Local casino reports drop in earnings

Tuesday, Nov. 2, 2004 | 10:58 a.m.

Profit at Herbst Gaming Inc. fell by about $7 million in the third quarter, the company reported today.

Herbst, which owns four Terrible's casinos across Las Vegas, Henderson and Pahrump, reported profit of $352,000 compared with $7.2 million in the third quarter of last year.

Revenue, including promotional expenses, fell 15 percent to $79.6 million and cash flow fell 30 percent to $12.7 million.

The company reported $38 million in expenses as a result of refinancing its debt in June.

Excluding those costs, the company would have reported a 43 percent increase in cash flow to $18.2 million.

In July, Herbst announced plans to purchase three casinos -- one in Iowa and two in Missouri -- from Grace Entertainment Inc. for $287.5 million. The deal is expected to close in the first quarter of next year.

In October, the company extended its slot route contracts with Vons and Safeway supermarket chains to 2011. The extended contracts contain similar terms as the previous contracts, the company said. Herbst is one of the state's largest slot route operators.

Revenue from route operations fell 15 percent to $62.3 million. Revenue from casino operations fell 14 percent to $19.3 million.