LAS VEGAS, April 22 /PRNewswire-FirstCall/ -- Riviera Holdings Corporation (AMEX:RIV) today reported financial results for the first quarter of 2002. Net revenues for the quarter were $46.5 million, down 11.0 percent from net revenues of $52.2 million in the first quarter of 2001. Income from operations for the quarter was $3.7 million down $1.8 million from the first quarter of 2001. EBITDA (Earnings Before Interest, income Taxes, Depreciation, Amortization and other income and expense, net) for the quarter was $8.2 million, down 15.7 percent from EBITDA of $9.7 million in the first quarter of 2001. The net loss was ($2.8 million) or ($0.82) cents per share compared to a net loss of ($658,000) or ($0.18) cents per share in the first quarter of 2001.
Riviera Holdings Corporation had cash and short-term investments of $41.5 million, working capital of $20.1 million and shareholders' equity of $6.2 million at March 31, 2002.
First Quarter 2001 Highlights
-- Riviera Black Hawk contributed $2.9 million in EBITDA, an increase of
$403,000 from the first quarter of 2001
-- Riviera Las Vegas EBITDA decreases $1.9 million or 27 percent due to
continued economic impact and subsequent rise in marketing costs
-- Riviera Las Vegas occupancy decreased from 96.3 percent in the first
quarter of 2001 to 87.9 percent in the first quarter of 2002
-- Riviera Las Vegas ADR (Average Daily Rate) decreased $5.82 to
$62.32 during the first quarter
-- Cash and short-term investments totaled $41.5 million at March 31,
2002
-- Management explores other gaming venues to further expand revenue base
Riviera Las Vegas
Bob Vannucci, President of Riviera Las Vegas, said, Although net revenues in Las Vegas were down $6.5 million or 15.8 percent for the first quarter, we saw improvements each month with March equaling the prior year's March EBITDA. For the quarter, the average daily rate decreased $5.82 to $62.32 and occupancy decreased 8.4 points to 87.9 percent. Hotel occupancy improved each month during the first quarter of 2002, from 74.5 percent in January to 89.5 percent in February and 99.6 percent in March. We have been able to bring occupancy back to normal levels; however, the ADR remained 9 percent below normal in March 2002. Slot machine coin-in or volume decreased 13.8 percent for the quarter while slot win decreased only 9.4 percent. Our margins in Las Vegas continue to be pressured by the economy and competitor actions, but have improved each month. For the quarter our margins were 15.1 percent compared to 17.4 percent in the same quarter of 2001. We are spending more marketing dollars to increase demand and will continue to focus and grow our incentive programs through the rest of the year and into 2003.
Our primary focus before September 11 was on customers arriving primarily by air and living in the mid-west and eastern United States. We increased our gaming marketing expenditures to protect and attract our loyal slot customer base. We increased our room marketing efforts towards customers in the western United States, and saw positive results by late January of 2002. Call volumes, booking patterns and occupancy began to normalize in mid January. We had an excellent Super Bowl and saw our hotel occupancy increase dramatically in February and March. Our tour operator programs have restored long haul vacation visitor bookings back to normal, although room rates continue to be depressed due to competitive pressures. Citywide convention attendance and room bookings continue to lag behind prior years. We have replaced much of that business with smaller in house conventions and increased business from our tour operators and loyal gaming customers, said Mr. Vannucci.
Riviera Black Hawk
First quarter 2002 revenues for Riviera Black Hawk were $11.8 million, an increase of $819,000 or 7.5 percent over first quarter 2001 revenues. First quarter EBITDA was $2.9 million, up $403,000 or 15.8 percent higher than last year's first quarter. EBITDA margin for the first quarter increased to 25 percent.
Ron Johnson, President of Riviera Black Hawk, said, It is encouraging to note that gaming revenues in the Black Hawk Market grew by a healthy 15.7 percent in the first quarter of 2002 compared to the first quarter of 2001, more than offsetting the 12.0 percent increase in gaming devices as a result of the opening of the Hyatt Casino in December, 2001. This continues a historical trend of growth for the Black Hawk market as new casinos offering a variety of new amenities have expanded the market's appeal to a broader base of customers.
We continue to refine our marketing efforts by constantly measuring the success rates of our own programs, while monitoring the offerings of our competitors. We are attempting to strike a balance between player incentives, gaming product, food offerings and entertainment as our primary marketing programs, said Mr. Johnson.
Consolidated Operations and New Venues
William L. Westerman, Chairman of the Board and CEO, said, We are encouraged by the fact that the decline in EBITDA from the prior year's quarter decreased from 19 percent in the fourth quarter of 2001 to 16 percent in the first quarter of 2002, and especially the improving trend with EBITDA for March 2002 compared to the prior year. In Las Vegas, with occupancy and restaurant covers returning to mostly normal levels, we have been able to recall all of our regular employees who were laid off following September 11. Black Hawk's continued successful EBITDA margins and return on investment motivate us to accelerate our diversification efforts.
We believe we will be endorsed by Jefferson County, Missouri for a casino/hotel development project located approximately 22 miles south of downtown St. Louis. As soon as we secure the Commission's endorsement, we will file a formal application with the Missouri Gaming Commission. However, we have been informed that the site selection process will not begin until late summer or early fall. Assuming we get approval from the state regulators, construction work should start in early 2003, with a completion date in late 2004 or early 2005.
We are pursuing another diversification possibility and have recently filed an application with the New Mexico Racing Commission to build and operate a racino with 600 slot machines in Hobbs, New Mexico. Lubbock and Odessa, Texas are within a 100-mile radius of Hobbs, and Amarillo, Texas is less than 200 miles away. The closest competitive gaming facility is 150 miles from Hobbs. We have an agreement for an option on 296 acres for this facility. The project would be a joint venture in which we would own 51 percent. The minority partner has been active for a long time in New Mexico's racing community. We understand that a total of four applications have been filed and that only one applicant may be granted a license.
Last week we celebrated Riviera Las Vegas's 47th anniversary and we are looking forward to our 50th. This has been a difficult six months for our property and we expect the remainder of 2002 and even 2003 to be challenging for all Las Vegas operators. However, the trend is going in the right direction as we are seeing slow, yet steady improvement in the Las Vegas market, said Mr. Westerman.
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