River Rock Entertainment Authority Announces Second Quarter 2006 Financial Results.GEYSERVILLE, Calif. -- The River Rock Entertainment Authority (the "Authority"), the operator of the River Rock Casino River Rock Casino can be one of:
Second Quarter Operating Results for the Period Ended June 30, 2006 Net revenues for the second quarter ended June 30, 2006 were $34.0 million. Casino casino or cassino (both: kəsē`nō). 1 Card game played with a full deck by two to four players. Its origins are obscure though it probably traces back to the Italian game of Scopa. revenues totaled $33.0 million in the second quarter which included slot revenue of $29.2 million and table game revenue of $3.8 million. Food, beverage, and retail revenues were $1.6 million. The retail value of food and beverages F&B is a common abbreviation in the United States and Commonwealth countries, including Hong Kong. F&B is typically the widely accepted abbreviation for "Food and Beverage," which is the sector/industry that specializes in the conceptualization, the making of, and delivery of foods. provided to customers without charge is included in gross revenues and then deducted de·duct v. de·duct·ed, de·duct·ing, de·ducts v.tr. 1. To take away (a quantity) from another; subtract. 2. To derive by deduction; deduce. v.intr. as promotional allowances. The redemption of cash incentives earned by the players club members is also recorded as promotional allowance. For the second quarter ended June 30, 2006, the promotional allowance was $0.7 million. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the second quarter ended June 30, 2006 were $24.8 million. Operating expenses consisted of casino expense of $5.5 million, food, beverage and retail expense of $1.7 million, selling, general and administrative expense of $11.8 million, depreciation expense of $2.9 million, credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing fees (2) of $1.9 million, gaming commission expense of $0.7 million and compact revenue sharing revenue sharing Funding arrangement in which one government unit grants a portion of its tax income to another government unit. For example, provinces or states may share revenue with local governments, or national governments may share revenue with provinces or states. trust fund expense of $0.3 million. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (1) for the second quarter 2006 was $12.3 million, or 36.2% of net revenues. Income from operations for the second quarter 2006 was $9.2 million and represented 27.1% of net revenues. Other expense, net for the second quarter 2006 was $5.0 million and included $5.2 million of interest expense. Chief Executive Officer Shawn Shawn , Ted 1891-1972. American dancer and choreographer noted for his partnership with Ruth Saint Denis. Together they founded the Denishawn Dance School (1915), for which he choreographed works based on Native American themes. Smyth stated, "Our second quarter financial results continued to be impacted by diminished di·min·ish v. di·min·ished, di·min·ish·ing, di·min·ish·es v.tr. 1. a. To make smaller or less or to cause to appear so. b. traffic that resulted from the flood-related closure of the Geyserville Bridge at the beginning of this year. However, we are pleased to note that the new bridge is currently scheduled to be completed by the end of August, well ahead of schedule." Mr. Smyth continued, "During the second quarter we completed a comprehensive review of the casino and began to implement several initiatives designed to enhance our financial and operational performance. We are currently making upgrades to the slot floor and we are also refocusing Noun 1. refocusing - focusing again focalisation, focalization, focusing - the act of bringing into focus our marketing program in order to more effectively reach the sizeable market we are targeting. We look forward to reporting our continued progress as these and other initiatives take hold." Liquidity and Capital Resources Net cash provided by operating activities for the second quarter totaled $14.0 million. Net cash used in capital and related financing activities for the second quarter totaled $14.3 million. Cash used in non-capital financing activities for the second quarter totaled $3.1 million, which was solely distributed to the Tribe tribe [Lat., tribus: the tripartite division of Romans into Latins, Sabines, and Etruscans], a social group bound by common ancestry and ties of consanguinity and affinity; a common language and territory; and characterized by a political and economic . Cash and cash equivalents and restricted cash at June 30, 2006 totaled $29.1 million. Current cash balances and operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. are expected to provide us with sufficient resources to meet our existing debt obligations, planned capital expenditures, infrastructure improvements, and distributions to the Tribe. "EBITDA" is income before distributions to the Tribe plus interest, taxes, depreciation and amortization. EBITDA should not be construed as an alternative to operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , as an indicator of the Authority's operating performance, or as an alternative to cash flows from operating activities, as a measure of liquidity, or as any other measure determined in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). Moreover, our calculations of EBITDA may not be comparable to that reported by other companies. EBITDA is a basis upon which we assess our liquidity and because certain covenants in the Indenture An agreement declaring the benefits and obligations of two or more parties, often applicable in the context of Bankruptcy and bond trading. The term indenture primarily describes secured contracts and has several applications in U.S. law. for our $200 million senior notes are tied to similar measures. EBITDA also presents useful information regarding our ability to service and incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. . EBITDA does not take into account our debt service requirements, and accordingly, is not necessarily indicative of amounts that may be available for debt service. The following table reconciles EBITDA and cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for the periods indicated (in thousands).
Three Months Three Months
Ended Ended
June 30, June 30,
2006 2005
------------ ------------
Net cash provided by (used in) operating
activities $14,046 $15,131
Increase (decrease) in accounts receivable (22) (3)
Increase (decrease) in inventories (19) 87
Increase (decrease) in prepaid and - -
other current assets (177) 260
Increase (decrease) in accounts payable - -
trade credit 795 (946)
Increase (decrease) in accrued liabilities (427) 163
Loss on sale of fixed assets (38) -
Credit enhancement fee (1,860) (1,857)
------------ ------------
EBITDA $12,298 $12,835
============ ============
(1) EBITDA provides a metric to analyze our operations that should be
considered with both our GAAP results and the reconciliation to net
cash provided by operating activities. EBITDA is presented solely as a
supplemental disclosure because the Authority believes it provides a
more complete understanding of our business, it may be used by
investors to assess the operating performance of the business in
comparison to other operators in the gaming industry and the Authority
uses EBITDA as a benchmark to evaluate its own performance in
comparison to its competitors.
(2) Credit Enhancement Fees: We are obligated to pay Dry Creek Casino,
LLC twenty percent (20%) of the Authority's net income before
distributions to the Tribe plus depreciation and amortization plus
annual interest on $25.0 million principal amount of the senior notes,
less revenues from sales of alcoholic beverages (the "Credit
Enhancement Fee"). The Credit Enhancement Fees are required to be paid
for a period of five years commencing on June 1, 2003. The Credit
Enhancement Fees for the three months ended June 30, 2006 was $1.9
million.
River Rock Entertainment Authority We are a Tribal governmental instrumentality Instrumentality Notes issued by a federal agency whose obligations are guaranteed by the full-faith-and-credit of the government, even though the agency's responsibilities are not necessarily those of the US government. of the Dry Creek Rancheria The is the land base for the Dry Creek Rancheria of Pomo Indians of California. External link
2. In general, Indians have no political rights in the United States; they cannot vote at the general elections for officers, nor hold office. (the "Tribe"), a federally recognized self-governing Indian tribe INDIAN TRIBE. A separate and distinct community or body of the aboriginal Indian race of men found in the United States. 2. Such a tribe, situated within the boundaries of a state, and exercising the powers of government and, sovereignty, under the national . The Tribe has 931 enrolled members and approximately 75-acre reservation in Sonoma County, California. We own and operate the River Rock Casino, a 68,000 square foot facility which is on the reservation and overlooks the scenic Alexander Valley, 75 miles north of San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden . River Rock Casino features 35,500 square feet of gaming space containing 1,600 slot and video poker Video poker is a casino game based on five-card draw poker. It is played on a computerized console which is a similar size to a slot machine. History Video poker first became commercially viable when it became economical to combine a television-like monitor with a machines, as well as a full-service restaurant. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This release contains certain "forward-looking statements" within the meaning of the Unites States Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Whenever you read a statement that is not simply a statement of historical fact (such as when we describe what we "believe," "expect" or "anticipate" will occur and other similar statements), you must remember that our expectations may not be correct, even though we believe they are reasonable. We do not guarantee that the transactions and events described in this press release will happen as described (or that they will happen at all). You should read this press release completely and with the understanding that actual future results may be materially different from what we expect. We will not update these forward-looking statements, even though our situation will change in the future. Whether actual results will conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" our expectations and predictions is subject to a number of risks and uncertainties, including: --Our financial performance --Our dependence on a single gaming site --Our levels of leverage and ability to meet our debt service and other obligations --General local, domestic and global economic conditions --Changes in federal or state tax laws or regulations, including the Compact --Maintenance of licenses required under gaming laws Gaming law can be described as the set of rules and regulations that apply to the gaming or gambling industry. Gaming law is not exactly a branch of law in the traditional sense but rather a transversal gathering of a range of legal topics related to gaming which encompasses and regulations and construction permits and approvals required under applicable laws and regulations; and --Development of new competitive gaming properties.
RIVER ROCK ENTERTAINMENT AUTHORITY
(A Governmental Instrumentality of the Dry Creek Rancheria Band of
Pomo Indians)
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND DEFICIT
(Unaudited)
Three-Month
Period Ended
June 30,
2006 2005
------------- -------------
REVENUES:
Casino $32,959 $34,842
Food, beverage & retail 1,634 1,838
Other 145 168
------------- -------------
Gross revenues 34,738 36,848
Promotional allowance (718) (1,056)
------------- -------------
Net revenues 34,020 35,792
OPERATING EXPENSES:
Casino 5,518 5,221
Food, beverage & retail 1,689 1,617
Selling, general and administrative 11,798 13,623
Depreciation 2,871 2,758
Credit enhancement fee 1,859 1,857
Gaming commission expense 726 356
Compact revenue sharing trust fund 334 334
------------- -------------
Total Operating expenses 24,796 25,765
------------- -------------
INCOME FROM OPERATIONS 9,224 10,027
------------- -------------
OTHER EXPENSE-Net
Interest expense (5,221) (5,245)
Interest income 211 52
Loss on sale of assets (38) -
Other expense (0) (1)
------------- -------------
Other expense-net (5,047) (5,194)
------------- -------------
INCOME BEFORE DISTRIBUTIONS TO TRIBE 4,177 4,832
DISTRIBUTIONS TO TRIBE (3,060) (3,000)
------------- -------------
NET INCOME AFTER DISTRIBUTIONS TO TRIBE 1,117 1,832
FUND DEFICIT-Beginning of period (40,303) (45,136)
------------- -------------
FUND DEFICIT-End of period $(39,186) $(43,304)
============= =============
RIVER ROCK ENTERTAINMENT AUTHORITY
(A Governmental Instrumentality of the Dry Creek Rancheria Band of
Pomo Indians)
BALANCE SHEETS
(Unaudited)
June 30, December 31,
2006 2005
ASSETS ------------- -------------
CURRENT ASSETS:
Cash and cash equivalents $21,944 $17,650
Restricted cash-current 467 667
Accounts receivable 165 93
Inventories 153 159
Prepaid expenses and other current assets 1,223 1,428
------------- -------------
Total current assets 23,951 19,997
------------- -------------
RESTRICTED CASH-Net of Current 6,738 6,707
------------- -------------
PROPERTY AND EQUIPMENT:
Buildings, land and building improvements 129,180 128,859
Furniture, fixtures and equipment 26,711 26,016
------------- -------------
155,891 154,875
Accumulated depreciation (27,413) (21,802)
Construction in progress 3,563 1,819
------------- -------------
Property and equipment-net 132,042 134,892
---------------------------
DEPOSITS AND OTHER ASSETS 5,493 6,082
------------- -------------
TOTAL ASSETS $168,224 $167,678
============= =============
LIABILITIES AND FUND DEFICIT
CURRENT LIABILITIES:
Accounts payable:
Trade $1,607 $2,178
Construction 467 1,115
Accrued liabilities 6,688 6,464
Current maturities of long-term debt 124 104
------------- -------------
Total current liabilities 8,885 9,860
LONG-TERM DEBT - net of current maturities 198,525 198,243
------------- -------------
Total long term liabilities 198,525 198,243
FUND DEFICIT
Invested in capital assets-net of related
debt (66,607) (63,455)
Restricted for capital projects 7,204 7,373
Unrestricted 20,216 15,656
------------- -------------
Total Fund Deficit (39,186) (40,425)
------------- -------------
TOTAL LIABILITIES AND FUND DEFICIT $168,224 $167,678
============= =============
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