.2 million increase in room revenue in Las Vegas, offset by a $1.0 million reduction in Las Vegas food and beverage revenues and a $2.4 million increase in casino revenues in Black Hawk. The improvement in the average daily cash room rate in Las Vegas was 7.7 percent, or $5.90 per room, and the increase in slot revenues in Black Hawk was a result of the slot revenue mix.
Income from operations was $29.8 million, an increase of $4.4 million or 17.2 percent from 2006, and a record for the Company. Included in income from operations for the years ended December 31, 2007 and 2006 were expenses of $600,000 and $1.3 million, respectively, related to mergers, acquisitions and development costs. Adjusted EBITDA was $44.6 million, an increase of $4.3 million or 10.7 percent from the same period in 2006, and another record for the Company.
The net loss for the year ended December 31, 2007 was $18.3 million, or $1.48 per share, compared with a net loss of $335,000, or $0.03 per share, for the year ended December 31, 2006. The increased net loss for 2007 was a result of the Company's refinancing its $215 million debt in July. Included in the refinancing costs was $7.9 million in cash costs for the premium to call the debt. Also incurred were non-cash charges of $5.0 million in connection with the write-off of the previous debt, and an additional $13.3 million of non-cash expense for the effects of accounting for the interest rate swap agreement with the current debt facility. This increase was partially offset by a $3.9 million reduction in net interest expense for 2007 and a $4.4 million increase in operating income.
2007 Highlights
-- Riviera Las Vegas net revenue increased $2.3 million or 1.5 percent
-- Riviera Las Vegas property EBITDA was $30.2 million, an increase of
7.4 percent
-- Riviera Black Hawk net revenue increased $2.2 million or 4.3 percent
-- Riviera Black Hawk property EBITDA was $19.1 million, a increase of
13.7 percent
Fourth Quarter 2007
Net revenues for the three months ended December 31, 2007 were $47.4 million, an increase of $950,000 over the fourth quarter of 2006. The increase in net revenues was generated from higher entertainment revenues in Las Vegas primarily related to having a show in the main show room in 2007, compared to no show in that venue in the fourth quarter of 2006.
Income from operations was $4.7 million for the fourth quarter of 2007, essentially flat with the fourth quarter of 2006. Included in income from operations in the fourth quarter of 2007 was $72,000 in asset impairment costs compared to $3,000 in 2006. The 2007 impairment costs related to a write off of costs associated with certain slot machines in Black Hawk that were no longer in compliance with local gaming laws. Net loss for the fourth quarter of 2007 was $6.1 million, or $0.50 per share, compared with a net loss $1.6 million, or $0.13 per share for the fourth quarter of 2006. The higher net loss in the fourth quarter of 2007 was a result of non-cash expense of $6.6 million related to the Company's accounting for its interest rate swap agreements, offset by $2.1 million reduction in net interest expense related to the refinancing.
Adjusted EBITDA was $8.5 million in the fourth quarter of 2007 compared to $8.4 million in 2006, an improvement of 1.5 percent. Adjusted EBITDA consists of earnings before interest including the effects of the swap and refinancing, income taxes, depreciation, amortization, equity-based compensation, asset impairments, and mergers, acquisitions and development costs, as shown in the reconciliation to net loss in the tables and notes of this release.
Fourth Quarter 2007 Developments
-- Riviera Las Vegas net revenue increased $681,000 or 2.0 percent
-- Riviera Las Vegas Property EBITDA increased $477,000, or 8.6 percent
-- Riviera Black Hawk net revenue increased $273,000 or 2.2 percent
-- Riviera Black Hawk Property EBITDA was $4.0 million, a decrease of
1.2 percent
-- Cash as of December 31, 2007 was $31.6 million compared to
$25.2 million on December 31, 2006
-- A $20 million revolver was fully available on December 31, 2007
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 room product, as well as implementing 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, 2007 was 93 percent and consistent with 2006. However, our revenue per available room rate (RevPar) for 2007 was $77.05 compared to $72.37 in 2006, a 6.5 percent increase. Our average daily win per slot unit increased to $148.84 in 2007 compared to $127.27 in 2006. This was a result of significant upgrades to our slot product and the reengineering of the slot floor to cater to the demands of our customers. These changes, along with our new state of the art Race & Sports Book and Grill which opened in February of 2008, have been very favorably received," said Mr. Vannucci.
Riviera Black Hawk Mark Lefever, the President of Riviera Black Hawk, said, "We are very pleased with the performance of our Black Hawk property in 2007. We attribute our record EBITDA of over $19 million to our ability to exceed the demands of our Black Hawk guests. On January 1, 2008, we opened three outdoor smoking patios at an aggregate cost of approximately $1.2 million. Additionally, last month we welcomed Nick Polcino as the property's new General Manager. Nick comes to us with a significant amount of gaming experience, most recently as an AGM of a property located in Tunica, Mississippi. His insight and attention to detail brings a great complement to our team." Consolidated Operations Mr. Westerman said, "The Company recorded record results for 2007. Non- cash costs associated with our refinancing and swap agreement were slightly greater than our reported net loss. Our capital improvements are well underway in Las Vegas, and we are excited about the current opportunities available to the Riviera in Las Vegas. We are concerned with the potential expansion of slot machines to racetracks in Colorado, and what could be a considerable impact on the gaming market in Black Hawk and Central City." Termination of Formal Strategic Process The Company announced that it has completed its formal strategic review process which commenced in May 2007 when it retained Jefferies & Company, Inc. as financial advisor to assist in exploring a range of potential strategic and financial alternatives in order to enhance shareholder value. In the course of this process, the Company's financial advisor thoroughly explored a sale of the entire Company, contacting over thirty-five potential bidders over several months, including Riv Acquisition Holdings and its affiliates.
In deciding to terminate the strategic alternative process, The Company took into account the uncertainty that would be faced by any potential buyer in attempting to complete a potential transaction, the deterioration in the credit markets, the potential costs of terminating the Company's swap agreement due to the unprecedented drop in interest rates, the ability to obtain shareholder and regulatory approval of a transaction, the possibility of increased competition from slot machines at Colorado racetracks and the impact of weak economic conditions on the Company's business.
While the Company's strategic review process did not result in entering into a transaction to sell the entire Company at the present time, the Company has and will continue to review all opportunities and consider all proposals that it receives, as well as other possible ways in which the Company can maximize shareholder value.
The Company continues to have discussions with the Riv Acquisition Holdings group regarding a possible sale of the Company, although no agreements have been entered into related to such a transaction, nor can any assurance be given that an agreement will be ultimately entered into, or if entered into, on what terms or price.
2008 Annual Stockholder's Meeting The Annual Meeting of the Riviera Holdings Corporation stockholders is scheduled on Tuesday, May 13, 2008 at 11:00 am, Pacific Standard Time at the Riviera Hotel and Casino, 2901 Las Vegas Boulevard South, Las Vegas, Nevada.
Conference Call Information In conjunction with the release of fourth quarter 2007 financial results, Riviera will broadcast a conference call at 2 p.m. Eastern Standard Time today, Friday, March 7, 2007. Investors can listen to the call via the Internet at http://www.rivierahotel.com/ or by dialing (800) 268-8047. The conference call rebroadcast will be available at (888) 203-1112, pass code 2829744.
Forward-Looking Statements In accordance with the "Safe Harbor" provisions (as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) of the Private Securities Litigation Reform Act of 1995, we provide the following cautionary remarks regarding important factors which, among others, could cause future results to differ materially from the forward-looking statements, expectations and assumptions expressed or implied in this news release. Forward-looking statements include the words "may," "aim," "foresee," "potential," "should," "would," "could," "likely," "estimate," "intend," "plan," "continue," "believe," "expect," "projections" or "anticipate," and similar words, and they include all discussions about ongoing or future plans, objectives or expectations. Risks and uncertainties that could cause actual results to differ materially from the results anticipated in the forward-looking statements include, among other factors: uncertain hotel and casino market conditions, financing requirements, interest rates, proposals for the acquisition of Riviera, increases in energy costs, economic and political instability, disruptions affecting expansion and modernization objectives and timetables, onerous regulatory requirements, fiscally burdensome planned or unplanned Capital Expenditures and other risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission. Forward-looking statements involve significant known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements expressed or implied by the forward-looking statements. We do not intend to update 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
2007 2006 Var % Var
Net Revenues
Riviera Las Vegas $34,908 $34,227 $681 2.0%
Riviera Black Hawk 12,515 12,242 273 2.2% Total Net Revenues 47,423 46,469 954 2.1% Operating Income
Riviera Las Vegas 4,253 3,765 488 13.0%
Riviera Black Hawk 2,449 2,595 (146) -5.6%
Mergers, Acquisitions and
Development Costs, net (163) (159) (4) 2.5%
Equity-Based Compensation (207) (224) 17 7.5%
Asset Impairment (72) (3) (69) NM%
Corporate Expenses (1,535) (1,230) (305) -24.8% Total Operating Income 4,725 4,744 (19) -0.4% Adjusted EBITDA (1)
Riviera Las Vegas 6,023 5,546 477 8.6%
Riviera Black Hawk 4,001 4,051 (50) -1.2%
Corporate Expenses (1,535) (1,230) (305) -24.8% Total Adjusted EBITDA 8,489 8,367 122 1.5% Adjusted EBITDA Margins (2)
Riviera Las Vegas 17.3% 16.2% 1.1%
Riviera Black Hawk 32.0% 33.1% -1.1%
Consolidated 17.9% 18.0% -0.1% Net loss $(6,140) $(1,601) $(4,539) EARNINGS PER SHARE DATA Weighted average basic shares
outstanding 12,326 12,170 156
Basic loss per share $(0.50) $(0.13) $(0.37) Weighted average diluted shares
outstanding 12,326 12,170 156
Diluted loss per share $(0.50) $(0.13) $(0.37)
Twelve Months Ended December 31
2007 2006 Var % Var
Net Revenues
Riviera Las Vegas $151,505 $149,202 $2,303 1.5%
Riviera Black Hawk 53,990 51,742 2,248 4.3% Total Net Revenues 205,495 200,944 4,551 2.3% Operating Income
Riviera Las Vegas 23,530 21,000 2,530 12.0%
Riviera Black Hawk 12,653 11,209 1,444 12.9%
Mergers, Acquisitions and
Development Costs, net (611) (1,318) 707 53.6%
Equity-Based Compensation (966) (813) (153) -18.8%
Asset Impairment (72) (19) (53) 278.9%
Corporate Expenses (4,745) (4,643) (102) -2.2% Total Operating Income 29,712 25,416 4,373 17.2% Adjusted EBITDA (1)
Riviera Las Vegas 30,166 28,075 2,091 7.4%
Riviera Black Hawk 19,133 16,825 2,308 13.7%
Corporate Expenses (4,745) (4,643) (102) -2.2% Total Adjusted EBITDA 44,554 40,257 4,297 10.7% Adjusted EBITDA Margins (2)
Riviera Las Vegas 19.9% 18.8% 1.1%
Riviera Black Hawk 35.4% 32.5% 2.9%
Consolidated 21.7% 20.0% 1.7% Net loss $(18,258) $(335) $(17,923) EARNINGS PER SHARE DATA Weighted average basic shares
outstanding 12,309 12,134 175
Basic loss per share $(1.48) $(0.03) $(1.46) Weighted average diluted shares
outstanding 12,309 12,134 175
Diluted loss per share $(1.48) $(0.03) $(1.46) (1) Adjusted EBITDA consists of earnings before interest, income taxes
depreciation, amortization, equity-based compensation, asset
impairment loss on extinguishments of debt, the effects of the
accounting for our interest rate swap agreement, and mergers,
acquisitions and development costs, net, as shown in the
reconciliation with net income in the tables below in this release. 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 to Adjusted EBITDA
is included in the tables below in this release.
(2) Adjusted EBITDA margins represent Adjusted EBITDA divided by Net
Revenues.
Reconciliation of Net Income to Adjusted EBITDA
(Amounts in thousands) Net Interest
Income Income Asset
(Loss) & (Exp.) Depreciation Impairment
Fourth Quarter 2007:
Riviera Las Vegas $4,293 $40 $2,271 $ -
Riviera Black Hawk 1,092 (1,285) 1,051 72
Corporate (11,525) (9,620) - -
$ (6,140) $(10,865) $3,322 $72 Fourth Quarter 2006:
Riviera Las Vegas $3,803 $38 $2,260 $ -
Riviera Black Hawk 697 (1,898) 977 -
Corporate (6,101) (4,485) - 3
$(1,601) $(6,345) $3,237 $ 3 Twelve Months Ended
December 31, 2007:
Riviera Las Vegas $ 23,715 $ 185 $9,143 $ -
Riviera Black Hawk 5,785 (6,796) 3,973 72
Corporate (47,758) (41,436) - -
$(18,258) $(48,047) $13,116 $72 Twelve Months Ended
December 31, 2006:
Riviera Las Vegas $21,118 $ 118 $9,032 $ -
Riviera Black Hawk 3,564 (7,645) 3,659 -
Corporate (25,017) (18,224) - 19
$(335) $(25,751) $12,691 $19
Mergers,
Equity Acquisitions,
Based Development Management Adjusted
Comp. & Costs, net Fee EBITDA Fourth Quarter 2007:
Riviera Las Vegas $ - $ - $(501) $6,023
Riviera Black Hawk - - 501 4,001
Corporate 207 163 - (1,535)
$207 $163 $ - $8,489 Fourth Quarter 2006:
Riviera Las Vegas $ - $ - $(479) $5,546
Riviera Black Hawk - - 479 4,051
Corporate 224 159 - (1,230)
$224 $159 $ - $8,367 Twelve Months Ended
December 31, 2007:
Riviera Las Vegas $ - $ - $(2,507) $30,166
Riviera Black Hawk - - 2,507 19,133
Corporate 966 611 - (4,745)
$966 $611 $ - $44,554 Twelve Months Ended
December 31, 2006:
Riviera Las Vegas $ - $ - $(1,957) $28,075
Riviera Black Hawk - - 1,957 16,825
Corporate 813 1,318 - (4,643)
$813 $1,318 $ - $40,257 Balance Sheet Summary December 31, December 31,
2007 2006 Cash and short term investments $31,592 $25,285
Total current assets 40,211 34,142
Property and equipment, net 172,865 171,320
Total assets 218,462 213,682
Total current liabilities 26,665 25,235
Long-term debt, net of current
portion 225,287 214,124
Total shareholders' deficiency (47,826) (30,534) 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,
2007 2006 2007 2006
REVENUES
Casino $26,399 $26,253 $114,340 $111,459
Rooms 13,614 13,615 59,890 56,700
Food and beverage 7,416 7,371 32,353 33,125
Entertainment 3,539 2,506 13,498 13,672
Other 1,591 1,461 6,632 6,431
Total Revenues 52,559 51,206 226,713 221,387
Less - promotional allowances (5,136) (4,737) (21,218) (20,443)
Net revenues 47,423 46,469 205,495 200,944
COSTS AND EXPENSES
Direct costs and expenses of
operating departments
Casino 13,737 14,322 56,197 57,311
Rooms 6,502 6,484 28,121 27,100
Food and beverage 5,240 5,482 23,848 24,144
Entertainment 2,334 1,642 8,687 9,377
Other 317 300 1,360 1,437
Other operating expenses
General and administrative 10,804 9,872 42,728 41,318
Mergers, acquisitions and
development costs, net 163 159 611 1,318
Equity-based compensation 207 224 966 813
Asset impairment 72 3 72 19
Depreciation and amortization 3,322 3,237 13,116 12,691
Total costs and expenses 42,698 41,725 175,706 175,528
INCOME FROM OPERATIONS 4,725 4,744 29,789 25,416
Interest expense, net (10,865) (6,345) (48,047) (25,751)
NET LOSS $(6,140) $(1,601) $(18,258) $(335)
Shares Outstanding
Basic 12,326 12,170 12,309 12,134
Diluted 12,326 12,170 12,309 12,134
Net loss per common share
Basic $(0.50) $(0.13) $(1.48) $(0.03)
Diluted $(0.50) $(0.13) $(1.48) $(0.03)
DATASOURCE: Riviera Holdings Corporation CONTACT: Mark Lefever, Treasurer and CFO of Riviera Holdings Corporation, +1-702-794-9527, fax, +1-702-794-9442, ; or Investor Relations, Betsy Truax of Skorpus Consulting, +1-208-241-3704, fax, +1-208-232-5317, , for Riviera Holdings Corporation Web site: http://www.theriviera.com/
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