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Missouri, Indiana help Argosy
overcome higher taxes in Illinois

May 4, 2004 4:52 AM

Excluding an expense related to the refinancing of some outstanding debt, Argosy Gaming Company reported earnings per share of $0.63 per diluted share for the first quarter that ended on March 31. This compared with the $0.50 per share reported in the comparable period of a year ago.

Net revenues for the period were $264 million, up nearly $28 million or 12% over last year’s revenues. Boosting both revenue and earnings were the 62% increase at the company’s properties in Missouri and Indiana while hurting the report were the tax-suffering properties in Illinois that saw their revenues decline by $4.2 million.

"To have EBITDA (earnings before interest, taxes, depreciation and amortization) more than double from the same quarter last year is outstanding," said Richard J. Glasier, president and CEO of Argosy. "We’re especially pleased that the new facility (in Kansas City, Mo.) has been successful."

As for future guidance, the company said that after deducting the refinancing charge, the company expects earnings per share for the fiscal year to be between $1.73 and $1.83.

Las Vegas Sands

Although not publicly-traded, Las Vegas Sands, Inc., owner of The Venetian on the Las Vegas Strip reports its fiscal experience to advise its bondholders of its financial condition. For the first three months of the year, the company said it probably became the most profitable hotel-casino in Las Vegas.

EBITDA for the period reached $103.9 million, topping the previous leader, the Bellagio that reported $99 million in EBITDA.

The company said its net income for the period was a record $37.8 million compared with last year’s $13 million. Revenues were $220.8 million, up from $158.7 million in 2003.

Contributing to the improved performance was a substantial increase in average daily room rate that reached $235 per night.

Ameristar Casinos

A few weeks ago, officials of Ameristar Casinos Inc. (ASCA) raised its guidance for the March 31 first quarter to $0.40 to $0.44 from the previous expectation of $0.33 to $0.35 per share. But when the numbers were announced last week, even that prediction was exceeded.

The company said its net revenues of $214.4 million set a company record as did its operating income of $42.1 million, a 20.3% increase over the first quarter of 2003.

Earnings per share reached $0.58 per diluted share.

Following the quarter, the company’s board of directors declared the first quarterly cash dividend in the company’s history of $0.125 per share payable on April 30 to shareholders of record on April 14.

Penn National

Penn National Gaming Inc. (PENN) reported record first-quarter profit of $17.2 million or $0.43 a share, up from last year’s $13.2 million or $0.33 a share.

Revenues during the period were $330.8 million, while EBITDA increased from last year’s $53 million to $74.7 million.

The company said it expects revenues to grow now that arrangements are underway to increase the number of slot machines at Charles Town Races & Slots in West Virginia to 3,800 machines, 1,000 more than is currently available. The first 300 additional machines are expected to be operating by the end of the calendar year with the others to follow.

As for the company’s efforts to get a slots bill in Pennsylvania, the company said only "we remain hopeful."

Harrah’s Entertainment

Harrah’s Entertainment Inc. (HET) reported record first-quarter revenues of $1.11 billion, up 4.7% over the $1.06 billion in the 2003 first quarter.

Income from operations declined 1.3% to $188 million from last year’s $190.4 million but net income was $81.7 million, beating by 0.7% the $81.1 million reported last year.

The company’s Total Rewards customer-loyalty program "accelerated the positive momentum we developed in the fourth quarter of 2003," said Gary Loveman, the company’s president and CEO. "As a result, net income exceeded that of the 2003 first quarter despite the impact of gaming tax rate increases imposed in mid-2003 in several states."

Particularly strong performances were posted by the company’s Southern Nevada operations, Loveman noted. "We are optimistic about the outlook for the remainder of the year," he added.

In progress, he said, was the development of Binion’s Horseshoe in Downtown Las Vegas that was opened by the company on April 1. This month, Loveman said, the company will operate a permanent casino at Louisiana Downs, adding 500 slot machines and raising the slot total to 1,400 machines.

Boyd Gaming

The performance of the Borgata Hotel Casino and Spa in Atlantic City brought smiles to the faces of the executives at Boyd Gaming Inc. (BYD) who reported that the property that opened last July had net revenues of $146 million for the quarter.

Because the first three months of the year was affected by wintry conditions, Borgata’s performance was considered remarkable and "exceeded our expectations," said Bill Boyd, chairman and CEO of the company. The Borgata is jointly owned by Boyd Gaming and MGM MIRAGE Inc.

Although Atlantic City is known primarily as a slots haven that attracts thousands of so-called day-trippers, the Borgata has made a substantial impact with the popularity of its table games. During the quarter, the table game win was $52.3 million, continuing the Borgata’s position as the leading table game operation in Atlantic City.

Slot win during the period was $88 million, making it the third property in the market.

Another strong performance, the company said, was turned in by its Las Vegas property, Sam Town’s Gambling Hall on the Boulder Highway. The property reported its strongest EBITDA ever.

Affecting the company’s earnings during the period was a negative tax ruling made by the Indiana Tax Court. The ruling, made in response to an appeal from an unrelated gaming company, said the company could not deduct Indiana state income tax for income purposes. The company took a charge of $5.7 million or $0.09 per share as a result of the court’s decision.