Riviera Reports Third Quarter 2003

PRNewswire-FirstCall LAS VEGAS Oct. 21 :

Riviera Holdings Corporation today reported financial results for the
third quarter of 2003. Net revenues for the quarter were $49.0 million, up
$523,000 or 1.1 percent from net revenues of $48.5 million in the third
quarter of 2002. Income from operations for the quarter was $3.6 million,
up $138,000 or 3.9 percent from the third quarter of 2002. EBITDA for the
quarter was $7.6 million, down $353,000 or 4.4 percent from EBITDA of $7.9
million in the third quarter of 2002. The net loss was ($3.2 million) or
($0.91) per share compared with a net loss of ($16.9 million) or ($4.89)
per share in the third quarter of 2002. Net income for the third quarter
of 2002 was affected by the loss on extinguishment of debt and additional
interest expense totaling $13.5 million or $3.92.

For the first nine months of 2003, net revenues were $144.8 million
compared with $144.6 million in the first nine months of 2002. Income from
operations was approximately $12.8 million in the first nine months of
both 2003 and 2002. EBITDA for the first nine months of 2003 was $25.1
million, down $1.2 million or 4.5 percent from EBITDA of $26.3 million in
the first nine months of 2002. The net loss was ($7.7 million) or ($2.23)
per share for the first nine months of 2003 compared with a net loss of
($20.8 million) or ($6.04) per share in the first nine months of 2002. Net
income for the first nine months of 2002 was affected by the loss on
extinguishment of debt and additional interest expense totaling $13.9
million or $4.03 per share.
EBITDA, which is defined by the Riviera as Earnings Before Interest,
Income Taxes, Depreciation, Amortization and loss on extinguishment of
debt, is not a Generally Accepted Accounting Principles measurement. A
reconciliation of EBITDA to net loss is attached to this press release.

Third Quarter 2003 Highlights:
- Riviera Black Hawk contributed $2.1 million of income from operations,
an increase of $345,000 or 19.1 percent from the third quarter of 2002
  - Riviera Black Hawk contributed $3.6 million in EBITDA, an increase of
$269,000 or 8.1 percent from the third quarter of 2002
  - Riviera Las Vegas income from operations decreased $265,000 or
9.4 percent to $2.6 million
  - Riviera Las Vegas EBITDA decreased $680,000 or 11.8 percent to
$5.1 million
  - Riviera Las Vegas occupancy was 96.7 percent compared with 92.5 percent in 2002; ADR (average daily room rate) decreased $2.66 to $57.32. RevPar
(revenue per available room) was comparable to the third quarter of 2002
  - The two shareholder suits against the Riviera seeking class action
status were vigorously defended and subsequently, were voluntarily
dismissed with prejudice by each of the respective plaintiffs, one
August 28, 2003 and the other on September 29, 2003
  - Riviera Las Vegas entered into an agreement with Alliance Gaming to
provide ACSC slot systems, including ticket-in, ticket-out capability

Riviera Las Vegas:
Bob Vannucci, President of Riviera Las Vegas, said, “Third quarter Las
Vegas revenues were up $532,000 or 1.5 percent, primarily due to a 6.2
percent increase in slot revenues. Slot machine coin-in, or volume,
increased 3.9 percent for the quarter. Convention rooms decreased from
36.7 percent to 31.9 percent of total occupancy while leisure and gaming
increased from 55.4 percent to 59.8 percent and Internet sales rose from
7.8 percent to 12.2 percent. The overall average daily room rate decreased
$2.66 to $57.32 due to the change in room mix. RevPar remained flat at
$55.45. Occupancy, however, increased 4.2 points to 96.7 percent.

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“Las Vegas EBITDA declined $680,000 or 11.8 percent for the third quarter.
This was primarily due to increases in health care costs and other
employee benefits. Our margins were 14.1 percent compared to 16.2 percent
in the same quarter of 2002.

“The decline in Convention room nights was partially caused by
conventioneers booking via the Internet which circumvent traditional hotel
room blocks. While occupancy levels may not have been affected, the ADR
has been impacted. Leisure and Asian segments are rebooking and the fall
looks encouraging for overall bookings. It appears that the effects of the
war with Iraq and the SARS virus have been mitigated.

“Las Vegas Strip gaming revenues were up 7.0 percent in July 2003, while
Riviera Las Vegas gaming revenues were up 9.3 percent. Las Vegas Strip
gaming revenues were down 10.4 percent in August 2003 and our gaming
revenues were down 5.4 percent. Citywide visitor volumes, occupancy and
convention attendance were up in both July and August 2003.

“We are optimistic that our agreement with Alliance Gaming to provide the
ACSC slot system will allow us to increase or customer database by
offering new competitive features such as free play promotional vouchers
and electronic drawings. We will also have the capability to initiate
ticket-in, ticket-out technology on our machines in an orderly transition.
We believe that this capital investment will help maintain our competitive
position in the market and will provide cost savings over the long term as
we implement the system.”

Riviera Black Hawk
-
Ron Johnson, President of Riviera Black Hawk, said, “We are pleased that
third quarter EBITDA of $3.6 million was up $269,000 or 8.1 percent over
last year. Gaming revenues, slot market share and EBITDA margins all
increased compared to last year`s third quarter. Changes in the focus of
our marketing programs introduced in November of last year continue to
strengthen our position in the Black Hawk market.

“Neil Narter, General Manager of Riviera Black Hawk, tendered his
resignation effective October 17, 2003 to pursue a gaming management
opportunity in Louisiana. To help ensure a smooth transition I will serve
as General Manager on an interim basis.”

Consolidated Operations
-
Bill Westerman, Chairman and CEO, said, “With $25 million of cash and $30
million under our line of credit, we have the financial resources to
endure adverse short-term business conditions and to fund the equity
portion of our potential projects in New Mexico and Missouri, further
diversifying our earnings base. The Riviera and the three other remaining
applicants for a Racino in Hobbs, New Mexico are scheduled to appear
before the New Mexico Racing Commission the week of November 10. A
decision by the Commission is expected in early December. Finally, we
believe that the dismissal of the shareholder litigation, with prejudice,
is reflective of our continuing diligence in evaluating proposals and
responding to potential investors in a professional manner.”

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