AGY blew the Street away again!
Tuesday October 26, 10:10 am Eastern Time
Company Press Release
SOURCE: Argosy Gaming Company
Argosy Gaming Company Reports Record Third Quarter Operating Results
-- Argosy posts record earnings -- Argosy reports record revenues and cash flows -- Refinancing completed
ALTON, Ill., Oct. 26 /PRNewswire/ -- Argosy Gaming Company (NYSE: AGY - news) announced record earnings, revenues and cash flows for its third quarter and nine months ended September 30, 1999, before giving effect to an extraordinary loss related to debt extinguished as part of the Company's recent refinancing.
Record earnings
The Company reported net income attributable to common shareholders of $14.3 million or $.49 per diluted share for the third quarter ended September 30, 1999, before giving effect to an extraordinary loss of $3.7 million related to the final phase of the Company's recent refinancing, as compared to net income attributable to common shareholders of $4.0 million or $.15 per diluted share for the third quarter ended September 30,1998.
For the nine months ended September 30, 1999, the Company reported net income attributable to common shareholders of $26.7 million or $.93 per diluted share, before giving effect to an extraordinary loss of $38.4 million related the Company's recent refinancing and a one time charge of $1.8 million related to severance incurred in the first quarter, as compared to net income of $1.7 million or $.07 per diluted share for the nine months of 1998.
After giving effect to the extraordinary and one time items, the Company reported net income attributable to common shareholders of $10.7 million or $.37 per diluted share for the three months ended September 30, 1999, and a net loss attributable to common shareholders of $13.5 million or $.47 per diluted share for the nine months ended September 30, 1999.
* Record revenues and cash flows
Quarter Ended Nine months Ended
September 30th September 30th
1999 1998 1999 1998
(unaudited) (unaudited) (unaudited) (unaudited)
Casino Revenues
Western Properties $ 66,975 $ 52,294 $182,007 $157,102
Lawrenceburg 80,292 72,036 230,307 192,101
Total $147,267 $124,330 $412,314 $349,203
Casino EBITDA
(Excluding corporate)
Western Properties $16,662 $ 8,959 $ 40,595 $24,384
Lawrenceburg 32,383 30,222 92,360 75,379
Total $49,045 $39,181 $132,955 $99,763
Casino revenues for the third quarter were $147.3 million reflecting an increase of $23.0 million over the third quarter of 1998. Casino revenues increased 28% from $52.3 million to $67.0 million at the western properties (Alton, Riverside, Baton Rouge and Sioux City) and 11% from $72.0 million to $80.3 million at Lawrenceburg over 1998 amounts.
For the nine months ended September 30, 1999, Argosy reported an increase in casino revenues of $63.1 million to $412.3 million versus $349.2 million over the first nine months of 1998. Casino revenues increased 16% from $157.1 million to $182.0 million at the western properties and 20% from $192.1 million to $230.3 million at Lawrenceburg for the nine months ended September 30, 1999.
The Company attributes its growth in revenues at the western properties in the third quarter to the continued effective use of its marketing and operating strategy coupled with favorable regulatory changes in Illinois effective June 7, 1999, which now provides for permanent dockside operations at its Alton casino, and in Baton Rouge, with the elimination on July 1st of video poker at many non casino sites in Baton Rouge.
James B. Perry, President and Chief Executive Officer, commenting on the results of the third quarter, said, ''The recent regulatory changes in Illinois and Louisiana, together with the continuation of previous trends, helped us achieve 35% greater casino revenues in Alton and 25% greater casino revenues in Baton Rouge.'' Perry also stated, ''Since we are now operating at or near capacity on weekends in Alton, we have applied for approval to install approximately 130 additional slot machines on the new Alton barge facility which is expected to open in December.'' Perry, excited about the prospects of open boarding in Missouri, added, ''The pilot program for open boarding in eastern Missouri has proven to be very successful, and the Missouri Gaming Commission now anticipates allowing open boarding in western Missouri in November.''
The Company reported record consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) for the third quarter 1999 of $43.2 million as compared to $34.1 million in 1998.
Argosy reported consolidated record EBITDA for the first nine months of 1999 of $114.6 million, as compared to $85.6 million in 1998.
Operating margins increased from 16.2% to 23.9% at the western properties for the third quarter 1999 and from 14.6% to 21.3% for the nine months ended September 30, 1999. The Company continued to maintain strong margins at Lawrenceburg for the third quarter and nine months ended September 30, 1999 of approximately 37%.
Argosy attributed the increased margins to growth in both the number of customers and the win per customer while effectively managing the increased business levels by maintaining marketing spending levels and by maintaining payroll while increasing the number of service employees. In addition, the Company realized approximately $.5 million in cost savings in the third quarter upon the commencement of construction of a hotel in Baton Rouge on July 29, which relieved a penalty tax. ''Finally,'' said Perry, ''as we continue to maintain our focus on customer service, gaining product, and database marketing at all of our operations, we will strive to convert approximately 30% of our future incremental revenues to EBITDA.''
Refinancing completed
Argosy completed the final phase of its refinancing in the third quarter when it replaced all of its outstanding $115 million 12% Convertible Subordinated Notes due 2001 with borrowings under the Company's line of credit. Perry, commenting on the completion of the Company's refinancing, said, ''Our refinancing coupled with third quarter results has allowed us to begin implementing our strategy to de-lever the Company's balance sheet and continue to enhance shareholder value. The refinancing has reduced our cost of capital and provided us the flexibility to evaluate other opportunities, primarily from within our current operations, including the purchase of the minority interests in Lawrenceburg should they become available.'' The Company has reduced borrowings on its credit facility to $102 million at the end of the third quarter. Argosy, however, anticipates that debt levels will remain relatively flat in the fourth quarter due to its $10.8 million interest payment in December and as it funds the construction costs of approximately $8.5 million on its new landing facility in Alton which is expected to open in December and $1.2 million on its hotel in Baton Rouge which is expected to be completed by the end of 2000.
This press release contains statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of any number of risks, and uncertainties, including but not limited to, competitive and general economic conditions in the markets in which the Company operates, construction delays related to the Alton renovation project and the Baton Rouge Hotel, approval to add slot machines on the Alton barge facility by the Illinois Gaming Board, approval of open boarding by the Missouri Gaming Commission, and the effect of future legislation or regulatory changes on the Company's operation as well as other risks and uncertainties detailed from time to time in the Company's Securities and Exchange Commission filings.
Argosy is a leading multi-jurisdictional owner and operator of riverboat casinos and related entertainment and hotel facilities in the midwestern and southern United States. Argosy, through its subsidiaries and joint ventures, owns and operates the Alton Belle Casino in Alton, Illinois, serving the St. Louis metropolitan market; the Argosy Casino in Riverside, Missouri, serving the greater Kansas City metropolitan market; and the Argosy Casino-Baton Rouge in Louisiana. Argosy is also a majority partner and operator of the Belle of Sioux City in Iowa, and the Argosy Casino & Hotel in Lawrenceburg, Indiana, serving the Cincinnati and Dayton metropolitan markets.
ARGOSY GAMING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Share and Per Share Data)
Three Months Ended Nine Months Ended
Sept 30, Sept 30, Sept 30, Sept 30,
1999 1998 1999 1998
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues:
Casino $147,267 $124,330 $412,314 $349,203
Admissions 5,057 4,581 14,013 11,781
Food, beverage and other 15,265 13,780 42,938 37,345
167,589 142,691 469,265 398,329
Less promotional
allowances (11,020) (9,158) (30,703) (24,639)
Net revenues 156,569 133,533 438,562 373,690
Costs and expenses:
Casino 65,610 57,935 186,044 165,307
Food, beverage and other 10,612 10,473 30,491 30,183
Other operating expenses 7,113 6,847 20,364 20,150
Selling, general and
administrative 30,053 24,129 85,305 72,489
Depreciation and
amortization 8,628 8,452 25,719 24,823
Settlement expenses -- -- 1,800 --
122,016 107,836 349,723 312,952
Income from operations 34,553 25,697 88,839 60,738
Other income (expense):
Interest income 684 933 2,386 2,575
Interest expense (10,732) (14,627) (38,518) (43,114)
(10,048) (13,694) (36,132) (40,539)
Income before minority
interest, income taxes
and extraordinary item 24,505 12,003 52,707 20,199
Minority interests (9,587) (7,697) (25,977) (17,921)
Income tax expense (600) (195) (1,800) (445)
Net income before
extraordinary item 14,318 4,111 24,930 1,833
Extraordinary loss on
extinguishment of debt (3,660) -- (38,420) --
Net income (loss) 10,658 4,111 (13,490) 1,833
Preferred Stock dividends
and accretion -- (95) (27) (110)
Net income (loss)
attributable to
Common Shareholders $10,658 $4,016 ($13,517) $1,723
Basic income (loss)
per share - prior
to extraordinary loss $0.51 $0.17 $0.90 $0.07
Basic loss per share -
extraordinary loss $(0.13) -- (1.39) --
Basic income (loss)
per share - after
extraordinary loss $0.38 $0.17 $(0.49) $0.07
Diluted income (loss)
per share-prior to
extraordinary loss $0.49 $0.15 0.87 0.07
Diluted loss per share
- extraordinary loss $(0.12) -- (1.34) --
Diluted income (loss)
per share - after
extraordinary loss $0.37 $0.15 $(0.47) $0.07
ARGOSY GAMING COMPANY AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(in Thousands)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1999 1998 1999 1998
(unaudited) (unaudited)(unaudited)(unaudited)
Casino Revenues
Alton Belle Casino $23,438 $17,223 $61,457 $51,540
Argosy Casino Riverside 21,685 17,712 61,680 53,067
Argosy Casino - Baton Rouge 14,510 11,527 38,825 35,812
Belle Of Sioux City Casino 7,342 5,832 20,045 16,683
Argosy Casino & Hotel in
Lawrenceburg 80,292 72,036 230,307 192,101
Total $147,267 $124,330 $412,314 $349,203
Net Revenues
Alton Belle Casino $24,333 $18,346 $64,103 $54,794
Argosy Casino Riverside 22,859 18,903 65,282 56,763
Argosy Casino - Baton Rouge 14,901 12,042 40,101 37,585
Belle Of Sioux City Casino 7,572 6,104 20,702 17,410
Argosy Casino & Hotel in
Lawrenceburg 86,815 78,070 248,104 206,881
Other 89 68 270 257
Total $156,569 $133,533 $438,562 373,690
Income (loss) from
Operations(A)
Alton Belle Casino $7,179 $3,514 $16,465 $10,593
Argosy Casino Riverside 3,467 1,861 8,724 3,236
Argosy Casino -
Baton Rouge 473 (1,026) (269) (2,941)
Belle of Sioux City Casino 1,392 534 3,197 1,326
Argosy Casino & Hotel
in Lawrenceburg 27,305 25,401 77,548 62,463
Corporate© (3,641) (2,934) (11,994) (8,017)
Jazz (1,292) (1,291) (3,838) (4,823)
Other (330) (362) (994) (1,099)
Total $34,553 $25,697 $88,839 $60,738
EBITDA(A)(B)
Alton Belle Casino $8,232 $4,527 $19,565 $13,549
Argosy Casino Riverside 4,888 3,308 13,049 7,714
Argosy Casino - Baton Rouge 1,814 300 3,862 991
Belle of Sioux City Casino 1,728 824 4,119 2,130
Argosy Casino & Hotel
in Lawrenceburg 32,383 30,222 92,360 75,379
Lawrenceburg financial
advisory fee (D) (1,619) (1,511) (4,618) (3,687)
Corporate© (3,638) (2,796) (11,991) (7,466)
Jazz (617) (703) (1,812) (2,969)
Other 10 (22) 24 (80)
Total $43,181 $34,149 $114,558 $85,561
ARGOSY GAMING COMPANY
SELECTED FINANCIAL INFORMATION
(continued)
(A) Income from operations and EBITDA are presented before consideration
of any management fee paid to the Company and in the case of Sioux
City and Lawrenceburg before the 30% and 42.5% minority interests,
respectively.
(B) "EBITDA" is defined as earnings before interest, taxes, depreciation
and amortization and is presented before any management fees paid.
EBITDA should not be construed as an alternative to operating income,
or net income (as determined in accordance with generally accepted
accounting principles) as an indicator of the Company's operating
performance, or as an alternative to cash flows generated by
operating, investing and financing activities (as an indicator of cash
flow or a measure of liquidity). EBITDA is presented solely as a
supplemental disclosure because management believes that it is a
widely used measure of operating performance in the gaming industry
and for companies with a significant amount of depreciation and
amortization -- EBITDA may not be comparable to similarly titled
measures reported by other companies. The Company has other
significant uses of cash flows, including capital expenditures,
which are not reflected in EBITDA.
(C) Includes expenses related to a severance package and a settlement
agreement of $1.8 million for the nine months ended September 30,
1999.
(D) The Lawrenceburg partnership pays a financial advisory fee equal to
5.0% of its EBITDA to a minority partner.
SOURCE: Argosy Gaming Company |
