Herbst Gaming posted an $8 million profit in the first quarter despite continued revenue declines across its various business sectors, a Thursday filing with the Securities and Exchange Commission shows.
The profit for the quarter ended March 31 was largely due to the company being free of $1.15 billion in debt that weighed the company down, such as a $29.5 million interest payment that drove the company's $32.8 million loss in the first quarter 2009.
In October, the U.S. Bankruptcy Court in Reno approved the plan to wipe out the debt and turn the company over to secured creditors. Approval of the plan is pending from government agencies, including casino regulators in Nevada, Missouri and Iowa, where the company operates.
Quarterly revenues fell 7.3 percent to $159.1 million from $171.7 million. Revenue in hotel-casino operations declined 10.3 percent, to $105 million from $117.1 million the prior year. Slot route operation revenues declined 10.6 percent, to $48.2 million from $53.9 million.
Herbst Gaming has 12 casinos in Nevada, one in Iowa and two in Missouri, along with a 6,100-machine Nevada slot route.
Cash flow, defined as earnings before interest, taxes, depreciation and amortization, improved at Herbst's hotel-casinos by 22.6 percent to $18.4 million but dropped 20.4 percent to $3.4 million in slot operations. Revenues at the Nevada casinos dropped 12.6 percent to $70.8 million, but cash flow rose 68.6 percent to $8.6 million.
The company said its three Primm properties -- Primm Valley Resort, Buffalo Bill's and Whiskey Pete's -- accounted for $9.5 million of the $10.2 million of Nevada's revenue decline. The company also owns Terrible's Hotel & Casino on Flamingo Road, two properties in Pahrump, two small casinos in Henderson and Searchlight, and four in Northern Nevada, including the Sands Regency in Reno.
A group of nearly 140 secured lenders will take over the company as early as late this year.
Herbst Gaming was privately held and operated by brothers Edward, Tim and Troy Herbst when the company filed for bankruptcy in March 2009. It has not been disclosed whether the family will have a role with the company postbankruptcy.
Contact reporter Arnold M. Knightly at email@example.com or 702-477-3893.