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Ameristar Casinos nearly doubles its first-quarter profits

3 May 2012

Ameristar Casinos, Inc. nearly doubled its profits in the first quarter, the company said Wednesday.

The Las Vegas-based regional casino operator said its net income for the quarter that ended March 31 was $41.4 million, compared to net income of $21.8 million for the same period in 2011. The profits translated into earnings per share of $1.21, compared to 37 cent in same quarter last year.

In a statement, Ameristar said "efficient revenue flow-through, a $15.7 million reduction in the income tax provision and the absence of nonoperational professional fees," helped spur the increase in profits.

Ameristar's net revenues increased 1.1 percent to $312.1 million. Casinos in Black Hawk, Colo., and Council Bluffs, Iowa, had the highest revenue increase among the company's properties.

KDP Investment Advisors gaming analyst Barbara Cappaert said the performances by several of Ameristar's properties were unexpected.

"The surprises to us were the improvement in numbers at East Chicago (Ind.), which had been struggling with a major bridge closure for the past two years. We were looking for another slight decline there," Cappaert said. "In addition, the Vicksburg (Miss.) property recovered nicely after struggling from flooding closures last year."

Ameristar Chief Executive Officer Gordon Kanofsky called the company's first quarter financial performance one its best on record.

"Mild winter weather, highly efficient operations and leap year contributed to a quarter where we eclipsed $100 million in Adjusted (cash flow) for the first time," Kanofsky said in a statement.

Ameristar spent $32.5 million in March to acquire a casino site in Lake Charles, La. The company has until July 20 to begin construction on the resort, which had been named Mojito Pointe by the original developer, Creative Casinos.

Most analysts are interested to see how the company progresses with the $500 million Lake Charles project.

"We intend to construct a high-quality property that will cater to patrons from southwest Louisiana and east Texas, including the Houston metropolitan area, which is one of the country's largest and most under-served gaming markets," Kanofsky said.

The resort, now called Ameristar Lake Charles, will be located on 242-acre site next to Pinnacle Entertainment's L'Auberge du Lac. The property will have 700 hotel rooms and a casino with 1,600 slot machines and 60 table games, an 18-hole golf course, restaurant and entertainment amenities.

Ameristar will the project through a combination of cash from operations and a revolving credit agreement. The resort is expected to open in mid-2014.