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August 17, 2017

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Hooters loses $5.05 million in 2nd quarter

Company warns it might seek bankruptcy protection

The company that owns the Hooters Casino Hotel in Las Vegas today said it swung to a loss in the second quarter and again warned it may seek bankruptcy protection if it can't restructure operations, refinance its debt or gain forbearance deals from lenders.

Hooters lost $5.05 million in the quarter vs. a profit of $2.44 million in 2008's second quarter. Revenue fell from $16.435 million to $11.67 million, said the company, which reiterated it has been unable to make recent debt payments.

The 696-room property on Tropicana Avenue, with about $164 million in debt and other liabilities, said results suffered in the quarter because of the decline in visitation to Las Vegas, the closure of 235 rooms in May for a plumbing job and traffic disruptions.

Hooters owner, 155 East Tropicana LLC said a project for installation of utilities for a new terminal at McCarran International Airport has disrupted the Tropicana Avenue auto traffic flow into its property as well as walk-in traffic to the property via the walk-way between Hooter's and the MGM Grand hotel-casino.

"To counter these business disruptions and economic conditions, we have continued to focus on managing costs. Overall, operating expenses declined $2.9 million from the same quarter prior year. Operating costs are expected to continue to decline in the third quarter of 2009 as we continue to target cost reductions,'' Hooters owner said in a regulatory filing.

In the second quarter, casino revenue tumbled at Hooters 37.2 percent and hotel revenue was off 33 percent as the average daily room rate fell 16 percent to $58 and the occupancy rate fell year-over-year from 97.6 percent to 84.6 percent.

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