bajalou
Ultra Nomad
Posts: 4459
Registered: 3-11-2004
Location: South of the broder
Member Is Offline
|
|
Is this why we havent seen the Herbst racers lately?
Subject: [Queso] Herbst Gaming Shuts Down ...
$1.146 billion debt - Debt-strapped Herbst Gaming shuts small Northern Nevada casino
Financially troubled Herbst Gaming closed one of its small Northern Nevada casinos this week.
The Las Vegas-based company, which told investors in late March it was facing possible bankruptcy over a mounting debt load, closed the Red Hawk
Sports Bar in Dayton, laying off an undetermined number of workers. The small casino, which had 33 slot machines, was purchased by Herbst in January
2007 through its $119 million acquisition of Sands Regent, a Reno-area casino operator.
Herbst officials could not be reached for comment Wednesday.
The company operates 15 casinos in Southern and Northern Nevada, including the three Primm resorts along Interstate 15 at the California-Nevada
border, 35 miles south of Las Vegas, and the off-Strip Terrible's on East Flamingo Road. The company also owns three casinos in Missouri and Iowa and
operates approximately 7,200 slot machines through its Nevada route operation.
A gaming source said Herbst had filed a notice of temporary closure of the Red Hawk with Nevada gaming regulators earlier this month.
Herbst Gaming said it might have to seek bankruptcy protection unless it can reorganize a payment structure for its more than $1.146 billion debt.
Auditors said the company's troubles meeting its bond payments triggered a potential default under its credit agreement.
Herbst said its Southern Nevada operations have been hurt by failing economic conditions, a statewide ban on smoking in taverns and restaurants, and
competition from American Indian casinos in Southern California.
In May, family-controlled Herbst Gaming shook up its management structure, replacing Chairman and Chief Executive Officer Ed Herbst with his two
brothers. Tim Herbst was named chairman of the board while Troy Herbst was named CEO. Ed Herbst remained as a company director, but is on a leave of
absence from his officer duties due to personal reasons.
The company is privately held by the three brothers but has publicly owned debt.
Got this from race poster "El Chinero" who operates a Email network of racing info.
No Bad Days
\"Never argue with an idiot. People watching may not be able to tell the difference\"
\"The trouble with doing nothing is - how do I know when I\'m done?\"
Nomad Baja Interactive map
And in the San Felipe area - check out Valle Chico area |
|
|
comitan
Ultra Nomad
Posts: 4177
Registered: 3-27-2004
Location: La Paz
Member Is Offline
Mood: mellow
|
|
There were 3 of them last weekend racing trucks @Primm and it was on TV.
Strive For The Ideal, But Deal With What\'s Real.
Every day is a new day, better than the day before.(from some song)
Lord, Keep your arm around my shoulder and your hand over my mouth.
“The sincere pursuit of truth requires you to entertain the possibility that everything you believe to be true may in fact be false”
|
|
|
bajalou
Ultra Nomad
Posts: 4459
Registered: 3-11-2004
Location: South of the broder
Member Is Offline
|
|
Their home track I guess but they missed some other of the races.
No Bad Days
\"Never argue with an idiot. People watching may not be able to tell the difference\"
\"The trouble with doing nothing is - how do I know when I\'m done?\"
Nomad Baja Interactive map
And in the San Felipe area - check out Valle Chico area |
|
|
bajaguy
Elite Nomad
Posts: 9247
Registered: 9-16-2003
Location: Carson City, NV/Ensenada - Baja Country Club
Member Is Offline
Mood: must be 5 O'clock somewhere in Baja
|
|
They are still building and opening C stores in Nevada
|
|
|
capt. mike
Elite Nomad
Posts: 8085
Registered: 11-26-2002
Location: Bat Cave
Member Is Offline
Mood: Sling time!
|
|
i doubt they're hurting much - maybe a little over extended and need to dump some properties and debt.
those casinos gin money. cash cows to the max.
the re organization says a lot re the bros tho.!!
formerly Ordained in Rev. Ewing\'s Church by Mail - busted on tax fraud.......
Now joined L. Ron Hoover\'s church of Appliantology
\"Remember there is a big difference between kneeling down and bending over....\"
www.facebook.com/michael.l.goering |
|
|
TMW
Select Nomad
Posts: 10659
Registered: 9-1-2003
Location: Bakersfield, CA
Member Is Offline
|
|
["$1.146 billion debt - Debt-strapped Herbst Gaming shuts small Northern Nevada casino"]
Interesting
|
|
|
TMW
Select Nomad
Posts: 10659
Registered: 9-1-2003
Location: Bakersfield, CA
Member Is Offline
|
|
Posted on race-dezert:
CASINO COMPANIES: Herbst Gaming faces hurdles
Filings suggest company must restructure debt payments or face bankruptcy
By HOWARD STUTZ
REVIEW-JOURNAL
Casino operator and slot machine route manager Herbst Gaming may be forced to file for bankruptcy protection unless the company can reorganize a
payment structure for its more than $1.146 billion debt, according to documents filed with the U.S. Securities and Exchange Commission.
The Las Vegas-based company said its Southern Nevada operations have been negatively affected by failing economic conditions, a statewide ban on
smoking in taverns and restaurants, and competition from American Indian casinos in Southern California.
Herbst Gaming operates 16 casinos in Southern and Northern Nevada, including the three Primm resorts along Interstate 15 at the California-Nevada
border, 35 miles south of Las Vegas, and the off-Strip Terrible's on East Flamingo Road. The company also owns three casinos in Missouri and Iowa and
operates approximately 7,200 slot machines through its Nevada route operation.
The company is privately held by brothers Ed, Tim and Troy Herbst, but roughly $800 million of its debt is through publicly traded bonds.
In its Form 10-K annual report filed late Monday with the SEC, Herbst Gaming said the poor financial results the company experienced during the second
half of 2007 have carried over into the first few months of 2008.
Herbst's overall revenues were $849.2 million in 2007, almost 43 percent higher than 2006, because the company spent $543 million to acquire two major
casino companies, almost doubling the size of its casino holdings.
However, a 20 percent loss in revenues from its slot route business, coupled with a doubling of the company's costs, expenses and interest payments,
sent Herbst Gaming to a net loss of $127.2 million last year.
In February, Herbst hired Wall Street investment house Goldman Sachs to evaluate strategic alternatives for the company, which could include anything
from a debt recapitalization to a sale of some of its businesses.
According to an independent audit of the company's finances by Deloitte & Touche, Herbst Gaming has "going concern" qualification, which is a
default under its credit agreement with its bond holders. The company plans to discuss the matter soon with its bond holders to try and restructure
the debt.
"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," the company said in the filing.
If Herbst Gaming cannot complete a refinancing or restructuring, the company may be required to seek protection under Chapter 11 of the U.S.
Bankruptcy Code.
Herbst Gaming general counsel Sean Higgins declined comment Tuesday, saying the 10-K filing would speak for the company. Herbst Gaming is not planning
to hold a conference call to discuss its 2007 year-end and fourth-quarter earnings.
Gaming Control Board Chairman Dennis Neilander said casinos operated by Herbst Gaming would be placed on a different status than other licensees
because of the company's financial warnings. Additional audits of the finances and bankrolls at each location will be conducted.
Neilander said the control board became aware of Herbst's financial issues as they mounted over the last six months.
"This is not a new scenario for us," Neilander said, saying the Aladdin on the Strip and Fitzgeralds in Reno were the last casinos to operate under
bankruptcy protection. "It's tough because they were hit by so many factors at the same time. At this point, technically, this is the process we have
to take."
An investment source with knowledge of the situation said Herbst Gaming wants to resolve the matter without filing for bankruptcy. The source said
banks that control about $320 million of Herbst's debt are pushing for some sort of resolution. The source said the bank debt is currently worth about
70 cents on the dollar while the bond debt is worth about 14 cents on the dollar.
Several sources said Herbst's downfall began with last April's $394 million purchase of the three Primm casinos from MGM Mirage.
"They overpaid, pure and simple," said a gaming source who asked not to be named.
In January 2007, Herbst paid $149 million to acquire five Northern Nevada casinos, including the Sands Regency in Reno.
During Nevada licensing hearings in March 2007, Herbst executives admitted cash flow at the Primm casinos had fallen from $75 million in 2000 to about
$30 million in 2003 because of Indian gaming competition. Executives told regulators they were confident they could win back lost business. A year
later, it hasn't happened.
Sources confirmed that Primm executive Michael Puggi, who had been operating the resorts for MGM Mirage and was retained by Herbst, was recently let
go. In the 10-K, the company said the Primm casinos continue to lose business to the expanding California Indian casinos in Riverside County and San
Bernardino County.
"The Primm casinos derive a significant amount of their business from the Inland Empire region of Southern California, the economies of which have
been negatively impacted due to a number of factors, including the subprime mortgage crisis and higher gasoline costs," Herbst Gaming stated.
In its slot machine route operation, Herbst blamed a voter-enacted statewide ban on smoking in places that serve food with sending its tavern and
restaurant customers to traditional casinos if they want to smoke and gamble. The ban started in January 2007.
Not only have revenues in the route operation fallen, $276.9 million in 2007 compared with $347 million in 2006, but cash flow from the division was
off more than 56 percent, $32.8 million in 2007 compared with $75.5 million in 2006.
Herbst Gaming said it has renegotiated several lease agreements and has decreased its annual rent payments by approximately $20 million.
"However, if we are not able to offset decreased patron play, or patron play continues to decrease, there may be a material adverse effect on our
business, financial condition and results of operations," the company stated. "The success of our route operations is dependent on our ability to
renew our contracts."
Contact reporter Howard Stutz at hstutz@reviewjournal.com or (702) 477-3871.
|
|
|
Woooosh
Banned
Posts: 5240
Registered: 1-28-2007
Location: Rosarito Beach
Member Is Offline
Mood: Luminescent Waves at Rosarito Beach
|
|
The Herbst boys are fine financially. I saw a great special on them and their race division. Private helicopters and jets- a nice life they have
carved out in addition to their family tradition of off roading. Quite a great group of guys.
For the first time ever though- Vegas is seeing flat revenues. Usually when times get tough- peolpe still go to Vegas and hope for a windfall. No
one really understands why the downturn yet- could be travel hassles and expense related along with deep discounting and oversupply on the casino
side. MGM sold several properties to the Herbst family while at the same time developing casinos in Asia- where the market is headed and five-star
service is the norm. I'm certain the Herbsts were projecting continued growth- not stagnation. The numbers worked when they bought and financed
them- but not in the long run apparently
The wealthiest gamblers (called "whales") are heading to Macau China of late. It's a lot closer for most of them and many of the same casino players
(MGM, Wynn, etc) are there too. Asian culture embraces luck and gambling.
\"The only thing necessary for the triumph of evil is for good men to do nothing\"
1961- JFK to Canadian parliament (Edmund Burke)
|
|
|
Taco de Baja
Super Nomad
Posts: 1913
Registered: 4-14-2004
Location: Behind the Orange Curtain, CA
Member Is Offline
Mood: Dreamin' of Baja
|
|
With all the gas stations Herbst owns in NV, you think he would try selling fuel as a loss-leader (say $1.00 to $1.50 less than the going rate) to
attract people to Primm. He would more than make it up after a few pulls at the slots 
Truth generally lies in the coordination of antagonistic opinions
-Herbert Spencer
|
|
|
Gadget
Senior Nomad
Posts: 851
Registered: 9-10-2006
Location: Point Loma CA
Member Is Offline
Mood: Blessed with another day
|
|
Well if taking in 94% of every dollar in the casinos isn't enough to keep those Trophy Trucks rolling, then with the economy on the down swing, we may
see a big increase in class 11 entries in the future.
I wanna see Mark Post and Robby Gordon dukeing it out in the herby class 
"Mankind will not be judged by their faults, but by the direction of their lives." Leo Giovinetti
See you in Baja
http://www.LocosMocos.com
Gadget |
|
|
TMW
Select Nomad
Posts: 10659
Registered: 9-1-2003
Location: Bakersfield, CA
Member Is Offline
|
|
From an advertising standpoint auto ads are way down both from a national and local level but the gambling casinos ads are up, at least here in CA.
|
|
|
Woooosh
Banned
Posts: 5240
Registered: 1-28-2007
Location: Rosarito Beach
Member Is Offline
Mood: Luminescent Waves at Rosarito Beach
|
|
| Quote: | Originally posted by Gadget
Well if taking in 94% of every dollar in the casinos isn't enough to keep those Trophy Trucks rolling, then with the economy on the down swing, we may
see a big increase in class 11 entries in the future.
I wanna see Mark Post and Robby Gordon dukeing it out in the herby class |
Actually casino numbers are the other way around- but the percentages depends on the machines and casino locations. Casinos generally pay out 97-99
cent of every dollar they take in. The house advantge for a hand of shoe blackjack against a good player using basic strategy is just 1.54%. Of
course you multiply that by a hundred thousand hands (or pulls of the handle on a slot) and it adds up.
But those numbers are for top casino operators on dollar machines and the higher-limit table games. The type of customer Herbst trolls for off the
freeway aren't the high-roller type gambler. They get the families and budget vacationers who play the penny, nickel or dime slots, use the RV
hook-ups and pool and then bail out. One comp beer pretty much takes the profit away (which is why you won't ever see c-cktail serves in those areas
of the casino).
\"The only thing necessary for the triumph of evil is for good men to do nothing\"
1961- JFK to Canadian parliament (Edmund Burke)
|
|
|
pargo
Nomad
Posts: 162
Registered: 9-14-2006
Location: Burbank Ca.
Member Is Offline
Mood: Baja Nomas
|
|
Terrible Herbst...jus terrible
|
|
|
A-OK
Nomad
Posts: 162
Registered: 9-11-2004
Location: San Diego
Member Is Offline
Mood: faded
|
|
| Quote: | Originally posted by Woooosh
The Herbst boys are fine financially. I saw a great special on them and their race division. Private helicopters and jets- a nice life they have
carved out in addition to their family tradition of off roading. Quite a great group of guys.
For the first time ever though- Vegas is seeing flat revenues. Usually when times get tough- peolpe still go to Vegas and hope for a windfall. No
one really understands why the downturn yet- could be travel hassles and expense related along with deep discounting and oversupply on the casino
side. MGM sold several properties to the Herbst family while at the same time developing casinos in Asia- where the market is headed and five-star
service is the norm. I'm certain the Herbsts were projecting continued growth- not stagnation. The numbers worked when they bought and financed
them- but not in the long run apparently
The wealthiest gamblers (called "whales") are heading to Macau China of late. It's a lot closer for most of them and many of the same casino players
(MGM, Wynn, etc) are there too. Asian culture embraces luck and gambling. |
That show is over 5 years old.
If this new info is true.... sounds like karma is catching up to Team Herbst.
|
|
|
![[*]](images/xmbforum/default_icon.gif){kind=icon}
