• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

  • It's Here


    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

Another solid quarter.



“Ameristar’s fourth quarter financial performance capped off a record-breaking year that was driven by our consistent delivery of a superior guest experience, focus on cost management and effective marketing... Our ability to generate significant free cash flow has allowed us to make substantial debt repayments, increase our quarterly dividend and opportunistically repurchase shares and pursue growth"

- Gordon Kanofsky, Ameristar’s Chief Executive Officer


  • Excluding share repurchases, YoY EPS would have still increased by 6% YoY
  • Continued to implement central best practices across all properties, which clearly helped their results
  • Promotional efficencies and favorable weather helped the quarter
  • There was a one time $5.6MM stock comp impact in the quarter resulting from equity reward modifications that accelerated the recognition of the expense. This impacted EPS by $0.16
  • The only gaming company that continued to pay dividends from 2008-2011 - only missing one quarter during that period 
  • Dividend for 2012 is only 10% of their FCF and therefore a very sustainable level
  • New Kansas City facility will open next quarter and the bridge by their St Charles facility will have some construction - which will lead to a complete bridge closure by November 2012 for about a year and that will negatively impact them. However, there are alternative routes to get to their facility
  • $15-20MM will be a normal maintenance capex run rate per quarter in 2012
  • Will pay down $155-165MM of debt for the year and $xxMM in 1Q12
  • Shares should be about 34MM in 1Q12
  • MA: 25% gaming tax rate, no limit on positions, 3 casinos in 3 regions and a racino with a 40% tax rate
    • ASCA site in Springfield, MA: 27 miles from Hartford and 86 miles from Albany, 74 miles from the closest existing casino
    • Springfield has the largest population in Western MA
    • There are 2.45MM adults within a 50 mile radius with a total household income of $106BN with only 1 future casino within a 50 mile radius. This compares to St Charles which has 1.98MM adults within a 50 mile radius with a total household income of $82.6BN and 6 casinos within a 50 mile radius 
    • Minimum of $500MM spend and $85MM licensing fee


  • Nebraska gaming legislation is very preliminary, they are hopeful that nothing will move forward in the term
  • To maximize their chances in Springfield it doesn't make a lot of sense to pursue a lot of other greenfield opportunities - would rather look at an acquisition. They do look at everything however
  • They are looking at pursuing I-gaming
  • MA will be a substantial facility, enough to compete with the CT facilities although not as large. It will be a full scale facility for them
  • Goal is to be in a position to present a license application to show that they will have no financing contingency for whatever they want to build in MA
  • Seeing decent degree of stabilization across their markets. There are some indicators that point to a recovery but its too soon to tell.
  • Yes the farm economies are doing well
  • Flow-through in 2012 should continue to be strong
  • The bridge won't be completely closed near St Charles - just a partial closure. So they think it will be a short term, manageable impact. They learned how to manage around this sort of thing in East Chicago.
  • Corporate expense increase is mostly due to their development efforts in MA
  • Thinks that their gains in East Chicago are sustainable
  • Gaming tax rate reduction will be a topic of discussion in Colorado this year
  • They are pushing maximum margins at their properties until revenues increase
  • 4Q tax rate:
    • Costs that were built into the stock buyback that weren't deductible and hit them in the 4Q
  • CZR's is still a formidable competitor and not asleep at the switch, but the competitive environment has remained stable and rational
  • Cline Avenue Bridge- replacement talks are going on behind close doors. Its been radio silent over the last 60 days. Plan is for the state to turn over the bridge to the city and for the city to enter into an agreement with a private contractor using tolls to pay for the repair.
  • One of their core goals is to strive for continuous improvement.   


  • "Council Bluffs... benefited from market share growth and overall market strength."
  • "East Chicago had a 2.6% year-over-year decline in net revenues that was mostly attributable to a new competitor in Des Plaines, Illinois, partially offset by market share growth in the more immediate Northwest Indiana market."
  • "Notably, Jackpot and Black Hawk delivered Adjusted EBITDA margin improvements of 8.4 percentage points and 5.3 percentage points, respectively."
  • Balance sheet info:
    • $257MM of borrowing capacity under the R/C
    • Total Net Leverage Ratio: 5.04x vs. a 7.0x covenant
    • Senior Secured Net Leverage: 2.53x vs. a 4.5x covenant
    • Interest Expense Coverage: 2.62x vs. a 2.0x covenant
  • 4Q Capex: $36.5MM, "included a $9.3 million settlement payment to the general contractor for our St. Charles hotel construction project completed in 2008."
  • In 4Q, ASCA repurchased 200k shares for $2.4MM
  • 1Q12 outlook: 
    • D&A: $26.5MM to $27.5MM
    • Interest expense (net of capitalized interest): $26.5MM to 27.5MM (including $1.4MM of non-cash interest)
    • Tax rate: 43-44%
    • Stock comp: $4.5MM to $5.0MM
    • Capex: $31MM to $36MM (including $16MM MA land purchase)
    • Corporate expense (ex stock comp): $12.5MM to $13MM
  • 2012 outlook: 
    • D&A: $105MM to $110MM
    • Interest expense (net of capitalized interest): $103.5MM to $108.5MM (including $5.5MM of non-cash interest)
    • Tax rate: 43-44%
    • Stock comp: $14.8MM to $15.8MM
    • Capex: $85MM to $90MM (including $16MM MA land purchase)
    • Corporate expense (ex stock comp): $52MM to $53MM