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Press Release: Resorts Atlantic City
October 29, 2002
ATLANTIC CITY, NJ -- Resorts Atlantic City ("Resorts"), an affiliate of Colony Investors IV, L.P., yesterday
reported its operating results for the third quarter and nine months ended September 30, 2002.
For the quarter ended September 30, 2002 earnings before interest, taxes, depreciation, and amortization ("EBITDA")
were $13.3 million, an increase of 1% over the comparable 2001 quarter of $13.2 million. For the nine months ended
September 30, 2002, Resorts' EBITDA rose 17% to $32.0 million from the comparable 2001 period. EBITDA margin was
17% in 2002 compared to 16% in 2001.
During the quarter, Resorts began construction of its new 459-room hotel tower. On September 4, 2002 the existing
166 room Atlantic Tower permanently closed and demolition commenced. In addition to 166 rooms, the Atlantic Tower
also housed Resorts' simulcast area and 161 slot machines. Simulcast has relocated and a portion of the Atlantic
Tower slot inventory was added to the main casino floor. Completion of the new tower is planned for spring 2004.
Resorts recorded the third highest slot win growth, and second highest total gross gaming growth in Atlantic City
this quarter. For the nine months ended September 30, 2002, Resorts recorded the highest slot win growth, and the
second highest gross gaming win growth in Atlantic City.
Third quarter 2002 net revenue increased 1% to $65.3. For the nine months ended September 30, 2002, net revenue
rose 7% to $184.9 million. Operating expenses, excluding depreciation and amortization, increased 1% over the comparable
2001 quarter. Higher insurance costs and real estate taxes during the quarter were the primary causes for the increased
operating expenses. For the nine months ended September 30, 2002, operating expenses increased 5%. In addition
to the aforementioned increases, other increases included higher labor costs, gaming taxes and fees, and other
operating expenses that were in line with the increase in net revenue.
Net income for the quarter was $2.7 million, a decrease of 50% from the comparable 2001 quarter. This decline is
principally the result of an increase in interest expense of $3.1 million caused by the issuance in March 2002
of the $180 million 11 1/2% First Mortgage Notes due 2009 (the "First Mortgage Notes"), and an increase
in state income taxes of approximately $800,000 as a result of a recently enacted change to the New Jersey State
income tax code. Net income for the nine months ended September 30, 2002 was $5.5 million compared to $2.7 million
for the comparable 2001 period, an increase of $2.8 million, or 103%.
Resorts' operating results for the third quarter were in line with management's expectations considering the early
September closing of the 166-room Atlantic Tower and the loss of 161 slot machines. Management is committed to
minimizing the impact on its operations during the construction of its new 459-room hotel tower. Resorts' operations
continues to reflect its successful management initiatives including more cost effective and focused marketing
programs, improved product offerings, and enhanced guest service.
"We continue to be pleased with our 2002 operating results," stated Nicholas L. Ribis, Vice Chairman.
"Construction of our new hotel tower is progressing, and management continues to maximize operating performance
during this time."
Resorts defines EBITDA as earnings before interest, taxes, depreciation, amortization, casino reinvestment valuation
expenses, and expenses in connection with redeemable stock interest and restricted equity grants.
Management will conduct a conference call for holders of its First Mortgage Notes and investment analysts; Thursday
October 31 at 1p.m. EST. Management will review operating results, status of the construction of the new hotel
tower, and other pertinent matters. Interested participants should call toll free 1-800-915-4836. The ID is "Resorts
Atlantic City Third Quarter Earnings". A replay of the call will be available on the web at www.streetevents.com
Except for historical information contained herein, the disclosures in this press release constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
and Exchange Act of 1934, as amended and are made under the Safe Harbor Provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve risks and uncertainties that could cause actual results
to differ materially from those described in the forward-looking statements. Although Resorts believes the assumptions
on which the forward-looking statements contained herein are based on reasonable, any of those assumptions could
prove to be inaccurate given the inherent uncertainties as to the occurrence or non-occurrence of future events.
There can be no assurance that the forward-looking statements contained in this press release will prove to be
accurate. The inclusion of a forward-looking statement herein should not be regarded as a representation by Resorts
that Resorts' objectives will be achieved. The forward-looking statements included herein are made as the date
of the press release, and Resorts assumes no obligation to update the forward-looking statements after the date
hereof.
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Contact:
Resorts Atlantic City
Kim Butler, 609/340-6432
Source: Resorts Atlantic City