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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 30, 1997
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STATION CASINOS, INC.
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(Exact name of registrant as specified in its charter)
NEVADA 000-21640 88-0136443
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
2411 WEST SAHARA AVENUE
LAS VEGAS, NEVADA 89102
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 702/367-2411
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N/A
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(Former name or former address, if changed since last report)
This is Page 1 of a Total of 4 Pages.
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ITEM 5. OTHER EVENTS.
Attached is a press release issued by the Registrant on July 30,
1997. The press release in incorporated herein by this reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
STATION CASINOS, INC.
a Nevada corporation
By: /s/ Glenn C. Christenson
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Glenn C. Christenson
Executive Vice President
Chief Financial Officer and Treasurer
Date: August 7, 1997
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EXHIBIT INDEX
Exhibit Exhibit
Number Description
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99 The Registrant's press release, dated July 30, 1997.
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STATION CASINOS, INC. REPORTS FIRST QUARTER EARNINGS OF $0.1 MILLION
Las Vegas, July 30 -- Station Casinos, Inc. (NYSE:STN) today announced the
results of its operations for the first quarter of fiscal 1998.
Station Casinos, Inc. ("STN" or "the Company") reported net revenues for the
quarter of $173.5 million, a 28 percent increase over net revenues of $135.4
million in the prior year's quarter. Earnings before interest, taxes,
depreciation and amortization (EBITDA) increased 7 percent to $35.0 million,
compared to $32.6 million in the prior year.
Excluding the impact of preopening expenses from Sunset Station Hotel &
Casino, which opened June 10, and the expiration of certain option payments
to lease or acquire land for future development, which had previously been
capitalized but were expensed during the quarter, of $5.0 million, the
Company reported net income of $0.1 million, or $0.00 per share for the
quarter. "We believe that the decision to terminate certain development
opportunities is consistent with the Company's strategies of focusing on
existing operations and moving to deleverage the balance sheet," stated Glenn
C. Christenson, executive vice-president and chief financial officer.
Including the above charges, the Company reported a net loss applicable to
common stock of $10.1 million, or $0.29 per share for the quarter, compared
to net income applicable to common stock of $7.6 million or $0.22 per share
in the prior year.
NEVADA OPERATIONS
The Company's Nevada Operations reported record net revenues and EBITDA for the
quarter. Combined net revenues for the quarter increased 12 percent to $99.5
million, compared to $88.5 million in the prior year's quarter. Combined EBITDA
increased 23 percent to $30.0 million, compared to $24.4 million in the prior
year. "Our Las Vegas properties continue to perform exceptionally well with
record EBITDA at Boulder Station and Texas Station, steady results at Palace
Station, and strong initial results from Sunset Station," said Christenson. "We
also showed margin improvement at each of our Las Vegas properties. Our margins
continue to outperform our peer group and rank among the highest in Las Vegas."
Palace Station Hotel & Casino (Palace Station):
First quarter net revenues at Palace Station were $32.9 million, a slight
decline from the prior year's quarter, while EBITDA remained steady at $9.9
million. EBITDA margins improved to 30 percent, compared to 29 percent in the
prior year. "Palace Station's operating results remain impressive despite
minimal capital investment over the past several years," said Christenson.
Boulder Station Hotel & Casino (Boulder Station):
First quarter net revenues at Boulder Station increased 4 percent to $35.9
million from $34.4 million in the prior year's quarter. EBITDA increased 16
percent to a record $13.3 million from $11.4 million, representing an EBITDA
margin of 37 percent, compared to 33 percent in the prior year. "Boulder Station
continues to demonstrate its operational strength. The initial impact on Boulder
Station from Sunset Station's opening is in line with our expectations, and
diminishing with each week of operations," said Christenson.
Texas Station Gambling Hall & Hotel (Texas Station):
Texas Station built upon the momentum generated in the fourth quarter of fiscal
1997 with its second consecutive quarter of record EBITDA. Net revenues
increased 7 percent to $21.1 million from $19.8 million in the prior year.
EBITDA grew 50 percent to $4.5 million from $3.0 million in the prior year,
representing an EBITDA margin of 21 percent, the highest ever achieved at the
property. "We continue to make steady progress in raising Texas Station to the
standards set at our other Las Vegas properties," said Christenson. "We are
pleased with the growing success at the property and will continue our efforts
to make further advances in same-store growth over the next several quarters."
Sunset Station Hotel & Casino (Sunset Station):
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Sunset Station opened to capacity crowds on June 10, expanding the Company's
distribution to the southeast quadrant of the Las Vegas Valley. Net revenues and
EBITDAR (earnings before interest, taxes, depreciation, amortization and rent)
for the first 21 days of operations at Sunset Station were $9.5 million and $2.8
million, respectively, representing an EBITDAR margin of 29 percent. Management
believes EBITDAR gives a better representation of operating cash flow at Sunset
Station as a result of a $40 million operating lease included in Sunset
Station's Capital structure resulting in rent expense of approximately $8
million annually. "We are very pleased with Sunset's initial results, and will
continue to execute our business plan to build customer loyalty and enhance
operations over the next several quarters," said Christenson.
Missouri Operations
Station Casino St. Charles (St. Charles Station):
Net revenues at St. Charles Station declined 21 percent to $31.4 million from
$39.5 million in the prior year's quarter. EBITDA decreased 41 percent to
$6.7 million from $11.3 million in the prior year. Results for the quarter
were negatively impacted by the opening of new competition in Maryland
Heights in March 1997. "Unfortunately, the new capacity added to the St.
Louis market in March has not resulted in significant market growth. The
impact of new competition heightened as the quarter progressed, making for a
difficult operating environment at present. We have taken steps in recent
weeks to address our fixed cost structure and adapt to the new demand levels
as we head into the typically stronger summer season," said Christenson.
Station Casino Kansas City (Kansas City Station)
Net revenues and EBITDA at Kansas City Station, which opened January 16,
1997, were $35.3 million and $1.2 million, respectively. Gaming revenues and
admissions totaled $27.9 million and 1.8 million, respectively, translating
into a win-per-admission of approximately $15. During the quarter, Kansas
City Station focused on building top line momentum and market share which had
a considerable impact on operating margins. "Although we are disappointed
with our results for the quarter, we are encouraged by recent results in July
which we perceive to be in excess of seasonally adjusted gains. We remain
confident in our long-term business strategy. We will continue to ramp-up
operations as quickly as possible, but this ramp-up process will take time,"
said Christenson.
An 18-screen movie theater complex operated by ACT III Theatres, and a 5,700-
square-foot video arcade and midway operated by Sega GameWorks opened to the
public on July 4.
Other Developments
The Company previously announced that's had signed a non-binding letter of
intent with Gordon Group Holdings, Ltd. (the "Gordon Group"), to develop and
lease approximately 220,000 square feet of space in a uniquely styled,
two-story entertainment complex at Station Casino St. Charles. The letter of
intent is subject to various termination provisions and a 90-day due
diligence period which the parties have continued to conduct beyond the
original June 19 due diligence expiration date. If the Gordon Group fails to
proceed with development of the retail and entertainment complex, the Company
may explore several options, including but not limited to, the build-out of a
portion of the complex, initiating discussions with other developers, or
halting construction indefinitely.
In June 1997, the Company obtained an amendment to its Amended and Restated
Reducing Revolving Loan Agreement. This amendment modified the covenant
restricting the maximum consolidated funded debt to EBITDA ratio for the four
quarters of fiscal 1998, increasing the permitted ratio to 5.75 for the June
1997 quarter, 5.85 for the quarter ended September 1997, and 5.75 for the
December 1997 and March 1998 quarters. Subsequent to fiscal 1998, the covenant
returns to the original requirement. "This amendment allows for the flexibility
that the Company needs to address competitive issues in St. Louis," stated
Christenson. "We are pleased with the continued support of our bank group as we
complete our capital expenditure program and transition toward a focus on
improving operations at our existing facilities and deleveraging our balance
sheet."
Station Casinos, Inc. is a multi-jurisdictional gaming Company that owns and
operates Palace Station Hotel & Casino, the Boulder Station Hotel & Casino,
and Texas Station Gambling Hall & Hotel in Las Vegas, NV, Sunset Station
Hotel & Casino in Henderson, NV, as well as slot machine route management
services in Southern Nevada and Louisiana. Station Casinos, Inc. also owns
and operates Station Casino St. Charles, a gaming and entertainment facility
in St. Charles, MO and Station Casino Kansas City, a gaming and entertainment
facility in Kansas City, MO.
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This press release may be deemed to contain certain forward-looking statements
with respect to the financial condition, results of operations and expansion
projects of STN and its subsidiaries which involve risks and uncertainties
including, but not limited to, competition from other gaming operations,
construction risks, and licensing and other regulatory risks. Further
information on potential factors which could affect the financial condition,
results of operations and expansion projects of STN and its subsidiaries are
included in the filings of STN with the Securities and Exchange Commission,
including, but not limited to STN's Annual Report on Form 10-K for the fiscal
year ended March 31, 1997 and Registration Statement on Form S-4 File No. 333-
30685.
Station Casinos, Inc.
Condensed Consolidated Balance Sheets
(amounts in thousands)
(unaudited)
June 30, March 31,
1997 1997
Assets:
Cash and cash equivalents $49,018 $42,522
Accounts and notes receivable, net 12,802 7,852
Other current assets 24,178 18,995
Total current assets 85,998 69,369
Property and equipment, net 1,130,127 1,069,052
Other long-term assets 87,715 95,697
Total assets $1,303,840 $1,234,118
Liabilities and stockholders' equity:
Current portion of long-term debt $19,186 $18,807
Construction contracts payable 49,679 94,835
Other current liabilities 83,342 71,624
Total current liabilities 152,207 185,266
Long-term debt, less current portion 763,907 696,156
Sunset Station first mortgage note 89,500 46,000
Other long-term liabilities 9,393 7,848
Total liabilities 1,015,007 935,270
Stockholders' equity 288,833 298,848
Total liabilities and
stockholders' equity $1,303,840 $1,234,118
Station Casinos, Inc.
Consolidated Statements of Operations
(amounts in thousands, except per share data)
(unaudited)
Three Months Ended
June 30,
1997 1996
Operating revenues:
Casino $133,275 $104,660
Food and beverage 28,855 21,166
Room 8,039 6,444
Other 14,208 11,301
Gross revenues 184,377 143,571
Less promotional allowances (10,861) (8,131)
Net revenues 173,516 135,440
Operating costs and expenses:
Casino 64,291 45,314
Food and beverage 21,281 16,085
Room 3,101 2,558
Other 7,162 5,795
Selling, general and administrative 38,656 28,522
Corporate expenses 3,894 4,213
Development expenses 104 317
Depreciation and amortization 15,983 9,823
Preopening expenses 10,866 --
165,338 112,627
Operating income 8,178 22,813
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Other income (expense):
Interest expense, net (16,007) (8,293)
Other (5,017) 61
Income (loss) before income taxes (12,846) 14,581
Income tax (provision) benefit 4,556 (5,122)
Net income (loss) (8,290) 9,459
Preferred stock dividends (1,811) (1,811)
Net income (loss) applicable to common stock $(10,101) $7,648
Earnings (loss) per common share $(0.29) $0.22
Weighted average common shares outstanding 35,314 35,308
Station Casinos, Inc.
Property Information Tables
(amounts in thousands)
(unaudited)
Three Months Ended
June 30,
1997 1996
Nevada Operations:
Palace Station
Net revenues $32,890 $34,320
Operating income $7,770 $7,893
EBITDA (2) $9,903 $9,931
Boulder Station
Net revenues $35,896 $34,399
Operating income $10,383 $8,823
EBITDA (2) $13,289 $11,414
Texas Station
Net revenues $21,141 $19,788
Operating income $2,354 $1,312
EBITDA (2) $4,512 $3,007
Sunset Station
Net revenues $9,543 $--
Operating loss $(8,836) $--
EBITDAR (2) $2,786 $--
EBITDA (2) $2,265 $--
Total Nevada Operations:
Net revenues $99,470 $88,507
Operating income $11,671 $18,028
EBITDA (2) $29,969 $24,352
Missouri Operations:
Station Casino St. Charles
Net revenues $31,354 $39,525
Operating income $3,378 $ 8,540
EBITDA (2) $6,664 $11,320
Station Casino Kansas City
Net revenues $35,279 $--
Operating loss $(3,270) $--
EBITDA (2) $1,160 $--
Total Missouri Operations:
Net revenues $66,633 $39,525
Operating income $108 $8,540
EBITDA (2) $7,824 $11,320
Station Casinos, Inc. and other
Net revenues $7,413 $7,408
Operating loss $(3,601) $(3,755)
EBITDA (2) $(2,766) $(3,036)
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Station Casinos, Inc.
Property Information Tables
(unaudited)
Additional Data
Three Months Ended
June 30,
1997 1996
Palace Station
Occupancy percentage 97% 97%
ADR $43 $46
Boulder Station
Occupancy percentage 99% 98%
ADR $51 $49
Texas Station
Occupancy percentage 94% 96%
ADR $53 $48
Sunset Station
Occupancy percentage 95% --
ADR $45 --
Station Casino Kansas City
Occupancy percentage 87% --
ADR $91 --
(1) The consolidated financial statements of Station Casinos, Inc. include the
accounts of: Palace Station Hotel & Casino, Inc., Boulder Station, Inc., Texas
Station, Inc., Sunset Station, Inc., St. Charles Riverfront Station, Inc.,
Kansas City Station Corporation and the Southwest Companies.
(2) EBITDA (Earnings before Interest, Taxes, Depreciation, Amortization and
Preopening) and EBITDAR (Earnings before Interest, Taxes, Depreciation,
Amortization, Preopening and Rent) are presented solely as a supplemental
disclosure because the Company believes that certain investors consider this
information useful in the evaluation of the financial performance of companies
with substantial depreciation, amortization and rent expense.
