SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Mark One
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
-----------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 000-21430
Riviera Holdings Corporation
(Exact name of Registrant as specified in its charter)
Nevada 88-0296885
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
2901 Las Vegas Boulevard South, Las Vegas, Nevada 89109
- -----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (702) 794-9527
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes No
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE LAST FIVE YEARS
Indicate by check mark whether the Registrant has filed all
documentation and reports required to be filed by Section 12, 13, or 15(d) of
the Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.
Yes No
APPLICABLE ONLY TO CORPORATE REGISTRANTS
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date.
As of June 30, 1999 there were 5,067,676 shares of Common Stock, $.001 par
value per share, outstanding.
<PAGE>
RIVIERA HOLDINGS CORPORATION
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Independent Accountants' Report 2
Condensed Consolidated Balance Sheets at June 30, 1999 (Unaudited) and
December 31, 1998 3
Condensed Consolidated Statements of Operations (Unaudited) for the
Three Months and Six Months ended June 30, 1999 and 1998 4
Condensed Consolidated Statements of Cash Flows (Unaudited) for the
Three Months and Six Months ended June 30, 1999 and 1998 5
Notes to Condensed Consolidated Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 19
Item 5. Other Information 19
Item 6. Exhibits and Reports on Form 8-K 19
Signature Page 20
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors
Riviera Holdings Corporation
We have reviewed the accompanying condensed consolidated balance sheet of
Riviera Holdings Corporation (the "Company") and subsidiaries as of June 30,
1999, and the related condensed consolidated statements of operations and of
cash flows for the three months and six months ended June 30, 1999 and 1998.
These financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such condensed consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Riviera Holdings Corporation as of
December 31, 1998, and the related consolidated statements of operations,
stockholders' equity, and cash flows for the year then ended (not presented
herein); and in our report dated February 19, 1999, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance sheet
as of December 31, 1998, is fairly stated, in all material respects, in relation
to the consolidated balance sheet from which it has been derived.
DELOITTE & TOUCHE LLP
July 26, 1999
Las Vegas, Nevada
<PAGE>
<TABLE>
<CAPTION>
RIVIERA HOLDINGS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, except share amounts)
June 30, December 31,
1999 1998
(Unaudited)
---------------- -----------------
ASSETS
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $41,496 $48,883
Cash and cash equivalents - restricted 26,278
Short term investments 5,121
Short term investments - restricted 10,101
Accounts receivable, net 3,797 5,390
Inventories 2,490 2,726
Prepaid expenses and other assets 3,379 4,028
---------------- -----------------
Total current assets 92,662 61,027
PROPERTY AND EQUIPMENT, NET 188,236 175,622
OTHER ASSETS, NET 10,384 7,797
RESTRICTED CASH 410 463
---------------- -----------------
TOTAL ASSETS $291,692 $244,909
================ =================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $415 $363
Accounts payable 13,252 11,865
Accrued interest, other 7,018 6,563
Accrued expenses - other 9,386 10,053
---------------- -----------------
Total current liabilities 30,071 28,844
---------------- -----------------
Deferred income taxes 2,857 3,123
---------------- -----------------
Other long-term liabilities 5,209 4,933
---------------- -----------------
LONG-TERM DEBT, NET OF CURRENT PORTION 220,729 174,506
---------------- -----------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock ($.001 par value; 20,000,000 shares authorized; 5,067,676 issued
and outstanding at June 30, 1999
and 5,073,376 at December 31, 1999) 5 5
Additional paid-in capital 13,446 13,457
Treasury stock (39,100 shares at June 30, 1999, and
34,300 shares at December 31, 1998) (189) (167)
Notes receivable from Employee Shareholders (3)
Retained earnings 19,564 20,211
---------------- -----------------
Total shareholders' equity 32,826 33,503
---------------- -----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $291,692 $244,909
================ =================
</TABLE>
See notes to condensed consolidated financial statements
<PAGE>
<TABLE>
<CAPTION>
RIVIERA HOLDINGS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
(In Thousands, Except Per Share Amounts) Three Months Ended Six Months Ended
June 30, June 30,
-----------------------------------------------------------------
1999 1998 1999 1998
REVENUES:
<S> <C> <C> <C> <C>
Casino $19,364 $20,788 $38,280 $39,479
Rooms 10,061 10,403 20,200 20,347
Food and beverage 6,680 6,386 13,036 12,153
Entertainment 5,456 5,428 11,068 10,773
Other 2,958 2,897 5,781 5,692
--------------- --------------- --------------- ---------------
44,519 45,902 88,365 88,444
Less promotional allowances 3,869 3,713 7,418 7,088
--------------- --------------- --------------- ---------------
Net revenues 40,650 42,189 80,947 81,356
--------------- --------------- --------------- ---------------
COSTS AND EXPENSES:
Direct costs and expenses of operating departments:
Casino 11,346 11,347 22,695 22,323
Rooms 5,613 5,568 10,862 10,429
Food and beverage 4,565 4,698 8,960 8,683
Entertainment 4,191 4,248 8,380 8,450
Other 836 884 1,638 1,658
Other operating expenses:
General and administrative 7,224 6,540 14,345 13,090
Preopening expenses-Black Hawk, Colorado casino project 73 73
Depreciation and amortization 3,521 3,015 6,854 5,990
--------------- --------------- --------------- ---------------
Total costs and expenses 37,369 36,300 73,807 70,623
--------------- --------------- --------------- ---------------
INCOME FROM OPERATIONS 3,281 5,889 7,140 10,733
--------------- --------------- --------------- ---------------
OTHER INCOME (EXPENSE)
Interest expense on $100 million notes (1,875) (4,642)
Interest on Treasury Bills held to retire $100 million notes 920 2,334
Interest expense, other (5,372) (4,852) (10,242) (9,798)
Interest income, other 346 679 699 1,352
Interest capitalized 810 563 1,771 1,003
Other, net (229) (342) (280) (491)
--------------- --------------- --------------- ---------------
Total other income (expense) (4,445) (4,907) (8,052) (10,242)
--------------- --------------- --------------- ---------------
INCOME (LOSS) BEFORE PROVISION (BENEFIT)
FOR INCOME TAXES (1,164) 982 (912) 491
PROVISION (BENEFIT) FOR INCOME TAXES (352) 343 (266) 171
--------------- --------------- --------------- ---------------
INCOME BEFORE EXTRAORDINARY ITEM (812) 639 (646) 320
EXTRAORDINARY ITEM, NET OF INCOME TAX (3,006) (3,006)
--------------- --------------- --------------- ---------------
NET INCOME (LOSS) ($812) ($2,367) ($646) ($2,686)
=============== =============== =============== ===============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 5,068 5,038 5,069 4,970
--------------- --------------- --------------- ---------------
EARNINGS (LOSS) PER SHARE-BASIC $ (0.16) $ (0.47) $ (0.13) $ (0.54)
--------------- --------------- --------------- ---------------
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 5,068 5,084 5,069 5,017
--------------- --------------- --------------- ---------------
EARNINGS (LOSS) PER SHARE-DILUTED $ (0.16) $ (0.47) $ (0.13) $ (0.54)
--------------- --------------- --------------- ---------------
</TABLE>
See notes to condensed consolidated financial statements
<PAGE>
<TABLE>
<CAPTION>
RIVIERA HOLDINGS CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
----------- ---------- --------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C> <C>
Net Income (loss) ($812) ($2,367) ($646) ($2,686)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 3,521 3,015 6,854 5,990
Extraordinary item, call premium to defease $100M Bonds 4,624 4,624
Interest income on Tbills to defease $100M Bonds (920) (2,334)
Interest expense, $100M Bonds 1,875 4,642
Interest paid, $100M Bonds (4,614) (4,614)
Interest expense, other 5,372 5,292 10,242 9,798
Interest paid, other (25) (30) (8,791) (8,901)
Capitalized interest on construction projects (810) (563) (1,771) (1,003)
Other expense, net 302 342 353 491
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable, net 1,395 371 1,592 1,336
Decrease (increase) in inventories (105) (311) 236 317
Decrease (increase) in prepaid expenses
and other assets 90 (75) 649 (328)
Increase (decrease) in accounts payable (2,781) 2,456 (4,845) (1,852)
Increase (decrease) in accrued liabilities (1,185) (144) (1,482) (1,108)
Increase (decrease) in deferred income taxes (352) (1,951) (266) (1,951)
Increase in non-qualified pension plan obligation
to CEO upon retirement 69 245 328 485
----------- ---------- --------- -----------
Net cash provided by operating activities 4,679 7,245 2,453 2,906
----------- ---------- --------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures for property and equipment, Las Vegas, Nevada (1,417) (6,044) (6,644) (7,632)
Capital expenditures - Black Hawk, Colorado project (6,486) (2,531) (12,824) (3,340)
Property acquired with accounts payable - primarily Black Hawk, Co. 2,812 6,230
Capitalized Interest on construction projects 810 563 1,771 1,003
Purchase of short term investments (15,222) (15) (15,222) (32)
Purchase of Tbills for Black Hawk, Colorado restricted funds (26,278) (26,278)
Decrease (increase) in other assets (2,981) (428) (2,966) 35
----------- ---------- --------- -----------
Net cash used in investing activities (48,762) (8,455) (55,932) (9,966)
----------- ---------- --------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from US Tbills invested to defease $100M Bonds 107,516 108,930
Payments to defease $100M Bonds with call premium (104,313) (104,313)
Proceeds from long-term borrowings 45,854 46,265
Payments on long-term borrowings (72) (89) (143) (177)
Purchase of treasury stock (22)
Net collections, cancellations employee stock purchase plan
and exercise of employee stock options (7) (151) (7) (50)
----------- ---------- --------- -----------
Net cash provided by financing activities 45,774 2,963 46,092 4,390
----------- ---------- --------- -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $1,691 $1,753 ($7,387) ($2,670)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $39,805 $60,937 $48,883 $65,360
----------- ---------- --------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $41,496 $62,690 $41,496 $62,690
=========== ========== ========= ===========
</TABLE>
See notes to condensed consolidated financial statements
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Riviera Holdings Corporation (the "Company") and its wholly-owned subsidiary
Riviera Operating Corporation ("ROC") were incorporated on January 27, 1993, in
order to acquire all assets and liabilities of Riviera, Inc. Casino-Hotel
Division on June 30, 1993, pursuant to a plan of reorganization.
In July 1994, management established a new division, Riviera Gaming Management,
Inc. ("RGM") for the purpose of obtaining management contracts in Nevada and
other jurisdictions. In August 1996, RGM incorporated in the State of Nevada as
a wholly owned subsidiary of ROC. In March 1997 Riviera Gaming Management of
Colorado was incorporated in the State of Colorado, and in August 1997 Riviera
Black Hawk, Inc. was incorporated in the State of Colorado for the purpose of
developing a casino in Black Hawk, Colorado.
Nature of Operations
The primary line of business of the Company is the operation of the Riviera
Hotel & Casino on the "Strip" in Las Vegas, Nevada, including the operation of a
hotel/casino with restaurants and related facilities. The Company also manages
the Four Queens Hotel/Casino in downtown Las Vegas and is developing a casino in
Black Hawk, Colorado.
Casino operations are subject to extensive regulation in the State of Nevada by
the Gaming Control Board and various other state and local regulatory agencies.
Management believes that the Company's procedures for supervising casino
operations, for recording casino and other revenues and for granting credit
comply, in all material respects, with the applicable regulations.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company, its
wholly owned subsidiary ROC and various indirect wholly owned subsidiaries. All
material intercompany accounts and transactions have been eliminated.
The financial information at June 30, 1999 and for the three months and six
months ended June 30, 1999 and 1998 is unaudited. However, such information
reflects all adjustments (consisting solely of normal recurring adjustments)
that are, in the opinion of management, necessary for a fair presentation of the
financial position, results of operations, and cash flows for the interim
periods. The results of operations for the six months ended June 30, 1999 and
1998, are not necessarily indicative of the results that will be achieved for
the entire year.
These financial statements should be read in conjunction with the audited
consolidated financial statements and notes thereto for the year ended December
31, 1998, included in the Company's Annual Report on Form 10-K.
Legal Proceedings
The Company is a party to several routine lawsuits both as plaintiff and as
defendant arising from the normal operations of a hotel /casino. Management does
not believe that the outcome of such litigation, in the aggregate, will have a
material adverse effect on the financial position or results of operations of
the Company or ROC. (See also Note 4 - Paulson Merger, Contingent Value Rights
and Related Litigation).
Estimates and Assumptions
The preparation of condensed consolidated financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses during
the reporting period. Significant estimates used by the Company include
estimated useful lives for depreciable and amortizable assets, certain accrued
liabilities and the estimated allowance for receivables. Actual results may
differ from estimates.
Cash and cash equivalents and short term investments - restricted
Amounts related to the Riviera Black Hawk casino project in Black Hawk, Colorado
are restricted in use to that project or for the related 13% First Mortgage
Notes interest payments.
Earnings Per Share
Basic per share amounts are computed by dividing net income (loss) by average
shares outstanding during the period. Diluted net income per share amounts are
computed by dividing net income by average shares outstanding plus the dilutive
effect of common share equivalents. However, the effect of stock options
outstanding is not included in diluted net loss per share calculations. Since
the Company incurred net loss from continuing operations during the three month
and six month period ended June 30, 1999, diluted per share calculations are
based upon average shares outstanding during this period. The effect of stock
options outstanding to purchase approximately 509,000 shares was not included in
diluted per share calculations during the six-month period ended June 30, 1999
as the average exercise price of such options was greater than the average price
of the Company's common stock.
Recently Issued Accounting Standards
The Financial Accounting Standards Board recently issued FAS No. 137, `Deferral
of FAS 133 Accounting for Derivatives' which delays the implementation of that
pronouncement to June 15, 2000. The Company has not determined what effect, if
any, that FAS 133 may have on its results of operations
Reclassifications
Certain amounts in the prior periods have been reclassified to conform to the
current period presentation.
2. DEBT
On August 13, 1997, the Company issued 10% First Mortgage Notes ("the 10%
Notes") with a principal amount of $175 million. The Notes were issued at a
discount in the amount of $2.2 million. The discount is being amortized over the
life of the 10% Notes on a straight-line basis. On August 13, 1997, under a
contractual defeasance, the Company used part of these proceeds to purchase
United States Government Treasury bills ("the Securities") at a cost of $109.8
million which were deposited into an irrevocable trust. The proceeds from these
securities, together with interest that was earned by the Securities was used to
pay the principal, interest and call premium due on the 11% First Mortgage Notes
("the 11% Notes" or "$100 million notes") on June 1, 1998, the earliest date the
11% Notes could be redeemed. Interest earned from the Securities is included in
"Interest income on Treasury Bills held to retire $100 million notes." The
interest expense from the 10% Notes is included in "Interest expense, other",
and from the 11% Notes is included in "Interest expense on $100 million notes".
The $100 million notes, which were contractually defeased in August 1997, were
redeemed on June 1, 1998. The call premium of $4.3 million and unamortized
deferred financing costs totaling $300,000 were recorded net of the 35% income
tax effect of $1.6 million resulting in an extraordinary loss of $3.0 million.
On June 3, 1999, Riviera Black Hawk, Inc. ("RBH"), a wholly owned subsidiary,
closed a $45 million private placement of 13% First Mortgage Notes. The net
proceeds of the placement will be used to fund the completion of RBH's casino
project in Black Hawk, Colorado. The Company has not guaranteed the $45 million
RBH Notes, but has agreed to a "Capital Completion Commitment" of up to $10
million and a "Keep Well" of $5 million per year (or an aggregate limited to $10
million) for the first 3 years of RBH operations to cover if (i) the $5.85
million interest on such Notes is not paid by RBH and (ii) the amount by which
RBH cash flow is less than $7.5 million per year.
In April 1999, the Company entered into a $3.0 million capital lease line for 60
months at approximately 8.3% of which $1.2 million was used to date for general
equipment purchases.
In July 1999, the Company entered into a $3.5 million equipment financing
arrangement for 60 months at approximately 9.1%.
3. COMMITMENTS
RBH is constructing a casino in Black Hawk, Colorado on a site which was
purchased for $15 million in August 1997. As of June 30, 1999 the Company had
made $20.0 million in cash contributions to RBH (excluding capitalized
interest).
In July 1999, the Company's 100% owned subsidiary, Riviera Black Hawk, Inc.
committed to a $10.6 million capital lease line for 60 months at approximately
10.6% for gaming equipment , furniture and fixtures at the Black Hawk, Colorado
casino. Management believes that these financial arrangements along with the $45
million First Mortgage Notes will be sufficient to construct and open the
casino.
As a result of the scheduled opening of several new Las Vegas Strip properties
in 1999 and 2000, an estimated 38,000 jobs must be filled, including
approximately 5,000 supervisory positions. Because of the Company's performance
and reputation, its employees are prime candidates to fill these positions. In
the third quarter of 1998 management instituted an employee retention plan ("the
Plan") which covers approximately 85 executive, supervisory and technical
support positions and includes a combination of employment contracts, stay put
agreements, bonus arrangements and salary adjustments. The period costs
associated with the Plan are being accrued as additional payroll costs and
included approximately $150,000 in the second quarter of 1999 and $300,000 year
to date. The total cost of the Plan is estimated to be approximately $2.0
million over the period July 1, 1998 through June 30, 2001.
4. PAULSON MERGER, CONTINGENT VALUE RIGHTS AND RELATED LITIGATION
Riviera Holdings is a defendant in an action commenced on April 9, 1998, by
Allen Paulson, R&E Gaming Corp. and other Paulson-controlled entities
(collectively, "Paulson") in the United States District Court for the Central
District of California. The other defendants in the action include Jefferies &
Company, Inc. (the initial Purchaser of the notes), as well as Morgens,
Waterfall, Vintiadis & Company, Inc., Keyport Life Insurance Company, Sun
America Life Insurance Company and others. Paulson's claims arise from a merger
agreement between Riviera Holdings and Paulson which was terminated in the first
half of 1998. Paulson has requested a refund of the amounts deposited in escrow
for the minority shareholders in connection with the proposed merger as well as
other damages. On July 2, 1999, Riviera Holdings Corporation announced that it
had agreed to settle its portion of the action brought by Allen Paulson,
however, the action will continue against the other defendants. The settlement
is subject to court approval which is anticipated sometime later this year.
Under the terms of the settlement Mr. Paulson would receive $5 million
consisting of $3,477,000 ($7.50 per share) for the 463,655 shares of RHC common
stock he has owned since 1997 and $1,523,000 out of the funds being held in
escrow to be distributed to the holders of the CVR's after court approval (
approximately $4,350,000 or $2.46 per CVR,after giving effect to the
settlement).
<PAGE>
5. SEGMENT DISCLOSURES
The Company provides Las Vegas-style gaming, amenities and entertainment. The
Company's four reportable segments are based upon the type of service provided:
Casino, rooms, food and beverage, and entertainment. The casino segment provides
customers with gaming activities through traditional table games and slot
machines. The rooms segment provides hotel services. The food and beverage
segment provides restaurant and drink services through a variety of themed
restaurants and bars. The entertainment segment provides customers with a
variety of live Las Vegas-style shows, reviews and concerts. All other segment
activity consists of rent income, retail store income, telephone and other
activity. Intersegment revenues consist of revenues generated through
complimentary sales to customers by the casino segment. The Company evaluates
each segment's performance based on segment operating profit. The accounting
policies of the operating segments are the same as those described in the
summary of significant accounting policies
<TABLE>
<CAPTION>
Food and Entertain-
Three Months ended June 30, 1999 Casino Rooms Beverage ment All Other Total
<S> <C> <C> <C> <C> <C> <C>
Revenues from external customers $19,364 $10,061 $6,680 $5,456 $2,958 $44,519
Intersegment revenues 1,138 2,015 716 3,869
Segment profit 8,018 3,310 100 549 2,122 14,099
Three Months ended June 30, 1998
Revenues from external customers $20,788 $10,403 $6,386 $5,428 $2,897 $45,902
Intersegment revenues 1,088 1,979 646 3,713
Segment profit 9,441 3,747 (291) 534 2,013 15,444
Six Months ended June 30, 1999
Revenues from external customers 38,280 20,200 13,036 11,068 5,781 $88,365
Intersegment revenues 2,035 3,946 1,437 7,418
Segment profit 15,585 7,303 130 1,251 4,143 28,412
Six Months ended June 30, 1998
Revenues from external customers $39,479 $20,347 $12,153 $10,773 $5,692 $88,444
Intersegment revenues 2,049 3,652 1,387 7,088
Segment profit 17,156 7,869 (182) 936 4,034 29,813
</TABLE>
Reconciliation of segment profit to consolidated net income before taxes and
extraordinary items:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Segment profit 14,099 15,444 $28,412 $29,813
Other operating expenses 10,818 9,555 21,272 19,080
Other expense 4,445 4,907 8,052 10,242
-------------------------------------------------
Net income (loss) before provision (benefit) for taxes ($1,164) $982 ($912) $491
=================================================
</TABLE>
The Company does not have significant marketing programs for residents of Las
Vegas. Substantially all revenues are derived from patrons visiting the Company
from other parts of the United States and other countries. Revenues from a
foreign country or region may exceed 10% of all reported segment revenues,
however, the Company cannot precisely identify such information based upon the
nature of gaming operations.
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following tables set forth certain operating information for the Company for
the three months and six months ended June 30, 1999 and 1998. Revenues and
promotional allowances are shown as a percentage of net revenues. Department
costs are shown as a percentage of departmental revenues.
All other percentages are based on net revenues.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
Income Statement Data: 1999 1998 1999 1998
--------- -------- --------- ---------
Revenues:
<S> <C> <C> <C> <C>
Casino 47.6% 49.3% 47.3% 48.5%
Rooms 24.8% 24.7% 25.0% 25.0%
Food and beverage 16.4% 15.1% 16.1% 14.9%
Entertainment 13.4% 12.9% 13.7% 13.2%
Other 7.3% 6.8% 7.1% 7.0%
Less promotional allowances -9.5% -8.8% -9.2% -8.7%
Net Revenues 100.0% 100.0% 100.0% 100.0%
Costs and Expenses:
Casino 58.6% 54.6% 59.3% 56.4%
Rooms 55.8% 53.5% 53.8% 51.3%
Food and beverage 68.3% 73.6% 68.7% 71.4%
Entertainment 76.8% 78.3% 75.7% 78.4%
Other 28.3% 30.5% 28.3% 29.1%
General and administrative 17.8% 15.5% 17.7% 16.1%
Preopening Expenses - Black Hawk, Colorado Project 0.2% 0.0% 0.0% 0.0%
Depreciation and amortization 8.7% 7.1% 8.5% 7.4%
Total costs and expenses 91.9% 86.0% 91.2% 86.8%
Income from operations 8.1% 14.0% 8.8% 13.2%
Interest expense on $100 million notes 0.0% -4.4% 0.0% -5.7%
Interest income on Treasury Bills to retire $100 million notes 0.0% 2.2% 0.0% 2.9%
Interest expense, other -13.2% -11.5% -12.7% -12.0%
Interest income, other 0.9% 1.6% 0.9% 1.7%
Interest, capitalized 2.0% 1.3% 2.2% 1.2%
Other, net -0.6% -0.8% -0.4% -0.6%
Income before (benefit) provision for income taxes -2.9% 2.3% -1.1% 0.6%
(Benefit) provision for income taxes -0.9% 0.8% -0.3% 0.2%
Net income before extraordinary item -2.0% 1.5% -0.8% 0.4%
Extraordinary item, net of income taxes of $1.6 million 0.0% -7.1% 0.0% -3.7%
Net Income (Loss) -2.0% -5.6% -0.8% -3.3%
EBITDA (1) Margin 16.9% 21.1% 17.4% 20.6%
Net cash provided by operating activities 11.5% 17.2% 3.0% 3.6%
</TABLE>
1 EBITDA consists of earnings before interest, income taxes, depreciation,
amortization, preopening expenses, and Other, net. While EBITDA should not be
construed as a substitute for operating income or a better indicator of
liquidity than cash flow from operating activities, which are determined in
accordance with generally accepted accounting principles ("GAAP"), it is
included herein to provide additional information with respect to the ability of
the Company to meet its future debt service, capital expenditure and working
capital requirements. Although EBITDA is not necessarily a measure of the
Company's ability to fund its cash needs, management believes that certain
investors find EBITDA to be a useful tool for measuring the ability of the
Company to service its debt. EBITDA margin is EBITDA as a percent of net
revenues. The Company's definition of EBITDA may not be comparable to other
companies' definitions.
<PAGE>
Three Months Ended June 30, 1999 Compared to Three Months Ended June 30, 1998
Revenues
Net revenues decreased by $1.5 million, or 3.7%, from $42.2 million in the
second quarter of 1998 to $40.7 million in second quarter of 1999. Casino
revenues decreased by $1.4 million, or 6.9%, from $20.8 million during 1998 to
$19.4 million during 1999 due to a decrease in table games revenues, which was
partially offset by higher slot revenues. The decrease in table games revenues
was due primarily to a lower hold percentage, which was 14.3% in the second
quarter of 1999 compared to 19.5% in the second quarter of 1998. In addition,
table games drop, which is generally considered to be gross volume in the casino
industry, was relatively flat. Management believes its surveillance and other
control systems are functioning properly and that the fluctuations in hold
percentage are a normal function of the games and that they return to normal
percentages over time. Racebook revenues decreased $121,000 in the quarter due
to lower handle (volume) with comparable hold percentages. These decreases were
partially offset by increases in slot revenues due to additional marketing
efforts, the continued success of lower denomination slot machines and the
reduction of amounts paid to distributors of participation machines for a share
of the revenues.
Room revenues decreased by $342,000, or 3.3% from $10.4 million in 1998 to $10.1
million in 1999 as the result of a decrease of $2.81 in average daily rate from
$56.74 in 1998 to $53.93 in 1999, which was partially offset by an increase in
hotel occupancy of 1.2% from 97.4% to 98.5%. Convention room revenue decreased
$660,000 or 16.0% from $4.1 million in 1998 to $3.4 million in 1999 and was
partially offset by an increase in individual reservations. Convention revenues
decreased due to lower attendance at recurring conventions and competition among
the Las Vegas Strip hotels for the delegates.
Food and beverage revenues increased $294,000, or 4.6%, from $6.4 million during
1998 to $6.7 million in 1999 due primarily to the expansion of the convention
center banquet facilities. In addition, prices were increased in some of the
other food and beverage outlets, and price increases will continue in months
following the end of the quarter.
Entertainment revenues remained constant at approximately $5.4 million, as
attendance and pricing was relatively unchanged.
Promotional allowances increased $156,000, or 4.2%, from $3.7 million in 1998 to
$3.9 million in 1999 due to competition for gaming revenues on the Las Vegas
Strip.
Direct Costs and Expenses of Operating Departments
Total direct costs and expenses of operating departments decreased $194,000, or
0.7%, from $26.7 million for the three months ended June 30, 1998 to $26.5
million for the three months ended June 30, 1999.
Casino expenses were comparable in total at $11.3 million as overall casino
revenues decrease due to casino marketing programs necessitated by the
competition on the Las Vegas Strip. Casino expenses as a percent of casino
revenue increased from 54.6% to 58.6%.
Room costs remained the same at approximately $5.6 million in 1998 and 1999.
Room costs as a percentage of room revenue increased slightly from 53.5% in 1998
to 55.8% in 1999 due to the increase in occupancy, increased union wage scales
and a decision to increase staffing to offer greater service to our hotel
guests.
Food and beverage costs decreased $133,000, or 2.8%, from $4.7 million during
the 1998 period to $4.6 million for the 1999 period. However, food and beverage
costs as a percentage of revenues decreased from 73.6% to 68.3% because of the
higher banquet revenues which are more profitable and price increases in some of
the restaurants.
Entertainment costs remained the same at approximately $4.2 million in 1998 and
1999. Entertainment expense as a percentage of entertainment revenues decreased
from 78.3% in 1998 to 76.8% in 1999 as a result of the increased operating
efficiency.
Other departmental expenses were down 5.4% and costs as a percentage of revenues
decreased from 30.5% to 28.3% due to increased revenues and operating
efficiencies.
Other Operating Expenses
General and administrative expenses increased $684,000, or 10.5%, from $6.5
million in 1998 to $7.2 million in 1999. These expenses increased from 15.5% of
total net revenues in 1998 to 17.8% during the 1999 period. In the third quarter
of 1998 management instituted an employee retention plan which covers
approximately 85 executive, supervisory and technical support positions and
includes a combination of employment contracts, stay put agreements, bonus
arrangements and salary adjustments. The period costs associated with the plan
are being accrued as additional payroll costs and included approximately
$150,000 in the second quarter of 1999. The total cost of the plan is estimated
to be approximately $2.0 million over the period July 1, 1998 through June 30,
2001. Additionally, utility costs have increased $150,000 from 1998 to 1999 due
to the expansion of the convention center.
Depreciation and amortization increased by $506,000, or 16.8%, from $3.0 million
in 1998 to $3.5 million in 1999 due to capital expenditures for the casino
renovation, which was completed in December 1998, and the Convention Center
Pavilion, which was completed in February 1999.
Other Income (Expense)
Interest expense on the $100 million notes of $1.9 million, less interest income
on U.S. Treasury Bills of $920,000 was recorded in second quarter of 1998 until
the notes were redeemed on June 1, 1998. Interest expense, other increased
$520,000 due to the issuance of 13% First Mortgage Notes on the Black Hawk,
Colorado, project effective June 1999. Interest income, other decreased $330,000
because of the weighted average decrease in investment balances for the period
as the proceeds of the $175 million notes were utilized in the Convention Center
Pavilion and the Black Hawk, Colorado project prior to the issuance of the Black
Hawk 13% Mortgage Notes.
Capitalized interest for the second quarter of 1999 was $810,000 on the Black
Hawk, Colorado project compared to $563,000 in 1998 (which also included the
Convention Center Pavilion).
Extraordinary Item, Net of Taxes in the Second Quarter of 1998
The $100 million notes, which were contractually defeased in August 1997, were
retired on June 1, 1998. The call premium of $4.3 million and unamortized
deferred financing costs totaling $300.000 were recorded net of the income tax
effect of $1.6 million resulting in as an extraordinary loss of $3.0 million.
Net Income (Loss)
The Net Loss decreased by $1.6 million from $2.4 million for the three months
ended June 30, 1998 to $812,000 for the three months ended June 30, 1999 due
primarily to the extraordinary item in 1998 and other fluctuations discussed
above.
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased $2.5 million from $7.2
million in 1998 to $4.7 million in 1999. Net revenues, primarily casino table
games, decreased $1.5 million or 3.7%, and general and administrative increased
approximately $700,000 as previously discussed.
EBITDA
EBITDA decreased by $2.0 million, or 22.8%, from $8.9 million in 1998 (a record
in any second quarter) to $6.9 million in 1999.
Six Months Ended June 30, 1999 Compared to Six Months Ended June 30, 1998
Revenues
Net revenues decreased by $400,000, or 0.5%, from $81.4 million in 1998 to $80.9
million in 1999. Casino revenues decreased by $1.2 million, or 3.0%, from $39.5
million during 1998 to $38.3 million during 1999 due primarily to a decrease in
table games revenues which was partially offset by an increase in slot revenues.
The decrease in table games revenues was due primarily to a lower hold
percentage which was 15.9% in 1999 compared to 18.4% in 1998. In addition, table
games drop, which is generally considered to be gross volume in the casino
industry, was relatively flat. Management believes its surveillance and other
control systems are functioning properly and that the fluctuations in hold
percentage are a normal function of the games and that they return to normal
percentages over time. Racebook revenues decreased $163,000 in the period due to
lower handle (volume) with comparable hold percentages. These decreases were
partially offset by increases in slot revenues due to additional marketing
efforts, the continued success of lower denomination slot machines and the
reduction of amounts paid to distributors of participation slot machines for a
share of the revenues.
Room revenues decreased by $147,000, or 0.7% from $20.3 million in 1998 to $20.2
million in 1999 as the result of a decrease of $ 2.66 in average daily rate from
$57.30 in 1998 to $54.64 in 1999. However, hotel occupancy increased from 94.75%
in 1998 to 97.79% in 1999. Convention room revenue decreased $330,000 or 4.3%
from $7.6 million in 1998 to $7.3 million in 1999 and was partially offset by an
increase in tour operator revenues. Convention revenues decreased due to lower
attendance at recurring conventions and competition among the Las Vegas Strip
hotels for the delegates.
Food and beverage revenues increased approximately $883,000, or 7.3%, from $12.2
million during 1998 to $13.0 million in 1999 due primarily to the expansion of
the convention center banquet facilities. Banquet covers increased approximately
43,000, or 24.1%, from 179,000 in 1998 to 222,000 in 1999.
Entertainment revenues increased by approximately $300,000, or 2.7%, from $10.8
million during 1998 to $11.1 million in 1999 due to a 1.4% increase in
attendance.
Promotional allowances increased $330,000, or 4.7%, from $7.1 million in 1998 to
$7.4 million in 1999 due to competition for gaming revenues on the Las Vegas
Strip.
Direct Costs and Expenses of Operating Departments
Total direct costs and expenses of operating departments increased by
approximately $1.0 million, or 1.9%, from $51.5 million for the six months ended
June 30, 1998 to $52.5 million for the six months ended June 30, 1999.
Casino expenses increased by approximately $400,000, or 1.7%, from $22.3 million
during 1998 to $22.7 million during 1999 due to casino marketing programs.
Casino expenses as a percent of casino revenue increased from 56.4% to 59.3%.
Although the marketing programs produced additional drop, the win was not
adequate to cover the additional expenses.
Room costs increased by approximately $400,000, or 4.2%, from $10.4 million
during the 1998 period to $10.8 million during the 1999 period and room costs as
a percentage of room revenue increased from 51.3% in 1998 to 53.8% in 1999 due
to the increase in occupancy and a decision to increase staffing to offer
greater service to our hotel guests.
Food and beverage costs increased approximately $300,000, or 3.2%, from $8.7
million during the 1998 period to $9.0 million for the 1999 period. However,
food and beverage costs as a percentage of revenues decreased from 71.4% in 1998
to 68.7% in 1999 because of the higher banquet revenues which are more
profitable and price increases in some of the restaurants.
Entertainment costs remained the same at approximately $8.4 million in 1998 and
1999. Entertainment expense as a percentage of entertainment revenues decreased
from 78.4% in 1998 to 75.7% in 1999 as a result of the increased revenues and
operating efficiency.
Other expenses remained at approximately $1.6 million in 1998 and 1999.
Increased cost of sales and payroll for the gift shops were offset by reduced
telephone operating costs brought about by newly installed telecommunications
systems.
Other Operating Expenses
General and administrative expenses increased $1.2 million, or 9.6%, from $13.1
million in 1998 to $14.3 million in 1999. These expenses increased from 16.1% of
total net revenues in 1998 to 17.7% during the 1999 period. As previously
discussed, in the third quarter of 1998 management instituted an employee
retention plan in anticipation of the competition for employees on the Las Vegas
Strip. The period costs associated with the Plan are being accrued as additional
payroll costs and included approximately $300,000 in 1999. The total cost of the
Plan is estimated to be approximately $2.0 million over the period July 1, 1998
through June 30, 2001. Additionally, utility costs have increased $300,000 from
1998 to 1999 due to the expansion of the convention center.
Depreciation and amortization increased by approximately $900,000, or 14.4%,
from $6.0 million in 1998 to $6.9 million in 1999 due to capital expenditures
for the casino renovation, which was completed in December 1998, and the
Convention Center Pavilion, which was completed in February 1999.
Other Income (Expense)
Interest expense on the $100 million notes of $4.6 million, less interest income
on U.S. Treasury Bills of $2.3 million was recorded in 1998 until the notes were
redeemed on June 1, 1998. Interest expense, other increased $450,000 due to the
13% First Mortgage Notes issued by Riviera Black Hawk in June 1999. Interest
income, other decreased $650,000 because of the decrease in investment balances
for the period as the proceeds of the $175 million notes were utilized in the
Convention Center Pavilion and the Black Hawk, Colorado project prior to the
issuance of the 13% First Mortgage Notes.
Capitalized interest for 1999 was $1.7 million on the Black Hawk, Colorado and
Riviera Convention Center Pavilion projects compared to $1.0 million in 1998.
Extraordinary Item, Net of Taxes in 1998
The $100 million notes, which were contractually defeased in August 1997, were
retired on June 1, 1998. The call premium of $4.3 million and unamortized
deferred financing costs totaling $300.000 were recorded net of the income tax
effect of $1.6 million resulting in as an extraordinary loss of $3.0 million.
Net Income (Loss)
Net loss decreased $2.0 million from a loss of $2.6 million for the six months
ended June 30, 1998 to a loss of $650,000 for the six months ended June 30, 1999
due primarily to the extraordinary item in 1998.
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased approximately $400,000 from
$2.9 million in 1998 to $2.5 million in 1999. Net revenues, primarily casino
table games, decreased $1.2 million or 3.0% and general and administrative
increased approximately $1.3 million. These decreases were partially offset by
increases in components of working capital.
EBITDA
EBITDA decreased by approximately $2.6 million, or 15.9%, from $16.7 million in
1998 to $14.1 million in 1999
Liquidity and Capital Resources
At June 30, 1999, the Company had cash and short term investments of $83.0
million, including $36.4 million restricted for the Black Hawk project. The
Company had working capital of $62.6 million and shareholders equity of $32.8
million. The cash and short term investments increased during the first six
months of 1999 as a result of the private placement of $45 million in Riviera
Black Hawk, Inc. first mortgage bonds in June 1999 and $14.1 million of EBITDA.
The Company's net cash provided by operating activities was approximately $2.5
million for the six months ended June 30, 1999 compared to $2.9 million in 1998.
Management believes that cash flow from operations, combined with the $83.0
million cash and short term investments will be sufficient to cover the
Company's debt service and enable investment in budgeted capital expenditures
for 1999 including completion of the Black Hawk casino development.
Cash flow from operations is not expected to be sufficient to pay 100% of the
principal of the $175 million 10% Notes at maturity on August 15, 2004 and the
$45 million 13% Notes at maturity on May 1, 2005. Accordingly, the ability of
the Company and its subsidiary to repay the Notes at maturity will be dependent
upon its ability to refinance those notes. There can be no assurance that the
Company and its subsidiary will be able to refinance the principal amount of the
Notes at maturity. The 10% Notes are not redeemable at the option of the Company
until August 15, 2001, and thereafter are redeemable at premiums beginning at
105.0% and declining each subsequent year to par in 2003. Although Riviera Black
Hawk, Inc. can, at any time prior to May 1, 2001, redeem up to 35% of the
aggregate principal amount of the 13% notes at 113% , the subsidiary may not
redeem 100% of the 13% Notes until May 1, 2002, at premiums beginning at 106.5%
and declining each subsequent year to par in 2004.
The 10% and 13% Note Indentures provide that, in certain circumstances, the
Company and its subsidiary must offer to repurchase the Notes upon the
occurrence of a change of control or certain other events. In the event of such
mandatory redemption or repurchase prior to maturity, the Company and its
subsidiary would be unable to pay the principal amount of the Notes without a
refinancing.
The 10% Note Indenture contains certain covenants, which limit the ability of
the Company and its restricted subsidiaries (and its unrestricted subsidiary
Riviera Black Hawk, Inc. under the 13% Notes Indenture), subject to certain
exceptions, to : (i) incur additional indebtedness; (ii) pay dividends or other
distributions, repurchase capital stock or other equity interests or
subordinated indebtedness; (iii) enter into certain transactions with
affiliates; (iv) create certain liens; sell certain assets; and (v) enter into
certain mergers and consolidations. As a result of these restrictions, the
ability of the Company and its subsidiaries to incur additional indebtedness to
fund operations or to make capital expenditures is limited. In the event that
cash flow from operations is insufficient to cover cash requirements, the
Company and its subsidiaries would be required to curtail or defer certain of
their capital expenditure programs under these circumstances, which could have
an adverse effect on operations. At June 30, 1999, the Company believes that it
is in compliance with the covenants.
In August 1997, the Company, through its indirect 100% owned subsidiary, Riviera
Black Hawk, Inc., purchased approximately 70,000 square feet of land in Black
Hawk, Colorado, which is entirely zoned for gaming. The Company is constructing
a casino containing 1,000 slot machines, 14 table games, a 520-space covered
parking garage, and entertainment and food service amenities. Management intends
to finance the remainder of the project with a portion of the unused proceeds
from the 13%First Mortgage Notes and equipment leases. The casino is scheduled
to open in January 2000. As of June 30, 1999, the company had invested $20.0
million in cash in the Black Hawk, Colorado project (excluding capitalized
interest) and the total project costs to date including capitalized interest
were $39.9 million.
Year 2000
In the past, many computer software programs were written using two digits
rather than four to define the applicable year. As a result, date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. This situation is generally referred to as the "Year 2000 Problem". If
such situation occurs, the potential exists for computer system failures or
miscalculations by computer programs, which could disrupt operations.
The Company has conducted a comprehensive review of its computer systems and
other systems for the purpose of assessing its potential Year 2000 Problem, and
is in the process of modifying or replacing those systems which are not Year
2000 compliant. Based upon this review, management believes such systems will be
compliant by October 1999. However, if modifications are not made or not
completed timely, the Year 2000 Problem could have a significant impact on the
Company's operations.
All costs related to the Year 2000 Problem are expensed as incurred, while the
cost of new hardware and software is capitalized and amortized over its expected
useful life. The costs associated with Year 2000 compliance have not been and
are not anticipated to be material to the Company's financial position or
results of operations. As of June 30, 1999, the Company has incurred costs of
approximately $100,000 (primarily for internal labor) related to the system
applications and anticipates spending an additional $100,000 to become Year 2000
compliant. The estimated completion date and remaining costs are based upon
management's best estimates, as well as third party modification plans and other
factors. However, there can be no guarantee that such estimates will occur and
actual results could differ.
In addition, the Company has communicated with its major vendors and suppliers
to determine their state of readiness relative to the Year 2000 Problem and the
Company's possible exposure to Year 2000 issues of such third parties. However,
there can be no guarantee that the systems of other companies, which the
Company's systems may rely upon, will be timely converted or representations
made to the Company by these parties are accurate. As a result the failure of a
major vendor or supplier to adequately address their Year 2000 Problem could
have a significant adverse impact on the Company's operations.
As a result of various external risk factors, the Company could be adversely
impacted and the effect could be material regardless of the readiness of its own
systems. For example, if one or more of the Company's utility providers (of
electric, natural gas, water, and sewer) experiences Year 2000 problems that
impact their ability to provide their services the operations of the Company
could be adversely impacted. Furthermore, disruption of services for any of the
markets for the Company's customers could result in an adverse change in
customer visits from the affected market. - Airline service to and from the Las
Vegas market could be disrupted by Year 2000 problems, which would limit the
ability of potential customers to visit the property. - The possible long term
disruption of banking services due to Year 2000 problems could ultimately impair
the Company's daily financial transactions, including the deposit of monies and
processing of checks. Furthermore, credit card processing and customers' access
to cash via automated teller machines could also be disrupted.
The most likely worst case scenario is a failure of utility companies to deliver
services. Under that scenario, the entire Las Vegas hotel and casino industry
would be closed until the utilities were restored. The contingency plan is to
provide minimal services to the guests until the utilities can be restored.
The Company has developed, and continues to update and revise, contingency plans
to address the identified risks. However, given the nature of many of the
external risk factors, the Company does not believe viable alternatives would be
available. For example, the Company cannot develop a meaningful contingency plan
to address a disruption in airline service. Consequently, the occurrence of any
of the aforementioned disruptions could, depending upon their severity and
duration, have a material adverse impact on operating results.
Forward Looking Statements
The Private Securities Litigation Reform Act of 1997 provides a "safe harbor"
for certain forward-looking statements. Certain matters discussed in this filing
could be characterized as forward-looking statements such as statements relating
to plans for future expansion, as well as other capital spending, financing
sources and effects of regulation and competition. Such forward-looking
statements involve important risks and uncertainties that could cause actual
results to differ materially from those expressed in such forward-looking
statements.
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of the Company, held on June 8, 1999, in Las Vegas,
Nevada, stockholders holding 4,280,604 shares of Common Stock, in person or by
proxy, voted for election of directors of the Company, William L. Westerman,
Robert R. Barengo, Richard L.
Barovick and James N. Land, Jr. There were 23,900 shares abstaining.
Voters holding 3,221,474 shares of Common Stock, in person or by proxy, votes
to adopt an amendment to the Second Restated Articles of Incorporation of the
Company which provided that all persons owning or controlling securities of the
Company and its affiliated companies must comply with all gaming laws in each
jurisdiction in which the Company or its affiliated companies conduct or plan to
conduct gaming activities. The amendment also provides that the Company could
redeem, or force the divestiture of, the Company's securities owned by any
person or an affiliate of such person who was found to be "unsuitable" by a
gaming authority to own or control securities of the Company or any of its
affiliated companies, or who causes the Company or any of its affiliated
companies to be threatened with the loss of any gaming license. There were
24,800 shares against and 68,320 abstaining.
Item 5. Other Information
Proposals of stockholders intended to be presented at the 2000 Annual Meeting of
Stockholders must be received at the Company's executive offices on or before
December 31, 1999, for inclusion in the Company's Proxy Statement with respect
to such meeting.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K - none.
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
RIVIERA HOLDINGS CORPORATION
By: /s/ William L. Westerman
William L. Westerman
Chairman of the Board and
Chief Executive Officer
By: /s/ Duane Krohn
Duane Krohn
Treasurer and
Chief Financial Officer
Date: August 12, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 41,496,000
<SECURITIES> 41,500,000
<RECEIVABLES> 5,363,000
<ALLOWANCES> 1,566,000
<INVENTORY> 2,490,000
<CURRENT-ASSETS> 92,662,000
<PP&E> 240,808,000
<DEPRECIATION> 52,572,000
<TOTAL-ASSETS> 291,692,000
<CURRENT-LIABILITIES> 30,071,000
<BONDS> 220,000,000
0
0
<COMMON> 5,068,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 291,692,000
<SALES> 44,519,000
<TOTAL-REVENUES> 40,650,000
<CGS> 0
<TOTAL-COSTS> 37,369,000
<OTHER-EXPENSES> 229,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,216,000
<INCOME-PRETAX> (1,164,000)
<INCOME-TAX> 352,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (812,000)
<EPS-BASIC> (0.16)
<EPS-DILUTED> (0.16)
</TABLE>
