Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 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 No. 33-50733-02
Resorts International Hotel, Inc.
(Exact name of registrant as specified in its charter)
NEW JERSEY 21-0423320
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1133 Boardwalk, Atlantic City, New Jersey 08401
(Address of principal executive offices) (Zip Code)
(609) 344-6000
(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 such filing requirements for the past 90
days.
Yes X No
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
Yes X No
Number of shares outstanding of registrant's common stock as of March
31, 1995: 1,000,000, all of which are owned by one shareholder.
Accordingly there is no current market for any of such shares.
Exhibit Index is presented on page 12
Total Number of Pages 13
1<PAGE>
RESORTS INTERNATIONAL HOTEL, INC.
FORM 10-Q
INDEX
Page Number
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of
Operations for the Quarters
Ended March 31, 1995 and 1994 3
Consolidated Balance Sheets
at March 31, 1995 and
December 31, 1994 4
Consolidated Statements of
Cash Flows for the Quarters
Ended March 31, 1995 and 1994 5
Notes to Consolidated
Financial Statements 6
Item 2. Management's Discussion
and Analysis of Financial
Condition and Results of
Operations 8
Part II. Other Information
Item 6. Exhibits and Reports on
Form 8-K 10
2<PAGE>
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
RESORTS INTERNATIONAL HOTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands of Dollars)
(Unaudited)
Quarter Ended
March 31,
1995 1994
Revenues:
Casino $62,118 $53,649
Rooms 1,346 1,178
Food and beverage 3,030 3,114
Other casino/hotel revenues 1,186 932
67,680 58,873
Expenses:
Casino 37,064 33,692
Rooms 975 710
Food and beverage 3,389 3,577
Other casino/hotel operating expenses 8,632 8,605
Selling, general and administrative 9,422 8,775
RII parent services fee 2,200 1,933
Depreciation 3,179 3,272
64,861 60,564
Earnings (loss) from operations 2,819 (1,691)
Other income (deductions):
Interest income 666 1,924
Interest expense (4,195) (4)
Amortization of debt discounts (469)
Recapitalization costs (604)
Net loss $(1,179) $ (375)
3<PAGE>
RESORTS INTERNATIONAL HOTEL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars, except par value)
March 31, December 31,
1995 1994
(Unaudited)
ASSETS
Current assets:
Cash (including cash equivalents
of $14,519 and $12,695) $ 27,642 $ 26,876
Receivables, less allowance for
doubtful accounts of $3,893
and $3,901 5,840 6,232
Inventories 1,799 1,793
Prepaid expenses 7,058 8,566
Total current assets 42,339 43,467
Property and equipment, net of
accumulated depreciation of
$52,077 and $48,906 155,006 157,501
Deferred charges and other assets 11,739 11,766
$209,084 $212,734
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $ 25,065 $ 24,365
Interest payable to affiliate 1,397 4,113
Due to RII 3,487 4,411
Total current liabilities 29,949 32,889
Notes payable to affiliate, net
of unamortized discounts 125,778 125,309
Deferred income taxes 19,400 19,400
Shareholder's equity:
Common stock - $1 par value 1,000 1,000
Capital in excess of par 21,366 21,366
Retained earnings 11,591 12,770
Total shareholder's equity 33,957 35,136
$209,084 $212,734
4<PAGE>
RESORTS INTERNATIONAL HOTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
(Unaudited)
Quarter Ended
March 31,
1995 1994
Cash flows from operating activities:
Cash received from customers $ 68,511 $ 58,547
Cash paid to suppliers and employees (59,040) (54,361)
Cash flow from operations before
interest 9,471 4,186
Interest received 587 210
Interest paid (6,911) (4)
Net cash provided by operating
activities 3,147 4,392
Cash flows from investing activities:
Payments for property and equipment (684) (1,608)
Casino Reinvestment Development
Authority deposits and bond
purchases (773) (693)
Net cash used in investing
activities (1,457) (2,301)
Cash flows from financing activities:
Repayments to RII (924) (3,200)
Recapitalization costs paid to RII (604)
Debt repayments (9)
Net cash used in financing
activities (924) (3,813)
Net increase (decrease) in cash and
cash equivalents 766 (1,722)
Cash and cash equivalents at beginning
of period 26,876 25,947
Cash and cash equivalents at end
of period $ 27,642 $ 24,225
5<PAGE>
RESORTS INTERNATIONAL HOTEL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. General:
The accompanying consolidated interim financial statements, which
are unaudited, include the operations of Resorts International Hotel,
Inc. ("RIH") and its subsidiaries. RIH owns and operates Merv
Griffin's Resorts Casino Hotel (the "Resorts Casino Hotel"), a
casino/hotel complex located in Atlantic City, New Jersey. RIH is a
wholly owned subsidiary of GGRI, Inc., which is a wholly owned
subsidiary of Resorts International, Inc. ("RII").
W h i l e the accompanying interim financial information is
unaudited, management of RIH believes that all adjustments necessary
for a fair presentation of these interim results have been made and
all such adjustments are of a normal recurring nature.
The notes presented herein are intended to provide supplemental
disclosure of items of significance occurring subsequent to December
31, 1994 and should be read in conjunction with the Notes to
Consolidated Financial Statements contained in pages 28 through 40 of
RIH's Annual Report on Form 10-K for the year ended December 31,
1994.
B. Reverse Repurchase Agreements:
Cash equivalents at March 31, 1995 included reverse repurchase
agreements (federal government securities purchased under agreements
to resell those securities) with the institutions listed in the
following table under which RIH had not taken delivery of the
underlying securities. The agreements matured on April 3, 1995.
(In Thousands of Dollars)
National Westminster Bank NJ $ 4,841
Prudential Securities, Inc. $11,565
C. Complimentary Services:
The Consolidated Statements of Operations reflect each category
of operating revenues excluding the retail value of complimentary
services provided to casino patrons without charge. The rooms, food
and beverage, and other casino/hotel operations departments allocate a
percentage of their total operating expenses to the casino department
for complimentary services provided to casino patrons. These
allocations do not necessarily represent the incremental cost of
providing such complimentary services to casino patrons. Amounts
6<PAGE>
a l l ocated to the casino department from the other operating
departments were as follows:
Quarter Ended
March 31,
(In Thousands of Dollars) 1995 1994
Rooms $1,051 $ 972
Food and beverage 3,946 3,583
Other casino/hotel operations 1,318 1,607
Total allocated to casino $6,315 $6,162
D. Statements of Cash Flows:
Supplemental disclosures required by Statement of Financial
Accounting Standards No. 95 "Statement of Cash Flows" are presented
below.
Quarter Ended
March 31,
(In Thousands of Dollars) 1995 1994
Reconciliation of net loss to net cash
provided by operating activities:
Net loss $(1,179) $ (375)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation 3,179 3,272
Provision for doubtful receivables 218 168
Provision for discount on Casino
Reinvestment Development Authority
obligations, net of amortization 368 311
Amortization of debt discounts 469
Recapitalization costs 604
Net decrease in receivables 174 476
Net increase in interest
receivable from affiliate (1,688)
Net decrease in inventories and
prepaid expenses 1,502 1,315
Net decrease in deferred charges
and other assets 433 95
Net increase in accounts payable
and accrued liabilities 699 214
Net decrease in interest payable
to affiliate (2,716)
Net cash provided by operating activities $ 3,147 $ 4,392
7<PAGE>
E. Commitments and Contingencies:
RIH is a defendant in certain litigation. In the opinion of
management, based upon the advice of counsel, the aggregate liability,
if any, arising from such litigation will not have a material adverse
effect on the accompanying consolidated financial statements.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
FINANCIAL CONDITION
Liquidity
At March 31, 1995 RIH had working capital of $12,390,000
including $27,642,000 of unrestricted cash and equivalents. The day-
to-day operations of RIH require approximately $10,000,000 of currency
and coin on hand which amount varies by days of the week, holidays and
seasons. Additional cash balances are necessary to meet current
working capital needs.
RIH, through affiliated notes payable to Resorts International
Hotel Financing, Inc. ("RIHF"), a subsidiary of RII, is the principal
source of funds for servicing the $125,000,000 principal amount 11%
Mortgage Notes (the "Mortgage Notes") and the $35,000,000 principal
amount 11.375% Junior Mortgage Notes (the "Junior Mortgage Notes")
issued by RIHF as part of the restructuring of RII in May 1994. RIH
owns $12,899,000 principal amount of the Junior Mortgage Notes.
Annual interest expense on the Mortgage Notes and the Junior Mortgage
Notes, after the reduction for interest on the $12,899,000 principal
amount of Junior Mortgage Notes held by RIH, will total approximately
$16,500,000. Based on projected operating results, management
believes that RIH's liquidity will continue to be satisfactory;
however, management can give no assurances as to RIH's future
l i quidity due to the possibility of unanticipated events and
circumstances inherent in any projections.
RIHF has a $19,738,000 senior credit facility (the "Senior
Facility") available for the period ending May 2, 1996 should RIH or
RII have unforeseen cash needs. Management believes that the Senior
Facility will serve as a safeguard if an emergency arises from current
operations, or serve as a source of funds for a profitable investment
opportunity. However, market interest rates and other economic
conditions, among other factors, will determine if it is appropriate
to draw on the Senior Facility. To the extent the Senior Facility is
utilized, RIH would be the primary source of funds for servicing such
debt.
RIHF will satisfy the interest due June 15, 1995 on the Junior
Mortgage Notes by cash payment. Therefore, on that date RIH will pay
interest due on its affiliated note payable to RIHF in cash. Also on
June 15, 1995, RIH will receive interest due on the $12,899,000
principal amount of Junior Mortgage Notes owned by RIH.
8<PAGE>
Capital Expenditures
During the first quarter of 1995 RIH's $684,000 of capital
expenditures were primarily for various guest room, back-of-the-house
and restaurant renovations.
As previously reported, RIH received approval to increase the
casino gaming area at Resorts Casino Hotel by 10,000 square feet. RIH
has already modified a portion of its bus waiting area to house
approximately 180 slot machines and is presently converting Mr. G's
lounge to accommodate approximately 135 more slot machines. This
project is expected to be completed by Memorial Day weekend. The
estimated construction cost of these renovations, excluding the cost
of slot machines and related equipment, is approximately $1,500,000.
The new slot machines will be financed by a bank loan.
RII also recently announced that RIH has signed a franchise
agreement with California Pizza Kitchen to open a new restaurant in
Resorts Casino Hotel. The space formerly occupied by the Celebrity
Deli is currently being renovated to house this new restaurant and a
new cocktail lounge. This conversion, which is expected to cost
approximately $3,000,000 including furniture, fixtures and equipment,
is scheduled to be completed in late June.
RESULTS OF OPERATIONS
RIH operates in one business segment. Following is a discussion
of the results of operations for the first quarter of 1995 compared to
1994. The discussion should be read in conjunction with the
Consolidated Financial Statements included herein.
Revenues
Casino revenues increased by $8,469,000 for the first quarter of
1995 as RIH's slot win and table game win increased by $7,897,000 and
$931,000, respectively. RIH's revenue from poker, simulcasting and
keno was down for the first quarter of 1995. RIH's slot win and table
game win were both up primarily due to increases in amounts wagered
and, to a lesser extent, increases in hold percentages (ratio of
casino win to total amount wagered for slots or total amount of chips
purchased for table games). The increased amounts wagered reflect
RIH's increased emphasis on bus and junket air programs. In addition,
poor weather conditions during the first quarter of 1994 adversely
affected operations in that period as the principal means of
transportation to Atlantic City is by automobile or bus.
Earnings from Operations
For the first quarter of 1995 casino, hotel and related operating
results increased by $4,510,000 as the increased revenues described
above were partially offset by a net increase in operating costs. The
most significant variances in operating expenses were increases in
casino promotional costs ($2,100,000), casino win tax ($700,000) and
performance and incentive bonuses ($700,000). Casino promotional
costs increased primarily due to increases in the amount of cash
giveaway to
9<PAGE>
bus patrons and costs associated with the expanded junket air program.
Casino win tax increased relative to the increase in casino revenues.
Other Income (Deductions)
RIH's interest income in 1994 was largely attributable to a
$50,000,000 note receivable from a former Bahamian affiliate. This
note was cancelled in May 1994 as part of the restructuring of RII.
Prior to RII's restructuring in May 1994, RIH's interest expense
w a s limited to minor amounts incurred on capitalized lease
obligations. Since the restructuring, RIH bears the interest on the
Mortgage Notes and the Junior Mortgage Notes, through affiliated notes
payable to RIHF, the terms of which mirror the terms of such debt of
RIHF.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
The following Part I exhibit is filed herewith:
Exhibit
Number Exhibit
(27) Financial data schedule
b. Reports on Form 8-K
No Current Report on Form 8-K was filed by RIH covering an event
during the first quarter of 1995. No amendments to previously filed
Forms 8-K were filed during the first quarter of 1995.
10<PAGE>
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.
RESORTS INTERNATIONAL HOTEL, INC.
(Registrant)
/s/ Matthew B. Kearney
Matthew B. Kearney
Executive Vice President
(Authorized Officer of
Registrant and Chief
Financial Officer)
Date: May 11, 1995
11<PAGE>
RESORTS INTERNATIONAL HOTEL, INC.
Form 10-Q for the quarterly period
ended March 31, 1995
EXHIBIT INDEX
Exhibit Page
Number Exhibit Number
(27) Financial data schedule 13
12<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM RESORTS
INTERNATIONAL HOTEL, INC.'S CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO
INCLUDED IN THE FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1995, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> $27,642<F1>
<SECURITIES> 0
<RECEIVABLES> $8,290
<ALLOWANCES> $3,893
<INVENTORY> $1,799
<CURRENT-ASSETS> $42,339
<PP&E> $207,083
<DEPRECIATION> $52,077
<TOTAL-ASSETS> $209,084
<CURRENT-LIABILITIES> $29,949
<BONDS> $125,778<F2>
<COMMON> $1,000
0
0
<OTHER-SE> $32,957
<TOTAL-LIABILITY-AND-EQUITY> $209,084
<SALES> 0
<TOTAL-REVENUES> $67,680
<CGS> 0
<TOTAL-COSTS> $50,060<F3>
<OTHER-EXPENSES> $3,179<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> $4,664
<INCOME-PRETAX> $(1,179)
<INCOME-TAX> 0
<INCOME-CONTINUING> $(1,179)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> $(1,179)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>INCLUDES NON-RESTRICTED CASH EQUIVALENTS OF $14,519.
<F2>NET OF UNAMORTIZED DISCOUNTS.
<F3>EXCLUDES DEPRECIATION EXPENSE.
<F4>DEPRECIATION EXPENSE.
</FN>
</TABLE>
