Ameristar Casinos, Inc. (NASDAQ: ASCA)
- 2Q Net Revenues decreased $8.8 million (2.9%)
YOY to $296.3 million
- 2Q Adjusted EBITDA declined $4.1 million
(4.3%) YOY to $90.2 million
- Strong 2Q Adjusted EBITDA margin of
30.4%
- 2Q Adjusted EPS improved by $0.01 (2.0%) YOY
to $0.51
- Construction of Ameristar Lake Charles
commenced on July 20, 2012
Ameristar Casinos, Inc. (NASDAQ: ASCA) today announced financial
results for the second quarter of 2012.
"After an extremely strong first quarter, when we established
several all-time financial performance records, the second quarter
of 2012 proved to be a bit softer," said Gordon Kanofsky,
Ameristar's Chief Executive Officer. "The combination of new
competition, construction disruption and a pull-back in consumer
discretionary spending impacted the quarter. As a result, we were
unable to continue our lengthy year-over-year quarterly increases
in net revenues, Adjusted EBITDA and Adjusted EBITDA margin.
Nonetheless, our Adjusted EPS grew on a year-over-year basis for
the seventh consecutive quarter and we continued to operate with a
strong consolidated Adjusted EBITDA margin above 30%. Our Black
Hawk property was a notable contributor to the consolidated margin
as it produced the best quarterly financial performance in its
history. Looking beyond the quarterly performance measures, we
achieved the best first-half financial performance in Ameristar's
history.
"Additionally, we are pleased with the progress made on our
casino hotel spa development in Lake Charles, La. Within the last
two months, we received the necessary regulatory approvals,
completed the acquisition and commenced construction. We look
forward to further growing our company and diversifying our
operations by adding a luxury casino resort that will cater to
patrons from southwest Louisiana and east Texas, including the
Houston metropolitan area."
Consolidated net revenues for the second quarter decreased year
over year by $8.8 million, to $296.3 million. We believe the slower
growth in consumer discretionary spending adversely impacted our
top-line results. Additionally, new competition continued to
adversely impact our Kansas City and East Chicago properties, with
year-over-year declines of $5.0 million (8.8%) and $3.6 million
(6.4%), respectively. Net revenues at our Jackpot properties
decreased by $1.6 million (10.2%), due mostly to the combined
effect of road repaving on Highway 93 between Twin Falls, Idaho and
Jackpot and a hotel renovation that was completed in late July
2012. As a result, Jackpot had a disproportionately large impact on
the year-over-year changes in our key financial metrics for the
second quarter. Our Black Hawk and Vicksburg properties improved
year-over-year net revenues by $1.8 million (4.6%) and $1.5 million
(5.2%), respectively, as Black Hawk set a second quarter record and
Vicksburg rebounded from the prior-year flooding. Consolidated
second quarter promotional allowances decreased $1.9 million (2.8%)
from the prior-year second quarter, although promotional costs as a
percentage of gross gaming revenues experienced a slight
year-over-year increase.
For the second quarter of 2012, consolidated Adjusted EBITDA
decreased from the prior-year second quarter by $4.1 million (4.3%)
to $90.2 million. Five of our properties had lower Adjusted EBITDA
on a year-over-year basis, with Kansas City down $2.8 million
(12.8%) and Jackpot down $1.4 million (25.8%). Black Hawk
established its all-time quarterly Adjusted EBITDA record at $15.0
million, an increase of $1.5 million (11.3%) over the prior-year
second quarter.
Consolidated Adjusted EBITDA margin decreased from 30.9% in the
second quarter of 2011 to 30.4% in the current-year second quarter.
Nonetheless, the second quarter of 2011 and 2012 are the only
quarters in which we have generated a consolidated Adjusted EBITDA
margin in excess of 30% during the second, third or fourth
quarters, reflecting the strength of the operational improvements
we have put in place during the current economic downturn. We
generated operating income of $59.0 million in the second quarter
of 2012, compared to $59.4 million in the same period in 2011.
Prior-year operating income was adversely impacted by $3.4 million
in non-operational professional fees.
For the quarter ended June 30, 2012, we reported net income of
$17.6 million, compared to a net loss of $41.3 million for the same
period in 2011. The year-over-year improvement in net income was
mostly attributable to a pre-tax loss on early retirement of debt
of $85.3 million ($54.7 million on an after-tax basis) recognized
in the prior-year second quarter and the absence of non-operational
professional fees in the current period. Diluted earnings per share
was $0.51 for the second quarter of 2012, compared to a loss per
share of $1.10 in the prior-year second quarter. Adjusted EPS of
$0.51 for the quarter ended June 30, 2012 represents an increase of
$0.01 over Adjusted EPS for the 2011 second quarter. Second quarter
2012 EPS calculations were favorably impacted by the reduction from
the prior-year second quarter of approximately 3.3 million
weighted-average number of diluted shares as a result of the April
2011 share repurchase from our then majority shareholder.
Ameristar Lake Charles Construction Begins
On March 14, 2012, we entered into a definitive agreement to
acquire all of the equity interests of Creative Casinos of
Louisiana, L.L.C. (''Creative'') for $32.5 million. The transaction
closed on July 16, 2012, and construction began on July 20,
2012.
Ameristar Casino Resort Spa Lake Charles is being developed on a
243-acre leased site and will include a casino with approximately
1,600 slot machines and 60 table games, a hotel with approximately
700 guest rooms (including 70 suites), a variety of food and
beverage outlets, an 18-hole golf course, a tennis club, swimming
pools, a spa and other resort amenities, and approximately 3,000
parking spaces, 1,000 of which will be in a garage. The cost of the
project (including the purchase price) is expected to be between
$560 million to $580 million, excluding capitalized interest and
pre-opening expenses. We anticipate funding the project through a
combination of cash from operations and borrowings under our
revolving credit facility. We expect to open the resort in the
third quarter of 2014.
Additional Financial Information
Cash and Cash Equivalents. At June 30, 2012,
total cash was $135.5 million, which represented an increase of
$49.8 million from total cash as of December 31, 2011 and was
approximately $60 million more than required for daily operations.
The increase is attributable to accumulated cash flows from
operations and no outstanding indebtedness subject to voluntary
repayment under our revolving credit facility (as described below).
A portion of the excess cash was utilized to cover the Creative
purchase price in July and the balance will be used primarily to
fund the development of Ameristar Lake Charles.
Debt. At June 30, 2012, the face amount of
our outstanding debt was $1.9 billion. Net borrowings for the
second quarter of 2012 totaled $19.8 million. At June 30, 2012, our
Total Net Leverage Ratio (as defined in the senior credit facility)
was required to be no more than 6.50:1. As of that date, our Total
Net Leverage Ratio was 4.99:1.
On April 26, 2012, we issued $240.0 million principal amount of
7.50% Senior Notes due 2021. These notes were issued under the same
indenture as the $800.0 million principal amount of 7.50% Senior
Notes due 2021 that we issued in April 2011. The new notes were
sold at a premium to the principal amount, resulting in a yield to
maturity of 6.88%. The net proceeds from this offering were $244.0
million, of which $236.0 million was used to repay all the
outstanding indebtedness under our revolving credit facility, which
we may re-borrow from time to time. The balance of the net proceeds
will be used for general corporate purposes. After applying the
proceeds to the outstanding revolving credit facility and with no
subsequent borrowings, we had $496.0 million available for
borrowing under the revolving credit facility as of June 30,
2012.
Capital Expenditures. For the quarters
ended June 30, 2012 and 2011, capital expenditures totaled $20.3
million and $16.1 million, respectively.
Dividend. During the second quarter of
2012, our Board of Directors declared a cash dividend of $0.125 per
share, which we paid on June 15, 2012. On July 25, 2012, the Board
declared a cash dividend of $0.125 per share, payable on September
14, 2012.
Outlook
In the third quarter of 2012, we currently expect:
- depreciation to range from $26.5 million to $27.5 million.
- interest expense, net of capitalized interest, to be between
$29.0 million and $30.0 million, including non-cash interest
expense of approximately $1.4 million.
- the combined state and federal income tax rate to be in the
range of 40.5% to 41.5%.
- capital spending of $75.0 million to $80.0 million, including
$31.5 million for the balance due in the purchase of the equity
interests in Creative and approximately $30.0 million in design and
construction costs for the Lake Charles project.
- non-cash stock-based compensation expense of $3.5 million to
$4.0 million.
- corporate expense, excluding non-cash stock-based compensation
expense, to be between $13.0 million and $14.0 million.
Conference Call Information We will hold a
conference call to discuss our second quarter results on Wednesday,
August 1, 2012 at 11 a.m. EDT. The call may be accessed live by
dialing toll-free 866-400-0018 domestically, or 913-981-5521, and
referencing pass code number 4022778. Conference call participants
are requested to dial in at least five minutes early to ensure a
prompt start. Interested parties wishing to listen to the
conference call and view corresponding informative slides on the
Internet may do so live at our website -- www.ameristar.com -- by
clicking on "About Us/Investor Relations" and selecting the
"Webcasts and Events" link. A copy of the slides will be available
in the corresponding "Earnings Releases" section one-half hour
before the conference call. In addition, the call will be recorded
and can be replayed from 2 p.m. EDT August 1, 2012 until 11:59 p.m.
EDT August 14, 2012. To listen to the replay, call toll-free
888-203-1112 domestically, or 719-457-0820, and reference the pass
code number above.
Forward-Looking Information This release
contains certain forward-looking information that generally can be
identified by the context of the statement or the use of
forward-looking terminology, such as "believes," "estimates,"
"anticipates," "intends," "expects," "plans," "is confident that,"
"should," "could," "would," "will" or words of similar meaning,
with reference to Ameristar or our management. Similarly,
statements that describe our future plans, objectives, strategies,
financial results or position, operational expectations or goals
are forward-looking statements. It is possible that our
expectations may not be met due to various factors, many of which
are beyond our control, and we therefore cannot give any assurance
that such expectations will prove to be correct. For a discussion
of relevant factors, risks and uncertainties that could materially
affect our future results, attention is directed to "Item 1A. Risk
Factors" and "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" in our Annual Report
on Form 10-K for the year ended December 31, 2011, and "Item 2.
Management's Discussion and Analysis of Financial Condition and
Results of Operations" in our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2012.
On a monthly basis, gaming regulatory authorities in certain
states in which we operate publish gross gaming revenue and/or
certain other financial information for the gaming facilities that
operate within their respective jurisdictions. Because various
factors in addition to our gross gaming revenue (including
operating costs, promotional allowances and corporate and other
expenses) influence our operating income, Adjusted EBITDA and
diluted earnings per share, such reported information, as it
relates to Ameristar, may not accurately reflect the results of our
operations for such periods or for future periods.
About Ameristar Ameristar Casinos is an
innovative casino gaming company featuring the newest and most
popular slot machines. Our 7,500 dedicated team members pride
themselves on delivering consistently friendly and appreciative
service to our guests. We continuously strive to increase the
loyalty of our guests through the quality of our slot machines,
table games, hotel, dining and other leisure offerings. Our eight
casino hotel properties primarily serve guests from Colorado,
Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi,
Missouri, Nebraska and Nevada. We began construction on our ninth
property, a casino resort in Lake Charles, La., in July 2012, which
we expect will open in the third quarter of 2014. We have been a
public company since 1993, and our stock is traded on the Nasdaq
Global Select Market. We generate more than $1 billion in net
revenues annually.
Visit Ameristar Casinos' website at www.ameristar.com (which
shall not be deemed to be incorporated in or a part of this news
release).
Please refer to the tables near the end of this release for the
reconciliation of the non-GAAP financial measures Adjusted EBITDA
and Adjusted EPS reported throughout this release. Additionally,
more information on these non-GAAP financial measures can be found
under the caption "Use of Non-GAAP Financial Measures" at the end
of this release.
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2012 2011 2012 2011
--------- --------- --------- ---------
REVENUES:
Casino $ 303,356 $ 313,860 $ 623,063 $ 630,981
Food and beverage 33,250 33,151 67,940 68,320
Rooms 19,485 19,715 38,758 38,918
Other 7,060 7,191 13,967 14,413
--------- --------- --------- ---------
363,151 373,917 743,728 752,632
Less: promotional allowances (66,897) (68,823) (135,341) (138,795)
--------- --------- --------- ---------
Net revenues 296,254 305,094 608,387 613,837
OPERATING EXPENSES:
Casino 132,254 136,595 269,356 275,402
Food and beverage 13,050 12,947 27,181 26,457
Rooms 1,853 1,959 3,898 3,780
Other 2,531 2,599 4,883 5,239
Selling, general and
administrative 59,994 65,511 121,040 128,548
Depreciation and amortization 26,999 26,102 53,520 52,546
Net loss (gain) on disposition
of assets 550 10 228 (119)
--------- --------- --------- ---------
Total operating expenses 237,231 245,723 480,106 491,853
Income from operations 59,023 59,371 128,281 121,984
OTHER INCOME (EXPENSE):
Interest income 12 1 33 3
Interest expense, net of
capitalized interest (28,821) (27,164) (55,706) (52,219)
Loss on early retirement of
debt - (85,296) - (85,296)
Other (112) (150) 834 304
--------- --------- --------- ---------
INCOME (LOSS) BEFORE INCOME TAX
PROVISION
(BENEFIT) 30,102 (53,238) 73,442 (15,224)
Income tax provision
(benefit) 12,480 (11,925) 14,454 4,243
--------- --------- --------- ---------
NET INCOME (LOSS) $ 17,622 $ (41,313) $ 58,988 $ (19,467)
========= ========= ========= =========
EARNINGS (LOSS) PER SHARE:
Basic $ 0.53 $ (1.10) $ 1.79 $ (0.41)
========= ========= ========= =========
Diluted $ 0.51 $ (1.10) $ 1.73 $ (0.41)
========= ========= ========= =========
CASH DIVIDENDS DECLARED PER
SHARE $ 0.125 $ 0.105 $ 0.250 $ 0.210
========= ========= ========= =========
WEIGHTED-AVERAGE SHARES
OUTSTANDING:
Basic 33,020 37,512 32,939 47,860
========= ========= ========= =========
Diluted 34,255 37,512 34,138 47,860
========= ========= ========= =========
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands)
(Unaudited)
June 30, 2012 December 31, 2011
-------------------- --------------------
Balance sheet data
Cash and cash equivalents $ 135,527 $ 85,719
Total assets $ 2,058,481 $ 2,012,039
Total debt, including net
discount of $861 and $8,258 $ 1,923,515 $ 1,926,064
Stockholders' deficit $ (28,008) $ (90,578)
Three Months Ended Six Months Ended
June 30, June 30,
2012 2011 2012 2011
--------- --------- --------- ---------
Consolidated cash flow
information
Net cash provided by operating
activities $ 43,846 $ 61,342 $ 115,817 $ 142,968
Net cash used in investing
activities $ (19,891) $ (17,806) $ (53,111) $ (29,879)
Net cash provided by (used in)
financing activities $ 18,843 $ (48,737) $ (12,898) $(100,721)
Net revenues
Ameristar St. Charles $ 66,135 $ 67,494 $ 134,344 $ 135,594
Ameristar Kansas City 52,048 57,091 108,396 114,195
Ameristar Council Bluffs 41,132 41,633 84,839 83,194
Ameristar Black Hawk 39,839 38,074 79,161 74,955
Ameristar Vicksburg 30,545 29,041 62,822 60,375
Ameristar East Chicago 52,357 55,950 109,876 114,714
Jackpot Properties 14,198 15,811 28,949 30,810
--------- --------- --------- ---------
Consolidated net revenues $ 296,254 $ 305,094 $ 608,387 $ 613,837
========= ========= ========= =========
Operating income (loss)
Ameristar St. Charles $ 16,953 $ 18,560 $ 36,016 $ 37,204
Ameristar Kansas City 14,988 17,681 32,907 34,621
Ameristar Council Bluffs 14,749 15,071 31,629 29,845
Ameristar Black Hawk 10,435 9,046 20,560 17,474
Ameristar Vicksburg 10,300 9,486 22,208 20,967
Ameristar East Chicago 5,089 6,228 13,577 13,820
Jackpot Properties 2,700 4,060 6,023 7,714
Corporate and other (16,191) (20,761) (34,639) (39,661)
--------- --------- --------- ---------
Consolidated operating
income $ 59,023 $ 59,371 $ 128,281 $ 121,984
========= ========= ========= =========
Adjusted EBITDA
Ameristar St. Charles $ 23,891 $ 25,233 $ 49,612 $ 50,532
Ameristar Kansas City 18,826 21,583 40,289 42,251
Ameristar Council Bluffs 16,696 17,210 35,736 33,872
Ameristar Black Hawk 14,988 13,471 29,524 26,768
Ameristar Vicksburg 14,000 13,343 29,622 28,447
Ameristar East Chicago 10,217 10,485 23,209 22,374
Jackpot Properties 4,042 5,450 8,751 10,490
Corporate and other (12,503) (12,527) (24,610) (24,126)
--------- --------- --------- ---------
Consolidated Adjusted EBITDA $ 90,157 $ 94,248 $ 192,133 $ 190,608
========= ========= ========= =========
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL DATA - CONTINUED
(Dollars in Thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2012 2011 2012 2011
--------- --------- --------- ---------
Operating income margins (1)
Ameristar St. Charles 25.6% 27.5% 26.8% 27.4%
Ameristar Kansas City 28.8% 31.0% 30.4% 30.3%
Ameristar Council Bluffs 35.9% 36.2% 37.3% 35.9%
Ameristar Black Hawk 26.2% 23.8% 26.0% 23.3%
Ameristar Vicksburg 33.7% 32.7% 35.4% 34.7%
Ameristar East Chicago 9.7% 11.1% 12.4% 12.0%
Jackpot Properties 19.0% 25.7% 20.8% 25.0%
Consolidated operating income
margin 19.9% 19.5% 21.1% 19.9%
Adjusted EBITDA margins (2)
Ameristar St. Charles 36.1% 37.4% 36.9% 37.3%
Ameristar Kansas City 36.2% 37.8% 37.2% 37.0%
Ameristar Council Bluffs 40.6% 41.3% 42.1% 40.7%
Ameristar Black Hawk 37.6% 35.4% 37.3% 35.7%
Ameristar Vicksburg 45.8% 45.9% 47.2% 47.1%
Ameristar East Chicago 19.5% 18.7% 21.1% 19.5%
Jackpot Properties 28.5% 34.5% 30.2% 34.0%
Consolidated Adjusted EBITDA
margin 30.4% 30.9% 31.6% 31.1%
(1) Operating income margin is operating income as a percentage
of net revenues. (2) Adjusted EBITDA margin is Adjusted EBITDA as a
percentage of net revenues.
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED EBITDA
(Dollars in Thousands) (Unaudited)
The following tables set forth reconciliations of operating income (loss), a
GAAP financial measure, to Adjusted EBITDA, a non-GAAP financial measure.
Three Months Ended June 30, 2012
----------------------------------------------------------------
Depreciation Loss (Gain) on
Operating and Disposition of
Income (Loss) Amortization Assets
---------------------------------------------
Ameristar St.
Charles $ 16,953 $ 6,789 $ -
Ameristar Kansas
City 14,988 3,748 1
Ameristar Council
Bluffs 14,749 2,022 -
Ameristar Black
Hawk 10,435 4,453 -
Ameristar
Vicksburg 10,300 3,575 (1)
Ameristar East
Chicago 5,089 4,411 609
Jackpot Properties 2,700 1,289 (59)
Corporate and
other (16,191) 712 -
---------------------------------------------
Consolidated $ 59,023 $ 26,999 $ 550
=============================================
Three Months Ended June 30, 2012
----------------------------------------------------------------------------
Deferred Net River
Compensation Flooding
Stock-Based Plan Expense Reimbursements Adjusted
Compensation (1) (2) EBITDA
----------------------------------------------------------
Ameristar St.
Charles $ 149 $ - $ - $ 23,891
Ameristar Kansas
City 89 - - 18,826
Ameristar Council
Bluffs 114 - (189) 16,696
Ameristar Black
Hawk 100 - - 14,988
Ameristar
Vicksburg 126 - - 14,000
Ameristar East
Chicago 108 - - 10,217
Jackpot Properties 112 - - 4,042
Corporate and
other 2,852 124 - (12,503)
----------------------------------------------------------
Consolidated $ 3,650 $ 124 $ (189) $ 90,157
==========================================================
Three Months Ended June 30, 2011
----------------------------------------------------------------------------
Depreciation Loss (Gain) on
Operating and Disposition of Stock-Based
Income (Loss) Amortization Assets Compensation
---------------------------------------------------------
Ameristar St.
Charles $ 18,560 $ 6,506 $ - $ 167
Ameristar Kansas
City 17,681 3,824 (36) 114
Ameristar Council
Bluffs 15,071 1,853 21 116
Ameristar Black
Hawk 9,046 4,293 8 124
Ameristar
Vicksburg 9,486 3,470 1 144
Ameristar East
Chicago 6,228 4,148 5 104
Jackpot Properties 4,060 1,262 11 117
Corporate and
other (20,761) 746 - 3,991
---------------------------------------------------------
Consolidated $ 59,371 $ 26,102 $ 10 $ 4,877
=========================================================
Three Months Ended June 30, 2011
---------------------------------------------------------------------------
Deferred Non-
Compensation Operational River
Plan Expense Professional Flooding Adjusted
(1) Fees Expenses (2) EBITDA
---------------------------------------------------------
Ameristar St.
Charles $ - $ - $ - $ 25,233
Ameristar Kansas
City - - - 21,583
Ameristar Council
Bluffs - - 149 17,210
Ameristar Black
Hawk - - - 13,471
Ameristar
Vicksburg - - 242 13,343
Ameristar East
Chicago - - - 10,485
Jackpot Properties - - - 5,450
Corporate and
other 99 3,398 - (12,527)
---------------------------------------------------------
Consolidated $ 99 $ 3,398 $ 391 $ 94,248
=========================================================
----------
(1) Deferred compensation plan expense represents the change in
the Company's non-cash liability based on plan participant
investment results. This expense is included in selling, general
and administrative expenses in the Company's consolidated
statements of operations. (2) Amounts are net of insurance
reimbursements and represent non-capitalizable costs incurred to
reduce exposure to significant property damage from extraordinary
flood levels, as well as required flood cleanup costs.
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED EBITDA - CONTINUED
(Dollars in Thousands) (Unaudited)
Six Months Ended June 30, 2012
--------------------------------------------------------------
Depreciation Loss (Gain) on
Operating and Disposition of
Income (Loss) Amortization Assets
-------------------------------------------
Ameristar St.
Charles $ 36,016 $ 13,448 $ (150)
Ameristar Kansas
City 32,907 7,298 (94)
Ameristar Council
Bluffs 31,629 4,013 -
Ameristar Black
Hawk 20,560 8,831 (76)
Ameristar
Vicksburg 22,208 7,159 (1)
Ameristar East
Chicago 13,577 8,806 608
Jackpot Properties 6,023 2,562 (59)
Corporate and
other (34,639) 1,403 -
-------------------------------------------
Consolidated $ 128,281 $ 53,520 $ 228
===========================================
Six Months Ended June 30, 2012
----------------------------------------------------------------------------
Deferred Net River
Compensation Flooding
Stock-Based Plan Expense Reimbursements Adjusted
Compensation (1) (2) EBITDA
----------------------------------------------------------
Ameristar St.
Charles $ 298 $ - $ - $ 49,612
Ameristar Kansas
City 178 - - 40,289
Ameristar Council
Bluffs 227 - (133) 35,736
Ameristar Black
Hawk 209 - - 29,524
Ameristar
Vicksburg 256 - - 29,622
Ameristar East
Chicago 218 - - 23,209
Jackpot Properties 225 - - 8,751
Corporate and
other 7,399 1,227 - (24,610)
----------------------------------------------------------
Consolidated $ 9,010 $ 1,227 $ (133) $ 192,133
==========================================================
Six Months Ended June 30, 2011
----------------------------------------------------------------------------
Depreciation (Gain) Loss on
Operating and Disposition of Stock-Based
Income (Loss) Amortization Assets Compensation
---------------------------------------------------------
Ameristar St.
Charles $ 37,204 $ 12,992 $ 4 $ 332
Ameristar Kansas
City 34,621 7,481 (77) 226
Ameristar Council
Bluffs 29,845 3,761 (113) 230
Ameristar Black
Hawk 17,474 9,065 (21) 250
Ameristar
Vicksburg 20,967 6,951 (1) 288
Ameristar East
Chicago 13,820 8,270 76 208
Jackpot Properties 7,714 2,532 13 231
Corporate and
other (39,661) 1,494 - 6,382
---------------------------------------------------------
Consolidated $ 121,984 $ 52,546 $ (119) $ 8,147
=========================================================
Six Months Ended June 30, 2011
---------------------------------------------------------------------------
Deferred Non-
Compensation Operational River
Plan Expense Professional Flooding Adjusted
(1) Fees Expenses (2) EBITDA
---------------------------------------------------------
Ameristar St.
Charles $ - $ - $ - $ 50,532
Ameristar Kansas
City - - - 42,251
Ameristar Council
Bluffs - - 149 33,872
Ameristar Black
Hawk - - - 26,768
Ameristar
Vicksburg - - 242 28,447
Ameristar East
Chicago - - - 22,374
Jackpot Properties - - - 10,490
Corporate and
other 698 6,961 - (24,126)
---------------------------------------------------------
Consolidated $ 698 $ 6,961 $ 391 $ 190,608
=========================================================
----------
(1) Deferred compensation plan expense represents the change in
the Company's non-cash liability based on plan participant
investment results. This expense is included in selling, general
and administrative expenses in the Company's consolidated
statements of operations. (2) Amounts are net of insurance
reimbursements and represent non-capitalizable costs incurred to
reduce exposure to significant property damage from extraordinary
flood levels, as well as required flood cleanup costs.
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
(Dollars in Thousands) (Unaudited)
The following table sets forth a reconciliation of consolidated net income
(loss), a GAAP financial measure, to consolidated Adjusted EBITDA, a non-
GAAP financial measure.
Three Months Ended Six Months Ended
June 30, June 30,
2012 2011 2012 2011
--------- --------- --------- ---------
Net income (loss) $ 17,622 $ (41,313) $ 58,988 $ (19,467)
Income tax provision (benefit) 12,480 (11,925) 14,454 4,243
Interest expense, net of
capitalized interest 28,821 27,164 55,706 52,219
Interest income (12) (1) (33) (3)
Other 112 150 (834) (304)
Net loss (gain) on disposition
of assets 550 10 228 (119)
Depreciation and amortization 26,999 26,102 53,520 52,546
Stock-based compensation 3,650 4,877 9,010 8,147
Deferred compensation plan
expense 124 99 1,227 698
Loss on early retirement of
debt - 85,296 - 85,296
Non-operational professional
fees - 3,398 - 6,961
Net river flooding
(reimbursements) expenses (189) 391 (133) 391
--------- --------- --------- ---------
Adjusted EBITDA $ 90,157 $ 94,248 $ 192,133 $ 190,608
========= ========= ========= =========
RECONCILIATION OF DILUTED EPS TO ADJUSTED DILUTED EPS
(Shares in Thousands) (Unaudited)
The following table sets forth a reconciliation of diluted earnings
(loss) per share (EPS), a GAAP financial measure, to adjusted diluted
earnings per share (Adjusted EPS), a non-GAAP financial measure.
Three Months Ended Six Months Ended
June 30, June 30,
2012 2011 2012 2011
--------- --------- --------- ---------
Diluted income (loss) per
share (EPS) $ 0.51 $ (1.10) $ 1.73 $ (0.41)
Cumulative effect from tax
elections - - (0.46) -
Loss on early retirement of
debt - 1.41 - 1.11
Non-operational professional
fees - 0.09 - 0.12
Non-cash tax provision
impact from change in
Indiana state tax rate
- 0.09 - 0.07
River flooding expenses - 0.01 - 0.01
--------- --------- --------- ---------
Adjusted diluted earnings per
share (Adjusted EPS) $ 0.51 $ 0.50 $ 1.27 $ 0.90
========= ========= ========= =========
Weighted-average diluted
shares outstanding used in
calculating Adjusted EPS 34,255 38,888 34,138 49,174
========= ========= ========= =========
Use of Non-GAAP Financial Measures
Securities and Exchange Commission Regulation G, "Conditions for
Use of Non-GAAP Financial Measures," prescribes the conditions for
use of non-GAAP financial information in public disclosures. We
believe our presentation of the non-GAAP financial measures
Adjusted EBITDA and Adjusted EPS are important supplemental
measures of operating performance to investors. The following
discussion defines these terms and explains why we believe they are
useful measures of our performance.
Adjusted EBITDA is a commonly used measure of performance in the
gaming industry that we believe, when considered with measures
calculated in accordance with United States generally accepted
accounting principles, or GAAP, gives investors a more complete
understanding of operating results before the impact of investing
and financing transactions, income taxes and certain non-cash and
non-recurring items and facilitates comparisons between us and our
competitors.
Adjusted EBITDA is a significant factor in management's internal
evaluation of total Company and individual property performance and
in the evaluation of incentive compensation for employees.
Therefore, we believe Adjusted EBITDA is useful to investors
because it allows greater transparency related to a significant
measure used by management in its financial and operational
decision-making and because it permits investors similarly to
perform more meaningful analyses of past, present and future
operating results and evaluations of the results of core ongoing
operations. Furthermore, we believe investors would, in the absence
of the Company's disclosure of Adjusted EBITDA, attempt to use
equivalent or similar measures in assessment of our operating
performance and the valuation of our Company. We have reported
Adjusted EBITDA to our investors in the past and believe its
inclusion at this time will provide consistency in our financial
reporting.
Adjusted EBITDA, as used in this press release, is earnings
before interest, taxes, depreciation, amortization, other
non-operating income and expenses, stock-based compensation,
deferred compensation plan expense, non-operational professional
fees and river flooding expenses and reimbursements. In future
periods, the calculation of Adjusted EBITDA may be different than
in this release. The foregoing tables reconcile Adjusted EBITDA to
operating income (loss) and net income, based upon GAAP.
Adjusted EPS, as used in this press release, is diluted earnings
per share, excluding the after-tax per-share impact of loss on
early retirement of debt, the cumulative effect from tax elections,
non-operational professional fees, non-cash tax provision impact
from state tax rate change and river flooding expenses and
reimbursements. Management adjusts EPS, when deemed appropriate,
for the evaluation of operating performance because we believe that
the exclusion of certain items is necessary to provide the most
accurate measure of our core operating results and as a means to
compare period-to-period results. We have chosen to provide this
information to investors to enable them to perform more meaningful
analysis of past, present and future operating results and as a
means to evaluate the results of our core ongoing operations.
Adjusted EPS is a significant factor in the internal evaluation of
total Company performance. Management believes this measure is used
by investors in their assessment of our operating performance and
the valuation of our Company. In future periods, the adjustments we
make to EPS in order to calculate Adjusted EPS may be different
than or in addition to those made in this release. The foregoing
table reconciles EPS to Adjusted EPS.
Limitations on the Use of Non-GAAP Measures The use of Adjusted
EBITDA and Adjusted EPS has certain limitations. Our presentation
of Adjusted EBITDA and Adjusted EPS may be different from the
presentations used by other companies and therefore comparability
among companies may be limited. Depreciation expense for various
long-term assets, interest expense, income taxes and other items
have been and will be incurred and are not reflected in the
presentation of Adjusted EBITDA. Each of these items should also be
considered in the overall evaluation of our results. Additionally,
Adjusted EBITDA does not consider capital expenditures and other
investing activities and should not be considered as a measure of
our liquidity. We compensate for these limitations by providing the
relevant disclosure of our depreciation, interest and income tax
expense, capital expenditures and other items both in our
reconciliations to the GAAP financial measures and in our
consolidated financial statements, all of which should be
considered when evaluating our performance.
Adjusted EBITDA and Adjusted EPS should be used in addition to
and in conjunction with results presented in accordance with GAAP.
Adjusted EBITDA and Adjusted EPS should not be considered as an
alternative to net income, operating income or any other operating
performance measure prescribed by GAAP, nor should these measures
be relied upon to the exclusion of GAAP financial measures.
Adjusted EBITDA and Adjusted EPS reflect additional ways of viewing
our operations that we believe, when viewed with our GAAP results
and the reconciliations to the corresponding GAAP financial
measures, provide a more complete understanding of factors and
trends affecting our business than could be obtained absent this
disclosure. Management strongly encourages investors to review our
financial information in its entirety and not to rely on a single
financial measure.
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CONTACT: Tom Steinbauer Senior Vice President, Chief
Financial Officer Ameristar Casinos, Inc. 702-567-7000
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