<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 2000 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 0-14050
THE SANDS REGENT
(exact name of registrant as specified in charter)
Nevada 88-0201135
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
345 North Arlington Avenue, Reno, Nevada 89501
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (775) 348-2200
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 [ ]
On May 12, 2000, the registrant had outstanding 4,497,722 shares of its common
stock, $.05 par value.
<PAGE> 2
THE SANDS REGENT AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
<S> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements. 1 - 7
Consolidated Statements of Operations 1 - 2
Consolidated Balance Sheets 3 - 4
Consolidated Statements of Cash Flows 5 - 6
Notes to Interim Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations. 8 - 12
PART II OTHER INFORMATION
Item 1. Legal Proceedings. 13
Item 2. Changes in Securities. 13
Item 3. Defaults Upon Senior Securities. 13
Item 4. Submission of Matters to a Vote of
Security Holders. 13
Item 5. Other Information. 13
Item 6. Exhibits and Reports on Form 8-K. 13
SIGNATURES 14
</TABLE>
<PAGE> 3
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.
THE SANDS REGENT AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
(Dollars in thousands, THREE MONTHS NINE MONTHS
except per share amounts) ENDED MARCH 31, ENDED MARCH 31,
----------------------- -----------------------
1999 2000 1999 2000
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Operating revenues:
Gaming $ 4,236 $ 5,529 $ 23,641 $ 15,236
Lodging 1,777 1,698 6,392 6,022
Food and beverage 1,510 1,556 5,562 4,902
Other 331 300 1,040 874
-------- -------- -------- --------
7,854 9,083 36,635 27,034
Less complimentary lodging, food
and beverage included above 486 460 1,917 1,461
-------- -------- -------- --------
7,368 8,623 34,718 25,573
-------- -------- -------- --------
Operating costs and expenses:
Gaming 2,210 2,455 12,511 7,154
Lodging 946 989 3,074 3,087
Food and beverage 1,306 1,363 4,870 4,262
Other 116 136 393 402
Maintenance and utilities 794 766 3,892 2,254
General and administrative 1,592 1,785 8,177 5,213
Depreciation and amortization 700 732 2,716 2,162
-------- -------- -------- --------
7,664 8,226 35,633 24,534
-------- -------- -------- --------
Income (loss) from operations (296) 397 (915) 1,039
-------- -------- -------- --------
Other income (deductions):
Interest and other income 67 87 242 250
Interest and other expense (326) (312) (1,409) (879)
Gain on disposition of
property and equipment -- 25 -- 128
-------- -------- -------- --------
(259) (200) (1,167) (501)
-------- -------- -------- --------
Income (loss) before income taxes (555) 197 (2,082) 538
Income tax (provision) benefit 177 (54) 602 (102)
-------- -------- -------- --------
Net income (loss) $ (378) $ 143 $ (1,480) $ 436
======== ======== ======== ========
</TABLE>
(continued)
The accompanying notes are an integral part of these consolidated financial
statements.
-1-
<PAGE> 4
THE SANDS REGENT AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
(Dollars in thousands, THREE MONTHS NINE MONTHS
except per share amounts) ENDED MARCH 31, ENDED MARCH 31,
----------------------- ------------------------
(continued) 1999 2000 1999 2000
--------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net income (loss) per share:
Basic $ (.08) $ .03 $ (.33) $ .10
========= ========== ========== ==========
Diluted $ (.08) $ .03 $ (.33) $ .10
========= ========== ========== ==========
Weighted average shares outstanding:
Basic 4,498,361 4,497,381 4,497,622 4,496,424
========= ========== ========== ==========
Diluted 4,498,361 4,564,962 4,497,622 4,538,897
========= ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-2-
<PAGE> 5
THE SANDS REGENT AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (Unaudited)
<TABLE>
<CAPTION>
(Dollars in thousands) JUNE 30, MARCH 31,
1999 2000
------- -------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 5,540 $ 7,161
Short-term investments 10 743
Accounts and notes receivable less allow-
ance for possible losses of $27 and $26 1,096 335
Note receivable, sale of subsidiaries 180 180
Inventories 483 575
Federal income tax refund receivable 300 7
Prepaid expenses and other assets 1,215 888
------- -------
Total current assets 8,824 9,889
PROPERTY AND EQUIPMENT:
Land 8,093 8,476
Buildings and improvements 35,751 37,142
Equipment, furniture and fixtures 18,508 17,993
Construction in progress 768 146
------- -------
63,120 63,757
Less accumulated depreciation
and amortization 30,126 30,387
------- -------
32,994 33,370
OTHER ASSETS:
Deferred federal income tax asset -- --
Note receivable, sale of subsidiaries, net 1,741 1,347
Other 135 487
------- -------
1,876 1,834
------- -------
Total assets $43,694 $45,093
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-3-
<PAGE> 6
THE SANDS REGENT AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (Unaudited)
<TABLE>
<CAPTION>
(Dollars in thousands) JUNE 30, MARCH 31,
1999 2000
-------- --------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 814 $ 2,041
Accrued salaries, wages and benefits 854 1,288
Other accrued expenses 270 234
Deferred federal income tax liability 299 114
Current maturities of long-term debt 10,752 257
-------- --------
Total current liabilities 12,989 3,934
LONG-TERM DEBT 491 10,279
-------- --------
DEFERRED FEDERAL INCOME TAX LIABILITY 370 598
-------- --------
Total liabilities 13,850 14,811
-------- --------
STOCKHOLDERS' EQUITY:
Preferred stock, $.10 par value, 5,000,000
shares authorized, none issued -- --
Common stock, $.05 par value, 20,000,000
shares authorized, 6,898,722 and
6,900,722 shares issued 345 345
Additional paid-in capital 13,074 13,076
Retained earnings 38,783 39,219
-------- --------
52,202 52,640
Treasury stock, at cost, 2,403,000 and
2,403,000 shares (22,358) (22,358)
-------- --------
Total stockholders' equity 29,844 30,282
-------- --------
Total liabilities and stockholders'
equity $ 43,694 $ 45,093
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-4-
<PAGE> 7
THE SANDS REGENT AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<TABLE>
<CAPTION>
(Dollars in thousands) NINE MONTHS ENDED
MARCH 31,
---------------------
1999 2000
------- -------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) ($1,480) $ 436
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 2,716 2,162
(Gain) loss on sale of property
and equipment 32 (128)
(Increase) decrease in accounts
and notes receivable 113 108
(Increase) decrease in inventories 60 (92)
Decrease in prepaid expenses
and other current assets 72 327
Decrease in other assets 51 90
Increase in accounts payable 1,205 747
Increase in accrued expenses 146 398
Change in federal income taxes
payable/receivable 382 293
Changes in deferred federal
income taxes (231) 43
------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,066 4,384
------- -------
INVESTING ACTIVITIES:
Purchase of short term investments -- (1,983)
Sale and maturity of short-term
investments -- 1,250
Receipt of funds previously held in escrow
and included in accounts receivable
relative to the sale of subsidiaries -- 653
Payments received on note receivable -- 394
Additions to property and equipment (866) (2,257)
Proceeds from sale of property and
equipment 22 327
Down payment on sale of subsidiaries
held in escrow and reflected in
accounts receivable (500) --
Cash retained by former subsidiary
companies upon sale (3,277) --
------- -------
NET CASH USED IN INVESTING ACTIVITIES (4,621) (1,616)
------- -------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-5-
<PAGE> 8
THE SANDS REGENT AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (continued)
<TABLE>
<CAPTION>
(Dollars in thousands) NINE MONTHS ENDED
MARCH 31,
-----------------------
1999 2000
-------- --------
<S> <C> <C>
FINANCING ACTIVITIES:
Payment of accounts payable on prior
period purchases of property and
equipment (9) --
Issuance of long-term debt 239 10,000
Payment of costs relative to
issuance of long-term debt -- (442)
Payments on long-term debt (675) (10,707)
Issuance of common stock -- 2
Purchase of Company common stock (3) --
-------- --------
NET CASH USED IN FINANCING ACTIVITIES (448) (1,147)
-------- --------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (2,003) 1,621
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 9,203 5,540
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 7,200 $ 7,161
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Net investment in subsidiaries converted
to note receivable upon sale, net $ 2,171 $ --
======== ========
Payments received on note receivable
from sale of subsidiaries held in
escrow and reflected in accounts
receivable $ (106) $ --
======== ========
Property and equipment acquired by
accounts payable $ -- $ 480
======== ========
Interest paid, net of amount capitalized $ 1,046 $ 1,015
======== ========
Federal income taxes paid $ -- $ --
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-6-
<PAGE> 9
THE SANDS REGENT AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NINE MONTHS ENDED MARCH 31, 2000 AND 1999
NOTE 1 - BASIS OF PREPARATION
These statements should be read in connection with the 1999 Annual
Report heretofore filed with the Securities and Exchange Commission as Exhibit
13 to the Registrant's Form 10-K for the year ended June 30, 1999. The
accounting policies utilized in the preparation of the financial information
herein are the same as set forth in such annual report except as modified for
interim accounting policies which are within the guidelines set forth in
Accounting Principles Board Opinion No. 28.
The Consolidated Balance Sheet at June 30, 1999 has been taken from the
audited financial statements at that date. The interim consolidated financial
information is unaudited. In the opinion of management, all adjustments,
consisting only of normal recurring accruals, necessary to present fairly the
financial condition as of March 31, 2000 and the results of operations for the
three and nine months and cash flows for nine months ended March 31, 2000 and
1999 have been included. Interim results of operations are not necessarily
indicative of the results of operations for the full year.
The accompanying Consolidated Financial Statements include the accounts
of the Company and its wholly owned subsidiary Zante, Inc. ("Zante") (together
the "Company"). The Consolidated Statements of Operations and Cash Flows, for
the nine months ended March 31, 1999, include the accounts of the wholly owned
subsidiaries Patrician, Inc. ("Patrician"), Gulfside Casino, Inc. ("GCI"),
Artemis, Inc. ("Artemis"), and Gulfside Casino Partnership ("GCP") which were
sold by the Company to unrelated third parties on December 23, 1998. Zante owns
and operates the Sands Regency casino/hotel in Reno, Nevada and GCP owned and
operated the Copa Casino in Gulfport, Mississippi.
NOTE 2 - EARNINGS PER SHARE
The weighted average number of shares outstanding for the calculation of
diluted earnings per share, for the three and nine months ended March 31, 2000,
include the dilutive effect of Company stock options to purchase common stock.
For the three and nine months ended March 31, 1999, there were no outstanding
convertible securities that would result in dilutive potential common shares.
-7-
<PAGE> 10
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The Company sold Patrician, GCI and Artemis, including the Copa Casino,
to unrelated third parties on December 23, 1998. The Company's consolidated
statements of operations and cash flows include the operating results of such
companies through December 23, 1998 which are included in the nine months ended
March 31, 1999. Management's Discussion and Analysis of Financial Condition and
Results of Operations will be directed at continuing operations with only
general and otherwise pertinent information provided regarding operating results
for the companies sold.
Results of operations - Three months ended March 31, 2000 compared to three
months ended March 31, 1999
In the three month period ended March 31, 2000, compared to the same
three months ended March 31, 1999, revenues, which included only the Sands
Regency, increased to $8.6 million from $7.4 million, a 17 percent increase. For
the same comparable quarters, income from operations improved from a loss from
operations of $296,000 in the third quarter of fiscal 1999 to income from
operations of $397,000 in the third quarter of fiscal 2000.
Net income and net income per share also improved from a net loss of
$378,000, or loss per share of $(.08), in the three months ended March 31, 1999
to net income of $143,000, or income per share (basic and diluted) of $.03, in
the three months ended March 31, 2000. Earnings before depreciation, interest,
gain/(loss) and taxes (EBITDA) also improved from $471,000 to $1.2 million, an
increase of over 150 percent.
The improvements in revenue, income from operations, net income and
EBITDA are a result of improved gaming revenue and the continued positive effect
of improved methods of operations and increased efficiencies implemented in
fiscal 1999.
The decrease in lodging revenue to $1.7 million in the third quarter of
fiscal 2000, from $1.8 million in the third quarter of fiscal 1999, is due to a
decline in the average room rate. The average room rate declined from
approximately $30 in the quarter ended March 31, 1999 to $28 in the quarter
ended March 31, 2000. Hotel occupancy for the comparable quarters was
approximately the same at 60,000 room nights rented which represented a 78.7%
occupancy in the March 31, 2000 quarter versus 71.0% in the quarter ended March
31, 1999. In early April 1999, the Company discontinued the use of 102 older
motel rooms which were razed.
Gaming revenue improved by over 30% to $5.5 million in the March 31,
2000 quarter versus $4.2 million in the March 1999 quarter. Such increase
represents improved casino revenue per occupied room which increased from
approximately $69 per occupied room to $90. This reflects, in part, increased
gaming from non-hotel guests, primarily local residents. In order to attract
non-hotel guests, the Company has added new games, including Bingo in February
2000, and has liberalized rules and payouts. The Company has also implemented
various promotions to reward guest gaming activity.
-8-
<PAGE> 11
Results of operations - Three months ended March 31, 2000 compared to three
months ended March 31, 1999 (continued)
Food and beverage revenue increase from approximately $1.5 million in
the three months ended March 31, 1999 to $1.6 million in the three months ended
March 31, 2000. Such improvement is due, in part, to the updating of food venues
and menu prices and an increase in food and beverages provided to non-hotel
guests.
Gaming costs and expenses increased from $2.2 million in the three
months ended March 31, 1999 to $2.5 million in the three months ended March 31,
2000. Such increase is primarily related to the associated increase in gaming
revenue. The increase in food and beverage costs and expense of $57,000, in the
third quarter of fiscal 2000 compared to the third quarter of fiscal 1999, is
likewise primarily related to the associated increase in food and beverage
revenue.
General and administrative costs and expenses increased by approximately
$193,000 to $1.8 million in the three months ended March 31, 2000 compared to
$1.6 million in the three months ended March 31, 1999. Such increase includes
increased advertising and promotions and expenses and an increase in incentive
compensation. The increased advertising and promotional costs are due to
expanded advertising efforts and in-house promotional programs to attract hotel
and non-hotel guests.
The effective income tax rate in the three months ended March 31, 2000
is different from the statutory rate due to the impact of certain tax credits
that otherwise reduce income taxes for federal income tax purposes.
Results of operations - First nine months of fiscal 2000 compared to first nine
months of fiscal 1999
In the nine months ended March 31, 2000, compared to the nine months
ended March 31, 1999, revenues decreased to $25.6 million from $34.7 million.
This decrease in revenues is due to the elimination of revenues from the Copa
Casino of $11.5 million. Such decrease was offset by improved revenues from the
Sands Regency to $25.6 million in the current year nine months from $23.3
million in the prior year nine months, an increase of 10%. For the same
comparable nine month periods, income from operations improved from a loss from
operations of $915,000 to income from operations of $1.0 million. Approximately
all of this $2.0 million increase in income from operations is attributable to
the Sands Regency.
The Company had net income in the nine months ended March 31, 2000 of
$436,000, or income per share (basic and diluted) of $.10, as compared to a net
loss of $1.5 million, or loss per share of $.33 in the nine months ended March
31, 1999. This $1.9 million improvement in net income includes the elimination
of the prior net loss from the Copa Casino of $294,000 and improved net income
from the Sands Regency. Net income from the Sands Regency improved from a net
loss of $1.2 million to net income of $436,000.
Earnings before depreciation, interest, gain/(loss) and taxes (EBITDA)
also improved from $2.0 million in the nine months ended March 31, 1999 to $3.5
million in the nine months ended March 31, 2000. At the Sands Regency, EBITDA
improved by approximately 150 percent from $1.4 million to $3.5 million.
-9-
<PAGE> 12
Results of operations - First nine months of fiscal 2000 compared to first nine
months of fiscal 1999 (continued)
The improvements in revenue, income from operations, net income and
EBITDA at the Sands Regency are a result of improved gaming revenue and the
continued positive effect of improved methods of operations and increased
efficiencies implemented in fiscal 1999.
The decrease in lodging revenue to $6.0 million in the nine months ended
March 31, 2000, from $6.4 million in the nine months ended March 31, 1999, is
due to a slight decline in occupancy and a decline in the average room rate.
Hotel occupancy declined from approximately 188,000 room nights (73.1%) in the
March 31, 1999 nine months to 187,000 room nights (81.1%) in the nine months
ended March 31, 2000. Such decline in occupancy is primarily attributable to the
months of November, December and January. For the same comparable periods, the
average room rate also declined from approximately $34 to $32. In early April
1999, the Company discontinued the use of 102 older motel rooms which were
razed.
The $8.4 million decrease in gaming revenue, in the nine months ended
March 31, 2000 versus the March 31, 1999 nine months, consists of the
elimination of gaming revenues from the Copa Casino of $10.9 million and
increased gaming revenues from the Sands Regency of $2.5 million. At the Sands
Regency, gaming revenues improved from $12.7 million to $15.2 million, a 20%
increase. Such increase is attributable to an increase in casino gaming revenue
per occupied room. Casino revenue per occupied room increased from approximately
$66 to $80 which reflects, in part, increased gaming from non-hotel guests,
primarily local residents. In order to attract non-hotel guests, the Company has
added new games, including Bingo in February 2000, and has liberalized rules and
payouts. The Company has also implemented various promotions to reward guest
gaming activity.
The decrease in food and beverage revenue of $660,000, in the nine
months ended March 31, 2000 versus the comparable prior year nine months,
consists of a decrease from the Copa Casino of $917,000 which was partially
offset by an increase at the Sands Regency of $257,000. Such increase at the
Sands Regency is due to increased food revenue per occupied room which increased
from approximately $21 in the nine months ended March 31, 1999 to approximately
$22 in the nine months ended March 31, 2000. Such improvement is due, in part,
to the updating of food venues and menu prices and an increase in food and
beverages provided to non-hotel guests.
The decrease in other revenue of $166,000, in the nine months ended
March 31, 2000 versus the nine months ended March 31, 1999, includes the
elimination of other revenue from the Copa Casino of $107,000 and a decrease at
the Sands Regency of approximately $59,000. The decline at the Sands Regency
consists of a decline in rental income due to the April razing of a non-casino
building which was rented to third parties.
The decrease in complimentary lodging, food and beverage, deducted from
revenue, of $456,000 is primarily attributable to the elimination of the Copa
Casino.
-10-
<PAGE> 13
Results of operations - First nine months of fiscal 2000 compared to first nine
months of fiscal 1999 (continued)
The decrease in gaming costs and expenses of $5.4 million in the nine
months ended March 31, 2000, compared to the nine months ended March 31, 1999,
consists of a decrease from the Copa Casino of approximately $5.5 million and an
increase from the Sands Regency of $152,000. The increase at the Sands Regency
is primarily related to the associated increase in gaming revenue.
The decrease in food and beverage costs and expense of $608,000, in the
first nine months of fiscal 2000 compared to the first nine months of fiscal
1999, is primarily attributable to the elimination of the Copa Casino. At the
Sands Regency, food and beverage costs increased slightly in relationship to the
associated increase in food and beverage revenue.
The decrease in maintenance and utilities costs and expenses of $1.6
million consists of the elimination of costs and expenses associated with the
Copa Casino of $1.4 million and a decline from the Sands Regency of
approximately $212,000. The decrease at the Sands Regency is primarily salaries,
wages and benefits and utility costs and is, in part, a result of the continuing
effect of improved efficiencies at the Sands Regency.
The decrease in general and administrative costs and expenses of $3.0
million includes a decline of $3.2 million attributable to the Copa Casino as
partially offset by an increase from the Sands Regency of $279,000. The increase
at the Sands Regency is due to increases in advertising and promotional costs
and expenses and in incentive compensation. The increased advertising and
promotional costs are due to expanded advertising efforts and in-house
promotional programs to attract hotel and non-hotel guests.
The decrease in depreciation and amortization expense of $554,000, in
the nine months ended March 31, 2000 compared to the nine months ended March 31,
1999, is primarily attributable to the Copa Casino.
The decrease in interest and other expense of $530,000 includes a
decrease due to the elimination of the Copa Casino of $391,000 and a decrease at
the Sands Regency of approximately $139,000. The decrease at the Sands Regency
is primarily due to the elimination of prior accrued interest payable upon the
successful refinancing of the Company's secured bank debt.
The effective income tax rate in the nine months ended March 31, 2000 is
different from the statutory rate due, in part, to the impact of certain tax
credits that otherwise reduce income taxes for federal income tax purposes. The
effective income tax rate in the nine months ended March 31, 1999 is different
from the statutory rate due to certain items that are not deductible for federal
income tax purposes.
Capital resources and liquidity
In December 1999, the Company refinanced its long-term bank debt. Such
debt was otherwise due in full in January 2000 and was included on the Company'
Consolidated Balance Sheet at June 30, 1999 as a current liability. The new
long-term debt is $10 million and requires monthly interest only payments at an
annual interest rate of 10.75%. The
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<PAGE> 14
Capital resources and liquidity (continued)
principal balance is due in full in December 2004. As a result of the
refinancing, the Company's working capital has improved by over $10 million.
Other than above, there were no material changes in The Sands Regent's
financial condition nor were there any substantive changes relative to matters
discussed in the Capital Resources and Liquidity section of Management's
Discussion and Analysis of Financial Condition and Results of Operations as
presented in the 1999 Annual Report appearing as Exhibit 13 to the Company's
Form 10-K for the year ended June 30, 1999.
Year 2000
The Company completed all phases of its study and evaluation of its Y2K
Systems and Components presently utilized by the Company prior to December 31,
1999 including inquiries and follow-up with material third party vendors.
Appropriate corrective actions, as necessary, were also undertaken. Upon the
change in date to the year 2000, the Company did not experience any significant
issues or adverse conditions relative to its Y2K Systems and Components nor was
it adversely impacted by potential Y2K failures experienced by third party
vendors.
The cost to the Company to assure Y2K compliance, including remediation efforts,
was insignificant and did not materially affect the Company's financial
condition. The Company believes that there is a minimal probability of future
material adverse impacts relative to potential failures of its Y2K Systems and
Components and has generally curtailed further Y2K compliance efforts including
the need to develop contingency plans.
Cautionary statement for purposes of the "Safe Harbor" provisions of the Private
Securities Litigation Reform Act of 1995
The foregoing Management's Discussion and Analysis of Financial
Condition and Results of Operations contains various "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
which represent the Company's expectations or beliefs concerning future events.
Such statements are identified by the words "anticipates", "believes",
"expects", "intends", "future", or words of similar import. Various important
factors that could cause actual results to differ materially from those in the
forward-looking statements include, without limitation, the following: increased
competition in existing markets or the opening of new gaming jurisdictions; a
decline in the public acceptance of gaming; the limitation, conditioning or
suspension of any of the Company's gaming licenses; increases in or new taxes
imposed on gaming revenues or gaming devices; a finding of unsuitability by
regulatory authorities with respect to the Company's officers, directors or key
employees; loss or retirement of key executives; significant increases in fuel
or transportation prices; adverse economic conditions in the Company's key
markets; severe and unusual weather in the Company's key markets and adverse
results of significant litigation matters.
-12-
<PAGE> 15
PART II OTHER INFORMATION
Item 1. Legal Proceedings.
NONE
Item 2. Changes in Securities.
NONE
Item 3. Defaults Upon Senior Securities.
NONE
Item 4. Submission of Matters to a Vote of Security Holders.
NONE
Item 5. Other information.
NONE
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K:
NONE
-13-
<PAGE> 16
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.
THE SANDS REGENT
(Registrant)
Date: May 12, 2000 By /S/ David R. Wood
--------------------------------------
David R. Wood, Executive Vice
President and Principal Accounting and
Financial Officer
-14-
<PAGE> 17
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Page
------- ------------
<S> <C>
27 Financial Data Schedule...................
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-2000
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