<PAGE> 1
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 September 30, 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
October 31, 1995
<TABLE>
<CAPTION>
Class Outstanding
----- -----------
<S> <C>
Common stock, no par value 1,000
</TABLE>
<PAGE> 2
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
SEPTEMBER 30,
1995 1994
----------- ------------
(IN THOUSANDS)
<S> <C> <C>
INCOME STATEMENT DATA
NET REVENUES
Stardust $ 47,794 $ 48,156
Boulder Strip Properties 42,912 39,730
Downtown Properties 32,451 32,896
----------- ------------
Total Properties 123,157 120,782
----------- ------------
OPERATING INCOME
Stardust 5,803 6,532
Boulder Strip Properties 2,893 1,562
Downtown Properties 2,984 4,371
----------- ------------
Total Properties 11,680 12,465
----------- ------------
</TABLE>
<PAGE> 3
Consolidated net revenues increased 2.0% for the three-month period
ended September 30, 1995 compared to the same period in the prior fiscal year.
Revenues at the Boulder Strip Properties increased 8.0% primarily as a result
of increases at Sam's Town while revenues at the Stardust decreased 0.8% and
revenues at the Downtown properties declined 1.4% compared to the prior year.
Revenue growth was achieved in all major areas of the Company's operations with
casino revenue up 1.4%, rooms revenue up 12.6% and food and beverage revenue up
0.6%. Slot revenue, the largest component of casino revenue, increased 3.8%
for the three months ended September 30, 1995 and accounted for over two-thirds
of total casino revenue. Table games revenue, the only other significant
component of casino revenue, decreased 4.8% as a result of a 1.2 % increase in
wagering offset by lower net winnings. Company wide occupied rooms increased
2.3% primarily as a result of the opening of the California Hotel and Casino
rooms expansion (146 rooms, opened in December 1994), which were open for the
full fiscal quarter ended September 30, 1995. In addition, the Company's
average room rate rose 11.2% for the three months ended September 30, 1995
versus the comparable period in the prior fiscal year. Occupancy statistics do
not include Main Street Station rooms which the Company uses to augment the
room base at the California and the Fremont.
Consolidated operating income and consolidated operating income
margins declined to $8.1 million and 6.5%, respectively, compared to $10.2
million and 8.5%, respectively, for the three month period ended September 30,
1995 versus the comparable period in the prior fiscal year. The decline in
consolidated operating income and consolidated operating income margins was
primarily the result of increases at the Boulder Strip Properties offset by
declines at the Stardust and Downtown Properties.
Net revenue at the Stardust decreased 0.8% for the first quarter of
fiscal 1996 versus the first quarter in the prior fiscal year. Casino and food
and beverage revenue declined 3.3% and 0.9%, respectively, while rooms revenue
increased 15.0%. Slot and table games revenue, the largest components of
casino revenue, declined 4.3% and 1.0%, respectively, as a result of declines
in wagering of 5.3% and 2.8%, respectively, offset by higher net winnings.
Room revenue for the three months increased 15.0% with a 3.1% decrease in
occupied rooms offset by a 17.8% increase in the average daily room rate.
Operating income margin for the quarter was 12.1% versus 13.6% in the prior
year's first quarter. The decline in operating income and operating margin is
attributable primarily to increased operating income and operating income
margins in the rooms department not fully offsetting higher advertising and
promotional expenses.
Net revenues at the Boulder Strip Properties increased 8.0% for the
three months ended September 30, 1995 compared to the same period in the prior
year primarily as a result of an 8.1% increase in revenues at Sam's Town Las
Vegas. Net revenues at the Eldorado Casino and Jokers Wild Casino increased
4.7% and 10.5%, respectively. Casino revenues at the Boulder Strip Properties
increased 10.8% for the three months ended September 30, 1995, while rooms
<PAGE> 4
revenue increased 11.9% and food and beverage revenue declined 1.4%. The
operating income margin at the Boulder Strip properties increased to 6.7% from
3.9% for the three months ended September 30, 1995 versus the same period in
the prior fiscal year. Both Sam's Town Las Vegas and the Eldorado Casino
posted increased operating income margins, up 3.3 and 2.5 percentage points,
respectively, while operating income margin at the Jokers Wild Casino declined
slightly.
Net revenues at the Downtown Properties (California and Fremont)
decreased 1.4% for the three months ended September 30, 1995 compared to the
comparable period in the prior year. Net revenues at the California increased
3.2% for the first three months of fiscal 1996 with casino revenue increasing
1.8%, rooms revenue increasing 17.2% and food and beverage revenue increasing
6.3%. The increase in casino revenue at the California, for the three month
period was the result of a 10.7% increase in slot revenue offset by a 11.2%
decline in table game revenue. The decline in table game revenue was caused by
a 9.8% increase in wagering that was offset by lower net winnings. At the
Fremont, net revenues declined 6.1% for the three month period ended September
30, 1995 versus the comparable period in the prior fiscal year with casino
revenue declining 8.4% and rooms and food and beverage declining 0.8% and 3.9%,
respectively. The Fremont continued to be negatively impacted by the
construction of the Fremont Street Experience. The construction of this
project, as well as work on several adjacent streets, has impeded the free flow
of both vehicular and pedestrian traffic through downtown Las Vegas. The
Company expects to be negatively impacted by this construction until the
project's completion which is expected to be December 1995. Operating income
margins at the Downtown Properties were 9.2% for the three months ended
September 30, 1995 versus 13.3% in the comparable period in the prior fiscal
year. Operating income at the California and Fremont declined to 9.8% and
8.5%, respectively, for the three months ended September 30, 1995 versus 13.2%
and 13.4%, respectively, for the same period in the prior fiscal year.
Interest expense was $9.6 million for the first quarter of fiscal 1996
compared to $9.0 million in the first quarter of the prior year. The Company
incurred increased interest expense for the quarter ended September 30, 1995 as
a result of higher interest rates compared to the first quarter of the prior
fiscal year.
As a result of these factors net income decreased $2.0 million for the
first fiscal quarter of 1996 compared to the first fiscal quarter of the prior
year.
FINANCIAL CONDITION AND CAPITAL RESOURCES
For the three months ended September 30, 1995 the Company's net cash
provided by operating activities was $11.2 million versus $2.0 million in last
year's first fiscal quarter. This increase was primarily a result of increases
in accounts payable. As of September 30, 1995 the Company had balances of cash
and cash equivalents of approximately $23.7 million and had approximately $59.0
million of credit available under credit agreements.
<PAGE> 5
In connection with the opening of the Fremont Street Experience the
Company is committed to opening Main Street Station Hotel and Casino by the
middle of 1996. This project is expected to include a refurbishment of rooms,
a redesign of the property's public space and the construction of a parking
garage. The Company is in the design and planning stages of this project and
has not yet developed a definitive budget. The Company has also identified a
potential casino/hotel site in Reno, Nevada. The Company is working to resolve
certain zoning matters before this project can commence. The source of funds
required to complete these projects and for the Company's ongoing maintenance
capital expenditure program is expected to be cash on hand, cash flow from
operations, availability under existing credit agreements, new borrowings to
the extent permitted under existing debt agreements and vendor and other
financing.
<PAGE> 6
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)
