CasinoCityTimes.com

Gurus
News
Newsletter
Search News Subscribe
Stay informed with the
NEW Casino City Times newsletter!
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!

Gaming News

 

Ameristar Casinos, Inc. Reports Q1 2001 Record Revenues

24 April 2001

LAS VEGAS, Nevada –(Press Release) --April 24, 2001-- Ameristar Casinos, Inc. (Nasdaq: ASCA) announced today record first quarter basic earnings per share of $0.31 before non-recurring charges compared to $0.14 for the first quarter in 2000, which significantly exceeded analysts' average consensus expectations of $0.23.

Net revenues for the first quarter of 2001 were $152.1 million, an impressive increase of $72.2 million or 90.2 percent over the Company's net revenues of $80.0 million for the first quarter in 2000. For the quarter ended March 31, 2001, Ameristar reported record income from operations of $26.8 million, up 137.2 percent from $11.3 million for the same period in 2000.

The Company's EBITDA (as defined below) for the quarter ended March 31, 2001 was $35.8 million, compared to $18.3 million for the same period in 2000, and also a new record in the Company's history. The Company's EBITDA margin for the three months-ended March 31, 2001 increased to 23.5 percent, compared to 22.8 percent for the same period in 2000.

The Kansas City and St. Charles, Mo. properties, acquired on December 20, 2000, strongly contributed to the quarter's results, including $86.1 million in net revenues, $21.9 million in operating income and $25.8 million in EBITDA. The Reserve Hotel & Casino in Henderson, Nev. contributed to the quarter's results through January 29, 2001, the date of its sale for approximately $71.8 million.

``The dramatic accomplishments and growth of Ameristar Casinos in 2000 are demonstrated by our first quarter 2001 results,'' said Ameristar President and Chief Executive Officer Craig H. Neilsen. ``Ameristar's acquisition of the Missouri properties significantly increases the Company's earnings potential, strengthens the Ameristar brand, diversifies the Company's portfolio, and provides greater economies of scale.''

Ameristar Kansas City is one of the largest and most impressive casinos in the United States. A leader in the $559 million Kansas City market, the property features approximately 140,000 square feet of gaming space, 3,249 slot and video poker machines and 161 table games.

Ameristar Kansas City also boasts unrivaled amenities, including an expansive streetscape with seven full-service restaurants, several express food outlets, 11 bars and lounges, an 18-screen movie theatre complex, an arcade and a Kid's Quest child-care facility. The area's top tourist attraction, the property also features 184 quality hotel rooms and suites.

Ameristar St. Charles serves the greater St. Louis area, one of the top gaming markets in the U.S., generating $684 million in gaming revenue annually. The property has an ideal location, immediately north of Interstate 70, a 10-lane freeway that handles 188,000 vehicles per day. Currently, Ameristar St. Charles is comprised of 45,000 square feet of gaming space, 1,875 slot and video poker machines, 40 table games, and such amenities as a 250-seat buffet, a distinctive steakhouse, and a 4,000 space parking structure.

Ameristar continues to mobilize for the completion in mid-2002 of the new St. Charles casino and entertainment facility, which will have at least 70,000 square feet of casino space, an impressive streetscape that will include a 550-seat buffet with exhibition cooking stations, a signature steakhouse and a dynamic entertainment lounge. The Company is currently considering an alternate design that would further expand the casino, among other enhancements.

During the first quarter of 2001, Ameristar invested or committed to approximately $5.0 million in capital expenditures on this project, including site remediation and other pre-construction activities. The Company is currently negotiating construction contracts for the project, and construction is expected to begin during the second quarter of 2001.

In connection with the Company's acquisition of the Missouri properties, the Company obtained a $300 million interim senior subordinated credit facility that was refinanced in the first quarter of 2001 with the proceeds from an issuance of the Company's 10 3/4% Senior Subordinated Notes due 2009. Due to the demand for the Notes, the offering was increased from $300 million to $380 million in principal amount.

A portion of the additional offering proceeds ($50 million) was used to repay and permanently reduce borrowings under the Company's Senior Secured Credit Facility. The write-off of the unamortized interim credit facility loan fee and a prepayment premium on the retired senior debt resulted in a non-recurring charge to interest expense of $3.5 million ($2.3 million net of the associated tax benefit) and reduced the Company's basic earnings per share for the first quarter 2001 to $0.19.

The Company's cash increased from $36.2 at December 31, 2000 to $42.6 million at March 31, 2001, as a result of cash generated from operations. The Company reduced total debt in the first quarter by $62.2 million from $796.5 million at December 31, 2000 to $734.3 million at March 31, 2001.

Net revenues at Ameristar Kansas City and Ameristar St. Charles in the first quarter of 2001 were a combined $86.1 million, a 6.4 percent increase from the same period in 2000. EBITDA of $25.8 million and operating income of $21.9 million for the Missouri properties were up 16.2 percent and 28.1 percent, respectively, compared to $22.2 million and $17.1 million for the first quarter of 2000.

The increases in EBITDA and operating income were due to various operational changes implemented by Ameristar since acquiring the Missouri properties, including slot product enhancements, and the consolidation of the casino at St. Charles onto a single barge in April 2000 that resulted in improved operational efficiencies. Ameristar St. Charles produced a $10.2 million in EBITDA in the first quarter of 2001, a record since the 1997 opening of two competing casinos across the Missouri River in Maryland Heights.

Ameristar Council Bluffs' net revenues in the first quarter of 2001 were $29.0 million, off 7.6 percent from $31.4 million in the corresponding period in 2000. Ameristar Council Bluffs' EBITDA for the quarter-ended March 31, 2001 was $7.4 million, down 24 percent from $9.8 million in 2000. Ameristar Council Bluffs' gaming revenues were negatively impacted by a 3.5 percent decline in total gaming market revenues for the first quarter of 2001 compared to the first quarter of 2000.

Management believes the gaming market in Council Bluffs was negatively impacted by high energy costs and severe weather conditions, especially in the month of February. Ameristar Council Bluffs' market share decreased one percentage point to 31.1 percent for the quarter ended March 31, 2001, compared to 32.1 percent in 2000.

The market share decrease is primarily attributable to construction disruption associated with the $7.4 million renovation and enhancement project for the casino floor and restaurants that began in the fourth quarter of 2000 and which has been substantially completed.

Ameristar Council Bluffs' casino has been totally renovated and multimedia, high-definition plasma screens have been installed throughout the casino, along with new slot product and EZ-Pay, a cashless ticket system designed to improve guest satisfaction. The property has also added two new restaurants: The Atrium, a casual and contemporary cafe and deli that features live entertainment, and the Prairie Mill Cafe & Bakery, a unique 24-hour specialty restaurant.

Following the completion of the casino construction at the end of February, both revenues and market share for the month of March were up slightly over the same period in 2000. The Company believes these additional amenities will lead to further market share increases and improved operating results.

Ameristar Vicksburg's net revenues for the first quarter of 2001 were $18.6 million, a decrease of 7.0 percent compared to $20.0 million in 2000. The decrease in net revenues is largely due to the adverse impact of construction disruption associated with the $10 million renovation and enhancement project for the casino and restaurants that began in the fourth quarter and is expected to continue into the second quarter of 2001.

In addition to the construction disruption, the Vicksburg gaming market was flat in the first quarter of 2001, with an increase in gaming revenue of only 0.6 percent (or less than one percent) from the same period in 2000. For the quarter ended March 31, 2001, EBITDA decreased 21.4 percent to $5.5 million from $7.0 million in 2000.

The Company is strengthening its market leadership position by completely renovating the casino and adding a number of new and exciting amenities such as the Bottleneck Blues Bar, a dynamic club featuring live entertainment that re-creates an authentic delta blues ``roadhouse'' atmosphere, a new VIP lounge, and new high-definition plasma screens positioned throughout the casino. Company management believes that these new amenities will position the property to further increase its market share lead and operating results.

The Company's Jackpot properties, Cactus Petes Resort Casino and The Horseshu Hotel & Casino, reported net revenues of $13.4 million for the three months-ended March 31, 2001 compared to $14.2 million for 2000, a decline of $0.8 million or 5.6 percent.

The decreased revenues are primarily attributable to slow economic conditions in the Southern Idaho market and severe winter weather conditions compared to the prior period. EBITDA for the Jackpot properties for the quarter-ended March 31, 2001 was $2.8 million, which is a decrease of $0.7 million from the prior year.

``The increased scale and diversification of the Company resulting from the acquisition of the Missouri properties, in addition to extensive property enhancements being completed at Ameristar Council Bluffs and Vicksburg, position the Company to further enhance financial performance,'' said Mr. Neilsen.

< Gaming News