Ameristar Casinos Inc. Reports Operating Results (10-Q)
Ameristar Casinos, Inc. is a leading Las Vegas-based gaming and entertainment company known for its premier properties characterized by innovative architecture, state-of-the-art casino floors and superior dining, lodging and entertainment offerings. Ameristar's focus on the total entertainment experience and the highest quality guest service has earned it a leading market share position in each of the markets in which it operates. Founded in 1954 in Jackpot, Nevada, Ameristar has been a public company since November 1993. The company has a portfolio of seven casinos in six markets: Ameristar St. Charles; Ameristar Kansas City; Ameristar Council Bluffs; Ameristar Vicksburg; Ameristar Black Hawk; and Cactus Petes and the Horseshu in Jackpot, Nevada. Ameristar Casinos Inc. has a market cap of $912.68 million; its shares were traded at around $15.83 with a P/E ratio of 12.56 and P/S ratio of 0.72. The dividend yield of Ameristar Casinos Inc. stocks is 2.65%. Ameristar Casinos Inc. had an annual average earning growth of 20% over the past 10 years. GuruFocus rated Ameristar Casinos Inc. the business predictability rank of 3-star. Highlight of Business Operations: Consolidated net revenues for the quarter ended September 30, 2009 decreased $22.0 million, or 6.8%, from the third quarter of 2008. The decrease in consolidated net revenues was primarily attributable to the weak economy and increased competition that opened in the second half of 2008 in our East Chicago and Vicksburg markets. Third quarter 2009 net revenues declined on a year-over-year basis at six of our seven gaming locations while Ameristar Black Hawks net revenues increased by $5.1 million, or 24.2%, when compared to third quarter 2008. Ameristar Black Hawks net revenue increase is due to the implementation of the beneficial regulatory reform on July 2, 2009.
For the nine months ended September 30, 2009, consolidated net revenues decreased $50.1 million, or 5.1%, from the corresponding 2008 period. During the first nine months of 2009, net revenues declined from the corresponding 2008 period by 10.8% at Ameristar East Chicago, 10.2% at Ameristar Council Bluffs, 9.7% at Ameristar Vicksburg, 6.6% at our Jackpot Properties and 4.0% at Ameristar Kansas City. We believe the weak economic conditions and the increased competition in our East Chicago and Vicksburg markets adversely impacted financial results throughout the first three quarters of 2009. Ameristar Black Hawks net revenues increased by $5.5 million, or 8.9%, for the first nine months of 2009 when compared to the corresponding 2008 period. The increase is primarily attributable to the implementation of the beneficial regulatory reform on July 2, 2009. Ameristar St. Charles net revenue increased 1.1% over the first three quarters. We believe that the regulatory reform in Missouri had a beneficial impact on the net revenues of Ameristar St. Charles and Ameristar Kansas City.
In the third quarter of 2009, consolidated operating income increased $4.7 million, or 10.2%, from the third quarter of 2008, primarily as a result of the previously mentioned implementation of operational and marketing efficiencies at all our properties. Operating income margins improved year-over-year at six of our seven gaming locations. Vicksburgs operating income decreased by $2.7 million, or 30.2%, when compared to third quarter 2008. This is mainly the result of a new competitor entering the Vicksburg market in October 2008 as described above.
For the nine months ended September 30, 2009, our operating income was $175.7 million, compared to $17.2 million for the corresponding 2008 period. The increase is primarily attributable to the $129.0 million non-cash impairment charge recorded in the first quarter of 2008 relating to East Chicagos intangible assets. Excluding the impairment charge, consolidated operating income improved $29.5 million, or 20.2%, when compared to the first three quarters of 2008. This increase is primarily due to the implemented operational efficiencies and the favorable regulatory reform in Missouri and Colorado.
For the quarter ended September 30, 2009, consolidated interest expense, net of amounts capitalized, increased $11.1 million (58.1%) from the 2008 third quarter. The increase is due primarily to higher interest rate add-ons resulting from the credit facility amendment and increased interest expense from the issuance of the Notes. Year to date, consolidated interest expense, net of amounts capitalized, increased $15.8 million (27.7%) from the first nine months of 2008 due to the increased interest from the credit facility amendment and Notes issuance. Additionally, since we have opened the Black
For the three months ended September 30, 2009, consolidated net income increased $0.1 million, or 0.9%, from the third quarter of 2008. Diluted earnings per share were $0.25 in each of the quarters ended September 30, 2009 and 2008. For the nine months ended September 30, 2009 and 2008, we reported net income of $58.6 million and a net loss of $29.6 million, respectively. Diluted earnings per share were $1.01 for the first nine months of 2009, compared to a diluted loss per share of $0.52 in the corresponding 2008 period. The impairment charge at Ameristar East Chicago adversely affected diluted earnings per share by $1.34 for the nine months ended September 30, 2008.
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