Net revenues and operating income were both up during the third fiscal quarter, but Riviera Holdings Corporation (RIV) reported a loss $18 million or $1.48 per share compared to a loss of $432,000 or $0.04 in the comparable quarter.
The company explained that the corporate loss resulted from charges associated with the swapping of 11% notes in favor of notes fixed at 7.5% on $225 million of debt.
Third quarter revenues rose 4.2% to $52.4 million from last year’s $50.3 million. Cash flow rose 9% to $10.3 million.
Expected to add to the company’s revenues in the immediate future was the acquisition of the New Frontier’s customer list which is being used by the marketing department to lure those former players to the Riviera.
In commenting on the third quarter, CEO William Westerman remarked, "We believe we are positioned in the marketplace to continue to generate increases in revenues and operating income for the foreseeable future."
Westerman also noted that the refinancing of the company’s debt resulted in "a significant reduction to our previous borrowing arrangements."
For the first nine months of fiscal year 2007, the company has recorded net revenues of $158 million, up from last year’s $154 million. Operating income has jumped from $17.2 million to $19.2 million while total adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) has reached $36 million, a more than $4 million increase over the previous year.
As for progress in the discussions with Riv Acquisition Holdings, which had made a $423.6 million, or $34 per share, bid for the company, Westerman noted that turmoil in the credit and capital markets is having an effect on all mergers and acquisitions globally.
Competition and weaker demand took their toll on third-quarter earnings for Ameristar Casinos Inc. (ASCA) whose net income of $20 million or $0.34 per share was less than last year’s $21.1 million or $0.37 per share.
And some Wall Street watchers fear that with the growing competition in the St. Louis, Mo., area, what with the opening of Lumiere Place by Pinnacle Entertainment Inc. (PNK), the company’s problems could be growing.
Net revenues for the reporting period were $265 million compared to last year’s $253 million. The amount also included revenue from Resorts East Chicago, a property that was acquired on Sept. 18.
Integration and pre-opening costs amounted to $800,000 or one penny per share.
John Boushy, president and CEO, said, "Ameristar succeeded in generating higher net revenues at four of our six locations and we achieved companywide net revenue growth despite slower than expected growth in most of our markets during the third quarter.
"We continue our disciplined focus on maximizing our profitability, while moving ahead with important expansion projects that provide significant potential for growth beginning next year," he added.
The company said that it expected the fourth quarter and full year 2007 to range in line with the outlook previously given. Diluted earnings per share for the fourth quarter are expected to be between $0.14 and $0.17.