LAS VEGAS, July 28 /PRNewswire-FirstCall/ -- Ameristar Casinos, Inc.
(Nasdaq: ASCA) today announced financial results for the second quarter of
2004, reflecting the continued growth of the company.
Second Quarter 2004 Financial Highlights
* Record second quarter consolidated net revenues of $210.0 million,
representing an increase of $15.2 million, or 7.8%, over the second
quarter of 2003.
* Record second quarter consolidated EBITDA (a non-GAAP financial
measure which is defined and reconciled with operating income below)
of $56.9 million, representing an increase of $1.8 million, or 3.2%,
over the second quarter of 2003.
* Consolidated operating income of $39.1 million for the second quarter
of 2004, a decrease of $0.2 million from the prior-year second
quarter.
* Record second quarter net income of $15.0 million, up $0.6 million, or
3.8%, from the second quarter of 2003.
* Diluted earnings per share of $0.54 for the second quarter of 2004,
compared to $0.54 for the second quarter of 2003. Our previously
issued earnings guidance for the second quarter of 2004 indicated a
range of $0.55 to $0.57 per share. Analysts' latest consensus
estimate for the second quarter of 2004, as reported by Thomson First
Call, was $0.59.
* On June 1, 2004, our Board of Directors declared a quarterly cash
dividend of $0.125 per share, which was paid on June 30, 2004 to
shareholders of record on June 15, 2004.
* During the second quarter of 2004, we prepaid $15.0 million of
long-term debt under our senior credit facilities, further improving
our total debt leverage ratio (as defined in our senior credit
agreement) from 3.49:1 at December 31, 2003 to 3.17:1 at June 30,
2004.
Second Quarter 2004 Operational Highlights
* We extended and improved our leadership position in market share
(based on gross gaming receipts) in each of our markets with
Ameristar-branded properties during the second quarter of 2004
compared to the same period in 2003.
* As of June 30, 2004, nearly 100% of the slot machines at our
Ameristar-branded properties have been equipped with coinless
technology.
Other Second Quarter 2004 Highlights
* On May 28, 2004, we signed an agreement with Windsor Woodmont Black
Hawk Resort Corp. to acquire Mountain High Casino in Black Hawk,
Colorado for approximately $115.0 million, plus the assumption of
approximately $2.4 million of outstanding debt and certain other
contingent consideration. Closing of this acquisition is expected to
occur in December 2004. Mountain High Casino is an upscale,
integrated gaming and entertainment facility and is currently the
largest casino in Colorado. Following the closing of the transaction,
we intend to invest approximately $75 million in capital expenditures
to improve the competitiveness of the property, as well as make other
operational enhancements. The planned capital improvements include
construction of a hotel and additional covered parking,
reconfiguration and expansion of the gaming area, the introduction of
cashless slot technology and other gaming equipment upgrades, the
addition and replacement of food and beverage outlets and enhancement
of the entertainment showroom.
* On July 15, 2004, we received approval from the Iowa Racing and Gaming
Commission for a $26 million expansion and enhancement of Ameristar
Council Bluffs. Our expansion plans call for adding another
9,800 square feet of gaming space to accommodate 398 additional gaming
positions, including slot machines, table games and a poker room, as
well as an overlook bar and deli. In addition to satisfying demand
during peak times, the changes will result in a more spacious casino
floor with improved circulation and traffic flow.
Enhancements to the landside facilities include an extensive renovation to
the buffet, which will be re-branded as the Heritage Buffet. The changes will
bring an upscale Craftsman-era ambiance to the room and an upgrade to the
entire buffet line, including the creation of several display cooking
stations. The buffet will also be expanded by 53 seats to bring it to a total
of 340 seats. In the hotel -- currently the only AAA Four Diamond-rated hotel
in the Omaha area -- all of the 162 guest rooms will undergo a complete
renovation. The new rooms will feature a classically modern interior accented
by hardwood furniture, and upscale bathroom finishings. The rooms will
provide luxury conveniences, including a 32" LCD TV, pillow-top bed and fully
functioning work desks with high-speed internet access.
"Our continued market share leadership in all of the jurisdictions in
which we operate further evidences the strength of the Ameristar brand," said
Craig H. Neilsen, Chairman and CEO. "We are most pleased that since the
introduction of our all-new Ameristar Kansas City property in the third
quarter of 2003, we have seen steady improvement in our market share
leadership despite a significant increase in the number of gaming positions in
the Kansas City market. Our solid financial performance has allowed us to
continue to return a portion of our earnings to our shareholders with the
declaration of our second quarterly cash dividend, while at the same time we
have further reduced our financial leverage. Indeed, we believe we are
well-positioned to further grow the Company."
Financial Results
Net Revenues
Net revenues for the second quarter of 2004 increased to $210.0 million,
an increase of 7.8% compared to the second quarter of 2003. All of our
Ameristar-branded properties improved in net revenues, with increases of
11.2% at Ameristar Vicksburg, 9.3% at Ameristar Council Bluffs, 8.6% at
Ameristar Kansas City and 7.5% at Ameristar St. Charles. For the quarter,
each of our Ameristar-branded properties improved its market share. Ameristar
Vicksburg and Ameristar Council Bluffs further improved their long-time market
leadership positions to 45.7% and 40.9%, respectively, with increases of
6.5 and 2.1 percentage points, respectively, over the prior-year second
quarter. Ameristar St. Charles and Ameristar Kansas City increased reported
market shares to 32.7% and 34.8%, respectively, up 1.7 and 0.9 percentage
points, respectively, over the prior-year second quarter.
Driven by a $23.2 million (14.3%) increase in slot revenues, casino
revenues for the second quarter of 2004 increased $23.8 million, or
12.6%, from the second quarter of 2003. We believe casino revenues increased
in part as a result of our continued successful implementation of our targeted
marketing programs, which is evidenced by a 21.7% increase in rated play at
our Ameristar-branded properties when compared to the second quarter of 2003.
We also believe that the growth in slot revenues has been driven by our
aggressive implementation of coinless slot technology at our Ameristar-branded
properties, which are now nearly 100% coinless. In addition, we believe our
continued leadership in the introduction of new-generation nickel and penny
slot machines at our Ameristar-branded properties is a contributor to the
improvement in slot revenues, due to the popularity of this segment of the
slot market.
We believe the quality of our food and beverage operations also
contributed to our market share leadership. Food and beverage revenues
increased by $3.5 million, or 14.0%, in the second quarter of 2004 compared to
the prior-year second quarter. The increase was principally attributable to
our new food and beverage venues that opened at Ameristar Kansas City in the
third quarter of 2003 and Ameristar Vicksburg's newly renovated Heritage
Buffet, which was completed in the fourth quarter of 2003. The renovation and
expansion of the buffet at Ameristar Council Bluffs is expected to achieve
results similar to those of our other recent food and beverage projects.
Net revenues at the Jackpot Properties decreased to $15.5 million,
representing a $0.3 million decrease compared to the second quarter of 2003.
Lower net revenues were the result of increased competition from a Native
American gaming property in Southeastern Idaho and higher fuel prices.
Operating Income and EBITDA
In the second quarter of 2004, consolidated operating income decreased
0.6% to $39.1 million and consolidated operating income margin dropped
1.6 percentage points from the prior-year second quarter, to 18.6%. Operating
income margin decreased at Ameristar St. Charles, Ameristar Kansas City and
the Jackpot Properties by 1.5, 1.9 and 7.3 percentage points, respectively,
when compared to the same period in 2003. Consolidated EBITDA increased
3.2% to $56.9 million compared to the second quarter of 2003. However,
consolidated EBITDA margin in the second quarter of 2004 decreased from
28.3% to 27.1%, primarily due to Ameristar St. Charles, Ameristar Kansas City
and the Jackpot Properties, where EBITDA margin dropped 2.3, 0.5 and
7.1 percentage points, respectively, from the prior-year second quarter. The
declines in operating income and EBITDA margins at these properties were
primarily attributable to increased costs for marketing and advertising to
maintain competitiveness, as well as increased employee benefits costs. At
the Jackpot Properties, the decreases in EBITDA and operating income and
related margins were also the result of the aforementioned decline in net
revenues and higher labor and entertainment costs.
Ameristar Kansas City's operating income margin was also negatively
impacted by an increase in depreciation expense of $1.1 million from the
prior-year quarter, as a result of the completion of the enhancement and
renovation projects at the property in the third quarter of 2003. However,
EBITDA at Ameristar Kansas City increased $0.9 million, or 6.6%, over the
prior-year second quarter, due primarily to the aforementioned increases in
gaming and food and beverage revenues.
Ameristar Vicksburg improved its EBITDA margin to 34.0% from 32.5% and its
operating income margin to 23.1% from 22.5% in the second quarter of 2003.
Ameristar Council Bluffs' EBITDA margin increased to 37.0% in the second
quarter of 2004 from 35.9% in the second quarter of 2003, and its operating
income margin improved 0.8 percentage points to 30.3% when compared to the
same quarter in 2003. The growth in EBITDA and operating income margins at
these properties was principally driven by the increase in revenues noted
above.
Corporate expense increased $1.1 million in the second quarter of 2004
compared to the same quarter of 2003. The increase in corporate expense was
primarily the result of our expanded development activities. We expect this
trend to continue through the remainder of 2004 as we seek growth through
development opportunities in the United Kingdom and Pennsylvania, and through
acquisition opportunities.
Depreciation and amortization expense increased to $17.8 million in the
second quarter of 2004 from $15.8 million in the second quarter of 2003,
primarily due to the increase in our depreciable assets resulting from the
enhancement and renovation projects at Ameristar Kansas City and Ameristar
Vicksburg and the continued implementation of coinless slot technology.
Net Income and Diluted Earnings Per Share
For the second quarter of 2004, net income increased 3.8% to $15.0 million
from $14.5 million for the second quarter of 2003. Diluted earnings per share
were $0.54 in each of the quarters ended June 30, 2004 and 2003. Interest
expense for the 2004 second quarter was $13.8 million, down $2.8 million from
the second quarter of 2003. The decline in interest expense was due to a
decrease in our long-term debt levels, the termination of our interest rate
swap agreement on March 31, 2004, and lower interest rates on our senior
credit facilities year-over-year. In the 2004 second quarter, we incurred a
non-operating loss on early retirement of debt of $0.2 million. Our effective
income tax rate for the quarter ended June 30, 2004 was 40.0%, compared to
37.0% for the quarter ended June 30, 2003, due primarily to an increase in the
effective state income tax rate.
Liquidity and Capital Resources
Our financial position remains strong, with approximately $89.7 million of
cash and cash equivalents and $68.9 million of available borrowing capacity
under our senior credit facilities as of June 30, 2004. During the second
quarter of 2004, we reduced our long-term debt by approximately $15.8 million,
including the prepayment of $15.0 million of principal under our senior credit
facilities. At June 30, 2004, our total debt was $685.4 million, representing
a decrease of $31.6 million (4.4%) from December 31, 2003. We expect to
increase the borrowing capacity under our senior credit facilities in order to
fund the acquisition of Mountain High Casino.
Capital expenditures for the second quarter of 2004 totaled $28.8 million
and included capital maintenance projects at all of our properties, the
continued acquisition of coinless slot machines and the implementation of
information technology solutions to enhance our operating capabilities.
Outlook
Based on our preliminary results of operations to date in July 2004 and
our outlook for the remainder of the quarter, we currently estimate operating
income of $37 million to $39 million, EBITDA of $55 million to $57 million
(given anticipated depreciation expense of $18 million), interest expense of
$14 million and diluted earnings per share of $0.50 to $0.53 for the third
quarter of 2004.
Conference Call
We will hold a conference call to discuss our second quarter results and
guidance for the third quarter at 3:00 p.m. Eastern Time on July 28, 2004.
The call can be accessed live by calling (800) 500-0311. It can be replayed
until August 4, 2004 at 12:00 a.m. Eastern Time by calling (888) 203-1112 and
using the access code number 368895. This press release may be accessed on
our website at http://www.ameristar.com/corp/c_aa_proom.asp.
Forward-Looking Information
This press release contains certain forward-looking information that
generally can be identified by the context of the statement or the use of
forward-looking terminology, such as "believes," "estimates," "anticipates,"
"intends," "expects," "plans," "is confident that" or words of similar
meaning, with reference to Ameristar or our management. Similarly, statements
that describe our future plans, objectives, strategies, financial results or
position, operational expectations or goals are forward-looking statements.
It is possible that our expectations may not be met due to various factors,
many of which are beyond our control, and we therefore cannot give any
assurance that such expectations will prove to be correct. For a discussion
of relevant factors, risks and uncertainties that could materially affect our
future results, attention is directed to "Item 1. Business - Risk Factors" and
"Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations" in our Annual Report on Form 10-K for the year ended
December 31, 2003 and "Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations" in our Quarterly Report on Form
10-Q for the quarter ended March 31, 2004.
About Ameristar
Ameristar Casinos, Inc. is a leading Las Vegas-based gaming and
entertainment company known for its premier properties characterized by
innovative architecture, state-of-the-art casino floors and superior dining,
lodging and entertainment offerings. Ameristar's focus on the total
entertainment experience and the highest quality guest service has earned it
the leading market share position in each of the five markets in which it
operates. Founded in 1954 in Jackpot, Nevada, Ameristar recently marked its
10th anniversary as a public company. The company has a portfolio of six
casinos: Ameristar Kansas City; Ameristar St. Charles (greater St. Louis);
Ameristar Council Bluffs (Omaha, Nebraska and southwestern Iowa); Ameristar
Vicksburg (Jackson, Mississippi and Monroe, Louisiana); and Cactus Petes and
the Horseshu in Jackpot, Nevada (Idaho and the Pacific Northwest).
Visit Ameristar Casinos' Web site at http://www.ameristar.com
(which shall not be deemed to be incorporated in or a part
of this news release).
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in Thousands, Except Per Share Data)
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
2004 2003 2004 2003
REVENUES:
Casino $211,904 $188,128 $427,214 $371,888
Food and beverage 28,198 24,734 57,246 49,500
Rooms 6,746 6,565 13,060 12,071
Other 5,756 5,787 11,415 10,437
252,604 225,214 508,935 443,896
Less: Promotional
allowances 42,599 30,388 84,567 60,550
Net revenues 210,005 194,826 424,368 383,346
OPERATING EXPENSES:
Casino 94,830 86,142 190,948 170,661
Food and beverage 15,692 13,917 31,028 28,030
Rooms 1,581 1,460 3,206 3,061
Other 3,318 2,501 6,492 5,909
Selling, general and
administrative 37,703 35,604 76,235 69,989
Depreciation and
amortization 17,796 15,767 35,128 30,778
Impairment loss (17) 88 95 540
Total operating
expenses 170,903 155,479 343,132 308,968
Income from operations 39,102 39,347 81,236 74,378
OTHER INCOME (EXPENSE):
Interest income 78 104 88 211
Interest expense (13,788) (16,635) (29,223) (33,229)
Loss on early
retirement of debt (224) -- (470) --
Other (140) 147 (97) 34
INCOME BEFORE INCOME TAX
PROVISION 25,028 22,963 51,534 41,394
Income tax provision 10,009 8,496 20,614 15,207
NET INCOME $15,019 $14,467 $30,920 $26,187
EARNINGS PER SHARE:
Net income:
Basic $0.56 $0.55 $1.15 $1.00
Diluted $0.54 $0.54 $1.12 $0.97
WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic 27,044 26,377 26,924 26,318
Diluted 27,860 27,012 27,727 26,866
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands)
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
2004 2003 2004 2003
Consolidated cash flow
information
Cash flows provided
by operations $58,827 $51,753 $93,906 $86,016
Cash flows used
in investing $(26,830) $(15,214) $(47,862) $(43,021)
Cash flows used
in financing $(21,269) $(21,224) $(34,586) $(31,327)
Net revenues
Ameristar St. Charles $69,009 $64,170 $140,449 $125,837
Ameristar Kansas City 57,038 52,540 114,640 104,350
Ameristar Council
Bluffs 42,473 38,850 84,827 76,465
Ameristar Vicksburg 26,010 23,392 54,925 47,281
Jackpot Properties 15,475 15,744 29,527 29,375
Corporate and other -- 130 -- 38
Consolidated net
revenues $210,005 $194,826 $424,368 $383,346
Operating income (loss)
Ameristar St. Charles $16,346 $16,177 $35,767 $30,657
Ameristar Kansas City 10,794 10,924 21,376 21,865
Ameristar Council
Bluffs 12,854 11,457 25,071 21,379
Ameristar Vicksburg 6,021 5,254 14,731 11,192
Jackpot Properties 2,209 3,399 3,554 5,055
Corporate and other (9,122) (7,864) (19,263) (15,770)
Consolidated operating
income $39,102 $39,347 $81,236 $74,378
EBITDA (1)
Ameristar St. Charles $22,240 $22,154 $47,283 $42,273
Ameristar Kansas City 15,322 14,380 30,553 28,181
Ameristar Council
Bluffs 15,700 13,940 30,571 26,368
Ameristar Vicksburg 8,847 7,594 20,303 15,965
Jackpot Properties 3,161 4,335 5,412 7,023
Corporate and other (8,372) (7,289) (17,758) (14,654)
Consolidated EBITDA $56,898 $55,114 $116,364 $105,156
Operating income
margins (2)
Ameristar St. Charles 23.7% 25.2% 25.5% 24.4%
Ameristar Kansas City 18.9% 20.8% 18.6% 21.0%
Ameristar Council
Bluffs 30.3% 29.5% 29.6% 28.0%
Ameristar Vicksburg 23.1% 22.5% 26.8% 23.7%
Jackpot Properties 14.3% 21.6% 12.0% 17.2%
Consolidated operating
income margin 18.6% 20.2% 19.1% 19.4%
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL DATA-CONTINUED
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
2004 2003 2004 2003
EBITDA margins (1)
Ameristar St. Charles 32.2% 34.5% 33.7% 33.6%
Ameristar Kansas City 26.9% 27.4% 26.7% 27.0%
Ameristar Council Bluffs 37.0% 35.9% 36.0% 34.5%
Ameristar Vicksburg 34.0% 32.5% 37.0% 33.8%
Jackpot Properties 20.4% 27.5% 18.3% 23.9%
Consolidated EBITDA
margin 27.1% 28.3% 27.4% 27.4%
(1) EBITDA is earnings before interest, taxes, depreciation and
amortization. EBITDA is presented solely as a supplemental
disclosure because management believes that it is a widely used
measure of operating performance in the gaming industry and a
principal basis for the valuation of gaming companies. Our credit
agreement also requires the use of EBITDA as a measure of compliance
with our principal debt covenants. In addition, management uses
property-level EBITDA (EBITDA before corporate expense) as the
primary measure of our operating properties' performance, including
the evaluation of operating personnel. EBITDA margin is EBITDA as a
percentage of net revenues. EBITDA should not be construed as an
alternative to income from operations (as determined in accordance
with GAAP) as an indicator of our operating performance, or as an
alternative to cash flows from operating activities (as determined in
accordance with GAAP) as a measure of liquidity, or as an alternative
to any other measure determined in accordance with GAAP. We have
significant uses of cash flows, including capital expenditures,
interest payments, taxes and debt principal repayments, which are not
reflected in EBITDA. It should also be noted that not all gaming
companies that report EBITDA calculate EBITDA in the same manner as
we do.
(2) Operating income margin is operating income as a percentage of net
revenues.
RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA
(Dollars in Thousands)
(Unaudited)
The following table sets forth a reconciliation of operating income
(loss), a GAAP financial measure, to EBITDA, a non-GAAP financial
measure.
Three Months Six Months
Ended June 30, Ended June 30,
2004 2003 2004 2003
Ameristar St. Charles:
Operating income $16,346 $16,177 $35,767 $30,657
Depreciation and
amortization 5,894 5,977 11,516 11,616
EBITDA $22,240 $22,154 $47,283 $42,273
Ameristar Kansas City:
Operating income $10,794 $10,924 $21,376 $21,865
Depreciation and
amortization 4,528 3,456 9,177 6,316
EBITDA $15,322 $14,380 $30,553 $28,181
Ameristar Council Bluffs:
Operating income $12,854 $11,457 $25,071 $21,379
Depreciation and
amortization 2,846 2,483 5,500 4,989
EBITDA $15,700 $13,940 $30,571 $26,368
Ameristar Vicksburg:
Operating income $6,021 $5,254 $14,731 $11,192
Depreciation and
amortization 2,826 2,340 5,572 4,773
EBITDA $8,847 $7,594 $20,303 $15,965
Jackpot Properties:
Operating income $2,209 $3,399 $3,554 $5,055
Depreciation and
amortization 952 936 1,858 1,968
EBITDA $3,161 $4,335 $5,412 $7,023
Corporate and other:
Operating loss $(9,122) $(7,864) $(19,263) $(15,770)
Depreciation and
amortization 750 575 1,505 1,116
EBITDA $(8,372) $(7,289) $(17,758) $(14,654)
Consolidated:
Operating income $39,102 $39,347 $81,236 $74,378
Depreciation and
amortization 17,796 15,767 35,128 30,778
EBITDA $56,898 $55,114 $116,364 $105,156
SOURCE Ameristar Casinos, Inc.
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http://www.ameristarcasinos.com
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CONTACT:
Tom Steinbauer, Senior Vice President of
Finance, Chief Financial Officer of Ameristar Casinos, Inc.,
+1-702-567-7000
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