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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Affinity Gaming turns small quarterly profit

4 April 2012

LAS VEGAS -- Las Vegas-based Affinity Gaming, which is refocusing itself as casino operator in four markets, grew revenues and turned a small profit in the 2011 fourth quarter, the company said in statement Tuesday.

Affinity, formerly known as Herbst Gaming, had revenues of $154.6 million in the quarter ended Dec. 31, a increase of 2.6 percent from a year earlier.

Net income was $4.2 million in the quarter. In the 2010 fourth quarter, Affinity's net income of $371.3 million contained items related the Herbst bankruptcy reorganization.

Affinity said it grew cash flow 10.4 percent in the quarter due to insurance proceeds from a flood at the company's St. Jo Frontier Casino in St. Joseph, Mo., which closed the property for three months.

For all of 2011, Affinity reported $631.2 million of net revenues and net income of $6.5 million.

Affinity Gaming operates the off-Strip Terrible's casino and the three casinos in Primm.

Earlier this year, Affinity sold a casino in Searchlight and a portion of its slot machine route operations affiliated with Terrible Herbst convenience stores to Las Vegas-based JETT Gaming.

The company sold the remainder of its slot route operations and its two Pahrump casinos to Las Vegas-based tavern operator and slot machine route operator Golden Gaming.

In connection with the Golden Gaming deal, Affinity acquired three casinos in Black Hawk, Colo., that were leased back to Golden until Affinity is licensed in Colorado. The company expects the licensing to take place later this year.

According to a regulatory filing, Affinity will pay Golden Gaming $4.2 million between the two transactions.

Affinity now owns 15 casinos, nine in Nevada, three in Colorado, two in Missouri and one in Iowa.

Affinity Chief Executive Officer David Ross said the company was able to sell what it considered noncore assets and look at expansion opportunities.

"In our first year of operations after the completion of our restructuring, we refreshed several of our properties with new slot product and upgrades to common areas and amenities," Ross said. "Our assets are well positioned, our balance sheet is strong and we will continue executing on our growth strategy in 2012."