<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 March 29, 1998
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: 0-26518
FITZGERALDS GAMING CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 88-0329170
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
301 FREMONT STREET, LAS VEGAS NV 89101
(Address of principal executive offices) (Zip Code)
(702) 388-2224
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
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 than the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
Shares outstanding of each of the registrant's classes of common stock as
of May 11, 1998
<TABLE>
<CAPTION>
Class Outstanding as of May 11, 1998
----- ------------------------------
<S> <C>
Common stock, $.01 par value 4,012,846
</TABLE>
<PAGE> 2
FITZGERALDS GAMING CORPORATION
FORM 10-Q
INDEX
<TABLE>
<S> <C>
PART I FINANCIAL INFORMATION
ITEM 1 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 29, 1998
AND DECEMBER 31, 1997 4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
QUARTERS ENDED MARCH 29, 1998 AND MARCH 30, 1997 6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
QUARTERS ENDED MARCH 29, 1998 AND MARCH 30, 1997 7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 8
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 11
PART II OTHER INFORMATION 21
SIGNATURES 24
</TABLE>
<PAGE> 3
PART I
FINANCIAL INFORMATION
ITEM 1
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<PAGE> 4
FITZGERALDS GAMING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 29, 1998 AND DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS MAR. 29, 1998 DEC. 31, 1997
------------- -------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 16,818,973 $ 14,809,617
Accounts receivable, net of allowance for doubtful
accounts of $475,883 and $411,881 2,139,984 2,060,045
Accounts and notes receivable - related parties 137,476 136,173
Inventories 1,159,937 1,313,611
Prepaid expenses:
Gaming taxes 1,058,986 1,163,342
Other 1,712,544 1,734,186
------------ ------------
Total current assets 23,027,900 21,216,974
------------ ------------
PROPERTY AND EQUIPMENT, net 162,933,204 163,704,715
------------ ------------
OTHER ASSETS:
Estimated realizable value of Nevada Club assets
held for sale 3,979,227 3,979,228
Restricted cash - construction 273,519 393,987
Restricted investment 1,000,000 1,000,000
Investments 1,175,063 1,347,813
Debt offering costs 8,681,572 8,724,936
Goodwill, net 13,960,533 14,046,231
Other assets 1,197,408 1,206,356
------------ ------------
Total other assets 30,267,322 30,698,551
------------ ------------
MINORITY INTEREST -- 75,199
------------ ------------
TOTAL $216,228,426 $215,695,439
============ ============
</TABLE>
(continued)
See Notes to Condensed Consolidated Financial Statements
Page 4 of 24
<PAGE> 5
FITZGERALDS GAMING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
MARCH 29, 1998 AND DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' DEFICIENCY MAR. 29, 1998 DEC. 31, 1997
------------- -------------
<S> <C> <C>
CURRENT LIABILITIES:
Current portion of long-term debt $ 5,882,244 $ 7,285,897
Current portion of notes payable - related parties 304,637 304,637
Accounts payable 4,131,837 7,236,856
Accrued and other:
Payroll and related 5,236,287 4,061,565
Progressive jackpots 1,118,482 979,449
Outstanding chips and tokens 894,412 768,633
Interest 6,415,405 175,432
Offering costs 233,990 660,775
Other 5,827,550 6,262,740
------------- -------------
Total current liabilities 30,044,844 27,735,984
LONG-TERM DEBT, net of current portion 206,978,022 206,191,485
------------- -------------
Total liabilities 237,022,866 233,927,469
------------- -------------
MINORITY INTEREST 17,748 --
------------- -------------
CUMULATIVE REDEEMABLE PREFERRED STOCK,
$.01 par value; $25 stated value; 800,000 shares authorized,
issued and outstanding; liquidation preference $20,000,000
stated value plus accrued dividends of $7,995,550 and
$6,983,663 recorded at liquidation preference, net of
unamortized offering costs and discount of $7,229,620
and $7,352,266, respectively 20,765,930 19,631,397
------------- -------------
STOCKHOLDERS' DEFICIENCY:
Common stock, $.01 par value; 29,200,000 shares
authorized; 4,012,846 shares issued and outstanding 40,128 40,128
Additional paid-in capital 23,649,582 23,649,582
Accumulated deficit (65,267,828) (61,553,137)
------------- -------------
Total stockholders' deficiency (41,578,118) (37,863,427)
------------- -------------
TOTAL $ 216,228,426 $ 215,695,439
============= =============
</TABLE>
See Notes to Condensed Consolidated Financial Statements
Page 5 of 24
<PAGE> 6
FITZGERALDS GAMING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED MARCH 29, 1998 AND MARCH 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAR. 29, 1998 MAR. 30, 1997
------------- -------------
<S> <C> <C>
OPERATING REVENUES:
Casino $ 38,809,468 $ 30,617,232
Food and beverage 5,931,651 5,285,837
Rooms 4,786,502 4,870,739
Other 2,172,458 2,109,503
------------ ------------
Total 51,700,079 42,883,311
Less promotional allowances 4,281,723 3,465,925
------------ ------------
Net 47,418,356 39,417,386
------------ ------------
OPERATING COSTS AND EXPENSES:
Casino 19,086,529 15,555,957
Food and beverage 4,140,180 3,978,337
Rooms 2,813,508 2,880,444
Other operating expense 482,350 352,429
Selling, general and administrative 13,185,522 11,027,173
Depreciation and amortization 3,250,680 2,834,482
------------ ------------
Total 42,958,769 36,628,822
------------ ------------
INCOME FROM OPERATIONS 4,459,587 2,788,564
OTHER INCOME (EXPENSE):
Interest income 78,211 82,262
Interest income - stockholders -- 19,479
Interest expense (6,815,532) (5,752,214)
Interest expense - stockholders (4,583) (36,452)
Other expense (297,841) (524,284)
------------ ------------
NET LOSS (2,580,158) (3,422,645)
PREFERRED STOCK DIVIDENDS (1,134,533) (979,184)
------------ ------------
NET LOSS APPLICABLE TO COMMON STOCK $ (3,714,691) $ (4,401,829)
============ ============
NET LOSS PER COMMON SHARE - BASIC $ (0.93) $ (1.10)
============ ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 4,012,846 4,012,846
============ ============
</TABLE>
See Notes to Condensed Consolidated Financial Statements
Page 6 of 24
<PAGE> 7
FITZGERALDS GAMING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE QUARTERS ENDED MARCH 29, 1998 AND MARCH 30, 1997
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAR. 29, 1998 MAR. 30, 1997
------------- -------------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES: $ 5,508,580 $ 784,252
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of assets 473,487 6,000
Acquisition of property and equipment (1,198,616) (1,460,328)
Decrease in restricted cash - construction 120,468 1,694,534
Other (203,872) 283,834
------------ ------------
Net cash provided by (used in) investing activities (808,533) 524,040
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt -- 328,203
Payment of debt offering costs (580,111) --
Repayment of long-term debt (2,044,788) (1,953,611)
Dividends to minority stockholders (65,792) (99,441)
------------ ------------
Net cash used in financing activities (2,690,691) (1,724,849)
------------ ------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 2,009,356 (416,557)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 14,809,617 13,349,497
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 16,818,973 $ 12,932,940
============ ============
CASH PAID FOR INTEREST $ 286,258 $ 678,457
============ ============
SUMMARY OF NON-CASH INVESTING
AND FINANCING ACTIVITIES
Property and equipment acquired through issuance of debt $ 1,344,944 $ 38,729
Accretion of discount on preferred stock 122,647 105,852
Accrual of preferred stock dividends 1,011,885 873,332
Accrual of offering costs 153,326 --
</TABLE>
See Notes to Condensed Consolidated Financial Statements
Page 7 of 24
<PAGE> 8
FITZGERALDS GAMING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying condensed consolidated financial statements of
Fitzgeralds Gaming Corporation (the "Company") as of March 29, 1998 and for the
quarters ended March 29, 1998 and March 30, 1997 have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Accordingly, certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles ("GAAP") have been condensed or
omitted.
In the opinion of management, all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the interim
condensed consolidated financial statements have been included. These condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1997. The results of
operations for the quarter ended March 29, 1998 are not necessarily indicative
of the results to be expected for the year ending December 31, 1998.
2. Recently Issued Accounting Standards
In 1997, the Company adopted Statement of Financial Accounting Standards
No. 128 ("SFAS 128"), Earnings per Share. This statement simplifies the
standards for computing earnings per share ("EPS") and makes them comparable to
international EPS standards. It replaces the presentation of primary EPS with a
presentation of basic EPS. It also requires dual presentation of basic and
diluted EPS on the face of the income statement for all entities with complex
capital structures. The adoption of SFAS 128 had no effect on the Company's loss
per share calculation for the quarter ended March 30, 1997.
During the quarters ended March 29, 1998 and March 30, 1997, there were
no outstanding convertible securities that would result in dilutive potential
common shares and, as such, diluted earnings per share are not applicable.
Options to purchase 670,327 shares of common stock at prices ranging from $1.00
to $1.10 per share and 757,642 shares of common at prices ranging from $1.00 to
$4.50 per share and warrants to purchase 1,971,835 and 2,675,237 shares of
common stock at $.01 per share were outstanding at March 29, 1998 and March 30,
1997, respectively. Such options and warrants are not included in the
computation of diluted earnings per share because to do so would have been
antidilutive for the periods presented.
On June 30, 1997, the Financial Accounting Standards Board ("FASB")
issued SFAS 130, Reporting Comprehensive Income. This statement requires
companies to classify items of other comprehensive income by their nature in a
financial statement and display the accumulated
Page 8 of 24
<PAGE> 9
balance of other comprehensive income separately from retained earnings and
additional paid-in capital in the equity section of a statement of financial
position, and is effective for financial statements issued for fiscal years
beginning after December 15, 1997. Management does not believe this new
statement will have a material impact on the financial statements of the
Company.
Also in June 1997, the FASB issued SFAS 131, Disclosures about Segments
of an Enterprise and Related Information, which became effective for the Company
beginning January 1, 1998. SFAS 131 redefines how operating segments are
determined and requires qualitative disclosure of certain financial descriptive
information about a company's operating segments. The Company anticipates with
the adoption of SFAS 131, it will expand its segment disclosures relative to
Nevada, Colorado and Mississippi operations. The Company believes the segment
information required to be disclosed under SFAS 131 will be more comprehensive
than previously reported, including expanded disclosure of income statement and
balance sheet items for each of its reportable operating segments.
3. Long-Term Debt
In December 1997, the Company issued $205.0 million 12 1/4% Senior
Secured Notes due 2004. Of the $202.6 million net proceeds, the Company used
$123.0 million to retire its 13% Senior Secured Notes due 2002 With Contingent
Interest; $5.4 million to retire its 13% Priority Secured Notes due 1998; $39.7
million to retire the 13% First Mortgage Notes due 2000 of 101 Main Street
Limited Liability Company ("101 Main"); and approximately $20.1 million to
retire other secured indebtedness. Of the remaining proceeds, $8.7 million was
used for expenses of the offering and $5.7 million was applied to accrued
interest totaling approximately $10.6 million at December 31, 1997.
4. Contingencies
On May 31, 1995, Fitzgeralds Reno, Inc. ("FRI") sold the closed Harolds
Club in Reno to an unrelated publicly-traded company which subsequently sold
Harolds Club to a company whose assets are now under control of the United
States Bankruptcy Court for the Northern District of New York. Under the terms
of certain indemnification agreements executed by FRI in connection with the
sale of Harolds Club, FRI is contingently obligated for certain land lease
payments to five lessors in the amount of approximately $580,000 annually plus
certain property-related costs, such as taxes and insurance, if said lease
payments and costs are not paid by the current owner of Harolds Club. As of
March 29, 1998, the current owner of Harolds Club was approximately $1,251,000
in arrears in land lease payments and approximately $285,000 in arrears in
property taxes and assessments.
The current owner of Harolds Club and the five land lessors have
received a verbal offer to purchase their respective interests in Harolds Club.
The same unrelated party has made an offer to purchase the Nevada Club, and in
anticipation of completing the sale, the Company closed the Nevada Club in
December 1997. To facilitate the sale of both properties, and subject to terms
and conditions to be agreed upon between the potential purchaser and FRI, FRI
has
Page 9 of 24
<PAGE> 10
agreed to pay the land lessors $2,125,000 in exchange for a dismissal with
prejudice of all claims and cross-claims against FRI rising out of FRI's
purchase and subsequent sale of Harolds Club. FRI anticipates paying $600,000 of
the $2,125,000 settlement in cash, less the cumulative amount of interim monthly
rental payments ($28,977 per month, concurrently with the closing of the Harolds
Club transaction and executing five separate promissory notes totaling
$1,525,000 for the balance. The notes will be amortized over five years with
interest fixed at the prime rate in effect at the largest financial institution
in Nevada on the date the notes are executed and will be secured by the personal
guarantee of the Chairman and Chief Executive Officer of the Company. In
addition to such guarantee, and subject to certain conditions, a prior owner of
Harolds Club named in four of the five actions has agreed to reimburse FRI
$300,000, and to provide a payment guarantee for one of the five notes as its
contribution to the settlement of the actions. Each of the notes will be
permitted to be prepaid any time together with interest accrued to the date of
payment. The closing of the Harolds Club transaction is subject to the receipt
by FRI of the $300,000 reimbursement and the closing of the Nevada Club sale.
During the quarter ended March 29, 1998, the Company did not incur any expenses
for the anticipated net settlement obligation or related legal fees. See Part
II, Item 1. Legal Proceedings.
5. Nevada Club
In the fall of 1997, the Company received an offer to purchase the
Nevada Club from an unaffiliated party and closed the casino in December 1997 in
anticipation of the pending sale. Although it is currently anticipated that the
sale will close during 1998, no assurance can be given that the sale will be
completed. See Part II, Item 1. Legal Proceedings.
Page 10 of 24
<PAGE> 11
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with, and is
qualified in its entirety by, the Condensed Consolidated Financial Statements
and the Notes thereto included in this report. The following discussion contains
certain forward-looking statements. The forward-looking statements are
necessarily based upon a number of estimates and assumptions that, while
considered reasonable, are inherently subject to significant business, economic
and competitive uncertainties and contingencies, many of which are beyond the
control of the Company, and upon assumptions with respect to future business
decisions which are subject to change. Risks to which the Company is subject
include, but are not necessarily limited to, competition, high level of
indebtedness, the need for additional financing, development and construction
risks, market fluctuations, gaming, liquor and other regulatory matters,
taxation, the availability and retention of key management and environmental
matters. Accordingly, actual results could differ materially from those
contemplated by such forward-looking statements.
GENERAL
Fitzgeralds Gaming Corporation (the "Company") is a diversified
multi-jurisdictional gaming holding company that owns and operates four
Fitzgeralds-brand casino-hotels, located in downtown Las Vegas, Nevada
("Fitzgeralds Las Vegas"), Reno, Nevada ("Fitzgeralds Reno") Tunica, Mississippi
("Fitzgeralds Tunica") and Black Hawk, Colorado ("Fitzgeralds Black Hawk"). The
Company also has an exclusive agreement through May 2000 to manage the Cliff
Castle Casino, ("Cliff Castle"), a gaming facility in Camp Verde, Arizona, owned
and operated by the Yavapai-Apache Indian Nation. In consideration of the work
performed by the Company prior and subsequent to the opening of the Turning
Stone Casino in Verona, New York, the Company entered into a settlement
agreement with the Oneida Indian Nation pursuant to which it receives monthly
payments through August 1998. The Company has received an offer to purchase the
Nevada Club, located in Reno, Nevada, from an unaffiliated party and closed the
property in December 1997 in anticipation of the pending sale.
Changes in operations affecting the period-to-period comparisons below
include (a) the purchase of the remaining 78% membership interest in 101 Main,
which owns and operates Fitzgeralds Black Hawk, on August 15, 1997 and (b) the
closing of Nevada Club in December 1997 in anticipation of its pending sale.
In the narrative discussion below, the "1998 Period" is defined as the
quarter ended March 29, 1998 and the "1997 Period" is defined as the quarter
ended March 30, 1997. Financial performance is focused on the principal ongoing
operating properties of the Company, which include Fitzgeralds Las Vegas,
Fitzgeralds Tunica, Fitzgeralds Reno and, commencing August 15, 1997,
Fitzgeralds Black Hawk, and management fees received by Fitzgeralds Incorporated
Page 11 of 24
<PAGE> 12
("FI"), collectively referred to as (the "Properties"). Unless the context
otherwise indicates, the discussion below excludes Nevada Club, which was closed
in December 1997 in anticipation of its pending sale and, in management's
opinion, is not material to the ongoing operations of the Company. Results for
the Properties include corporate expenses allocated to the respective
properties. Such amounts for each property were approximately $250,000 for each
of the periods represented.
RESULTS OF OPERATIONS
The table below sets forth Net Operating Revenues, Income (Loss) from
Operations, EBITDA, Adjusted EBITDA and other financial data for the 1998 Period
and the 1997 Period. Adjusted EBITDA, which the Company uses as a reasonable
measure of its ability to generate cash from operating activities and as a means
to compare the Company's performance with that of its competitors increased
31.8%, from $6.2 million for the 1997 Period to $8.1 million for the 1998
Period. For a definition of EBIDTA and adjusted EBITDA, see footnotes 3 and 5
of the table.
Page 12 of 24
<PAGE> 13
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS DATA MAR. 29, 1998 MAR. 30, 1997
------------- -------------
(IN THOUSANDS)
<S> <C> <C>
Net Operating Revenues:
Fitzgeralds Las Vegas $ 12,867 $ 12,038
Fitzgeralds Tunica 16,458 16,198
Fitzgeralds Reno 8,008 8,408
Fitzgeralds Black Hawk1 8,731 --
Other2 1,354 1,284
-------- --------
Total Properties 47,418 37,928
Nevada Club -- 1,489
-------- --------
Total $ 47,418 $ 39,417
======== ========
Income (Loss) from Operations:
Fitzgeralds Las Vegas $ 871 $ 355
Fitzgeralds Tunica 817 1,637
Fitzgeralds Reno (383) 54
Fitzgeralds Black Hawk1 2,431 --
Other 1,130 795
-------- --------
Total Properties 4,866 2,841
Nevada Club (406) (52)
-------- --------
Total $ 4,460 $ 2,789
======== ========
OTHER DATA
EBITDA3:
Fitzgeralds Las Vegas $ 1,624 $ 1,119
Fitzgeralds Tunica 2,283 3,081
Fitzgeralds Reno 200 628
Fitzgeralds Black Hawk1 2,849 --
Other4 1,156 799
-------- --------
Total Properties 8,112 5,627
Nevada Club (402) (4)
-------- --------
Total EBITDA 7,710 5,623
Adjustments to EBITDA5: 402 532
-------- --------
Adjusted EBITDA $ 8,112 $ 6,155
======== ========
Net Cash Provided by (Used in):
Operating Activities $ 5,509 $ 784
Investing Activities (809) 524
Financing Activities (2,691) (1,725)
Depreciation and Amortization 3,251 2,834
Capital Expenditures (2,544) (1,499)
Earnings to Fixed Charges6 -- --
</TABLE>
- --------------
1 Includes operating results of Fitzgeralds Black Hawk for the 1998
Period.
2 Includes management fees from Fitzgeralds Black Hawk for the 1997
Period, Cliff Castle and Turning Stone.
3 EBITDA, or "earnings before interest, taxes on income, depreciation and
amortization", is a supplemental financial measurement used by the
Company in the evaluation of its gaming business and by many gaming
industry analysts. EBITDA is calculated by adding depreciation and
amortization expense to income from operations. At any property, EBITDA
is calculated after the allocation of corporate costs. However, EBITDA
should only be read in conjunction with all of the Company's financial
data summarized above and its financial statements prepared in
accordance with GAAP appearing elsewhere herein,
Page 13 of 24
<PAGE> 14
and should not be construed as an alternative either to income from
operations (as determined in accordance with GAAP) as an indication of
the Company's operating performance or to cash flows from operating
activities (as determined in accordance with GAAP) as a measure of
liquidity. This presentation of EBITDA may not be comparable to
similarly titled measures reported by other companies.
4 Includes fees from management agreement from Fitzgeralds Black Hawk for
the 1997 Period, Cliff Castle and Turning Stone, net of corporate
expenses and expenses of FI.
5 Adjustments to EBITDA include (i) exclusion of EBITDA for Nevada Club
for both periods presented and (ii) inclusion of $0.5 million in cash
received by the Company in the 1997 Period as a result of its 22%
membership in 101 Main.
6 For the Ratio of Earnings to Fixed Charges, earnings are defined as
earnings before income taxes, interest on indebtedness, imputed interest
on capital lease obligations, and the portion of rent expense deemed to
represent interest. Fixed charges consist of interest on indebtedness,
imputed interest on capital lease obligations, and the portion of rent
expense deemed to represent interest. Earnings were insufficient to
cover fixed charges by $2.2 million and $2.8 million for the 1998 and
1997 Periods, respectively.
OPERATING REVENUES
Total revenues for the Properties were $51.7 million and net operating
revenues were $47.4 million for the 1998 Period, representing 25.3% and 25.0%
increases, respectively, over total revenues of $41.3 million and net operating
revenues of $37.9 million for the 1997 Period. Such increases were due primarily
to the consolidation of operating results of Fitzgeralds Black Hawk for the 1998
Period which were not included in the 1997 Period.
The Company's business can be separated into four operating departments:
casino, food and beverage, rooms and other. Casino revenues for the Properties
(of which approximately 80.3% and 75.5% were derived from slot machine revenues
for the 1998 and 1997 Periods, respectively) increased 32.2% to $38.8 million
for the 1998 Period from the $29.4 million recorded for the 1997 Period, due
primarily to the consolidation of operating results of Fitzgeralds Black Hawk.
Casino revenues increased 10.5% at the Las Vegas property, due primarily to
improved marketing strategies and an effective guest development program, and
increased 3.2% at the Tunica property. Casino revenues decreased 4.8% at the
Reno property, due primarily to severe weather conditions throughout the 1998
Period which affected travel over the mountains to Reno, particularly on
weekends. Casino revenue for the Properties represented 75.1% and 71.1% of total
revenues for the Properties for the 1998 and 1997 Periods, respectively.
Room revenues for the Properties (at 9.3% and 11.8% of total revenues
for the Properties for the 1998 and 1997 Periods, respectively) decreased 1.7%
from the 1997 Period. At Fitzgeralds Tunica, room revenues were essentially
unchanged. This was due to the combination of a higher average occupancy rate,
which increased to 97.7% from 87.1% for the 1997 Period, offset by a decrease in
the average daily rate of 10.0% for the 1998 Period due to an increase in room
capacity in the market. Room revenues decreased 3.5% at Fitzgeralds Las Vegas
while the occupancy rate decreased to 92.0% from 93.8% for the 1997 Period and
the average daily rate decreased 1.4%. At Fitzgeralds Reno, room revenues also
decreased slightly. The occupancy rate decreased to 81.2% from 86.2% for the
1997 Period, mainly due to severe weather conditions, but was offset by a 7.7%
increase in the average daily rate for the 1998 Period as the
Page 14 of 24
<PAGE> 15
result of room demand by the Men's National Bowling Tournament whose
participants primarily travel to Reno by air.
Food and beverage revenues for the Properties (at 11.5% and 12.0% of
total revenues for the Properties for the 1998 and 1997 Periods, respectively)
increased approximately $1.0 million or 20.1% from the 1997 Period to the 1998
Period. This increase was the result of gains at the Tunica, Las Vegas and Reno
properties of 11.4%, 6.0% and 5.4%, respectively, and inclusion of Fitzgeralds
Black Hawk revenues of approximately $0.6 million for the 1998 Period.
Other Revenues for the Properties increased only slightly for the 1998
Period, as a result of increased management fees from Cliff Castle for the 1998
Period offset by the termination of Fitzgeralds Black Hawk management fees which
were reported in the 1997 Period.
Promotional allowances for the Properties increased 28.4% for the year
as a result of increases in volumes, partially offset by improved methods to
award complimentary goods and services and inclusion of Fitzgeralds Black Hawk
promotional allowances for the 1998 Period.
OPERATING COSTS AND EXPENSES
Total operating costs and expenses for the Properties increased 21.3%,
to $42.6 million for the 1998 Period from $35.1 million for the 1997 Period, due
to increases in revenues and payroll costs, and inclusion of Fitzgeralds Black
Hawk operating expenses of approximately $6.3 million.
Casino expenses for the Properties were $18.9 million for the 1998
Period, a 29.3% increase from the $14.6 million for the 1997 Period, primarily
due to inclusion of Fitzgeralds Black Hawk casino expenses, which accounted for
86.0% of the total increase for the 1998 Period. Food and beverage expenses for
the Properties increased 11.3%, to $4.1 million for the 1998 Period from $3.7
million for the 1997 Period. Room expenses for the Properties decreased 2.3%, to
$2.8 million for the 1998 Period from $2.9 million for the 1997 Period,
primarily as the result of improved efficiencies in operations and reduction of
revenue volumes. At the Las Vegas and Reno properties, room expenses decreased
by 8.0% and 8.3%, respectively, but increased at the Tunica property by 9.2%,
due primarily to increases in payroll costs. Selling, general and administrative
expense for the Properties increased 20.9%, to $13.0 million for the 1998 Period
from $10.7 million for the 1997 Period due mostly to increases in personnel and
marketing expenses, and inclusion of Fitzgeralds Black Hawk expenses for the
1998 Period, as explained below.
Personnel expenses for the Properties increased 16.9%, to approximately
$18.0 million for the 1998 Period from approximately $15.4 million for the 1997
Period. This increase was due primarily to inclusion of Fitzgeralds Black Hawk
personnel expenses, which accounted for 76.5% of the total increase for the 1998
Period, and a 14.3% increase at the Tunica property due to under-staffing for a
portion of the 1997 Period.
Page 15 of 24
<PAGE> 16
Marketing expenses for the Properties, which include advertising,
promotional material, special events and the operations of the Fitzgeralds
player tracking card, increased 20.4% for the 1998 Period. The increase is due
to more intensive marketing efforts at the Tunica property undertaken in
response to increasing competitive activity and inclusion of Fitzgeralds Black
Hawk marketing expenses, which accounted for 85.4% of the total increase for the
1998 Period. The Company's strategy is to utilize its expanded and renovated
facilities as additional marketing elements and to continue to adjust marketing
expense levels as needed to respond to competition.
Depreciation and amortization expense of the Properties increased 16.5%,
to $3.2 million for the 1998 Period from $2.8 million for the 1997 Period. The
increase resulted primarily from inclusion of Fitzgeralds Black Hawk
depreciation and amortization expense of $0.4 million for the 1998 Period.
INCOME FROM OPERATIONS
As a result of the foregoing, income from operations for the Properties
increased 71.3%, to $4.9 million for the 1998 Period from $2.8 million for the
1997 Period.
NET INTEREST EXPENSE
Interest expense for the Properties (net of interest income), increased
19.1%, to $6.7 million for the 1998 Period from $5.6 million for the 1997
Period, primarily due to increased debt as a result of the purchase of the 78%
interest in 101 Main.
NET LOSS
For the reasons described above, net loss for the Properties decreased
to $2.3 million for the 1998 Period as compared to $3.2 million for the 1997
Period.
LIQUIDITY AND CAPITAL RESOURCES
In December 1997, the Company issued $205.0 million 12 1/4% Senior
Secured Notes due 2004. Of the $202.6 million net proceeds, the Company used
$123.0 million to retire its 13% Senior Secured Notes due 2002 With Contingent
Interest, $5.4 million to retire its 13% Priority Secured Notes due 1998, $39.7
million to retire the 101 Main 13% First Mortgage Notes due 2000; and
approximately $20.1 million to retire other secured indebtedness. Of the
remaining proceeds, $8.7 million was used for expenses of the offering and $5.7
million was applied to accrued interest totaling approximately $10.6 million at
December 31, 1997.
At March 29, 1998, the Company had unrestricted cash of $16.9 million,
compared to $14.8 million at December 31, 1997 and $12.9 million at March 30,
1997. The Company's primary sources of liquidity and cash flow during the 1998
Period were operations of $5.5 million, and proceeds from the sale of assets of
$0.5 million. Uses of liquidity during the 1998 Period included acquisition of
property and equipment of $1.2 million, repayment of long term debt of $2.0
million and payment of debt offering costs of $0.6 million.
Page 16 of 24
<PAGE> 17
Net cash used in investing activities was $0.8 million for the 1998
Period as compared to net cash provided of $0.5 million for the 1997 Period. Net
cash used in financing activities was $2.7 million for the 1998 Period as
compared with net cash used of $1.7 million during the 1997 Period.
Under the terms of certain indemnification, assignment and assumption
and guarantee agreements executed by FRI in connection with the purchase and
subsequent sale of Harolds Club, FRI is contingently obligated for certain land
lease payments to five lessors in the amount of approximately $580,000 annually
plus certain property-related costs, such as taxes and insurance if said lease
payments and costs are not paid by the current owner of Harolds Club. As of
March 28, 1998, the current owner of Harolds Club was approximately $1,251,000
in arrears in land lease payments and approximately $285,000 in arrears in
property taxes and assessments.
The current owner of Harolds Club and the five land lessors have
received a verbal offer to purchase their respective interests in Harolds Club.
The same unrelated party has made an offer to purchase the Nevada Club, and in
anticipation of completing the sale, the Company closed the Nevada Club in
December 1997. To facilitate the sale of both properties, and subject to terms
and conditions to be agreed upon between the potential purchaser and FRI, FRI
has agreed to pay the land lessors $2,125,000 in exchange for a dismissal with
prejudice of all claims and cross-claims against FRI rising out of FRI's
purchase and subsequent sale of Harolds Club. FRI anticipates paying $600,000 of
the $2,125,000 settlement in cash, less the cumulative amount of interim monthly
rental payments ($28,977 per month), concurrently with the closing of the
Harolds Club transaction and executing five separate promissory notes totaling
$1,525,000 for the balance. The notes will be amortized over five years with
interest fixed at the prime rate in effect at the largest financial institution
in Nevada on the date the notes are executed and will be secured by the personal
guarantee of the Chairman and Chief Executive Officer of the Company. In
addition to such guarantee, and subject to certain conditions, a prior owner of
Harolds Club named in four of the five actions has agreed to reimburse FRI
$300,000, and to provide a payment guarantee for one of the five notes as its
contribution to the settlement of the actions. Each of the notes will be
permitted to be prepaid any time together with interest accrued to the date of
payment. The closing of the Harolds Club transaction is subject to the receipt
by FRI of the $300,000 reimbursement and the closing of the Nevada Club sale.
During 1997, the Company recorded an expense of $1.9 million for the anticipated
net settlement obligation, including related legal fees. In anticipation of the
Nevada Club transaction, the Company reclassified $6.2 million from Property and
Equipment to Estimated Realizable Value of Nevada Club Assets Held for Sale in
the consolidated balance sheet as of December 31, 1997, and recorded an
allowance of $2.2 million against the book value of the assets held for sale to
write such assets down to the estimated net realizable value in the consolidated
statement of operations for year ended December 31, 1997. (See Note 4 in Notes
to Condensed Consolidated Financial Statements and Part II, Item 1. Legal
Proceedings)
In December 1997, the Company closed the Nevada Club in anticipation of
the aforementioned sale. Upon the sale, a note payable by Nevada Club, Inc.
("NCI") to a bank, which is secured by Nevada Club assets and guaranteed by the
Chairman and Chief Executive
Page 17 of 24
<PAGE> 18
Officer of the Company, will be retired. Such note payable had a principal
balance of $2.6 million as of March 29, 1998, and has covenants placing certain
restrictions on NCI and requiring that certain financial ratios be maintained.
As of March 29, 1998, NCI was not in compliance with the following covenants:
Tangible Net Worth of $800,000, Funded Debt to EBITDA Ratio of 3.5 to 1.0, Debt
Service Coverage Ratio of 1.2 to 1.0 and a Fixed Charge Coverage Ratio of 1.0 to
1.0; however, NCI continues to make scheduled principal and interest payments on
the note. Although the lender has not taken any action to date with respect to
the Company's failure to comply with such covenants, the lender has notified
the Company that it has not waived such non-compliance. The lender has
additionally stated that it will forbear exercising any of its remedies
provided that Nevada Club is sold by June 30, 1998, and the note is repaid in
full at that time. However, there can be no assurance that Nevada Club will be
sold by June 30, 1998, and if it is not sold by June 30, 1998, that the lender
will continue to forbear exercising its remedies after June 30, 1998. A note
payable by FRI to a trust which is also secured by Nevada Club assets will be
retired upon the sale. As of March 29, 1998, such note payable had a principal
balance of approximately $1.0 million. See Note 5 in Notes to Condensed
Consolidated Financial Statements and Part II, Item 1. Legal Proceedings.
The Company's principal sources of capital will consist of cash from
operations and vendor and lease financing of gaming and other equipment.
Additionally, the indenture under which the Senior Secured Notes were issued
allows the Company, under certain circumstances, to establish a secured $15.0
million line of credit, of which up to $5.0 million could be used for capital
projects at Fitzgeralds Black Hawk. As of March 29, 1998, the Company had not
established such line of credit. Based upon anticipated levels of operations,
the Company currently expects its cash flows will be sufficient to enable the
Company to satisfy its anticipated operating cash requirements including debt
service requirements, working capital and other fixed charges through 1998, as
well as anticipated maintenance capital expenditures of approximately $6.0
million during 1998. There can be no assurance as to the actual level of
operating cash requirements or of the amount of cash flows from operations or
their sufficiency to meet such requirements.
EBITDA AND ADJUSTED EBITDA
The Company's earnings before interest, income taxes, depreciation and
amortization ("EBITDA") was $7.7 million for the 1998 Period and $5.6 million
for the 1997 Period. EBITDA is calculated by adding depreciation and
amortization expenses to income from operations. The Company's Adjusted EBITDA
was $8.1 million for the 1998 Period and $6.2 million for the 1997 Period.
Adjusted EBITDA is determined based on the adjustments described in Note 5 to
"Statement of Operations Data." However, EBITDA should only be read in
conjunction with all of the Company's financial data summarized above and its
financial statements prepared in accordance with GAAP appearing elsewhere
herein, and should not be construed as an alternative either to income from
operations (as determined in accordance with GAAP) as an indication of the
Company's operating performance or to cash flows from operating activities (as
determined in accordance with GAAP) as a measure of liquidity. This presentation
of EBITDA may not be comparable to similarly titled measures reported by other
companies.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges measures the extent by which
earnings, as defined, exceed certain fixed charges. Earnings are defined as
earnings before income taxes, interest on
Page 18 of 24
<PAGE> 19
indebtedness, imputed interest on capital lease obligations and the portion of
rent expense deemed to represent interest. Fixed charges consist of interest on
indebtedness, imputed interest on capital lease obligations, and the portion of
rent expense deemed to represent interest. Earnings were insufficient to cover
fixed charges by $2.2 million and $2.8 million for the 1998 and 1997 Periods,
respectively.
BUSINESS SEASONALITY AND SEVERE WEATHER
The gaming operations of the Company in certain locations may be
seasonal and, depending on the location and other circumstances, the effects of
such seasonality could be significant. At Fitzgeralds Las Vegas, business levels
are generally weaker from Thanksgiving through the middle of January (except
during the week between Christmas and New Year's) and throughout the summer, and
generally stronger from mid-January through Easter and from mid-September
through Thanksgiving. At each of the three other Fitzgeralds-brand properties,
business levels are typically weaker from Thanksgiving through the end of the
spring and typically stronger from mid-June to mid-November.
The Company's results are also affected by inclement weather in relevant
markets. The Fitzgeralds Black Hawk site, located in the mountains of Colorado,
and the Fitzgeralds Reno site, located in the foothills of the Sierra Nevada
mountains in Nevada, are subject to snow and icy road conditions during the
winter months. Any such severe weather conditions may discourage potential
customers from visiting the Company's facilities.
COMPUTERIZED OPERATIONS AND THE YEAR 2000
During recent years, there has been significant global awareness raised
regarding the potential disruption to business operations worldwide resulting
from the inability of current technology to process properly the change from the
year 1999 to 2000. The Year 2000 Issue is the result of computer programs being
written using two digits rather than four to define the applicable year. Any of
the Company's computer programs that have time-sensitive software may recognize
a date using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities.
In 1997, the Company initiated an investigation to identify and ensure
that all significant applications will be Year 2000 compliant. The Company is
conducting its investigation and is in the process of obtaining assurances from
its vendors that timely updates will be made available to ensure that all
purchased applications are Year 2000 compliant. However, there can be no
guarantee that the systems of other companies on which the Company's systems
rely will be timely converted, or that a failure to convert by another company,
or a conversion that is incompatible with the Company's systems, would not have
a material adverse effect on the Company.
Page 19 of 24
<PAGE> 20
The Company will utilize both internal and external resources to test,
program and/or replace applications to ensure that they are Year 2000 compliant.
Completion of this project is anticipated not later than October 31, 1999.
Although the costs associated with the Year 2000 project are not expected to be
material in nature, the Company has not finalized its investigation and is
unable to provide an estimate of such costs at this time. Such costs are
expected to be funded through operating cash flows. Costs of hardware and
software required to be purchased as a result of the Year 2000 Issue will be
capitalized in accordance with normal policy. Personnel and all other costs
related to the project will be expensed as incurred. The conversion of most
purchased applications will be completed under the terms of maintenance
agreements which provide for the conversion of such applications at no
additional cost. All equipment and other operating systems are currently being
evaluated to determine if Year 2000 issues have an effect on their ability to
perform their respective functions.
Although, based on its investigation to date the Company does not
believe that it will experience any significant adverse effects or material
unbudgeted costs associated with the Year 2000 project, the Company cannot
provide any assurance in this regard, and any such cause or effect could
materially and adversely affect the Company.
Page 20 of 24
<PAGE> 21
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
On May 31, 1995, FRI sold the closed Harolds Club in Reno to an
unrelated publicly-traded company which subsequently sold Harolds Club to a
company, the assets of which are now under control of the United States
Bankruptcy Court for the Northern District of New York. Pursuant to the terms of
certain indemnification, assignment and assumption and guarantee agreements
executed by FRI in connection with FRI's purchase and subsequent sale of Harolds
Club, FRI is contingently obligated for certain land lease payments in the
amount of approximately $580,000 annually plus certain property-related costs,
such as taxes and insurance.
The current owner of Harolds Club has not met its obligations with
respect to the land leases, and in August 1996 each of the five land lessors
filed separate actions in the Second Judicial District Court, Washoe County,
State of Nevada, against the current owner, FRI and other non-related prior
lessees under the land leases, seeking past due rent, taxes and other
property-related expenses, as well as attorneys' fees and costs. Cross-claims
for indemnification have been asserted against FRI by the entity from which it
assumed the land leases, and FRI has asserted cross-claims or third party
complaints against the entities that are obligated to indemnify FRI under the
various indemnification, assignment and assumption, and guarantee agreements.
Additionally, in or about December 1997, one of the land lessors filed an
additional action seeking rent, taxes and assessments accruing from October 1997
through March 1998.
Orders granting summary judgment against FRI have been entered in five
of the actions for the aggregate sum of $1,302,827. Two orders have been reduced
to judgments in the aggregate amount of $836,150. In anticipation of the sale of
Harolds Club, the parties to each of the five land lessor actions are currently
negotiating a settlement agreement, the details of which are set forth below.
Pending the sale of Harolds Club, and subject to certain other terms and
conditions, FRI has agreed to pay monthly lease payments on two of the land
leases in the total amount of $28,977.
The current owner of Harolds Club and the five land lessors have
received a verbal offer to purchase their respective interests in Harolds Club.
The same unrelated party has made an offer to purchase the Nevada Club, and in
anticipation of completing the sale, the Company closed the Nevada Club in
December 1997. To facilitate the sale of both properties, and subject to terms
and conditions to be agreed upon between the potential purchaser and FRI, FRI
has agreed to pay the land lessors $2,125,000 in exchange for a dismissal with
prejudice of all claims against FRI arising out of FRI's purchase and subsequent
sale of Harolds Club. FRI anticipates paying $600,000 of the $2,125,000
settlement in cash, less the cumulative amount of interim monthly rental
payments ($28,977 per month), concurrently with the closing of the Harolds Club
transaction and executing five separate promissory notes totaling $1,525,000 for
the balance. The notes will be amortized over five years with interest fixed at
the prime rate in effect at the largest financial institution in Nevada on the
date the notes are executed and will be secured by
Page 21 of 24
<PAGE> 22
the personal guarantee of the Chairman and Chief Executive Officer of the
Company. In addition to such guarantee, and subject to certain conditions, a
prior owner of Harolds Club named in four of the five land lessor actions has
agreed to reimburse FRI $300,000, and to provide a payment guarantee for one of
the five notes as its contribution to the settlement of the actions. Each of the
notes will be permitted to be prepaid at any time together with interest accrued
to the date of payment. The closing of the Harolds Club transaction is subject
to the receipt by FRI of the $300,000 reimbursement and the closing of the
Nevada Club sale.
In October 1993, Fitzgeralds Mississippi, Inc. "(FMI"), a wholly owned
subsidiary of the Company and manager of Fitzgeralds Tunica, executed a road
contract (the "Contract") with Treasure Bay Gaming and Resorts, Inc. ("Treasure
Bay") to share equally the cost of developing a road leading to the two
properties (the "Roadway") and of the acquisition of a 3.67-acre tract of land
(the "Tract"). The Company believes that it has paid its portion of such costs,
although documents filed by Treasure Bay in the Treasure Bay bankruptcy
proceeding referred to below reflect its claim that approximately $300,000
remains outstanding. Pursuant to the Contract, the Roadway and Tract were
acquired by Treasure Bay and the Roadway was constructed providing access from
Commerce Road to the Fitzgeralds Tunica and Treasure Bay casinos. Pursuant to
Treasure Bay's acquisition contract and deed, Treasure Bay was also obligated to
convey the Roadway to Tunica County within a reasonable time after its
development, and adjacent land owners and utility companies were to be entitled
to full rights of access.
Treasure Bay is currently subject to a bankruptcy proceeding pursuant to
Title 11 of the United States Code (the "Bankruptcy Code"). Preliminary title
reports on the Roadway and Tract indicate that a deed of trust securing $115
million in Treasure Bay bonds and approximately $8 million in mechanics' and
materialmen's liens are recorded against such properties. In addition, the lien
of the deed of trust is prior to the Company's easement rights over two
additional tracts that are necessary for access to the Fitzgeralds Tunica
property. The holder of the deed of trust was aware of the rights of Fitzgeralds
Mississippi, Inc. ("FMI") at the time the deed of trust was recorded. To quiet
title in the Roadway and the Tract, FMI filed an adversary proceeding against
Treasure Bay and others claiming an interest in the Roadway and the Tract. FMI's
complaint seeks, among other relief, a declaratory judgment that FMI owns an
unencumbered, undivided one-half interest in the Roadway and Tract and the
avoidance of all liens on the Roadway and Tract. In an effort to compromise and
settle its tax liability on the Roadway, Tract, and other real property it owns,
in September 1996, Treasure Bay executed a Quitclaim Deed in favor of Tunica
County to convey a one-half interest in the Tract. Prior to this conveyance, all
lien-holders released their liens against the Tract.
A Chapter 11 Plan of Reorganization (the "Plan") has been confirmed in
the Treasure Bay bankruptcy proceeding. All assets of Treasure Bay re-vested in
Treasure Bay upon confirmation of the Plan. To the best of the Company's
knowledge, with the exception of certain excluded assets (as defined in the new
indenture which is attached to the Plan), the Plan grants Treasure Bay's new
indenture trustee (as defined in the Plan) a replacement lien on substantially
all assets which it previously held as collateral. The Tract was specifically
released from the new indenture trustee's collateral as part of the compromise
of Tunica County's priority tax claim whereby Treasure Bay's one-half interest
in the Tract was conveyed to Tunica County free and
Page 22 of 24
<PAGE> 23
clear of all liens and security interests. To the extent Treasure Bay owns the
Roadway, it appears to be part of the collateral which re-vested in favor of its
bondholders. The Plan also grants a permanent easement free and clear of all
liens and encumbrances on the Roadway to a land lessor under the real property
lease for the Treasure Bay Tunica casino. With respect to the above-mentioned
mechanics' and materialmen's liens, the Plan provides that such liens, if they
are deemed to be valid, attached to the proceeds from the sale of the Treasure
Bay barge and consequently no longer constitute encumbrances on the Roadway or
the Tract.
The quiet title proceeding filed by FMI against Treasure Bay and
Treasure Bay's adversarial proceeding against FMI to recover approximately
$300,000 for the cost of developing the Roadway and the Tract are still pending,
and it not possible at the present time to predict the outcome. Furthermore,
there can be no assurance that Tunica County would be prepared to accept the
conveyance of the Roadway at this time in which case FMI would continue to
undertake maintenance of the Roadway. FMI is in physical possession of and
utilizing the Roadway and Tract. The loss of access to the Roadway would require
the Company to construct a new road to its property. However, both the
Bankruptcy Code and the Mississippi law offer protection to FMI, as a purchaser
in possession, in spite of there being no recorded deeds in favor of FMI. In
addition, both the Bankruptcy Code and Mississippi law offer protection to FMI
with regard to deeds of trust recorded at a time when the holder thereof had
knowledge of FMI's claim. Accordingly, the Company believes that FMI will
continue to have full access and use of the Roadway and the Tract.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
Not Applicable
ITEM 5. OTHER INFORMATION.
Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
27(c): Financial Data Schedule
(b) Reports on Form 8-K
Report on Form 8-K, Item 5, filed on January 12, 1998
Page 23 of 24
<PAGE> 24
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 thereunto duly authorized.
Dated: May 11, 1998
FITZGERALDS GAMING CORPORATION
/s/ MICHAEL E. MCPHERSON
Michael E. McPherson
Senior Vice President and
Chief Financial Officer
(Duly Authorized Officer, Principal
Financial Officer and Principal
Accounting Officer)
Page 24 of 24
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