Tuesday February 1, 10:05 am Eastern Time
Company Press Release
SOURCE: Argosy Gaming Company
Argosy Gaming Company Reports Record
Fourth Quarter and Year End Operating Results
-- Argosy reports record earnings -- Argosy posts record revenues and cash flows --
Argosy's strategic plan lays foundation for continued growth
ALTON, Ill., Feb. 1 /PRNewswire/ -- Argosy Gaming Company (NYSE: AGY - news) today announced record
earnings, revenues and cash flows for its fourth quarter and year ended December 31, 1999, before non-recurring
items.
Record Earnings
The Company reported record net income attributable to common shareholders of $15.0 million or $.52 per diluted
share for the fourth quarter ended December 31, 1999, before consideration of a $10.0 million or $.34 per diluted
share tax benefit resulting from the Company's expected utilization of net operating loss carryforwards which had
previously been fully reserved. After consideration of the tax benefit, earnings were $.86 per diluted share for the
fourth quarter of 1999. Earnings for the fourth quarter 1998 were $4.0 million or $.14 per diluted share.
For the twelve months ended December 31, 1999, the Company reported record net income attributable to
common shareholders of $41.7 million or $1.44 per diluted share before giving effect to non-recurring items, as
compared to $5.7 million or $.23 per diluted share for 1998.
After giving effect to the above-mentioned $10.0 million tax benefit, a charge of $1.8 million related to severance in
the first quarter, and extraordinary losses in the second and third quarters, totaling $38.4 million related to the
Company's refinancing, the Company reported net income attributable to common shareholders of $11.5 million or
$.40 per diluted share for the year ended December 31, 1999.
As a result of recognizing the deferred tax asset in 1999, the Company recorded a net tax benefit in 1999. The
Company anticipates that its effective tax rate will increase to approximately 39% in 2000.
The fourth quarter is the sixth consecutive quarter of record revenues, EBITDA and earnings.
Record Revenues and Cash Flows
Quarter Ended December 31, Year Ended December 31,
1999 1998 1999 1998
(unaudited) (unaudited)
Casino Revenues
Western Properties $68,824 $52,050 $250,831 $209,153
Lawrenceburg 78,009 72,252 308,316 264,352
Total $146,833 $124,302 $559,147 $473,505
Casino EBITDA
(Excluding Corporate)
Western Properties $17,232 $9,654 $57,826 $34,035
Lawrenceburg 30,723 30,295 123,083 105,674
Total $47,955 $39,949 $180,909 $139,709
The Company reported an increase of $22.5 million in casino revenues to $146.8 million for the fourth quarter 1999,
reflecting an increase of 18% over the fourth quarter 1998. Casino revenues increased most significantly at the
western properties (Alton, Riverside, Baton Rouge and Sioux City) from $52.1 million to $68.8 million, reflecting an
increase of 32% over the same period last year. Casino revenues for the quarter increased 8% in Lawrenceburg
from $72.3 million to $78.0 million over 1998 amounts.
For the year ended December 31, 1999, the Company reported casino revenues of $559.1 million, reflecting an
increase of $85.6 million, or 18%, above 1998. Casino revenues increased $41.7 million or 20% to $250.8 million at
the western properties and $44.0 million, or 17%, to $308.3 million at Lawrenceburg for the year ended December
31, 1999.
The Company attributed the increase in revenues for both the fourth quarter and all of 1999, to increases in both
the number of patrons and the win per patron at each of its properties. These increases were achieved through
continued emphasis on database marketing techniques, continued upgrading of older gaming equipment, and
significant renovation projects at several of its facilities in 1999. In addition, revenues were favorably impacted by
regulatory changes in three of its markets; dockside gaming in Alton, beginning June 26, 1999, the July 1
elimination of video poker at many non-casino sites in Baton Rouge, and the advent of open boarding in Kansas
City on November 15. The Company expects that these regulatory changes will continue to have positive year
over year impact through the first half of 2000.
The Company reported record fourth quarter consolidated EBITDA (earnings before interest, taxes, depreciation
and amortization) of $42.5 million, up from $35.7 million in 1998. EBITDA soared 78% from $9.7 million to $17.2
million at the western properties and increased to $30.7 million from $30.3 million in 1998 at Lawrenceburg.
For the year ended December 31, 1999, the Company reported record consolidated EBITDA of $158.9 million,
excluding the $1.8 million first quarter charge, an increase of 31% from $121.2 million in 1998. EBITDA increased
$23.8 million or 70% to $57.8 million from $34.0 million at the western properties and $17.4 million or 16% in
Lawrenceburg to $123.1 million from $105.7 million in 1998.
The Company reported strong growth in operating margins, primarily due to results at the western properties
where margins increased from 18% to 24% for the fourth quarter ended December 31, 1999 versus 1998 amounts,
and from 15% for the year ended December 31, 1998 to 22% for the year ended 1999. Lawrenceburg continued to
maintain robust margins of 37% for the fourth quarter and year ended December 31, 1999.
James B. Perry, President and Chief Executive Officer, stated, ``The increases in cash flow and margins have made
us stronger than ever before. The continued solid cash flow and margins experienced at Lawrenceburg have been
greatly enhanced by the dramatic improvements in operating results at our western properties over the last
eighteen months. The western properties now provide the Company with a greater diversification of cash flow
and a solid foundation to build upon going into the new year.' Perry added, ``We will strive to maintain this
positive cash flow trend in 2000 as we continue to focus on the marketing and operating disciplines that brought
about these results. '
Strategic Plan Lays Foundation for Future Growth
The Company also reported that as a result of its refinancing earlier in 1999, interest expense decreased $4.3
million to $10.1 million for the fourth quarter ended 1999, as compared to $14.4 million for the fourth quarter ended
December 31, 1998. For the year ended December 31, 1999, the Company reported interest expense of $48.6 million,
reflecting a decrease of $8.9 million from $57.5 million for the year ended 1998. Net borrowings on the Company's
credit facility increased by $1.8 million during the fourth quarter to $103.8 million at December 31, 1999.
The Company reported that capital expenditures in 1999 were approximately $37.7 million, consisting of $10.2
million in maintenance capital, which includes renovating the third deck of the Argosy Casino in Lawrenceburg to
accommodate the high limit areas, and $27.5 million for expansion projects, including the Company's new landing
facility (including 130 additional slot machines) in Alton and commencement of construction on a 300 room hotel
in Baton Rouge. In 2000, Argosy expects maintenance capital expenditures primarily related to the purchase of
new slot product to be approximately $16.0 million, and expenditures related to the Baton Rouge hotel to be
approximately $18.0 million.
Perry, commenting on the year, said, ``Our accomplishments this year, whether measured by the strong operating
results achieved at each site or by the value created for our shareholders as evidenced by our common stock
performance is nothing less than outstanding. We ended the year as the third best performing stock on the New
York Stock Exchange in 1999. We believe we are a much better riverboat casino operator today, and our Company
ranks among the top casino companies in the country in return on invested capital. Our goal to be recognized as
the premier riverboat casino operator in the country remains paramount, and we will strive to achieve the goal by
adhering to the disciplines of our marketing and operating plans, making the Company a great place for our
employees to work and by providing an excellent gaming experience for our customers.'
The Company plans to continue to de-lever its balance sheet in the year ahead until other strategic opportunities
become available. The Company's balance sheet now provides the financial flexibility which, combined with its
strategic plan, operating philosophy and unique skills, builds a solid foundation to take advantage of other
potential opportunities.
``Finally,' said Perry, ``we have developed a disciplined approach to analyzing, among other considerations, the
financial, operational, sales and marketing, and employee impacts of any potential opportunities, whether
operational or through capital investment, including the acquisition of the minority interests in Lawrenceburg.
These programs should help assure, among many other factors, that returns to shareholders would be in excess
of the Company's cost of capital and that any potential transaction would further enhance shareholder value.'
The Company reported that while their minority partners in Lawrenceburg have had the right to put their interests
to Argosy since December 10, 1999 neither of the partners have exercised their put rights nor has the Company
had any substantive conversations regarding purchasing the partners' interests.
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 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
Baton Rouge Hotel, 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 Twelve Months Ended
Dec. 31 Dec. 31 Dec. 31 Dec. 31
1999 1998 1999 1998
(unaudited) (unaudited) (unaudited)(unaudited)
Revenues:
Casino $146,833 $124,302 $559,147 $473,505
Admissions 4,878 4,244 18,893 16,025
Food, beverage and other 15,061 13,712 57,998 51,057
166,772 142,258 636,038 540,587
Less promotional
allowances (10,780) (9,280) (41,484) (33,919)
Net revenues 155,992 132,978 594,554 506,668
Costs and expenses:
Casino 64,515 56,375 250,559 221,682
Food, beverage and other 11,036 10,367 41,528 40,550
Other operating expenses 7,502 6,489 27,866 26,639
Selling, general and
administrative 30,413 24,061 115,718 96,550
Depreciation and
amortization 8,339 8,613 34,058 33,436
Settlement expenses -- -- 1,800 --
121,805 105,905 471,529 418,857
Income from operations 34,187 27,073 123,025 87,811
Other income (expense):
Interest income 482 1,008 2,870 3,582
Interest expense (10,075) (14,373) (48,594) (57,487)
(9,593) (13,365) (45,724) (53,905)
Income before minority
interest, income taxes
and extraordinary item 24,594 13,708 77,301 33,906
Minority interests (8,998) (8,284) (34,975) (26,205)
Income tax benefit
(expense) 9,400 (695) 7,600 (1,140)
Net income before
extraordinary item 24,996 4,729 49,926 6,561
Extraordinary loss on
extinguishment of debt -- -- (38,420) --
Net income 24,996 4,729 11,506 6,561
Preferred Stock dividends
and accretion -- (710) (27) (820)
Net income attributable
to Common Shareholders $24,996 $4,019 $11,479 $5,741
Basic income per share
-- prior to
extraordinary loss $0.89 $0.16 $1.79 $0.23
Basic loss per share
-- extraordinary loss -- -- (1.38) --
Basic income per share
-- after extraordinary
loss $0.89 $0.16 $0.41 $0.23
Diluted income per share
-- prior to extraordinary
loss $0.86 $0.14 1.73 0.23
Diluted loss per share
-- extraordinary loss -- -- (1.33) --
Diluted income per share
-- after extraordinary
loss $0.86 $0.14 $0.40 $0.23
ARGOSY GAMING COMPANY AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(in Thousands)
Three Months Ended Twelve Months Ended
Dec. 31 Dec. 31 Dec. 31 Dec. 31
1999 1998 1999 1998
(unaudited) (unaudited) (unaudited) (unaudited)
Casino Revenues
Alton Belle Casino $23,207 $16,258 $84,664 $67,798
Argosy Casino
Riverside 23,212 18,888 84,892 71,955
Argosy Casino
Baton Rouge 14,437 11,016 53,262 46,828
Belle of Sioux City
Casino 7,968 5,888 28,013 22,572
Argosy Casino & Hotel
in Lawrenceburg 78,009 72,252 308,316 264,352
Total $146,833 $124,302 $559,147 $473,505
Net Revenues
Alton Belle Casino $23,977 $17,270 $88,079 $72,064
Argosy Casino
Riverside 24,531 20,197 89,813 76,960
Argosy Casino
- Baton Rouge 15,009 11,469 55,110 49,054
Belle of Sioux City
Casino 8,187 6,116 28,889 23,526
Argosy Casino & Hotel
in Lawrenceburg 84,132 77,840 332,235 284,721
Other 156 86 428 343
Total $155,992 $132,978 $594,554 $506,669
Income (loss) from
Operations(A)
Alton Belle Casino $6,650 $3,257 $23,115 $13,850
Argosy Casino
Riverside 3,840 2,133 12,564 5,369
Argosy Casino
- Baton Rouge 1,399 (440) 1,129 (3,381)
Belle of Sioux City
Casino 1,373 593 4,570 1,919
Argosy Casino & Hotel
in Lawrenceburg 25,747 25,444 103,295 87,907
Corporate¸ (3,120) (1,973) (15,113) (9,990)
Jazz (1,280) (1,489) (5,118) (6,312)
Other (422) (452) (1,417) (1,551)
Total $34,187 $27,073 $123,025 $87,811
EBITDA(A)(B)
Alton Belle Casino $7,822 $4,286 $27,388 $17,835
Argosy Casino
Riverside 5,203 3,579 18,252 11,293
Argosy Casino
- Baton Rouge 2,487 900 6,348 1,891
Belle of Sioux City
Casino 1,720 889 5,838 3,016
Argosy Casino & Hotel
in Lawrenceburg 30,723 30,295 123,083 105,674
Lawrenceburg financial
advisory fee (D) (1,536) (1,515) (6,154) (5,200)
Corporate¸ (3,092) (1,970) (15,082) (9,436)
Jazz (605) (664) (2,417) (3,633)
Other (196) (114) (173) (193)
Total $42,526 $35,686 $157,083 $121,247
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 twelve months ended December 31,
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 |
