UNION PLAZA HOTEL AND CASINO, INC.
1 Main Street
Las Vegas, NV 89101
November 14, 2000
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.
Joe Woody, Controller
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, 2000
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, 2000
$.50 par value 757,419 shares
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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/ JOE WOODY
JOE WOODY, Controller
Las Vegas, Nevada
November 14, 2000
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PART 1. - Financial Information
Item 1. Financial Statements
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
September 30, 2000 AND DECEMBER 31, 1999
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UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<CAPTION>
September 30, 2000 AND DECEMBER 31, 1999
ASSETS
SEPTEMBER 30, DECEMBER 31,
2000 1999
<S> <C>(Unaudited) <C>
Current Assets:
Cash $ 2,769,000 $ 3,250,000
Accounts receivable 674,000 519,000
Inventories of food, beverage
and supplies 427,000 348,000
Prepaid expense 884,000 810,000
Total current assets 4,754,000 4,927,000
Property and equipment:
Land 7,012,000 7,012,000
Buildings 57,127,000 56,887,000
Leasehold improvements 3,534,000 3,530,000
Furniture and equipment 38,152,000 39,607,000
105,825,000 107,036,000
Less accumulated depreciation
and amortization 69,328,000 69,526,000
Net property and equipment 36,497,000 37,510,000
Other assets 657,000 841,000
$ 41,908,000 $ 43,278,000
The accompanying notes are an integral
part of these financial statements.
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LIABILITIES AND STOCKHOLDERS' EQUITY
SEPTEMBER 30, DECEMBER 31,
2000 1999
<S> <C>(Unaudited)<C>
Current liabilities:
Accounts payable $ 3,456,000 $ 3,709,000
Accrued liabilities 2,351,000 1,839,000
Current portion of long-term debt 603,000 1,368,000
Current portion of obligations under
capital leases 1,338,000 1,338,000
Total current liabilities 7,748,000 8,254,000
Long-term debt, less current portion 29,900,000 28,754,000
Obligations under capital leases, less
current portion 53,000 1,133,000
Total Liabilities 37,701,000 38,141,000
Commitments and contingencies
Stockholders' equity:
Common stock, $.50 par value; authorized
20,000,000 shares; issued 1,500,000
shares; Outstanding 757,419 shares at
December 31, 1999 and
September 30, 2000. 750,000 750,000
Additional paid-in capital 5,462,000 5,462,000
Retained earnings 11,892,000 12,822,000
18,104,000 19,034,000
Less treasury stock, at cost, 742,581
shares at December 31, 1999 and
September 30, 1999. 13,897,000 13,897,000
Total stockholders' equity 4,207,000 5,137,000
$41,908,000 $43,278,000
The accompanying notes are an integral
part of these financial statements.
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UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
Amounts in thousands except per share data
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Revenues:
Casino $ 27,395 $25,597 $ 8,644 $ 8,236
Food and Beverage 7,397 7,294 2,290 2,179
Rooms 8,422 8,250 2,787 2,566
Other 1,680 1,621 527 492
Gross revenues 44,894 42,762 14,248 13,473
Less promotional complimentaries 5,144 5,737 1,745 1,897
Net revenues 39,750 37,025 12,503 11,576
Operating expenses:
Casino 11,175 11,292 3,677 3,800
Food and Beverage 10,491 11,010 3,459 3,416
Rooms 4,442 4,396 1,502 1,424
General & Administrative 2,676 2,988 828 924
Entertainment 341 356 112 124
Advertising & Promotion 619 244 206 148
Utilities & Maintenance 4,643 4,572 1,712 1,686
Depreciation & Amortization 3,016 2,477 1,015 879
Provisions for Doubtful Accts. 23 28 5 7
Other Costs and Expenses 1,035 988 347 267
Total operating expenses 38,461 38,351 12,863 12,675
Operating income/(loss) 1,289 (1,326) (360) (1,099)
Other income (expense):
Gain on sale of assets 27 0 3 0
Interest Income 17 1 8 0
Interest Expense (2,262) (1,796) (808) (631)
Total other income (expense) (2,218) (1,795) (797) (631)
Income before income taxes (929) (3,121) (1,157) (1,730)
Net income/(loss) (929) (3,121) (1,157) (1,730)
Earnings/(loss) per common share ($1.23) ($4.12) ($1.53) ($2.28)
The accompanying notes are an integral
part of these financial statements.
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UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
INCREASE IN CASH AND CASH EQUIVALENTS
2000 1999
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 39,595,000 $ 37,067,000
Cash paid to suppliers and employees (34,951,000) (34,741,000)
Interest received 17,000 1,000
Interest paid (2,467,000) (1,796,000)
Income taxes paid 0 0
Net cash provided by operating activities 2,194,000 531,000
Cash flows from investing activities:
Proceeds from sale of property & equipment 28,000 15,000
Purchase of property and equipment (2,003,000) (2,744,000)
Net cash used in investing activities (1,975,000) (2,729,000)
Cash flows from financing activities:
Proceeds from borrowing 1,616,000 2,400,000
Principal payments on capital lease (1,080,000) (690,000)
Principal payments on long-term debt (1,236,000) 0
Net cash (used) in financing activities (700,000) 1,710,000
Net increase (decrease) in cash and
cash equivalents (481,000) (488,000)
Cash and cash equivalents
at 12/31/99 & 12/31/98 3,250,000 3,228,000
Cash and cash equivalents,
at 09/30/00 & 09/30/99 2,769,000 2,740,000
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING
ACTIVITIES
Net income(loss) for period ended
09/30/00 and 09/30/99 $ (929,000) $ (3,121,000)
Adjustments to reconcile net income to
Net cash provided by operating activities:
Depreciation and amortization 3,016,000 2,478,000
Loss (Gain) on sale of assets (27,000) 23,000
(Increase) decrease in assets:
Accounts receivable (155,000) (53,000)
Inventories (79,000) (81,000)
Prepaid expenses (74,000) 28,000
Other assets 184,000 190,000
Increase (decrease) in liabilities:
Accounts payable and accrued expenses 258,000 1,067,000
Total adjustments 3,123,000 3,652,000
Net cash provided (used) by operating
activities $ 2,194,000 $ 531,000
The accompanying notes are an integral
part of these financial statements.
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UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
NOTE 2 - EMPLOYEE BENEFIT PLANS
The Company contributes to a discretionary executive bonus
plan. During the first nine months of 2000 the Company contributed
$159,000 to this plan compared to a year ago when $22,000 was
contributed.
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. There have been no profit
sharing plan contributions during the past ten quarters and it is
anticipated that there will be none during the remainder of 2000.
NOTE 3 - RELATED PARTIES
On December 18, 1991, Exber, Inc., a 48.9% stockholder as
of September 30, 2000, 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 borrowed
an additional $1,483,000 from Exber, Inc. to supplement cash flows
to meet normal operating requirements and during 1998 did the same,
increasing the note to $25,500,000. At varying intervals during
1997, 1998 and 1999 the Company has borrowed additional funds to
supplement its cash flow and to meet normal operating requirements.
At the end of 1999, the Company owed Exber, Inc. $28,400,000.
During the first nine months of 2000, the Company borrowed an
additional $1,500,000 to provide funds for capital improvements.
The outstanding balance of the note at September 30, 2000 was
$29,900,000.
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 4 - 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.
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UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
NOTE 5 - LONG TERM DEBT
Long term debt consists of the following: September 30, December 31,
2000 1999
<C> <C>
Related party note, payable in monthly
Installments of interest only at prime rate
Not to exceed 12%, until January 1, 2005, at
Which time the entire balance plus accrued
Interest is due. The note is secured by a
First Deed of Trust on land and buildings.
The effective rate of interest at September
30, 2000 is 9.5%. $29,900,000 $28,400,000
Contract payable, secured by slot
machines and related equipment, payable in
monthly installments of 25% of net win with
no stated interest for the first twelve
months, after which an interest of 3% over
prime applies to the remaining balance.
Any remaining balance plus accrued interest
is due on April 1, 2001. 63,000 146,000
Contract payable, secured by slot
machines and related equipment, payable in
monthly installments of 25% of net win with
no stated interest for the first twelve
months, after which an interest of 3% over
prime applies to the remaining balance.
Any remaining balance plus accrued interest
is due on May 1, 2001. 343,000 1,037,000
Contract payable, secured by slot
machines and related equipment, payable in
monthly installments of 25% of net win with
no stated interest for the first twelve
months, after which an interest of 3% over
prime applies to the remaining balance.
Any remaining balance plus accrued interest
is due on April 1, 2001. - 28,000
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UNION PLAZA HOTEL AND CASINO, INC AND SUBSIDIARIES
UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, December 31,
2000 1999
Contract payable, secured by slot
machines and related equipment, payable in
monthly installments of 25% of net win with
no stated interest for the first twelve
months, after which an interest of 3% over
prime applies to the remaining balance.
Any remaining balance plus accrued interest
is due on September 1, 2001. 11,000 72,000
Contract payable, secured by slot
machines and related equipment, payable in
monthly installments of 25% of net win with
no stated interest. Any remaining balance
plus accrued interest is due on July 1, 2001. 101,000 178,000
Contract payable, secured by slot
machines and related equipment, payable in
monthly installments of 25% of net win with
no stated interest for the first twelve
months, after which an interest of 3% over
prime applies to the remaining balance.
Any remaining balance plus accrued interest
is due on December 1, 2001. 16,000 -
Contract payable, secured by slot
Machines and related equipment, payable in
Monthly installments of $32,707 until
August 31, 2000, with no stated interest - 261,000
Contract payable, secured by slot
machines and related equipment, payable in
monthly installments of 25% of net win with
no stated interest for the first twelve
months, after which an interest of 3% over
prime applies to the remaining balance.
Any remaining balance plus accrued interest
is due on September 1, 2002. 69,000 -
30,503,000 30,122,000
Less current portion 603,000 1,368,000
$29,900,000 $ 28,754,000
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PART 1. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ANALYSIS OF FINANCIAL CONDITION
The Company had cash assets of $2,769,000 (6.6% of total
assets) at September 30, 2000 and $3,250,000 (7.5% of total assets)
at December 31, 1999. The ratio of current assets to current
liabilities was .6 to 1 at September 30, 2000 and .6 to 1 at
December 31, 1999.
Long-term debt obligations, including current maturities
were $30,502,000 at September 30, 2000 compared to $30,122,000
at December 31, 1999. Accounts payable declined $253,000 during
the first nine months from $3,709,000 to $3,456,000 due primarily
to timing differences in billing cycles and reporting periods.
Accrued liabilities and expenses increased $512,000 reflecting
higher slot club liabilities, payroll and local taxes payable
at the end of the period.
The Company relies on upon Exber, Inc., its majority
shareholder, for financing of capital improvements and for
operating cash when needed. Should Exber, Inc. discontinue
its financial relationship for any reason, there would be a
material impact on the financial condition of the Company.
RESULTS OF OPERATIONS
Net revenues at the Company's hotel and casino increased
$927,000 during the third quarter compared to the same period
in 1999. The revenue growth in the third quarter is attributed
to $408,000 in higher casino win, $221,000 from increased hotel
income and $111,000 in additional food and beverage revenue.
Also contributing to the overall improvement in net revenues was
A $152,000 decline in promotional complimentaries and a $35,000
increase in other income. These revenue gains were partially
offset by an increase of $188,000 in operating costs. Higher
advertising costs, increased departmental and maintenance
expense, and higher depreciation costs were all factors in the
overall rise in the operating costs.
Overall, the Company reported a net operating loss of $360,000
during the quarter compared to net operating loss of $1,099,000
in the year ago quarter. The third quarter in typically a difficult
operating quarter for the Company's hotel and casino due to reduced
visitor counts and higher summer expenses. The increases in
revenue that were recorded are the result of continued efforts by
management to revitalize the Plaza Hotel and Casino through
investment and marketing. The improvements that have been made
and those that continue to be made are having a positive impact
on the operating results. Investments in the casino, the hotel and
general facilities have been costly but are necessary to market the
property to travel agencies and the downtown tourist. Management
continues to utilize all capital from the Company's positive cash
flow to fund most of these improvements. From time to time however,
it has become necessary to borrow or lease additional funds to meet
the demands of the operation.
For the nine months ended September 30, 2000, revenues increased
by $2,725,000 over the same period in 1999. Higher revenues from all
segments of the Company's operation, along with lower promotional
complimentaries were the primary factors in the year-over-year
improvement. Despite these revenue gains of nearly $3 million,
operating expenses have increased just $110,000. Management continues
to focus on controlling expenses while maintaining above average
service and property cleanliness. Operating income for the first
nine months was $1,289,000 compared to an operating loss of $1,326,000
in the year ago period.
Overall, the Company reported a quarterly loss of $1,157,000 or
$1.53 a share versus a loss of $1,730,000 or $2.28 a share one year
ago. Interest expense rose $177,000 reflecting a higher rate of
interest and larger balance on the Company's first mortgage note.
For the first nine months of the year, the Company suffered a loss
of $929,000 or $1.23 per share compared to a loss of $3,121,000
or $4.12 per share in the year ago period. Interest through
September 30, 2000 was $2,262,000 versus $1,762,000 last year due
to the same factors mentioned above.
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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: November 14, 2000 /SS/ JOHN D. GAUGHAN
JOHN D. GAUGHAN, President
Date: November 14, 2000 /SS/ JOE WOODY
JOE WOODY, Controller
Date: November 14, 2000 /SS/ JOHN P. JONES
JOHN P. JONES, Vice President &
Treasurer
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