Cash flow up at Hard Rock

Thursday, March 7, 2002 | 11:06 a.m.

In contrast with its competitors on the Las Vegas Strip, the Hard Rock hotel-casino today reported a significant improvement in financial results for the quarter ended Dec. 31.

The off-Strip resort reported a loss prior to preferred dividends of $106,000, compared to $3.1 million in the year-ago period. Preferred stock dividends pushed this loss up to $1.4 million, down from the year-ago loss of $4.3 million.

Since only the Hard Rock's debt trades publicly, cash flow is a more widely followed indicator of the property's financial success. Hard Rock reported $6.3 million in cash flow, a 52 percent increase over the year-ago period. Revenues inched up 2 percent to $27.8 million.

The Hard Rock said it was able to drive higher casino play and hotel occupancy during the quarter, but that these trends were somewhat offset by a lower-than-normal casino hold percentage and lower room rates.

Cash flow increased at a far higher rate as the result of expense cutting measures.

Hard Rock spent $2.3 million on comps during the quarter, down 11 percent; interest expenses dropped 10 percent to $3.5 million; and all other expenses fell 7 percent to $21.5 million.

"We have proven that the Hard Rock Hotel and Casino, with its operational strengths and its loyal customers, is more resilient than most other Las Vegas gaming properties operating under recent adverse market conditions," Hard Rock Chairman and Chief Executive Peter Morton said.

The Hard Rock showed revenue gains in three areas: Casino revenues rose 5 percent to $12.4 million; food and beverage was up 2 percent to $8.5 million; and "other" revenue was up 16 percent to $1.5 million.

These gains were offset by lodging revenue, which fell 9 percent to $5.5 million, and retail revenues, which declined 13 percent to $2.1 million.