SNDS Sands Regent

The Sands Regent Reports Third Quarter and Fiscal 2005 Year-To-Date Financial Results - Operating income increases year over year from $145,000 to $802,000 for the third quarter and from $2.1 million to $5.3 million for the year to date. RENO, Nev., May 11 /PRNewswire-FirstCall/ -- The Sands Regent (NASDAQ:SNDS) today announced financial results for the third quarter and first nine months of fiscal year 2005, ended March 31, 2005. For the quarter ended March 31, 2005, consolidated net revenues improved by 39.9% to $18.4 million, from $13.2 million for the quarter ended March 31, 2004. This primarily reflected the inclusion of $6.2 million in net revenues from Rail City Casino in Sparks, Nevada, which The Sands Regent acquired in May 2004. Net revenue from the downtown Sands Regency and Gold Ranch declined 7.1% from the prior-year period as a result of severe weather conditions during the quarter. The Company's income from operations improved from $145,000 in the prior- year quarter to $802,000 in the most recent quarter. The improvement also resulted from the inclusion of the third full quarter of Rail City's results as a subsidiary of The Sands Regent, partially offset by the weather-impacted results at the downtown Reno Sands Regency and the Gold Ranch in Verdi, Nevada. The Company reported consolidated net income of $259,000, or $0.04 per basic share, $0.03 diluted, for the quarter ended March 31, 2005. This compared to consolidated net income of $30,000, or $0.01 per basic and diluted share for the quarter ended March 31, 2004. Quarterly EBITDAR for the period ended March 31, 2005 was $2.5 million, 90.3% higher than the $1.3 million in EBITDAR recorded for the prior-year quarter. For the nine months ended March 31, 2005, consolidated net revenues for The Sands Regent grew 42.6%, to $59.7 million, from $41.8 million for the corresponding prior-year period, again reflecting strong Rail City results. Rail City's net revenues for the nine-month period totaled $18.5 million. The Company's income from operations improved 157.8%, to $5.3 million in the nine months ended March 31, 2005, compared to $2.1 million in the corresponding prior-year period, also reflecting strong Rail City results. Consolidated net income totaled $2.4 million, or $0.38 per basic share, $0.35 diluted for the nine months ended March 31, 2005, as compared to consolidated net income of $5.4 million, or $1.06 per basic share, $1.01 diluted for the nine months ended March 31, 2004. The results for the prior- year nine-month period included non-operating gains totaling $4.4 million in connection with sale of the Copa Casino. Nine-month EBITDAR grew 89.5% year over year, from $5.5 million in the nine months ended March 31, 2004 to $10.5 million in the nine months ended March 31, 2005. Ferenc B. Szony, President and CEO of The Sands Regent, commented, "We continue to be pleased with the results of Rail City, the latest addition to our portfolio of properties. Unusually severe winter weather during the third quarter adversely impacted results at our downtown Sands Regency property and at Gold Ranch, which are more dependent on tourist traffic. In April, the downtown Sands Regency and Gold Ranch continued to be affected by unusual weather patterns. Rail City, with its customer base consisting almost exclusively of residents of the greater Reno/Sparks area, provided diversification and balance to our results." Mr. Szony continued, "As previously announced, our pending acquisition of the Depot Casino and Red Hawk Sports Bar in Dayton, Nevada will allow us to continue to pursue our strategy of diversification. We expect to close on the Dayton transaction in the first quarter of fiscal 2006." Mr. Szony concluded, "We continue to pay down long-term debt, which stood at $36.9 million at June 30, 2004 and has declined to $21.4 million at March 31, 2005." Management of The Sands Regent will host a conference call to discuss its third-quarter and nine-month financial results today, Wednesday, May 11, at 10:00 a.m. PDT. To participate in the conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: (800) 399-7496, International callers should dial (706) 634-6508. There is no pass code required for this call. If you are unable to participate in the call at this time, a replay will be available on Wednesday, May 11 at 12 noon PDT through Wednesday, May 18 at 9:00 p.m. PDT; call (800) 642-1687 and enter the conference ID number 6073820; international callers should call (706) 645-9291. About The Sands Regent The Sands Regent owns and operates the Sands Regency Casino and Hotel in downtown Reno, Nevada, Gold Ranch Casino and RV Resort in Verdi, Nevada and Rail City Casino in Sparks, Nevada. The Sands Regency is an 833-room hotel and casino with 29,000 square feet of gaming space offering table games, a sports book, poker room, keno, bingo and slot machines. In addition to the amenities and on-site brand name restaurants, the Company's property also includes a 12,000 square foot convention and meeting center which seats close to 1,000 people. For further information, visit http://www.sandsregency.com/. The Gold Ranch Casino and RV Resort is located in Verdi, Nevada, twelve miles west of Reno. Gold Ranch offers slot machines in an 8,000 square foot casino, a sports book, two restaurants, a 105-space RV park, a California lottery station, an ARCO gas station and a convenience store. Web site: http://www.goldranchrvcasino.com/. Rail City Casino, located in Sparks, Nevada, has approximately 16,600 square feet of gaming space housing slot machines, table games, keno, a sports book, and the City Cafe family-style restaurant. Located near Victorian Square at 2121 Victorian Avenue in Sparks, it is the first casino a motorist encounters when exiting Interstate 80 at the Rock Boulevard exit (Exit 16). Web site: http://www.railcity.com/. This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained in this release are based on current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those suggested in the forward-looking statements. Such risks and uncertainties include, among others, the future performance of the Company's management team general economic financial and business conditions, overall conditions in the gaming and entertainment industries, our ability to successfully integrate the operations of casinos that we acquire and realize the expected benefits of these acquisitions, and other factors discussed in our Annual Report on Form 10-K for the year ended June 30, 2004, subsequent Forms 10-Q and other filings with the Securities and Exchange Commission. The Sands is providing this information as of the date of this release and does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise. Contact: Ferenc B. Szony, President and Chief Executive Officer The Sands Regent (775) 348-2210 or Sean Collins, Partner CCG Investor Relations (818) 789-0100 (financial tables follow) THE SANDS REGENT CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) THREE MONTHS NINE MONTHS ENDED MARCH 31, ENDED MARCH 31, (Dollars in thousands, except per share amounts) 2004 2005 2004 2005 Operating revenues Gaming $6,762 $11,786 $20,210 $36,117 Lodging 1,893 1,692 6,802 6,555 Food and beverage 1,609 2,845 4,834 8,678 Fuel and convenience store 3,558 3,562 11,735 12,345 Other 358 439 1,194 1,388 Gross revenues 14,180 20,324 44,775 65,083 Promotional allowances 1,007 1,892 2,937 5,419 Net revenues 13,173 18,432 41,838 59,664 Operating expenses Gaming 3,193 4,990 9,110 14,791 Lodging 931 898 3,024 2,939 Food and beverage 1,060 1,800 3,213 5,603 Fuel and convenience store 3,362 3,324 11,074 11,712 Other 138 160 428 460 Maintenance and utilities 1,021 1,410 3,128 4,284 General and administrative 2,323 3,497 6,905 9,966 Depreciation and amortization 1,000 1,551 2,901 4,612 13,028 17,630 39,783 54,367 Income from operations 145 802 2,055 5,297 Other income (expense) Interest expense (109) (438) (498) (1,843) Collections on previously reserved note receivable -- -- 4,393 -- Insurance settlement -- -- -- 200 Other, net 4 -- (83) (64) (105) (438) 3,812 (1,707) Income before income taxes 40 364 5,867 3,590 Income tax provision (10) (105) (420) (1,193) Net income $30 $259 $5,447 $2,397 Net income per share Basic $0.01 $0.04 $1.06 $0.38 Diluted $0.01 $0.03 $1.01 $0.35 Weighted average of shares outstanding Basic 5,245,847 6,950,255 5,124,527 6,303,534 Diluted 5,579,159 7,504,769 5,402,102 6,849,554 EBITDAR (3) $1,337 $2,544 $5,532 $10,482 Reconciliation of Net Income to EBITDAR THE SANDS REGENT CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) THREE MONTHS NINE MONTHS ENDED MARCH 31, ENDED MARCH 31, (Dollars in thousands, except per share amounts) 2004 2005 2004 2005 Net income 30 259 5,447 2,397 Interest expense 109 438 498 1,843 Income tax provision 10 105 420 1,193 (Gain) loss on disposal of property and abandonment of new project (4) -- 83 64 Gain on previously reserved note receivable (1) -- -- (4,393) -- Gain on non-recurring insurance settlement (2) -- -- -- (200) Rent and management fees 192 191 576 573 Depreciation and amortization 1,000 1,551 2,901 4,612 EBITDAR (3) $1,337 $2,544 $5,532 $10,482 (1) In the nine months ended March 31, 2004, we recognized a $4.4 million gain on a promissory note held by us in connection with a December 1998 sale of our interest in the Copa Casino in Gulfport, Mississippi. (2) In June 2003, we realized a loss of $547,000, which stemmed from a personal injury lawsuit filed against us. The Company had a personal injury claim filed against it, from which we were insured against loss, subject to a deductible. However, subsequent to the incident which under lied the claim, we were informed that our insurance carrier had become insolvent and unable to pay any claims. The Company sought relief from its insurance broker and received partial recovery ($200,000) of our loss in October 2004. (3) EBITDAR includes earnings before depreciation and amortization, interest expense, income taxes, rent, and any gain (loss) on the sale or disposal of property or subsidiaries. EBITDAR is not a calculation determined pursuant to generally accepted accounting principles and is not an alternative to operating income or net income, and is not a measure of liquidity. Since not all companies calculate this measure in the same manner, the Company's EBITDAR measure may not be comparable to similarly titled measures reported by other companies. The Company believes that this disclosure enhances the understanding of the financial performance of a company with substantial interest expense, depreciation and amortization. Prior to the Gold Ranch acquisition, the Company reported "EBITDA" data. However, Gold Ranch has a substantial real property rent component and the Company believes EBITDAR provides a more complete depiction of the Company's financial position and performance. Moreover, if the option of the Company to purchase the Gold Ranch real property is exercised, which can happen at the Company's sole discretion, the rental expense would be available for other uses by the Company. THE SANDS REGENT CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) JUNE 30, MARCH 31, (Dollars in thousands except share data) 2004 2005 ASSETS Current assets: Cash and cash equivalents $5,443 $3,722 Accounts receivable, net 714 381 Inventories 775 736 Prepaid expenses and other assets 2,014 1,635 Total current assets 8,946 6,474 Property and equipment: Land 10,007 10,007 Buildings and improvements 42,823 43,606 Equipment, furniture and fixtures 24,634 25,871 Construction in progress 387 1,336 Total property and equipment 77,851 80,820 Less accumulated depreciation and amortization 37,993 41,536 Property and equipment, net 39,858 39,284 Other assets: Goodwill 28,674 28,642 Other intangibles 13,011 12,580 Other 1,104 1,023 Total other assets 42,789 42,245 Total assets $91,593 $88,003 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $3,380 $2,883 Accrued salaries, wages and benefits 2,384 2,307 Other accrued expenses 465 361 Federal income tax payable 768 437 Deferred federal income tax liability 258 283 Current maturities of long-term debt 3,144 3,520 Total current liabilities 10,399 9,791 Long-term debt 33,799 17,916 Deferred federal income tax liability 1,852 2,305 Total liabilities 46,050 30,012 Common stock ($.10 par value, 20,000,000 shares authorized; 8,049,555 and 9,376,766 shares issued) 805 938 Additional paid-in capital 17,018 26,936 Retained earnings 50,078 52,475 67,901 80,349 Treasury stock (at cost; 2,403,000 shares) (22,358) (22,358) Total stockholders' equity 45,543 57,991 Total liabilities and stockholders' equity $91,593 $88,003 DATASOURCE: The Sands Regent CONTACT: Ferenc B. Szony, President and Chief Executive Officer of The Sands Regent, +1-775-348-2210; or Sean Collins, Partner of CCG Investor Relations, +1-818-789-0100, for The Sands Regent Web site: http://www.goldranchrvcasino.com/ Web site: http://www.railcity.com/ Web site: http://www.sandsregency.com/

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