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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q / A
(AMENDMENT NUMBER 1)
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1995
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 33-51672
CALIFORNIA HOTEL AND CASINO
(Exact name of registrant as specified in its charter)
NEVADA 88-0121743
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2950 SOUTH INDUSTRIAL ROAD
LAS VEGAS, NEVADA
89109
(Address of principal executive offices)
(Zip Code)
(702) 792-7200
(Registrant's telephone number, including area code)
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
filing requirements for the past 90 days.
Yes X No
----- -----
Shares outstanding of each of the Registrant's classes of common stock as of
January 31, 1996
<TABLE>
<CAPTION>
Class Outstanding
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<S> <C>
Common stock, no par value 1,000
</TABLE>
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated certain Income
Statement Data for the Company's properties. As used herein, "Boulder Strip
Properties" consist of Sam's Town Las Vegas, the Eldorado Casino and Jokers
Wild Casino; and "Downtown Properties" consist of the California Hotel and
Casino and the Fremont Hotel and Casino.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1995 1994 1995 1994
--------- --------- --------- ----------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA
NET REVENUES
Stardust $ 48,612 $ 50,581 $ 96,406 $ 98,737
Boulder Strip Properties 50,492 43,631 93,404 83,361
Downtown Properties 36,311 35,203 68,762 68,099
--------- --------- --------- ----------
Total Properties 135,415 129,415 258,572 250,197
--------- --------- --------- ----------
OPERATING INCOME
Stardust 7,114 8,284 12,917 14,816
Boulder Strip Properties 6,673 3,845 9,566 5,407
Downtown Properties 5,995 7,028 8,979 11,399
--------- --------- --------- ----------
Total Properties 19,782 19,157 31,462 31,622
--------- --------- --------- ----------
</TABLE>
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Consolidated net revenues increased 4.6% and 3.3%, respectively, for
the three and six-month periods ended December 31, 1995 versus the comparable
periods in the prior fiscal year. Revenues at the Boulder Strip Properties
increased 15.7% and 12.0%, respectively, while Stardust revenues declined 3.9%
and 2.4%, respectively, and revenues at the Downtown Properties increased 3.1%
and 1.0%, respectively. Revenue growth on a consolidated basis was achieved in
all major revenue categories of the Company's operations for both the three and
six-month periods ended December 31, 1995, with casino revenue up 4.2% and
2.9%, respectively, food and beverage revenue, up 4.2% and 2.4%, respectively,
and room revenue up 8.1% and 10.3%, respectively. Slot revenue, which accounts
for 70% of casino revenue, increased 8.1% and 6.0%, respectively, for the three
and six-month periods ended December 31, 1995 versus comparable periods in the
prior fiscal year. Table games revenue, the only other significant component
of casino revenue, decreased 3.6% and 4.2%, respectively, for the three and
six-month periods. The Company's hotel rooms posted an overall occupancy rate
of 92% and 94% for the three and six-month periods ended December 31, 1995.
The Company's average room rate rose 9.6% and 10.4% for the three and six-month
periods ended December 31, 1995, primarily as a result of an increase of 13.7%
and 15.5% rise in average room rate at the Stardust for three and six-month
period ended December 31, 1995. Occupancy statistics do not include Main
Street Station rooms which the Company uses to augment the rooms base at the
California and the Fremont.
Consolidated operating income margins were 12.3% and 9.5%,
respectively, for the three and six-month periods ended December 31, 1995
versus 12.1% and 10.3% for the comparable periods in the prior fiscal year.
Consolidated operating income was $16.6 million and $24.7 million for the three
and six-month periods ended December 31, 1995 versus $15.6 million and $25.9
million for the comparable periods of the prior fiscal year. The Boulder Strip
Properties posted increases in operating income of 74% and 77% for the three
and six-month periods ended December 31, 1995 which were offset by operating
income declines at the Stardust and Downtown Properties.
Net revenues at the Stardust declined 3.9% and 2.4%, respectively, for
the second fiscal quarter and for the first six months of the current fiscal
year versus the comparable periods in the prior fiscal year. Slot revenue
decreased 4.5% in the second quarter and declined 4.4% for the six months ended
December 31, 1995 compared to the comparable periods in the prior fiscal year.
Table games revenue for the three and six-month periods ended December 31, 1995
was down 11.3% and 6.4%, respectively, versus comparable periods in the prior
fiscal year as a result of flat wagering and lower net winnings. Room revenue
at the Stardust for the three and six-months ended December 31, 1995 increased
6.7% and 10.6%, respectively, with declines in occupied rooms offset by
increases in the average daily room rate of 13.7% and 15.5%, respectively.
Operating income margins for the three and six-month periods ended December 31,
1995 were 14.6% and 13.4%, respectively, versus 16.4% and 15.0%, respectively,
in the comparable periods in the prior fiscal year. The decline in operating
income and operating income margin for the three and six-month periods is
primarily attributable to decreased revenues and higher advertising and
promotional expenses partially offset by increased operating income and
operating income margins in the rooms department.
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Net revenues at the Boulder Strip Properties increased 15.7% and
12.0%, respectively, for the three and six- month periods ended December 31,
1995 compared to the comparable periods in the prior fiscal year. Net revenues
at Sam's Town increased 17.3% and 13.0% for the three and six-month periods
ended December 31, 1995 versus the comparable periods in the prior fiscal year
while revenues at the Eldorado and Jokers Wild increased slightly in both the
three and six-month periods. Casino revenues at the Boulder Strip Properties
increased 21.4% and 16.2%, respectively, for the three and six-month periods
ended December 31, 1995, while rooms revenue increased 11.4% and 11.6%,
respectively, and food and beverage revenue increased 8.0% and 3.9%,
respectively. Operating income margins at the Boulder Strip Properties
increased to 13.2% and 10.2%, respectively, for the three and six-month periods
ended December 31, 1995 versus 8.8% and 6.5%, respectively, in the comparable
periods of the prior year. All three Boulder Strip Properties posted operating
income margin increases in the three and six-month periods ending December 31,
1995 with Sam's Town posting increases of 5.0 and 4.3 percentage points,
respectively. Operating income margin at the Eldorado increased 3.5 and 1.5
percentage points, respectively, and operating income margins at Jokers Wild
increased 2.9 and 0.5 percentage points, respectively, for the three and
six-month periods. The significant increases in revenues, operating income and
operating income margins at Sam's Town are primarily attributable to the
successful implementation of aggressive marketing programs creating increased
customer awareness and visitation.
Net revenues at the Downtown Properties increased 3.1% and 1.0%,
respectively, for the three and six-month periods ended December 31, 1995
versus the comparable periods in the prior fiscal year. Slot revenue and table
games revenue for the second quarter and first six months ended December 31,
1995, were flat on slightly increased wagering. Net revenues at the Fremont
increased 2.4% and declined 1.8% for the three and six-month periods ended
December 31, 1995, versus the comparable periods in the prior fiscal year. Net
revenues at the California increased 3.8% and 3.5% for the three and six-month
periods ended December 31, 1995 versus the comparable periods in the prior
fiscal year. Operating income margins at the Downtown Properties were 16.5%
and 13.1% for the three and six-month periods ended December 31, 1995 versus
20.0% and 16.7% in the comparable period of the prior year. The Fremont
operating income margin was 14.4% and 11.7%, respectively, for the three and
six-month periods ended December 31, 1995 versus 17.9% and 15.7%, respectively,
in the comparable three and six-month periods in the prior fiscal year. The
California had operating income margins of 18.4% and 14.3%, respectively, for
the three and six-month periods ended December 31, 1995 versus 21.8% and 17.7%,
respectively, in the comparable three and six-month periods in the prior fiscal
year. Construction of the Fremont Street Experience project, which was
completed and opened to the public in December 1995, continued to negatively
impact the Downtown Properties for the majority of the second fiscal quarter
and first six months of the current fiscal year.
Interest expense was $9.2 million and $18.8 million for the three and
six-month periods ended December 31, 1995 versus $9.5 million and $18.5 million
for the comparable period in the prior fiscal year.
As a result of these factors, net income increased $1.5 million and
decreased $0.5 million, respectively, for the three and six-months ended
December 31, 1995 compared to the same period in the prior fiscal year.
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FINANCIAL CONDITION AND CAPITAL RESOURCES
For the six months ended December 31, 1995, the Company's net cash
provided by operating activities was $31.5 million compared to $13.4 million in
the prior year period primarily as a result of an increase in accounts payable
and other liabilities. As of December 31, 1995, the Company had balances of
cash and cash equivalents of approximately $34.3 million and had approximately
$22.8 million of credit available under its bank credit agreement.
In connection with opening of the Fremont Street Experience, the
Company is committed to opening Main Street Station Hotel and Casino during
1996. This project is expected to include a refurbishment of rooms, a redesign
of the property's public space, additional expanded restaurant facilities and
increased parking capacity. The Company is in the design and planning stages
of this project and has not yet developed a definite budget. The Company has
also identified a potential casino/hotel site in Reno, Nevada. The Company has
resolved certain zoning matters and is in the initial planning stages of the
project design.
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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.
CALIFORNIA HOTEL AND CASINO
(Registrant)
Date: June 7, 1996 By /s/ Keith E. Smith
---------------------------------
Keith E. Smith
Vice President and Controller
(Chief Accounting Officer)
