Plaza owner narrows loss in third quarter

Friday, Dec. 13, 2002 | 11:13 a.m.

Cost-cutting moves helped Union Plaza Hotel & Casino Inc. narrow a loss of $1.4 million in the third quarter of last year to $947,000 for the same quarter this year, the Las Vegas company disclosed in a securities filing.

The company owns the Plaza hotel-casino in downtown Las Vegas and is controlled by downtown casino pioneer Jackie Gaughan.

This month Gaughan announced a deal to sell the Plaza and three other downtown casinos to startup company Barrick Gaming Corp.

Operating cash flow was $2.5 million for the nine months ending Sept. 30 compared to $1.3 million a year ago. The improvement was the result of trimming more than $3 million in operating expenses combined with interest savings of nearly $578,000, the company said.

Operating expenses declined by $2.2 million, or 16 percent, for the quarter compared to last year as a result of expense reductions following Sept. 11, 2001. Payroll declined by $1 million, or 13.7 percent, with about 160 fewer employees working each day compared to a year ago.

Food and beverage costs declined $366,000 due to lower sales and tighter inventory controls. Group health benefit costs for non-union employees were down nearly 29 percent compared to last year as a result of negotiating better medical coverage contracts.

Revenues declined from $13.5 million during the third quarter of 2001 to $11.6 million for the same quarter this year. Revenues were down in each segment of the hotel and casino because of significantly lower hotel occupancy rates compared to last year's average, the filing said. Hotel bookings were down 7.1 percent during the quarter and gaming win -- the amount won from gamblers -- fell 16.7 percent.

Revenues declined from $41.3 million last year to $38.7 million for the nine months ended Sept. 30.