Monday, May 24, 1999 | 11:17 a.m.
American Vantage Companies of Las Vegas said the Table Mountain Rancheria Band of Indians voted to terminate its contract to provide consulting services for the tribe's casino in Friant, Calif., near Fresno.
But that contract will not expire until June 30, 2000, meaning American Vantage will continue to receive $650,000 to $800,000 per month through the end of December, and $300,000 to $450,000 per month from next January through the contract's June termination, said Roy Keefer, the company's chief financial officer.
In the meantime, the company's first WCW Nitro Grill restaurant opened in the Excalibur hotel-casino Saturday, and it's 49-percent owned Border Grill restaurant is scheduled to open at the Mandalay Bay hotel-casino in June. The restaurant openings will help American Vantage absorb the hit of the canceled Table Mountain contract, Keefer said.
"We're in a process of diversifying ... so that we're not dependant on one source of revenue," said Keefer.
The Table Mountain Tribe terminated the American Vantage contract after tribal members voted in a new tribal leader, said Keefer. The tribe also fired its Tribal Business Committee, the body charged with overseeing the tribe's business operations, its casino president and its tribal legal counsel.
"I think as in a lot of things whenever you have a change in powers you like to start with a clean slate," Keefer said. "And that's what they're doing."
American Vantage shares have fallen in recent days, from the $1.10 range in early May to 93 cents in midday trading today.
Keefer said American Vantage is considering its alternatives, including possible legal action against the tribe.
The majority of American Vantage revenues have historically come from its consulting contract with the Table Mountain Tribe. In the company's second fiscal quarter ended Jan. 31, American Vantage generated $2.04 million in revenues, all from casino consulting fees. The company also generated $267,000 in interest from bank deposits.
American Vantage earned $842,000 in that quarter, or 5 cents per diluted share, up from $551,000, or 3 cents per diluted share, earned in the second fiscal quarter of 1998.
Under the terms of the company's contract with the Table Mountain Tribe, American Vantage receives a flat monthly fee of $350,000, plus a fee based on consulting work at the tribe's casino. The flat fee is slated to expire at the end of December. Monthly consulting fees range from $300,000 to $450,000 per month, said Keefer.
By its terms, the company's contract expires June 30, 2000. The tribe's action does not change the current contract -- it simply notifies American Vantage that it will not extend the contract as it has in the past. The original contract was signed in 1993.
Under the contract, American Vantage has loaned the tribe more than $1.3 million to help the tribe renovate and expand its casino. Keefer said all money loaned the tribe has been paid back.
Keefer is optimistic the company's new restaurant ventures will help it replace revenues from the Table Mountain operation. American Vantage also plans a North Las Vegas funeral home and cemetery. Keefer said the company is waiting for Clark County to finalize flood control plans for the area before developing the site.
Once the flood control plans are finalized, the funeral home and cemetery will take nine months to a year to complete, Keefer said.
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