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Howard Stutz

Colorado property fuels first-quarter profit rise for Ameristar

2 May 2007

COLORADO -- Ameristar Casinos said Tuesday it was on a Rocky Mountain high during the recently ended first quarter.

Fueled by results from its casino outside Denver, Ameristar reported a net income of $24 million, or 41 cents per share in the quarter ended March 31. Analysts polled by Thomson First Call expected the company to earn 37 cents a share in the quarter.

A year ago, the company had a net income of $2.6 million or 5 cents a share, brought down by a loss on early retirement of debt.

Ameristar Chief Executive Officer John Boushy said investors should be impressed with the results.

"Ameristar continues to deliver record financial performance as we begin (the year)," Boushy said in a statement. "Our first quarter in 2007 is our strongest quarter ever."

Quarterly revenue rose 1.2 percent to $259.1 million from $256.1 million.

Cash flow, reported as earnings before interest, taxes, depreciation and amortization, was $73.8 million, an 11.4 percent increase compared with $66.2 million last year.

Ameristar, which is headquartered in Las Vegas, operates seven casinos in six regional markets. The company, which has two casinos in Northern Nevada, does not have a casino in Las Vegas.

Boushy touted results from Ameristar Black Hawk, the company's casino outside of Denver that was acquired more than a year ago, for the increased earnings.

The casino, which does not have a hotel, had revenues of $22.1 million in the quarter, a 35 percent increase compared with $14.4 million in the first quarter of 2006. Cash flow at the casino was $7.2 million, a 73 percent increase compared with $1.9 million last year.

Boushy said Ameristar's market share in Black Hawk increased to 16 percent. The company is currently spending $220 million to add a 537-room hotel tower at Ameristar Black Hawk. However, weather conditions and site development delays have put off completion of the project until 2009.

In April, Ameristar announced it was spending $675 million to buy a riverboat casino from Resorts International in Indiana, located about 25 miles from downtown Chicago. The transaction is expected to close by the end of the year.

Ameristar Executive Vice President Gordon Kanofsky said the company will make several capital improvements to the casino once it acquires the property. He said the purchase is a step toward doubling the size of Ameristar over the next three to four years.

Kanofsky said the riverboat casino "hits the bull's-eye of our acquisition criteria."

Ameristar shares rose 9 cents or 0.3 percent, Tuesday to close at $30.45 on the Nasdaq National Market.