Cash flow falls at Riviera, increases at Tropicana

Tuesday, April 20, 1999 | 12:05 p.m.

Riviera Holdings Corp. of Las Vegas today reported a first-quarter profit of $165,000 or 3 cents per share -- a turnaround from a loss in the year-ago quarter of $319,000 or 7 cents per share. The profit came despite lower cash flow.

Separately, Aztar Corp. of Phoenix said revenue of $35.8 million at the Las Vegas Tropicana was down from $37.6 million in the 1998 quarter. But EBITDAR cash flow of $3 million was up from $1.5 million thanks to strong demand for rooms and cost control programs. EBITDAR is earnings before interest, taxes, depreciation, amortization and rent. Aztar, which also has casino resorts in Atlantic City and elsewhere, said it earned $2.9 million or 6 cents per share during the quarter, up from $618,000 or 1 cent per share a year earlier. Riviera holdings said quarterly revenues of $40.3 million were up 3 percent from a year ago.

Riviera owns and operates the Riviera hotel-casino on the Las Vegas Strip, operates the Four Queens hotel-casino in downtown Las Vegas and is developing a casino in Black Hawk, Colo.

"Riviera's performance in the first quarter was outstanding, particularly in light of the increased competition from recently opened resorts on the Las Vegas Strip," said Chief Executive Bill Westerman.

Cash flow -- earnings before interest, taxes, depreciation and amortization (EBITDA) was $7.2 million -- compared with EBITDA of $7.8 million in the first quarter of 1998. The decline was the result of increased operating expenses, mostly related to higher payroll and benefit costs, Riviera said.

"In 1998, Riviera instituted a key employee retention program (ERP) covering approximately 85 executives, supervisors and technical support positions," said Westerman. "With the opening of several new properties in Las Vegas, there is a premium on experienced hotel and gaming managers, thus the cost of our ERP is well-justified compared with the potential expense of recruiting and training new personnel."