Mandalay’s good news

May 8, 2001 9:14 AM

Mandalay Resort Group has issued an earnings forecast for the first fiscal quarter which ended April 30 that shows the casino giant handily beating analysts’ expectations.

EPS will be approximately 60 cents, compared with 58 cents in the same period last year, the company said. The consensus on Wall Street was 51 cents.

Mandalay will release its first-quarter results on May 18 and has scheduled a conference call that day at 1:30 p.m. PDT to discuss the results with analysts, investors and the press.

Big Strip projects languish in funding limbo

They want to build, but will they fund? Two Strip projects totaling $800 million are in a holding pattern while awaiting financing. A third venture - a 1,700-room addition to the MGM Grand - received another two-year delay last week.

A $700 million, 52-story hotel tower remains on the drawing board south of Harmon Avenue. In a bid to kick-start the 4-year-old project, Minneapolis-based Lakes Gaming hooked up with local developer Brett Torino last year. Still, the so-called Metroplex venture, which centers on high-rise condos, a 400,000-square-foot shopping plaza and entertainment venues - but no casino - has stalled for lack of capital.

There are some signs of activity at the 16-acre site, however. Last Thursday, the county Planning Commission OK’d Fun Time Thrill Rides’ "Slingshot," which catapults riders 230 feet into the air. The 100-mph ride debuted briefly over New Year’s.

Wheeling, dealing

Meanwhile, developers are hoping to lure the giant Millennium Ferris Wheel, the largest such ride in the world, to the site near the Harley Davidson Cafe.

At the south end of the Strip, the clock is ticking on Dynasty Forbidden City. The $104 million hotel casino project features a 600-room Asian-themed resort on 10 acres near Belz Factory Outlet.

But with less than 30 days until the close of escrow on the real estate, there are indications that the consortium of Southern California investors may have only half its financing in hand.

Industry analysts say a slowing national economy has tightened credit for smaller, private borrowers. Concerns about soft occupancy rates and future tourism levels have pushed some lenders to be more conservative.

Even big casino companies such as MGM Mirage have pulled in the reins, holding off on plans to build a 49-story addition to the MGM Grand. The company announced its intention to partner with Marriott on the expansion back in 1998. But last week, MGM asked for a two-year delay. The request was granted by the Planning Commission.

"This preserves the right to proceed," planning consultant Greg Borgel said.

If and when the project goes forward, MGM would have up to 6,700 rooms and another 25,000 square feet of casino space along with more retail shopping and a health spa. The complex would be located north of the Tropicana Avenue parking garage and south of MGM’s theme park.

Rio plans

Off the Strip, Harrah’s has announced plans to erect a new hotel tower at its Rio hotel casino. Chairman Phil Satre said such an addition would be less expensive than building a new resort. But he would not say how many rooms might be added to the 2,548-room Rio. Nor did he offer a timetable.

Analysts say construction could be later rather than sooner, noting that the Rio’s revenues declined 12 percent last year and 1,000 more rooms will be coming on line this year at the Maloof family’s new Palms hotel casino across Flamingo Road.

Black Hawk’s earnings down as Jacobs moves in

In the wake of a battle royal over the ownership of the company in the future, Black Hawk Gaming & Development Co. (BHWK) has announced earnings for the first quarter ended March 31.

The company reported net income had decreased to $1.4 million, or 33 cents per share, compared with 2000 first-quarter earnings of 44 cents a share. For the year 2000 the company earned $1.31, but no estimates were given for the current year.

Actually, by the fourth quarter, the company expects to be taken over by Gameco. Inc., a company predominantly owned by entrepreneur Jeffrey Jacobs. He originally offered $11 per share for each share not owned by his company. However, after a competing bid of $12 was made by an insider, Jacobs increased his offer to $12 and the insider withdrew his bid.

Sun International

Sun International Hotels reported quarterly net income of $32.9 million, a 20 percent increase over the $27.4 million earned in the same period last year.

Earnings per share were $1.20 compared with 97 cents last year.

Company officials attributed the gains to strong pre-tax earnings at its Atlantis and Mohegan Sun casinos and elimination of losses from Resorts Atlantic City, which the company recently sold to Colony Capital.


Reversing the previous year’s earnings of 3 cents a share was Paul-Son Gaming (PLS), which reported a net loss for the most recent quarter of 7 cents a share. On another front, Paul-Son said it had terminated its previously announced merger with France’s Bougogne et Grasset and its Las Vegas subsidiary, Bud Jones. Paul-Son also said it would seek a $1 million termination fee from the French company.

Acres Gaming

Showing dramatic strength in its earnings announcement for the first quarter was Acres Gaming (AGAM). The company said net income totaled $2.6 million, or 25 cents a share, compared with the previous year’s net loss of $1.1 million, or 13 cents a share.

Innovative Gaming

Innovative Gaming Corp. of America took a steep plunge in the fourth quarter, losing $730,000, or 6 cents per share, compared with $7 million in net income, or 89 cents a share, in the same period a year earlier.

Sales, however, nearly trebled in the quarter, from $1.1 million to $3 million.

For the year the company posted a net loss of $2.3 million, or 23 cents per share, significantly less than 1999, when the company lost $13.5 million, or $1.80 per share.

Sales for the year rose from $4 million to $8.9 million.

MTR Gaming

MTR Gaming Group (MNTG), which operates two casinos in Nevada and a horse track/casino in West Virginia, reported record results for the first quarter. Total revenues rose 35 percent to $48.6 million while net income grew by 28 percent to $4.3 million, or 17 cents a share.

April showers

The 12 casinos in Atlantic City won $354 million in April, a decline of $13.7 million from April 2000.

Through the first four months of 2001, gaming revenue was about $1.4 billion, down 1.1 percent.

Reporting on a period that was hampered by bad weather, the city’s Claridge Hotel & Casino Corp. reported a net loss of $2.5 million.