UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0-22494
AMERISTAR CASINOS, INC.
(Exact name of Registrant as Specified in its Charter)
| Nevada | 88-0304799 | |
|
|
||
| (State or other jurisdiction of | (I.R.S. employer | |
| incorporation or organization) | identification no.) |
3773 Howard Hughes Parkway
Suite 490 South
Las Vegas, Nevada 89109
(Address of principal executive offices)
(702) 567-7000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
As of November 7, 2002, 26,211,914 shares of Common Stock of the registrant were issued and outstanding.
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AMERISTAR CASINOS, INC.
FORM 10-Q
INDEX
| Page No(s). | ||||||
Part I. FINANCIAL INFORMATION |
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Item 1. Financial Statements: |
||||||
A. Condensed Consolidated Balance
Sheets at December 31, 2001 and September
30, 2002 (unaudited) |
3 - 4 | |||||
B. Condensed Consolidated
Statements of Income (unaudited) for the
three and nine months ended September 30,
2001 and September 30, 2002 |
5 - 6 | |||||
C. Condensed Consolidated
Statements of Cash Flows (unaudited) for
the nine months ended September 30, 2001
and September 30, 2002 |
7 - 8 | |||||
D. Notes to Condensed Consolidated
Financial Statements |
9 - 14 | |||||
Item 2. Management’s Discussion and Analysis of
Financial Condition and Results of Operations |
15 - 24 | |||||
Item 3. Quantitative and Qualitative Disclosures about Market Risk |
24 | |||||
Item 4. Controls and Procedures |
24 | |||||
Part II. OTHER INFORMATION |
||||||
Item 6. Exhibits and Reports on Form 8-K |
25 | |||||
SIGNATURE AND CERTIFICATIONS |
26 - 30 | |||||
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(Amounts in Thousands)
| December 31, | September 30, | |||||||||
| 2001 | 2002 | |||||||||
| (Unaudited) | ||||||||||
CURRENT ASSETS: |
||||||||||
Cash and cash equivalents |
$ | 41,143 | $ | 47,219 | ||||||
Accounts receivable, net |
3,608 | 3,792 | ||||||||
Income tax refund receivable |
— | 4,275 | ||||||||
Inventories |
5,206 | 6,550 | ||||||||
Prepaid expenses |
7,421 | 10,156 | ||||||||
Deferred income taxes |
3,452 | 6,996 | ||||||||
Assets held for sale |
— | 1,583 | ||||||||
Total current assets |
60,830 | 80,571 | ||||||||
PROPERTY AND EQUIPMENT
Net of accumulated depreciation and amortization of
$149,945 and $173,065, respectively |
720,515 | 886,805 | ||||||||
EXCESS OF PURCHASE PRICE OVER FAIR
MARKET VALUE OF NET ASSETS ACQUIRED |
83,224 | 82,321 | ||||||||
DEPOSITS AND OTHER ASSETS |
28,023 | 27,416 | ||||||||
TOTAL ASSETS |
$ | 892,592 | $ | 1,077,113 | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS-CONTINUED
LIABILITIES AND STOCKHOLDERS’ EQUITY
(Amounts in Thousands, Except Share Data)
| December 31, | September 30, | |||||||||
| 2001 | 2002 | |||||||||
| (Unaudited) | ||||||||||
CURRENT LIABILITIES: |
||||||||||
Accounts payable |
$ | 10,331 | $ | 7,384 | ||||||
Construction contracts payable |
16,455 | 25,352 | ||||||||
Accrued liabilities |
51,648 | 54,131 | ||||||||
Current obligations under capitalized leases |
1,170 | 1,200 | ||||||||
Current maturities of notes payable and long-term debt |
8,433 | 13,713 | ||||||||
Total current liabilities |
88,037 | 101,780 | ||||||||
OBLIGATIONS UNDER CAPITALIZED LEASES, net of
current maturities |
2,184 | 1,273 | ||||||||
LONG-TERM DEBT, net of current maturities |
622,071 | 739,665 | ||||||||
DEFERRED INCOME TAXES AND OTHER LONG-TERM LIABILITIES |
22,964 | 38,391 | ||||||||
COMMITMENTS AND CONTINGENCIES |
||||||||||
STOCKHOLDERS’ EQUITY: |
||||||||||
Preferred stock, $.01 par value: Authorized – 30,000,000 |
— | — | ||||||||
shares; Issued – None
Common stock, $.01 par value: Authorized – 60,000,000
shares; Issued and outstanding – 25,858,771 shares
at December 31, 2001 and 26,211,713 shares at
September 30, 2002 |
258 | 262 | ||||||||
Additional paid-in capital |
141,302 | 145,697 | ||||||||
Accumulated other comprehensive loss |
(1,953 | ) | (3,171 | ) | ||||||
Retained earnings |
17,729 | 53,216 | ||||||||
Total stockholders’ equity |
157,336 | 196,004 | ||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | 892,592 | $ | 1,077,113 | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in Thousands, Except Per Share Data)
(Unaudited)
| Three Months | Nine Months | |||||||||||||||||||
| Ended September 30, | Ended September 30, | |||||||||||||||||||
| 2001 | 2002 | 2001 | 2002 | |||||||||||||||||
REVENUES: |
||||||||||||||||||||
Casino |
$ | 142,965 | $ | 176,347 | $ | 409,651 | $ | 485,881 | ||||||||||||
Food and beverage |
18,589 | 23,039 | 52,351 | 60,722 | ||||||||||||||||
Rooms |
6,313 | 6,492 | 17,908 | 18,629 | ||||||||||||||||
Other |
5,048 | 5,703 | 13,698 | 14,343 | ||||||||||||||||
| 172,915 | 211,581 | 493,608 | 579,575 | |||||||||||||||||
Less: Promotional allowances |
17,109 | 24,323 | 42,809 | 63,231 | ||||||||||||||||
Net revenues |
155,806 | 187,258 | 450,799 | 516,344 | ||||||||||||||||
OPERATING EXPENSES: |
||||||||||||||||||||
Casino |
63,809 | 80,867 | 187,507 | 217,093 | ||||||||||||||||
Food and beverage |
11,283 | 15,477 | 34,066 | 38,512 | ||||||||||||||||
Rooms |
2,156 | 2,010 | 6,053 | 5,683 | ||||||||||||||||
Other |
3,120 | 4,488 | 9,136 | 10,403 | ||||||||||||||||
Selling, general and administrative |
33,492 | 39,443 | 97,556 | 108,953 | ||||||||||||||||
Depreciation and amortization |
9,974 | 13,602 | 28,292 | 34,024 | ||||||||||||||||
Impairment loss on assets held for sale |
— | 1,077 | — | 5,213 | ||||||||||||||||
Preopening expenses |
— | 4,925 | — | 6,401 | ||||||||||||||||
Total operating expenses |
123,834 | 161,889 | 362,610 | 426,282 | ||||||||||||||||
Income from operations |
31,972 | 25,369 | 88,189 | 90,062 | ||||||||||||||||
OTHER INCOME (EXPENSE): |
||||||||||||||||||||
Interest income |
193 | 23 | 475 | 108 | ||||||||||||||||
Interest expense |
(14,818 | ) | (13,935 | ) | (50,839 | ) | (33,931 | ) | ||||||||||||
Other |
143 | (318 | ) | (143 | ) | (415 | ) | |||||||||||||
| INCOME BEFORE INCOME TAX PROVISION AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE | 17,490 | 11,139 | 37,682 | 55,824 | ||||||||||||||||
Income tax provision |
6,225 | 3,731 | 13,546 | 20,337 | ||||||||||||||||
| INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE | 11,265 | 7,408 | 24,136 | 35,487 | ||||||||||||||||
| CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE – adoption of SFAS No. 133, net of income tax benefit of $73 | — | — | (135 | ) | — | |||||||||||||||
NET INCOME |
$ | 11,265 | $ | 7,408 | $ | 24,001 | $ | 35,487 | ||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME-CONTINUED
(Amounts in Thousands, Except Per Share Data)
(Unaudited)
| Three Months | Nine Months | ||||||||||||||||
| Ended September 30, | Ended September 30, | ||||||||||||||||
| 2001 | 2002 | 2001 | 2002 | ||||||||||||||
EARNINGS PER SHARE: |
|||||||||||||||||
| Income before cumulative effect of change in accounting principle: | |||||||||||||||||
Basic |
$ | 0.54 | $ | 0.28 | $ | 1.17 | $ | 1.36 | |||||||||
Diluted |
$ | 0.49 | $ | 0.28 | $ | 1.08 | $ | 1.34 | |||||||||
Net income: |
|||||||||||||||||
Basic |
$ | 0.54 | $ | 0.28 | $ | 1.16 | $ | 1.36 | |||||||||
Diluted |
$ | 0.49 | $ | 0.28 | $ | 1.07 | $ | 1.34 | |||||||||
WEIGHTED AVERAGE SHARES
OUTSTANDING: |
|||||||||||||||||
Basic |
20,845 | 26,159 | 20,655 | 26,067 | |||||||||||||
Diluted |
22,908 | 26,367 | 22,349 | 26,424 | |||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)
| Nine Months | ||||||||||
| Ended September 30, | ||||||||||
| 2001 | 2002 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||||
Net income |
$ | 24,001 | $ | 35,487 | ||||||
Adjustments to reconcile net income to net cash
provided by operating activities: |
||||||||||
Depreciation and amortization |
28,292 | 34,024 | ||||||||
Amortization of debt issuance costs and debt discounts |
6,239 | 3,459 | ||||||||
Impairment loss on assets held for sale |
— | 5,213 | ||||||||
Net loss on disposition of assets |
241 | 328 | ||||||||
Change in deferred income taxes |
11,851 | 12,014 | ||||||||
Decrease (increase) in income tax refund receivable |
125 | (4,275 | ) | |||||||
Decrease
(increase) in other current assets |
514 | (5,845 | ) | |||||||
Increase in current liabilities |
5,729 | 1,827 | ||||||||
Total adjustments |
52,991 | 46,745 | ||||||||
Net cash provided by operating activities |
76,992 | 82,232 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||||
Capital expenditures |
(65,139 | ) | (211,980 | ) | ||||||
Increase in construction contracts payable |
5,262 | 8,897 | ||||||||
Proceeds from sale of The Reserve |
71,559 | — | ||||||||
Proceeds from sale of assets (other than The Reserve) |
3 | 8,370 | ||||||||
Increase in deposits and other non-current assets |
(1,663 | ) | (3,694 | ) | ||||||
Net cash provided by (used in) investing activities |
10,022 | (198,407 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||||
Proceeds from issuance of notes payable and long-term debt |
386,006 | 131,236 | ||||||||
Principal payments of notes payable, long-term debt
and capitalized leases |
(461,169 | ) | (9,710 | ) | ||||||
Debt issuance costs |
(7,467 | ) | — | |||||||
Amendment fee for senior credit facilities |
— | (936 | ) | |||||||
Proceeds from stock option exercises |
1,302 | 1,661 | ||||||||
Net cash (used in) provided by financing activities |
(81,328 | ) | 122,251 | |||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS-CONTINUED
(Amounts in Thousands)
(Unaudited)
| Nine Months | |||||||||
| Ended September 30, | |||||||||
| 2001 | 2002 | ||||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS |
5,686 | ||||||||