UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|
(Mark One) |
|
|
|
|
|
ý |
Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange |
|
|
|
|
For the quarterly period ended March 30, 2003 |
|
|
|
|
|
OR |
|
|
|
|
|
o |
Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange |
|
|
|
|
Commission File Number: 333-81778 |
|
WHEELING ISLAND GAMING, INC.
(Exact name of registrant as specified in its charter)
|
DELAWARE |
|
16-1333214 |
|
(State or other jurisdiction
of |
|
(I.R.S. Employer Identification No.) |
|
|
|
|
|
1 South Stone Street |
||
|
(Address of principal executive offices) |
||
|
26003 |
||
|
(Zip Code) |
||
|
|
|
|
|
Registrant’s telephone number, including area code: (304) 232-5050 |
||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 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 ý No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934):
Yes o No ý
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
Not applicable.
WHEELING ISLAND GAMING, INC.
INDEX
WHEELING ISLAND GAMING, INC.
($000’s omitted, except per share amounts)
|
|
|
March 30, |
|
December
31, |
|
||
|
Assets |
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
Current assets: |
|
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
8,657 |
|
$ |
9,014 |
|
|
Receivables |
|
1,160 |
|
1,292 |
|
||
|
Prepaid expenses and other assets |
|
677 |
|
479 |
|
||
|
Prepaid income taxes |
|
— |
|
1,067 |
|
||
|
Deferred income taxes |
|
92 |
|
92 |
|
||
|
|
|
|
|
|
|
||
|
Total current assets |
|
10,586 |
|
11,944 |
|
||
|
|
|
|
|
|
|
||
|
Property and equipment, net |
|
66,594 |
|
55,845 |
|
||
|
Licenses |
|
65,919 |
|
65,919 |
|
||
|
Goodwill |
|
32,221 |
|
32,221 |
|
||
|
Non-compete covenant |
|
11,151 |
|
11,902 |
|
||
|
Other intangible assets |
|
2,309 |
|
2,318 |
|
||
|
Debt issuance costs |
|
5,381 |
|
5,591 |
|
||
|
|
|
|
|
|
|
||
|
|
|
194,161 |
|
185,740 |
|
||
|
|
|
|
|
|
|
||
|
Liabilities and Shareholders’ Equity |
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
Current liabilities: |
|
|
|
|
|
||
|
Accounts payable |
|
2,069 |
|
3,949 |
|
||
|
Accrued expenses |
|
6,875 |
|
4,273 |
|
||
|
Income taxes payable |
|
1,314 |
|
— |
|
||
|
|
|
|
|
|
|
||
|
Total current liabilities |
|
10,258 |
|
8,222 |
|
||
|
|
|
|
|
|
|
||
|
Long-term debt |
|
129,500 |
|
126,500 |
|
||
|
Deferred income tax |
|
23,860 |
|
23,530 |
|
||
|
|
|
|
|
|
|
||
|
Total liabilities |
|
163,618 |
|
158,252 |
|
||
|
|
|
|
|
|
|
||
|
Shareholders’ equity: |
|
|
|
|
|
||
|
Common stock, $1 par value, 500 shares authorized, issued and outstanding in 2002 and 2001, respectively |
|
1 |
|
1 |
|
||
|
Additional paid-in capital |
|
5,915 |
|
5,915 |
|
||
|
Retained earnings |
|
24,627 |
|
21,572 |
|
||
|
|
|
|
|
|
|
||
|
Total shareholders’ equity |
|
30,543 |
|
27,488 |
|
||
|
|
|
|
|
|
|
||
|
|
|
$ |
194,161 |
|
$ |
185,740 |
|
1
WHEELING ISLAND GAMING, INC.
Consolidated Statements of Operations
($000’s omitted)
|
|
|
Three Months Ended |
|
||||
|
|
|
March 30, |
|
March 31, |
|
||
|
Operating revenue: |
|
|
|
|
|
||
|
Gaming revenue |
|
$ |
17,886 |
|
$ |
19,036 |
|
|
Pari-mutuel revenue |
|
1,901 |
|
2,196 |
|
||
|
Food & beverage revenue |
|
1,057 |
|
1,136 |
|
||
|
Other revenue |
|
226 |
|
185 |
|
||
|
|
|
21,070 |
|
22,553 |
|
||
|
Operating expenses: |
|
|
|
|
|
||
|
Purse expense |
|
4,216 |
|
4,600 |
|
||
|
Gaming expenses |
|
1,096 |
|
1,021 |
|
||
|
Pari-mutuel expenses |
|
918 |
|
1,040 |
|
||
|
Food & beverage expenses |
|
1,078 |
|
1,294 |
|
||
|
Marketing and promotions |
|
1,271 |
|
1,575 |
|
||
|
Facilities and maintenance |
|
1,441 |
|
1,285 |
|
||
|
General and administrative |
|
1,147 |
|
939 |
|
||
|
Depreciation and amortization |
|
1,948 |
|
1,810 |
|
||
|
|
|
|
|
|
|
||
|
|
|
13,115 |
|
13,564 |
|
||
|
Operating income |
|
7,955 |
|
8,989 |
|
||
|
Interest expense, net |
|
(3,256 |
) |
(3,401 |
) |
||
|
Income before income tax |
|
4,699 |
|
5,588 |
|
||
|
Income tax expense |
|
1,644 |
|
1,956 |
|
||
|
|
|
|
|
|
|
||
|
Net Income |
|
$ |
3,055 |
|
$ |
3,632 |
|
2
WHEELING ISLAND GAMING, INC.
($000’s omitted)
|
|
|
Three Months Ended |
|
||||
|
|
|
March 30, |
|
March 31, |
|
||
|
|
|
|
|
|
|
||
|
Cash flows relating to operating activities: |
|
|
|
|
|
||
|
Net Income |
|
$ |
3,055 |
|
$ |
3,632 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities - |
|
|
|
|
|
||
|
Depreciation and amortization |
|
1,948 |
|
1,810 |
|
||
|
Other |
|
540 |
|
64 |
|
||
|
Change in assets and liabilities: |
|
|
|
|
|
||
|
Receivables |
|
132 |
|
(365 |
) |
||
|
Prepaid expenses and other assets |
|
(198 |
) |
21 |
|
||
|
Prepaid income taxes |
|
1,067 |
|
43 |
|
||
|
Accounts payable |
|
(1,880 |
) |
197 |
|
||
|
Accrued expenses |
|
2,602 |
|
3,339 |
|
||
|
Income taxes payable |
|
1,314 |
|
1,984 |
|
||
|
|
|
|
|
|
|
||
|
Net cash provided by operating activities |
|
8,580 |
|
10,725 |
|
||
|
|
|
|
|
|
|
||
|
Cash flows relating to investing activities: |
|
|
|
|
|
||
|
Payments for capital expenditures |
|
(11,937 |
) |
(3,476 |
) |
||
|
|
|
|
|
|
|
||
|
Cash flows relating to financing activities: |
|
|
|
|
|
||
|
Proceeds from long-term borrowings |
|
3,000 |
|
— |
|
||
|
Debt issuance costs and other |
|
— |
|
(165 |
) |
||
|
|
|
|
|
|
|
||
|
Net cash provided by (used in) financing activities |
|
3,000 |
|
(165 |
) |
||
|
|
|
|
|
|
|
||
|
Net (decrease) increase in cash |
|
(357 |
) |
7,084 |
|
||
|
|
|
|
|
|
|
||
|
Cash balances: |
|
|
|
|
|
||
|
Beginning of period |
|
9,014 |
|
9,903 |
|
||
|
|
|
|
|
|
|
||
|
End of period |
|
$ |
8,657 |
|
$ |
16,987 |
|
|
|
|
|
|
|
|
||
|
Supplemental disclosure: |
|
|
|
|
|
||
|
Cash paid (refunded) during the period for - |
|
|
|
|
|
||
|
Income taxes |
|
$ |
(1,067 |
) |
$ |
60 |
|
|
|
|
|
|
|
|
||
|
Interest |
|
$ |
299 |
|
$ |
220 |
|
3
WHEELING ISLAND GAMING, INC.
Notes to Consolidated Financial Statements
($000’s omitted)
1. Business and ownership
Wheeling Island Gaming, Inc. is a wholly owned subsidiary of Sportsystems Corporation (Sportsystems). Sportsystems is a wholly owned subsidiary of Delaware North Companies, Incorporated (DNC).
2. Basis of presentation
The consolidated interim financial statements are unaudited, and certain information and footnote disclosure related thereto normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted in accordance with Rule 10-01 of Regulation S-X. In the opinion of management, the accompanying unaudited consolidated financial statements were prepared following the same policies and procedures used in the preparation of the audited financial statements and reflect all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position of Wheeling Island Gaming, Inc. and its subsidiaries (the Company). The results of operations for the interim periods are not necessarily indicative of the results for the entire fiscal year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related footnotes of the Company for the year ended December 31, 2002, as included in the Company’s recently filed Form 10-K.
The fiscal year of the Company begins on January 1 and ends on December 31. Fiscal quarters of the Company end on the Sunday nearest March 31, June 30, and September 30, respectively. The three-month period ended March 30, 2003 consists of 89 days and the three-month period ended March 31, 2002 consists of 90 days.
Certain prior year amounts have been reclassified in order to conform to the presentation used in the 2003 financial statements.
In June 2001, the Financial Accounting Standards Board (the FASB) issued SFAS No. 143 (SFAS 143), Accounting for Asset Retirement Obligations, which became effective January 1, 2003. SFAS 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. SFAS 143 requires that the fair value of a liability or an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as a part of the carrying amount of the long-lived asset. The Company implemented SFAS 143 in January 2003 and it did not have a material impact on the Company’s financial position and results of operations.
4
4. Income Taxes
The provision for income taxes consists of the following:
|
|
|
2003 |
|
2002 |
|
||
|
|
|
|
|
|
|
||
|
Current federal tax expense |
|
$ |
1,314 |
|
$ |
2,087 |
|
|
|
|
|
|
|
|
||
|
Deferred federal tax expense |
|
330 |
|
(131 |
) |
||
|
(benefit) |
|
|
|
|
|
||
|
|
|
$ |
1,644 |
|
$ |
1,956 |
|
Federal income taxes included in the accompanying balance sheets at March 30, 2003 and December 31, 2002 are due to and receivable from DNC, respectively.
The Company is not subject to state income tax.
5. Related Party Transactions
Pursuant to an administrative services agreement with Sportsystems and DNC, the Company pays an annual administrative services fee equal to the greater of 1.5% of the preceding year’s total operating revenues or $1,200 for certain support services provided to the Company. During the three-month periods ended March 30, 2003 and March 31, 2002, the Company recorded administrative services fees of $363 and $313, respectively.
The Company invests its excess cash in a segregated account administered by DNC under its centralized cash management program. At March 30, 2003 and March 31, 2002, the Company had $631 and $10,156 invested in this program, respectively. During the three-month periods ended March 30, 2003 and March 31, 2002, the Company recorded interest income of $10 and $20, respectively.
6. Commitments
The Company has begun a significant expansion project adjacent to, and connected with, the existing gaming facility. The Wheeling Island expansion will include a hotel, new gaming areas, a multi-purpose showroom intended for use as an entertainment venue and conference facility and dining facilities. The cost of completing the Wheeling Island expansion is expected to be approximately $67,000. Completion is anticipated in late June 2003. Through March 30, 2003, the Company had incurred $35,523 of capital expenditures related to the Wheeling Island expansion. The project will be financed with cash from operations and, to the extent required, the Company’s $40,000 secured Revolving Credit Facility (the Revolver). At March 30, 2003, the Company had drawn $4,500 against the Revolver.
7. Business segments
In prior years, under SFAS No. 131 (SFAS 131), Disclosures about Segments of an Enterprise and Related Information, the Company had recognized three reportable operating segments: (i) gaming, (ii) pari-mutuel and (iii) food and beverage. The Company has modified its approach and no longer considers any portion of its business to be managed independently. Accordingly, beginning in fiscal 2003, the Company no longer reports segment information under SFAS 131.
5
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
General
We own and operate Wheeling Island Racetrack & Gaming Center, or Wheeling Island, a premier gaming and entertainment complex located in Wheeling, West Virginia. Wheeling Island features 1,623 slot machines, a greyhound racetrack, pari-mutuel wagering on live greyhound racing and simulcast greyhound, thoroughbred and harness racing and various dining venues.
To accommodate growing demand, we are constructing the Wheeling Island expansion. The Wheeling Island expansion is a gaming and hotel expansion that will be adjacent to and connected with our existing gaming facility. The construction phase of the Wheeling Island expansion has commenced, and in July 2002 we executed a construction management agreement with our construction manager, Louis P. Ciminelli Construction Company. Current plans for the Wheeling Island expansion include:
• 30,000 square feet of gaming area with 570 additional slot machines;
• a 151-room hotel;
• one fine dining restaurant, one casual dining restaurant, a food court and bar and lounge areas;
• a 600-seat multi-purpose showroom; and
• 180 covered parking spaces plus additional outdoor parking spaces.
We expect the cost of designing, developing, constructing and equipping the Wheeling Island expansion to be approximately $67.0 million, including architect fees. We expect to complete the expansion and open the new area for gaming in late June 2003. During the three months ended March 30, 2003, we incurred capital expenditures relating to the Wheeling Island expansion of $11.7 million.
Results of Operations
Three Months Ended March 30, 2003 Compared to Three Months Ended March 31, 2002
Gaming revenues were $17.9 million for the quarter ended March 30, 2003, a decrease of $1.1 million, or 6.0%, from $19.0 million for the quarter ended March 31, 2002. The decrease was due to unfavorable weather conditions, a $0.5 million increase in the accrued share of net terminal income and surcharge amount (net of recoupments) owed to the state of West Virginia and a $0.6 million increase in the redemption of Preferred Players Club points for cash. During the first quarter of 2003, the Wheeling area experienced several significant snow and ice storms, which negatively impacted our visitation and closed our gaming operation for one day and a portion of another day. The state of West Virginia’s share of net terminal income above a predetermined level increases from 30.0% to 41.0% during each state fiscal year. In addition, the state retains a 10.0% surcharge from all net terminal income in excess of the predetermined level for the state fiscal year. Of the total 10.0% surcharge, 42.0% can be recouped for certain types of capital investments made at the facility. We accrue for the state’s share of net terminal income and the expected surcharge amount (net of recoupments) ratably throughout the year. The state’s percentage share of net terminal income and surcharge amount (net of recoupments) is expected to increase in 2003 due to projected increases in net terminal income in the third and fourth quarters resulting from the opening of the Wheeling Island expansion. Such increases in net terminal income will be subject to the higher percentage paid to the state (41.0%) and the 10.0% surcharge (net of recoupments). All cash redemptions of points earned by members of our Preferred Players Club are recognized as reductions in gaming revenues. Such cash redemptions were $1.6 million for the quarter ended March 30, 2003, an increase of $0.6 million, or 68.0%, from $1.0 million for the quarter ended March 31, 2002. The increase in cash redemptions is due to the increase in Preferred Players Club membership from 121,625 at March 31, 2002 to 190,575 at March 30, 2003, and a revision in Preferred Players Club reward incentives in October 2002 that allowed instantaneous redemptions of points for cash.
Pari-mutuel revenues for the quarter ended March 30, 2003 were $1.9 million, a decrease of $0.3 million, or 13.4%, from $2.2 million for the quarter ended March 31, 2002. The decrease in pari-mutuel revenues was due to a $1.5 million decrease in wagering handle on our live races and a $0.4 million decrease in
6
wagering handle on simulcast races. The lower live wagering handle was due to the cancellation of three live racing performances caused by unfavorable winter weather and a 14.6% decrease in the average live wagering handle per performance. The lower simulcast wagering handle was also due to unfavorable winter weather, which cancelled two planned simulcast performances, and a 9.2% decrease in the average simulcast wagering handle per performance.
Food and beverage revenues for the quarter ended March 30, 2003 were unchanged from the quarter ended March 31, 2002.
Other revenues for the quarter ended March 30, 2003 were unchanged from the quarter ended March 31, 2002.
Purse expenses were $4.2 million for the quarter ended March 30, 2003, a decrease of $0.4 million, or 8.3%, from $4.6 million for the quarter ended March 31, 2002. The decrease was due primarily to a $0.3 million decrease in gaming purse expense and a $0.1 million decrease in pari-mutuel purses. The $0.3 million decrease in gaming purse expense is due to the decrease in the expected purse share of net terminal income during 2003. The state of West Virginia’s share of net terminal income above a predetermined level increases from 30.0% to 41.0% during each state fiscal year. In addition, the state deducts a 10.0% surcharge from all net terminal income in excess of the predetermined level for the state fiscal year. The purse share of all excess net terminal income amounts remaining after the surcharge deduction is 8.0%, as compared to 14.0% of all net terminal income before the predetermined level. We accrue for the expected decrease in the purse share of net terminal income ratably throughout the year. The purse share of net terminal income is expected to decrease in 2003 due to projected increases in net terminal income in the third and fourth quarters resulting from the opening of the Wheeling Island expansion. Such increases in net terminal income will be subject to the 10.0% surcharge and the lower percentage paid to purses (8.0%) after the surcharge deduction. The $0.1 million decrease in pari-mutuel purses is due to a $1.5 million decrease in wagering handle on our live races and a $0.4 million decrease in wagering handle on simulcast races.
Gaming expenses were $1.1 million for the quarter ended March 30, 2003, an increase of $0.1 million, or 7.3%, from $1.0 million for the quarter ended March 31, 2002. The increase in gaming expenses is due primarily to increases in payroll and repair costs associated with an increase in the number of slot machines from 1,530 at March 31, 2002 to 1,623 at March 30, 2003.
Pari-mutuel expenses were $0.9 million for the quarter ended March 30, 2003, a decrease of $0.1 million, or 11.7%, from $1.0 million for the quarter ended March 31, 2002. The decrease in pari-mutuel expenses is due primarily to lower costs associated with the $1.5 million decrease in wagering handle on our live races and $0.4 million decrease in wagering handle on simulcast races.
Food and beverage expenses for the quarter ended March 30, 2003 were $1.1 million, a decrease of $0.2 million, or 16.7%, from $1.3 million for the quarter ended March 31, 2002. The decrease in food and beverage expenses was due primarily to decreased food costs in the Island Room Buffet.
7
Marketing and promotions expenses for the quarter ended March 30, 2003 were $1.3 million, a decrease of $0.3 million, or 19.3%, from $1.6 million for the quarter ended March 31, 2002. The decrease in marketing and promotions expenses is due primarily to decreased costs associated with merchandise giveaways and other promotional events.
Facilities and maintenance expenses were $1.4 million for the quarter ended March 30, 2003, an increase of $0.1 million, or 12.1%, from $1.3 million for the quarter ended March 31, 2002. The increase in facilities and maintenance expense is due primarily to higher insurance premiums paid for liability and property coverage.
General and administrative, or G&A, expenses were $1.1 million for the quarter ended March 30, 2003, an increase of $0.2 million, or 22.2%, from $0.9 million for the quarter ended March 31, 2002. The increase in G&A expense was due to a $0.1 million increase in administrative services fees paid to the shareholders and a $0.1 million increase in consulting, legal and other professional services costs.
Depreciation and amortization expenses for the quarter ended March 30, 2003 were $1.9 million, a $0.1 million, or 7.6%, increase from $1.8 million for the quarter ended March 31, 2002. The increase was due to the increased depreciation expense associated with the $8.3 million of assets that were added to our buildings, improvements and equipment accounts during the twelve months ended March 30, 2003.
Interest expense was $3.3 million for the quarter ended March 30, 2003, a decrease of $0.1 million, or 4.3%, from $3.4 million for the quarter ended March 31, 2002. The $0.1 million decrease is due to lower reported interest expense associated with the $125.0 million of unsecured senior notes, due principally to the quarter ended March 30, 2003 consisting of one fewer day than the quarter ended March 31, 2002 and a partial reversal of accrued interest relating to the agreement that we reached with the Internal Revenue Service in 2002.
Income tax expense for the quarter ended March 30, 2003 was $1.6 million, a decrease of $0.4 million, or 16.0%, from $2.0 million for the quarter ended March 31, 2002. The decrease was directly attributable to the $0.9 million decrease in income before taxes to $4.7 million for the quarter ended March 30, 2003 from $5.6 million for the quarter ended March 31, 2002.
Liquidity and Capital Resources
As of March 30, 2003, the Company had cash and cash equivalents of $8.7 million, as compared to cash and cash equivalents of $9.0 million as of December 31, 2002. The Company’s source of liquidity for the quarter ended March 30, 2003 consisted of cash provided by operating activities and cash provided by financing activities. The Company’s source of liquidity for the quarter ended March 31, 2002 consisted of cash provided by operating activities. The cash provided by operating activities for the quarter ended March 30, 2003 was $8.6 million, a $2.1 million decrease from $10.7 million for the quarter ended March 31, 2002. The $2.1 million decrease was due to a $2.2 million increase in the change in working capital due primarily to decreases in accounts payable for the quarter ended March 30, 2003 relating to intercompany settlements between the Company and its shareholder, and a $0.5 million decrease in net income offset partially by a $0.6 million increase in non-cash adjustments including depreciation and amortization.
Cash used in investing activities for the quarter ended March 30, 2003 was $11.9 million, an increase of $8.4 million from $3.5 million for the quarter ended March 31, 2002. The $8.4 million increase in cash used for investing activities was due principally to a $9.1 million increase in capital expenditures relating to the Wheeling Island expansion.
Cash provided by financing activities for the quarter ended March 30, 2003 was $3.0 million, or $3.2 million higher than the $0.2 million of cash used in financing activities for the quarter ended March 31, 2002. The $3.2 million increase in cash provided by (used in) financing activities is due to a $3.0 million borrowing under the $40.0 million revolving credit facility during the quarter ended March 30, 2003 and the incurrence of $0.2 million of debt issuance costs during the quarter ended March 31, 2002 related to the issuance of $125.0 million of unsecured senior notes in December 2001.
8
We believe our future cash provided by operating activities, as well as the availability under our $40.0 million revolving credit facility, will provide sufficient funding for our future working capital needs and capital expenditures, including all capital expenditures relating to the Wheeling Island expansion.
Contractual Obligations and Commitments
To accommodate growing demand, we are constructing the Wheeling Island expansion. The expansion is expected to include a hotel, new gaming areas, a conference facility, dining facilities and a multi-purpose showroom. The cost of completing the expansion is expected to be approximately $67.0 million. We executed a construction management agreement with Louis P. Ciminelli Construction Company in July 2002. Completion of the Wheeling Island expansion is anticipated in late June 2003. The project will be financed with cash flow from operations and, to the extent required, borrowings under our $40.0 million revolving credit facility.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
None.
ITEM 4. Controls and Procedures
(a) The Company’s Chief Executive Officer and President (the principal executive officers) and Vice President of Finance (the principal financial officer), after evaluating the effectiveness of the Company’s disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c) as of a date within 90 days of the filing date of this quarterly report on Form 10-Q (the “Evaluation Date”)), have concluded that as of the Evaluation Date, the Company’s disclosure controls and procedures were adequate and effective to ensure that material information relating to the Company and its subsidiaries would be communicated to them.
(b) There were no significant changes in the Company’s internal controls or in other factors that could significantly affect the Company’s disclosure controls and procedures subsequent to the Evaluation Date, nor any significant deficiencies or material weaknesses in such disclosure controls and procedures requiring corrective actions. As a result, no corrective actions were taken.
9
We are a co-defendant in litigation brought against an independent kennel for the loss of 14 racing greyhounds. In October 2002, the plaintiffs were awarded a judgment, which, with accrued interest from the date of the loss, currently amounts to approximately $900,000. We were found to have committed no negligent act in connection with the loss of the greyhounds, but the plaintiffs seek to hold us jointly and severally liable with the negligent kennel operator based on the theory that we and the kennel were engaged in a joint venture. We have appealed that part of the trial court’s findings that suggest we were engaged in a joint venture with the negligent kennel operator. We deny any liability or financial responsibility for the loss, and we believe the availability of insurance coverage and the possibility of legal recourse by us against the kennel will result in this matter having no material adverse impact on us.
We are a party to a number of legal proceedings that have arisen in the ordinary course of our business. We believe that the outcome of such proceedings will not have a material adverse effect on our operating results or financial condition.
ITEM 2. Changes in Securities and Use of Proceeds
None.
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
None.
None.
(a) Exhibits
None.
(b) Reports on Form 8-K
(i) On February 19, 2003, the Company filed a Form 8-K under Item 5 announcing that on February 19, 2003, the Company issued the press release filed as an Exhibit to such Form 8-K with respect to the election of the Board of Directors and formation of an Audit Committee of the Board of Directors of the Company.
(ii) On March 28, 2003, the Company filed a Form 8-K under Item 5 announcing that on March 28, 2003, the Company issued the press release filed as an Exhibit to such Form 8-K with respect to the Company’s financial results for the fiscal year ended December 31, 2002 and the filing of the Company’s Form 10-K.
10
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.
|
|
WHEELING ISLAND GAMING, INC. |
|
|
|
(Registrant) |
|
|
|
|
|
|
|
|
|
|
|
By: |
/s/ Michael D. Corbin |
|
|
|
Michael D. Corbin |
|
|
|
Vice President of Finance |
|
|
|
|
|
|
|
|
|
Dated: May 13, 2003 |
|
|
I, Ronald A. Sultemeier, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Wheeling Island Gaming, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
11
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|
Dated: May 13, 2003 |
/s/ Ronald A. Sultemeier |
|
|
Ronald A. Sultemeier |
CERTIFICATION
I, Scott L. Cooper, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Wheeling Island Gaming, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
12
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|
Dated: May 13, 2003 |
/s/ Scott L. Cooper |
|
|
Scott L. Cooper |
CERTIFICATION
I, Michael D. Corbin, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Wheeling Island Gaming, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
13
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|
Dated: May 13, 2003 |
/s /Michael D. Corbin |
|
|
Michael D. Corbin |
14