Including the effect of the business development write-off, net of tax, the Company posted net income of $1.5 million in the second quarter of 1999.

For the most recent six-month period, Harveys generated net income, excluding merger related costs and non-recurring items, of $4.7 million, on net revenues of $153.3 million. This $4.7 million is after deducting $11.8 million of net interest expense. In comparison, 1998�s six-month net income, excluding non-recurring items, of $6.5 million, on net revenues of $145.3 million, was after deducting $8.0 million of net interest expense. A record fiscal six-month EBITDA of $32.8 million was achieved in 1999 compared to $29.2 million for the same period last
year.

The six months of 1999 have been adjusted to exclude the combined effects, net of tax, of $15.1 million for merger related costs and non-recurring items and $869,000 for the loss on the early retirement of debt. The same six-month period in 1998 excludes $49,000 of non-recurring items, net of tax.

Including the effects of these merger related costs and non-recurring items, net of tax, the company posted a net loss of $11.3 million for the first six-months of 1999 and net income of $6.4 million in 1998.

�Our cash flow results for the quarter represent the ninth consecutive record performance for our Company,� said Scharer. �For the first half of our fiscal year, the $32.8 million in cash flow is more than a 12% increase over last year and positions Harveys very nicely as we begin the busy summer season,� Scharer added.

Founded in 1944, Harveys Casino Resorts operates Harveys Resort Hotel/Casino, a AAA Four-Diamond full-service resort at Lake Tahoe, Nevada; Harveys Wagon Wheel Hotel/Casino in Central City, Colorado; and Harveys Casino Hotel in Council Bluffs, Iowa.

    Net revenues               $77,635     $76,537       $153,284   $145,309
    Interest expense, net       $6,905      $3,994        $11,823     $8,009
Net income excluding
merger related costs
and non-recurring
items                      $2,681      $4,892         $4,690     $6,472
Merger related costs
and non-recurring
     items, net of tax         $(1,226)         $0       $(15,981)      $(49)
    Net income (loss)           $1,455      $4,892       $(11,291)    $6,423
 

                               Three-Months Ended         Six-Months Ended
                              5/31/99      5/31/98       5/31/99     5/31/98
Net Revenues
      Harveys Resort           $32,374    $ 31,777        $63,523    $59,451
      Harveys Wagon Wheel       13,707      16,257         27,906     30,772
      Harveys Casino Hotel      31,554      28,503         61,855     55,086
    Total Net Revenues        $ 77,635    $ 76,537      $ 153,284  $ 145,309

Operating Income
      Harveys Resort            $5,087      $5,411         $8,464     $7,456
      Harveys Wagon Wheel        2,520       4,188          4,894      7,409
      Harveys Casino Hotel       6,792       5,602         13,267     10,157
      Corporate                 (3,065)     (3,010)        (5,958)    (6,166)
      Business Development      (2,013)          0         (2,149)       (81)
Consent Fee  Merger
       Costs                         0           0        (19,879)         0
    Total Operating Income      $9,321     $12,191        $(1,361)   $18,775

EBITDA (a)
      Harveys Resort            $7,510      $7,699        $13,213    $12,254
      Harveys Wagon Wheel        3,506       5,096          6,829      9,223
      Harveys Casino Hotel       8,991       7,345         17,409     13,639
      Corporate                 (2,180)     (2,894)        (4,672)    (5,896)
    Total EBITDA              $ 17,827    $ 17,246        $32,779    $29,220

(a) EBITDA is defined as operating income, excluding non-recurring items, plus depreciation and amortization.