Ameristar Casinos, Inc. (NASDAQ: ASCA)
- Consolidated Net Revenues Increased $12.1
Million (4.1%) Year Over Year to $305.1 Million
- Consolidated Adjusted EBITDA Improved $14.7
Million (18.4%) Year Over Year to $94.2 Million
- Consolidated Adjusted EBITDA Margin Improved
3.7 Percentage Points Year Over Year to 30.9%
- Adjusted EPS Improved by $0.37 Year Over Year
to $0.50
- Completed Refinancing and Stock Repurchase in
April
Ameristar Casinos, Inc. (NASDAQ: ASCA) today announced financial
results for the second quarter of 2011, with significant
year-over-year improvement in all key financial metrics and the
achievement of multiple new records for the Company and several
individual properties.
"Ameristar broke several second-quarter financial records as our
properties continued to generate significant revenue flow-through
to Adjusted EBITDA," said Gordon Kanofsky, Ameristar's Chief
Executive Officer. "Three of our four key financial metrics --
Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EPS -- reached
their highest levels ever in a second quarter. Our fourth key
financial metric, net revenues, increased year-over-year for the
fourth consecutive quarter. We also set a number of all-time
quarterly records at the individual property level, including for
Adjusted EBITDA at two properties (Kansas City and Council Bluffs)
and Adjusted EBITDA margins at four properties (St. Charles, Kansas
City, Council Bluffs and Jackpot)."
Second Quarter 2011 Highlights We had
strong financial performances from all our properties, including
Ameristar Vicksburg and Ameristar Council Bluffs, which remained
open throughout the second quarter despite regional flooding.
Ameristar Vicksburg produced Adjusted EBITDA growth of $0.6
million, or 4.6%, over the prior-year second quarter. In addition
to setting all-time quarterly records for Adjusted EBITDA and
Adjusted EBITDA margin, Ameristar Council Bluffs achieved
year-over-year net revenue growth for the fourth consecutive
quarter. Ameristar St. Charles reported its first quarter of
year-over-year net revenue growth since new competition entered the
market in March 2010 that, together with strong operating
efficiencies, helped the property establish its all-time quarterly
high for Adjusted EBITDA margin. Additionally, Ameristar Kansas
City and Ameristar East Chicago each achieved significant
year-over-year improvement in all key financial metrics, notably
continuing their respective recent trends of strong quarterly
performances.
On April 14, 2011, we refinanced our outstanding debt through
the issuance of $2.2 billion of new debt, including the issuance of
$800.0 million principal amount of 7.50% senior unsecured notes due
2021 and a $1.4 billion senior secured credit facility. Proceeds
from the refinancing were used to (i) repurchase our outstanding
9¼% senior notes due 2014, including payment of the tender premium
and accrued interest, (ii) prepay and permanently retire all of the
indebtedness under our previous senior secured credit facility,
(iii) repurchase 26,150,000 shares of our common stock from the
Estate of Craig H. Neilsen at $17.50 per share for a total of
$457.6 million and (iv) pay related fees and expenses. As a result
of these transactions, we recorded on a pre-tax basis an $85.3
million loss on early retirement of debt and $3.4 million in
non-operational professional fees during the 2011 second
quarter.
"The refinancing extended the maturity of all our debt, reduced
our weighted-average interest rate, resulted in more favorable
covenants and provides us with flexibility for meaningful growth
opportunities in the future," said Kanofsky.
Second Quarter 2011 Results Consolidated
net revenues for the second quarter improved year over year by
$12.1 million, to $305.1 million. Five of our properties improved
year-over-year net revenues between 1.5% and 9.8%, with our East
Chicago (9.8%) and Council Bluffs (8.3%) properties delivering the
most significant improvements. While gross revenues were relatively
unchanged, promotional allowances decreased $12.7 million (15.5%)
from the prior-year second quarter. Promotional costs were reduced
as a percentage of gross gaming revenues at each property, with an
overall decrease from 26.0% in the second quarter of 2010 to 21.9%
in the second quarter of 2011.
During the second quarter of 2011, consolidated Adjusted EBITDA
increased $14.7 million over the prior-year quarter, to $94.2
million. Six of our properties generated improved Adjusted EBITDA
on a year-over-year basis, with five of them posting double-digit
percentage increases led by East Chicago (89.9%) and St. Charles
(24.6%).
Consolidated Adjusted EBITDA margin improved from 27.2% in the
second quarter of 2010 to 30.9% in the current-year second quarter.
During both of the first two quarters of 2011, consolidated
Adjusted EBITDA margin surpassed 30%, representing the first time
in our history with consecutive quarters above that mark.
We generated operating income of $59.4 million in the second
quarter of 2011, compared to an operating loss of $6.0 million in
the same period in 2010. Operating income for the 2011 second
quarter was adversely impacted by a $7.8 million year-over-year
increase in corporate expense, which was due to non-operational
professional fees and severance costs. The prior-year second
quarter was adversely impacted by a $56.0 million non-cash
impairment charge associated with the goodwill and intangible
assets initially recorded as part of the 2007 acquisition of our
East Chicago property.
For the quarter ended June 30, 2011, we incurred a net loss of
$41.3 million, compared to a net loss of $24.9 million for the same
period in 2010. The second quarter of 2011 was adversely impacted
by the pre-tax loss on early retirement of debt of $85.3 million
($54.7 million on an after-tax basis) and by a $3.5 million
non-cash adjustment to the income tax provision resulting from a
change in the Indiana state tax rate. In May 2011, Indiana reduced
its state income tax rate from 8.5% to 6.5%, which will be phased
in over a five-year period beginning July 1, 2012. This change
reduced the value of our state deferred tax assets (net of federal
taxes) that can be realized in the future. An East Chicago
impairment charge negatively impacted the net loss for the second
quarter of 2010 by $33.2 million on an after-tax basis.
Adjusted EPS was $0.50 for the quarter ended June 30, 2011,
compared to $0.13 for the 2010 second quarter. Adjusted EPS for the
2011 second quarter was favorably impacted by $0.15 (net of fees
and taxes) by the reduction of approximately 21.0 million in the
weighted-average number of diluted shares outstanding from the
April 19, 2011 share repurchase. The increase in Adjusted EPS from
the prior-year second quarter was also attributable to efficient
revenue flow-through and decreased interest expense resulting from
the termination of our interest rate swap agreements in July 2010
and the lower interest rates achieved through the refinancing.
Additional Financial Information
Debt. At June 30, 2011, the face amount of
our outstanding debt was $2.01 billion, an increase of $467.7
million from December 31, 2010. The increase in debt was
attributable to the April share repurchase and refinancing,
partially offset by second-quarter repayments totaling
approximately $76 million. In July 2011, we repaid an additional
$35.0 million. After taking into consideration the July debt
repayments, we have $221.8 million available for borrowing under
the revolving credit facility. At June 30, 2011, our Total Net
Leverage Ratio (as defined in the senior credit facility) was
required to be no more than 7.00:1. As of that date, our Total Net
Leverage Ratio was 5.48:1.
Interest Expense. For the second quarter
of 2011, net interest expense was $27.2 million, compared to $34.1
million in the prior-year second quarter. The decrease is due
mostly to the July 2010 expiration of our two interest rate swap
agreements and to a lesser extent the other factors described
above.
Capital Expenditures. For the second
quarters of 2011 and 2010, capital expenditures were $16.1 million
and $12.2 million, respectively.
Dividend. During the second quarter of
2011, our Board of Directors declared a cash dividend of $0.105 per
share, which we paid on June 15, 2011.
Outlook "The second quarter of 2011 may be
considered one of the most significant periods in Ameristar's
history because of the foundation it set for future growth," said
Kanofsky. "As we seek external growth opportunities, we believe the
combination of our ability to generate substantial free cash flow
and our recent strategic transactions will help to deleverage the
Company at a solid pace, particularly when the economy begins to
show meaningful recovery.
"Although the magnitude of the year-over-year growth seen in the
last two quarters may be difficult to sustain for the entire year,
we expect our stream-lined operations, profitable marketing
strategies and top-flight product and service offerings to result
in another strong and efficient financial performance for the third
quarter," added Kanofsky.
In the third quarter of 2011, we currently expect:
- depreciation to range from $26.0 million to $27.0 million.
- interest expense, net of capitalized interest, to be between
$27.0 million and $28.0 million, including non-cash interest
expense of approximately $1.3 million.
- the combined state and federal income tax rate to be
approximately 20% to 25% due to certain state tax allocation
changes. As a result of these changes, we expect our future
effective tax rate to be approximately 40% beginning in the fourth
quarter of 2011.
- capital spending of $10 million to $15 million.
- non-cash stock-based compensation expense of $3.5 million to
$4.0 million.
Conference Call Information
We will hold a conference call to discuss our second quarter
results on Wednesday, August 3, 2011 at 11 a.m. EDT. The call may
be accessed live by dialing toll-free 888-601-3869 domestically, or
913-312-1471, and referencing pass code number 2454563. 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 3,
2011 until 11:59 p.m. EDT, August 17, 2011. 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" 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, 2010, 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, 2011.
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 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,
2011 2010 2011 2010
-------- -------- --------- ---------
REVENUES:
Casino $313,860 $313,120 $ 630,981 $ 627,660
Food and beverage 33,151 32,674 68,320 65,935
Rooms 19,715 20,245 38,918 39,632
Other 7,191 8,453 14,413 16,182
-------- -------- --------- ---------
373,917 374,492 752,632 749,409
Less: promotional allowances (68,823) (81,488) (138,795) (153,786)
-------- -------- --------- ---------
Net revenues 305,094 293,004 613,837 595,623
OPERATING EXPENSES:
Casino 134,310 134,102 269,036 269,642
Food and beverage 13,876 15,618 29,445 32,076
Rooms 3,343 4,576 7,223 9,132
Other 2,571 3,301 5,174 6,550
Selling, general and
administrative 65,511 58,169 128,548 120,570
Depreciation and amortization 26,102 27,193 52,546 54,805
Impairment of goodwill - 21,438 - 21,438
Impairment of other intangible
assets - 34,600 - 34,600
Impairment of fixed assets - 4 - 4
Net loss (gain) on disposition
of assets 10 1 (119) 53
-------- -------- --------- ---------
Total operating expenses 245,723 299,002 491,853 548,870
Income (loss) from
operations 59,371 (5,998) 121,984 46,753
OTHER INCOME (EXPENSE):
Interest income 1 112 3 224
Interest expense, net of
capitalized interest (27,164) (34,059) (52,219) (68,499)
Loss on early retirement of debt (85,296) - (85,296) -
Other (150) (722) 304 (301)
-------- -------- --------- ---------
LOSS BEFORE INCOME TAX (BENEFIT)
PROVISION (53,238) (40,667) (15,224) (21,823)
Income tax (benefit) provision (11,925) (15,775) 4,243 (7,609)
-------- -------- --------- ---------
NET LOSS $(41,313) $(24,892) $ (19,467) $ (14,214)
======== ======== ========= =========
LOSS PER SHARE:
Basic $ (1.10) $ (0.43) $ (0.41) $ (0.25)
======== ======== ========= =========
Diluted $ (1.10) $ (0.43) $ (0.41) $ (0.25)
======== ======== ========= =========
CASH DIVIDENDS DECLARED PER SHARE $ 0.11 $ 0.11 $ 0.21 $ 0.21
======== ======== ========= =========
WEIGHTED-AVERAGE SHARES
OUTSTANDING:
Basic 37,512 58,005 47,860 57,908
======== ======== ========= =========
Diluted 37,512 58,005 47,860 57,908
======== ======== ========= =========
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands)
(Unaudited)
June 30, 2011 December 31, 2010
--------------- -----------------
Balance sheet data
Cash and cash equivalents $ 83,554 $ 71,186
Total assets $ 2,067,113 $ 2,061,542
Total debt, net of discounts of $8,605
and $10,315 $ 1,999,221 $ 1,529,798
Stockholders' (deficit) equity $ (121,929) $ 351,020
Three Months Ended Six Months Ended
June 30, June 30,
2011 2010 2011 2010
--------- --------- --------- ---------
Consolidated cash flow
information
Net cash provided by operating
activities $ 61,342 $ 37,515 $ 142,968 $ 107,301
Net cash used in investing
activities $ (17,806) $ (14,620) $ (29,879) $ (31,191)
Net cash used in financing
activities $ (48,737) $ (33,290) $(100,721) $ (74,697)
Net revenues
Ameristar St. Charles $ 67,494 $ 64,791 $ 135,594 $ 135,100
Ameristar Kansas City 57,091 55,421 114,195 110,045
Ameristar Council Bluffs 41,633 38,456 83,194 77,382
Ameristar Black Hawk 38,074 37,510 74,955 74,464
Ameristar Vicksburg 29,041 29,503 60,375 60,154
Ameristar East Chicago 55,950 50,959 114,714 106,979
Jackpot Properties 15,811 16,364 30,810 31,499
--------- --------- --------- ---------
Consolidated net revenues $ 305,094 $ 293,004 $ 613,837 $ 595,623
========= ========= ========= =========
Operating income (loss)
Ameristar St. Charles $ 18,560 $ 13,636 $ 37,204 $ 31,454
Ameristar Kansas City 17,681 14,423 34,621 28,700
Ameristar Council Bluffs 15,071 11,895 29,845 23,824
Ameristar Black Hawk 9,046 9,155 17,474 16,828
Ameristar Vicksburg 9,486 8,931 20,967 19,017
Ameristar East Chicago 6,228 (54,525) 13,820 (49,926)
Jackpot Properties 4,060 3,451 7,714 6,437
Corporate and other (20,761) (12,964) (39,661) (29,581)
--------- --------- --------- ---------
Consolidated operating
income (loss) $ 59,371 $ (5,998) $ 121,984 $ 46,753
========= ========= ========= =========
Adjusted EBITDA
Ameristar St. Charles $ 25,233 $ 20,252 $ 50,532 $ 44,662
Ameristar Kansas City 21,583 18,177 42,251 36,187
Ameristar Council Bluffs 17,210 14,629 33,872 29,372
Ameristar Black Hawk 13,471 14,102 26,768 26,883
Ameristar Vicksburg 13,343 12,758 28,447 26,860
Ameristar East Chicago 10,485 5,520 22,374 14,062
Jackpot Properties 5,450 4,863 10,490 9,406
Corporate and other (12,527) (10,708) (24,126) (22,686)
--------- --------- --------- ---------
Consolidated Adjusted EBITDA $ 94,248 $ 79,593 $ 190,608 $ 164,746
========= ========= ========= =========
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL DATA - CONTINUED
(Dollars in Thousands)
(Unaudited)
Three Months Six Months Ended
Ended June 30, June 30,
2011 2010 2011 2010
-------- -------- -------- --------
Operating income (loss) margins (1)
Ameristar St. Charles 27.5% 21.0% 27.4% 23.3%
Ameristar Kansas City 31.0% 26.0% 30.3% 26.1%
Ameristar Council Bluffs 36.2% 30.9% 35.9% 30.8%
Ameristar Black Hawk 23.8% 24.4% 23.3% 22.6%
Ameristar Vicksburg 32.7% 30.3% 34.7% 31.6%
Ameristar East Chicago 11.1% -107.0% 12.0% -46.7%
Jackpot Properties 25.7% 21.1% 25.0% 20.4%
Consolidated operating income (loss)
margin 19.5% -2.0% 19.9% 7.8%
Adjusted EBITDA margins (2)
Ameristar St. Charles 37.4% 31.3% 37.3% 33.1%
Ameristar Kansas City 37.8% 32.8% 37.0% 32.9%
Ameristar Council Bluffs 41.3% 38.0% 40.7% 38.0%
Ameristar Black Hawk 35.4% 37.6% 35.7% 36.1%
Ameristar Vicksburg 45.9% 43.2% 47.1% 44.7%
Ameristar East Chicago 18.7% 10.8% 19.5% 13.1%
Jackpot Properties 34.5% 29.7% 34.0% 29.9%
Consolidated Adjusted EBITDA margin 30.9% 27.2% 31.1% 27.7%
(1) Operating income (loss) margin is operating income (loss) 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, 2011
---------------------------------------------------------------------------
(Gain)
Loss Deferred Non- River
Depreci on Compensa Operat Flood
ation Dispos Stock- tion ional ing
Operating and ition Based Plan Profes Expen
Income Amortiz of Compens Expense sional ses Adjusted
(Loss) ation Assets ation (1) Fees (2) EBITDA
---------------------------------------------------------------
Ameristar
St.
Charles $ 18,560 $ 6,506 $ - $ 167 $ - $ - $ - $ 25,233
Ameristar
Kansas
City 17,681 3,824 (36) 114 - - - 21,583
Ameristar
Council
Bluffs 15,071 1,853 21 116 - - 149 17,210
Ameristar
Black Hawk 9,046 4,293 8 124 - - - 13,471
Ameristar
Vicksburg 9,486 3,470 1 144 - - 242 13,343
Ameristar
East
Chicago 6,228 4,148 5 104 - - - 10,485
Jackpot
Properties 4,060 1,262 11 117 - - - 5,450
Corporate
and other (20,761) 746 - 3,991 99 3,398 - (12,527)
---------------------------------------------------------------
Consolidat
ed $ 59,371 $26,102 $ 10 $ 4,877 $ 99 $3,398 $ 391 $ 94,248
===============================================================
Three Months Ended June 30, 2010
---------------------------------------------------------------------------
Impairment
Depreci Loss and Deferred
ation (Gain) Loss Stock- Compensat
Operating and on Based ion Plan
Income Amortiz Disposition Compens Expense Adjusted
(Loss) ation of Assets ation (1) EBITDA
-----------------------------------------------------------
Ameristar St.
Charles $ 13,636 $ 6,453 $ (2) $ 165 $ - $ 20,252
Ameristar Kansas
City 14,423 3,620 - 134 - 18,177
Ameristar
Council Bluffs 11,895 2,622 - 112 - 14,629
Ameristar Black
Hawk 9,155 4,827 - 120 - 14,102
Ameristar
Vicksburg 8,931 3,684 - 143 - 12,758
Ameristar East
Chicago (54,525) 3,925 56,041 79 - 5,520
Jackpot
Properties 3,451 1,297 - 115 - 4,863
Corporate and
other (12,964) 765 4 2,221 (734) (10,708)
-----------------------------------------------------------
Consolidated $ (5,998) $27,193 $ 56,043 $ 3,089 $ (734) $ 79,593
===========================================================
----------------
(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 condensed consolidated statements of operations.
(2) River flooding expenses represent non-capitalizable costs incurred in
the Company's efforts to reduce its exposure to significant property
damage from extraordinary flood levels.
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED EBITDA - CONTINUED
(Dollars in Thousands) (Unaudited)
Six Months Ended June 30, 2011
---------------------------------------------------------------------------
Deferred Non- River
Depreci (Gain) Compensa Operat Flood
ation Loss on Stock- tion ional ing
Operatin and Disposit Based Plan Profes Expen
g Income Amortiz ion of Compen Expense sional ses Adjusted
(Loss) ation Assets sation (1) Fees (2) EBITDA
-----------------------------------------------------------------
Ameristar
St.
Charles $ 37,204 $12,992 $ 4 $ 332 $ - $ - $ - $ 50,532
Ameristar
Kansas
City 34,621 7,481 (77) 226 - - - 42,251
Ameristar
Council
Bluffs 29,845 3,761 (113) 230 - - 149 33,872
Ameristar
Black
Hawk 17,474 9,065 (21) 250 - - - 26,768
Ameristar
Vicksburg 20,967 6,951 (1) 288 - - 242 28,447
Ameristar
East
Chicago 13,820 8,270 76 208 - - - 22,374
Jackpot
Properties 7,714 2,532 13 231 - - - 10,490
Corporate
and
other (39,661) 1,494 - 6,382 698 6,961 - (24,126)
-----------------------------------------------------------------
Consolid
ated $121,984 $52,546 $ (119) $8,147 $ 698 $6,961 $ 391 $190,608
=================================================================
Six Months Ended June 30, 2010
---------------------------------------------------------------------------
Impairment
Loss and Deferred
Deprecia (Gain) Loss Stock- Compensat
Operating tion and on Based ion Plan
Income Amortiza Disposition Compensa Expense Adjusted
(Loss) tion of Assets tion (1) EBITDA
-------------------------------------------------------------
Ameristar St.
Charles $ 31,454 $ 12,866 $ 14 $ 328 $ - $ 44,662
Ameristar
Kansas City 28,700 7,267 (44) 264 - 36,187
Ameristar
Council
Bluffs 23,824 5,325 - 223 - 29,372
Ameristar
Black Hawk 16,828 9,814 - 241 - 26,883
Ameristar
Vicksburg 19,017 7,543 14 286 - 26,860
Ameristar
East Chicago (49,926) 7,801 56,029 158 - 14,062
Jackpot
Properties 6,437 2,662 78 229 - 9,406
Corporate and
other (29,581) 1,527 4 5,550 (186) (22,686)
-------------------------------------------------------------
Consolidated $ 46,753 $ 54,805 $ 56,095 $ 7,279 $ (186) $ 164,746
=============================================================
-------------
(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 condensed consolidated statements of operations.
(2) River flooding expenses represent non-capitalizable costs incurred in
the Company's efforts to reduce its exposure to significant property
damage from extraordinary flood levels.
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(Dollars in Thousands) (Unaudited)
The following table sets forth a reconciliation of consolidated net loss, a
GAAP financial measure, to consolidated Adjusted EBITDA, a non-GAAP
financial measure.
Three Months Ended Six Months Ended
June 30, June 30,
2011 2010 2011 2010
--------- --------- --------- ---------
Net loss $ (41,313) $ (24,892) $ (19,467) $ (14,214)
Income tax (benefit) provision (11,925) (15,775) 4,243 (7,609)
Interest expense, net of
capitalized interest 27,164 34,059 52,219 68,499
Interest income (1) (112) (3) (224)
Other 150 722 (304) 301
Net loss (gain) on disposition
of assets 10 1 (119) 53
Impairment of goodwill - 21,438 - 21,438
Impairment of other intangible
assets - 34,600 - 34,600
Impairment of fixed assets - 4 - 4
Depreciation and amortization 26,102 27,193 52,546 54,805
Stock-based compensation 4,877 3,089 8,147 7,279
Deferred compensation plan
expense 99 (734) 698 (186)
Loss on early retirement of
debt 85,296 - 85,296 -
Non-operational professional
fees 3,398 - 6,961 -
River flooding expenses 391 - 391 -
--------- --------- --------- ---------
Adjusted EBITDA $ 94,248 $ 79,593 $ 190,608 $ 164,746
========= ========= ========= =========
RECONCILIATION OF DILUTED EPS TO ADJUSTED DILUTED EPS
(Shares in Thousands) (Unaudited)
The following table sets forth a reconciliation of diluted 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,
2011 2010 2011 2010
--------- --------- --------- ---------
Diluted loss per share (EPS) $ (1.10) $ (0.43) $ (0.41) $ (0.25)
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 -
Impairment loss on East
Chicago intangible assets - 0.56 - 0.56
--------- --------- --------- ---------
Adjusted diluted earnings per
share (Adjusted EPS) $ 0.50 $ 0.13 $ 0.90 $ 0.31
========= ========= ========= =========
Weighted-average diluted shares
outstanding used in calculating
Adjusted EPS 38,888 59,128 49,174 58,983
========= ========= ========= =========
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, river flooding expenses and impairment loss. 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 loss, 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, non-operational professional fees,
non-cash tax provision impact from state tax rate change, river
flooding expenses and impairment loss. 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.
CONTACT: Tom Steinbauer Senior Vice President, Chief Financial
Officer Ameristar Casinos, Inc. 702-567-7000
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