FILED PURSUANT TO RULE 424(b)(3)
Colorado Gaming & Entertainment Co.
Supplement No. 1 Dated December 11, 1996 to Prospectus Dated
October 22, 1996
On November 7, 1996, the Company issued the press release
attached hereto as Annex A and incorporated herein by this
reference.
ANNEX A
FOR IMMEDIATE RELEASE: Thursday, November 7, 1996
CONTACT: Stephen J. Szapor, Jr., President/CEO Madeleine Franco
Robert J. Stephens, Vice President/Treasurer Eric Simonsen
Colorado Gaming & Entertainment Co. Jordan Richard Assoc.
303-863-2400 801-595-8611
COLORADO GAMING & ENTERTAINMENT ANNOUNCES THIRD QUARTER RESULTS
DENVER, COLO. Stephen J. Szapor, Jr., president and chief
executive officer of Colorado Gaming & Entertainment Co.
(NASDAQ BB: CGME), announced today results for the three
months ended September 30, 1996, the company's first full
quarter of operations since completion of its reorganization
on June 7, 1996.
For the most recent three-month period, the company posted net
income of $232,000 or $0.05 per share on net revenue of $14.6
million (up 18 percent) compared to a net loss of $8.7 million
on net revenue of $12.4 million posted by the company's
predecessor, Hemmeter Enterprises, Inc. (a private company)
for the third quarter of 1995. The prior year's results
included losses attributable to Hemmeter's interest in a
riverboat project in New Orleans, as well as higher interest
charges from the predecessors company's debt structure, and
accordingly are not comparable.
Increases in revenue and profits were attributed primarily to
initial results of the Silver Hawk Casino, which opened on
June 26, 1996, in time for the historically busy summer
season. Additionally, Szapor indicated that additional parking
capacity since June at the company's Bullwhackers Black Hawk
facility has given the property a competitive edge. Szapor
also noted that continued reductions in corporate expenses
from downsizing in connection with the reorganization
contributed to favorable year-to-year comparisons.
According to Szapor, the company's casino operating profit
increased approximately $1.2 million, or 34 percent, to $4.8
million for the most recent three-month period. At the same
time, corporate expenses were down approximately $568,000 or
37 percent from the prior year to $955,000 despite a charge in
the most recent quarter for certain compensation expenses
relating to implementation of the company's new cash bonus and
stock incentive plans.
"We are pleased with this quarter's results, which attest to
the effectiveness of our new business plan," said Szapor. "We
continue to explore opportunities to expand our business
beyond one jurisdiction; however, clearly our emphasis is on
increasing revenue and earnings at our core Colorado
properties by creating an exceptional gaming experience for
our customers and a rewarding work environment for our
employees," he said.
Szapor noted that the company recently began construction on a
child care and entertainment center, adjacent to its
operations in Black Hawk. The facility, scheduled to open
during the second quarter of 1997, will be operated by New
Horizon Kids Quest (Minneapolis), with Colorado Gaming &
Entertainment receiving a percentage of gross revenue.
Colorado Gaming & Entertainment Co. currently owns and
operates three limited stakes casinos in Colorado located in
the adjacent towns of Black Hawk and Central City. The
casinos, operating under the names Bullwhackers and Silver
Hawk, offer combined gaming space of approximately 25,000
square feet, with 1,250 gaming devices and 23 gaming tables.
While all operations are currently located within Colorado,
the company continues to explore potential gaming
opportunities outside the state.
COLORADO GAMING AND ENTERTAINMENT
SELECTED CONSOLIDATED RESULTS FOR THE QUARTERS AND NINE
MONTHS ENDED SEPTEMBER 30
(numbers in thousands, except per share amounts)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
1996(a) 1995 1996(a) 1995
Net revenue $ 14,625 $ 12,440 $37,852 $36,107
Casino expenses 9,780 8,828 26,015 26,019
Casino operating profit 4,845 3,612 11,837 10,088
Pre-opening (Silver Hawk) (26) - 362 -
Corporate expenses 955 1,523 2,004 5,726
EBITDA 3,916 2,089 9,471 4,362
Income (loss)
from operations 1,997 469 2,984 (5,185)
Extraordinary gain
from reorganization - - 164,358 -
Net income (loss) 232 (8,685) 164,427 (36,284)
Net income per share(b) $0.05 N/A N/A N/A
Weighted average common
or common equivalent
shares outstanding(b) 5,138,888 N/A N/A N/A
(a) Due to the Reorganization and implementation of fresh
start accounting per SOP 90-7, financial statements for the
new Reorganized Company (period starting June 7, 1996) are not
comparable to those of the Predecessor Company. See Notes to
Consolidated Financial Statements for additional information.
(b) The net income per common share and the weighted average
shares outstanding for the predecessor company have not been
presented because, due to the reorganization and
implementation of fresh start reporting, they are not
comparable to subsequent periods.
Colorado Gaming & Entertainment Co.
Consolidated Balance Sheets
(In thousands, except shares amounts)
Reorganized Predecessor
Company (a) Company
September 30, 1996 December 31, 1995
(unaudited)
ASSETS
Cash $ 4,815 $ 3,623
Inventories 92 85
Accounts receivable, net 201 226
Prepaid expenses 405 638
Total current assets 5,513 4,572
Property, equipment and leasehold
improvements, net 42,374 32,127
Restricted funds in escrow (Note 2) 259 -
Excess reorganization value, net
(Note 1) 18,511 -
Other assets, net 814 981
Total assets $ 67,471 37,680
LIABILITIES AND STOCKHOLDERS
EQUITY
Current portion of notes payable 1,990 -
Accounts payable 821 404
Accrued interest 1,907 -
Accrued expenses 3,372 3,953
Total current liabilities 8,090 4,357
Senior secured notes payable
(Note 3) 50,000 -
Other notes payable, net of
current portion (Note 3) 4,953 -
Liabilities subject to compromise - 186,460
Total non-current liabilities 54,953 186,460
Total liabilities 63,043 190,817
Common stock, $.01 par value,
20 million and 50 million shares
authorized, respectively, 5,138,888
and 11,786,235 issued and
outstanding (Note 4) 51 118
Warrants issued - 7,000
Additional paid-in capital 14,896 2,162
Accumulated deficit (10,519) (162,417)
Total stockholders' equity
(deficit) 4,428 (153,137)
Total liabilities and
stockholders' equity
(deficit) $ 67,471 $ 37,680
(a) Due to the Reorganization and implementation of fresh
start accounting pursuant to SOP 90-7, financial statements
for the Reorganized Company (periods starting June 7, 1996)
are not comparable to those of the Predecessor Company. See
Notes to Consolidated Financial Statements for additional
information.
Colorado Gaming & Entertainment Co.
Consolidated Statements of Operations
(In thousands, except per data share)
Reorganized Company (a) Predecessor Company
Unaudited
Three June 7, Three January Nine
Months 1996 Months 1,1996 Months
Ended Through Ended Through Ended
September September September June September
30, 1996 30, 1996 30, 1995 6, 1996 30, 1995
Revenue:
Casino $13,973 $17,073 $11,718 $19,126 $ 34,101
Food and beverage 999 1,215 1,083 1,288 2,887
Other 40 47 80 32 235
Gross revenue 15,012 18,335 12,881 20,446 37,223
Less: Promotional
allowances (387) (465) (441) (464) (1,116)
Net revenue 14,625 17,870 12,440 19,982 36,107
Operating Expenses:
Casino 3,678 4,269 3,244 5,544 9,762
Gaming taxes 2,548 3,308 2,431 3,614 6,993
Food and beverage 928 1,128 790 1,299 2,340
General and
administrative:
Casino 723 917 792 1,249 2,594
Corporate 955 1,102 1,523 902 5,726
Marketing 1,903 2,338 1,571 2,349 4,330
Depreciation and 1,813 2,209 1,178 1,882 3,529
amortization
Pre-opening (26) 315 - 47 -
Reorganization items 106 106 442 2,290 700
Impairment of assets
and other expenses - - - - 5,318
Total operating
expenses 12,628 15,692 11,971 19,176 41,292
Income (loss) from
operations 1,997 2,178 469 806 (5,185)
Interest expense (1,743) (2,146) (6,076) (579) (16,052)
Interest income 49 59 43 66 333
Loss on disposition
of assets (71) (71) (51) (244) (124)
Equity in loss of GPRI - - (3,070) - (15,256)
Income (loss) before
income tax expense
and extraordinary
items 232 20 (8,685) 49 (36,284)
Income tax expense
(Note 5) - - - - -
Net income (loss)
before extraordinary
gain 232 20 (8,685) 49 (36,284)
Extraordinary gain
from reorganization
items - - - 164,358 -
Net income (loss) 232 20 (8,685) 164,407 (36,284)
Net income per common
share (b) 0.05 0.00 N/A N/A N/A
(a) Due to the Reorganization and implementation of fresh
start accounting pursuant to SOP 90-7, financial statements
for the Reorganized Company (periods starting June 7, 1996)
are not comparable to those of the Predecessor Company. See
Notes to the Financial Statements for additional information.
(b) The weighted average number of common shares outstanding
and net income per common share for the Predecessor Company
have not been presented because, due to the Reorganization and
implementation of fresh start accounting, they are not
comparable to subsequent periods.
