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Profits Fall for Poster Financial Group

LAS VEGAS -- Poster Financial Group, the owner and operator of the Golden Nugget Las Vegas and Golden Nugget Laughlin, on Tuesday said second-quarter operating income fell slightly and net income fell sharply compared with a year earlier.

In a statement, the company said pro forma net income was $74,000, compared with $262,000 a year earlier. These amounts reflect the acquisition of the casinos and related financing transactions as if they had occurred at the beginning of 2003.

On Jan. 23, Poster Financial completed the acquisition for $213.7 million, consisting of a $215 million purchase price (adjusted to $210.2 million for working capital and other adjustments at the closing date) and approximately $3.5 million in transaction fees.

Operating income was $4.4 million for the three months ended June 30, down from $4.5 million a year earlier.

Cash flow, defined as earnings before interest, taxes, depreciation and amortization, rose 13.2 percent to $8.6 million from $7.6 million.

Consolidated revenue rose 19 percent to $65.7 million from $55.2 million.

The company said significant increases in gambling volumes, increased occupancy and higher average daily room rate fueled the rises in operating income and cash flow.

John Mulkey, a Bear Stearns gambling analyst in New York, told The Associated Press that Poster's "year-over-year revenue growth was solid."

In addition to an ad campaign targeting Las Vegas visitors, Poster owners Tom Breitling and Tim Poster agreed to use the downtown Golden Nugget as the site for Fox television's reality show, "The Casino."

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