Revenues for the year, net of promotional allowances, were $75.7 million, a decrease of 1.8% compared to 1997 revenues of $77.0 million. Earnings before interest expense, income taxes, depreciation and amortization ("EBITDA") for the year was $17.9 million (excluding $1.5 million in non-recurring legal fees) compared to EBITDA of $18.7 million (excluding a charge for the termination of a management agreement of $24.7 million and other non-recurring financing fees of $0.4 million). Revenues decreased primarily as a result of decreased retail revenues (24.0%) offset by food and beverage revenues (up 13.6%) and table games revenue (up 6.6%). EBITDA decreased primarily as a result of the decreased revenues and higher marketing cost associated with hosting The Rolling Stones during the first quarter offset by the elimination of management fees paid under a terminated management agreement.

Revenues for the fourth quarter, net of promotional allowances, were $18.0 million, a decrease of 5.6% compared to fiscal fourth quarter 1997 revenues of $19.1 million. Earnings before interest expense, income taxes, depreciation and amortization ("EBITDA") for the fourth quarter were $4.2 million compared to EBITDA of $4.5 million excluding a charge for the termination of a management agreement for the fourth quarter of 1997. Revenues decreased directly as a result of a 34% decrease in retail revenues. EBITDA decreased primarily as a result of the decreased revenues offset by the elimination of management fees paid under a terminated management agreement.

The Hard Rock Hotel Casino is currently expanding its facility and is expecting completion during the second quarter of 1999. Key elements of the expansion include (i) nearly doubling the number of hotel rooms and suites, (ii) significantly increasing the size and features of the Beach Club and (iii) the addition of other amenities including a high-end gaming area, expanded retail store, four full-service restaurants and two new bars, a 1,088 space parking garage, a state of the art health club and spa, a nightclub and larger convention and meeting space.
 

ENTERTAINMENT The "Joint" a concert venue with 1400 person capacity and frequent appearances by today's top performers such as: The Rolling Stones, The Eagles, Sheryl Crow, Bob Dylan, Van Halen, Bonnie Raitt, Lenny Kravitz and more · "The Orbit Lounge", a dance club gyrating Friday and Saturday late-nights · "Underground Nightclub", an 8,000 sq. ft. trend-setting club/lounge/live-music and dance facility set to open in May, 1999 · "Pool & Beach Club", Summer Party Series Concerts by the Pool MEETING & SPECIAL EVENT FACILITIES Over 60,000 sq. ft. of function space · 6000 sq. ft. conference center with break-out capability · Six meeting rooms · Designated Boardroom · "The Joint" offers a 1400 person meeting capacity in dynamic surroundings with a large stage. Summer Party Series Concerts by the Pool GAMING The Hard Rock Hotel and Casino offers a unique gaming experience in "the round". Complete with table games, slots and an expanded Race and Sports Book · High limit gaming area featuring Baccarat, Craps and Blackjack set to open in 1999

Combining World-Class Service with Raw Glamour, Peter Morton's vision of a true destination resort has been realized in the Nevada desert. Offering style and sophistication with a dose of Rock'N'Roll, the hotel is located just one mile from the airport and three blocks from the Strip and offers convenient access to all of Las Vegas. ACCOMODATIONS 668 Rooms · 57 Suites · Over-sized guest rooms with double French doors which open allowing for warm desert breezes · Unique European-style design and furnishings · Upscale Rock'N'Roll Inspired art · Luxurious guest suites featuring state-of-the-art music systems, large screen Sony televisions · Current Hollywood movies on demand · Marble bathrooms and wet bar AMENITIES Expanded Pool and Beach Club featuring sandy beaches, private cabanas, lush tropical landscape, whirlpools and spas · Merchandise Shop featuring the largest collection of Hard Rock Hotel and Casino Logo-wear in the world · European-style Concierge · Deluxe Spa and Salon (Opening May, 1999) · Authentic Cuban Cigar store · Fully stocked sundry store · Fee valet parking · Complimentary Shuttle to the Strip · Multi-Million dollar memorabilia collection · Buff Athletic Club DINING Featuring "Mortoni's", Peter Morton's Italian version of his famed Hollywood restaurant, "Morton's", which offers both inside and patio dining · Mr. Lucky's 24/7 offers casual dining 24 hours a day · The expansion will see the addition of "NOBU", world-renown Asian cuisine · A Mexican-style restaurant and Tequila Bar · Traditional Steak House · A New Coffee Shop and Health & Juice Bar all opening May, 1999 · or just relax with Pool and Beach Club Service and 24 hour Room Service

Statements in this press release, other than those based on historical fact, are intended to be forward looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The statements are subject to risks and uncertainties including, but not limited to, those related to construction activities, dependence on existing management and increased competition in the Las Vegas marketplace. The historical results reported herein are not necessarily an indication of future prospects for the Company. Actual results in the future periods may differ materially.