FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 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 000-32987
COLONY RIH HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
| DELAWARE | 95-4849060 | |
| (State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
RESORTS INTERNATIONAL HOTEL AND CASINO, INC.
(Exact name of registrant as specified in its charter)
| DELAWARE | 95-4828297 | |
| (State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) | |
| 1133 Boardwalk Atlantic City, NJ |
08401 | |
| (Address of principal executive offices) | (Zip Code) | |
Registrants’ telephone number, including area code:
(609) 344-6000
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
The number of shares outstanding of Colony RIH Holdings, Inc.’s Class A Common Stock, $0.01 par value, was 38,295 and the number of shares outstanding of Colony RIH Holdings, Inc.’s Class B Common Stock, $0.01 par value, was 774,982, each as of November 12, 2004.
The number of shares outstanding of Resorts International Hotel and Casino, Inc.’s Common Stock, $0.01 par value, was 100 as of November 12, 2004.
AND
RESORTS INTERNATIONAL HOTEL AND CASINO, INC.
INDEX
| PAGE | ||||
| PART I. | FINANCIAL INFORMATION | |||
| Item 1. |
||||
| 2 | ||||
| 3 | ||||
| 4 | ||||
| Notes to Condensed Consolidated Financial Statements of Colony RIH Holdings, Inc. |
5 | |||
| 8 | ||||
| 9 | ||||
| 10 | ||||
| Notes to Condensed Consolidated Financial Statements of Resorts International Hotel and Casino, Inc. |
11 | |||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
13 | ||
| Item 3. |
21 | |||
| Item 4. |
21 | |||
| PART II. | OTHER INFORMATION | |||
| Item 1. |
22 | |||
| Item 2. |
22 | |||
| Item 3. |
22 | |||
| Item 4. |
22 | |||
| Item 5. |
22 | |||
| Item 6. |
22 | |||
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
| September 30, 2004 |
December 31, 2003 | |||||
| ASSETS | ||||||
| Current assets |
||||||
| Cash and cash equivalents |
$ | 21,638 | $ | 28,417 | ||
| Receivables, net |
7,167 | 5,175 | ||||
| Inventories |
1,980 | 1,503 | ||||
| Prepaid expenses and other current assets |
3,069 | 2,766 | ||||
| Deferred income taxes |
4,294 | 4,294 | ||||
| Total current assets |
38,148 | 42,155 | ||||
| Property and equipment, net |
290,873 | 189,609 | ||||
| Other assets (including $10,216 and $50,358 of restricted cash and cash equivalents in 2004 and 2003, respectively) |
27,905 | 70,922 | ||||
| Total assets |
$ | 356,926 | $ | 302,686 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current liabilities |
||||||
| Current maturities of long-term debt |
$ | 4,858 | $ | 846 | ||
| Accounts payable |
5,640 | 3,390 | ||||
| Accrued interest payable |
877 | 6,038 | ||||
| Accrued expenses and other current liabilities |
19,738 | 16,509 | ||||
| Total current liabilities |
31,113 | 26,783 | ||||
| Long-term debt, less current portion |
232,982 | 183,281 | ||||
| Deferred income taxes |
5,591 | 5,591 | ||||
| Redeemable common stock |
3,875 | 3,875 | ||||
| Total liabilities |
273,561 | 219,530 | ||||
| Shareholders’ equity |
||||||
| Common stock: |
||||||
| Class A |
— | — | ||||
| Class B |
8 | 8 | ||||
| Capital in excess of par |
73,790 | 73,790 | ||||
| Retained earnings |
9,567 | 9,358 | ||||
| Total shareholders’ equity |
83,365 | 83,156 | ||||
| Total liabilities and shareholders’ equity |
$ | 356,926 | $ | 302,686 | ||
See accompanying notes
2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in thousands)
| Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Revenue: |
||||||||||||||||
| Casino |
$ | 75,360 | $ | 64,220 | $ | 193,064 | $ | 183,252 | ||||||||
| Lodging |
6,604 | 2,907 | 13,451 | 8,099 | ||||||||||||
| Food and beverage |
7,792 | 6,481 | 18,748 | 17,154 | ||||||||||||
| Other |
2,206 | 1,924 | 6,848 | 4,980 | ||||||||||||
| Less: promotional allowances |
(20,914 | ) | (15,236 | ) | (51,832 | ) | (42,071 | ) | ||||||||
| Total net revenue |
71,048 | 60,296 | 180,279 | 171,414 | ||||||||||||
| Costs and expenses: |
||||||||||||||||
| Casino |
33,891 | 30,826 | 90,903 | 90,673 | ||||||||||||
| Lodging |
1,323 | 300 | 2,372 | 789 | ||||||||||||
| Food and beverage |
3,190 | 3,420 | 9,035 | 9,017 | ||||||||||||
| Other operating |
7,938 | 6,757 | 21,705 | 19,432 | ||||||||||||
| Selling, general, and administrative |
10,819 | 7,860 | 27,597 | 24,575 | ||||||||||||
| Depreciation and amortization |
4,965 | 746 | 12,565 | 6,540 | ||||||||||||
| Pre-opening |
560 | — | 2,722 | — | ||||||||||||
| Total costs and expenses |
62,686 | 49,909 | 166,899 | 151,026 | ||||||||||||
| Income from operations |
8,362 | 10,387 | 13,380 | 20,388 | ||||||||||||
| Interest income |
119 | 238 | 400 | 1,088 | ||||||||||||
| Interest expense |
(5,859 | ) | (4,590 | ) | (13,283 | ) | (14,819 | ) | ||||||||
| Other income (expense) |
441 | (45 | ) | 1,201 | (265 | ) | ||||||||||
| Income before income taxes |
3,063 | 5,990 | 1,698 | 6,392 | ||||||||||||
| Provision for income taxes |
(1,321 | ) | (2,488 | ) | (1,489 | ) | (3,331 | ) | ||||||||
| Net income |
$ | 1,742 | $ | 3,502 | $ | 209 | $ | 3,061 | ||||||||
See accompanying notes.
3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)
| Nine months ended September 30, |
||||||||
| 2004 |
2003 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
| Net income |
$ | 209 | $ | 3,061 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
11,172 | 8,934 | ||||||
| Amortization of debt premiums, discounts and issuance costs |
1,375 | 1,294 | ||||||
| Provision for doubtful receivables |
58 | 528 | ||||||
| Gain on disposal of fixed assets |
(1,148 | ) | — | |||||
| Other |
— | 26 | ||||||
| Provision for (reversal of) discount on CRDA obligations, net of amortization |
(1,393 | ) | (2,394 | ) | ||||
| Changes in operating assets and liabilities: |
||||||||
| Net (increase) decrease in receivables |
(2,050 | ) | 6 | |||||
| Net increase in inventories and prepaid expenses and other current assets |
(780 | ) | (1,822 | ) | ||||
| Net (increase) decrease in deferred charges and other assets |
3,773 | (1,358 | ) | |||||
| Net increase in accounts payable and accrued expenses |
5,109 | 1,139 | ||||||
| Net decrease in interest payable |
(5,161 | ) | (5,175 | ) | ||||
| Net cash provided by operating activities |
11,164 | 4,239 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
| Releases of cash and cash equivalents – restricted |
40,194 | 25,040 | ||||||
| Proceeds from sale of fixed assets |
1,638 | — | ||||||
| Purchases of property and equipment |
(66,370 | ) | (35,713 | ) | ||||
| CRDA deposits |
(2,091 | ) | (2,209 | ) | ||||
| CRDA refunds |
579 | 9,189 | ||||||
| Net cash used in investing activities |
(26,050 | ) | (3,693 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
| Proceeds from borrowings |
10,161 | — | ||||||
| Payments to secure borrowings |
(135 | ) | (62 | ) | ||||
| Debt repayments |
(1,919 | ) | (743 | ) | ||||
| Net cash provided by (used in) financing activities |
8,107 | (805 | ) | |||||
| Net decrease in cash and cash equivalents |
(6,779 | ) | (259 | ) | ||||
| Cash and cash equivalents at beginning of period |
28,417 | 32,989 | ||||||
| Cash and cash equivalents at end of period |
$ | 21,638 | $ | 32,730 | ||||
| SUPPLEMENTAL CASH FLOW DISCLOSURES: |
||||||||
| Cash paid during the period for: |
||||||||
| Interest |
$ | 21,128 | $ | 20,944 | ||||
| Income taxes, net of refunds |
1,038 | 50 | ||||||
| Non-cash transactions: |
||||||||
| Note payable issued in connection with option land purchase |
40,000 | — | ||||||
| Note payable issued in connection with warehouse purchase |
600 | — | ||||||
| Obligations incurred for the purchase of property & equipment |
4,500 | 645 | ||||||
See accompanying notes.
4
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Col