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Ameristar Casinos, Inc. Reports Record Results For Q1 2000

15 May 2000

LAS VEGAS, May 15 (Press Release) -- Ameristar Casinos, Inc. (Nasdaq: ASCA - news) announced today that the Company has achieved an all-time high in performance levels. The increase is reflected in record revenue, EBITDA, and earnings per share.

Earnings per share for the three months ended March 31, 2000 were $0.14 compared to a loss per share of $0.01 in the first quarter of 1999 and analyst consensus estimates of $0.03 per share. The Company had net revenues of $81.7 million compared to net revenues of $70 million for the three months ended March 31, 1999. Additionally, the Company reported income from operations of $11.3 million, compared to $6.2 million for the same period in 1999. This growth reflects a 17 percent increase in net revenues and an 82 percent increase in income from operations. While Ameristar Council Bluffs and Ameristar Vicksburg posted the strongest results, the increases are attributable to substantially improved performance at all of the Company's properties.

On a company-wide basis, earnings before interest, taxes, depreciation and amortization (EBITDA) substantially increased by 46 percent to $18.3 million for the three months ended March 31, 2000 compared to $12.5 million for the three months ended March 31, 1999. The Company's EBITDA margin (EBITDA as a percentage of net revenues) for the three months ended March 31, 2000 was 22.4 percent compared to 17.9 percent for the same period in 1999. Exclusive of The Reserve, the Company's EBITDA margin for the three months ended March 31, 2000 was 24.8 percent compared to 21.8 percent for the same period in 1999.(1)

The Company's operating income margin (operating income as a percentage of net revenues) increased to 13.9 percent for the three months ended March 31, 2000 compared to 8.9 percent for the same period in 1999. Exclusive of The Reserve, the Company's operating income margin for the three months ended March 31, 2000 was 17.6 percent compared to 14.1 percent for the same period in 1999.

"We are extremely pleased to have achieved record levels for revenues, EBITDA and earnings per share in the first quarter of 2000," says Ameristar President and CEO Craig H. Neilsen. "The capital investment in our properties, begun in 1999, is now beginning to pay strong dividends, significantly increasing our profitability. We continue to see the positive results of our strategy of investing in ourselves by expanding our existing properties and enhancing our facilities. These investments are producing a high rate of return."

Neilsen continues, "Each of our properties is well positioned for future growth and we remain excited about our potential casino project in Lemay, Missouri."

Ameristar Council Bluffs continued its excellent performance through expansion of the property and corresponding increases in market share, net revenues and operating income. The property's strong growth has resulted in record performance for the second quarter in a row. The property experienced a significant 27 percent growth in net revenues of $32.1 million for the three months ended March 31, 2000 compared to $25.4 million for the three months ended March 31, 1999. In addition, operating income for the first quarter of 2000 dramatically increased by 64 percent from the first quarter of 1999.

The increases in net revenues and operating income at Ameristar Council Bluffs were primarily attributable to the casino expansion, completed in November 1999, a more aggressive marketing approach and the Company's strategic systemwide upgrading of slot technology. Another contributing factor was continued growth in the Council Bluffs gaming market. The property's share of the gaming market increased by 10 percent for the three months ended March 31, 2000 to 32.1 percent from 29.5 percent for the same period in 1999.

"Ameristar Council Bluffs' results for the first quarter of 2000 reflect the dramatic impact of the Company's capital investments in this property in 1999 and 2000. We expect the impressive growth at this property to continue throughout this fiscal year and into the future. This is due to the casino's well-received third deck expansion and the April 2000 opening of the 1,000-space parking garage, which has increased the facility's guest parking capacity to approximately 3,000 covered and surface spaces and provides direct access to the casino from the garage," Neilsen says. "As the majority of the property's capital improvements did not occur until late 1999, management anticipates these assets will generate even more significant results for the remainder of the year."

Ameristar Vicksburg also posted especially strong results. The property's net revenues for the three months ended March 31, 2000 rose to $20.7 million, reflecting an increase of 8 percent compared to $19.1 million for the three months ended March 31, 1999. Income from operations for the three months ended March 31, 2000 increased by 50 percent compared to the corresponding 1999 period. These improvements were primarily attributable to increased casino revenues from the expanded casino and the upgraded slot product (an overall increase of 35 percent or 300 additional slot machines) and improved marketing strategies combined with operating cost decreases. Ameristar Vicksburg has remained the gaming revenue market leader for the twentieth consecutive quarter.

"Another important property improvement was the addition of 600 parking spaces, which gives the property a competitive marketplace advantage," Neilsen says. "Other key property improvements included the introduction of a signature steakhouse and renovation of the 24-hour casual restaurant to strengthen the property's dining offerings. The combined effects of these enhancements are anticipated to bring further positive impact to the bottom line."

An increase of 11 percent in net revenues was reported at the Company's Jackpot properties, Cactus Petes Resort Casino and The Horseshu Hotel & Casino. The Jackpot properties posted net revenues of $14.5 million, compared to $13.1 million for the same period in 1999. "This is an impressive growth rate in the mature northeastern Nevada market," Neilsen says. The improvement is attributable primarily to the facility's new slot technology upgrades and the implementation of a strategic advertising campaign. Operating income for the Jackpot properties increased 7 percent for the three months ended March 31, 2000 compared to the corresponding period in 1999.

The Reserve Hotel Casino also experienced significant improvement in operating results during the three months ended March 31, 2000 compared to the three months ended March 31, 1999. During the first quarter of 2000, management continued to implement strategies to drive revenues and capture market share. Primarily as a result of these efforts, net revenues increased 16 percent for the three months ended March 31, 2000 compared to the first quarter of 1999. The increased revenues reduced the property's operating loss for the three months ended March 31, 2000 to $0.5 million compared to its operating loss of $1.9 million for the three months ended March 31, 1999, an improvement of 71 percent. The Company continues to seek further operating improvements at The Reserve through enhanced revenues and cost controls.

The information set forth above includes forward-looking statements, including statements concerning performance expectations for 2000. It is possible that the Company's expectations may not be met due to various factors, many of which are beyond the control of the Company. Information concerning some of these factors is included in the Company's publicly available reports on Forms 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission. In particular, see "Item 1. Business - Risk Factors" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Form 10-K for the fiscal year ended December 31, 1999. Ameristar Casinos, Inc., a publicly traded company with a strong background in the gaming and hospitality industry dating back to 1954, owns and operates Cactus Petes Resort Casino and The Horseshu Hotel & Casino in Jackpot, Nevada, Ameristar Casino Vicksburg in Vicksburg, Mississippi, Ameristar Casino Council Bluffs in Council Bluffs, Iowa, and The Reserve Hotel Casino in Henderson, Nevada in metropolitan Las Vegas.

AMERISTAR CASINOS, INC., AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data) (Unaudited)

Three Months Ended March 31, 1999 2000

REVENUES:

Casino $58,084 $68,938

Food and beverage 11,422 12,993

Rooms 3,851 4,010

Other 2,386 2,646

75,743 88,587

Less: Promotional allowances 5,706 6,895

Net Revenues 70,037 81,692

OPERATING EXPENSES:

Casino 26,931 31,258

Food and beverage 7,442 7,811

Rooms 1,524 1,569

Other 2,357 2,582

Selling, general and administrative 19,271 20,207

Depreciation and amortization 6,280 6,931

Total operating expenses 63,805 70,358

Income from operations 6,232 11,334

OTHER INCOME (EXPENSE):

Interest income 60 45

Interest expense (6,097) (6,718)

Other (368) (346)

INCOME (LOSS) BEFORE INCOME TAX PROVISION

(173) 4,315

Income tax provision (benefit) (60) 1,531

NET INCOME (LOSS) $(113) $2,784

WEIGHTED AVERAGE SHARES OUTSTANDING

20,360 20,377

EARNINGS (LOSS) PER SHARE:

Basic $(0.01) $0.14

Diluted $(0.01) $0.13

(1) EBITDA information 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 for companies with a significant amount of depreciation and amortization. EBITDA should not be construed as an alternative to income from operations (as determined in accordance with generally accepted accounting principles) as an indicator of the Company's operating performance, or as an alternative to cash flow from operating activities (as determined in accordance with generally accepted accounting principles) as a measure of liquidity. The Company has significant uses of cash flows, including capital expenditures and debt principal repayments, that are not reflected in EBITDA. It should also be noted that not all gaming companies that report EBITDA information may calculate EBITDA in the same manner as the Company.

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