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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 22, 1998
RIO HOTEL & CASINO, INC.
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(Exact name of Registrant as specified in charter)
Nevada
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(State or other jurisdiction of incorporation)
1-11569 95-3671082
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(Commission File Number) (IRS Employee Identification No.)
3700 West Flamingo Road, Las Vegas, Nevada 89103
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (702) 252-7733
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Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On October 22, 1998, Rio Hotel & Casino, Inc., a Nevada
corporation ("Rio"), reported its results for the third quarter
and nine months ended September 30, 1998.
For additional information concerning the foregoing,
reference is made to Rio's press release dated October 22, 1998,
a copy of which is attached as an exhibit hereto and incorporated
by reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(A) Financial Statements of Business Acquired.
Not Applicable.
(b) Pro Forma Financial Information.
Not Applicable.
(c) Exhibits.
99.1 Text of Press Release, dated October 22, 1998.
2
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SIGNATURE
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 hereunto duly authorized.
RIO HOTEL & CASINO, INC.
(Registrant)
Date: October 29, 1998 By: /s/ Ronald J. Radcliffe
Ronald J. Radcliffe
Vice President, Chief Financial
Officer and Treasurer
3
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EXHIBIT INDEX
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
99.1 Text of Press Release, dated October 22, 1998. 5
4
EXHIBIT 99.1
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RIO HOTEL & CASINO, INC.
Subject: Rio Reports Results for Third
Quarter Ended September 30, 1998
Release Date: October 22, 1998
Contact: James A. Barrett, Jr. - President
Phone: (702) 252-7733
LAS VEGAS, Nevada -- Rio Hotel & Casino, Inc. (NYSE-RHC), the
"Company", today reported results for the third quarter ended
September 30, 1998.
Net income for the third quarter ended September 30, 1998,
adjusted on a pro-forma basis for executive severance expense and
merger related costs, was $8.0 million, or $0.32 per share
compared to net income of $7.8 million, or $0.35 per share for the
1997 third quarter. Net income for the 1998 third quarter, after
executive severance expense of $2.2 million and merger related
costs of $1.1 million, was $6.0 million, or $0.24 per share.
Executive severance expense represents the cost of the October
1998 termination of the employment contract with the Company's
former executive vice-president. Merger costs represent fees and
expenses incurred through September 30, 1998 in connection with
the Merger Agreement entered into on August 9, 1998 with Harrah's
Entertainment, Inc.
Revenues, net of promotional allowances, were $107.1 million for
the 1998 third quarter compared to 1997 third quarter net revenues
of $103.6 million. In the 1998 third quarter, EBITDA (earnings
before interest, income taxes, depreciation, and amortization)
before severance expense and merger costs, were $25.9 million or
$1.03 per share compared to $25.7 million or $1.17 per share for
the 1997 third quarter.
Per share amounts are based on 25.1 million and 22.0 million
shares for the quarters ended September 30, 1998 and 1997,
respectively.
Net revenues for the nine months ended September 30, 1998 were
$302.0 million compared to $270.7 million for the same period in
1997. Adjusted on a pro-forma basis for pre-opening expenses,
executive severance expenses and merger related costs, net income
for the nine months ended September 30, 1998 was $20.6 million or
$0.81 per share compared to $19.1 million or $0.88 per share for
the 1997 nine month period. EBITDA (earnings before interest,
income taxes, depreciation, and amortization) before severance,
merger, and pre-opening expense was $71.3 million or $2.80 per
share for the 1998 nine months compared to $67.9 million or $3.13
per share for the nine months ended September 30, 1997. Per share
amounts are based on 25.4 million and 21.7 million for the nine
months ended September 30, 1998 and 1997, respectively.
Anthony A. Marnell II, Chairman of the Board, stated, "We
continue to enjoy strong demand for the Rio products and service.
During the third quarter, our suites were 93% occupied at an
average daily rate of $95 and table game volume increased 17%
compared to the 1997 third quarter. Compared to the 1997 third
quarter, casino revenue was lower in the 1998 third quarter
because of 1997's higher than average table game hold percentage.
We did incur approximately $2.0 million of casino marketing costs
during the third quarter of 1998, which we expect to provide
benefit in the future as the Rio expands its market share.
Work continues on schedule for completion of the Rio's Palazzo
Suites complex by December 1998 and for the 100,000 square foot
convention-event facility by March of 1999.
A special meeting of stockholders has been scheduled for November
18, 1998 to vote upon the Agreement and Plan of Merger between the
Company and Harrah's Entertainment, Inc. Copies of the Joint Proxy
Statement were mailed to stockholders of record as of October 5,
1998. Subject to stockholders, regulatory, and other approvals,
the merger could be completed by the end of November 1998."
Rio Hotel & Casino, Inc., through a wholly owned subsidiary, owns
and operates the Rio Suite Hotel & Casino. The country's premier
all-suite hotel-casino, the Rio offers approximately 2,500 suites
and a 120,000 square foot casino. Home of the ``Masquerade Show in
the Sky,'' a $25 million entertainment extravaganza free to the
public, the Rio offers a wide variety of entertainment features.
These include 14 restaurants, the Wine Cellar, retail shops,
nightly performances by Danny Gans, and Rio Secco Golf Club, an 18-
hole championship golf course.
This press release contains statements that may be considered
forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, such as statements relating to plans for
future expansion, capital spending, financing sources, future
business levels, and completion of the merger with Harrah's
Entertainment, Inc. Such forward-looking information involves
important risks and uncertainties that could significantly affect
anticipated results in the future and, accordingly, such results
may differ from those expressed in any forward-looking statements
made herein. These risks and uncertainties include, but are not
limited to, those relating to construction activities, dependence
on existing management, gaming regulations (including actions
affecting licensing), leverage and debt service (including
sensitivity to fluctuations in interest rates), domestic or global
economic conditions, changes in federal or state laws or the
administration of such laws, and all approved conditions to
completion of the proposed merger.
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RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)(Unaudited)
Quarter Nine Months
Ended September 30, Ended September 30, Year Ended
----------------------- --------------------- December 31
1998 1997 1998 1997 1997
--------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
REVENUES:
Casino $54,902 $57,155 $148,987 $141,215 $214,036
Room 19,830 17,668 59,936 50,398 70,447
Food and
beverage 33,433 30,888 99,588 83,048 114,765
Other 8,314 7,007 21,826 18,695 25,590
Casino promotional
allowances (9,428) (9,143) (28,404) (22,663) (32,690)
--------- --------- ---------- ---------- ----------
107,051 103,575 301,933 270,693 392,148
--------- --------- ---------- ---------- ----------
EXPENSES:
Casino 31,813 30,684 83,796 74,433 117,649
Room 6,489 5,348 18,871 14,996 20,601
Food and
beverage 23,849 24,112 71,532 64,025 88,971
Other 6,347 4,154 13,830 11,253 15,093
Selling,
general and
administrative 12,693 13,530 42,654 38,062 53,622
Depreciation and
amortization 7,083 6,440 20,655 18,678 24,906
Preopening expense -- -- -- 11,200 11,200
--------- --------- ---------- ---------- ----------
88,274 84,268 251,338 232,647 332,042
--------- --------- ---------- ---------- ---------
OPERATING PROFIT 18,777 19,307 50,595 38,046 60,106
Interest expense 6,145 7,102 18,228 19,199 26,257
Executive
severance 2,161 -- 2,161 -- --
Merger costs 1,085 -- 1,085 -- --
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9,391 7,102 21,474 19,199 26,257
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INCOME BEFORE
INCOME TAX 9,386 12,205 29,121 18,847 33,849
Income tax
provision 3,426 4,449 10,629 6,879 12,355
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NET INCOME $5,960 $7,756 $18,492 $11,968 $21,494
========= ========= ========== ========== ==========
NET INCOME
PER COMMON
SHARE - DILUTED $0.24 $0.35 $0.73 $0.55 $0.98
========= ========= ========== ========== ==========
Weighted average
number of shares
outstanding 25,086 21,985 25,431 21,714 22,031
========= ========= ========== ========== ==========
Earnings before
interest, income
taxes, depreciation,
amortization,
severance and
merger costs, and
preopening
expense $25,860 $25,747 $71,250 $67,924 $96,212
========= ========= ========== ========== ==========
Earnings before
interest, income
taxes, depreciation,
amortization,
severance and
merger costs, and
preopening
expense per common
share $1.03 $1.17 $2.80 $3.13 $4.37
========= ========= ========== ========== ==========
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RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands) (Unaudited)
September 30, December 31,
1998 1997
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ASSETS
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CURRENT ASSETS:
Cash and cash equivalents $21,269 $22,242
Accounts receivable, net 37,748 28,177
Other current assets 22,170 16,075
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TOTAL CURRENT ASSETS 81,187 66,494
PROPERTY AND EQUIPMENT, NET 637,337 510,317
OTHER ASSETS 24,649 11,344
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$743,173 $588,155
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long term debt $2,621 $2,435
Accounts payable - related party 17,363 2,808
Accounts payable and accrued liabilities 46,165 42,407
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TOTAL CURRENT LIABILITIES 66,149 47,650
LONG-TERM DEBT, LESS CURRENT MATURITIES 367,747 250,523
DEFERRED INCOME TAXES 17,932 19,807
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TOTAL LIABILITIES 451,828 317,980
STOCKHOLDERS' EQUITY 291,345 270,175
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$743,173 $588,155
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