Quarterly losses widen for LV casino operator

Losses at Las Vegas-based Fitzgeralds Gaming Corp. worsened in the third quarter, as the company continued its default on more than $200 million in debt.

Fitzgeralds' losses rose 25.5 percent over the year-ago quarter, to $5.45 million. Over a nine-month period, Fitzgeralds has lost $10.05 million, compared to a $2.39 million loss over the first nine months of 1998.

Meanwhile, the company said it probably won't make a $12.5 million interest payment on $204 million in outstanding bonds, due Dec. 15. The company already missed a payment June 15.

The company said it is continuing restructuring negotiations with the bondholders, who have yet to take action against Fitzgeralds.

"By terminating the interest payments on the ... notes until such time as a restructuring plan has been negotiated and implemented, the company believes its liquidity and capital resources will be sufficient to maintain all of its normal operations at current levels during the restructuring period and does not anticipate any adverse impact on its operations, customers or employees," the company's filing stated. However, it referred to the likelihood of bankruptcy proceedings as a "virtual certainty."

The company did record a 2.5 percent gain in revenues during the quarter, to $52.1 million. Its downtown Las Vegas property recorded a 5.8 percent gain in revenues, to $12.4 million, while room occupancy at the hotel-casino reached 91.8 percent, up from 85.6 percent.

However, losses increased because of heavier interest payments -- $7.2 million in the third quarter, a 10.1 percent increase -- and increased marketing and personnel expenses. The company said its 4.6 percent rise in operating costs -- to $48.9 million -- was made necessary by "increasing competitive pressures."

The company's cash flow -- representing earnings before interest, taxes, depreciation and amortization -- was $6.74 million for the quarter, down 10.1 percent.

Fitzgeralds operates casinos in Las Vegas, Reno, Mississippi and Colorado. The company's shares do not trade publicly, but Fitzgeralds has publicly traded debt.

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