SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to
______________
Commission File number 333-18295
COLONIAL DOWNS HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Virginia 54-1826807
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
10515 Colonial Downs Parkway
New Kent, Virginia 23124
(Address of principal executive offices including zip code)
Registrant's telephone number, including area code:
(804) 966-7223
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 ____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of April 30, 1998.
Class Outstanding at April 30, 1998
Class A Common Stock, $.01 par value 5,000,000
Class B Common Stock, $.01 par value 2,250,000
<PAGE>
COLONIAL DOWNS HOLDINGS, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page Number
<S> <C>
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets -
March 31, 1998 and December 31, 1997 3
Consolidated Statements of Earnings--
Three Month Periods Ended
March 31, 1998 and 1997 4
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1998 and 1997 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial
Condition 8
Part II. Other Information
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 11
</TABLE>
<PAGE>
Part I. Financial Information
COLONIAL DOWNS HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
----------------- ---------------------
Assets (unaudited)
<S> <C>
Current assets
Cash and cash equivalents $ 2,310 $ 3,348
Horsemen's deposits 2,899 1,657
Accounts receivable 303 293
Prepaid expenses 690 497
Refundable income taxes 34 218
----------- -------------
Total current assets 6,236 6,013
Property and equipment 61,886 61,500
Less accumulated depreciation and amortization 994 660
----------- -------------
Net property and equipment 60,892 60,840
Other
Licensing costs, net of amortization 817 841
Miscellaneous 538 181
----------- -------------
Total other 1,355 1,022
----------- -------------
Total assets $ 68,483 $ 67,875
=========== =============
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 6,527 $ 11,678
Accrued expenses 874 637
Current maturities of long-term debt and capital
lease obligations 2,063 1,373
Deferred revenue 311 195
Purses due horsemen 2,889 1,597
----------- -------------
Total current liabilities 12,664 15,480
Long-term liabilities
Long-term debt and capital lease obligations, net
of current maturities 13,651 9,890
Notes payable - related parties 5,500 5,500
Other long-term liabilities 615 -
Deferred income taxes 84 84
----------- -------------
Total long-term liabilities 19,850 15,474
Stockholders' equity
Common stock
Class A, $.01 par value, 12,000,000 shares
Authorized; 5,000,000 outstanding 50 50
Class B, $.01 par value, 3,000,000 shares
Authorized; 2,250,000 shares outstanding 22 22
Additional paid in capital 37,842 37,842
Retained earnings (deficit) (1,945) (993)
----------- -------------
Total stockholders' equity 35,969 36,921
----------- -------------
Total liabilities and stockholders' equity $ 68,483 $ 67,875
=========== =============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
COLONIAL DOWNS HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
1998 1997
----------- ----------
<S> <C>
Revenues
Pari-mutuel and simulcasting commissions $ 6,444 $ 4,997
Other 328 420
----------- ----------
Total revenues 6,772 5,417
Operating expenses
Direct operating expenses
Purses, fees and pari-mutuel taxes 3,193 2,689
Simulcast and other direct expenses 2,592 1,882
Depreciation and amortization 516 102
----------- ----------
Total direct operating expenses 6,301 4,673
Selling, general, and administrative expenses 979 266
----------- ----------
Total operating expenses 7,280 4,939
Earnings (loss) from operations (508) 478
Other income (expense)
Interest expense (465) (38)
Interest income 21 25
----------- ----------
Earnings (loss) before income taxes (952) 465
Income taxes - 36
----------- ----------
Net earnings (loss) $ (952) $ 429
============ ==========
Earnings per share data
Basic and diluted earnings per share $ (0.13) $ 0.12
============ ==========
Weighted average number of shares outstanding 7,250 3,614
=========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
COLONIAL DOWNS HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------
1998 1997
---------- ---------
<S> <C>
Operating activities
Net earnings (loss) $ (952) $ 429
Adjustments to net earnings (loss)
Depreciation and amortization 516 102
(Increase) in accounts receivable and other assets (310) (30)
(Decrease) in accounts payable (281) (99)
Increase (decrease) in accrued expenses and other 354 (38)
Increase in horsemen's deposits and purses 50 -
---------- ---------
Net cash (used in) provided by operating activities (623) 364
Investing activities
Purchases of property and equipment (610) (4,076)
(Decrease) increase in construction payables (4,256) 48
(Decrease) in purses due horsemen - (1,620)
Investment in other assets - (6)
---------- ----------
Net cash used in investing activities (4,866) (5,654)
Financing activities
Proceeds from long-term debt and capital leases 4,628 129
Payments on long-term debt and capital leases (177) -
Net proceeds from stock offering - 36,291
Payments on stockholders' advances and notes payable - (699)
Proceeds from stockholder notes payable - 4,613
---------- ---------
Net cash provided by financing activities 4,451 40,334
---------- ---------
Net (decrease) increase in cash and cash equivalents (1,038) 35,044
Cash and cash equivalents, beginning of year 3,348 1,380
---------- ---------
Cash and cash equivalents, end of year $ 2,310 $ 36,424
========== =========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
COLONIAL DOWNS HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. In the opinion of management, the accompanying consolidated financial
statements of Colonial Downs Holdings, Inc. ( the "Company") have been
prepared in accordance with generally accepted accounting principles for
interim reporting, with applicable reporting regulations of the Securities
and Exchange Commission, and present fairly, in all material respects, the
Company's financial position as of March 31, 1998 and the results of
operations and the consolidated cash flows for the three-month periods
ended March 31, 1998 and 1997. All adjustments are of a normal, recurring
nature. The financial statements do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements and, accordingly, should be read in conjunction with
the consolidated financial statements and related footnotes included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1997.
Basic earnings per share is computed by dividing income available to common
shareholders by the weighted average number of common shares outstanding
for the period. Diluted earnings per share reflects the potential dilutive
effect of securities that could share in earnings of an entity. At March
31, 1998, there was no material dilutive effect on earnings (loss) per
share.
2. Long-term debt consists of the following (in thousands):
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
------------------ -------------------
<S> <C>
Note payable to a Bank maturing June 2000, with two one year
extensions, bearing interest at a variable rate (8.69% at March 31,
1997), with a $1,000,000 principal payment due in December 1998 and
quarterly principal payments of $500,000 commencing in March 1999,
collateralized by substantially all assets of the Company and
guaranteed by certain shareholders and related parties $ 10,000 $ 10,000
Convertible subordinated note payable to CD Entertainment, Ltd.,
maturing March 2000, with interest payable quarterly at a rate of
7.25%, collateralized by a second deed of trust on the
racetrack facility 5,500 5,500
Line of credit facility with a Bank, maturing June 2000, with two one
year extensions, bearing interest at a variable rate (ranging from
8.59% to 8.69% at March 31, 1998), collateralized by substantially
all assets of the Company and guaranteed by certain shareholders and
related parties 4,340 -
<PAGE>
Note payable to a Bank, maturing August 1999, bearing interest at
prime plus 1%, with monthly principal payments of $15,000,
collateralized by certain fixed assets 795 840
Note payable to an Insurance Company, maturing October 1998, bearing
interest at 7.30%, with monthly payments of $32,933 including
interest 188 -
Note payable to an Insurance Company, maturing October 1999, bearing
interest at 6.83%, with monthly payments of $8,622 including interest 148 170
Installment notes and capitalized leases collateralized by certain
vehicles, machinery and equipment, maturing at various dates through
September 2000, at interest rates ranging from 3% to
9% 243 253
------------------ ----------------------
21,214 16,763
Less current maturities 2,063 1,373
------------------ ----------------------
Long-term debt $ 19,151 $ 15,390
================== ======================
</TABLE>
3. Certain reclassifications have been made in the prior years' financial
statements to conform to the March 31, 1998 presentation.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
Overview
Colonial Downs Holdings, Inc. (the "Company") was organized to pursue
opportunities for horse racing and pari-mutuel wagering and holds the only
licenses to own and operate a racetrack and racing centers ("Racing Centers") in
Virginia. The Company currently operates Racing Centers in Chesapeake, Richmond,
Hampton, and Brunswick, and may apply for licenses for up to two additional
Racing Centers if suitable opportunities are identified. In September and
October 1997, the Company completed its inaugural thirty-day thoroughbred live
meet at its newly constructed racetrack (the "Track") located in New Kent
County, Virginia. On April 24, 1998, the Company began its first standardbred
racing meet, which will run through July 5, 1998. The Company's next
thoroughbred meet will commence August 24, 1998 and run through October 12,
1998. In addition, the Company has been selected to host the Breeders Crown, one
of the premier North American standardbred racing events, in November 1998. The
Company will also host the inaugural Virginia Derby, a race for three-year old
thoroughbreds. Both the Breeders Crown and the Virginia Derby are expected to be
televised on national cable networks.
Results of Operations
Three months ended March 31, 1998 compared to three months ended March 31, 1997
The following table presents the major components from the Company's
Consolidated Statements of Earnings as a percent of total revenues:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
1998 1997
--------------- ----------
<S> <C>
Revenues:
Pari-mutuel and simulcasting commissions 95.2% 92.2%
Other 4.8 7.8
--------- -----------
Total revenues 100.0 100.0
Direct operating expenses:
Purses, fees, and pari-mutuel taxes 47.2 49.7
Simulcast and other direct expenses 38.2 34.7
Depreciation and amortization 7.6 1.9
--------- -----------
Total direct operating expenses 93.0 86.3
Selling, general, and administrative expenses 14.5 4.9
--------- -----------
Total operating expenses 107.5 91.2
--------- -----------
Earnings (loss) from operations (7.5) 8.8
Interest (expense) income (6.6) (0.2)
----------- -----------
Earnings (loss) before taxes (14.1%) 8.6%
</TABLE>
Total revenues for the first quarter of 1998 amounted to $6.8 million, up $1.4
million (25%) from $5.4 million in the first quarter of 1997. Approximately $2.1
million of this increase was attributable to the operation of the Hampton and
Brunswick Racing Centers ("Racing Centers") which were not opened until December
1997. Excluding the impact of the new Racing Centers, total revenues decreased
by about $.7 million, primarily reflecting the anticipated effect of the new
Hampton Racing Center on the existing Chesapeake Racing Center, both of which
attract customers
<PAGE>
from the Tidewater region. Although revenues from the Chesapeake facility
decreased from the same period of the prior year, the combined operation of the
Chesapeake and Hampton Racing Centers increased revenue in the Tidewater region
by approximately $.9 million.
Operating expenses of $7.3 million for the first quarter of 1998 increased $2.4
million (47%) from $4.9 million in the first quarter of 1997. The increase
primarily resulted from the operation of the Hampton and Brunswick Racing
Centers ($2.0 million) in the first quarter of 1998 versus no operations in the
same period of the prior year. Also affecting the increase were depreciation,
corporate overhead, and other expenses associated with the ongoing operation of
the Company's racetrack ($1.2 million), which opened in September 1997.
Excluding the impact of the new Racing Centers, corporate overhead, and the
racetrack, operating expenses decreased by about $.9 million compared to the
first quarter of 1997. This reduction is primarily due to the reduction in
revenue at the Chesapeake Racing Center caused by the opening of the Hampton
Racing Center as well as improved operating efficiencies.
Due to the factors discussed above, the Company incurred a loss from operations
of $508,000 compared to earnings of $478,000 in the first quarter of 1997. All
Racing Centers with the exception of Brunswick operated at a profit for the
first quarter of 1998. Because the bulk of patrons that visit the Brunswick
Racing Center are from North Carolina, and customer traffic is heaviest later in
the week, the facility will be closed on Mondays and Tuesdays as of April 27,
1998 to maximize profitability and efficiency.
Other expenses increased to $444,000 in the first quarter of 1998 compared to
$13,000 in the same period of the prior year. This change of $431,000 reflects
the additional interest expense incurred from increased borrowings by the
Company to complete construction of the racetrack and Hampton and Brunswick
Racing Centers as well as the treatment of interest as an expense item in the
first quarter of 1998 versus as a capitalizable cost of construction in the same
period of the prior year.
Liquidity and Capital Resources.
The Company's primary sources of liquidity and capital resources have been
proceeds from the initial public offering of the Company's stock, long-term
debt, and stockholders loans. The Company believes that its cash on hand, cash
generated from operations, and access to other capital and financial resources
will be sufficient to cover its operating expenses and other cash requirements
for 1998.
Net cash used in operating activities totaled $623,000 for the first quarter of
fiscal 1998, representing a $987,000 decrease from $364,000 provided by
operating activities in the first quarter of the prior year. The decrease
primarily reflected the Company's net loss of $952,000 in the first quarter of
1998 versus net earnings of 429,000 in the same period of the prior year.
Net cash used in investing activities totaled $4.9 million for the first quarter
of 1998 and included property and equipment primarily for the completion of the
Track as well as the Hampton and Brunswick Racing Centers. Investing activities
were comprised of $.6 million in 1998 capital expenditures and approximately
$4.3 million related to the payment of construction payables accrued at December
31, 1997. Net cash used in investing activities in the first quarter of 1997
totaled $5.7 million, and reflected higher capital expenditures related to
constructing and preparing the Track for the inaugural live meet in September
1997. The Company anticipates that its capital spending in fiscal 1998 will
approximate $900,000.
<PAGE>
Net cash provided by financing activities was $4.4 million for the first quarter
of 1998 and reflected the Company's use of $4.3 million of its $5.0 million line
of credit facility to pay construction payables related to the completion of the
Track and Hampton and Brunswick Racing Centers as mentioned above.
Item 5. Other Information
Colonial Downs, L.P., a wholly-owned subsidiary of the Company, entered into a
First Amendment to Deed of Trust Note and Construction Loan Agreement, dated as
of February 27, 1998 (the "Amendment"). The Amendment modified the commencement
of the amortization of principal of the Company's $10,000,000 credit facility
from March 31, 1998 to March 31, 1999, with a $1,000,000 principal payment due
December 1, 1998.
Forward Looking Statements
This report contains forward-looking statements that inherently involve risks
and uncertainties. The Company's actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors. Statements regarding results of operations, the opening of additional
Racing Centers, and certain other statements contained in this report are
forward-looking statements and, as such, involve known and unknown risks,
uncertainties, and other factors which may cause the actual results,
performance, or achievements of the Company to be materially different from any
future results, performance, or achievements, expressed or implied by such
forward-looking statements. Such potential risks, uncertainties, and factors
include, but are not limited to, acts by parties outside the control of the
Corporation, including the Maryland Jockey Club and the Virginia Racing
Commission, political trends, the effects of adverse general economic
conditions, and governmental regulation, including licensing of additional
Racing Centers. The forward-looking statements contained herein speak only as of
the date of this report.
<PAGE>
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
<TABLE>
<CAPTION>
a. Exhibits:
<S> <C>
Exhibit Description
Exhibit 10.35 First Amendment to Deed of Trust Note and
Construction Loan Agreement dated as of
February 27, 1998, between Colonial Downs,
L.P., and PNC Bank, National Association
Exhibit 27 Financial Data Schedule
b. Reports on Form 8-K
</TABLE>
No reports on Form 8-K have been filed during the quarter for
which this report is filed.
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.
Colonial Downs Holdings, Inc.
Date: May 15, 1998 /s/ Ian M. Stewart
--------------------------------------
Ian M. Stewart, Vice President, Chief
Operating Officer and Chief
Financial Officer
FIRST AMENDMENT TO
DEED OF TRUST NOTE
AND CONSTRUCTION LOAN AGREEMENT
THIS FIRST AMENDMENT TO DEED OF TRUST NOTE AND CONSTRUCTION LOAN
AGREEMENT ("First Amendment") made as of the 27th day of February, 1998, between
COLONIAL DOWNS, L.P., a Virginia limited partnership, having its principal
office at 3610 Courthouse Road, P.O. Box 456, Providence Forge, Virginia 23140
(the "Borrower") and PNC BANK, NATIONAL ASSOCIATION ("the Bank"), whose address
is One PNC Plaza, P1-POPP-19-2, 19th Floor, 249 Fifth Avenue, Pittsburgh,
Pennsylvania 15222-2707, Attention: Real Estate Banking.
W I T N E S S E T H:
WHEREAS, the Borrower executed and delivered to the Bank that certain
Deed of Trust Note (the "Note") dated June 26, 1997, in the original principal
amount of $10,000,000 (all capitalized terms employed herein shall have the
meanings ascribed to such terms in the Note unless defined to the contrary
herein) pursuant to the terms and conditions of that certain Construction Loan
Agreement dated June 26, 1997 (the "Agreement"); and
WHEREAS, the Borrower remains the owner of, and party to, the Note, the
Agreement and of the other documents executed in connection with the Note; and
WHEREAS, the parties desire to amend the amortization schedule by
deferring the commencement date of principal payments required under the Note
from March 31, 1998 to December 1, 1998, and to amend the Note and the Agreement
in certain other respects.
NOW, THEREFORE, for good and valuable consideration, intending to be
legally bound, the parties covenant and agree as follows:
1. The definition of the term "Amortization Period" as used in
paragraph B of the Note and defined in paragraph 1.1 of the Agreement is hereby
amended to provide in full as follows:
"Amortization Period" shall mean the period of time during the
term of the Loan where Borrower shall make Mandatory Principal Payments
to Lender; which period shall begin on March 31, 1999
2. Paragraph B of the Note is hereby further amended by adding the
following sentence at the beginning of Paragraph B:
"On December 1, 1998, Borrower shall make a principal payment
in the amount of One Million Dollars ($1,000,000)".
3. Except as specifically modified herein, each of the Note and the
Agreement is hereby ratified and confirmed and all other terms and conditions of
the Note and the Agreement remain in full force and effect. Nothing contained
herein shall be deemed to constitute a novation of the obligations of Borrower
evidenced by the Note.
4. The Borrower hereby represents and warrants to the Bank that (a) no
Event of Default, and no event or condition which, with the passage of time or
the giving of notice or both, would constitute an Event of Default, has occurred
and is continuing on the date hereof, and (b) the Borrower has no set-off claim
or other defense with respect to its obligations under the Note, the Agreement,
and the other loan documents executed in connection therewith.
[Signatures to follow]
<PAGE>
IN WITNESS WHEREOF, the parties have executed this First Amendment as
of the date first written above.
ATTEST: PNC BANK, NATIONAL ASSOCIATION
/s/ Michael E. Smith By: /s/ Dina S. Muth
- -------------------- ----------------
Title: Vice President Title: Real Estate Officer
COLONIAL DOWNS, L.P., a Virginia limited
partnership
ATTEST: By: STANSLEY RACING CORP., a
Virginia corporation, its sole general
partner
/s/ Jim Weinberg By: /s/ Jeffrey P. Jacobs
- ---------------- -------------------------------
Title: _________________________ Title: CEO and President
<PAGE>
CONSENT
Each of the undersigned hereby consents as of the date first written above to
this First Amendment to Deed of Trust Note and Construction Loan Agreement and
ratifies and reaffirms its respective obligations under the Loan Documents,
including without limitation, the Guaranties, the Pledge Agreements and the
Subordination Agreement (Deed of Trust):
/s/ Jeffrey P. Jacobs
---------------------
JEFFREY P. JACOBS
/s/ Richard E. Jacobs
---------------------
RICHARD E. JACOBS
/s/ Jeffrey P. Jacobs
---------------------
STANSLEY RACING CORP.
By: Jeffrey P. Jacobs
Title: CEO and President
COLONIAL DOWNS HOLDINGS, INC.
By: /s/ Jeffrey P. Jacobs
-------------------------
Title: CEO and President
CD ENTERTAINMENT, LTD.
By: Jacobs Entertainment, Ltd., its Manager
By: /s/ Jeffrey P. Jacobs
---------------------
Title: Manager
<PAGE>
COMMONWEALTH OF PENNSYLVANIA )
) SS.:
COUNTY OF ALLEGHENY )
On this, the 30th day of March, 1998, before me, a Notary
Public, personally appeared Dina S. Muth, who acknowledged himself to be the
Real Estate Officer of PNC BANK, NATIONAL ASSOCIATION, and that he as such
officer, being authorized to do so, executed the foregoing instrument for the
purposes therein contained, by signing the name of the association by himself as
such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Karen Krzywicki
-------------------
Notary Public
My Commission Expires: July 23, 2001
COMMONWEALTH OF VIRGINIA )
) SS:
CITY OF RICHMOND )
On this, the 18th day of March, 1998, before me, a Notary
Public, personally appeared Jeffrey P. Jacobs, who acknowledged himself to be
the President and Chief Executive Officer of STANSLEY RACING CORP., a Virginia
corporation, the general partner of COLONIAL DOWNS, L.P., a Virginia limited
partnership, and that he as such officer, being authorized to do so, executed
the foregoing instrument for the purposes therein contained, by signing the name
of the corporation as general partner of such limited partnership by himself as
such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Rebecca S. Heath
--------------------
Notary Public
My Commission Expires: February 28, 2001
<PAGE>
COMMONWEALTH OF VIRGINIA )
) SS:
CITY OF RICHMOND )
On this, the 18th day of March, 1998, before me, a Notary Public,
personally appeared Jeffrey P. Jacobs, known to me (or satisfactory proven) to
be the person whose name is subscribed to the within instrument, and
acknowledged that such person executed the same for the purposes therein
contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Rebecca S. Heath
--------------------
Notary Public
My Commission Expires: February 28, 2001
STATE OF OHIO )
) SS:
COUNTY OF CUYAHOGA )
On this, the 24th day of March, 1998, before me, a Notary Public,
personally appeared Richard E. Jacobs, known to me (or satisfactory proven) to
be the person whose name is subscribed to the within instrument, and
acknowledged that such person executed the same for the purposes therein
contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Judith A. Radovic
---------------------
Notary Public
My Commission Expires: May 2, 2001
COMMONWEALTH OF VIRGINIA )
) SS:
CITY OF RICHMOND )
On this, the 18th day of March, 1998, before me, a Notary Public,
personally appeared Jeffrey P. Jacobs, who acknowledged himself to be the
Manager of Jacobs Entertainment, Ltd., Manager of CD ENTERTAINMENT, LTD., an
Ohio limited liability company, and that he as such officer, being authorized to
do so, executed the foregoing instrument for the purposes therein contained, by
signing the name of the corporation as general partner of such partnership by
himself as such officer.
<PAGE>
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Rebecca S. Heath
--------------------
Notary Public
My Commission Expires: February 28, 2001
COMMONWEALTH OF VIRGINIA )
) SS:
CITY OF RICHMOND )
Before me, a Notary Public, in and for said City and State, personally
appeared Jeffrey P. Jacobs, President and Chief Executive Officer of COLONIAL
DOWNS HOLDINGS, INC., a Virginia corporation, on behalf of the corporation, who
acknowledged that he did sign the foregoing instrument and that the same is his
free act and deed.
In Testimony Whereof, I have hereunto set my hand and official seal at
11:40 a.m. this 18th day of March, 1998.
/s/ Rebecca S. Heath
--------------------
Notary Public
My Commission Expires: February 28, 2001
COMMONWEALTH OF VIRGINIA )
) SS:
CITY OF RICHMOND )
Before me, a Notary Public, in and for said City and State, personally
appeared Jeffrey P. Jacobs, President and Chief Executive Officer of STANSLEY
RACING CORP., who acknowledged that he did sign the foregoing instrument and
that the same is his free act and deed.
In Testimony Whereof, I have hereunto set my hand and official seal at
11:40 a.m. this 18th day of March, 1998.
/s/ Rebecca S. Heath
--------------------
Notary Public
My Commission Expires: February 28, 2001
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF EARNINGS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 2,310
<SECURITIES> 0
<RECEIVABLES> 303
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,236
<PP&E> 61,886
<DEPRECIATION> 994
<TOTAL-ASSETS> 68,483
<CURRENT-LIABILITIES> 12,664
<BONDS> 0
0
0
<COMMON> 72
<OTHER-SE> 35,897
<TOTAL-LIABILITY-AND-EQUITY> 68,483
<SALES> 0
<TOTAL-REVENUES> 6,772
<CGS> 0
<TOTAL-COSTS> 7,280
<OTHER-EXPENSES> (21)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 465
<INCOME-PRETAX> (952)
<INCOME-TAX> 0
<INCOME-CONTINUING> (952)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (952)
<EPS-PRIMARY> (0.13)
<EPS-DILUTED> (0.13)
</TABLE>
