Gaming briefs for August 15, 2003

Friday, Aug. 15, 2003 | 11:04 a.m.

Vegas firm's finances improve

PDS Gaming Corp. reported a profit for the second quarter compared to a loss last year due to increased financing activity.

The Las Vegas company finances, leases and sells slot machines and also operates Rocky's Casino & Sports Bar in Reno.

In February PDS announced it was talking to a management group about a buyout of the company's common stock. The company faces a shareholder lawsuit in Clark County District Court alleging that directors violated their fiduciary duties by approving a letter of intent by the management group.

That case is pending, and negotiations with the management group are under way, the company said.

PDS reported net income of $182,000, or 5 cents per share, compared with a loss of $513,000, or 14 cents per share, for the prior year's quarter.

The second quarter of 2002 included a loss from discontinued operations of $484,000, or 13 cents per share.

Excluding the one-time item, earnings would have been 5 cents per share compared to a loss of 1 cent per share in the same quarter of last year.

Revenue increased 12 percent to $9.8 million.

Property's loss narrows

The Fitzgeralds hotel-casino in downtown Las Vegas narrowed its operating loss to $300,000 in the second quarter compared to a loss of $700,000 in the same quarter a year ago. The property's cash flow also rose, though revenue fell during the quarter.

The property reported its financial results this week along with its Indiana-based parent company, Majestic Star Casino LLC.

Fitzgeralds in Las Vegas reported cash flow of $400,000 compared to negligible cash flow last year. Revenue fell 5.5 percent, to $11.9 million.

The average daily win per slot machine was $86 in the second quarter compared to $95 a year earlier. Per table game, the daily win was $891 compared to $776 a year ago. Hotel occupancy fell to 81.3 percent from 93.4 percent, while the average daily rate, $34, remained flat.

The war in Iraq and poor economic conditions hurt revenue across the company's Fitzgeralds properties, which include single casinos in Tunica, Miss., and Black Hawk, Colo., the company said. Competitive pressure in Tunica and poor weather in Colorado also contributed.

But cash flow improved due to continued cost controls.

Profit across the three Fitzgeralds casinos declined 16.3 percent, to $978,435. Cash flow rose 3.5 percent, to $7.1 million. Revenue declined 2.9 percent, to $43.2 million.

"We continue to believe that as economic conditions improve so will our revenues and overall operating results," Majestic Star Chief Executive Don Barden said.