Business briefs for August 6, 1998

A summary of the day's top financial news

Local * RIVIERA SALES, EBITDA INCREASE -- Riviera Holdings Corp. lost $2.4 million, or 47 cents per share, on revenues of $42.2 million in the quarter ending June 30, compared to earnings of $2 million, or 39 cents on revenues of $40.6 million one year earlier. But EBITDA -- earnings before interest, taxes, depreciation and amortization -- rose from $8.3 million last year to $8.9 million. Riviera cited success of Nickle Town, a new nickle slot-focused area at the Riviera hotel-casino. Riviera attributed the earnings loss to charges for its refinancing last year of $100 million in secured debt with a new issue of $175 million 10 percent notes. The refinancing was done to facilitate a merger with a company controlled by Allen Paulson. Paulson later backed out of that merger. The company also incurred $342,000 in merger and litigation costs related to the failed Paulson merger. Riviera said the expansion of its convention center to 150,000 square feet is on track for an early 1999 completion, and that it has begun construction on its Black Hawk, Colo. casino.

* ANCHOR GAMING PROFIT JUMPS 74 PERCENT -- Slot designer Anchor Gaming of Las Vegas said net income for its fiscal 1998 fourth quarter ended June 30 rose 74 percent, to $18.5 million, or $1.42 per diluted share, from $10.7 million, or 79 cents a share, in the year-earlier quarter. Revenue for the quarter rose 40 percent, to $64.8 million from $46.1 million, the company said. Full-year net rose 92 percent, to $68.4 million, or $5.20 a share, from $35.7 million, or $2.63 per share in fiscal 1997. Full-year revenue rose 51 percent to $231.9 million from $153.7 million, Anchor said. The increases reflect the 24th consecutive quarter in which the Las Vegas-based company, which also owns two Colorado casinos and a Nevada slot route operation, posted higher earnings and revenue. Anchor stock, one of the most volatile in the gaming sector, closed at 65 3/4, up 1 3/4, in Wednesday trading.

* UNITED HEALTHCARE STOCK DEVASTATED ON REORGANIZATION NEWS -- United HealthCare Corp. of Minneapolis took a $900 million pretax charge in the second quarter for reorganizing its businesses and pulling out of some markets, resulting in a loss for the second-largest U.S. health insurer. Its shares plunged this morning 11 7/8 to 41. United Health said it's cutting back its Medicare plans in some markets and getting out of some commercial markets because financial performance wouldn't be up to expected levels. An analyst said today's announcement jeopardizes United's plan to acquire Humana Inc. for $5.4 billion.

* PACIFICARE PROFIT DOUBLES -- PacifiCare Health Systems Inc. said second-quarter profit more than doubled, beating forecasts, as the health insurer began to get a handle on rising medical costs. Santa Ana, Calif.-based PacifiCare reported second-quarter net income of $48.8 million, or $1.06 a diluted share, up from $18 million, or 37 cents, a year earlier.

* SIERRA'S LV PHARMACY NETWORK EXPANDED -- Sierra Health Services said its Health Plan of Nevada Inc. and Sierra Health & Life Insurance Co. units expanded their pharmacy network to include 40 Las Vegas-area Rite Aid Corp. and Smith's Food & Drug pharmacies. HPN says it is Nevada's largest health maintenance organization with approximately 170,000 members, while Sierra Health & Life has some 23,000 members.

* DISABLED SUE RIO OVER ITS BUSSES -- Las Vegas resident Ronald Ray Smith and the Utah-based Disabled Rights Action Committee sued the Rio hotel-casino in U.S. District Court this week, alleging its fixed-route shuttle busses are not wheelchair accessible in violation of the Americans with Disabilities Act. Attempts to contact Rio officials for comment failed.

* AIR FILTER COMPANIES FIGHTING IN COURT -- Air Filter Sales and Service sued competitor Environmental Filter Corp. this week in Clark County District Court, seeking an injunction barring Environmental Filter from using Air Filter in its name. Air Filter contends its competitor uses the moniker Air Filter Sales - Environmental Filter Corp., causing lost sales and confusion among customers. James McCave of Environmental Filter said he had not seen the suit.

To contact Sun Business Editor Steve Green, call 259-4083 or e-mail [email protected]

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