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 Reports Record Results for Q1 2002

24 April 2002

LAS VEGAS, Nevada – (Press Release) -- Ameristar Casinos, Inc. (Nasdaq: ASCA) today announced operating results for the first quarter of 2002. The Company reported record quarterly net income, earnings per share, net revenues, operating income and EBITDA. Highlights for the quarter ended March 31, 2002 include:

Net income of $15.4 million, an increase of 295 percent over net income of $3.9 million in the first quarter of 2001 (and 144 percent over net income before non-recurring items of $6.3 million in the first quarter of 2001).

Diluted earnings per share of $0.57, compared to first quarter 2001 diluted earnings per share of $0.18 ($0.29 per share before non-recurring items) and exceeding analysts' consensus expectations, as reported by Thomson's First Call, of $0.52 per share.

Net revenues of $170.1 million, an increase of $18.0 million or 11.8 percent from the first quarter of 2001.

Income from operations of $35.4 million, an increase of 32.1 percent from $26.8 million for the first quarter of 2001.

EBITDA (as defined below) of $45.5 million compared to $35.8 million for the first quarter of 2001, an increase of 27.1 percent.

Continued progress on construction of the new casino and entertainment facility in St. Charles, Missouri and the new 2,650-space parking garage at Ameristar Kansas City, each of which is on schedule to open this summer.

The Company's improved performance in the first quarter of 2002 was driven primarily by strong results at the Council Bluffs, Vicksburg and St. Charles properties. Each of the Company's properties benefited from the continuing implementation of targeted marketing programs, enhanced operating systems and cost containment programs during the first quarter of 2002. In addition, during January and February 2002, the Company's properties, other than the Jackpot Properties, were positively impacted by milder weather compared to the prior year.

These factors led to an increase in the Company's consolidated operating income margin from 17.6 percent in the first quarter of 2001 to 20.8 percent in the first quarter of 2002, and an increase in consolidated EBITDA margin from 23.5 percent in the first quarter of 2001 to 26.8 percent in the first quarter of 2002. In addition to the success of the Company's cost containment programs, these margin improvements demonstrate the positive operational leverage achieved at the higher revenue levels generated during the quarter.

Both Ameristar Council Bluffs and Ameristar Vicksburg yielded strong returns on the Company's investment in their extensive renovations completed in 2001. Each of these properties substantially increased its market share from the first quarter of 2001. Ameristar Council Bluffs and Ameristar Vicksburg also benefited from the elimination of construction disruption that adversely affected results in the first quarter of 2001.

``I am very pleased to announce the results of another record-setting quarter for Ameristar,'' said Craig H. Neilsen, the Company's Chairman, President and CEO. ``Our results demonstrate the dramatic payoffs from our capital improvement projects and operating programs, which allow us to continue to offer the highest quality gaming and entertainment experience to our guests. With the opening this summer of our new casino and entertainment facility in St. Charles and the state-of-the-art 2,650-space parking garage in Kansas City, we look forward to continuing the significant growth that we have experienced to date.''

Ameristar Kansas City generated net revenues of $54.1 million in the first quarter of 2002, up 3.0 percent from the prior-year quarter. Ameristar Kansas City's market share in the first quarter of 2002 improved to 33.0 percent, up from 32.5 percent in the first quarter of the prior year. Despite the increase in revenues, income from operations and EBITDA at Ameristar Kansas City were each down 3.2 percent to $12.1 million and $15.1 million, respectively, in the first quarter of 2002 compared to the first quarter of 2001.

The Company believes the stable operations at Ameristar Kansas City from the first quarter of 2001 to the first quarter of 2002 in general are positive since two of the three other competitors in the market completed major enhancements of their facilities during 2001 and results in the first quarter of 2002 at Ameristar Kansas City were disrupted by construction of the new parking garage.

Nonetheless, management believes that Ameristar Kansas City has not performed to its full potential since its acquisition in December 2000. Accordingly, management has been analyzing Ameristar Kansas City's operations and the existing facilities to develop a strategy for improved performance. In addition to operational changes, management is considering a renovation and enhancement program intended to produce a similar high rate of return on investment as realized on the recent programs at the Council Bluffs and Vicksburg properties.

Net revenues at Ameristar St. Charles for the first quarter of 2002 were $40.0 million, up 19.0 percent from the first quarter of 2001, marking the fifth straight quarter of double-digit revenue growth for the property. Ameristar St. Charles improved its market share in the first quarter of 2002 to 19.9 percent, up from 17.6 percent in the first quarter of 2001. Ameristar St. Charles' operating income of $11.3 million and EBITDA of $12.4 million represent increases of 20.2 percent and 21.6 percent, respectively, over the corresponding period in 2001.

Financial performance at Ameristar Council Bluffs continued its trend of substantial growth following the completion of its renovation in the second quarter of 2001, with the property generating $38.0 million in net revenues in the first quarter of 2002, up 31.0 percent from the same period a year earlier. Ameristar Council Bluffs posted operating income of $10.0 million and EBITDA of $12.3 million, increases of 92.3 percent and 66.2 percent, respectively, from the first quarter of 2001. Ameristar Council Bluffs achieved a market share of 36.9 percent in the first quarter of 2002, up from 31.1 percent in the first quarter of 2001, representing an increase of 18.6 percent. Ameristar Council Bluffs has led the market in gaming revenues for seven consecutive months.

Results at Ameristar Vicksburg also experienced substantial improvement from the renovations completed in the second quarter of 2001, with net revenues of $23.9 million, operating income of $6.6 million and EBITDA of $8.9 million in the first quarter of 2002, increases of 28.5 percent, 83.3 percent and 61.8 percent, respectively, from the 2001 first quarter. The property, which has led the Vicksburg market for seven consecutive years, improved its market share to 37.1 percent in the first quarter of 2002, up from 29.9 percent in the first quarter of 2001, an increase of 24.1 percent. The improved market share fueled revenue growth at Ameristar Vicksburg at a rate more than five times greater than the 5.4 percent growth experienced by the market as a whole.

Net revenues at the Jackpot Properties in the first quarter of 2002 were $13.9 million, up 3.7 percent from the first quarter of 2001. This improvement is primarily attributable to an improved Southern Idaho economy in the 2002 period compared to the 2001 period, partially offset by more harsh winter weather conditions in January and February 2002 compared to the same months in 2001. The Jackpot Properties generated operating income of $2.6 million and EBITDA of $3.6 million, up 44.4 percent and 28.6 percent, respectively, over the first quarter of 2001. These substantial improvements in operating income and EBITDA in comparison to the more modest revenue growth reflect the properties' continuing emphasis on controlling costs.

At March 31, 2002, the Company's total debt was $673.1 million, representing an increase of $39.2 million from $633.9 million at December 31, 2001. The increase is attributable to borrowings made to fund construction of the new casino and entertainment facility at Ameristar St. Charles and the parking garage at Ameristar Kansas City. As of March 31, 2002, the Company had spent approximately $100 million on the new St. Charles facility and $19 million on the Kansas City parking garage. The Company expects the remaining costs for the completion of construction of these projects, including purchases of furniture, fixtures and equipment, to be approximately $70 million for the St. Charles project and $4 million for the Kansas City parking garage. These costs are expected to be funded through operating cash flows and additional borrowings under the Company's credit facilities. The Company's cash increased to $45.8 million at March 31, 2002 compared to $41.1 million at December 31, 2001.

The Company's interest expense in the first quarter of 2002 was $10.6 million, down 48 percent from $20.4 million in the first quarter of 2001, due to: (1) a $94.2 million reduction in the Company's outstanding debt resulting from the application of the net proceeds from a 4.9 million share public offering of common stock by the Company in December 2001, (2) a lower average interest rate on the amounts outstanding, (3) increased capitalization of interest as a result of construction in progress at Ameristar St. Charles and Ameristar Kansas City, and (4) the write-off in the first quarter of 2001 of unamortized interim credit facility loan fees and pre-payment premiums on retired senior debt. The Company's total interest cost, before capitalizing interest associated with the Company's ongoing construction projects, was $16.7 million in the first quarter of 2002 compared to $24.5 million in the same period in 2001.

The number of diluted shares outstanding increased by 25.3 percent from the first quarter of 2001 to the first quarter of 2002, primarily due to the issuance of 4.9 million newly issued shares in the December 2001 public offering. Among other factors, this increase in outstanding shares affects the comparability of earnings per share between the first quarter of 2001 and the first quarter of 2002.

< Gaming News