<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended April 30, 1996
Commission File No. 0-10061
AMERICAN CASINO ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
Nevada 04-2709807
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6243 Industrial Rd., Las Vegas, Nevada 89118
(Address of principal executive offices) (Zip Code)
(702) 896-8888
(Registrant's telephone number, including area code)
N/A
(Former name, former address & former fiscal year,
if changed since last report)
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 the latest practicable date.
Outstanding at
Class June 12, 1996
----- --------------
Common Stock, $.01 Par Value 14,367,958
<PAGE> 2
American Casino Enterprises, Inc. and Subsidiaries
Consolidated Balance Sheets
April 30, 1996 and July 31, 1995
<TABLE>
<CAPTION>
April 30, July 31,
1996 1995
----------- -----------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $11,555,000 $ 8,841,000
Consulting fee and other receivables 56,000 344,000
Income taxes receivable 433,000 73,000
Deferred tax asset 37,000 342,000
Prepaid expenses 49,000 39,000
----------- -----------
Total current assets 12,130,000 9,639,000
----------- -----------
Property and equipment, net 75,000 93,000
----------- -----------
Other assets:
Consulting agreement acquisition costs, net 300,000 243,000
Deferred tax asset -- 34,000
Deposits 25,000 15,000
----------- -----------
325,000 292,000
----------- -----------
$12,530,000 $10,024,000
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 44,000 64,000
Income taxes payable -- 112,000
Accrued expenses 195,000 122,000
Payable to Table Mountain Tribe -- 233,000
----------- -----------
Total current liabilities 239,000 531,000
----------- -----------
Commitments -- --
Shareholders' equity:
Common stock; $.01 par; 30,000,000 shares
authorized; 14,367,958 shares
issued and outstanding 144,000 144,000
Preferred stock; $.01 par; 10,000,000 shares
authorized; shares issued and outstanding - none -- --
Capital in excess of par 3,213,000 3,213,000
Retained earnings 8,934,000 6,136,000
----------- -----------
Total shareholders' equity 12,291,000 9,493,000
----------- -----------
$12,530,000 $10,024,000
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
2
<PAGE> 3
American Casino Enterprises, Inc. and Subsidiaries
Consolidated Statements of Income
and Retained Earnings
Three Months Ended April 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Revenues:
Casino consulting fees $ 2,310,000 $ 2,964,000
----------- -----------
Costs and expenses:
Casino consulting 327,000 441,000
General and administrative 241,000 342,000
Amortization and depreciation 34,000 22,000
----------- -----------
602,000 805,000
----------- -----------
Income from operations 1,708,000 2,159,000
----------- -----------
Other income - interest 134,000 45,000
----------- -----------
Income before NIGC civil fine and income taxes 1,842,000 2,204,000
----------- -----------
NIGC civil fine -- --
----------- -----------
Income before income taxes 1,842,000 2,204,000
----------- -----------
Income taxes:
State - current 124,000 179,000
Federal:
Current 589,000 678,000
Deferred -- --
----------- -----------
713,000 857,000
----------- -----------
Net income 1,129,000 1,347,000
Retained earnings, beginning of period 7,805,000 3,216,000
----------- -----------
Retained earnings, end of period $ 8,934,000 $ 4,563,000
=========== ===========
Earnings per common share and
common share equivalent $ 0.07 $ 0.09
=========== ===========
Weighted average number of common shares
and common share equivalents 16,275,051 14,883,615
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE> 4
American Casino Enterprises, Inc. and Subsidiaries
Consolidated Statements of Income
and Retained Earnings
Nine Months Ended April 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Revenues:
Casino consulting fees $ 7,421,000 $ 6,737,000
----------- -----------
Costs and expenses:
Casino consulting 1,736,000 829,000
General and administrative 680,000 656,000
Amortization and depreciation 74,000 57,000
----------- -----------
2,490,000 1,542,000
----------- -----------
Income from operations 4,931,000 5,195,000
----------- -----------
Other income - interest 432,000 132,000
----------- -----------
Income before NIGC civil fine and income taxes 5,363,000 5,327,000
----------- -----------
NIGC civil fine 500,000 --
----------- -----------
Income before income taxes 4,863,000 5,327,000
----------- -----------
Income taxes:
State - current 360,000 404,000
Federal:
Current 1,367,000 1,355,000
Deferred 339,000 340,000
----------- -----------
2,066,000 2,099,000
----------- -----------
Net income 2,797,000 3,228,000
Retained earnings, beginning of period 6,137,000 1,335,000
----------- -----------
Retained earnings, end of period $ 8,934,000 $ 4,563,000
=========== ===========
Earnings per common share and
common share equivalent $ 0.17 $ 0.22
=========== ===========
Weighted average number of common shares
and common share equivalents 16,229,494 14,676,879
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
4
<PAGE> 5
American Casino Enterprises, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Nine Months Ended April 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,797,000 $ 3,228,000
------------ -----------
Adjustments to reconcile net income to
net cash provided (used) by operating activities:
Amortization and depreciation 74,000 57,000
Deferred income taxes 339,000 340,000
Changes in other assets and liabilities, net (493,000) 1,824,000
------------ -----------
(80,000) 2,221,000
------------ -----------
Net cash provided (used) by operating activities 2,717,000 5,449,000
------------ -----------
Cash flows from investing activities:
Property and equipment, net (3,000) (156,000)
------------ -----------
Net cash provided (used) by investing activities (3,000) (156,000)
------------ -----------
Cash flows from financing activities -- --
------------ -----------
Net cash provided (used) by financing activities -- --
------------ -----------
Net increase in cash 2,714,000 5,293,000
Cash and cash equivalents, at beginning of period 8,841,000 683,000
------------ -----------
Cash and cash equivalents, at end of period $ 11,555,000 $ 5,976,000
============ ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for income taxes $ 2,196,000 $ 1,467,000
============ ===========
</TABLE>
See Notes to Consolidated Financial Statements.
5
<PAGE> 6
AMERICAN CASINO ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED APRIL 30, 1996
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
As contemplated by the Securities and Exchange Commission (SEC) under Rule 10-01
of Regulation S-X, the accompanying consolidated financial statements and notes
have been condensed and, therefore, do not contain all disclosures required by
generally accepted accounting principles. The consolidated financial statements
include the accounts of American Casino Enterprises, Inc. and its wholly-owned
subsidiaries ("the Company"). All significant intercompany accounts and
transactions have been eliminated. For additional disclosures, refer to the Form
10-KSB of the Company for the year ended July 31, 1995.
In the opinion of the Company, the accompanying unaudited consolidated financial
statements contain all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the results for the interim
periods.
Certain amounts in the interim period financial statements for Fiscal 1995 have
been reclassified for comparability with the current period presentation.
The computations of earnings per common share and common share equivalents are
based on the weighted average number of common share and common share
equivalents outstanding. Stock warrants and options outstanding are considered
common stock equivalents. Fully diluted earnings per share is not presented
because the effect would be antidilutive or the dilutive effect is less than
three percent.
Results of the interim periods are not necessarily indicative of those to be
expected for the full year.
NOTE 2 - CONSULTING AGREEMENTS
TABLE MOUNTAIN CASINO & BINGO
On February 1, 1996, the Company signed a new consulting agreement with the
Table Mountain Band of Indians (the "Tribe") for the Table Mountain Casino &
Bingo (the "Casino") in Friant, California. The new consulting agreement has a
duration of 27 months, and provides that the Company will receive a base monthly
consulting fee of $90,000, plus an additional $90,000 for each increment of
$500,000 or portion thereof, of casino net income in excess of the first $1.5
million of net income from casino
6
<PAGE> 7
AMERICAN CASINO ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED APRIL 30, 1996
(UNAUDITED)
operations. Additionally, effective February 1, 1996, the Company and the Tribe
signed a termination agreement of the March 1993 agreement under which a monthly
payment of $350,000 will be paid to the Company for a term of 48 months.
The prior consulting agreement provided for consulting fees equal to 35% of the
Casino's net income before consulting fees. For the period from June 19, 1995 to
February 1, 1996, the Company paid a concession to the Tribe equal to seven
percent (7%) of the Casino's net income before consulting fees. During the six
month period ended January 31, 1996, the concession totaled $1,276,000.
Consulting fee revenue is reported net of the concession to the Tribe.
The Company is also obligated to make advances to the Casino in certain
circumstances, mainly for the acquisition of capital assets which cannot be
acquired using the Casino's operating cash surplus.
During Fiscal 1992, the Company and the Tribe entered into an agreement
requiring the Tribe to repay $1,500,000 of contract advances made by Millerton
Games, Inc, an entity which was acquired by the Company. In addition, $289,000
of unpaid management fees for Fiscal 1992 were converted to a note receivable
payable in 1997. The notes were paid in full in May 1995.
In Fiscal 1993 the Tribe began a substantial expansion and renovation program to
the Casino. To assist with the expansion costs, the Company advanced
approximately $365,000 to the Casino. The Casino repaid the advance in full in
Fiscal 1995. The expanded, renovated casino facility was completed in Fiscal
1995.
UNITED AUBURN INDIAN COMMUNITY
In March 1996, the Company formed a joint venture with the Table Mountain Tribe
to provide consulting services to the United Auburn Indian Community. The joint
venture will assist in the development of a Class II casino to be built and
owned by the Auburn Tribe near Sacramento, California. The joint venture will
also train tribal members in operating the casino. The Company has an 80%
interest in the joint venture.
Compensation to the joint venture for the consulting agreement is structured as
a base consulting fee of $150,000 per month, with additional fees of $37,500
paid for each increment of $250,000 of net income between $1,000,000 and
$3,000,000, and $31,250 paid for each increment of $250,000 of net income over
$3,000,000. The five
7
<PAGE> 8
AMERICAN CASINO ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED APRIL 30, 1996
(UNAUDITED)
year term of the agreement will commence when the casino becomes operational.
The joint venture is committed to finance the Auburn Tribe capital for land
acquisition, pre-development costs, and Tribal needs. The Auburn Tribe is in the
process of acquiring land for the casino. After its acquisition, the land will
be placed into trust by the Bureau of Indian Affairs, a process that is
anticipated to take up to 12 months. At the time the land is placed into trust,
a one-time fee of $125,000 will be paid by the joint venture to the Auburn
Tribe. The Auburn Tribe will also receive options to acquire 150,000 shares of
American Casino Enterprises' common stock at the then-current market price. In
the interim, a monthly payment of $22,500 will be made by the joint venture to
the Auburn Tribe until the gaming facility is operational.
NOTE 3 - CONSULTING AGREEMENT ACQUISITION COSTS
TABLE MOUNTAIN CASINO & BINGO
Consulting agreement acquisition costs are amortized over the life of the
consulting contract with the Table Mountain Tribe. The amortization period was
84 months for Fiscal 1995 and for the first six months of Fiscal 1996. The
amortization period will be 27 months, the length of the new consulting
agreement, for periods after February 1, 1996.
UNITED AUBURN INDIAN COMMUNITY
Interim payments to the Auburn Tribe, legal costs, payments for options to
acquire land, and other related expenditures are being capitalized and will
begin to be amortized, after the casino is operational, over the period of the
contract. At April 30, 1996, approximately $109,000 had been capitalized.
NOTE 4 - INCOME TAXES
The Company accounts for income taxes as provided by Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 109, Accounting
for Income Taxes.
At July 31, 1995, the Company had unused net operating loss carryforwards for
Federal income tax purposes totaling $1,099,000. The carryforwards expire
through 2006. Net operating loss carryforwards generated by American Casino
Enterprises, Inc. (the Parent) prior to the stock acquisition of certain
subsidiaries may be used to
8
<PAGE> 9
AMERICAN CASINO ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED APRIL 30, 1996
(UNAUDITED)
reduce future taxable income arising from the activities of the Parent only,
subject to limitations in accordance with Section 382 of the Internal Revenue
Code beginning on January 9, 1992. The annual limitation is calculated to be
approximately $1,000,000.
Approximately $1,000,000 of the net operating loss carryforwards ($2,000,000 in
the aggregate) was utilized to reduce the Company's current Federal income tax
liability for each of the nine month periods ended April 30, 1996 and 1995.
Accordingly, the deferred tax benefit recorded in the consolidated balance
sheets was reduced by approximately $339,000 and $340,000 in Fiscal 1996 and
Fiscal 1995, respectively, and charged to operations in the respective periods.
NOTE 5 - LITIGATION
AMERICAN CASINO ENTERPRISES, INC.
On July 15, 1994, the Chairman of the National Indian Gaming Commission ("NIGC")
issued a Notice of Violation and a separate Notice to Show Cause to the Company.
The Notice of Violation charged that the Company was in violation of certain
provisions of the Indian Gaming Regulatory Act ("IGRA") and the NIGC's
regulations, in that the Company had allegedly; (1) engaged in management of the
Table Mountain Casino & Bingo without an approved management contract beginning
on November 1, 1990; and (2) operated illegal video gaming devices and
house-banked blackjack games without a Class III gaming compact with the State
of California.
On February 1, 1996, the Company entered into a settlement agreement with the
NIGC. The settlement agreement resolved all issues associated with the Notice of
Violation and the Notice to Show Cause.
In the settlement, the NIGC agreed to fully withdraw any and all allegations,
charges and claims against the Company. In turn, the Company, without admitting
or denying the NIGC allegations, agreed to pay a civil fine of $500,000, and to
terminate its 1993 amended agreement with the Table Mountain Tribe. The civil
fine was accrued at January 31, 1996 and charged to operations for the period
then ended.
TABLE MOUNTAIN CASINO
In 1992, the National Indian Gaming Commission promulgated regulations stating
that Indian casinos could not offer certain games, including electronic gaming
machines, such as the Table Mountain Tribe's video pull tab gaming devices,
without state
9
<PAGE> 10
AMERICAN CASINO ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED APRIL 30, 1996
(UNAUDITED)
approval under tribal-state compacts. Several tribes sought a Compact to engage
in full casino gaming, however, the State of California refused to allow certain
games.
In May 1992, the Tribe and other California Indian tribes filed a lawsuit in
Federal Court against the State of California and its Governor over the scope of
gaming permissible on Indian land, captioned as Rumsey v.Wilson. In July 1993,
the Federal District Court ruled that the proposed electronic games are a proper
subject of negotiation with Tribal State Compact and that the Tribes and State
should negotiate to determine whether other banked and percentage card games
will be permitted under a Tribal-State Compact. The State of California appealed
the District Court decision in Rumsey v.
Wilson.
In November 1994, the U.S. Court of Appeals for the Ninth Circuit reversed in
part the July 1993 ruling by the District Court in favor of the tribes, and
remanded the case to the District Court for additional fact finding. The
remanded issue is whether California law permits the use of video gaming
devices. If California law is found to permit the use of video gaming devices,
the tribes are entitled to seek agreements for the use of such devices. If
California is not found to permit their use, the tribes would not be so entitled
under the Court of Appeals' analysis.
In December 1994, the tribes filed a petition for rehearing with the Ninth
Circuit and a suggestion for rehearing en banc. The petition and suggestion were
denied on August 11, 1995, with a vigorous dissent by six judges. The decision,
however, has not been finalized. On August 21, 1995, the Ninth Circuit issued an
order requesting further briefing by the parties on the relevance of an
important new decision of the California State Court of Appeals in Western
Telcon V. California State Lottery. In that case, the court held that the
California State Lottery was authorized to use most forms of slot machines and
that the Lottery was exempt from the State's Penal Code prohibitions against
banked games. On September 1, 1995, the parties in Western Telcon filed a
petition for review with the California Supreme Court. The California Supreme
Court subsequently heard the oral presentations by the parties involved and is
taking the arguments under advisement.
On October 6, 1995, the Ninth Circuit stayed its final decision in Rumsey until
the final disposition of Western Telcon by the California Supreme Court.
Effectively, this means that the Rumsey decision is still under consideration by
the Ninth Circuit.
10
<PAGE> 11
AMERICAN CASINO ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED APRIL 30, 1996
(UNAUDITED)
While the Company is optimistic the California tribes will ultimately prevail in
this action, should the State of California be successful in its legal actions,
it could have an adverse effect on the Company's sole business activity.
11
<PAGE> 12
PART 1
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
MATERIAL CHANGES IN RESULTS OF OPERATIONS
NINE MONTHS ENDED APRIL 30, 1996
REVENUES
Casino consulting fees in the nine months ended April 30, 1996 ("the Fiscal 1996
Period") increased 10.2% to $7,421,000 from the $6,737,000 recorded in the same
period in Fiscal 1995, as a result of an increase in casino consulting fees
derived from the Table Mountain Casino & Bingo operation.
Consulting fees in the nine month periods ended April 30, 1996 and 1995 were
derived from the consulting agreement the Company has with the Table Mountain
Band of Indians (the "Tribe") for the operation of the Table Mountain Casino &
Bingo (the "Table Mountain Casino"), which is located near Fresno, California.
On February 1, 1996, a new consulting agreement with the Table Mountain Band of
Indians was signed. The new consulting agreement has a duration of 27 months,
and provides that the Company will receive a base monthly consulting fee of
$90,000, plus an additional $90,000 for each increment of $500,000 or portion
thereof, of casino net income in excess of the first $1.5 million of net income
from casino operations. Additionally, effective February 1, 1996, the Company
and the Tribe signed a termination agreement of the March 1993 agreement under
which a monthly payment of $350,000 will be paid to the Company for a term of 48
months.
The prior consulting agreement provided for consulting fees equal to 35% of the
Casino's net income before consulting fees. Also, for the period from June 19,
1995 to January 31, 1996, when the concession ceased, the Company paid a
concession to the Tribe equal to seven percent (7%) of the net income, before
consulting fees, of the Casino. During the six month period ended January 31,
1996, the concession totaled $1,276,000. Consulting fee revenue is reported net
of the concession to the Tribe.
COSTS AND EXPENSES
Casino consulting expenses in the nine months ended April 30, 1996 increased to
$1,736,000, up 109.4%, from $829,000 in the comparable quarter in Fiscal 1995.
This increase is comprised principally of: legal costs related to the NIGC
regulatory action ($88,000) and incentive bonuses, and related payroll taxes,
paid to nine consultants and employees of the Company ($605,000). Also, during
Fiscal 1996, the Company acquired an option to invest in a company seeking to
build a cardroom in a
12
<PAGE> 13
California community. The community rejected the effort to legalize cardrooms in
a public referendum and the cost of the option ($175,000) and related legal
expenses ($15,000) were written off in the second quarter of Fiscal 1996.
General and administrative expenses in the nine month period ended April 30,
1996 increased by $24,000 or 3.7% over the comparable period of Fiscal 1995. The
increase resulted mainly from personnel costs and legal fees related to various
corporate matters.
Amortization and depreciation was $74,000 and $57,000 in the nine months ended
April 30, 1996 and 1995, respectively. Amortization is comprised of consulting
agreement acquisition costs, which are being amortized over the term of the
Table Mountain Casino agreement.
OTHER OPERATIONAL ITEMS
Interest income, represented principally by interest on time deposits with
financial institutions in Fiscal 1996 and interest on the contract advance to
Table Mountain Casino and interest earned on time deposits in Fiscal 1995,
totaled $432,000 and $132,000 in the nine month periods ended April 30, 1996 and
1995, respectively.
During the second quarter of Fiscal 1996, the Company charged operations for a
$500,000 civil fine assessed by the National Indian Gaming Commission.
The Company recorded provisions of $360,000 and $404,000 for State of California
income taxes for the nine month periods ended April 30, 1996 and 1995,
respectively.
At July 31, 1995, the Company had unused net operating loss carryforwards for
Federal income tax purposes totaling $1,099,000. The carryforwards expire
through 2006. Net operating loss carryforwards generated by American Casino
Enterprises, Inc. (the "Parent") prior to the acquisition of certain
subsidiaries may be used to reduce future taxable income arising from the
activities of the Parent only, subject to limitations in accordance with Section
382 of the Internal Revenue Code beginning on January 9, 1992. The annual
limitation is calculated to be approximately $1,000,000. Approximately
$1,000,000 of the net operating loss carryforwards was utilized to reduce the
Company's current Federal income tax liability for each of the nine month
periods ended April 30, 1996 and 1995.
Net income for the nine months ended April 30, 1996 was $2,797,000 or $0.17 per
common share and common share equivalent compared to $3,228,000 or $0.22 per
common share and common share equivalent for the nine months ended April 30,
1995.
13
<PAGE> 14
THREE MONTHS ENDED APRIL 30, 1996
REVENUES
Casino consulting fees in the third quarter of Fiscal 1996 decreased by $654,000
or 22.1% less than the third quarter of Fiscal 1995. The decrease is
attributable to the change in the consulting agreement and the method of
calculating consulting fees from the Table Mountain Casino.
COSTS AND EXPENSES
Casino consulting expenses decreased 25.9% to $327,000 in the third quarter of
Fiscal 1996 from $441,000 in the third quarter of Fiscal 1995. General and
administrative expenses were $241,000 for the third quarter of Fiscal 1996 and
$342,000 for the third quarter of Fiscal 1995, a decrease of 29.5%. The decrease
is principally attributed to the payment of incentive bonuses in the second
quarter of Fiscal 1996 versus their payment in the third quarter of Fiscal 1995.
OTHER OPERATIONAL ITEMS
Interest income increased to $134,000 in the third quarter of Fiscal 1996 from
$45,000 in the third quarter of Fiscal 1995. The income is represented
principally by interest earned on the Company's bank deposits in Fiscal 1996 and
the interest on the contract advances to the Tribe and interest earned on bank
deposits in Fiscal 1995.
The Company recorded state income taxes of $124,000 and Federal income taxes of
$589,000 for the three months ended April 30, 1996 as compared to state income
tax expense of $179,000 and Federal income taxes of $678,000 for the same period
in Fiscal 1995.
Net income for the three months ended April 30, 1996 was $1,129,000 or $0.07 per
common share and common share equivalent compared to $1,347,000 or $0.09 per
common share and common share equivalent for the three months ended April 30,
1995.
LIQUIDITY AND CAPITAL RESOURCES AT APRIL 30, 1996 AND
THE NINE MONTHS THEN ENDED
At April 30, 1996, the Company had consolidated working capital of $11,891,000,
as compared with working capital of $9,108,000 at July 31, 1995. The change
resulted principally from a combination of increases of cash ($2,714,000),
income taxes receivable ($360,000), accrued expenses ($73,000),and prepaid
expenses ($10,000), and reductions of consulting fee and other receivables
($288,000), deferred tax asset ($305,000), income taxes payable ($112,000),
accounts payable ($20,000), and payable to Table Mountain Tribe ($233,000).
During the nine month period ended April 30, 1996, investing activities used
$3,000 as compared to $156,000 used by investing activities in the same period
in Fiscal 1995. The cash used in investing activities in
14
<PAGE> 15
Fiscal 1995 was to acquire additional office furniture and equipment and
leasehold improvements.
The Company had no transactions of a financing nature in the nine month periods
ended April 30, 1996 and 1995. At April 30, 1996, the Company had no long-term
debt outstanding.
Historically, the Company has provided funds for its operations from operating
activities, financing from financial institutions and shareholders, and issuance
of common stock and it will likely continue to do so in the future. The Company
has always sought and will continue to seek other suitable consulting contracts
and/or ownership of casinos and other gaming opportunities on and off Indian
land. In the event any of these opportunities come to fruition, management will
consider satisfying necessary financing from working capital, through borrowing
or capital infusion through the public or private placement of common stock of
the Company or its subsidiaries.
At April 30, 1996, the Company had revolving lines of credit totaling $1,500,000
with two banks. One line for $1,000,000 expires in December 1996 and bears
interest at 2.5% above prime. The line is collateralized by certificates of
deposit totaling $500,000. The other $500,000 line of credit is unsecured,
expires in October 1996 and bears interest at 1% above an indexed prime (8.25%
at April 30, 1996). At April 30, 1996, no funds were outstanding on the lines of
credit.
15
<PAGE> 16
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
11.01 - Schedule of Computation of Earnings Per Common
Share And Common Share Equivalent.
27 - Financial Data Schedule.
(b) Reports on Form 8-K - On February 1, 1996, the Company
filed Form 8-K to report the settlement of its regulatory matter with the
National Indian Gaming Commission.
16
<PAGE> 17
SIGNATURE
Pursuant to the requirements of Section 13 or 15 (d) 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.
AMERICAN CASINO ENTERPRISES, INC.
Dated: June 12, 1996 By: /s/ Ronald J. Tassinari
Las Vegas, Nevada --------------------------------
Ronald J. Tassinari
President
(Principal Executive Officer)
/s/ Roy K. Keefer
--------------------------------
Roy K. Keefer
Chief Financial Officer
(Principal Financial
and Accounting Officer)
17
<PAGE> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
----------- ----------------------------------------------------
<S> <C>
11.01 Schedule of Computation of Earnings Per Common Share
And Common Share Equivalent
27 Financial Data Schedule
</TABLE>
18
<PAGE> 1
EXHIBIT 11.01
AMERICAN CASINO ENTERPRISES, INC. AND SUBSIDIARIES
SCHEDULE OF COMPUTATION OF EARNINGS PER COMMON SHARE
AND COMMON SHARE EQUIVALENT
THREE MONTHS ENDED APRIL 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
PRIMARY:
Net income $ 1,129,000 $ 1,347,000
=========== ===========
Weighted average number of common shares
outstanding during the period 14,367,958 14,229,069
Add:
Common stock equivalents (determined
using the "treasury stock" method) representing
shares issuable upon exercise of options
and warrants 1,907,093 654,546
----------- -----------
Weighted average number of shares used in
calculation of primary income per share 16,275,051 14,883,615
=========== ===========
PRIMARY EARNINGS PER COMMON SHARE
AND COMMON SHARE EQUIVALENT $ 0.07 $ 0.09
=========== ===========
FULLY DILUTED:
Net income $ 1,129,000 $ 1,347,000
=========== ===========
Weighted average number of common shares
outstanding during the year 14,367,958 14,229,069
Add:
Common stock equivalents (determined
using the "treasury stock" method) representing
shares issuable upon exercise of options
and warrants 1,350,482 746,234
----------- -----------
Weighted average number of shares used in
calculation of fully diluted income per share 15,718,440 14,975,303
=========== ===========
FULLY DILUTED EARNINGS PER COMMON SHARE
AND COMMON SHARE EQUIVALENT $ 0.07 $ 0.09
=========== ===========
</TABLE>
NOTE: Fully diluted earnings per common share and common share equivalent is
not presented in the Consolidated Statements of Income and Retained Earnings
because the effect is antidilutive or the dilutive effect is less than three
percent.
<PAGE> 2
EXHIBIT 11.01
AMERICAN CASINO ENTERPRISES, INC. AND SUBSIDIARIES
SCHEDULE OF COMPUTATION OF EARNINGS PER COMMON SHARE
AND COMMON SHARE EQUIVALENT
NINE MONTHS ENDED APRIL 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
PRIMARY:
Net income $ 2,797,000 $ 3,228,000
=========== ===========
Weighted average number of common shares
outstanding during the period 14,367,958 14,229,069
Add:
Common stock equivalents (determined
using the "treasury stock" method) representing
shares issuable upon exercise of options
and warrants 1,861,536 447,810
----------- -----------
Weighted average number of shares used in
calculation of primary income per share 16,229,494 14,676,879
=========== ===========
PRIMARY EARNINGS PER COMMON SHARE
AND COMMON SHARE EQUIVALENT $ 0.17 $ 0.22
=========== ===========
FULLY DILUTED:
Net income $ 2,797,000 $ 3,228,000
=========== ===========
Weighted average number of common shares
outstanding during the year 14,367,958 14,229,069
Add:
Common stock equivalents (determined
using the "treasury stock" method) representing
shares issuable upon exercise of options
and warrants 1,899,141 493,582
----------- -----------
Weighted average number of shares used in
calculation of fully diluted income per share 16,267,099 14,722,651
=========== ===========
FULLY DILUTED EARNINGS PER COMMON SHARE
AND COMMON SHARE EQUIVALENT $ 0.17 $ 0.22
=========== ===========
</TABLE>
NOTE: Fully diluted earnings per common share and common share equivalent is
not presented in the Consolidated Statements of Income and Retained Earnings
because the effect is antidilutive or the dilutive effect is less than three
percent.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-START> FEB-01-1996
<PERIOD-END> APR-30-1996
<EXCHANGE-RATE> 1
<CASH> 11,555,000
<SECURITIES> 0
<RECEIVABLES> 489,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 12,130,000
<PP&E> 75,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,530,000
<CURRENT-LIABILITIES> 239,000
<BONDS> 0
0
0
<COMMON> 144,000
<OTHER-SE> 12,147,000
<TOTAL-LIABILITY-AND-EQUITY> 12,530,000
<SALES> 7,421,000
<TOTAL-REVENUES> 7,421,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,990,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,863,000
<INCOME-TAX> 2,066,000
<INCOME-CONTINUING> 2,797,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,797,000
<EPS-PRIMARY> 0.17
<EPS-DILUTED> 0.17
</TABLE>
