Ameristar Casinos, Inc. (NASDAQ: ASCA)
- Consolidated Net Revenues Increased $4.9
Million (1.6%) Year Over Year to $304.5 Million
- Consolidated Adjusted EBITDA Improved $9.1
Million (11.2%) Year Over Year to $90.3 Million
- Consolidated Adjusted EBITDA Margin Improved
2.5 Percentage Points Year Over Year to 29.6%
- Adjusted EPS Improved by $0.36 Year Over Year
to $0.57
Ameristar Casinos, Inc. (NASDAQ: ASCA) today announced financial
results for the third quarter of 2011, with continued
year-over-year improvement in all key financial metrics -- net
revenues, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted
EPS.
"Ameristar had another record-breaking quarterly financial
performance, with new high water marks hit for Adjusted EBITDA and
Adjusted EPS in a third quarter and the best trailing 12-month
Adjusted EBITDA in the Company's history," said Gordon Kanofsky,
Ameristar's Chief Executive Officer. "We extended our streak of
year-over-year improvement in both net revenues and Adjusted EBITDA
to four quarters, and this is the third consecutive quarter in
which margin improvement has resulted in more than 100% of the net
revenue growth flowing through to Adjusted EBITDA. Our efforts to
strengthen our business model over the last few years have proven
successful."
Third Quarter 2011 Results Consolidated
net revenues for the third quarter improved year over year by $4.9
million, to $304.5 million. A majority of our properties improved
year-over-year net revenues between 1.5% and 8.2%, with our
Vicksburg (8.2%) and Council Bluffs (4.9%) properties delivering
the most significant improvements. Promotional allowances decreased
$6.8 million (8.6%) from the prior-year third quarter. Promotional
costs were reduced as a percentage of gross gaming revenues, with
an overall decrease from 24.9% in the third quarter of 2010 to
22.9% in the third quarter of 2011.
For the third quarter of 2011, consolidated Adjusted EBITDA
increased $9.1 million over the prior-year quarter, to $90.3
million. Six of our properties generated improved Adjusted EBITDA
on a year-over-year basis, with four of them posting double-digit
percentage increases led by Vicksburg (18.8%) and St. Charles
(18.1%). Notably, Council Bluffs improved year-over-year Adjusted
EBITDA by $1.7 million (11.1%) on net revenue growth of $1.9
million (4.9%) while overcoming some operational inconveniences
from flood conditions. Our East Chicago property achieved a 16.1%
year-over-year increase in Adjusted EBITDA despite a new competitor
opening in Des Plaines, Illinois during the quarter. Consolidated
Adjusted EBITDA margin improved from 27.1% in the third quarter of
2010 to 29.6% in the current-year third quarter. Our efficient
operating model contributed to year-over-year improvement in the
Adjusted EBITDA margin at six of our properties, with increases
ranging from 1.8 percentage points at Kansas City to 4.3 percentage
points at St. Charles. We generated operating income of $61.1
million in the third quarter of 2011, compared to $48.7 million in
the same period in 2010.
For the quarter ended September 30, 2011, we reported net income
of $18.9 million, compared to net income of $11.9 million for the
same period in 2010. The year-over-year improvement in net income
is mostly attributable to efficient revenue flow-through driven by
operating and marketing initiatives. Our Adjusted EPS of $0.57 for
the quarter ended September 30, 2011 established a third-quarter
record; Adjusted EPS for the 2010 third quarter was $0.21. Adjusted
EPS for the 2011 third quarter was favorably impacted by $0.25 from
the reduction of approximately 26.2 million shares outstanding from
the April 19, 2011 share repurchase and by the efficient revenue
flow-through.
Additional Financial Information
Debt. At September 30, 2011, the face amount
of our outstanding debt was $1.95 billion, an increase of $406.0
million from December 31, 2010. The increase in debt was
attributable to the April share repurchase and refinancing,
partially offset by approximately $183 million of free cash flow
applied to debt repayments in the first nine months of 2011. After
taking into consideration $61.8 million in third-quarter
repayments, we have $246.9 million available for borrowing under
the revolving credit facility. At September 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 5.15:1, representing significant improvement
over our pro forma Total Net Leverage Ratio as of March 31, 2011 of
5.95:1, which gives effect to our April 14, 2011 debt
refinancing.
Capital Expenditures. For the third
quarters of 2011 and 2010, capital expenditures were $19.1 million
and $14.1 million, respectively.
Stock Repurchase Program. On September 15,
2011, our Board of Directors approved the repurchase of up to $75
million of Ameristar common stock through September 30, 2014.
During the third quarter of 2011, we repurchased approximately 0.2
million shares of common stock at a total cost of approximately
$2.7 million under the stock repurchase program. Through November
2, 2011, we have repurchased approximately 0.3 million shares of
common stock, or 1% of our outstanding stock, at an average price
of $16.22 per share for a total cost of $5.1 million.
Dividend. During the third quarter of
2011, our Board of Directors declared a cash dividend of $0.105 per
share, which we paid on September 15, 2011.
Outlook For the full year 2011, the
Company currently expects:
- depreciation to range from $104.2 million to $105.2
million.
- interest expense, net of capitalized interest, to be between
$106.4 million and $107.4 million, including non-cash interest
expense of approximately $6.3 million.
- the combined state and federal income tax rate to be in the
range of 41% to 43%.
- capital spending of $65 million to $70 million.
- non-cash stock-based compensation expense of $22.3 million to
$23.3 million.
Conference Call Information We will hold a
conference call to discuss our third quarter results on Thursday,
November 3, 2011 at 1:30 p.m. EDT. The call may be accessed live by
dialing toll-free 800-946-0713 domestically, or 719-785-1764, and
referencing pass code number 5767243. 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 4:30 p.m. EDT, November 3, 2011 until
11:59 p.m. EST, November 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" and
"Item 1A. Risk Factors" in our Quarterly Report on Form 10-Q for
the quarter ended June 30, 2011.
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 Nine Months Ended
September 30, September 30,
2011 2010 2011 2010
---------- ---------- ---------- ----------
REVENUES:
Casino $ 312,595 $ 314,314 $ 943,576 $ 941,973
Food and beverage 35,805 35,444 104,125 101,379
Rooms 20,110 20,602 59,028 60,234
Other 7,538 7,499 21,951 23,681
---------- ---------- ---------- ----------
376,048 377,859 1,128,680 1,127,267
Less: promotional allowances (71,541) (78,292) (210,336) (232,077)
---------- ---------- ---------- ----------
Net revenues 304,507 299,567 918,344 895,190
OPERATING EXPENSES:
Casino 135,164 137,595 404,199 407,237
Food and beverage 14,815 15,727 44,260 47,803
Rooms 3,753 4,650 10,976 13,782
Other 2,737 3,131 7,911 9,681
Selling, general and
administrative 60,794 62,692 189,343 183,262
Depreciation and
amortization 26,111 27,016 78,657 81,821
Impairment of goodwill - - - 21,438
Impairment of other
intangible assets - 191 - 34,791
Impairment of fixed assets - - - 4
Net gain on disposition of
assets (4) (148) (123) (95)
---------- ---------- ---------- ----------
Total operating expenses 243,370 250,854 735,223 799,724
Income from operations 61,137 48,713 183,121 95,466
OTHER INCOME (EXPENSE):
Interest income 1 114 3 338
Interest expense, net of
capitalized interest (27,314) (28,065) (79,533) (96,564)
Loss on early retirement
of debt (15) - (85,311) -
Other (1,595) 956 (1,292) 655
---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE INCOME
TAX PROVISION 32,214 21,718 16,988 (105)
Income tax provision 13,330 9,794 17,572 2,185
---------- ---------- ---------- ----------
NET INCOME (LOSS) $ 18,884 $ 11,924 $ (584) $ (2,290)
========== ========== ========== ==========
EARNINGS (LOSS) PER SHARE:
Basic $ 0.58 $ 0.20 $ (0.01) $ (0.04)
========== ========== ========== ==========
Diluted $ 0.56 $ 0.20 $ (0.01) $ (0.04)
========== ========== ========== ==========
CASH DIVIDENDS DECLARED PER
SHARE $ 0.11 $ 0.11 $ 0.32 $ 0.32
========== ========== ========== ==========
WEIGHTED-AVERAGE SHARES
OUTSTANDING:
Basic 32,815 58,188 42,790 58,003
========== ========== ========== ==========
Diluted 33,874 59,421 42,790 58,003
========== ========== ========== ==========
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands)
(Unaudited)
September 30, 2011 December 31, 2010
------------------- --------------------
Balance sheet data
Cash and cash equivalents $ 91,915 $ 71,186
Total assets $ 2,030,377 $ 2,061,542
Total debt, net of discounts of
$8,433 and $10,315 $ 1,937,640 $ 1,529,798
Stockholders' (deficit) equity $ (105,704) $ 351,020
Three Months Ended Nine Months Ended
September 30, September 30,
2011 2010 2011 2010
--------- --------- --------- ---------
Consolidated cash flow
information
Net cash provided by operating
activities $ 66,311 $ 69,776 $ 209,279 $ 177,077
Net cash provided by (used in)
investing activities $ 11,204 $ (13,917) $ (18,675) $ (45,108)
Net cash used in financing
activities $ (69,154) $ (66,496) $(169,875) $(141,193)
Net revenues
Ameristar St. Charles $ 68,036 $ 65,479 $ 203,630 $ 200,579
Ameristar Kansas City 55,920 56,928 170,115 166,973
Ameristar Council Bluffs 40,654 38,759 123,849 116,141
Ameristar Black Hawk 40,105 39,499 115,060 113,963
Ameristar Vicksburg 29,586 27,335 89,961 87,489
Ameristar East Chicago 54,405 55,379 169,119 162,358
Jackpot Properties 15,801 16,188 46,610 47,687
--------- --------- --------- ---------
Consolidated net revenues $ 304,507 $ 299,567 $ 918,344 $ 895,190
========= ========= ========= =========
Operating income (loss)
Ameristar St. Charles $ 17,357 $ 13,544 $ 54,561 $ 44,998
Ameristar Kansas City 16,199 15,579 50,820 44,279
Ameristar Council Bluffs 14,140 12,320 43,985 36,144
Ameristar Black Hawk 10,211 8,634 27,685 25,462
Ameristar Vicksburg 9,475 7,440 30,442 26,457
Ameristar East Chicago 4,705 3,686 18,525 (46,240)
Jackpot Properties 3,509 3,851 11,223 10,288
Corporate and other (14,459) (16,341) (54,120) (45,922)
--------- --------- --------- ---------
Consolidated operating
income $ 61,137 $ 48,713 $ 183,121 $ 95,466
========= ========= ========= =========
Adjusted EBITDA
Ameristar St. Charles $ 24,020 $ 20,333 $ 74,552 $ 64,995
Ameristar Kansas City 20,002 19,310 62,253 55,497
Ameristar Council Bluffs 16,639 14,971 50,511 44,343
Ameristar Black Hawk 14,723 13,586 41,491 40,469
Ameristar Vicksburg 13,141 11,063 41,588 37,923
Ameristar East Chicago 9,070 7,814 31,444 21,876
Jackpot Properties 4,898 5,240 15,388 14,646
Corporate and other (12,219) (11,100) (36,345) (33,786)
--------- --------- --------- ---------
Consolidated Adjusted EBITDA $ 90,274 $ 81,217 $ 280,882 $ 245,963
========= ========= ========= =========
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL DATA - CONTINUED
(Dollars in Thousands)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2011 2010 2011 2010
-------- -------- -------- --------
Operating income (loss) margins (1)
Ameristar St. Charles 25.5% 20.7% 26.8% 22.4%
Ameristar Kansas City 29.0% 27.4% 29.9% 26.5%
Ameristar Council Bluffs 34.8% 31.8% 35.5% 31.1%
Ameristar Black Hawk 25.5% 21.9% 24.1% 22.3%
Ameristar Vicksburg 32.0% 27.2% 33.8% 30.2%
Ameristar East Chicago 8.6% 6.7% 11.0% -28.5%
Jackpot Properties 22.2% 23.8% 24.1% 21.6%
Consolidated operating income
margin 20.1% 16.3% 19.9% 10.7%
Adjusted EBITDA margins (2)
Ameristar St. Charles 35.3% 31.1% 36.6% 32.4%
Ameristar Kansas City 35.8% 33.9% 36.6% 33.2%
Ameristar Council Bluffs 40.9% 38.6% 40.8% 38.2%
Ameristar Black Hawk 36.7% 34.4% 36.1% 35.5%
Ameristar Vicksburg 44.4% 40.5% 46.2% 43.3%
Ameristar East Chicago 16.7% 14.1% 18.6% 13.5%
Jackpot Properties 31.0% 32.4% 33.0% 30.7%
Consolidated Adjusted EBITDA
margin 29.6% 27.1% 30.6% 27.5%
(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 September 30, 2011
(Gain)
Loss Deferred Non-
Depreci on Compensa Operati River
ation Dispos Stock- tion onal Floodi
Operating and ition Based Plan Profess ng
Income Amortiz of Compen Expense ional Expens Adjusted
(Loss) ation Assets sation (1) Fees es (2) EBITDA
--------- ------- ------ ------ -------- ------- ------ ---------
Ameristar
St.
Charles $ 17,357 $ 6,462 $ - $ 192 $ - $ - $ 9 $ 24,020
Ameristar
Kansas
City 16,199 3,674 (3) 132 - - - 20,002
Ameristar
Council
Bluffs 14,140 1,896 8 137 - - 458 16,639
Ameristar
Black Hawk 10,211 4,368 - 144 - - - 14,723
Ameristar
Vicksburg 9,475 3,500 - 159 - - 7 13,141
Ameristar
East
Chicago 4,705 4,247 (9) 127 - - - 9,070
Jackpot
Properties 3,509 1,253 - 136 - - - 4,898
Corporate
and other (14,459) 711 - 2,838 (1,321) 12 - (12,219)
--------- ------- ------ ------ -------- ------- ------ ---------
Consoli-
dated $ 61,137 $26,111 $ (4) $3,865 $(1,321) $ 12 $ 474 $ 90,274
========= ======= ====== ====== ======== ======= ====== =========
Three Months Ended September 30, 2010
Impair
ment
Loss and Deferred Non-
Depreci (Gain) Compensa Operat
ation Loss on Stock- tion ional
Operating and Disposi Based Plan Profess
Income Amortiz tion of Compensa Expense ional Adjusted
(Loss) ation Assets tion (1) Fees EBITDA
--------- ------- -------- -------- -------- ------- ---------
Ameristar St.
Charles $ 13,544 $ 6,520 $ 76 $ 193 $ - $ - $ 20,333
Ameristar
Kansas City 15,579 3,577 (4) 158 - - 19,310
Ameristar
Council
Bluffs 12,320 2,525 - 126 - - 14,971
Ameristar
Black Hawk 8,634 4,838 (32) 146 - - 13,586
Ameristar
Vicksburg 7,440 3,480 - 143 - - 11,063
Ameristar East
Chicago 3,686 4,046 3 79 - - 7,814
Jackpot
Properties 3,851 1,263 - 126 - - 5,240
Corporate and
other (16,341) 767 - 2,346 1,081 1,047 (11,100)
--------- ------- -------- -------- -------- ------- ---------
Consoli-
dated $ 48,713 $27,016 $ 43 $ 3,317 $ 1,081 $ 1,047 $ 81,217
========= ======= ======== ======== ======== ======= =========
(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 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)
Nine Months Ended September 30, 2011
(Gain)
Loss Deferred Non-
Depreci on Compensa Operat River
ation Dispos Stock- tion ional Floodi
Operating and ition Based Plan Profes ng
Income Amortiz of Compens Expense sional Expens Adjusted
(Loss) ation Assets ation (1) Fees es (2) EBITDA
--------- ------- ------ ------- -------- ------ ------ ---------
Ameristar
St.
Charles $ 54,561 $19,454 $ 4 $ 524 $ - $ - $ 9 $ 74,552
Ameristar
Kansas
City 50,820 11,155 (80) 358 - - - 62,253
Ameristar
Council
Bluffs 43,985 5,657 (105) 367 - - 607 50,511
Ameristar
Black Hawk 27,685 13,433 (21) 394 - - - 41,491
Ameristar
Vicksburg 30,442 10,451 (1) 447 - - 249 41,588
Ameristar
East
Chicago 18,525 12,517 67 335 - - - 31,444
Jackpot
Properties 11,223 3,785 13 367 - - - 15,388
Corporate
and other (54,120) 2,205 - 9,220 (623) 6,973 - (36,345)
--------- ------- ------ ------- -------- ------ ------ ---------
Consoli-
dated $ 183,121 $78,657 $(123) $12,012 $ (623) $6,973 $ 865 $ 280,882
========= ======= ====== ======= ======== ====== ====== =========
Nine Months Ended September 30, 2010
Impairm
ent
Loss
and Deferred Non-
Depreci (Gain) Compensa Operati
ation Loss on Stock- tion onal
Operating and Disposi Based Plan Profess
Income Amortiz tion of Compens Expense ional Adjusted
(Loss) ation Assets ation (1) Fees EBITDA
--------- ------- ------- ------- -------- ------- ---------
Ameristar St.
Charles $ 44,998 $19,386 $ 90 $ 521 $ - $ - $ 64,995
Ameristar Kansas
City 44,279 10,844 (48) 422 - - 55,497
Ameristar
Council Bluffs 36,144 7,850 - 349 - - 44,343
Ameristar Black
Hawk 25,462 14,652 (32) 387 - - 40,469
Ameristar
Vicksburg 26,457 11,023 14 429 - - 37,923
Ameristar East
Chicago (46,240) 11,847 56,032 237 - - 21,876
Jackpot
Properties 10,288 3,925 78 355 - - 14,646
Corporate and
other (45,922) 2,294 4 7,896 895 1,047 (33,786)
--------- ------- ------- ------- -------- ------- ---------
Consolidated $ 95,466 $81,821 $56,138 $10,596 $ 895 $ 1,047 $ 245,963
========= ======= ======= ======= ======== ======= =========
(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 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 Nine Months Ended
September 30, September 30,
2011 2010 2011 2010
--------- --------- --------- ---------
Net income (loss) $ 18,884 $ 11,924 $ (584) $ (2,290)
Income tax provision 13,330 9,794 17,572 2,185
Interest expense, net of
capitalized interest 27,314 28,065 79,533 96,564
Interest income (1) (114) (3) (338)
Other 1,595 (956) 1,292 (655)
Net gain on disposition of
assets (4) (148) (123) (95)
Impairment of goodwill - - - 21,438
Impairment of other intangible
assets - 191 - 34,791
Impairment of fixed assets - - - 4
Depreciation and amortization 26,111 27,016 78,657 81,821
Stock-based compensation 3,865 3,317 12,012 10,596
Deferred compensation plan
expense (1,321) 1,081 (623) 895
Loss on early retirement of
debt 15 - 85,311 -
Non-operational professional
fees 12 1,047 6,973 1,047
River flooding expenses 474 - 865 -
--------- --------- --------- ---------
Adjusted EBITDA $ 90,274 $ 81,217 $ 280,882 $ 245,963
========= ========= ========= =========
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 Nine Months Ended
September 30, September 30,
2011 2010 2011 2010
---------- ---------- --------- ---------
Diluted earnings (loss) per
share (EPS) $ 0.56 $ 0.20 $ (0.01) $ (0.04)
Loss on early retirement of
debt - - 1.25 -
Non-operational professional
fees - 0.01 0.14 0.01
Non-cash tax provision impact
from change in Indiana state
tax rate - - 0.08 -
River flooding expenses 0.01 - 0.01 -
Impairment loss on East
Chicago intangible assets - - - 0.56
---------- ---------- --------- ---------
Adjusted diluted earnings per
share (Adjusted EPS) $ 0.57 $ 0.21 $ 1.47 $ 0.53
========== ========== ========= =========
Weighted-average diluted shares
outstanding used in calculating
Adjusted EPS 33,874 59,421 43,875 59,162
========== ========== ========= =========
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 income (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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