PHOENIX, July 21 /PRNewswire/ -- Aztar Corporation (NYSE: AZR) today
reported record second-quarter operating income and operating cash flow for
its fiscal second quarter of 1999. Earnings per share before extraordinary
items were 13 cents, compared with 8 cents a year earlier.
For the quarter that ended July 1, 1999, operating income was
$24.5 million, up 14 percent from $21.6 million in the year-earlier quarter.
Consolidated operating cash flow, as defined by earnings before interest,
taxes, depreciation, amortization and rent (EBITDAR), was $42.3 million, up
from $40.0 million a year earlier.
"Aztar's trailing-12-month operating cash flow increased to $158 million
at the end of June 1999," said Paul E. Rubeli, Aztar chairman of the board,
president and chief executive officer. "That's an increase of almost
60 percent since 1995, when the company produced $101 million in operating
cash flow. Our operating cash flow now has increased over the year-earlier
quarter in 13 of the last 14 quarters during the past 3 1/2 years."
In the most recent quarter, income before income taxes and extraordinary
items was up more than 50 percent to $9.3 million compared with $6.1 million a
year earlier. Net income for the quarter was $1.8 million, equivalent to
4 cents per share, diluted, for the 1999 quarter, after the effects of an
extraordinary item of $4.1 million, equivalent to 9 cents per share. The
extraordinary item consisted of expenses related to early redemption during
the quarter of $200 million of the company's 11% Senior Subordinated Notes
due 2002.
"We completed a very successful financing in the second quarter, issuing
$235 million of 8 7/8% Senior Subordinated Notes to replace our 11% Notes,"
said Robert M. Haddock, Aztar executive vice president and chief financial
officer. "Our next goal is to replace our $180 million of 13 3/4% Notes
redeemable on October 1, 1999 with funds from our reducing revolving bank
credit facility, which currently bears interest at 6.9 percent. When
completed, these refinancings will lower our cost of borrowing, favorably
impacting the company's earnings and free cash flow. In addition, our board of
directors authorized a stock repurchase program, which we began to implement
in the quarter."
Atlantic City Tropicana
The Atlantic City Tropicana generated operating cash flow of
$25.7 million, an 11 percent increase from $23.2 million in the prior year's
quarter. This quarter marks the 11th straight quarter in which the property
has produced quarterly operating cash flows higher than the year-earlier
quarter. Operating cash flow at the Atlantic City Tropicana for the most
recent twelve months was $98.1 million, a record for the property.
During the 1999 second quarter, revenues at the Tropicana increased by
7 percent over the prior year. Slot revenue increased dramatically during the
quarter, up 14.5 percent on a calendar basis from the year-earlier quarter,
compared with 7.7 percent for the Atlantic City market. Hotel cash rooms
revenue increased 25 percent. The Tropicana's operating cash flow margin was
23.1 percent, up from 22.3 percent a year earlier.
"The Atlantic City market continued its strong momentum in the second
quarter," Rubeli said. "This significant market growth gave us the
opportunity to use our large room base to capitalize on the strong and growing
consumer demand for casino entertainment in the booming northeastern regional
gaming market."
Las Vegas Tropicana
At the Las Vegas Tropicana, operating cash flow was $4.8 million in the
1999 second quarter, a 30 percent increase from a year earlier. Consumer
visitation to Las Vegas and demand on the Las Vegas Strip remained very
strong. Occupancy at the Las Vegas Tropicana during the quarter was
96.7 percent, with a 10 percent increase in the property's average daily rate.
Cash rooms revenue increased 19 percent. Slot win was up slightly year over
year. Table games win was down, in part as a result of the company's decision
to virtually eliminate baccarat business in the revenue mix of the Las Vegas
Tropicana.
Ramada Express Laughlin
The Ramada Express continued its strong momentum in the Laughlin market
with an operating cash flow increase of 22 percent in the 1999 quarter from a
year earlier, to $5.4 million. During the 12 months through the end of the
second quarter of 1999, the Ramada Express generated operating cash flow of
more than $20 million.
The strength of the property's performance showed throughout its operating
departments in the 1999 second quarter. Slot win was up 12 percent and table
games win was up 5 percent. Occupancy for the quarter was 88.5 percent, more
than 4 percentage points higher than in the year-earlier quarter. Cash rooms
revenue increased 13 percent. Operating margin grew to 22.2 percent from
20.6 percent a year earlier.
"We have been seeing significant revenue growth in the Laughlin market for
some time now," Rubeli said. "Since the Ramada Express's market share of
Laughlin casino win has been increasing over the past 5 years, the property
now has the benefit of significant operating leverage when the market grows
significantly, as has been the case in the last 3 quarters. With 1,500 hotel
rooms, our property is one of the premier casino resorts in the market. This
makes us feel confident about the property's continued performance at these
levels," he said.
Casino Aztar Evansville
Aztar's riverboat casino in Evansville, Indiana generated operating cash
flow of $9.0 million during the second quarter of 1999, down $2.5 million from
a year earlier. As expected, operations in Evansville were impacted by the
Caesars riverboat casino, which opened in November 1998 in the Louisville
market, located about 100 miles away. Casino revenue at Casino Aztar
Evansville was down 12 percent in the 1999 second quarter. Hotel cash rooms
revenue increased 5 percent. Operating cash flow margin at Evansville
declined by 4 points to 32.7 percent.
"The impact from the new Caesars riverboat during the quarter was within
the parameters that we had expected," Rubeli said. "Our goal is to maintain
our present quarterly cash flow run rate for the rest of the year, and to
begin increasing it once we have passed the Caesars boat's first anniversary
in November."
Casino Aztar Caruthersville
The company's riverboat casino in Caruthersville, Missouri reported
$456,000 in operating cash flow in the second quarter of 1999, up from
$302,000 a year earlier, on basically flat revenues.
The property also opened an expansion of its casino in late June, adding
175 slot machines. The new casino area occupies more than 6,500 square feet
of space on the barge that also serves as the patron boarding area. The new,
more spacious facilities on the barge provide a better casino experience as
well as additional operational flexibility and capacity for the property to
deal with peak weekend business.
Financial Matters
During the second quarter of 1999, the company:
-- Redeemed the $200 million of its 11% Senior Subordinated Notes due
2002, resulting in the extraordinary charge.
-- Issued $235 million of 8 7/8% Senior Subordinated Notes due 2007.
-- Purchased 669,500 shares of Aztar common stock at prices ranging from
6.69 per share to $9.25 per share and at an average price of
7.96 per share.
Long-term debt, including the current portion, was $470.7 million at the
end of the quarter, compared with $481.3 million at the end of the first
quarter of 1999. The company had no borrowings against its $300 million
reducing revolving bank credit facility at the end of the second quarter.
Cash and cash equivalents were $44.0 million at the end of the quarter,
compared with $40.6 million at the end of the first quarter. |
