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Sands Regent on the prowl for an acquisition

John Seelmeyer

Bouyed by the success of its acquisition

of Gold Ranch at Verdi, Reno-based Sands

Regent Corp. clearly is looking for a repeat

performance.

Ferenc Szony, president and chief executive

officer of the company that operates the

Sands Regency hotel casino in downtown

Reno as well as Gold Ranch, told analysts

last week that the company actively is looking

for acquisitions to reduce its reliance on

visitors from California.

As it reported its earnings for the first

quarter of its fiscal year, The Sands Regent

said its acquisition of Gold Ranch along

Interstate 80 at the California state line was

one of the key factors in improving its bottom

line. Among other benefits, the company

said, is the opportunity to cross-promote

the two properties

“We continue to look for opportunities

like Gold Ranch,” Szony said. “If we could

find another Gold Ranch opportunity, it

would be something we would jump on.”

But the company’s interest in diversification

doesn’t mean it’s giving up on downtown

Reno. Anything but.

Sands Regent said last week that occupancy

at the downtown hotel ran 92.5 percent

during the July-September quarter.

That, Szony said, is the best figure posted

by the hotel since 1994.

He played down, meanwhile, the effects

of an average room rate of $41 at the hotel

during the quarter. That’s about 5 percent

higher than the year-earlier figure.

In casino operations, Szony said, it’s far

more important to keep the rooms filled

with patrons who will spend money elsewhere

in the building.

That’s reflected in the 9.5 percent

increase in total revenue posted by the

downtown hotel during the quarter.

Besides, the Sands Regent executive

said, things may be changing in the region.

“Reno is an underpriced, value-driven

market,” Szony said.

So what will change?

As the region is more successful at

attracting business meetings and conventions,

he said, room rates no longer will be

driven entirely by hotel operators’ efforts to

capture the weekend getaway market.

Increases in meeting and convention

bookings already are apparent after renovation

of the Reno-Sparks Convention

Center, and Szony said he expects another

boost to his company’s downtown property

when the new events center is completed.

Even while Sands Regent looks for possible

acquisitions, it’s content in the meantime

to pay down a line of credit that carries

a 7.1 percent interest rate. The company’s

debt on Sept. 30 totaled $17.9 million, and

it paid $350,000 in interest during the

quarter.

For the first quarter of its fiscal year,

Sands Regent earned $41.3 million, or 26

cents a diluted share, on revenues of $15.8

million.

That compared with earnings of

$468,000, or 10 cents a share, on revenues

of $8.9 million a year earlier.

Business was so awful a year ago, however,

that Szony said the company compares

its results to 2000 figures. In the comparable

quarter of that year, the company earned

$757,000, of 17 cents a share, on revenues

of $10.8 million.

If you’re wondering why the company’s

quarterly earning report seems to be coming

awfully close on the heels of the company’s

report of its annual earnings at the end of

September, an investor relations spokeswoman

for the company explains: The

numbers for the fiscal year ended June 30

take a while to accumulate and doublecheck;

a quarter’s worth of revenue and

earning can be calculated and reported

more quickly.


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