Executive stock grants cut into Mandalay estimate

Friday, April 16, 2004 | 10:33 a.m.

Mandalay Resort Group has issued a large chunk of restricted shares of stock to some of its top officers.

In filings with the Securities and Exchange Commission Tuesday, the company said it had issued about 826,500 shares of stock to Chairman and Chief Executive Michael Ensign, Vice Chairman William Richardson and President and Chief Financial Officer Glenn Schaeffer.

Ensign received 405,000 shares, Richardson received 300,000 shares and Schaeffer received 121,500 shares.

The shares can't immediately be sold and would be forfeited if the officers leave the company within a year. A smaller portion of the shares would be forfeited if the officers leave the company within three years.

All three officers have sold off millions of shares through January as the company's stock hit new highs. Ensign and Richardson had sold off all of their shares, though both retained stock options.

Wall Street analysts said the grants, which were unexpected, will reduce the company's current and 2005 earnings.

Fulcrum Global Partners analyst Joe Greff said earnings would be reduced by about 15 cents per share but that the share grants, which amount to a non-cash expense, wouldn't affect the company's cash flow. Greff reduced his current and 2005 earnings to $3.44 per share and $3.95 per share, respectively, from $3.56 per share and $4.10 per share. Jefferies & Co. analyst Lawrence Klatzkin reduced 2005 earnings to $4.07 from $4.21.

Greff said the company "remains strong" and that Las Vegas -- where the company generates a majority of its revenue and profit -- is poised for future growth.