SANDS REGENT - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

x	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2004 or

¨	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 0-14050

THE SANDS REGENT

(exact name of registrant as specified in charter)


Nevada		88-0201135
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


345 North Arlington Avenue, Reno, Nevada		89501
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code (775) 348-2200

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act.

Yes ¨ No x

On May 14, 2004, the registrant had outstanding 5,646,555 shares of its common stock, $.10 par value.

THE SANDS REGENT AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS


		Page No.

PART I FINANCIAL INFORMATION

Item 1.	Financial Statements	1-3
	Condensed Consolidated Statements of Operations (unaudited)	1
	Condensed Consolidated Balance Sheets (unaudited)	2
	Condensed Consolidated Statements of Cash Flows (unaudited)	3
	Condensed Notes to Consolidated Financial Statements (unaudited)	4-7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8-16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	16

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	17
Item 2.	Changes in Securities	17
Item 3.	Defaults Upon Senior Securities	17
Item 4.	Submission of Matters to a Vote of Security Holders	17
Item 5.	Other Information	17
Item 6.	Exhibits and Reports on Form 8-K	17

SIGNATURES		18
CERTIFICATIONS		19-21

PART I FINANCIAL INFORMATION

Item 1.

Financial Statements

THE SANDS REGENT AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)


	THREE MONTHS ENDED MARCH 31,						NINE MONTHS ENDED MARCH 31,
(Dollars in thousands except per share amounts)	2003			2004			2003			2004
Operating revenues
Gaming	$	6,362		$	6,762		$	20,070		$	20,210
Lodging		1,554			1,893			6,437			6,802
Food and beverage		1,250			1,609			4,763			4,834
Fuel and convenience store		3,849			3,558			10,905			11,735
Other		392			358			1,198			1,194

Gross revenues		13,407			14,180			43,373			44,775
Promotional allowances		906			1,007			2,725			2,937

Net revenues		12,501			13,173			40,648			41,838

Operating expenses
Gaming		2,819			3,193			8,582			9,110
Lodging		868			931			3,031			3,024
Food and beverage		764			1,060			2,987			3,213
Fuel and convenience store		3,637			3,362			10,323			11,074
Other		139			138			426			428
Maintenance and utilities		968			1,021			3,125			3,128
General and administrative		2,234			2,323			6,857			6,905
Depreciation and amortization		878			1,000			2,638			2,901

		12,307			13,028			37,969			39,783

Income from operations		194			145			2,679			2,055

Other income (expense)
Interest expense		(290	)		(109	)		(958	)		(498	)
Gain on previously reserved note receivable		205			—			205			4,393
Loss on abandonment of new projects		—			—			(59	)		(46	)
Other income (loss)		3			4			(80	)		(37	)

		(82	)		(105	)		(892	)		3,812

Income before income taxes		112			40			1,787			5,867
Income tax provision		(35	)		(10	)		(610	)		(420	)

Net income	$	77		$	30		$	1,177		$	5,447

Net income per share
Basic	$	0.02		$	0.01		$	0.24		$	1.06
Diluted		0.01			0.01			0.23			1.01
Weighted average of shares outstanding
Basic		4,935,003			5,245,847			4,930,584			5,124,527
Diluted		5,254,912			5,579,159			5,214,903			5,402,102

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

THE SANDS REGENT AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)


(Dollars in thousands except share data)	JUNE 30, 2003			MARCH 31, 2004
ASSETS
Cash and cash equivalents	$	3,965		$	4,001
Accounts receivable, net		675			508
Inventories		637			633
Federal income tax refund receivable		611			—
Prepaid expenses and other assets		1,247			962

Total current assets		7,135			6,104

Land		8,506			8,443
Buildings and improvements		40,999			41,335
Equipment, furniture and fixtures		20,569			21,004
Construction in progress		157			228

Total property and equipment		70,231			71,010
Less accumulated depreciation and amortization		34,700			36,856

Property and equipment, net		35,531			34,154

Goodwill		11,018			11,018
Other intangibles		1,356			1,356
Other		406			1,726

Total other assets		12,780			14,100

Total assets	$	55,446		$	54,358

LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	2,669		$	2,626
Accrued salaries, wages and benefits		1,612			1,487
Other accrued expenses		254			207
Federal income tax payable		—			52
Deferred federal income tax liability		206			86
Current maturities of long-term debt		806			16

Total current liabilities		5,547			4,474
Long-term debt		12,620			3,678
Deferred federal income tax liability		1,747			2,006

Total liabilities		19,914			10,158

Common stock ($.10 par value, 20,000,000 shares authorized; 7,357,055 issued at June 30, 2003; 8,049,555 issued at March 31, 2004)		736			810
Additional paid-in capital		13,967			17,115
Retained earnings		43,187			48,633

		57,890			66,558
Treasury stock (at cost; 2,403,000 shares)		(22,358	)		(22,358	)

Total stockholders’ equity		35,532			44,200

Total liabilities and stockholders’ equity	$	55,446		$	54,358

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

THE SANDS REGENT AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE SANDS REGENT AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)


	NINE MONTHS ENDED MARCH 31,
(Dollars in thousands)	2003		2004
Operating Activities
Net income	$	1,177	$	5,447
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,638		2,901
Loss on disposal of property and equipment		146		42
Gain on previously reserved note receivable		—		(4,393	)
Decrease in accounts receivable, net		53		167
Decrease in inventories		65		4
Decrease in prepaid expenses and other current assets

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents