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Ameristar Casinos Inc. Reports Operating Results (10-Q)

August 08, 2012 | About:
10qk

10qk

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Ameristar Casinos Inc. (ASCA) filed Quarterly Report for the period ended 2012-06-30.

Ameristar Casinos, Inc. has a market cap of $527.5 million; its shares were traded at around $17.04 with a P/E ratio of 7.8 and P/S ratio of 0.4. The dividend yield of Ameristar Casinos, Inc. stocks is 3.1%.

Highlight of Business Operations:

Consolidated net revenues for the quarter ended June 30, 2012 declined $8.8 million, or 2.9%, from the second quarter of 2011. Second quarter 2012 net revenues decreased on a year-over-year basis at five of our seven gaming locations. During the second quarter of 2012, net revenues declined from the corresponding 2011 period by 10.2% at our Jackpot properties, 8.8% at Ameristar Kansas City, 6.4% at Ameristar East Chicago, 2.0% at Ameristar St. Charles and 1.2% at Ameristar Council Bluffs. The construction disruption relating to the hotel room renovation experienced at Cactus Petes as well as the road repaving on Highway 93 between Twin Falls and Jackpot contributed to the Jackpot properties decline in net revenues. A full quarter with new competition in the Chicagoland and Kansas City markets contributed to the year-over-year quarterly net revenue declines at Ameristar East Chicago and Ameristar Kansas City, respectively. We are installing a multi-stage, company-wide slot system upgrade to enhance the guest experience. Casino floor disruption from the upgrade affected the financial performance of our St. Charles property during the second quarter of 2012. Our other properties that have commenced these upgrades have not experienced disruption to the same extent as Ameristar St. Charles.

During the three months ended June 30, 2012, consolidated promotional allowances decreased $1.9 million, or 2.8%, from the corresponding 2011 period. Consolidated promotional allowances as a percentage of gross gaming revenues increased from 21.9% in the second quarter of 2011 to 22.1% in the second quarter of 2012.

For the six months ended June 30, 2012, consolidated net revenues declined $5.5 million, or 0.9%, from the corresponding 2011 period. During the first six months of 2012, net revenues decreased from the corresponding 2011 period by 6.0% at the Jackpot properties, 5.1% at Ameristar Kansas City and 4.2% at Ameristar East Chicago. The competitive pressures in the Chicagoland and Kansas City markets, as well as the construction disruption at Cactus Petes, adversely impacted financial results in the first half of 2012. The decline in net revenues was partially mitigated by the performance of Ameristar Black Hawk, Ameristar Vicksburg and Ameristar Council Bluffs. Unseasonably mild winter weather conditions and the extra day due to leap year contributed to the consolidated net revenue improvement at these properties in 2012.

In the second quarter of 2012, we generated operating income of $59.0 million, compared to $59.4 million in the same period in 2011. Second quarter 2012 operating income declined on a year-over-year basis at five of our seven gaming locations, while operating income improved by 15.4% at Ameristar Black Hawk and 8.6% at Ameristar Vicksburg. The operating income decline resulted from the factors that affected net revenues discussed above.

For the three months ended June 30, 2012, we had consolidated net income of $17.6 million, compared to a net loss of $41.3 million for the quarter ended June 30, 2011. For the six months ended June 30, 2012, we reported net income of $59.0 million, compared to a net loss of $19.5 million for the six months ended June 30, 2011. The year-over-year improvement in net income was mostly attributable to efficient revenue flow-through, the $15.7 million cumulative reduction in the income tax provision mentioned above and the absence of the pre-tax loss on early retirement of debt of $85.3 million and non-operational professional fees in the current periods that were incurred in the first half of 2011. Diluted earnings per share for the three and six months ended June 30, 2012 was $0.51 and $1.73, respectively, compared to diluted loss per share of $1.10 and $0.41, respectively, for the corresponding prior-year periods. Diluted earnings per share for the first half of 2012 benefited from the reduction in the number of shares outstanding due to the repurchase of shares from the Estate that took place in the second quarter of 2011.

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