UNION PLAZA HOTEL AND CASINO, INC.
1 Main Street
Las Vegas, NV 89101
March 31, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
Pursuant to the requirements of the Securities Exchange Act of 1934, we are
transmitting herewith the attached Form 10-K along with Exhibit 13 (Annual
Report) and the 1996 financial data statement.
Sincerely,
UNION PLAZA HOTEL AND CASINO, INC.
Larry Dolesh, Vice President
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
1997
ANNUAL REPORT
<PAGE>
TABLE OF CONTENTS
Page
Letter to Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . .1
Selected financial data. . . . . . . . . . . . . . . . . . . . . . . . . .2
Management's discussion and analysis of
financial condition and results of
operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3-7
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . .8
Financial Statements:
Consolidated balance sheets. . . . . . . . . . . . . . . . . . . . . 9-10
Consolidated statements of operations . . . . . . . . . . . . . . . . 11
Consolidated statements of stockholders'
equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Consolidated statements of cash flows. . . . . . . . . . . . . . . .13-14
Notes to consolidated financial
statements. . . . . . . . . . . . . . . . . . . . . . . . . .15-24
Directors and executive officers . . . . . . . . . . . . . . . . . . . . 25
Special information. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
<PAGE>
To Our Shareholders,
1997 was a very difficult year for the Union Plaza as the operating conditions
throughout downtown Las Vegas continued to deteriorate in the face of
increasing competition in this market. For the year, we had a net loss of
$3,644,000, including $471,000 in losses attibuted to the Fremont Street
Experience.
As the Las Vegas valley continues its ever expanding growth, our customer is
increasingly drawn from our property to see and become active in the many
different attractions offered to them. Since our Company is unable to offer
the entertainment and amenities of the mega-resorts, we understand the need
to improve the level of service and friendliness in our casino to make our
customers want to stay and play with us.
Our on-going market program is centered on building our niche of customers
who frequent Las Vegas two or more times per year. We want that customer
to return to our establishment each visit and to have and enjoyable gambling
experience in a comfortable environment. Utilizing our slot promotion
campaign, I am pleased to report that our Company was able to keep the
percentage of rooms occupied above 90% during 1997, despite the abundance of
hotel rooms in the valley. Unfortunately, the high level of occupancy did not
equate into satisfaction with our casino results. For the year, our casino
results continued to decline as they have fallen to 67% of net revenues
from 70% reported two years ago.
Despite the disappointing results recorded for 1997, we are not discouraged.
Towards the end of 1997, we began reviewing our operating strategy and took
several steps to improve our casino image. We added various new games on the
casino floor that appeal to the tourist and locals alike. These new games are
performing better than expected and we are now looking at more of these games
to enhance our floor mix. Changes were also made in the beverage department
to provide products that our customers have been asking for while keeping our
prices at the lowest levels downtown. In a program that seems to be generating
more casino traffic, our show producer has recently begun aggressively pricing
his nightly show, appealing to our room guests and those persons crossing the
street from the Fremont Street Experience. We also welcome Irving K. Epstein
to our Board of Directors. Mr. Epstein joins our Board with a vast amount of
gaming experience and we look forward to his involvement with our Company.
In closing, I would like to thank each and everyone of you for continued
support as we look forward to improved operating conditions in 1998 and
beyond. On behalf of the Union Plaza, I would also like to extend my regrets
to the family of the late General R.G. Taylor who passed away during this past
year. General Taylor's presence on the Board will be missed.
Please make plans to join us on May 15, 1998 at 10:00am in the Center Stage
Restaurant for the annual meeting of shareholders.
Sincerely,
/s/ JOHN D. GAUGHAN
John D. Gaughan
Chairman of the Board
<PAGE>
<TABLE>
SELECTED FINANCIAL DATA
Amounts in thousands, except per share data
<CAPTION>
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Net revenues $ 48,015 $ 53,332 $ 51,999 $ 54,689 $ 57,238
Casino operating
revenue 32,135 36,292 36,558 38,864 40,039
Net income
(loss) (3,644) (736) 104 1,107 1,784
Total assets 45,192 49,317 53,163 54,386 55,917
Long-term
obligations 26,079 26,510 29,845 31,498 30,888
Stockholders'
equity 13,331 16,977 17,794 17,740 17,198
Earnings (loss)
per common
share $ (4.80) $ (.97) $ .14 $ 1.45 $ 2.25
Cash dividends
declared
common share $ -0- $ -0- $ -0- $ -0- $ -0-
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
This discussion and analysis should be reviewed with the financial
statements, notes and the special information.
1997 COMPARED TO 1996
Gross revenues for the Company were $55.3 million in 1997 compared to $60.7
million in 1996, a decrease of $5.4 million (8.9%). The decrease in revenues
is attributed to a $4.2 million (11.5%) decline in casino win and nearly
$1.0 million decline in hotel revenues during 1997.
The Company's operating loss was $2.2 million in 1997 compared to operating
income of $1.9 million in 1996. The operating loss is attributed to a
nearly 9% loss in revenues while operating expenses declined by only 2.3%.
Virtually all segments of the Company's operation suffered from a decline in
customer traffic during the year. In addition to the increased competition
from the new and larger hotel and casino operations, it appears as if the
Fremont Street Experience is impacting the customer traffic in the casino
greater than previously estimated. During 1997, the hotel occupancy levels
remained above 90%; however, it was apparent that many of those room guests
were not staying in the casino to gamble. Despite occupancy levels slightly
higher than downtown as a whole, hotel guests were drawn from the casino to
look at the Fremont Street Experience (see note 13) and visit other casinos
with "must see" attractions. Despite being a partner in the Fremont Street
Experience , Management is convinced that the attraction is detrimental to
its business.
OPERATING EXPENSES
In connection with the decline in revenues, Management was able to reduce
operating expenses in all areas except the food and beverage and room
sectors which were adversely affected by higher payroll costs associated with
Culinary Union pay raises over the comparable period. Food and beverage
expenses rose $300,000 (2.1%) and room expenses rose by $60,000 (1.1%).
Casino expenses fell from $14.7 million to $14.1 million (4.1%) during the
year due to a reduction in the expenses relating to the decline in business
activity. Promotional, advertising and entertainment costs all fell slightly
compared to the same period in 1996 as management adhered to basically the
same promotional programs and retained the same entertainment schedules in
1997.
OTHER EXPENSES
Utility and maintenance costs declined by $250,000 during the year as
electricity fell over $200,000. Amortization and depreciation expenses
declined by $367,000 in 1997 compared to those expenses recorded in the prior
year. Interest expense also declined nearly $100,000 in the period
as the result of an aggressive debt reduction strategy in the first half of
1996.
PROVISION (BENEFIT) FOR INCOME TAXES
The Company's effective tax rate was (24.8%) and (32.3%) for the years 1997
and 1996 respectively. The actual tax benefit due to net operating loss
carryforwards at December 31, 1997 were $1,198,000 and $350,000 at December
31, 1996.
NET INCOME (LOSS)
As a result of the factors defined above, the Company reported a net loss of
$3,644,000 for the year ended December 31, 1997 compared to a net loss of
$736,000 for the year ended December 31, 1996.
1996 COMPARED TO 1995
Gross revenues at the Company's hotel and casino were $60,728,000 in
1996 which reflects an increase of $987,000 or 2% when compared to 1995.
The increase in revenues is credited primarily to the Company's food, beverage
and hotel operations. Higher occupancy levels and increased food and
beverage sales are attributed to the completion of the "Fremont Street
Experience" or FSE (See Note 13). It is the Company's opinion that the end
of construction has had a greater impact on the revenues than the benefit of
the Fremont Street Experience project itself. Hotel occupancy rates increased
5.4% to 95.3% compared to 89.9% for all of 1995. The increased occupancy
levels resulted in nearly 50,000 more guests staying in the hotel during 1996
which is only 22,000 more guests than stayed in the Company's hotel in 1994.
These hotel guests have consequently resulted in higher food and beverage
sales at the facility for 1996. The increased customer base also had a
positive impact on "other income" during the year with liquor and gift shops
sales rising $46,000 or 4.3%. Casino revenues fell by 1% or $266,000 during
1996 following two years where casino revenues fell by more than two
million dollars annually. Live table games revenue declined by $1.1 million
or 12% during the year with a 16% decline in twenty-one revenue. The Company
adopted a tightened promotional policy during the first half of 1996 in an
effort to reduce complimentary expense. While the tightened policy succeeded
in reducing promotional allowances by $346,000 or 5%, the overall result was a
sharp decline in live table games play. Card room revenues increased by
$151,000 or 12.5% in the period benefiting from an 18% or $163,000 increase in
poker revenue while pan revenues fell by $12,000. The use of progressive
jackpots in the card room appears to be an attractive proposition for new and
existing poker players. The Company recorded a slight decrease overall in the
counter games sector. Sport book revenues increased by a small margin while
race book and keno revenues each declined slightly. Slot operations were the
main beneficiary of increased traffic early in 1996. Revenues from the video
slot machines rose by $611,000 or 2.6%, during the period.
During 1996 the Company recorded significantly higher operational expenses of
$2,425,000 or 5% as the result of higher costs associated with food and
beverage and hotel operations. Food and beverage costs increased by
$1,870,000 or 15% during the period. The rise in food and beverage costs are
the result of two factors including an overall higher cost-of-sales expense as
well as increased payroll costs. Payroll costs soared $1,186,000 or 15% due
to increased business and higher contractual union wages for most all
employees in those areas. Cost-of-sales increased by $659,000 or 17% compared
to last year due to higher volume and general inflation on high volume items
used in the Company's three restuarants. The hotel results also reflected
higher operating costs compared to 1995 due primarily to increased payroll
costs associated with union wage hikes for guest room attendants.
Hotel payroll costs of $488,000 were 10% more than in 1995. Other hotel
increases were the result of a greater level of occupancy in the hotel
relating to guest room supplies and travel agency commissions. General and
administrative expenses fell by $209,000 or 5%. The primary cause for the
decline in general and administrative costs is a significant reduction in
workmen's compensation and group insurance claims during the year. The
Company utilizes a light duty program to get injured workers back to work
quickly and has taken measures to aggressively deter fraudulent claims -
this program has resulted in fewer claims overall at the hotel and casino
during the last several years. Advertising and promotional costs rose by
$70,000 due to higher credit card commissions and souvenir costs. Credit
card commissions rose from increased charge card transactions; while more
souvenirs were purchased for giveaways. Entertainment expenses were also
higher due to increased contract fees for live entertainment. Operating
expenses in each of the other departments rose by less significant amounts
due mostly to higher service costs for guest amenities and maintenance on
the facility.
For December of 1996 the Company wrote down a significant portion of its
investment in the Fremont Street Experience due to significant losses in that
entity. The 1996 loss in the Fremont Street Experience amounted to $753,000
or 1% gross revenues. The Company does not anticipate any income from the
Fremont Street Experience due to the nature of the operation and cannot be
reasonably assured that this project will positively impact revenues.
1995 COMPARED TO 1994
Gross revenues of $59,741,000 were down 4% or $2,467,000 from 1994. The
decline in revenues was primarily due to fewer patrons in the casino as a
result of downtown construction relating to the "Fremont Street Experience"
project. Total Gaming revenues were down $2,306,000 (6%) as significantly
all major gaming departments showed a decline in revenue during 1995. Slot
revenue was down $1,670,000 (7%), Table Games revenue was down $164,000
(2%), Card Room revenue decreased by $203,000 (14%), and the Race and Sports
Book revenue also fell by $300,000 (15%). Keno was the only gaming
department to show an increase during the year with a gain of $31,000 (4%).
Food and Beverage revenues were down $373,000 (4%) which is also attributed
to less casino traffic. Occupancy rates in the Hotel averaged 89.9% in 1995
compared to 92.9% in 1994. Despite 11,000 fewer rooms rented in 1995, room
revenues actually rose $14,000 in 1995. Other revenues increased by
$198,000.
Total operating expenses were down $1,360,000. Food and Beverage expenses
were down $994,000 (7%) of which $540,000 is attributable to Cost of Food
Sales and $286,000 is attributable to other costs in the Food Department.
General and Administrative costs declined by $622,000, Advertising and
promotional expenses declined $109,000 and utility and maintenance expenses
were less by $168,000. While there was an overall decline in operating
expenses during the year, casino, entertainment and room expenses increased
in 1995. The $155,000 increase in casino costs were due to higher payroll
costs in the pit and the costs associated with leasing automatic shuffling
machines which amounted to $129,000. Room expenses increased by $56,000 and
entertainment expenses rose by $93,000.
For 1995 the Company recorded net income of $104,000 which was down
$1,003,000 from the net income of $1,107,000 reported in 1994. During the
summer of 1995, the Company negotiated and signed a new contract with the
Culinary and Bartenders Unions. Management believes that the collective
bargaining agreement which was signed in June will not have a material impact
on the profitability of the Company.
The completion of the "Fremont Street Experience" at the beginning of
December resulted in more visitors to the casino in a traditionally slow
month. The Fremont Street Experience is a steel structured canopy over five
blocks of Fremont Street in front of the North Hotel Tower of the Company.
This new structure and nightly show is a must see attraction for visitors in
Las Vegas. Upon reopening the street to foot traffic there was a visible
amount of increased activity in the area and a generally positive response
<PAGE>
generated from the public.
LIQUIDITY AND CAPITAL RESOURCES
The Company had total cash assets of $3.1 million (6.9% of total assets) at
December 31, 1997 and $3.0 million (6.1%) at December 31, 1996. The ratio of
current assets to current liabilities was .9 to 1 for both 1997 and 1996
Long-term debt, including current maturities, increased from $19.3 million to
$20.5 million during 1997. The ratio of long-term debt to equity was 1.5 to 1
at December 31, 1997 compared to 1.1 to 1 at December 31, 1996.
As of December 31, 1997, the Company had outstanding receivables of $821,000
compared to $883,000 at December 31, 1996. The difference is attributed to
a $83,000 decline in casino receivables resulting from less credit play in the
Company's casino during 1997. Inventories of food, beverage and supplies
declined by $67,000 due in part to the write-off of inventory which was used
in slot promotions and other giveaways at the casino. The Company's other
asset balance fell $521,000 in 1997 due primarily to the fact that only
$386,000 was invested in the Fremont Street Experience during 1997 compared to
$716,000 in 1996, and, the reduction in gaming rights and direct financing
lease assets resulting from amortization of those assets.
Current liabilities fell 1% or $48,000 from $5,830,000 in 1996 to $5,782,000
in 1997. Long-term capital lease obligations declined significantly as
maturity of these obligations approaches in the year 2001. Deferred tax
liabilities declined by over $1 million in 1997 as a result of the operating
loss recorded for the year. Retained earnings and stockholders' equity both
declined representative of the poor operating results in 1997.
During the year ended December 31, 1997 the Company generated operating cash
flows of $54,000 compared to $4,210,000 for the same period 1996. Operating
cash flows for 1997 were affected by the sharp decline in revenues reported
for the Company's casino. In connection with the decline in operating cash
flows, management sharply reduced capital expenditures during 1997 from
$1,499,000 to $461,000 (69.2%) and was also forced to borrow $1,483,000 to
meet existing lease and debt obligations. The Company was able to borrow
from its majority shareholder, Exber, Inc., providing the necessary liquidity
to meet operating requirements.
Management continues to believe that maintaining a high level of room
occupancy is a key factor in increasing revenues. Management aggressively
prices the hotel rooms to maintain the maximum level of occupancy while
targeting a customer that may have less interest in sight-seeing and prefers
staying downtown versus the strip. Several operational strategies have been
enacted at the end of 1997 which are anticipated to increase revenues and
improve cash flows during 1998 and beyond. Management is working with the
existing show producer to market the nightly revue more aggressively and bring
more customers into our facility. Several popular participating slot machine
system games have been ordered which will provide popular gaming attraction
without any capital investment by the Company. Management also continues to
seek other sources of income to supplement operations including office and
retail space rental, advertising space, and other types of lease and
commission agreements with various vendors.
Management believes that the Company will continue to provide positive
operating cash flows in 1998 and beyond, however, if the Company is unable to
improve revenues, it may be unable to retire the existing long-term debt
obligation on the July 6, 2004 due date. Should the operating conditions
continue to weaken or deteriorate further in the short-term, the Company may
be forced to borrow additional funds and re-negotiate the terms of long-term
debt agreement with its debtor, Exber, Inc. While there are no assurances
that such an agreement with Exber, Inc. Could be reached, management is
confident that it is in the best interest of its majority shareholder to
provide financing and terms that are beneficial to the Company as needed.
There has been no indication that Exber, Inc. would not provide said financing
as needed for the Company to remain a viable entity.
The Company is exposed to various factors that could and will likely have an
adverse impact on earnings and cash flow in the near future. The impact of
increasing competition in the Las Vegas Valley with newer and bigger casinos
and attractions currently under construction and increasing numbers of local
taverns and bars are all factors that affect the Company's business. The
legalization of gambling in other jurisdictions in the United States,
inflation, changes in the regulatory environment, along with the possibility
of a nationwide recession could each bring financial hardship on the Company.
As a result of these factors, management is unable to accurately predict
future profitability at the Company's hotel and casino.
PRIVATE SECURITIES LITIGATION REFORM ACT
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward looking statements. Certain information included in the 10-K and
other materials filed by the Company with the Securities and Exchange
Commission contains statements that are forward-looking, such as statements
relating to plans for capital spending , financing sources and effects of
regulation and competition. Such forward-looking statements involve important
risks and uncertainties that could significantly affect anticipated results in
the future, and accordingly, actual results may differ materially from those
expressed in any forward-looking statements made by or on behalf of the
Company.
Due to the fact that shares in the Company are closely held and there is
virtually no trading in the common shares, the performance graph has been
omitted from this filing.
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC.
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
AND
INDEPENDENT AUDITORS' REPORT
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Stockholders and
Board of Directors
Union Plaza Hotel and Casino, Inc.
We have audited the accompanying consolidated balance sheets of Union Plaza
Hotel and Casino, Inc. and subsidiaries as of December 31, 1997 and 1996,
and the related consolidated statements of operations, stockholders' equity
and cash flows for the years ended December 31, 1997, 1996 and 1995. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Union Plaza Hotel and
Casino, Inc. and subsidiaries as of December 31, 1997 and 1996, and the
results of their operations and their cash flows for the years ended December
31, 1997, 1996 and 1995 in conformity with generally accepted accounting
principles.
Gary V. Campbell, CPA, Ltd.
Las Vegas, Nevada
February 5, 1998
<PAGE> UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
AND
INDEPENDENT AUDITORS' REPORT
<PAGE>
<TABLE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1997 AND 1996
Amounts in thousands, except per share data
ASSETS
1997 1996
<S> <C> <C>
CURRENT ASSETS:
Cash $ 3,135 $ 2,982
Accounts receivable (Note 3) 821 883
Inventories of food, beverage
and supplies 267 334
Prepaid expenses 979 997
TOTAL CURRENT ASSETS 5,202 5,196
PROPERTY AND EQUIPMENT (Note 8):
Land 7,012 7,012
Buildings 56,794 56,746
Leasehold improvements 3,514 3,484
Furniture and equipment 34,304 34,176
101,624 101,418
Less accumulated depreciation
and amortization 63,069 59,253
NET PROPERTY AND EQUIPMENT 38,555 42,165
OTHER ASSETS (Note 4) 1,435 1,956
$ 45,192 $ 49,317
<FN>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1997 AND 1996
LIABILITIES AND STOCKHOLDERS' EQUITY
Amounts in thousands, except per share data
<CAPTION>
1997 1996
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 2,745 $ 2,323
Accrued liabilities (Note 5) 2,058 2,143
Checks issued against future deposits - 330
Current portion of long-term debt (Note 7) 161 320
Current portion of obligations under
capital leases (Note 8) 818 714
TOTAL CURRENT LIABILITIES 5,782 5,830
LONG-TERM DEBT - related party,
less current portion (Note 7) 20,359 18,970
OBLIGATIONS UNDER CAPITAL LEASES - related party,
less current portion (Note 8) 2,707 3,525
DEFERRED INCOME TAXES (Note 6) 3,013 4,015
31,861 32,340
COMMITMENTS AND CONTINGENCIES (Notes 8 and 12) - -
STOCKHOLDERS' EQUITY:
Common stock, $.50 par value; authorized
20,000,000 shares; issued 1,500,000 shares;
outstanding 758,419 shares and 758,469
shares at December 31, 1997 and 1996,
respectively 750 750
Additional paid-in capital 5,462 5,462
Retained earnings 20,991 24,635
27,203 30,847
Less treasury stock, at cost, 741,581 shares
and 741,531 shares at December 31, 1997
and 1996, respectively 13,872 13,870
TOTAL STOCKHOLDERS' EQUITY 13,331 16,977
$ 45,192 $ 49,317
<FN>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
Amounts in thousands, except per share data
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
REVENUES:
Casino $ 32,135 $ 36,292 $ 36,558
Food and beverage 9,515 9,799 8,953
Rooms 11,472 12,293 11,971
Other 2,261 2,344 2,259
GROSS REVENUES 55,383 60,728 59,741
Less promotional allowances 7,368 7,396 7,742
NET REVENUES 48,015 53,332 51,999
OPERATING EXPENSES:
Casino 14,089 14,726 14,843
Food and beverage 14,674 14,369 12,499
Rooms 5,771 5,710 5,143
General and administrative 3,876 4,036 4,245
Entertainment 619 648 595
Advertising and promotion 385 414 344
Utilities and maintenance 5,480 5,735 5,637
Depreciation & amortization 4,094 4,461 4,422
Provision for doubtful accounts 33 65 6
Other costs and expenses 1,218 1,284 1,289
TOTAL OPERATING EXPENSES 50,239 51,448 49,023
OPERATING INCOME (LOSS) (2,224) 1,884 2,976
OTHER INCOME (EXPENSE):
Interest income 39 62 65
Interest expense - related party (2,186) (2,279) (2,645)
Investment in Fremont
Street Experience (Note 13) ( 471) ( 753) ( 46)
TOTAL OTHER INCOME (EXPENSE) (2,618) (2,970) (2,626)
INCOME(LOSS) BEFORE
INCOME TAX EXPENSE (4,842) (1,086) 350
INCOME TAX EXPENSE (BENEFIT)(Note 6):
Current ( 196) - 4
Deferred (1,002) ( 350) 242
TOTAL INCOME TAX EXPENSE(BENEFIT) (1,198) ( 350) 246
NET INCOME(LOSS) $(3,644) $( 736) $ 104
EARNINGS (LOSS) PER COMMON SHARE
(Note 10) $( 4.80) $( .97) $ .14
<FN>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
Amounts in thousands, except per share data
<CAPTION>
Additional
Common paid-in Retained Treasury
stock capital earnings stock Total
<S> <C> <C> <C> <C> <C>
BALANCE:
December 31, 1994 $750 $ 5,462 $ 25,267 $(13,739) $ 17,740
Purchase of 2,500
shares of
treasury stock - - - ( 50) ( 50)
Net income for 1995 - - 104 - 104
BALANCE:
December 31, 1995 $750 $ 5,462 $ 25,371 $(13,789) $ 17,794
Purchase of 3,450
shares of
treasury stock - - - ( 86) ( 86)
Sale of 200 shares
Of treasury stock - - - 5 5
Net income for 1996 - - (736) - (736)
BALANCE:
December 31, 1996 $750 $ 5,462 $ 24,635 $(13,870) $ 16,977
Purchase of 50
shares of
treasury stock - - - ( 2) ( 2)
Net loss for 1997 - - (3,644) - (3,644)
BALANCE
December 31, 1997 $750 $5,462 $20,991 $(13,872) $ 13,331
<FN>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
Amounts in thousands, except per share data
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $ 48,062 $ 53,485 $ 51,577
Cash paid to suppliers and
employees (46,025) (47,064) (44,249)
Interest received 59 68 75
Interest paid - related party ( 2,186) ( 2,279) ( 2,645)
Income taxes received 144 - -
NET CASH PROVIDED BY
OPERATING ACTIVITIES 54 4,210 4,758
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property
and equipment 21 6 70
Proceeds from sale of bonds 25 - 25
Purchase of property and equipment ( 461) ( 1,499) ( 2,575)
NET CASH USED IN
INVESTING ACTIVITIES ( 415) ( 1,493) ( 2,480)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of treasury stock - 5 -
Proceeds from long-term debt 1,483 - -
Principal payments on capital leases ( 714) ( 623) ( 543)
Principal payments on long-term debt ( 253) ( 1,990) ( 1,470)
Purchase of treasury stock ( 2) ( 86) ( 50)
NET CASH USED IN
FINANCING ACTIVITIES 514 ( 2,694) ( 2,063)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 153 23 215
CASH AND CASH EQUIVALENTS, at
beginning of the year 2,982 2,959 2,744
CASH AND CASH EQUIVALENTS, at
end of the year $ 3,135 $ 2,982 $ 2,959
<FN>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
Amounts in thousands, except per share data
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
RECONCILIATION OF NET INCOME (LOSS) TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Net income (loss) $(3,644) $ ( 736) $ 104
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS)
TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation and amortization 4,094 4,461 4,422
(Gain) loss on sale and abandonment of
property, equipment and improvements ( 3) ( 8) ( 35)
Equity investment loss 471 702 -
Provision for doubtful accounts ( 15) 29 6
(Increase) decrease in assets:
Accounts receivable 57 48 ( 375)
Interest receivable 20 6 -
Inventories 67 ( 58) ( 8)
Prepaid expenses 18 309 ( 14)
Other assets ( 16) ( 235) ( 78)
Increase (decrease) in liabilities:
Accounts payable 422 ( 364) 602
Checks issued against future deposits ( 330) 330 -
Accrued salaries 140 87 ( 208)
Accrued liabilities ( 225) ( 11) 100
Deferred income tax (1,002) ( 350) 242
TOTAL ADJUSTMENTS 3,698 4,946 4,654
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 54 $ 4,210 $ 4,758
<FN>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
</TABLE>
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF THE OPERATIONS AND BASIS OF ACCOUNTING
The Company's wholly-owned subsidiary, Union Plaza Operating Company,
operates hotel and gaming operations in downtown Las Vegas, Nevada. A
substantial portion of the operating revenues of the Company's subsidiary is
derived from gaming operations which are subject to extensive regulations in
the State of Nevada by the Gaming Commission, the Gaming Control Board and
local regulatory agencies. The Company does not anticipate any material
changes in which the financial results are reported due to the adoption of new
or proposed accounting pronouncements.
In 1994, the Company organized Union Plaza Experience, Inc. as a wholly owned
subsidiary to participate with other downtown Las Vegas casino enterprises and
the City of Las Vegas Redevelopment Agency, in a redevelopment project known
as the Fremont Street Experience. Investment was $386,000 at December 31,
1997 and $716,000 at December 31, 1996. The Company has no other material
important subsidiaries or operations.
Management believes that the Company's procedures for supervising casino
operations, recording casino and other revenues and for granting credit comply
in all material respects with applicable regulations.
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements for 1997, 1996 and
1995 include the accounts of Union Plaza Hotel and Casino, Inc. (the
Company) and its wholly-owned subsidiaries. All material intercompany
balances and transactions have been eliminated in consolidation.
CASINO REVENUE AND RECEIVABLES
In accordance with common industry practice, the Company recognizes as
casino revenue the net win (which is the difference between amounts wagered
and amounts paid to winning patrons) from gaming activities. Credit is
extended to certain casino customers and the Company records all unpaid
advances as casino receivables on the date credit was granted. Allowances
for estimated uncollectible casino receivables are provided to reduce these
receivables to amounts anticipated to be collected. The Company does not
believe it is subject to any unusual credit risk beyond the normal risk
attendant to operating its business.
PROMOTIONAL ALLOWANCES
Gross revenues include the retail value of complimentary food, beverage and
hotel services furnished to customers. The retail value of these promotional
allowances is deducted to arrive at net revenues.
<PAGE>UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
FAIR VALUE OF FINANCIAL INSTRUMENTS
Based on the borrowing rates currently available to the Company, the carrying
value of notes payable and long-term debt, approximates fair value.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts and disclosures.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Expenditures for additions,
renewals and betterments are capitalized; expenditures for maintenance and
repairs are charged to expenses as incurred. Upon retirement or disposal of
assets, the cost and accumulated depreciation are eliminated from the accounts
and the resulting gain or loss is included in income. Depreciation, including
amortization of capitalized leases, is computed using the straight-line
method. Leasehold improvements (distinguished from unamortized leasehold
costs) are amortized over the lives of the leases.
Property and equipment, including capitalized leases, are depreciated over
their estimated useful lives of 3 to 20 years for land improvements, 20 to 40
years for buildings, 5 to 30 years for leasehold improvements and 3 to
10 years for furniture and equipment.
OTHER ASSETS
Leasehold costs are being amortized on a straight-line basis over the initial
30-year term of the lease. Expansion of gaming rights is being amortized on a
straight-line basis over 20 years. Subordination of security interest in
lease is being amortized on a straight-line basis over 15 years.
PROGRESSIVE SLOT LIABILITY
The Company has installed a number of progressive slot machines. As coins are
played the amount available to win increases and will be paid out when the
appropriate jackpot is hit. In accordance with common industry practice, the
Company has recorded the liability and has charged this amount against casino
revenue.
INVENTORIES
Inventories are valued at the lower cost (first-in, first-out) or market.
Maintenance and other operating supplies are stated at estimated amounts
considered by management to be necessary to conduct full operations.
Subsequent replacements are charged to expense.
STATEMENTS OF CASH FLOWS
The Statements of Cash flows classify changes in cash and cash
equivalents according to operating, investing or financing activities. For
purposes of the statement of cash flows, the Company considers all highly
liquid investments purchased with a maturity of three months or less to be
cash equivalents.
<PAGE>UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES
The Company and its subsidiaries file a consolidated federal
income tax return. Deferred income taxes are provided to reflect the tax
effect of timing differences between financial and tax reporting,
principally related to depreciation, slot machine revenue, interest costs,
accrued expenses, capitalization of leases, capitalization of property costs
and write-down of facilities and other investments to estimated recoverable
value. The Company accounts for the investment tax credit as a reduction of
income tax expense in the year in which such credits are utilized.
Carryforwards of this credit, as well as the tax effect of net operating
loss carryforwards, are shown as a reduction to deferred income taxes.
The Company maintains cash balances in two financial institutions in
Las Vegas, Nevada insured by the Federal Deposit Insurance Corporation up to
$100,000 . Uninsured balances at December 31, 1997 and December 31, 1996 are
$185,000 and $-0- respectively. Also included in cash are uninsured money
market funds amounting to $18,000 and $230,000 at December 31, 1997 and
December 31, 1996, respectively.
NOTE 3 - ACCOUNTS RECEIVABLE
<TABLE>
Accounts receivable consist of the following:
Amounts in thousands
<CAPTION>
December 31,
1997 1996
<S> <C> <C>
Casino $ 512 $ 595
Hotel 277 262
Other 60 69
849 926
Less allowance for
doubtful accounts 28 43
$ 821 $ 883
</TABLE>
<PAGE>
<TABLE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 4 - OTHER ASSETS
Other assets consist of the following:
Amounts in thousands
<CAPTION>
December 31,
1997 1996
<S> <C> <C>
Expansion of gaming rights, less
accumulated amortization of
$668,000 and $628,000 $ 142 $ 182
Subordination of security interest
in lease, less accumulated
amortization of $810,000 and
$810,000 - -
Net investment in direct financing
lease, net of current portion
(Note 8) 143 186
Leasehold costs, less accumulated
amortization of $389,000 and
$374,000 50 65
Investment in Fremont Street Experience
(Note 13) 386 716
Deposits and other 714 807
$ 1,435 $ 1,956
</TABLE>
<TABLE>
NOTE 5 - ACCRUED LIABILITIES
Accrued liabilities consist of the following:
Amounts in thousands
<CAPTION>
December 31,
1997 1996
<S> <C> <C>
Salaries and wages $ 1,224 $ 1,083
Union back wages 48 82
Taxes, other than taxes on income 396 325
Other 390 653
$ 2,058 $ 2,143
</TABLE>
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 6 - INCOME TAXES
Deferred income tax expense (benefit) results from timing differences in
the recognition of revenue and expense for tax and financial statement
purposes.
Statements of Financial Accounting Standards No. 109, "Accounting for Income
Taxes," (SFAS 109) requires deferred tax liabilities or assets at the end of
each period be determined using the tax rate expected to be in effect when
taxes are actually paid or recovered. Previous rules required providing
deferred taxes using rates in effect when the tax liability or asset was first
recorded, without subsequent adjustment for tax-rate changes. Deferred income
taxes have been calculated based on this new standard, no material adjustment
for prior years was necessary.
<TABLE>
The sources of those timing differences and the current tax effect of each
were as follows:
Amounts in thousands
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Depreciation and respective
gains $ 59 $ 112 $ 250
Capitalized leases 170 141 115
Net operating losses (1,477) (664) (90)
Vacation and backpay ( 9) 28 31
Tax credits ( 249) ( 4) 1
Valuation Allowance 513 - -
Other ( 9) 37 ( 65)
$(1,002) $ (350) $ 242
</TABLE>
<TABLE>
The components of the net deferred tax liability at December 31, 1997 and 1996
under SFAS 109 are as follows:
<CAPTION>
1997 1996
<S> <C> <C>
Depreciation and
amortization $ 6,137 $ 5,909
Net operating loss (2,206) ( 754)
Tax and AMT credits, net ( 633) ( 872)
Other ( 285) ( 268)
$ 3,013 $ 4,015
</TABLE>
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 6 - INCOME TAXES (CONTINUED)
The Company has net operating loss and tax credit carryforwards at December
31, 1997 of approximately $6,488,000 and $673,000, respectively, with
expiration dates through December 31, 2012. Tax credits were used to reduce
federal income taxes for the year in which they occur.
Reconciliations between the actual tax expense (benefit) and the amount
computed by applying the U.S. Federal Income Tax rate to income (loss) before
taxes are as follows:
<TABLE>
Amounts in thousands
<CAPTION>
1997 1996 1995
Percent Percent Percent
of of of
pretax pretax pretax
Amount income Amount income Amount income
<S> <C> <C> <C> <C> <C> <C>
Computed "expected"
tax expense(benefit) $(1,646) (34.0%) $(369) (34.0%) $ 119 34.0%
Increase (reduction)
in tax resulting from:
Tax credits ( 110) ( 2.3%) - - - -
Valuation allowance 513 10.6%
Other ( 3) ( .1%) - - 4 1.1%
Nondeductible
expenses 48 1% 19 1.7% 123 35.1%
ACTUAL TAX
EXPENSE (BENEFIT) $(1,198) (24.8%) $(350) (32.3%) $ 246 70.2%
</TABLE>
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 7 - LONG-TERM DEBT
Long-term debt at December 31, 1997 and 1996 is as follows:
<TABLE>
Amounts in Thousands
<CAPTION>
December 31,
1997 1996
<C> <C>
Bank of America prime rate, payable in
monthly installments of $158,265,
including principal and interest, until
July 6, 2004 at which time the entire
balance plus accrued interest is due.
The note is secured by a First Deed of
Trust on land and building. (See Note 11) $ 20,520 $ 19,290
Less current portion 161 320
$ 20,359 $ 18,970
</TABLE>
Principal payments on long-term debt during the succeeding five years are
as follows:
1998 $ 161
1999 175
2000 191
2001 208
2002 226
Thereafter 19,559
$ 20,520
Interest on long-term debt was $1,650,000 in 1997, $1,651,000 in 1996 and
$1,938,000 in 1995.
<PAGE>UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 8 - LEASES
The Company leases buildings and equipment under long-term agreements
which are classified as capital leases. The lease with Exber Inc. (Note 11)
covering the hotel and bus depot property expires in 2001. The hotel and
bus depot property lease contains one renewal option of twenty-five years
and four renewal options of ten years. The bus depot property is sublet to
Greyhound Lines, Inc. under a lease expiring in 2001, with two ten-year
renewal options available.
<TABLE>
Property and equipment includes the following property under capital
leases by major classes:
Amounts in thousands
<CAPTION>
December 31,
1997 1996
<S> <C> <C>
Building $ 9,242 $ 9,242
Less accumulated amortization 8,617 8,441
$ 625 $ 801
</TABLE>
Depreciation and amortization expense includes amortization of property
under capital leases of $176,000, per year for 1997, 1996, and 1995.
Interest paid on property under capital leases was $536,000 for 1997,
$627,000 for 1996 and $706,000 for 1995.
Future minimum payments, by year and in the aggregate, under capital leases
and non-cancelable operating leases with initial or remaining terms of one
year or more consist of the following at December 31, 1997:
CAPITAL
LEASES
(In thousands)
1998 $ 1,250
1999 1,250
2000 1,250
2001 729
TOTAL MINIMUM LEASE PAYMENTS 4,479
Less amount representing interest 954
Present value of net minimum lease
payments under capital leases 3,525
Less current portion 818
OBLIGATIONS UNDER CAPITAL LEASES $ 2,707
<PAGE>
<TABLE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 8 - LEASES (CONTINUED)
Rental expense for all operating leases are as follows:
Amounts in thousands
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Parking lot leases $ 24 $ 24 $ 72
</TABLE>
<TABLE>
SUBLEASES
The bus depot property under a capital lease is sublet as follows:
Amounts in thousands
<CAPTION>
December 31,
1997 1996
<S> <C> <C>
Minimum future rents receivable $236 $303
Less amount representing interest 50 79
Minimum lease payments receivable 186 224
Less current portion (included in
accounts receivable) 43 38
Net investment in direct financing
lease (See Note 4) $143 $186
</TABLE>
Other sublet rental property:
The Company rents building space to several retail stores under various
short-term leases.
Income from these subleases, included in other income, for 1997, 1996, and
1995 was $313,000, $298,000 and $188,000, respectively.
<PAGE>UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 9 -EMPLOYEE BENEFIT PLANS
The Company contributes to a discretionary executive bonus plan. Contributions
for 1997, 1996, and 1995 were $-0-, $288,000 and $247,000, respectively.
The Company also has a qualified profit sharing plan for eligible non-union
employees. Contributions to this plan are made at the discretion of the Board
of Directors and benefits are limited to the allocated interests in fund
assets. Annual Contributions were $-0-,$300,000,$300,000 for 1997, 1996, and
1995, respectively.
The Company provides no post-retirement benefits to employees subject to the
requirements of Statement of Financial Accounting Standards No. 106 (SFAS 106)
which requires accrual of expected cost of providing those benefits to an
employee during the years that the employee renders service.
NOTE 10 - EARNINGS (LOSS) PER COMMON SHARE
Earnings (loss) per common share is based on the weighted average number
of shares of common stock outstanding during the years. Shares used for the
computation on earning per common share are 758,420 in 1997, 760,623 in 1996
and 762,448 in 1995.
NOTE 11 - RELATED PARTIES
As of December 31, 1997, the Company holds a note payable to Exber, Inc.,
a 45.2% stockholder, in the amount of $20,520,000, payable in monthly
installments of $158,265 including principal and interest until July 2004
when entire principal and accrued interest is due in full. Interest expense
on loans from Exber, Inc. was $1,650,000, $1,651,000 and $1,938,000 for 1997,
1996, and 1995, respectively.
Exber, Inc. also leased to the Company land and buildings in Las Vegas,
Nevada. Annual payments by the Company and its subsidiaries are
approximately $1,250,000. The leases extend through 2001 with renewal
options.
NOTE 12 - CONTINGENCIES
The Company has contingent liabilities with respect to lawsuits and other
matters arising in the ordinary course of business. It is estimated that the
adverse effect of these lawsuits will not exceed $350,000.
<PAGE>UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 13 - INVESTMENT IN FREMONT STREET EXPERIENCE
In 1995, the Company's wholly-owned subsidiary, Union Plaza Experience,
Inc., was organized to participate with other downtown Las Vegas casino
enterprises and the City of Las Vegas Redevelopment Agency, in a
redevelopment project known as the Fremont Street Experience. The Union
Plaza Experience, Inc. is entitled to one seat on the board of directors of
the Fremont Street Experience Limited Liability Company at all times. The
Company's 5.9% investment had been accounted for by the equity method whereby
the investment is increased or decreased by their proportionate share of the
investees net earnings or loss, which amounted to losses of $471,000 and
$753,000 for the years 1997 and 1996 respectively. The investment at
December 31, 1997 and 1996 was $386,000 and $716,000 respectively.
NOTE 14 - RECLASSIFICATIONS
Certain items in the 1996 statement have been reclassified to comform to
current year classifications. Such reclassifications had no material effect
on previously reported net income.
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
Directors
John D. Gaughan Chairman of the Board
J.K. Houssels Vice Chairman of the Board
Donald L. Dobson Director
Larry Dolesh Director
John P. Jones Director
Michael Nolan Director
Irving K. Epstein Director
Executive Officers
John D. Gaughan Chief Executive Officer/
President
Donald L. Dobson Vice President/Corporate
Secretary
John P. Jones Vice President/Treasurer
Larry Dolesh Vice President
Michael Nolan Vice President
Alan J. Woody Controller
<PAGE> SPECIAL INFORMATION
SCOPE OF OPERATIONS
The Company operates the Union Plaza Hotel and Casino (Union Plaza) resort
complex in downtown Las Vegas, Nevada.
The casino facilities offer a variety of games which generate approximately
58% of the gross revenue of the Company. The major games of chance featured
by the Company's casino include craps, card room, blackjack ("21"), keno, slot
machines, race and sports book, roulette, baccarat and pai gow poker.
The food and beverage facilities account for approximately 17% of the
Company's gross revenues. The room operation provides approximately 21% of
gross revenue with retail shops, subleases, vending, interest on
investments, and miscellaneous gains on the sale of assets accounting for
the remaining 4%.
FORM 10-K
A copy of the Company's Annual Report of Form 10-K, as filed with the
Securities and Exchange Commission, will be furnished without charge to any
stockholder upon written request to Mr. John D. Gaughan, President, Union
Plaza Hotel and Casino, Number One Main Street, P.O. Box 760, Las Vegas,
Nevada 89125.
ANNUAL STOCKHOLDERS' MEETING
The annual meeting of Union Plaza Hotel and Casino, Inc. will be held on
May 15, 1998, at the Center Stage Restaurant, Number One Main Street, Las
Vegas, Nevada.
DIVIDENDS AND MARKET PRICE STATISTICS OF COMMON STOCK
The Company's stock is not traded on any securities exchange. A dividend
of $.10 per share was paid to the stockholders of record on the shares of
common stock outstanding on the last day of each quarter during 1981 and
1980. No dividends have been declared or paid since 1981.
AUDITORS
The Company's auditors are Gary V. Campbell, CPA, Ltd., 7440 West Sahara
Avenue, Las Vegas, Nevada 89117.
This report is prepared for the information of stockholders,
employees, and other interested persons. It is not
transmitted in connection with the sale of any security or
offer to sell or offer to buy any security.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 3135000
<SECURITIES> 0
<RECEIVABLES> 821000
<ALLOWANCES> 0
<INVENTORY> 267000
<CURRENT-ASSETS> 5202000
<PP&E> 101624000
<DEPRECIATION> 63069000
<TOTAL-ASSETS> 45192000
<CURRENT-LIABILITIES> 5782000
<BONDS> 20359000
0
0
<COMMON> 750000
<OTHER-SE> 12581000
<TOTAL-LIABILITY-AND-EQUITY> 45192000
<SALES> 9515000
<TOTAL-REVENUES> 55383000
<CGS> 14674000
<TOTAL-COSTS> 28232000
<OTHER-EXPENSES> 10792000
<LOSS-PROVISION> 33000
<INTEREST-EXPENSE> 2186000
<INCOME-PRETAX> (4842000)
<INCOME-TAX> (1198000)
<INCOME-CONTINUING> (3644000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3644000)
<EPS-PRIMARY> ( 4.80 )
<EPS-DILUTED> ( 4.80 )
</TABLE>
