Financially strapped Herbst Gaming had another challenging quarter, losing $62.3 million while suffering revenue declines in both its slot machine route operations and casinos.
The Las Vegas-based company, which said in March it might be forced to file for bankruptcy, said the loss covered the quarter that ended June 30. In the same quarter a year ago, Herbst Gaming lost almost $1.4 million.
The company recently filed its quarterly earnings report with the Securities and Exchange Commission. The company did not issue a statement nor hold a conference call on the results.
Herbst Gaming’s overall revenues fell 4.5 percent to $204.5 million, compared with $214.2 million in the second quarter of 2007.
Revenues from the company’s 7,200-machine Nevada slot machine route operations, which have declined significantly since a voter-approved statewide smoking ban in restaurants and taverns took effect in January 2007, fell 11 percent in the quarter to $63.9 million. Casino revenues fell 8.4 percent for $120.2 million.
Herbst operates 15 casinos in Southern and Northern Nevada.
Most of the casino losses were at the company’s three Primm resorts, which have seen visitation from Southern California curtailed by high gasoline prices. Herbst paid $394 million to acquire the Primm casinos from MGM Mirage in April 2007.
Herbst Gaming is privately held by brothers Ed, Tim and Troy Herbst but has publicly held debt of more than $1.146 billion.
At the end of March, Herbst Gaming told investors the company might have to seek bankruptcy protection unless it can reorganize a payment structure for its debt. Auditors said the company’s troubles meeting its bond payments triggered a potential default under its credit agreement.
“We continue our evaluation of financial and strategic alternatives, which may include a recapitalization, refinancing, restructuring or reorganization of our obligations or a sale of some or all of our businesses,” Herbst Gaming said in its filing with the SEC.
“We and our advisers are actively working toward such a transaction that would address the decline in our operating results and our capital structure, including our outstanding indebtedness. We cannot assure you that we will be successful in undertaking any such alternative in the near term.”
Contact reporter Howard Stutz at email@example.com or 702-477-3871.