| LAS VEGAS, July 20, 2000 - Station Casinos,
Inc. (NYSE: STN - news) today reaffirmed its commitment to the Las Vegas
locals� market with the announcement of a strategic repositioning focused
on Southern Nevada.
�We continue to believe that the steady population growth in Las Vegas,
coupled with our operating experience and success in this market, provides
a solid platform to support our continued investment in the Las Vegas metropolitan
area,� said Frank J. Fertitta III, chairman and chief executive officer.
�We are excited about the strategic opportunities and value that this repositioning
will provide our customers, team members, and shareholders.�
Station Casinos, Inc. (�Station� or �the Company�) today announced it
has entered into a definitive agreement to acquire the Fiesta Casino Hotel
in North Las Vegas, Nevada, from Fiesta Hotel Corporation (�Fiesta�), a
subsidiary of Joe G. Maloof & Company, Inc. (�Maloof�). The purchase
price of $185 million includes a non-compete agreement with Maloof, Fiesta,
and certain members of the Maloof family. The all-cash purchase has been
approved by the boards of directors of Station, Maloof and Fiesta and is
expected to close by January 31, 2001. Completion of the acquisition is
subject to regulatory approvals.
| The Fiesta Casino Hotel is located at the intersection of Lake Mead
Boulevard and Rancho Road in North Las Vegas, near the Texas Station Gambling
Hall & Hotel. Situated on 25 acres, the Fiesta currently offers approximately
70,000 square feet of casino space featuring 1,900 gaming devices and 30
table games, 100 guest rooms, four full-service restaurants, a buffet,
several fast-food outlets, bingo, and a race and |
Fiesta Casino Hotel
2400 N. Rancho Drive,
North Las Vegas, Nevada
|
sports book. Upon completion of the transaction, the property will retain
the Fiesta name and theme.
George Maloof, president of Fiesta Hotel Corporation, said, �The Fiesta
brand is a natural fit for Station and will complement the existing Station
brand in Las Vegas. Station shares the same high standards of quality service
and value for which we have become known. In considering the sale for our
employees, we valued Station�s reputation as a distinguished employer and
the range of opportunities for growth that this transaction would provide.
We are pleased that the Fiesta will join Station�s franchise of premier
gaming and entertainment properties for Las Vegas residents.�
The Fiesta purchase follows Station�s announcement in June that it has
entered into an agreement to purchase the Santa Fe Hotel & Casino in
Las Vegas, Nevada, from Santa Fe Hotel, Inc. (SFHI), a subsidiary of Santa
Fe Gaming Corporation (SFGC). The Santa Fe transaction is expected to close
in the fourth quarter of 2000.
�The acquisition of the Fiesta is a natural progression in our strategy
to maintain a leadership position in the Las Vegas locals� market,� Fertitta
said. �Together with the Santa Fe, the Fiesta property solidifies our franchise
in northwest Las Vegas, while providing a platform to further develop the
Fiesta brand as a complement to the Station brand. The Fiesta has been
successful in differentiating itself as a dynamic, mid-sized casino, blending
many of the same elements of our Station brand in appealing to Las Vegas
residents. We expect to utilize this brand at sites where a smaller footprint
is required or advantageous.�
As part of its repositioning strategy, Station also announced it has
entered into a definitive agreement to sell its Missouri properties, Station
Casino St. Charles and Station Casino Kansas City, to a group led by John
Finamore, president of Station�s Midwest operations, and William W. Warner,
the company�s vice president of finance.
The purchase price for the Missouri assets is $475 million. However,
the Company expects net cash received to exceed the purchase price, based
on its belief that it can complete a like-kind exchange for the properties.
Frank Fertitta said, �The sale of the Missouri assets is consistent
with our Company�s focus on expanding our presence in the Las Vegas market,
where we have generated exceptional returns on invested capital. While
the transaction will be dilutive to earnings initially, it reflects the
Company�s commitment to maintaining a strong balance sheet, which provides
the flexibility to capitalize on the master planning and new development
opportunities embedded in our Las Vegas franchise. We believe the sale
will also create more long-term shareholder value by focusing all the Company�s
resources on Las Vegas. Its completion provides us the most strategically
focused portfolio of assets in the gaming industry.�
Station has a portfolio of six fully entitled parcels for the development
of new gaming properties in the Las Vegas Valley. The addition of the Fiesta
brand to the existing Station brand will provide added flexibility for
future development at any time.
The Missouri transaction is subject to certain customary contingencies,
including the purchaser�s receipt of regulatory approvals and financing.
In order to ensure it has the management resources to accomplish its
Las Vegas-based strategy, the Company also announced today that Lorenzo
J. Fertitta will join the Company�s management team full-time with the
title of president. He will report to Frank J. Fertitta III, who
will continue to serve as the chairman and chief executive officer of the
Company. Blake L. Sartini will remain chief operating officer, member of
the board of directors and a principal shareholder.
Lorenzo Fertitta is a principal shareholder and a co-founder of the
Company, having served as a member of the Board of Directors of the Company
since 1991. He holds an MBA from New York University and has been actively
involved in the strategic direction of the Company, serving as a consultant
and frequent advisor to the chairman of the board.
Frank Fertitta said, �As our Company has grown, so has our need for
Lorenzo to take a more active role in the day-to-day management of the
Company�s business. He has a unique understanding of our Las Vegas locals
strategy and the confidence of our entire management team.�
Two other Station executives, Don Marrandino and Kevin Kelley, have
been promoted as part of the repositioned management structure.
Marrandino, president/general manager of Boulder Station and Sunset
Station, will become president of East Las Vegas operations with overall
management responsibility for Boulder Station, Sunset Station, Barley�s
Casino and Brewing Co., Southwest Gaming Services and the new Station Casino
Green Valley Ranch.
Kelley, president/general manager of Texas Station, will become president
of West Las Vegas operations with overall management responsibility for
Texas Station, Palace Station, The Wild Wild West Gambling Hall & Hotel,
the future Santa Fe Station, and the Fiesta brand.
|
Station Reports
EPS of $0.33 Post-Split
LAS VEGAS, July 20, 2000 - Station Casinos, Inc. (NYSE: STN - news)
today announced the results of its operations for the second quarter ended
June 30, 2000.
Highlights for the second quarter included the following:
-
Record second quarter cash flow of $71.3 million, up 16 percent year-over-year;
-
Record second quarter earnings per share of $0.33 (adjusted for a 3-for-2
stock split, effective July 17, 2000);
-
Eight percent increase in Nevada cash flow to $53.2 million on a same-store
basis;
-
32 percent increase in Missouri cash flow to $22.6 million on a same-store
basis;
-
Agreement to acquire the Santa Fe Hotel & Casino in northwest Las Vegas.
Station Casinos, Inc. (�Station� or �the Company�) reported net revenues
for the second quarter ended June 30, 2000, of $244.3 million, a four percent
increase over the prior year�s quarter. Earnings before interest, taxes,
depreciation and amortization (EBITDA), adjusted for the Sunset equipment
lease, increased 16 percent to $71.3 million compared to $61.6 million
in the prior year. Earnings applicable to common stock increased to $20.7
million, or $0.33 per share, from $12.8 million, or $0.20 per share. The
prior year�s earnings per share exclude the effect on net income of $8.8
million related to a litigation settlement with Crescent Real Estate Equities,
Inc. (NYSE: CEI - news). Including the litigation settlement, the
Company reported earnings of $21.6 million, or $0.33 per share in the prior
year�s quarter.
Balance Sheet Items
The Company�s balance sheet reflected a decrease in total long-term
debt (including construction payables) to $937.3 million, a $14.6 million
decline from the period ended March 31, 2000. In addition to reducing borrowings
under its bank revolver, the Company utilized its free cash flow from operations
to fund $21.7 million in capital expenditures. The Company�s trailing
12-month debt to EBITDA ratio (per the Company�s Amended Bank Facility)
continued its decline to 3.5. The Company recently completed a $375 million
9 7/8 percent senior subordinated notes offering. Proceeds from this
offering reduced all amounts outstanding under the Company�s Term Loan
Agreement and the balance was used to reduce the Company�s revolving credit
facility.
Nevada Operations
Combined net revenues for the Company�s Nevada operations increased
three percent to $152.2 million, while EBITDA, adjusted for the Sunset
equipment lease, increased eight percent to $53.2 million. Cash flow margins
for the quarter increased to 35 percent from 33 percent in the prior year�s
quarter. The strong results for the quarter were largely due to a four
percent increase in gaming revenue, and continued reduction in operating
costs. �We continue to see the benefits of our brand strategy in appealing
to Las Vegas residents. We expect our recent acquisitions to further strengthen
our brand and afford our customers even greater convenience and choice,�
said Glenn C. Christenson, executive vice president and chief financial
officer.
Missouri Operations
The Company�s Missouri operations reported an increase in combined
net revenues of four percent from the prior year�s quarter to $80.1 million,
while EBITDA increased 32 percent to $22.6 million. The increase in EBITDA
is primarily attributable to continued improvement in operating margins
at both Station Casino Kansas City (SCKC) and Station Casino St. Charles
(SCSC). The margin improvement at SCSC is primarily related to the consolidation
and streamlining of operations onto a single gaming barge. Net revenues
at SCKC increased four percent to $50.1 million for the quarter while EBITDA
increased 22 percent to $14.9 million. At SCSC, net revenues increased
three percent from the prior year�s quarter to $30.0 million, while EBITDA
increased 57 percent to $7.7 million.
On July 7, 2000, the Board of Directors of the Company established a
special committee of independent members of the Board to monitor the ongoing
Missouri investigations of matters relating to Michael Lazaroff. Lazaroff
recently pled guilty to three felonies, including defrauding his law firm
by withholding bonus payments from his partners, defrauding clients�including
Station Casinos�through improper billing, and federal election law violations.
In connection with the ongoing investigations related to certain bonus
payments made between 1994 and 1996 to Lazaroff, Frank J. Fertitta
III, chairman and chief executive officer, and Glenn C. Christenson, executive
vice president and chief financial officer, recently received subpoenas
to testify before a federal grand jury in the western district of Missouri.
No date for the testimony is presently scheduled.
Stock Split
On July 17, 2000 the Company�s previously announced three-for-two stock
split became effective. Adjusted for the stock split, the Company has been
authorized to purchase 9,482,484 shares of common stock (of which 3,268,110
have already been purchased) under its stock buy-back program. |
Station Casinos, Inc. is a multi-jurisdictional gaming Company that
owns and operates the Palace Station Hotel & Casino, the Boulder Station
Hotel & Casino, the Texas Station Gambling Hall & Hotel, and the
Wild Wild West Gambling Hall & Hotel in Las Vegas, Nevada, Sunset Station
Hotel & Casino in Henderson, Nevada, as well as slot machine route
management services in Clark County, Nevada. Station Casinos, Inc. also
owns and operates Station Casino St. Charles, a gaming and entertainment
facility in St. Charles, Missouri, and Station Casino Kansas City, a gaming
and entertainment facility in Kansas City, Missouri.
This press release may be deemed to contain certain forward-looking
statements with respect to the business, financial condition, and results
of operations of the Company and its subsidiaries which involve risks and
uncertainties including, but not limited to, changes in the financial markets,
licensing and other regulatory risks, competition from other gaming operations,
and construction risks. |
