<PAGE> 1
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
QUARTERLY REPORT FILED PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1996
-----------------
Commission File Number
ROBINSON PROPERTY GROUP
LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Mississippi 7999 64-0840031
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification
organization) Code Number)
568 Colonial Road
Memphis, Tennessee 38117
(901) 820-2460
(Address, including zip code, and telephone number, including
area code, of registrants' principal executive office)
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 (or 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
--- ---
<PAGE> 2
ROBINSON PROPERTY GROUP, L.P.
CONDENSED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
----------- ------------
(Unaudited)
ASSETS
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 26,545 $ 32,706
Accounts receivable, net 4,298 3,144
Interest receivable - related party - 305
Inventories 377 418
Prepaid expenses and other 799 166
-------- --------
Total current assets 32,019 36,739
-------- --------
Property and Equipment:
Land 2,505 2,505
Buildings, barge and improvements 50,190 50,171
Furniture, fixtures and equipment 16,261 16,142
Less: accumulated depreciation (6,875) (5,390)
-------- --------
62,081 63,428
Construction in progress 673 298
-------- --------
Net property and equipment 62,754 63,726
-------- --------
Other Assets:
Deferred finance charges, net 1,515 2,237
Goodwill, net 21,084 21,299
Other, net 1,813 1,861
-------- --------
$119,185 $125,862
======== ========
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Accounts payable $ 1,315 $ 2,671
Due to affiliates 6,302 4,710
Accrued expenses and other 9,795 8,404
------- -------
Total current liabilities 17,412 15,785
------- -------
Long-term debt, less current maturities 50,000 70,000
------- -------
Total liabilities 67,412 85,785
------- -------
Commitments and Contingencies
Partners' Capital 51,773 40,077
------- -------
$119,185 $125,862
======== ========
</TABLE>
The accompanying notes are an integral
part of these condensed financial statements.
2
<PAGE> 3
ROBINSON PROPERTY GROUP, L.P.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
1996 1995
------- --------
<S> <C> <C>
Revenues:
Casino $40,147 $16,847
Food and beverage 2,845 1,249
Hotel 896 412
Other 789 311
------- -------
44,677 18,819
Promotional allowances (2,892) (1,235)
------- -------
Net revenues 41,785 17,584
------- -------
Expenses:
Casino 16,474 6,421
Food and beverage 2,388 1,190
Hotel 322 234
Other 289 131
General and administrative 6,220 2,431
Depreciation and amortization 1,748 1,141
Preopening - 7,021
------- -------
Total 27,441 18,569
------- -------
Operating Income (Loss) 14,344 (985)
Other Income (Expense):
Interest expense (2,949) (1,411)
Interest and other income 301 15
------- -------
Net Income (Loss) $11,696 $(2,381)
======= =======
</TABLE>
The accompanying notes are an integral
part of these condensed financial statements.
3
<PAGE> 4
ROBINSON PROPERTY GROUP, L.P.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
1996 1995
-------- --------
<S> <C> <C>
Cash provided by operating activities 12,760 8,849
-------- --------
Cash flows from investing activities:
Purchases of property and equipment (513) (17,459)
Increase in construction payable - (2,283)
Increase in other assets - (3,669)
-------- --------
Net cash used in investing
activities (513) (23,411)
-------- --------
Cash flows from financing activities:
Proceeds from debt - 24,788
Payments on debt (20,000) (1,795)
Changes in due to/from affiliates 1,592 1,500
-------- --------
Net cash (used in) provided by
financing activities (18,408) 24,493
-------- --------
Net change in cash and cash equivalents (6,161) 9,931
Cash and cash equivalents, beginning of period 32,706 1,879
-------- --------
Cash and cash equivalents, end of period $ 26,545 $ 11,810
======== ========
</TABLE>
The accompanying notes are an integral
part of these condensed financial statements.
4
<PAGE> 5
ROBINSON PROPERTY GROUP, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. Introduction:
The accompanying unaudited Condensed Financial Statements of Robinson Property
Group, L.P., (the "Partnership") have been prepared in accordance with the
instructions to Form 10-Q, and therefore do not include all information and
disclosures for complete financial statements in conformity with generally
accepted accounting principles. The consolidated condensed balance sheet at
December 31, 1995 was derived from audited financial statements, but does not
include all disclosures required by generally accepted accounting principles.
The results for the periods indicated are unaudited, but reflect all
adjustments (consisting only of normal recurring adjustments) which management
considers necessary for a fair presentation of operating results. Results of
operations for interim periods are not necessarily indicative of a full year of
operations.
Operating results for the 1995 period include the operations of Robinson
Property Group, L.P. (dba the Horseshoe Casino Center), commencing February 13,
1995.
2. Commitments and Contingencies:
Long-Term Debt
The Partnership has issued an unconditional guarantee as to the prinicpal of
and the interest and premium (if any) on the indebtedness of its parent company
under the Senior Secured Credit Facility dated as of October 10, 1995, under
which its parent owed $93,185,000 at March 31, 1996. The Partnership has
issued a separate unconditional guarantee as to the principal of and the
interest and premium (if any) on the indebtedness of its parent under the
Senior Notes due 2000, under which its parent owed $100,000,000 at March 31,
1996, and owed $150,000,000 at April 10, 1996. Each of these guarantees is
secured by substantially all of the assets of the Partnership.
Litigation
The Partnership, during the normal course of operating its business, becomes
engaged in various litigation and other legal disputes. In the opinion of the
Partnership's management, the ultimate disposition of such disputes will not
have a material impact on the Partnership's operations.
5
<PAGE> 6
PART I FINANCIAL INFORMATION
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The following discussion and analysis provides information which Management
believes is relevant to an assessment and understanding of the financial
condition and results of operations of Robinson Property Group L.P. (the
"Company"). The discussion should be read in conjunction with the Condensed
Financial Statements and notes thereto.
RESULTS OF OPERATIONS
The significant improvement in the Company's operating results for the three
months ended March 31, 1996, compared with the prior year period ended March
31, is directly related to the timing of the opening of the casino in Tunica
County, Mississippi, on February 13, 1995. Accordingly, 1995 operating results
include operations commencing February 13, 1995.
The Horseshoe Casino Center opened on February 13, 1995 and contributed net
revenues and operating income of $41.8 million and $14.3 million, respectively
for the three months ended March 31, 1996. The 1995 period consisted of only
one and one-half months of operations and contributed net revenues of $17.6
million. Operating income for the 1995 period was a loss of $1.0 million which
included a $7.0 million charge for preopening expenses. The Horseshoe Casino
Center's 1996 net revenues include $40.1 million of casino revenues and $1.7
million of non-casino revenues. Casino revenue per day increased approximately
20.5% in 1996 to $441,000 from $366,000 in 1995.
The Horseshoe Casino Center operates in the competitive Tunica County,
Mississippi, market, which currently consists of nine casinos. An additional
casino is scheduled to open in that market in the second quarter of 1996 one
mile closer to Memphis, Tennessee, than the Horseshoe Casino Center. Also,
several of the existing Tunica casinos, including the Horseshoe Casino Center,
have announced expansion plans, including hotel rooms. The Horseshoe Casino
Center is currently one of only four casinos in the Tunica market with a hotel.
While management expects that this new competition will affect the Horseshoe
Casino Center's revenues and operating income, management also believes the
projects will increase the size and scope of the overall Tunica gaming market,
mitigating the potential adverse impact on future operating levels at the
Horseshoe Casino Center.
OTHER FACTORS AFFECTING EARNINGS
The increase in interest expense for the three months ended March 31, 1996,
compared with the prior year period ended March 31, 1995, is due to an increase
in the amount of debt outstanding. This was partially offset by a reduction in
the overall interest rate on the Company's long-term debt, which resulted from
the refinancing of the Company's existing indebtedness as discussed in the
Liquidity and Capital Resources section below. During the first quarter of
1995, the Company capitalized interest of approximately $651,000 associated
with the cost of construction.
LIQUIDITY AND CAPITAL RESOURCES
In October 1995, the Company refinanced substantially all of its existing
indebtedness with $70 million in proceeds of an Intercompany Senior Secured
Note ("the Intercompany Note") issued to its parent company, Horseshoe Gaming,
L.L.C. ("Gaming"). The Intercompany Note matures on September 30, 2000 and
requires mandatory principal redemptions with available cash flow as defined in
the agreement. The Intercompany Note requires quarterly interest payments at
13.31% per annum. During March 1996, the Company paid $20 million in principal
payments to Gaming with an additional $12 million in principal paid in April,
1996.
Long-Term Debt
The Partnership has issued an unconditional guarantee as to the prinicpal of
and the interest and premium (if any) on the indebtedness of Gaming
under the Senior Secured Credit Facility dated as of October 10, 1995, under
which Gaming owed $93,185,000 at March 31, 1996. The Partnership has
issued a separate unconditional guarantee as to the principal of and the
interest and premium (if any) on the indebtedness of its parent under the
Senior Notes due 2000, under which its parent owed $100,000,000 at March 31,
1996, and owed $150,000,000 at April 10, 1996. Each of these guarantees is
secured by substantially all of the assets of the Partnership.
Development
Management of the Company has plans to further develop its casino site in
Tunica, Mississippi, for a total cost of approximately $60-$70 million.
Development plans include an additional 15,000 square feet of gaming space for
450 slot machines and 18 to 20 table games, 320 additional hotel suites, a
multi-level 1,000-space parking garage and an entertainment facility which will
accommodate approximately 1,200 to 1,500 customers and include a health club,
two additional restaurants, convention facilities and other amenities.
Construction of the expansion has commenced and is expected to be completed
during the first quarter of 1997.
6
<PAGE> 7
OTHER FACTORS AFFECTING LIQUIDITY
As of March 31, 1996, the Company had cash and cash equivalents of
approximately $26.5 million. Within the next twelve months, the Company
expects to spend approximately $60 to $70 million for expansion of its existing
facility.
Management believes that the Company's cash and cash equivalents on hand and
cash from operations will be adequate to meet the Company's existing
obligations as they become due. Additional financing may be required to fund
the Company's development plans discussed above through additional borrowings
from Gaming under its existing Intercompany Note.
The Company does not expect the impact of inflation to have a material adverse
effect on its operations. Absent changes in competitive and economic
conditions or in specific prices affecting the industry, the Company believes
that the hotel-casino industry may be able to maintain its operating profit
margins in periods of general inflation by increasing minimum wagering limits
for its games and increasing the prices of its hotel rooms, food and beverage
and other items, and by taking actions designed to increase the number of
patrons.
The Company has not experienced any significant seasonal trends; however, the
Company has a limited operating history and the Company may determine in the
future that its revenues and income may be seasonal in nature.
PART II OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit No. 27 Financial Data Schedule (for SEC use only)
7
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Robinson Property Group Limited Partnership
a Mississippi limited partnership
By: Horseshoe GP, Inc.,
a Nevada corporation
Its: Manager
Date: June 25, 1996 By: /s/ Walter J. Haybert
----------------------------------------
Treasurer and Chief Financial Officer
of Horseshoe GP, Inc.
8
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
27 Financial Data Schedule (SEC use only)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 1996, AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 12,117
<SECURITIES> 14,428
<RECEIVABLES> 4,298<F1>
<ALLOWANCES> 0<F1>
<INVENTORY> 377
<CURRENT-ASSETS> 32,019
<PP&E> 69,629
<DEPRECIATION> 6,875
<TOTAL-ASSETS> 119,185
<CURRENT-LIABILITIES> 17,412
<BONDS> 50,000
0
0
<COMMON> 0
<OTHER-SE> 51,773
<TOTAL-LIABILITY-AND-EQUITY> 119,185
<SALES> 1,189<F2>
<TOTAL-REVENUES> 41,785
<CGS> 2,677
<TOTAL-COSTS> 19,473
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,949
<INCOME-PRETAX> 11,696
<INCOME-TAX> 0
<INCOME-CONTINUING> 11,696
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,696
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
Amounts inapplicable or not disclosed as a separate line item on the Statement
of Financial Position or Results of Operations are reported as 0 herein.
<F1>(1) Notes and accounts receivable-trade are reported net of allowances for
doubtful accounts in the Statement of Financial Position.
<F2>(2) Net sales are reported net of promotional allowances applicable to
tangible items.
</FN>
</TABLE>
