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Archon Reports Loss

13 May 2002

LAS VEGAS --Archon Corp. of Las Vegas, owner of Laughlin's Pioneer hotel-casino, reported a loss of $1.21 million, or 20 cents per share, for the quarter ended March 31. In the year-ago quarter, the company posted net income of $2.23 million, or 33 cents per diluted share.

The loss came despite a 15 percent increase in revenues, to $14.03 million, and a 77 percent increase in cash flow, to $6.03 million.

The loss was apparently the result of a 175 percent increase in interest expense, to $4.2 million. The year-ago quarter was also helped by a one-time gain of $3.7 million from a litigation settlement.

Cash flow at the Pioneer was $2.61 million, down less than 1 percent from the year-ago quarter. Revenues fell 7 percent to $19.8 million, but cost-cutting measures helped keep cash flow even with last year's levels.

The increase in cash flow came from office buildings in Dorchester, Mass., and Gaithersburg, Md., acquired by the company in March 2001. These properties generated $3.1 million in cash flow during the quarter, up from $370,000 in the year-ago quarter.

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