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Arnold M. Knightly

Riviera earnings continue to sink

11 August 2009

LAS VEGAS, Nevada –- Riviera Holdings Corp., which reported widening losses in the second quarter, said Monday it is still in talks with its creditors about its future.

The company, which owns the Riviera on the Strip and a casino in Colorado, posted a net loss of $13.5 million for the quarter ended June 30, a sharp swing from the $10 million profit recorded for the same quarter last year, according to a filing with the Securities and Exchange Commission.

The result translated into an earnings loss of $1.08 cents per share in the quarter, down from 80 cents per share profit a year ago.

The drop drives the company's six-month loss to $14.5 million this year.

Because of its financial problems, Riviera did not make a $6 million interest payment in the second quarter, but the company said Monday it is still talking to creditors about restructuring its debt. The company, however, cautioned it could still end up in bankruptcy.

"With the aid of our financial advisers and outside counsel, we are continuing to negotiate with our various creditor constituencies to refinance or restructure our debt," the filing said. "We cannot assure you that we will be successful in completing a refinancing or consensual out-of-court restructuring, if necessary. If we were unable to do so, we would likely be compelled to seek protection under Chapter 11 of the U.S. Bankruptcy Code."

The company skipped a $4 million payment in March when it entered into talks with Wachovia Bank about restructuring its debts.

Riviera Holdings has $276.1 million in long-term debt, $245 million of which is a credit facility with Wachovia. The company has received multiple default notices on its debt this year.

The company reported that its loss from operations in the second quarter was $600,000, a drop from the $5 million in net income realized the same time last year.

Revenues fell 24.1 percent to $34.6 million in the quarter, down from $45.6 million last year. Revenues for the year have dropped 26 percent, to $69.3 million from $93.6 million.

Second-quarter cash flow, defined as earnings before interest, taxes, depreciation and amortization, fell 62.8 percent, to $3.2 million from $8.6 million in 2008. Cash flow the first six months is down 54.5 percent, to $8.5 million from $18.7 million.

At the 2,075-room Riviera on the Strip, revenues declined 27.8 percent to $24.9 million from $34.5 million. Casino revenues fell 16.6 percent to $12.3 million in the quarter.