Press Release: The Sands Regent
May 14, 2002
RENO, NV -- The Sands Regent (Nasdaq: SNDS) yesterday announced results of operations for its third quarter and
nine months ended March 31, 2002, and reported progress on the purchase of Gold Ranch Casino and RV Resort.
FINANCIAL RESULTS
For the nine months ended March 31, 2002, net income decreased to a net loss of $163,000, or loss per share of
$0.04, as compared to net income of $522,000, or $0.11 per share (diluted), for the nine months ended March 31,
2001. EBITDA decreased to $3.0 million in the nine-month period ended March 2002 as compared with $3.9 million
for the corresponding period last year. EBITDA is defined as earnings before depreciation and amortization, interest
expense, income taxes and any gain or loss on the disposal of property.
The Company's income from operations for the nine months ended March 31, 2002 decreased to $533,000 on revenues
of $24.1 million, versus income from operations of $1.3 million on revenues of $26.0 million in last year's comparable
nine-month period.
For the third quarter ended March 31, 2002, revenues declined to $7.6 million versus $7.9 million in the preceding
year's third quarter. Income from operations declined in the third quarter ended March 2002 to a loss from operations
of $154,000 as compared to income from operations of $3,000 in the March 2001 third quarter. Net income also declined
from a net loss of $90,000, or loss per share of $0.02, in the March 2001 quarter to a net loss of $379,000, or
loss per share of $0.08, in the March 2002 quarter.
APPROVAL of ACQUISITION of GOLD RANCH CASINO AND RV RESORT ("Gold Ranch")
On May 1, 2002, the Nevada Gaming Control Board approved the Company's acquisition of Gold Ranch Casino and RV
Resort, Verdi, Nevada. Final approval of such transaction will be by the Nevada Gaming Commission at a regularly-scheduled
hearing on May 16, 2002.
In addition to the gaming authority approvals, the Company has secured financing through the Reno Corporate Lending
Division of Nevada State Bank both for the purchase of Gold Ranch and to refinance the existing long-term debt
of the Sands Regency Casino and Hotel. Such new financing is expected to be put in place at or near the closing
of the Gold Ranch purchase transaction, which is anticipated to be June 1, 2002.
Ferenc B. Szony, President and Chief Executive Officer of The Sands Regent, commented, "We are pleased with
the progress in our purchase of Gold Ranch Casino and RV Resort and look forward to it becoming part of our Company.
Not only will our Company benefit from the operations of Gold Ranch, we also believe that various cross-marketing
and advertising programs we are developing will also enhance the operation of the Sands Regency Casino and Hotel."
Mr. Szony further noted that, "The new financing package will be, all in all, beneficial to the Company, and
we look forward to a long and fruitful relationship with Nevada State Bank."
Mr. Szony also stated that, "The operating performance for the quarter and nine months ended March 31, 2002
was not unexpected. Besides the negative impact of the September 11, 2001 catastrophe, we also continue to be negatively
impacted by the weakening of the economy, especially in California, and higher energy costs. Further, fiscal 2002
is the one year out of three that there is no major bowling event in the Reno area; these usually begin in late
winter and last for four to five months.
"We will continue with our multi-faceted advertising and marketing approaches, both in the Reno area and out-of-market.
These approaches are designed both to attract new customers and provide value for repeat visitors. We continue
to utilize many different marketing programs so as to create excitement and enhance the overall experience of our
guests. Innovation, and not solely relying on our past successes, is the name of the game. With the addition of
Gold Ranch, combined and other innovative marketing and advertising campaigns will be undertaken to increase overall
market share for both properties.
"At the Sands Regency, we will have completed our room renovation project by the end of May 2002. Thus, all
of our hotel rooms will have been renovated within the last one and one-half years. We will continue to make positive
changes and improvements at the Sands Regency in order to maintain our Company-wide objective of creating an affordable
experience in a casual and comfortable setting with efficient service.
"Besides the pending acquisition of Gold Ranch and continued improvements to our Sands Regency facilities,
we will continue to pursue other gaming expansion opportunities by building or acquiring gaming facilities. Our
criteria include striving for synergies of operations with our present operations and location proximity, so that
our management team may be readily involved."
The Sands Regent owns and operates the Sands Regency Casino and Hotel in downtown Reno, Nevada. The Sands Regency
is an 850-room hotel and casino with 29,000 square feet of gaming space offering table games, keno and slot machines.
In addition to complete 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.
The Gold Ranch Casino and RV Resort is located in Verdi, Nevada, twelve miles west of Reno. Gold Ranch offers approximately
300 slot machines in an 8,000 square foot casino, two restaurants, two bars, a 105-space RV park, a California
lottery station, an ARCO gas station and a convenience store. It is anticipated that the Company's purchase of
Gold Ranch will be consummated on June 1, 2002.
Statements contained in this release, which are not historical facts, are "forward-looking" statements
as contemplated by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject
to risks and uncertainties, which could cause actual results to differ materially from those projected or implied
in the forward-looking statements.
Contact:
David R. Wood, Executive Vice President and Chief Financial Officer
The Sands Regent
(775) 348-2210
or
Sean Collins, Vice President
Coffin Communications Group
(818) 789-0100
THE SANDS REGENT
FINANCIAL HIGHLIGHTS
(In Thousands except per share data)
Three Months Ended Nine Months Ended
March 31, March 31,
2002 2001 2002 2001
Consolidated Financial Report
Revenues $7,551 $7,858 $24,068 $25,985
Income (loss) from Operations (154) 3 533 1,321
Net Income (Loss) (379) (90) (163) 522
Net Income (Loss) per share
Basic (.08) (.02) (.04) .12
Diluted (.08) (.02) (.04) .11
EBITDA (a) 625 850 3,005 3,879
Cash and Cash Equivalents,
at period end 9,129 8,542 9,129 8,542
Working Capital, at period end 7,833 6,406 7,833 6,406
Stockholders' Equity, at
period end 32,456 31,862 32,456 31,862
Weighted Number of Shares
Outstanding: Diluted 4,525,722 4,500,655 4,525,722 4,750,700
(a) Earnings before depreciation and amortization, interest expense,
income taxes and any gain (loss) on the disposal of property. Not
determined in accordance with generally accepted accounting
principals and, since not all companies calculate EBITDA in the same
manner, the Company's EBITDA measure may not be comparable to
similarly-titled measures reported by other companies.
SOURCE: The Sands Regent