We are expecting an in line quarter tomorrow. Here is some forward looking commentary issued by ASCA since they announced their Q1.
Modified Local Development Agreement (ASCA East Chicago)- June 2, 2011
- Pursuant to the Modified LDA, for the period beginning June 3, 2011, Ameristar will pay 1.625% of its adjusted gross receipts from operation of the casino ("AGR") to the City of East Chicago, Indiana (the "City") and 1.625% of its AGR to Foundations of East Chicago, Inc., an Indiana not-for-profit corporation ("FEC"), to be used by the recipients solely to support and assist economic development in the City through specified initiatives set forth in the Modified LDA and for reasonable and necessary administrative expenses.
- The Modified LDA modifies and supersedes in its entirety the prior local development agreement for the East Chicago casino (the "Prior LDA"), pursuant to which Ameristar has been paying 2% of its AGR to FEC, 1% of its AGR to the City and 0.75% of its AGR to East Chicago Second Century, Inc., an Indiana corporation ("Second Century"), with the respective amounts payable to FEC and Second Century being deposited into the two Ameristar segregated bank accounts as described above.
Neilsen stock sale- May 16, 2011
- Craig H. Neilsen (the "Selling Stockholder"), an affiliate of the Company, has agreed to sell 4,560,055 of its shares of the Company's common stock in an underwritten public offering. The Selling Stockholder currently owns approximately 15% of the Company's outstanding common stock and after giving effect to this offering will own approximately 0.77% of the Company's outstanding common stock. The Company will not receive any proceeds from the offering. The total number of shares of the Company's common stock outstanding will not change as a result of this offering.
Youtube from Q1 Conference Call
- [East Chicago] “We’re continuing our attempts to strengthen the property by proceeding with the renovation of the hotel rooms there, as well as continuing negotiations regarding the rebuilding of the bridge with the state and local community and we’re cautiously optimistic that that will all work out.”
- “We’ve controlled costs well and we’ve taken steps to reduce the volatility of our table games play.”
- “Subsequent to the end of the quarter, with the amount of free cash flow the company’s been generating we were able to retire an additional $15 million in debt by the middle of April, which was just prior to completion of the debt restructuring.”
- “The effects from the [Craig H. Neilsen] transaction to the company is a reduction in the outstanding number of shares by 45%, which on a weighted-average basis will give us a total share count at the end of this year of about 40.6 million and then at the end of ‘12, 33.5 million shares. It’s created immediate accretion to earnings and free cash flow per share, excluding certain one-time charges that will be recorded in Q2.”
- “After the $15 million of debt repayments in early April and $4.2 million in outstanding letters of credit, we have $128 million in borrowing capacity under the revolver. Obviously, net of the OID on the senior unsecured notes in the B Term. Assuming quarterly dividends continue at current rates and interest rates don’t significantly change, dividend payment savings from the 45% reduction in outstanding shares will more than offset the cash interest increase we’ll experience from the new credit facility.”
- “Despite large debt increase, annualized interest expense at current LIBOR rates, is expected to increase only about $6 million on an annualized basis. With the debt reduction we’ll be saving at current dividend rate of about $11 million. So, from an free cash flow perspective, the transaction, and adding the amount of debt that we did, is better than neutral to the company.”
- [Stock comp] “We should see the numbers go back to $3.5 million, $4 million roughly starting in the third quarter"
- “Blended tax rate is still expected to be 42% to 43% in the second quarter. CAP spending, we’re still looking at a run rate of about $10 million to $15 million. Interest expense in the second quarter is expected to be between $25 million, $26 million. Non-cash interest is expected to be $1.7 million for Q2 with the new debt structure.”
- “As a result of refinancing, assuming minimal changes in LIBOR, we now expect full year 2011 leverage expense net of CAP interest to be between $104 million and $109 million, an increase from the previously announced $98 million to $103 million, as I said earlier, of about $6 million in cash interest. The new non-cash interest expense on an annual basis will be approximately $7 million, which is a slight reduction from what it had previously been. Interest expense will decrease year over year in Q2 by $8.5 million, due to the expiration of the swaps we had last year, and they expired in July 2010. We expect to, again, generate significant free cash flows that will allow us flexibility to pay down somewhere in the neighborhood of $40 million to $45 million worth of debt in Q2. The board did declare, for Q2, another dividend at $10.05 on April 29th payable on June 15th.”
- “In prior quarters you heard us talk a little bit about table games hold being a little erratic. And we’ve taken steps to make sure that that stays a little more stable, and I think we’ve been very successful at that.”
- [Iowa tax increase proposal] “I still don’t think it’s likely to move forward. I don’t think there’s any movement in the legislature to move forward the governor’s original or revised proposal.”
- [FY2011 Capex guidance] “I think at the beginning of year in the first call, we indicated the rate was going to be somewhere around $65 million, $70 million for the year including Kansas City’s hotel, the start of Kansas City hotel and some work in Vicksburg on the site stabilization.”
- “First quarter is always one of our strongest ones. I can’t tell you that we will maintain that margin throughout the entire year, but I do expect that we will continue to have great flow through and have year-over-year improvements as we move through it. Gas prices, it’s hard to really see an impact just yet. Not saying that there might not be some, but we don’t see it in any of our trend lines.”
- “We don’t have any strategic plan to sell any assets.”
- [Share count] “At the year end, it’s going to be about a little over 40 million. But this quarter, it’ll be about 38. Third and fourth quarters will be 33.5, 33.6.”
- “We’d have to say that we’re probably seeing slightly better play from our long-term existing players than seeing any material change in those customers that left two or three years ago when unemployment shot up and basically the recession began.”
- [ASCA Black Hawk] “I think at the margin levels we currently have based on the size of the hotel, that it probably has entertained the peak and that’ll occur as the economy improves. But based on where the economy is right now, I think that mid 30% EBITDA margin is very attractive for that size facility."
