Sands Regent's audit finds no cause to restate results

After more than a month of independent investigation, executives of the Sands Regents said last week their books are clean.

The publicly held company had delayed reporting of its financial results after a former employee raised questions about the way the company handled the accounting of its acquisition of the Dayton Depot casino last September. The ex-employee also raised questions about the accounting of some costs.

The audit committee of the Reno-based Sands Regent brought in a forensic accountant and outside counsel. The committee's review found no reason to restate any financial statements.

For the quarter ended Dec. 31, the company reported earnings of $603,000 compared with net of $498,000 in the same period a year earlier. Revenues grew to $22.3 million from $19.4 million a year earlier.

Revenues at the company's Rail City property in Sparks were up 6.2 percent, and revenues at the Sands Regent in downtown Reno rose by 4.8 percent, said Ferenc Szony, the company's president and chief executive.

Gold Ranch, its gaming-and-gas property on Interstate 80, saw a $51,000 decline in operating revenue. Higher gas prices hurt the gaming business, the company said.

Szony said the company is considering improvements to Gold Ranch perhaps working with the owners of neighboring properties to capture some of the traffic increases expected when Cabela's opens a mega-store nearby in late 2006.

Customer traffic at the Dayton Depot property, company executives said, hasn't been hurt by the opening of a Slot World casino about a mile away. Szony said it's possible the two properties together now are keeping Dayton gamblers from going to Carson City or Reno.

The Dayton property generated $1.5 million of the company's increase in net revenue for the quarter.