UNION PLAZA HOTEL AND CASINO, INC.
1 Main Street
Las Vegas, NV 89101
November 4, 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-Q.
Sincerely,
UNION PLAZA HOTEL AND CASINO, INC.
Larry Dolesh, Vice President
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
Commission file number 0-8133
UNION PLAZA HOTEL AND CASINO INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0110085
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
No. 1 Main Street 89125
Las Vegas, Nevada (Zip Code)
(Address of principal
executive offices)
(702) 386-2110
(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
and (2) has been subject to such filing requirements for the past
90 days.
YES [ X ] NO [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by
this report:
Outstanding at
Class of Common Stock September 30, 1998
$.50 par value 757,419 shares
<PAGE>
The Securities and Exchange Commission
Washington D.C.
The financial information included herein is unaudited. In
addition, the financial information does not include all
disclosures required under generally accepted accounting
principles because certain note information included in the
Company's annual report has been omitted; however, such
information reflects all adjustments (consisting entirely of normal
recurring adjustments) which are, in the opinion of Management,
necessary to a fair statement of the results for the interim
period.
/s/ LARRY DOLESH
Larry Dolesh, Vice President of Finance
Las Vegas, Nevada
October 31, 1998
<PAGE>
PART 1. - Financial Information
Item 1. Financial Statements
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
[CAPTION]
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
ASSETS
SEPTEMBER 30, DECEMBER 31,
1998 1997
[S] [C] [C]
Current Assets:
Cash $ 1,973,000 $ 3,135,000
Accounts receivable 457,000 821,000
Inventories of food, beverage
and supplies 402,000 267,000
Prepaid expense 915,000 979,000
Total current assets 3,747,000 5,202,000
Property and equipment:
Land 7,012,000 7,012,000
Buildings 56,855,000 56,794,000
Leasehold improvements 3,514,000 3,514,000
Furniture and equipment 33,819,000 34,304,000
101,200,000 101,624,000
Less accumulated depreciation
and amortization 65,224,000 63,069,000
Net property and equipment 35,976,000 38,555,000
Other assets 1,590,000 1,435,000
$ 41,313,000 $ 45,192,000
The accompanying notes are an integral
part of these financial statements.
<PAGE>
LIABILITIES AND STOCKHOLDERS' EQUITY
SEPTEMBER 30, DECEMBER 31,
1998 1997
[S] [C] [C]
Current liabilities:
Accounts payable $ 2,001,000 $ 2,745,000
Accrued liabilities 1,721,000 2,058,000
Current portion of long-term debt 161,000 161,000
Current portion of obligations under
capital leases 818,000 818,000
Total current liabilities 4,701,000 5,782,000
Long-term debt, less current portion 22,589,000 20,359,000
Obligations under capital leases, less
current portion 2,105,000 2,707,000
Deferred income taxes 2,800,000 3,013,000
32,195,000 31,861,000
Commitments and contingencies
Stockholders' equity:
Common stock, $.50 par value; authorized
20,000,000 shares; issued 1,500,000
shares; Outstanding 758,419 shares at
December 31, 1997 and 757,419 shares
at September 30, 1998. 750,000 750,000
Additional paid-in capital 5,462,000 5,462,000
Retained earnings 16,803,000 20,991,000
23,015,000 27,203,000
Less treasury stock, at cost, 741,581
shares at December 31, 1997 and 742,581
shares at September 30, 1998. 13,897,000 13,872,000
Total stockholders' equity 9,118,000 13,331,000
$41,313,000 $45,192,000
The accompanying notes are an integral
part of these financial statements.
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
[CAPTION]
NINE MONTH AND THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
Amounts in thousands except per share data
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1998 1997 1998 1997
[S] [C] [C] [C] [C]
Revenues:
Casino $ 24,220 $24,681 $ 7,520 $ 7,660
Food and Beverage 7,258 7,129 2,267 2,239
Rooms 8,073 8,527 2,609 2,663
Other 1,555 1,752 506 531
Gross revenues 41,106 42,089 12,902 13,093
Less promotional complimentaries 6,074 5,621 2,029 1,953
Net revenues 35,032 36,468 10,873 11,140
Operating expenses:
Casino 10,996 10,492 3,597 3,480
Food and Beverage 10,928 10,949 3,595 3,422
Rooms 4,299 4,290 1,438 1,449
General & Administrative 2,760 3,217 833 1,258
Entertainment 362 361 115 118
Advertising & Promotion 211 238 102 116
Utilities & Maintenance 4,333 4,211 1,673 1,553
Depreciation & Amortization 2,851 3,071 940 961
Provisions for Doubtful Accts. 29 34 8 14
Other Costs and Expenses 980 984 317 369
Total operating expenses 37,749 37,847 12,618 12,740
Operating income/(loss) (2,717) (1,379) (1,745) (1,600)
Other income (expense):
Interest Income 5 10 1 5
Interest Expense (1,688) (1,634) (576) (550)
Total other income (expense) (1,683) (1,624) (575) (545)
Income before income taxes (4,400) (3,003) (2,320) (2,145)
Income taxes (213) (1,127) 0 (722)
Net income/(loss) (4,187) (1,876) (2,320) (1,423)
Earnings/(loss) per common share ($5.52) ($2.47) ($2.23) ($1.87)
The accompanying notes are an integral
part of these financial statements.
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
INCREASE IN CASH AND CASH EQUIVALENTS
1998 1997
[S] [C] [C]
Cash flows from operating activities:
Cash received from customers $ 35,526,000 $ 36,909,000
Cash paid to suppliers and employees (36,326,000) (35,755,000)
Interest received 5,000 30,000
Interest paid (1,688,000) (1,634,000)
Net cash provided by operating activities (2,483,000) (450,000)
Cash flows from investing activities:
Proceeds from sale of property & equipment 2,000 0
Purchase of property and equipment (284,000) (344,000)
Net cash used in investing activities (282,000) (344,000)
Cash flows from financing activities:
Proceeds from note payable to Stockholder 2,274,000 741,000
Principal payments on capital lease (602,000) (526,000)
Principal payments on long-term debt (44,000) (250,000)
Purchase of Treasury Stock (25,000) (1,000)
Net cash used in financing activities 1,603,000 (36,000)
Net increase (decrease) in cash and
cash equivalents (1,162,000) (830,000)
Cash and cash equivalents
at 12/31/97 & 12/31/96 3,135,000 2,982,000
Cash and cash equivalents,
at 09/30/98 & 09/30/97 1,973,000 2,152,000
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING
ACTIVITIES
Net income(loss) for period ended
09/30/98 and 09/30/97 $ (4,187,000) $ (1,876,000)
Adjustments to reconcile net income to
Net cash provided by operating activities:
Depreciation and amortization 2,891,000 3,102,000
Bad debt expense (4,000) (11,000)
(Increase) decrease in assets:
Accounts receivable 566,000 529,000
Interest receivable 0 20,000
Inventories (135,000) 82,000
Prepaid expenses (133,000) (82,000)
Other assets (186,000) (65,000)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses (1,082,000) (1,022,000)
Deferred Income Tax (213,000) (1,127,000)
Total adjustments 1,704,000 1,426,000
Net cash provided (used) by operating
activities $ (2,483,000) $ (450,000)
The accompanying notes are an integral
part of these financial statements.
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements include
the accounts of Union Plaza Hotel and Casino, Inc. (the Company)
and its wholly-owned subsidiaries. All material inter-company
balances and transactions have been eliminated in consolidation.
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 at September 30, 1998 was
$746,000 and $386,000 at December 31. 1997. The Company has
no other materially 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.
Casino Receivables and Revenue
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 the receivables to
amounts anticipated to be collected. 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.
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.
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.
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 a capitalized lease, is computed using the
straight-line method. Leasehold improvements (distinguished from
un-amortized 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.
Earnings Per Common Share
Earnings per common share was computed by dividing net
income by the weighted average number of shares of common stock
outstanding during each period.
Inventories
Inventories are valued at the lower of 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.
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. Carry forwards of this credit, as well as the tax
effect of net operating loss carry forwards, are shown as a
reduction to deferred income taxes.
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Statement of Cash Flows
The Statement of Cash Flows classify changes in cash and
cash equivalents according to operating, investing and financing
activities. For purposes of the statement of cash flows, the
Company considers all highly liquid debt instruments purchased
with a maturity of three months or less to be cash equivalents.
NOTE 2 - ACCOUNTS RECEIVABLE
Accounts receivable consists of the following:
September 30, December 31,
1998 1997
Casino $ 233,000 $ 512,000
Hotel 38,000 277,000
Other 209,000 60,000
480,000 849,000
Less allowance for
doubtful accounts 23,000 28,000
$ 457,000 $ 821,000
NOTE 3 - OTHER ASSETS
Other assets consist of the following:
September 30, December 31,
1998 1997
Expansion of gaming rights, less
accumulated amortization of
$699,000 and $668,000 $ 111,000 $ 142,000
Net investment in direct financing
lease, net of current portion (Note 7) 111,000 143,000
Leasehold costs, less accumulated
amortization of $400,000 and
$389,000 39,000 50,000
Investment in Fremont Street
Experience 746,000 386,000
Deposits and other 583,000 714,000
$1,590,000 $1,435,000
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 4 - ACCRUED LIABILITIES
Accrued liabilities consist of the following:
September 30, December 31,
1998 1997
Salaries and Wages $ 766,000 $1,224,000
Union back wages 40,000 48,000
Taxes, other than tax on income 307,000 396,000
Other 608,000 390,000
$1,721,000 $2,058,000
NOTE 5 - INCOME TAXES
The Internal Revenue Service has examined the Company's
Federal income tax returns through 1991. Management is of the
opinion that all taxes have been paid or provided for through
September 30, 1998.
NOTE 6 - LONG-TERM DEBT
Long-term debt consists of the following:
September 30, December 31,
1998 1997
Note Payable to Exber, Inc. at the Prime
Interest Rate payable in monthly
installments of $158,265 including
principal and interest, until July 6,
2004 at which time the balance is due.
The note is secured by a first deed of
trust in land and building (See Note 9). 22,750,000 20,520,000
Less current portion 161,000 161,000
$22,589,000 $20,359,000
Principal payments on long-term debt during the succeeding
five years are as follows:
1998 (Remaining three months) 14,500
1999 129,000
2000 140,000
2001 152,000
2002 166,000
2003 180,000
Thereafter 21,968,500
$22,750,000
Maturities were calculated based upon interest rates in
effect at September 30, 1998.
<PAGE>
UNION PLAZA HOTEL AND CASINO INC., AND SUBSIDIARIES
UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 7 - LEASES
The Company leases equipment and hotel and bus depot
property under long-term lease agreements which are classified as
capital leases. The lease with Exber, Inc. (See Note 9) covering
the hotel and bus depot property expires in 2001 with renewals.
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. The value of the lease with Exber, Inc. is as
follows:
September 30, December 31,
1998 1997
Land and Buildings $ 9,242,000 $9,242,000
Less accumulated amortization 8,749,000 8,617,000
$ 493,000 $ 625,000
The following is a schedule of future minimum lease payments
as of September 30, 1998.
1998 (Remaining three months) $ 313,000
1999 1,250,000
2000 1,250,000
2001 729,000
Total minimum lease payments 3,542,000
Less amount representing interest 619,000
Present value of net minimum
lease pmts under capital leases 2,923,000
Less current portion 818,000
Long-term obligations under
capital leases $ 2,105,000
SUBLEASES
The bus depot property under a capital lease is sublet as
follows:
September 30, December 31,
1998 1997
Minimum future rents receivable $ 203,000 $ 236,000
Less amount representing interest 33,000 50,000
Minimum future rents receivable 170,000 186,000
Less current portion (included in
accounts receivable) 43,000 43,000
Net investment in direct
financing lease (See Note 3)$ 127,000 $ 143,000
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 8 - EMPLOYEE BENEFIT PLANS
The Company contributes to a discretionary executive bonus
plan. During the first nine months of 1998, the Company contributed
$32,000 to this plan compared to a year ago when there were no
bonus contributions.
The Company also has a qualified profit sharing plan for
eligible 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. During 1998 there have
been no profit sharing plan contributions and it is anticipated
that there will be none. Last year, there was $225,000 which was
accrued in the first nine months.
NOTE 9 - RELATED PARTIES
On December 18, 1991, Exber, Inc., a 46.08% stockholder as
of September 30, 1998, loaned the Company $1,800,000, payable
interest only in monthly installments at 10% per annum, with
principal due in full December 19, 1996. During February 1992
this loan was increased to $3,000,000 subject to the same terms
and maturity date of the original borrowing. During February
1993 this loan was refinanced to $18,000,000, interest only
at the prime rate published in the Wall Street Journal until
February 14, 1999. On February 14, 1994 an additional $1,500,000
was added to this loan bringing the loan balance to $19,500,000
with the same terms and maturity date. On June 3, 1994 an
additional $3,700,000 was borrowed and the balance refinanced
payable in monthly installments of $158,265 including principal
and interest, until July 6, 2004. The majority of the proceeds
of the note were used to retire the outstanding debt to Bank of
America. At varying intervals during 1997, the Company increased
its loan from Exber, Inc. by a total of $1,483,000.The proceeds of
this borrowing were used to meet operational obligations and for
needed capital improvements. During the first nine months of 1998,
the Company has borrowed an additional $2,000,000 from Exber, Inc.
to supplement its cash flows. The outstanding balance of the note
at September 30, 1998 was $22,750,000.
Exber, Inc. also leases 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 10 - CONTINGENCIES
The Company has contingent liabilities with respect to
lawsuits and other matters arising in the ordinary course of
business. In the opinion of management, no material liability
exists with respect to these contingencies.
<PAGE>
PART 1. - FINANCIAL INFORMATION
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
ANALYSIS OF FINANCIAL CONDITION
The Company had total cash assets of $1,973,000(4.8% of total
assets) at September 30, 1998 and $3,135,000 (6.9% of total assets)
at December 31, 1997. The ratio of current assets to current
liabilities was .8 to 1 at September 30, 1998 and .9 to 1 at
December 31, 1997.
Long-term debt obligations, including current maturities were
$22,750,000 at September 30, 1998 and $20,520,000 at December 31,
1997. Long-term debt obligations increased by $2,230,000 during
the nine months as the Company was forced to borrow funds from Exber,
Inc. the Company's majority shareholder, to meet normal operating
demands. Exber, Inc. continues to provide the financial stability
for the Company by supplying capital for operations and needed
improvements during slow operational periods. Management is
confident that as long as Exber, Inc. maintains its majority
position in the Company, financing options will remain available
as needed. Based on this relationship with Exber, Inc., Management
has not, and does not deem necessary at this time, the need to seek
alternative forms of financing. Due to the structure of the Exber,
Inc. note and the existing principal balance, it is probable that
the Company will be required to re-negotiate the terms of the
agreement and extend the maturity date beyond the year 2006.
As of September 30, 1998, outstanding receivables were $457,000
compared to $821,000 at December 31, 1997. The decline in
receivables is attributed to sharply lower hotel receivables at the
end of the period along with other recurring receivable fluctuations
caused by timing differences in reporting periods. Inventories of
food, beverage and shop items rose $135,000 from $267,000 to
$402,000 during the past nine months due to seasonal demands of the
operation. Compared to the same period last year, inventories are
down $44,000 due to weaker business demands and the timing effect on
purchases. Other assets increased by $155,000 in the past nine
months which is directly related to the investment in the Plaza
Experience, Inc. a partner in the Freemont Street Experience
partnership. Accounts payable declined by $744,000 during the first
nine months of the year $2,745,000 to $2,001,000.The decline in
payables is attributed to timing differences in billing cycles and
reporting periods. Compared to the third quarter of 1997, accounts
payable liabilities are up $111,000 or 6% which is related to higher
trade payables at the end of the quarter. Total accrued liabilities
and accrued expenses also declined compared to those reported in the
year ago period. The primary cause for this discrepancy is due to
the profit sharing plan accrual in 1997 compared to this year when
no such accrual has been recorded. Total stockholder equity declined
$4,213,000 during the first nine months of 1998.
RESULTS OF OPERATIONS
The third quarter has been another difficult period for the
casino as net revenues declined $267,000 or 2.4% compared to the same
period in 1997. Gaming and hotel revenues continue to be negatively
impacted by the intense competition in the Las Vegas market for both
room and casino guests. Downtown casinos have been particularly
vulnerable to the increased competition in the Las Vegas Valley.
<PAGE>
PART 1. - FINANCIAL INFORMATION
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
While downtown redevelopment efforts by the City of Las Vegas
have been unsuccessful to date, there is a high level of interest
by planners and City officials to revive the downtown corridor.
Current plans consist of a shopping area located downtown named
"Neonopolis" and at least two new government buildings are planned for
construction in the next couple of years. While these plans may help,
it is management's opinion that the future of the Company's business
and that of downtown is dependent upon the development of the area
west of downtown on Grand Central Parkway. Should the development of
that area occur and be successful, the Company's hotel and casino is
in the best location downtown to be the gateway to Fremont Street.
For the quarter ended September 30, 1998, gaming revenues
declined $140,000 or 1.8%, and room revenues declined $54,000 or
2.0%. Despite fewer hotel and casino guests, food and beverage
operations managed to show a 1.3% gain in sales during the
period. These gains however are attributed to higher complimentary
sales occurring in the reporting period. Food complimentary sales
are up 14.0% for the year compared to cash sales which are up only 2.4%.
The Company's total promotional complimentary expense rose $76,000 in
the quarter and are up $453,000 for the first nine months of the year.
The Company's total operating expense fell $122,000 or 1.0%
during the third quarter and are down $98,000 or 0.3% for the year.
Declines in general and administrative expenses represented
significantly all of the cost reduction as insurance, legal and
accounting costs were all below the amounts reported in 1997.
Casino related expenses rose the most by climbing 4.8% or
$504,000 when compared to the same period a year ago. Higher casino
payroll costs and increased departmental expenses reflect attempts
to improve service in these departments and provide additional
gaming options for our customers. Essentially all other segments of
our operation held costs in line with inflation or made improvements
where possible.
Despite the reduction in expenses during the quarter, the
Company reported a net operating loss of $1,745,000 compared to a
loss of $1,600,000 in the year ago period. For the first nine months
of 1998, the Company had a net operating loss of $2,717,000 compared
to a loss of $1,379,000 last year.
Overall, the Company reported a net loss for the third quarter
of $2,320,000 or $2.23 a share versus a net loss of $1,423,000 or
$1.87 a share in the year ago period. For the first nine months of
1998, the Company had a net loss of $4,187,000 or $5.52 a share
compared to a net loss of $1,876,000 or $2.46 a share a year ago.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934 the registrant had duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
UNION PLAZA HOTEL AND CASINO, INC.
(REGISTRANT)
Date: October 31, 1998 /SS/ JOHN D. GAUGHAN
JOHN D. GAUGHAN, President
Date: October 31, 1998 /SS/ LARRY DOLESH
LARRY DOLESH, Vice President
of Finance
Date: October 31, 1998 /SS/ JOHN P. JONES
JOHN P. JONES, Vice President &
Treasurer
Date: October 31, 1998 /SS/ ALAN J. WOODY
ALAN J. WOODY, Controller
16
[ARTICLE] 5
<TABLE>
<S> <C>
[PERIOD-TYPE] 9-MOS
[FISCAL-YEAR-END] DEC-31-1998
[PERIOD-END] SEP-30-1998
[CASH] 1973000
[SECURITIES] 0
[RECEIVABLES] 457000
[ALLOWANCES] 0
[INVENTORY] 402000
[CURRENT-ASSETS] 3747000
[PP&E] 101200000
[DEPRECIATION] 65224000
[TOTAL-ASSETS] 41313000
[CURRENT-LIABILITIES] 4701000
[BONDS] 22589000
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 750000
[OTHER-SE] 9118000
[TOTAL-LIABILITY-AND-EQUITY] 41313000
[SALES] 7258000
[TOTAL-REVENUES] 41106000
[CGS] 10928000
[TOTAL-COSTS] 21942000
[OTHER-EXPENSES] 8164000
[LOSS-PROVISION] 29000
[INTEREST-EXPENSE] 1688000
[INCOME-PRETAX] (4400000)
[INCOME-TAX] (213000)
[INCOME-CONTINUING] (4187000)
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (4187000)
[EPS-PRIMARY] ( 5.52)
[EPS-DILUTED] ( 5.52)
</TABLE>
