Golden Nugget properties report profit increase

Monday, April 12, 2004 | 10:29 a.m.

The Golden Nugget casinos in downtown Las Vegas and Laughlin today reported a profit of $2.9 million for 2003, up from a loss of $529,000 for 2002 primarily due to increased operating efficiency at the properties.

Last year, the Golden Nugget downtown reported a profit of $3.3 million while the Golden Nugget Laughlin reported a loss of $371,000. In 2002, the downtown property reported a loss of $881,000 and the Laughlin casino posted a profit of $352,000.

The results, reported by Poster Financial Group, mark the first reported stand-alone results for the two casinos in many years. The properties were purchased from MGM MIRAGE in January for about $217 million.

The properties reported combined revenue of $231.2 million in 2003, a 4.2 percent increase from the previous year. Cash flow was $21.4 million, up 28.1 percent from 2002.

Results for 2003 and 2002 include an overhead fee charged by MGM MIRAGE for certain corporate duties and for the use of the Golden Nugget name and trademark. Those fees totaled about $13.2 million in 2003 and $12.6 million in 2002. Poster Financial acquired the rights to the Golden Nugget name and trademarks from MGM MIRAGE and therefore no fee will be charged in the future for their use, the company said.

From the company's inception in June 2003 through the end of last year, Poster Financial reported a net loss of about $1.5 million, consisting entirely of pre-acquisition costs and expenses and bond interest. The Golden Nugget Group, which owns the casinos, has operated as a stand-alone business as part of Poster Financial.