Mandalay details spending, share buyback program

Tuesday, May 8, 2001 | 10:29 a.m.

Bank of America has been aggressively buying Mandalay Resort Group shares on behalf of the Las Vegas-based casino operator, Mandalay disclosed in its annual report last week.

B of A was authorized last year by Mandalay to purchase up to $125 million of Mandalay stock on the market. Mandalay's report, filed with the Securities and Exchange Commission, indicated B of A has already made $125 million in purchases, acquiring 6.1 million shares -- or 8 percent -- of Mandalay's outstanding stock.

Mandalay said it will purchase these shares from B of A in March 2002 at the price Bank of America paid for the shares, not including commissions.

B of A's purchases come under an 11.7-million-share repurchase authorization approved by Mandalay in May 2000. Mandalay purchased 1.8 million shares under this plan through Jan. 31, 2001.

In all, Mandalay said it bought 14.5 million shares of its own stock through the 12 months ending Jan. 31, 2001, spending $247.1 million. It has purchased back 12.67 million shares, or 16 percent of the company's outstanding stock, over the last two years.

Mandalay also reported it spent $110.2 million on capital expenditures during the fiscal year, down from $352.1 million in the fiscal year ending Jan. 31, 2000. Fiscal 2001 capital expenditures included $24.7 million spent on the Shark Reef at Mandalay Bay, and $15.6 million on room renovations at the Luxor.

The previous year's capital expenditures included $213.5 million spent on the completion of Mandalay Bay and $23.6 million on the Shark Reef. Mandalay did not estimate what capital expenditures would be for the fiscal year ending Jan. 31, 2002.

Mandalay also disclosed compensation paid to its top executives for the year in a proxy report filed separately with the SEC.

Michael Ensign, chairman and chief executive, received $900,000 in salary and a $900,000 bonus for the year, unchanged from 1999. Vice Chairman William Richardson was paid $850,000 in salary and an $850,000 bonus, also unchanged.

The salary of Glenn Schaeffer was actually down from 1999 levels -- the Mandalay president and chief financial officer was paid $733,000 in 2000, the proxy stated, down from $800,000 in 1999. Schaeffer's bonus was unchanged at $800,000. No reason was given for the reduction in Schaeffer's salary and he could not be reached for comment.

Ensign, Schaeffer and Richardson received no stock options in 2000, as the company's compensation committee felt that the company's "compensation policy would not be served by the granting of additional stock options to Mandalay executives during fiscal 2001. Ensign and Richardson were each granted 1 million stock options in fiscal 2000; Schaeffer was granted 350,000.