Hard Rock plays unlucky, but profit still improves

Tuesday, July 31, 2001 | 10:26 a.m.

Hard Rock Hotel Inc., owner of a hotel-casino by that name near the Las Vegas Strip, reported it earned $1.1 million or $14.92 per share in the second quarter versus a loss in the year-ago quarter of $3,000 or 4 cents per share.

The financial improvement was achieved despite a below-normal level of money held by the casino at its gaming tables. Customers playing lucky caused casino revenue to decline from $14.3 million to $13.5 million.

Revenue for the property on Paradise Road at Harmon Avenue increased modestly from $31.6 million to $32.7 million. EBITDA (cash flow) increased from $8 million to $9.3 million. EBITDA is earnings before interest, taxes, depreciation and amortization expenses.

Hard Rock said quarterly net income before the payment of preferred dividends increased 188 percent to $2.3 million compared with $816,000 in the year-earlier period.

The company attributed the increase in revenues to growth in hotel, food and beverage sales.

Table games drop increased 20 percent to $68.2 million from $56.7 million, though a lower hold percentage resulted in decreased table games revenues. Had the table games hold percentage remained at the level of the prior year period, net revenues would have increased to $35.6 million, an increase of $4.0 million or 13 percent, Hard Rock said.

Peter Morton, the Hard Rock's chairman and chief executive, said: "Improvements in table games volume and the net operating results in virtually every non-gaming department during the second quarter were very encouraging."

"We were especially pleased to reduce borrowings outstanding under the company's line of credit by $4.6 million during the 1st half of 2001 while funding $3.7 million in capital improvements including $3.2 million for remodeling costs associated with the original hotel tower," Morton said.