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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 0-20840
PRESIDENT CASINOS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 51-0341200
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(State or other jurisdiction of (I.R.S. Employer
incorporation or Identification No.)
organization)
802 North First Street, St. Louis, Missouri 63102
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Address of principal executive offices-Zip Code
314-622-3000
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Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: Common Stock, $.06 par value,
5,033,161 shares outstanding as of July 15, 2002.
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PRESIDENT CASINOS, INC.
INDEX TO FORM 10-Q
Page No.
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets (Unaudited)
as of May 31 and February 28, 2002..................................1
Condensed Consolidated Statements of Operations (Unaudited)
for the Three Months Ended May 31, 2002 and 2001....................2
Condensed Consolidated Statements of Cash Flows (Unaudited)
for the Three Months Ended May 31, 2002 and 2001....................3
Notes to Condensed Consolidated Financial Statements (Unaudited)......4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.................14
Item 3. Quantitative and Qualitative Disclosures About Market Risk....26
Part II. Other Information
Item 1. Legal Proceedings.............................................26
Item 2. Changes in Securities.........................................26
Item 3. Defaults Upon Senior Securities...............................27
Item 4. Submission of Matters to a Vote of Security Holders...........27
Item 5. Other Information.............................................27
Item 6. Exhibits and Reports on Form 8-K..............................27
Signature................................................................28
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Part I. Financial Information
Item 1. Financial Statements
PRESIDENT CASINOS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except per share data)
May 31, Feb. 28,
2002 2002
-------- --------
ASSETS
Current assets:
Cash and cash equivalents...................... $ 9,447 $ 10,110
Restricted cash................................ 7,114 6,942
Restricted short-term investments.............. 700 775
Accounts receivable, net of allowance for
doubtful accounts of $281 and $180........... 711 823
Other current assets........................... 4,113 3,193
--------- ---------
Total current assets....................... 22,085 21,843
--------- ---------
Property and equipment, net of accumulated
depreciation of $52,820 and $50,736............ 97,729 98,607
--------- ---------
$119,814 $120,450
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Short-term debt................................ $ -- $ 5
Current maturities of long-term debt........... 107,100 107,200
Accrued loan fee............................... 7,000 7,000
Accounts payable............................... 3,086 3,476
Accrued payroll and benefits................... 3,997 5,183
Accrued interest............................... 19,371 15,568
Other accrued liabilities...................... 7,128 7,451
--------- ---------
Total current liabilities.................. 147,682 145,883
--------- ---------
Minority interest................................ 15,350 15,102
Commitments and contingencies.................... -- --
Stockholders' deficit:
Preferred Stock, $0.01 par value per share;
150 shares authorized; none issued
and outstanding.............................. -- --
Common Stock, $0.06 par value per share;
14,000 shares authorized; 5,033 shares
issued and outstanding....................... 302 302
Additional paid-in capital..................... 101,729 101,729
Accumulated deficit............................ (145,249) (142,566)
--------- ---------
Total stockholders' deficit................ (43,218) (40,535)
--------- ---------
$119,814 $120,450
========= =========
See Notes to Condensed Consolidated Financial Statements.
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PRESIDENT CASINOS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share data)
Three Months Ended May 31,
2002 2001
------ ------
OPERATING REVENUES:
Gaming......................................... $ 32,574 $ 31,622
Food and beverage.............................. 3,548 3,725
Hotel.......................................... 1,654 1,464
Retail and other............................... 1,292 1,684
Less promotional allowances.................... (5,687) (5,394)
--------- ---------
Net operating revenues....................... 33,381 33,101
--------- ---------
OPERATING COSTS AND EXPENSES:
Gaming......................................... 18,054 18,180
Food and beverage.............................. 2,326 2,544
Hotel.......................................... 375 432
Retail and other............................... 457 597
Selling, general and administrative............ 8,225 7,825
Depreciation and amortization.................. 2,236 2,101
Development.................................... 47 39
--------- ---------
Total operating costs and expenses........... 31,720 31,718
--------- ---------
OPERATING INCOME................................. 1,661 1,383
--------- ---------
OTHER INCOME (EXPENSE):
Interest income................................ 53 272
Interest expense............................... (3,841) (3,813)
Reorganization costs........................... (218) (50)
Gain (loss) on sale of property and equipment.. (23) 10
--------- ---------
Total other income (expense)................. (4,029) (3,581)
--------- ---------
LOSS BEFORE MINORITY INTEREST.................... (2,368) (2,198)
Minority interest................................ 315 288
--------- ---------
NET LOSS......................................... $ (2,683) $ (2,486)
========= =========
Basic and diluted net loss per share............. $ (0.53) $ (0.49)
========= =========
Weighted average common and dilutive
potential shares outstanding.................... 5,033 5,033
========= =========
See Notes to Condensed Consolidated Financial Statements.
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PRESIDENT CASINOS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
Three Months Ended May 31,
2002 2001
------ ------
Net cash provided by (used in)
operating activities............................ $ 988 $ (3,877)
--------- ---------
Cash flows from investing activities:
Expenditures for property and equipment......... (1,388) (1,342)
Changes in restricted cash...................... (172) 409
Purchase of short-term investments.............. -- (250)
Maturity of short-term investments.............. 75 5,413
Proceeds from installment sale receivable....... -- 400
Proceeds from the sale of property
and equipment................................. 7 12
Payment of minority interest.................... (68) --
--------- ---------
Net cash provided by (used in)
investing activities...................... (1,546) 4,642
--------- ---------
Cash flows from financing activities:
Payments on notes payable....................... (105) (1,015)
Payments on capital lease obligations........... -- (1)
--------- ---------
Net cash used in financing activities....... (105) (1,016)
--------- ---------
Net decrease in cash and cash equivalents......... (663) (251)
Cash and cash equivalents at beginning of period.. 10,110 8,559
--------- ---------
Cash and cash equivalents at end of period........ $ 9,447 $ 8,308
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest.......................... $ 66 $ 6,139
========= =========
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:
Assets acquired in exchange for debt............ $ -- $ 2
========= =========
See Notes to Condensed Consolidated Financial Statements.
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PRESIDENT CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share data and unless otherwise stated)
1. BASIS OF PRESENTATION
The consolidated financial statements include the accounts and operations of
President Casinos, Inc., its wholly-owned subsidiaries, a 95%-owned limited
partnership and a limited liability company in which a wholly-owned subsidiary
of the Company has a Class A ownership interest and in which an entity wholly-
owned by the Chairman of the Board of the Company owns a Class B Unit and has
preferred rights to certain cash flows (collectively, the "Company"). All
material intercompany balances and transactions have been eliminated.
The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern, which assumes
continuity of operation and realization of assets and satisfaction of
liabilities in the ordinary course of business. The Company has experienced
operating losses since 1995 and has recently experienced significant
difficulty in generating sufficient cash flows to meet its obligations and
sustain its operations. As such, the Company has been in default under
various of its financial obligations as described below. Such conditions raise
substantial doubt about its ability to continue as a going concern. The
condensed consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments, consisting only of
normal recurring entries unless otherwise disclosed, necessary to present
fairly the Company's financial information for the interim periods presented
and have been prepared in accordance with accounting principles generally
accepted in the United States of America. The interim results reflected in
the condensed consolidated financial statements are not necessarily indicative
of results for the full year or other periods.
The financial statements contained herein should be read in conjunction with
the audited consolidated financial statements and accompanying notes to the
consolidated financial statements included in the Company's Annual Report on
Form 10-K for the period ending February 28, 2002. Accordingly, footnote
disclosure which would substantially duplicate the disclosure in the audited
consolidated financial statements has been omitted in the accompanying
unaudited condensed consolidated financial statements.
Certain amounts for fiscal 2002 have been reclassified to conform with
fiscal 2003 financial statement presentation.
2. BANKRUPTCY PROCEEDINGS
On June 20, 2002, the Company together with its subsidiary, President
Riverboat Casino-Missouri, Inc. ("President Missouri"), which owns and
operates the St. Louis operations, filed voluntary petitions for
reorganization under Chapter 11 of the bankruptcy code in the United States
Bankruptcy Court for the Southern District of Mississippi. On July 9, 2002,
the Company's subsidiary The President Riverboat Casino-Mississippi, Inc.
("President Mississippi") filed a voluntary reorganization petition in the
same Court. On July 11, 2002, substantially all of the Company's other
operating subsidiaries filed voluntary reorganization petitions under Chapter
11 in the same Court. The Company and its subsidiaries each continue in
possession and use of their assets as debtors in possession. The Company and
its subsidiaries have filed a motion for the administrative consolidation of
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their Chapter 11 cases under the Company's case. To date, the Court has not
ruled on the motion.
President Broadwater Hotel, LLC ("PBLLC"), a limited liability company in
which Broadwater Hotel, Inc., a wholly-owned subsidiary of the Company
("BHI"), has a Class A ownership interest, is in default under a $30,000
promissory note and associated $7,000 loan fee incurred in connection with the
July 1997 purchase by PBLLC of the real estate and improvements utilized in
the Company's operations in Biloxi, Mississippi. On April 19, 2001, PBLLC
filed a voluntary petition for reorganization under Chapter 11 of the
Bankruptcy Code in the United States Bankruptcy Court for the Southern
District of Mississippi. PBLLC continues in possession and use of its assets
as a debtor in possession and has entered into an agreement with its lender
approved by the Bankruptcy Court which allows PBLLC use of its cash
collateral. On October 31, 2001, PBLLC filed its plan of reorganization which
would permit PBLLC to restructure its debt obligations in a manner which was
designed to permit it to continue as a going concern. The Bankruptcy Court
has set October 30, 2002 for commencement of the hearing on confirmation of
the PBLLC Plan. The effect, if any, of the Chapter 11 filings by the Company
and its subsidiaries on the scheduled hearing on the PBLLC Plan has not yet
been determined. There can be no assurance that PBLLC will be able to
restructure its debt obligations and emerge from bankruptcy or continue as a
going concern. See "Note 6. Commitments and Contingent Liabilities."
As part of the Company's and subsidiaries' Chapter 11 reorganization
process, the Company will attempt to notify all known or potential creditors
of the filing for the purpose of identifying all pre-petition claims. In the
Company's Chapter 11 case, substantially all of the liabilities as of the
filing date are subject to adjustment under a plan of reorganization.
Generally, actions to enforce or otherwise effect repayment of all pre-
petition liabilities as well as all pending litigation against the Company are
stayed while the Company continues its business operations as debtors-in-
possession. Schedules will be filed by the Company with the Bankruptcy Court
setting forth the assets and liabilities of the debtors as of the filing date
as reflected in the Company's accounting records. Differences between amounts
reflected in such schedules and claims filed by creditors will be investigated
and amicably resolved or adjudicated before the Bankruptcy Court. The
ultimate amount and settlement terms for such liabilities are subject to a
plan of reorganization, and accordingly, are not presently determinable.
Under the Bankruptcy Code, the Company may elect to assume or reject real
estate leases, employment contracts, personal property leases, service
contracts and other executory pre-petition contracts, subject to Bankruptcy
Court review. The Company cannot presently determine or reasonably estimate
the ultimate liability that may result from rejecting leases or from filing of
claims for any rejected contracts, and no provisions have been made for these
items.
The Company continues to experience difficulty generating sufficient cash
flow to meet its debt obligations. As a result of the Company's relatively
high degree of leverage and the need for significant capital expenditures at
its St. Louis property, the Company was unable to pay the regularly scheduled
interest payments of $6,375 that were each due and payable March 15, and
September 15, 2000. Under the indentures pursuant to which the $75,000 13%
Senior Exchange Notes (the "Senior Exchange Notes") and $25,000 12% Secured
Notes (the "Secured Notes" and, collectively with the Senior Exchange Notes,
the "Notes") were issued, an Event of Default occurred on April 15, 2000, and
is continuing as of the date hereof. Additionally, the Company was unable to
pay the $25,000 principal payment due September 15, 2000 on the Senior
Exchange Notes. The holders of at least 25% of the Senior Exchange Notes and
the Secured Notes were notified of the defaults and instructed the Indenture
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Trustee to accelerate the Senior Exchange Notes and the Secured Notes and on
August 11, 2000, the holders declared the unpaid principal and interest to be
due and payable.
The Company was unable to make the principal and interest payments due
September 15, 2001 and the interest payments due March 15, 2002, on the
outstanding debt under the Senior Exchange Notes and Secured Notes. As of May
31, 2002, the outstanding principal consists of $56,250 of Senior Exchange
Notes and $18,750 of Secured Notes.
Management believes that during the bankruptcy proceedings, the Company's
liquidity and capital resources will be sufficient to maintain its normal
operations at current levels and does not anticipate any adverse impact on its
operations, customers or employees. Costs previously incurred and which will
be incurred in the future in connection with the reorganizations have been and
will continue to be substantial and, in any event, there can be no assurance
that the Company will be able to reorganize its indebtedness or that its
liquidity and capital resources will be sufficient to maintain its normal
operations during the reorganization period.
As of May 31, 2002, the Company had $9,447 of unrestricted cash and cash
equivalents. Of this amount, the Company requires approximately $6,500 of
cash to fund daily operations. The Company is heavily dependant on cash
generated from operations to continue to operate as planned in its existing
jurisdictions and to make capital expenditures. Management anticipates that
its existing available cash and cash equivalents and its anticipated cash
generated from operations will be sufficient to fund its ongoing operations
during the bankruptcy proceedings. Payments under the Company's defaulted
debt obligations generally will be stayed during the bankruptcy proceedings.
Cash restricted for payment of interest on the Company's Notes of $1,405
subsequently became unrestricted upon the Company's filing the voluntary
petition for reorganization. To the extent cash generated from operations is
less than anticipated, the Company may be required to curtail certain planned
expenditures and/or seek additional financing.
3. NATURE OF OPERATIONS
The Company owns and operates dockside gaming casinos through its
subsidiaries. The Company conducts dockside gaming operations in Biloxi,
Mississippi through its wholly-owned subsidiary President Mississippi and in
St. Louis, Missouri north of the Gateway Arch through its wholly-owned
subsidiary, President Missouri. In addition, the Company owns and manages
certain hotel and ancillary facilities associated with its gaming operations.
The President Broadwater Hotel, LLC, a limited liability company ("PBLLC") in
which Broadwater Hotel, Inc. ("BHI") has a Class A ownership interest, owns
approximately 260 acres in Biloxi, Mississippi, which includes a 111-slip
marina which contains the mooring site of "President Casino-Broadwater", two
hotels with approximately 500 rooms and an adjacent 18-hole golf course
(collectively, the "Broadwater Property"). BHI is a wholly-owned subsidiary
of the Company. Prior to July 2001, the Company also operated two non-gaming
dinner cruise, excursion and sightseeing vessels in St. Louis near the base of
the Gateway Arch. The assets of the non-gaming cruise operations were sold
July 17, 2001. See "Note 4. Property and Equipment."
On October 10, 2000, the Company sold the assets of its Davenport casino and
hotel operations. The Davenport casino operations were managed by the
Company's wholly-owned subsidiary, President Riverboat Casino-Iowa, Inc. ("PRC
Iowa"), which is the general partner of the 95% Company-owned operating
partnership, The Connelly Group, L.P. ("TCG"). The Blackhawk Hotel in
Davenport was owned by a wholly-owned subsidiary of the Company. The
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operating results of the Davenport casino and hotel operations have been
included in the consolidated operating results of the Company.
4. PROPERTY AND EQUIPMENT
On April 30, 2001, the Company executed an agreement to sell the assets of
Gateway Riverboat Cruises, the Company's non-gaming cruise operations which
provided dinner cruise, excursion and sightseeing on two riverboats on the
Mississippi River. The transaction was consummated on July 17, 2001.
5. CURRENT PORTION OF LONG-TERM DEBT
Long-term debt payable, all of which is classified as current liabilities,
are summarized as follows:
May 31, Feb.28,
2002 2002
------ ------
Senior Exchange Notes, 13%...................... $ 56,250 $ 56,250
Secured Notes, 12%,............................. 18,750 18,750
Broadwater Hotel note payable, variable
interest rate, 12.75% and 12.75%.............. 30,000 30,000
M/V "President Casino-Mississippi" note payable,
variable interest rate, 5.28% and 5.7%......... 2,100 2,200
--------- ---------
Total notes payable.......................... $107,100 $107,200
========= =========
Senior Exchange Notes and Secured Notes
The Senior Exchange Notes rank equal in right of payment to all present and
future senior debt, as defined in the indenture governing the Senior Exchange
Notes (the "Note Indenture"), of the Company and its subsidiaries and were
payable as follows: 25% of the outstanding principal amount on each of
September 15, 1999 and September 15, 2000 and the remainder of the outstanding
principal amount on September 15, 2001. In addition, the Senior Exchange
Notes are unconditionally guaranteed, jointly and severally on a senior basis,
by all of the Company's then existing wholly-owned subsidiaries (the
"Guarantors"), and, under certain circumstances, the Company's future
subsidiaries, although the subsidiary guarantee from TCG is limited in amount.
As security for the obligations of the Company and the Guarantors under the
Senior Exchange Notes, the Company and the Guarantors have pledged their
equity interests in each Guarantor and certain indebtedness from, and certain
investments in, certain gaming ventures. The Note Indenture contains certain
restrictive covenants which, among other things, limit the Company's
Guarantors' ability to pay dividends, incur additional indebtedness (exclusive
of $15,000 of senior debt), issue preferred stock, create liens on certain
assets, merge or consolidate with another company and sell or otherwise
dispose of all or substantially all of its properties or assets. On November
22, 2000, the Company and its principal subsidiaries executed an agreement
with a majority of the holders of its Senior Exchange Notes and Secured Notes.
On December 3, 1998, the Company repurchased $25,000 of its Senior Exchange
Notes. The repurchased notes were used to satisfy the $25,000 principal
payment due September 15, 1999 on the Company's $100,000 Senior Exchange
Notes. The repurchase was funded by the issuance of $25,000 of new 12% notes
due September 15, 2001 (the "Secured Notes"). The Secured Notes have no
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mandatory redemption obligation and are secured by mortgages on the "Admiral"
and the M/V "Surfside Princess," as well as subsidiary guarantees.
See "Note 2. Bankruptcy Proceedings" regarding default of the Senior
Exchange Notes and Secured Notes.
Broadwater Hotel Note
In conjunction with the purchase of the Broadwater Property, PBLLC borrowed
the sum of $30,000 from a third party (the "Indebtedness"). Except as set
forth in the promissory note and related security documents, PBLLC's
obligations under the Indebtedness are nonrecourse and are secured by the
Broadwater Property, its improvements and leases thereon. The Indebtedness
bears interest at a stipulated variable rate per annum equal to the greater of
(i) 8.75% or (ii) 4.0% plus the LIBOR 30-day rate.
PBLLC is obligated under the Indebtedness to make monthly payments of
interest accruing under the Indebtedness, and was obligated to repay the
Indebtedness in full on July 22, 2000. In addition, PBLLC was obligated to
pay to the lender a loan fee in the amount of $7,000 which was fully earned
and non-refundable when the Indebtedness was due. Neither the Indebtedness
nor the loan fee payments were made on the due date and the Indebtedness is in
default. In accordance with the terms of the loan, effective on the default
date, penalty interest of 4.0% is accrued in addition to interest at the
stipulated rate on the $30,000 principal. Additionally, PBLLC has accrued,
but not paid, interest on the unpaid loan fee at the stipulated rate since the
date of default. PBLLC continued to make the monthly interest payments
accruing on the $30,000 principal through April 19, 2001, when the Company
announced that PBLLC had filed for reorganization under Chapter 11 of the U.S.
Bankruptcy Code in the United States Bankruptcy Court for the Southern
District of Mississippi. See "Note 6. Commitments and Contingent
Liabilities" regarding the Chapter 11 petition filed by PBLLC.
M/V "President Casino-Mississippi" Note
The 5.28% term note payable is collateralized by the vessel M/V "President
Casino-Mississippi" and various equipment and is personally guaranteed by Mr.
Connelly. This note also contains certain covenants which, among other
things, require the Company to maintain a minimum tangible net worth of
$40,000. The aforementioned default on the Company's Senior Exchange Notes
and Secured Notes also constituted a default under this note. The Company
continued to make the quarterly principal and interest payments on this note
prior to the bankruptcy filed June 20, 2002. No action has been taken by the
lender to accelerate the note and declare the unpaid principal due and
payable. Under the terms of the 5.28% term note payable, $2,100 principal
becomes due and payable in August 2002.
The various agreements governing the notes described above generally limit
borrowings by the Company's affiliates without the respective lenders' prior
consent.
6. COMMITMENTS AND CONTINGENT LIABILITIES
--Bankruptcy Actions
On June 20, 2002, the Company together with its subsidiary, President
Missouri, which owns and operates the St. Louis operations, filed voluntary
petitions for reorganization under Chapter 11 of the Bankruptcy Code in the
United States Bankruptcy Court for the Southern District of Mississippi. On
July 9, 2002, the Company's subsidiary President Mississippi filed a voluntary
reorganization petition in the same Court. On July 11, 2002, substantially
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all of the Company's other operating subsidiaries filed voluntary
reorganization petitions under Chapter 11 in the same Court. The Company and
its subsidiaries each continue in possession and use of their assets as
debtors in possession.
On April 19, 2001, PBLLC (the "Debtor") filed a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code. That same day, the Bankruptcy
Court authorized the Debtor's interim use of cash collateral pursuant to a
Cash Collateral Stipulation and Agreement between the Debtor and its largest
creditor, Lehman Brothers Holdings Inc. ("Lehman"). Subsequent orders of the
Bankruptcy Court have extended the Debtor's authorized use of cash collateral
indefinitely until further order of the Court. The Debtor is operating its
businesses and managing its properties as a debtor-in-possession, and no
trustee has been appointed in the Debtor's case. The first meeting of
creditors was held on June 21, 2001, and an official committee of unsecured
creditors (the "Creditors Committee") has been appointed in the case. The
Bankruptcy Court fixed August 20, 2001 as the final date for creditors to file
proofs of claim in the Debtor's case, except that October 16, 2001 was fixed
as the final date for governmental units to file proofs of claim. The Debtor
is current with the filings of its monthly operating reports in the case, with
the report for June 2002 having been filed on July 15, 2002. Within its
exclusive period for filing a disclosure statement and plan of reorganization
as set by the Bankruptcy Court, the Debtor filed its Debtor's Plan of
Reorganization on October 31, 2001 (the "Plan") and its First Amended
Disclosure Statement on February 7, 2002 (the "Disclosure Statement"). The
Bankruptcy Court has set October 30, 2002 for commencement of the hearing on
confirmation of the PBLLC Plan. The effect, if any, of the Chapter 11 filings
by the Company and its subsidiaries on the scheduled hearing on the PBLLC Plan
has not yet been determined.
--Mizel Shareholder Derivative Suit
A shareholder derivative suit captioned "Mizel v. John E. Connelly et. al."
was filed on September 11, 1998, in the Court of Chancery of the State of
Delaware alleging that the Board of Directors of the Company failed to
exercise informed business judgment and wasted corporate assets in connection
with the July 1997 acquisition by the Company of certain real estate and
improvements in Biloxi, Mississippi, including the Broadwater Resort,
Broadwater Towers and a related golf course, from an entity controlled by Mr.
Connelly, Chairman of the Board and Chief Executive Officer of the Company.
The suit requested rescission of the transaction, a constructive trust upon
all benefits received by Mr. Connelly in the transaction, an award of damages
to the Company and attorneys' fees and costs. The Company filed a motion to
dismiss this action for failure by the plaintiff to make a demand for relief
upon the Board of Directors. The court denied the motion. The Company made
substantial paper discovery in response to requests for production. The
Company filed a motion to dismiss for failure to join an indispensable party,
PBLLC. This motion was denied. A motion for summary judgment was also
denied.
An oral settlement agreement was reached before the bankruptcy filing on
June 20, 2002 to resolve the matter by the payment to the Company of
approximately $75 with the plaintiff's attorneys applying to the Court for
attorneys fees of less than $50. The settlement has not been finalized and
the matter has been stayed pending the Company's reorganization.
--Poulos, McElmore and Shreier, et. al. v. Caesar's World, Inc. et. al.
In 1994, William H. Poulos filed a class-action lawsuit in the United Stated
District Court for the Middle District of Florida against over thirty-eight
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(38) casino operators, including the Company, and certain suppliers and
distributors of video poker and electronic slot machines. This lawsuit was
followed by several additional lawsuits of the same nature against the same,
as well as additional, defendants, all of which have now been consolidated
into a single class-action pending in the United States District Court for the
District of Nevada. Following a court order dismissing all pending pleadings
and allowing the plaintiffs to re-file a single complaint, a complaint has
been filed containing substantially identical claims, alleging that the
defendants fraudulently marketed and operated casino video poker machines and
electronic slot machines, and asserting common law fraud and deceit, unjust
enrichment and negligent misrepresentation. Various motions were filed by the
defendants seeking to have this new complaint dismissed or otherwise limited.
On December 19, 1997, the Court, in general, ruled on all motions in favor of
the plaintiffs. The plaintiffs then filed a motion seeking class certification
and the defendants have opposed it. On June 21, 2002 the Court entered an
order denying class certification. No appeal has been taken to date. Although
the outcome of litigation is inherently uncertain, management, after
consultation with counsel, believes the action will not have a material
adverse effect on the Company's financial position or results of operations.
--The Bank of New York v. M/V "Admiral" and M/V "Admiral Barge One" et. al.
On June 18, 2002, the Bank of New York, as trustee, initiated an action
against the M/V "Admiral" and M/V "Admiral Barge One" and President Missouri,
Owner, in Personum in the United States District Court for the Eastern
District of Missouri Eastern Division. The Verified Complaint alleged that
the Trustee had taken security in the M/V "Admiral" and M/V "Admiral Barge
One" and asked to realize on the M/V "Admiral" and M/V "Admiral Barge One" for
the benefit of the holders of the indebtedness represented by the Trustee.
This action has been administratively closed pending the conclusion of the
bankruptcy proceedings.
--"Surfside Princess" Litigation
On October 12, 2001, the Company's subsidiary which owned the M/V "Surfside
Princess," formerly known as the M/V "New Yorker," initiated an action in the
United States District Court for the Middle District of Florida against
Southern Gaming, LLC and its assignee for breach of a Bareboat Charter and
Purchase Agreement dated March 29, 2001 pursuant to which the M/V "Surfside
Princess" was chartered from the Company. The suit alleges breach of the
charter. Subsequent proceedings followed at which various parties claimed
various rights with respect to the vessel and its contents. The matter is
currently pending before the Court.
On October 19, 2001, Southern Gaming filed suit in the United States
District for Middle District of Florida seeking damages and alleging
subsequently this proceeding was consolidated with the prior proceeding
involving Southern Gaming. Other suits and claims exist with respect to the
vessel. While the Company currently believes it will ultimately recover the
vessel, it has not done so at this time. It is not possible to predict when
the Company will recover the vessel and be able to use or charter it.
The Company has also filed an action in the United States District Court for
the Eastern District of Missouri against the principals of Southern Gaming who
guaranteed the charter agreement. The matter is in the discovery state.
--Other
The Company is from time to time a party to litigation, which may or may not
10
13
be covered by insurance, arising in the ordinary course of its business. The
Company does not believe that the outcome of any such litigation will have a
material adverse effect on the Company's financial condition or results of
operations, or which would have any material adverse impact upon the gaming
licenses of the Company's subsidiaries.
7. SEGMENT INFORMATION
The Company evaluates performance based on operations EBITDA. Operations
EBITDA is earnings before interest, taxes, depreciation and amortization of
each of the reportable segments. Corporate and development expenses,
gain/loss on sale of assets, impairment of long-lived assets and
reorganization costs are not allocated to the reportable segments and are
therefore excluded from operations EBITDA.
The Company has no inter-segment sales and accounts for transfers of
property and inventory at its net book value at the time of such transfer.
The Company's reportable segments, other than the leasing operation, are
similar in operations, but have distinct and separate regional markets. The
Company's reportable segments are based on its two geographic gaming
operations and its leasing operation. The Biloxi operations consist of the
Biloxi casino and the Broadwater Property and the St. Louis operations consist
of the St. Louis casino and Gateway Riverboat Cruises ("Gateway"). On July
17, 2001, the assets of Gateway were sold and operations ceased. The Company
formerly reported Davenport operations as a third geographic gaming segment.
The Davenport operations consisted of the Davenport casino and the Blackhawk
Hotel, the assets of which were sold, and operations ceased, on October 10,
2000. Management views the residual costs and expenses incurred after the
sale of, and related to, the Davenport operations as a component of Corporate
EBITDA.
Three Months Ended May 31,
2002 2001
------ ------
OPERATING REVENUES:
St. Louis operations................... $ 19,895 $ 20,095
Biloxi operations...................... 13,486 13,006
--------- ---------
Net operating revenues............. $ 33,381 $ 33,101
========= =========
11 14
A reconciliation of operations EBITDA (before gain/loss on sale of property
and equipment, impairment of long-lived assets and reorganization costs) to
net income is as follows:
Three Months Ended May 31,
2002 2001
------ ------
OPERATIONS EBITDA:
St. Louis operations................... $ 3,468 $ 2,954
Biloxi operations...................... 1,888 1,565
--------- ---------
Gaming and ancillary operations...... 5,356 4,519
Leasing operations..................... (402) (105)
--------- ---------
Operations EBITDA.................. 4,954 4,414
Corporate administration............... (1,057) (930)
--------- ---------
Total EBITDA....................... 3,897 3,484
--------- ---------
DEPRECIATION AND AMORTIZATION............ 2,236 2,101
--------- ---------
OPERATING INCOME................... 1,661 1,383
--------- ---------
OTHER INCOME (EXPENSE):
Interest expense, net.................. (3,788) (3,541)
Reorganization costs................... (218) (50)
Gain (loss) on disposal of assets...... (23) 10
--------- ---------
Total other income (expense)......... (4,029) (3,581)
--------- ---------
LOSS BEFORE MINORITY INTEREST.......... (2,368) (2,198)
Minority interest...................... 315 288
--------- ---------
NET LOSS........................... $ (2,683) $ (2,486)
========= =========
EBITDA is not determined in accordance with generally accepted accounting
principles. Since not all companies calculate these measures in the same
manner, the Company's EBITDA measures may not be comparable to similarly
titled measures reported by other companies.
EBITDA should not be construed as an alternative to operating income as an
indicator of the Company's operating performance, or as an alternative to cash
flows from operational activities as a measure of liquidity. The Company has
presented EBITDA solely as a supplemental disclosure to facilitate a more
complete analysis of the Company's financial performance. The Company
believes that this disclosure enhances the understanding of the financial
performance of a company with substantial interest, depreciation and
amortization.
12
15
A summary of assets by segment, is as follows:
May 31, Feb. 28,
2002 2002
------ ------
St. Louis operations.................... $ 45,222 $ 46,281
Biloxi operations....................... 61,951 61,623
--------- ---------
Gaming and ancillary operations....... 107,173 107,904
Leasing operations...................... 3,857 4,001
--------- ---------
Operations' assets.................... 111,030 111,905
Corporate assets........................ 5,241 3,626
Development assets...................... 3,269 3,238
Davenport assets........................ 274 1,681
--------- ---------
Net assets.......................... $119,814 $120,450
========= =========
A summary of net property and equipment and additions to property and
equipment, by segment, is as follows:
May 31, Feb. 28,
2002 2002
------ ------
Property and Equipment:
St. Louis operations.................. $ 38,123 $ 38,534
Biloxi operations..................... 52,463 52,812
--------- ---------
Gaming and ancillary operations.... 90,586 91,346
Leasing operations.................... 3,854 4,000
--------- ---------
Operations assets................... 94,440 95,346
Corporate assets...................... 20 23
Development assets.................... 3,269 3,238
--------- ---------
Net Property and Equipment........ $ 97,729 $ 98,607
========= =========
Three Months Ended May 31,
2002 2001
------ ------
Additions to Property and Equipment:
St. Louis operations.................. $ 1,063 $ 614
Biloxi operations..................... 294 711
--------- ---------
Gaming and ancillary operations..... 1,357 1,325
Corporate assets...................... -- 1
Development assets.................... 31 18
--------- ---------
$ 1,388 $ 1,344
========= =========
Included in additions to property and equipment is $2 of assets acquired in
exchange for debt during the three-month period ended May 31, 2001.
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8. GUARANTEE OF CITY OBLIGATION
During 1998, the Company and the City of St. Louis reached an agreement for
the relocation of the "Admiral" approximately 1,000 feet north from its former
location on the Mississippi River. Under the terms of an agreement, the City
funded $3,000 of the relocation costs, $2,400 of which was financed through
bank debt. It is anticipated that the City will repay the debt from annual
allocations of $600 from the City's annual home dock city public safety fund
that is funded by admission taxes from the "Admiral." The Company has
guaranteed repayment of the bank debt if the City fails to pay the obligation.
As of May 31, 2002, the Company's guarantee was of $1,588.
9. INSURANCE RISK
The Company was partially self-insured for employee health and workers
compensation claims and third party liability costs through April 1999.
Effective May 1999, the Company became fully insured for workers compensation
claims. The Company continues to be partially self-insured for employee
health and third party liability claims. The self-insurance claim liability
is based on claims reported and claims incurred but not reported using the
Company's historic experience with such matters.
The Company does carry "Business Interruption" insurance, but due to the
current insurance market, the current policy does not cover interruption from
either windstorm or flood.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The following discussion should be read in conjunction with the consolidated
financial statements of the Company included elsewhere in this report.
President Casinos, Inc., President Riverboat Casino-Missouri, Inc., The
President Riverboat Casino-Mississippi, Inc., President Broadwater Hotel, LLC,
Broadwater Hotel, Inc., President Riverboat Casino-New York, Inc., PRC
Management, Inc., PRC Holdings Corporation, TCG/Blackhawk, Inc. and Vegas
Vegas, Inc. have each filed voluntary petitions for reorganization under
Chapter 11 of the Bankruptcy Code. See Note 2 "Bankruptcy Proceedings" of the
Notes to Condensed Consolidated Financial Statements included in Part I of
this report.
The Company continues to experience difficulty generating sufficient cash
flow to meet its debt obligations and sustain its operations. As a result of
the Company's relatively high degree of leverage and the need for significant
capital expenditures at its St. Louis property, the Company was unable to pay
the regularly scheduled interest payments of $6.4 million that were each due
and payable March 15, and September 15, 2000. Under the indenture pursuant to
which the $75.0 million 13.0% Senior Exchange Notes (the "Senior Exchange
Notes") and the $25.0 million 12% Secured Notes (the "Secured Notes" and
collectively with the Senior Exchange Notes, the "Notes") were issued, an
Event of Default occurred on April 15, 2000, and is continuing as of the date
hereof. Additionally, the Company was unable to pay the $25.0 million
principal payment due September 15, 2000 on the Senior Exchange Notes. The
holders of at least 25% of the Senior Exchange Notes and the Secured Notes
were notified of the defaults and instructed the Indenture Trustee to
accelerate the Senior Exchange Notes and the Secured Notes and on August 11,
2000, the holders declared the unpaid principal and interest to be due and
payable.
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On October 10, 2000, the Company sold the assets of its Davenport operations
for aggregate consideration of $58.2 million in cash. On November 22, 2000,
the Company entered into an agreement with a majority of the holders of the
Senior Exchange Notes and a majority of the holders of the Secured Notes. The
agreement provided for a proposed restructuring of the Company's debt
obligations under the Notes and the application of certain of the proceeds
received by the Company from the sale of the Company's Davenport, Iowa assets.
Approximately $43.0 million of the proceeds from the sale were deposited with
a trustee. Of this amount, $12.8 million was used to pay missed interest
payments due March 15, 2000 and September 15, 2000 on the Senior Exchange
Notes and the Secured Notes; $25.0 million was used to partially redeem the
Senior Exchange Notes and the Secured Notes; and $5.2 million was used to pay
interest due March 15, 2001 on the Senior Exchange Notes and the Secured
Notes.
Subsequently, the Company was unable to make the principal and interest
payments due September 15, 2001 and its interest payment due March 15, 2002,
on its Senior and Secured Notes. As of May 31, 2002, principal due on the
Senior and Secured Notes was $56.2 million and $18.8 million, respectively.
In July 2001, the Company completed the sale of its non-gaming cruise
operations in St. Louis, Missouri for $1.7 million. On March 29, 2001, the
Company executed an installment sale agreement for the M/V "Surfside Princess"
(formerly, the "New Yorker"). On October 3, 2001, as a result of the
purchasing party's inability to comply with the terms of the agreement, the
Company terminated the agreement and repossessed the vessel. Management
intends to continue to aggressively seek another buyer or find other uses for
the vessel. Until the Company is able to do so, the Company will continue to
incur legal fees, insurance and maintenance costs on the vessel.
In addition to the foregoing, President Broadwater Hotel, LLC ("PBLLC"), a
limited liability company in which a wholly-owned subsidiary of the Company
has a Class A ownership interest, is in default under a $30.0 million
promissory note and associated $7.0 million loan fee incurred in connection
with the July 1997 purchase by PBLLC of the real estate and improvements
utilized in the Company's operations in Biloxi, Mississippi. On April 19,
2001, PBLLC filed a voluntary petition for reorganization under Chapter 11 of
the Bankruptcy Code in the United States Bankruptcy Court for the Southern
District of Mississippi in Biloxi, Mississippi. PBLLC continues its
possession and use of its assets as a debtor in possession and has entered
into an agreement with its lender approved by the Bankruptcy Court which
allows PBLLC use of its cash collateral. On October 31, 2001, PBLLC filed a
Debtors' Plan of Reorganization (the "Plan") which was designed to permit
PBLLC to restructure its debt obligations in a manner which will permit it to
continue as a going concern. The Bankruptcy Court has set October 30, 2002
for commencement of the hearing on confirmation of the PBLLC Plan. The
effect, if any, of the Chapter 11 filings by the Company and its subsidiaries
on the scheduled hearing on the PBLLC Plan has not yet been determined.
The Plan of PBLLC provides that, following the confirmation of the Plan,
PBLLC and the Company will enter into a loan agreement under which the Company
will be obligated to loan to PBLLC such amounts as shall be necessary for
PBLLC to make certain payments due under the Plan. Additionally, if the Plan
is confirmed, the Class B membership interest of PBLLC held by JECA (an entity
controlled by John E. Connelly, the Company's Chairman and Chief Executive
Officer) will, with respect of its payment right against PBLLC of
15
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approximately $15.3 million, be entitled to receive in satisfaction thereof a
cash payment of $1.5 million and a one-year interest bearing promissory note
from PBLLC in the principal amount of $1.5 million. The Company would be
required to loan such amounts to PBLLC to the extent that PBLLC is unable to
fund such amounts. There can be no assurance that PBLLC will be able to
restructure its debt obligations and emerge from bankruptcy or continue as a
going concern.
Due to certain debt covenants and cross default provisions associated with
other debt agreements, the Company is also currently in default under its $2.1
million M/V "President Casino-Mississippi" note. See Liquidity and Capital
Resources.
Management believes the Company's liquidity and capital resources will be
sufficient to maintain its normal operations at current levels and does not
anticipate any adverse impact on its operations, customers or employees.
However, costs previously incurred and which will be incurred in the future in
connection with restructuring the Company's debt obligations and the
bankruptcy proceedings have been and will continue to be substantial and, in
any event, there can be no assurance that the Company will be able to
restructure successfully its indebtedness or that its liquidity and capital
resources will be sufficient to maintain its normal operations during the
restructuring period.
The Company's ability to continue as a going concern is dependent on its
ability to restructure successfully, including refinancing its debts, and the
ability of the Company to generate sufficient cash to fund future operations.
There can be no assurance in this regard.
Overview
The Company's operating results are affected by a number of factors,
including competitive pressures, changes in regulations governing the
Company's activities, the results of pursuing various development
opportunities and general weather conditions. Consequently, the Company's
operating results may fluctuate from period to period and the results for any
period may not be indicative of results for future periods. The Company's
operations in St. Louis, Missouri were temporarily suspended from May 13 to
May 20, 2002 as a result of flooding on the Mississippi River. The Company's
operations are not significantly affected by seasonality.
--Competition
Intensified competition for patrons continues to occur at each of the
Company's properties.
Since gaming began in Biloxi in August 1992, there has been steadily
increasing competition along the Mississippi Gulf Coast, in nearby New Orleans
and elsewhere in Louisiana and Mississippi. Several large hotel/casino
complexes have been built in recent years with the largest single resort in
the area opening in March 1999. There are currently twelve casinos operating
on the Mississippi Gulf Coast. See "Potential Growth Opportunities" regarding
a master plan for a destination resort the Company is developing in Biloxi,
Mississippi.
Competition is intense in the St. Louis market area. There are presently
four other casino companies operating five casinos in the market area. Many
of these competitors have significantly greater name recognition and financial
16
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and marketing resources than the Company. Two of these are Illinois casino
companies operating single casino vessels on the Mississippi River, one across
the Mississippi River from the "Admiral" and the second 20 miles upriver.
There are two Missouri casino companies, each of which operates casino vessels
approximately 20 miles west of St. Louis on the Missouri River. One company
operates one casino in the City of St. Charles, Missouri and the other company
operates two casinos in Maryland Heights, Missouri.
Applications were submitted to the Missouri Gaming Commission for approval
of potential new licenses at four different locations within the St. Louis
Metropolitan area along the Mississippi River, three of which were within 20
miles of the "Admiral." In July 2000, the Gaming Commission announced its
decision to award an additional license to the applicant proposing a site at
the greatest distance from the "Admiral" of the proposed locations. The
Commission's decision was being challenged by one of the applicants whose
proposal was not selected and by other entities. In September 2001, the
applicant selected by the Gaming Commission announced it would not proceed
with the development of the project. The Gaming Commission recently announced
that it would consider licensing an additional casino in the St. Louis market.
No such application has been filed. The opening of a new casino in the St.
Louis market would have a material adverse impact on the St. Louis operations
under most possible conditions.
--Regulatory Matters
Missouri regulations limit the loss per "simulated" cruise per passenger by
limiting the amount of chips or tokens a guest may purchase during each two-
hour gaming session to $500 (the "loss limit"). The company that operates
adjacent casinos is able to offer guests who reach the two-hour loss limit the
ability to move to the adjacent casino and continue to play. The lack of a
statutory loss limit on Illinois casinos allows them to attract higher stake
players. Additionally, their guests are not burdened with the administrative
requirements related to the loss limits. Any easing of the loss limits in
Missouri would be expected to have a positive impact on the Company's St.
Louis operations.
--Weather Conditions
The Company's operating results are susceptible to the effects of floods,
hurricanes and adverse weather conditions. Historically, the Company has
temporarily suspended operations on various occasions as a result of such
adversities. Under less severe conditions, high river levels cause reduced
parking and a general public perception of diminished access to the casino
resulting in decreased revenues. Management believes the move of the
"Admiral" diminished the negative effects of high water on operations.
However, on May 13, 2002, at 4:00 a.m. the St. Louis operations were
temporarily suspended due to high water levels. The "Admiral" was reopened on
May 20, 2002 at 6:00 p.m. During the same period for the prior year, the
Company recorded $1.4 million in St. Louis gaming revenue.
--Potential Growth Opportunities
Biloxi, Mississippi
In July 1997, the Company, through a newly created subsidiary, President
Broadwater Hotel, LLC ("PBLLC"), purchased for $40.5 million certain real
estate and improvements located on the Gulf Coast in Biloxi, Mississippi from
an entity which was wholly-owned by Mr. Connelly. The property comprises
approximately 260 acres and includes two hotels, a 111-slip marina and the
17
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adjacent 18-hole Sun Golf Course (collectively, the "Broadwater Property").
The marina is the site of the Company's casino operations in Biloxi and was
formerly leased by the Company under a long-term lease agreement. Broadwater
Hotel, Inc. a wholly-owned subsidiary of the Company ("BHI"), invested $5.0
million in PBLLC.
PBLLC financed the purchase of the Broadwater Property with $30.0 million of
financing from a third party lender, evidenced by a non-recourse promissory
note (the "Indebtedness") and issued a $10.0 million membership interest to
the seller. PBLLC is obligated to make monthly payments of interest accruing
under the Indebtedness, and was obligated to repay the Indebtedness in full on
July 22, 2000. In addition, PBLLC was obligated to pay to the lender a loan
fee in the amount of $7.0 million which became fully earned and nonrefundable
when the Indebtedness was due. See Liquidity and Capital Resources for a
discussion of the repayment of this obligation.
The Company has developed a master plan for the Broadwater Property.
Management believes that this site is ideal for the development of
"Destination Broadwater," a full-scale luxury destination resort offering an
array of entertainment attractions in addition to gaming. The plans for the
resort feature a village which will include a cluster of casinos, hotels,
restaurants, theaters and other entertainment attractions. Management
believes that with its beachfront location and contiguous golf course, the
property is the best site for such a development in the Gulf Coast market.
In January 1999, the Company received the permit from the Mississippi
Department of Marine Resources (the "DMR") for development of the full-scale
destination resort. This is the first of three permit approvals required of
the Joint Permit Application submitted in August 1998 to the DMR, the U.S.
Army Corps of Engineers (the "Corps") and the Mississippi Department of
Environment Quality. The two remaining permit approvals are still pending and
awaiting the completion of the Final Environmental Impact Statement ("EIS").
The Draft EIS has been completed, notice of which was posted in the Federal
Register in June 2000 for public comment. The comment period has been closed
and the Company is currently working with the Corps to resolve the comments in
order to facilitate the completion of the Final EIS. The comment period has
been closed and the Company has worked with the Corps to revise the plan in
order to resolve the comments and to facilitate the completion of the Final
EIS. The current permit application to the Corps was cancelled on June 10,
2002 pending re-submission of a revised project design that reflects the
changes resulting from the Company's work with the Corps. The cancellation is
an administrative measure which will allow the Corps to remove our application
from the Corps' pending action list, and should not affect future evaluation
of the permit request. The Company anticipates submitting a revised plan. At
that time, a new application number will be assigned, and the evaluation of
the permit request will resume.
In connection with the Company's proposed Destination Broadwater development
plan, to date, the Company has not identified any specific financing
alternatives or sources as the necessary regulatory approvals have not been
obtained. There can be no assurance that the Company will be able to obtain
the regulatory approvals or the requisite financing. Should the Company fail
to raise the required capital, such failure would materially and adversely
impact the Company's business plan.
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Results of Operations
Three-Month Period Ended May 31, 2002 Compared to the
Three-Month Period Ended May 31, 2001
The results of operations for the three-month periods ended May 31, 2002
and 2001 include the gaming results for the Company's operations in St. Louis,
Missouri and Biloxi, Mississippi and of much lesser significance, the resort
operations in Biloxi (the Broadwater Property). The assets of the St. Louis
non-gaming operations (Gateway Riverboat Cruises) were sold in July 2001. The
assets of the Davenport operations were sold on October 10, 2000.
The following table highlights the results of the Company's operations.
Three Months Ended May 31,
2002 2001
------ ------
(in millions)
St. Louis Operations
Operating revenues............. $ 19.9 $ 20.1
Operating income............... 2.1 1.5
Biloxi Operations
Operating revenues............. 13.5 13.0
Operating income............... 1.2 0.9
Corporate Leasing Operations
Operating loss................. (0.5) (0.1)
Corporate Administrative
and Development
Operating loss................. (1.1) (0.9)
The following table highlights cash flows of the Company's operations.
Three Months Ended May 31,
2002 2001
------ ------
(in millions)
Cash flows provided by (used in)
operating activities........... $ 1.0 $ (3.9)
Cash flows provided by (used in)
investing activities........... (1.5) 4.6
Cash flows used in
financing activities........... -- (0.3)
Cash paid for interest........... 0.1 6.1
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The following table provides a reconciliation of operations EBITDA (before
development and impairment expenses and gain/loss on sale of property and
equipment) to net income:
Three Months Ended May 28,
2002 2001
------ ------
(in millions)
OPERATIONS EBITDA:
St. Louis operations................ $ 3.5 $ 3.0
Biloxi operations................... 1.9 1.5
--------- ---------
Gaming and ancillary operations..... 5.4 4.5
Leasing operations.................. (0.4) (0.1)
--------- ---------
Operations EBITDA................. 5.0 4.4
CORPORATE EBITDA:
Corporate administration............ (1.0) (0.9)
Corporate development............... (0.1) (0.1)
--------- ---------
Total EBITDA..................... 3.9 3.4
--------- ---------
DEPRECIATION AND AMORTIZATION......... 2.2 2.1
--------- ---------
OPERATING INCOME................. 1.7 1.3
--------- ---------
OTHER INCOME (EXPENSE):
Interest, net....................... (3.8) (3.5)
Reorganization costs................ (0.3) --
--------- ---------
Total other income (expense)..... (4.0) (3.5)
--------- ---------
INCOME (LOSS) BEFORE
MINORITY INTEREST.................. (2.3) (2.2)
Minority interest................... 0.3 0.3
--------- ---------
NET INCOME (LOSS)................... $ (2.7) $ (2.5)
========= =========
St. Louis EBITDA margin............. 17.6% 14.9%
Biloxi EBITDA margin................ 14.1% 11.5%
* "EBITDA" consists of earnings from operations before interest, income
taxes, depreciation and amortization and before gain (loss) on disposal
of property and equipment, asset impairment and reorganization costs.
For the purposes of this presentation, EBITDA margin is calculated as
EBITDA divided by operating revenue. EBITDA and EBITDA margin are not
determined in accordance with generally accepted accounting principles.
Since not all companies calculate these measures in the same manner,
the Company's EBITDA measures may not be comparable to similarly titled
measures reported by other companies.
EBITDA should not be construed as an alternative to operating income
as an indicator of the Company's operating performance, or as an
alternative to cash flows from operational activities as a measure of
liquidity. The Company has presented EBITDA solely as a supplemental
disclosure to facilitate a more complete analysis of the Company's
20
23
financial performance. The Company believes that this disclosure
enhances the understanding of the financial performance of a company
with substantial interest, depreciation and amortization.
Operating revenues. The Company generated consolidated net operating
revenues of $33.4 million for the three-month period ended May 31, 2002
compared to $33.1 million for the three-month period ended May 31, 2001, an
increase of $0.3 million, or less than 1.0%. The St. Louis operations
experienced a decrease in revenue of $0.2 million and the Biloxi operations
experienced an increase in revenue of $0.5 million.
Gaming revenues in the Company's St. Louis operations increased $0.4 million
for the three-month period ended May 31, 2002, compared to the prior year
period. The St. Louis operations were temporarily suspended from May 13, 2002
to May 20, 2002, due to flood conditions on the Mississippi River. However,
the seven days of lost revenues from flooding was offset by the overall
increases in revenues. The key reasons for the increased St. Louis revenues
include an increase in downtown sporting events and the resulting influx of
tourists and the continued trend of increased capture of market share in the
Downtown St. Louis market since the move. During the two months prior to the
flood, the Company had captured 77% of the 5.7% market growth. Gaming
revenues at the Company's Biloxi operations increased $0.6 million for the
three-month period ended May 31, 2002 compared to the prior year period
primarily as a result of increased volume resulting from successful
promotional campaigns.
The Company's revenues from food and beverage, hotel, retail and other were
$6.5 million for the three-month period ended May 31, 2002, compared to $6.9
million for the three-month period ended May 31, 2001, a decrease $0.4
million, or 5.8%. The decrease was primarily attributable to a decrease of
food and beverage, retail and other revenue of $0.5 million as a result of the
sale of the non-gaming cruise operations in St. Louis in July 2001, offset by
an increase of $0.2 million in hotel revenue due to increased casino
promotions.
Promotional allowances were $5.7 million for the three-month period ended
May 31, 2002, compared to $5.4 million for the three-month period ended May
31, 2000, an increase of $0.3 million, or 5.6%. Promotional allowances in St.
Louis decreased $0.1 million and increased in Biloxi $0.4 million. In St.
Louis, the decrease is primarily the result of the seven-day suspension of
operations. In Biloxi, promotional allowances increased primarily as a result
of response to the competitive pressures in the market.
Operating costs and expenses. The Company's consolidated gaming expenses
were $18.0 million for the three-month period ended May 31, 2002, compared to
$18.2 million for the three-month period ended May 31, 2001, a decrease of
$0.2 million, or 1.1%. The decrease in gaming costs was primarily
attributable to a decrease in gaming costs in St. Louis as a result of the
seven-day suspension of operations. As a percentage of gaming revenues,
gaming costs decreased to 55.5% during the three-month period ended May 31,
2002 from 57.6% during the three-month period ended May 31, 2001. This
decrease in percentage cost was led by the increase in "win per passenger" in
St. Louis which effectively results in a decrease in certain of the gaming
taxes.
21
24
The Company's consolidated food and beverage expenses were $2.3 million for
the three-month period ended May 31, 2002, compared to $2.5 million for the
three-month period ended May 31, 2001, a decrease of $0.2 million, or 8.0%.
The St. Louis non-gaming cruise operations, sold in July 2001, contributed
$0.1 million to the decrease. The Biloxi operations contributed a decrease of
$0.1 million over the prior year.
The Company's consolidated hotel, retail and other expenses were $0.8
million for the three-month period ended May 31, 2002, compared to $1.0
million for the three-month period ended May 31, 2001. The sale of the St.
Louis non-gaming operations contributed $0.1 million to the decrease in hotel,
retail and other expenses.
The Company's consolidated selling, general and administrative expenses were
$8.2 million for the three-month period ended May 31, 2002, compared to $7.8
million for the three-month period ended May 31, 2001, an increase of $0.4
million, or 5.1%. The corporate leasing selling, general and administrative
expense increased $0.3 million as a result of legal fees, insurance and other
maintenance costs associated with having repossessed the "Surfside Princess"
(formerly, the "New Yorker.") Selling, general and administrative expenses
increased $0.2 million in Biloxi and $0.1 million in corporate administration,
offset by a decrease in $0.2 million as a result of the sale of the St. Louis
non-gaming operations.
Depreciation and amortization expenses were $2.2 million for the three-month
period ended May 31, 2002, compared to $2.1 million for the three-month period
ended May 31, 2001, an increase of $0.1 million. The increase is primarily
the result of adopting new accounting guidance, which requires the
depreciation of the corporate leasing assets, which had previously ceased
being depreciated.
Operating income. As a result of the foregoing items, the Company had
operating income of $1.7 million for the three-month period ended May 31,
2002, compared to operating income of $1.4 million for the three-month period
ended May 31, 2001.
Interest expense, net. The Company incurred net interest expense of $3.8
million for the three-month period ended May 31, 2002, compared to $3.5
million during the three-month period ended May 31, 2001, an increase of $0.3,
million or 8.6%. The increase is the result of a decrease of $0.2 million in
interest income, which resulted from the maturity of $5.6 million in short-
term investments in the prior year used to pay interest on the Company's
Senior Exchange and Secured Notes.
Reorganization costs. As a result of the bankruptcy proceedings associated
with the Broadwater Resort property, the Company incurred $0.2 million in
reorganization costs in the three-month period ended May 31, 2002, compared to
$0.1 million during the same period in the prior year.
Minority interest expense. The Company incurred $0.3 million minority
interest expense for both three-month periods ended May 31, 2002 and May 31,
2001.
Net loss. The Company incurred a net loss of $2.7 million for the three-
month period ended May 31, 2002, compared to a net loss of $2.5 million for
the three-month period ended May 31, 2001.
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Liquidity and Capital Resources
The Company meets its working capital requirements from a combination of
internally generated sources including cash from operations and the sale or
charter of assets no longer used in the Company's casino operations.
Management believes that it presently has adequate sources of liquidity to
meet its normal operating requirements. However, as a result of the Company's
high degree of leverage and the need for significant capital expenditures at
its St. Louis property, the Company was unable to make the regularly scheduled
interest payments of $6.4 million that were each due and payable March 15 and
September 15, 2000. Under the Indentures pursuant to which the Senior
Exchange Notes and Secured Notes were issued, an Event of Default occurred on
April 15, 2000, and is continuing as of the date hereof. Additionally the
Company did not pay the $25.0 million principal payment due September 15, 2000
on the Senior Exchange Notes. The holders of at least 25% of the Senior
Exchange Notes and Secured Notes were notified and instructed the Indenture
Trustee to accelerate the Senior Exchange Notes and Secured Notes and on
August 11, 2000, the holders declared the unpaid principal and interest to be
due and payable.
The Company was unable to make the principal and interest payments due
September 15, 2001 and the interest payment due March 15, 2002, on its Senior
and Secured Notes. As of May 31, 2002, principal due on the Senior and
Secured Notes was $56.2 million and $18.8 million, respectively.
Management presently believes that its liquidity and capital resources will
be sufficient to maintain all of its normal operations at current levels and
does not anticipate any adverse impact on its operations, customers or
employees. Costs previously incurred and to be incurred in the future in
connection with the reorganization have been and will continue to be
substantial and, in any event, there can be no assurance that the Company will
be able to reorganize its indebtedness or that its liquidity and capital
resources will be sufficient to maintain its normal operations during the
reorganization period. Additionally, any significant interruption or decrease
in the revenues derived by the Company from its operations would have a
material adverse effect on the Company's liquidity and the ability to maintain
the Company's operations as presently conducted.
The Company requires approximately $6.5 million of cash on hand to fund
daily operations. As of May 31, 2002, the Company had $2.9 million of non-
restricted cash in excess of the $6.5 million. The Company is heavily
dependant on cash generated from operations to continue to operate as planned
in its existing jurisdictions and to make capital expenditures. Management
anticipates that its existing available cash and cash equivalents and its
anticipated cash generated from operations will be sufficient to fund all of
its ongoing operations. The debt obligations will be stayed during the
bankruptcy proceedings. To the extent cash generated from operations is less
than anticipated, the Company may be required to curtail certain planned
expenditures or seek other sources of financing.
The Company had $7.1 million in restricted cash as of May 31, 2002. Of that
amount, $4.0 million relates to the Broadwater Property. Prior to the filing
for reorganization under Chapter 11, PBLLC deposited revenues into lockboxes
that were controlled by its lender. Expenditures from the lockboxes were
limited to the operating expenses, capital improvements and debt service of
the Broadwater Property as defined by its loan agreement. The lender
continues to control the capital improvements lockbox. PBLLC currently
operates under a cash collateral stipulation and agreement, which allows PBLLC
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to use its cash collateral for normal operations in accordance with certain
terms as defined by the cash collateral agreement. Revenues of PBLLC include
the operations of the hotels and golf course and $3.2 million annually of
proceeds from rental of the Biloxi casino's mooring site. Pursuant to the
bankruptcy reorganization plan submitted by PBLLC, the Company will be
obligated to loan to PBLLC certain amounts necessary to make payments under
the Plan. The Company had $1.7 million restricted for payment as a partial
redemption of its obligation under PBLLC's plan of reorganization and $1.4
million restricted for payment of interest on the Company's Notes. The $1.4
million restricted for payment of interest on the Company's Notes subsequently
became unrestricted upon the Company's filing the voluntary petition for
reorganization.
The Company had $0.7 million in restricted short-term investments as of May
31, 2002, consisting of certificates of deposit guaranteeing certain
performance obligations of the Company.
The Company generated $1.0 million of cash from operating activities during
the three-month period ending May 31, 2002.
Investing activities of the Company used $1.5 million of cash during the
three-month period ending May 31, 2002. The Company expended $1.4 million on
gaming equipment and capital improvements, of which approximately $1.1 million
and $0.3 million was expended in St. Louis and Biloxi, respectively.
The indenture governing the Company's Senior Exchange Notes (the
"Indenture"), restricts the ability of PCI, TCG and PCI's wholly-owned
subsidiaries which are guarantors of the Senior Exchange Notes (collectively,
the "Guarantors"), among other things, to dispose of or create liens on
certain assets, to make certain investments and to pay dividends. Under the
Indenture, the Guarantors have the ability to seek to borrow additional funds
of $15.0 million and may borrow additional funds for certain uses. The
Indenture also provides that the Guarantors must use cash proceeds from the
sale of certain assets within 180 days to either (i) permanently reduce
certain indebtedness or (ii) contract with an unrelated third party to make
investments or capital expenditures or to acquire long-term tangible assets,
in each case, in gaming and related businesses (provided any such investment
is substantially complete in 270 days.) In the event such proceeds are not so
utilized, the Company must make an offer to all holders of Senior Exchange
Notes to repurchase at par value an aggregate principal amount of Senior
Exchange Notes equal to the amount by which such proceeds exceeds $5.0
million. Certain provisions of the Indenture do not apply to the Company's
consolidated entities which do not guarantee the Senior Exchange Notes.
In conjunction with the purchase of the Broadwater Property, PBLLC borrowed
the sum of $30.0 million from a third party lender, evidenced by a non-
recourse promissory note (the "Indebtedness"). Except as set forth in the
promissory note and related security and guarantee documents, PBLLC's
obligations under the Indebtedness are nonrecourse and are secured by the
Broadwater Property, its improvements and leases thereon. The Indebtedness
bears interest at a variable rate per annum equal to the greater of (i) 8.75%
or (ii) 4% plus the LIBOR 30-day rate.
PBLLC is obligated under the Indebtedness to make monthly payments of
interest accruing under the Indebtedness, and was obligated to repay the
Indebtedness in full on July 22, 2000. In addition, PBLLC was obligated to
pay to the lender a loan fee in the amount of $7.0 million which was fully
earned and non-refundable when the Indebtedness became due. As of the default
date, the PBLLC is accruing, but has not paid, interest on the unpaid loan fee
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27
at the stipulated rate. PBLLC continued to make the monthly interest payments
accruing on the $30.0 million principal through April 19, 2001, when the
Company announced that PBLLC had filed for reorganization under Chapter 11 of
the U.S. Bankruptcy Code in the United States Bankruptcy Court for the
Southern District of Mississippi. The Bankruptcy Court has set October 30,
2002 for commencement of the hearing on confirmation of the PBLLC Plan. The
effect, if any, of the Chapter 11 filings by the Company and its subsidiaries
on the scheduled hearing on the PBLLC Plan has not yet been determined. The
Company is unable to offer any assurance that this will occur or that the
restructured debt, if it is restructured, will be paid in accordance with its
revised terms.
The 5.28% term note payable is collateralized by the vessel M/V "President
Casino-Mississippi" and various equipment and is personally guaranteed by Mr.
Connelly. This note also contains certain covenants which, among other
things, require the Company to maintain a minimum tangible net worth of $40.0
million. The aforementioned default on the Company's Senior Exchange Notes
and Secured Notes also constituted a default under this note. The Company
continued to make the quarterly principal and interest payments related to
this note prior to the bankruptcy filing on June 20, 2002. No action has been
taken by the lender to accelerate the note and declare the unpaid principal
due and payable. Under the terms of the 5.28% term note payable, $2.1 million
principal becomes due and payable in August 2002.
In connection with the Company's proposed "Destination Broadwater"
development plan, to date, the Company has not identified any particular
financing alternatives or sources as the necessary regulatory approvals have
not been obtained. There can be no assurance that the Company will be able to
obtain the regulatory approvals or the requisite financing. Should the
Company fail to raise the required capital, such failure would materially and
adversely impact the Company's business plan.
Forward Looking Statements
This Quarterly Report on Form 10-Q and certain information provided
periodically in writing and orally by the Company's designated officers and
agents contain certain statements which constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933,
as amended and Section 21E of the Securities Exchange Act of 1934, as amended.
The terms "Company," "we," "our" and "us" refer to President Casinos, Inc.
The words "expect," "believe," "goal," "plan," "intend," "estimate," and
similar expressions and variations thereof are intended to specifically
identify forward-looking statements. Those statements appear in this
Quarterly Report on Form 10-Q and the documents incorporated herein by
reference, particularly "Management's Discussion and Analysis of Financial
Condition and Results of Operations," and include statements regarding the
intent, belief or current expectations of the Company, its directors or its
officers with respect to, among other things: (i) our financial prospects;
(ii) our financing plans and our ability to meet our obligations under our
debt obligations and obtain satisfactory operating and working capital; (iii)
our operating and restructuring strategy; and (iv) the effect of competition
and regulatory developments on our current and expected future revenues. You
are cautioned that any such forward looking statements are not guarantees of
future performance and involve risks and uncertainties, and that actual
results may differ materially from those projected in the forward looking
statements as a result of various factors. The factors that might cause such
differences include, among others, the following: (i) continuation of future
operating and net losses by the Company; (ii) the inability of the Company to
restructure its debt obligations and facilitate PBLLC's successful emergence
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from bankruptcy; (iii) the inability of the Company to obtain sufficient cash
from its operations and other resources to fund ongoing obligations and
continue as a going concern; (iv) the ability of the Company to develop,
prosecute, confirm and consummate one or more plans of reorganization with
respect to the Chapter 11 case; (v) risks associated with third parties
seeking and obtaining court approval to terminate or shorten the exclusivity
period for the Company to propose and confirm one or more plans of
reorganization, for the appointment of a Chapter 11 trustee or to convert the
cases to Chapter 7 cases; (vi) the ability of the Company to obtain trade
credit, and shipments and terms with vendors and service providers; (vii) the
Company's ability to maintain contracts that are critical to its operations;
(viii) potential adverse developments with respect to the Company's liquidity
and results of operations; (ix) developments or new initiatives by our
competitors in the markets in which we compete; (x) our stock price; (xi)
adverse governmental or regulatory changes or actions which could negatively
impact our operations; and (xii) other factors including those identified in
the Company's filings made from time-to-time with the Securities and Exchange
Commission. The Company undertakes no obligation to publicly update or revise
forward looking statements to reflect events or circumstances after the date
of this Quarterly Report on Form 10-Q or to reflect the occurrence of
unanticipated events.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As of May 31, 2002, the Company had $114.1 million of debt, including a loan
fee of $7.0 million associated with the $30.0 million note related to the
Broadwater Property. Of this amount $75.0 million bears interest at fixed
rates. The remaining $39.1 million bears interest at variable rates. The
$30.0 million Broadwater Property note payable and associated $7.0 million
loan fee bear interest at a stipulated variable rate at the greater of (i)
8.75% or (ii) 4.0% plus the LIBOR 30-day rate. The M/V "President Casino-
Mississippi" note payable of $2.1 million bears interest at 2.0% over the
prime rate of J.P. Morgan Chase & Company. As of May 31, 2002, the average
interest rate applicable to the debt carrying variable rates was 11.63%. An
increase of one percentage point in the average interest rate applicable to
the variable rate debt outstanding as of May 31, 2002, would increase the
Company's annual interest costs by approximately $0.4 million. The Company
continues to monitor interest rate markets, but has not engaged in any hedging
transactions with respect to such risks.
Although the Company manages its short-term cash assets to maximize return
with minimal risk, the Company does not invest in market rate sensitive
instruments for trading or other purposes and the Company is not exposed to
foreign currency exchange risks or commodity price risks in its transactions.
Part II. Other Information
Item 1. Legal Proceedings
Information with respect to legal proceedings to which the Company is a
party is disclosed in Note 6 of Notes to Condensed Consolidated Financial
Statements included in Part I of this report and is incorporated herein by
reference.
Item 2. Changes in Securities
Not applicable.
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Item 3. Defaults Upon Senior Securities
The Company has 13.0% Senior Exchange Notes and 12.0% Secured Notes. The
Company did not pay the regularly scheduled interest payments of $6.4 million
that were each due and payable March 15 and September 15, 2000. Under the
Indentures pursuant to which the Senior Exchange Notes and Secured Notes were
issued, an Event of Default occurred on April 15, 2000, and is continuing as
of the date hereof. Additionally, the Company did not pay the $25.0 million
principal payment due September 15, 2000 on the Senior Exchange Notes. In
November 2000, the Company paid (i) $12.8 million interest and (ii) $18.75
million and $6.25 million principal on the Senior Exchange Notes and Secured
Notes, respectively. The Company did not make the interest payments due
September 15, 2001 and March 15, 2002. On June 20, 2002, the Company filed a
voluntary petition for reorganization under Chapter 11 of the bankruptcy code.
The noteholders of the Senior Exchange Notes and the Secured Notes were deemed
by management to be undersecured and as a result, interest ceased to accrue as
of the date of thereof. Total arrearage as of June 20, 2002, was $56.25
million of principal and $9.7 million of interest on the Senior Exchange Notes
and $18.75 million of principal and $3.1 million of interest on the Secured
Notes.
Additionally, PBLLC did not pay the $30.0 million note and the associated
$7.0 million loan fee due July 22, 2000, related to the Broadwater Property.
PBLLC is obligated under the Indebtedness to make monthly payments of interest
accruing under the Indebtedness at a variable rate per annum equal to the
greater of (i) 8.75% or (ii) 4% plus the LIBOR 30-day rate. PBLLC continued
to make the monthly interest payments related to the $30.0 million note
through April 19, 2001, at which time the Company announced that PBLLC had
filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the
United States Bankruptcy Court for the Southern District of Mississippi. In
order to be in compliance with accounting principles generally accepted in the
United States of America, PBLLC continues to accrue interest under the terms
of the Indebtedness. Management believes that actual interest and penalties
that will be determined by the bankruptcy judge may be an amount less than
that being accrued. Total accrued arrearage as of July 15, 2002, is $37.0
million of principal and $7.0 million of interest and fees.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The exhibits filed as part of this report are listed on Index to
Exhibits accompanying this report.
(b) Reports on Form 8-K
None.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
President Casinos, Inc.
-----------------------------
(Registrant)
Date: July 15, 2002 /s/ Ralph J. Vaclavik
-----------------------------
Ralph J. Vaclavik
Senior Vice President and
Chief Financial Officer
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INDEX TO EXHIBITS
-----------------
EXHIBIT NO.
3.1 Restated Articles of Incorporation of the Company. (8)
3.2 By-Laws of the Company, as amended. (4)
4.1 Indenture dated as of August 26, 1994, by and among the Company,
the Guarantors and United States Trust Company of New York ("U.S.
Trust"). (3)
4.1.1 Form of Senior Exchange Note issued pursuant to Indenture. (2)
4.1.2 Warrant Agreement dated as of September 23, 1993, by and between
the Company and U.S. Trust, as Warrant agent. (1)
4.1.3 Warrant Agreement dated as of August 26, 1994, by and between the
Company and U.S. Trust. (3)
4.1.4 Subsidiary Stock Pledge and Collateral Assignment Agreement dated
as of August 26, 1994, by the Company and Subsidiary Pledgors in
favor of U.S. Trust, as collateral agent. (3)
4.2 Rights Agreement, dated as of November 20, 1997, between the
Company and ChaseMellon Shareholder Services, LLC. (5)
4.3 Agreement to Exchange Securities, dated December 3, 1998 by and
among the Company, President Riverboat Casino-Iowa, Inc.
("President Iowa"), President Riverboat Casino-Missouri, Inc.
("President Missouri"), The President Riverboat Casino-
Mississippi, Inc. ("President Mississippi"), Blackhawk, P.R.C.-
Louisiana, Inc., President Riverboat Casino-New York, Inc.
("President New York"), President Casino New Yorker, Inc., PRC
Holdings Corporation, PRC Management, Inc. ("PRC Management"),
PRCX Corporation, President Riverboat Casino-Philadelphia, Inc.
("President Philadelphia"), Vegas Vegas, Inc., and TCG and each
holder of the Company's 13% Senior Exchange Notes due 2001. (6)
4.3.1 Indenture dated as of December 3, 1998, among The Company,
President Iowa, President Missouri, President Mississippi,
Blackhawk, P.R.C.-Louisiana, Inc., President New York, President
Casino New Yorker, Inc., PRC Holdings Corporation, PRC Management,
PRCX Corporation, President Philadelphia, Vegas Vegas, Inc. and
TCG and U.S. Trust Company of Texas, N.A. (6)
4.4.2 President Casinos, Inc. Supplemental Indenture with respect to
$25,000,000 12% Notes due September 15, 2001. (7)
4.4.3 President Casinos, Inc. Supplemental Indenture with respect to
$75,000,000 13% Senior Notes due September 15, 2001. (7)
(1) Incorporated by reference from the Company's Registration Statement on
Form S-4 (File No. 33-71332) filed November 5, 1993.
(2) Incorporated by reference from the Company's Registration Statement on
Form S-8 dated June 8, 1994.
(3) Incorporated by reference from the Company's Registration Statement on
Form S-4 (File No. 33-86386) filed November 15, 1994.
(4) Incorporated by reference from the Company's Quarterly Report on Form
10-Q for the quarterly period ended August 31, 1997 filed October 10,
1997.
(5) Incorporated by reference from the Company's Registration Statement on
Form 8-A dated December 5, 1997.
(6) Incorporated by reference from the Company's Report on Form 8-K
dated December 15, 1998.
(7) Incorporated by reference from the Company's Report on Form 8-K dated
November 22, 2000.
(8) Incorporated by reference from the Company's Registration Statement on
Form S-8 dated October 10, 2001.