UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q/A-1
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
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 August 12, 1997, 20,360,000 shares of Common Stock of the
registrant were issued and outstanding.
<PAGE>
AMERISTAR CASINOS, INC.
FORM 10-Q
INDEX
Page No.
Part I. FINANCIAL INFORMATION
Item 1.Financial Statements:
A. Condensed Consolidated Balance
Sheets at June 30, 1997 (unaudited)
and December 31, 1996 3 - 4
B. Condensed Consolidated Statements
of Income (unaudited) for the three
months and six months ended
June 30, 1997 and 1996 5
C. Condensed Consolidated Statements
of Cash Flows (unaudited) for the
six months ended June 30, 1997 and
1996 6
D. Notes to Condensed Consolidated
Financial Statements 7 - 9
Item 2.Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10 - 19
Item 3.Quantitative and Qualitative Disclosures
About
Market Risk 19
Part II. OTHER INFORMATION
Item 1.Legal Proceedings 20
Item 4.Submission of Matters to a Vote of
Security Holders 20
Item 6.Exhibits and Reports on Form 8-K 21
SIGNATURE 22
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
June 30, December 31,
1997 1996
---------- ----------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 12,622 $ 10,724
Restricted cash 286 418
Accounts receivable, net 1,048 1,408
Inventories 2,358 2,385
Prepaid expenses and
deferred income taxes 5,399 5,219
---------- ----------
Total current assets 21,713 20,154
PROPERTY AND EQUIPMENT AND LEASEHOLD
INTERESTS, at cost, less accumulated
depreciation and amortization of
$63,131 and $56,253, respectively 231,296 225,470
PREOPENING COSTS 3,677 2,594
EXCESS OF PURCHASE PRICE OVER FAIR
MARKET VALUE OF NET ASSETS ACQUIRED 15,382 19,043
DEPOSITS AND OTHER ASSETS 2,947 2,791
---------- ----------
$ 275,015 $ 270,052
========== ==========
The accompanying notes are an integral part of these condensed
consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, December 31,
1997 1996
---------- ----------
(unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 3,729 $ 7,303
Construction contracts payable 2,922 5,336
Accrued liabilities 14,831 13,564
Current obligations under
capitalized leases 1,194 506
Current maturities of
notes payable and long-term debt 9,842 19,740
Federal income tax payable 270 49
---------- ----------
Total current liabilities 32,788 46,498
---------- ----------
OBLIGATIONS UNDER CAPITALIZED LEASES,
net of current maturities 10,598 8,333
---------- ----------
NOTES PAYABLE AND LONG-TERM DEBT,
net of current maturities 147,732 135,560
---------- ----------
DEFERRED INCOME TAXES 7,391 8,446
---------- ----------
MINORITY INTEREST - 271
---------- ----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value:
Authorized - 30,000,000 shares
Issued - None - - Common stock, $.01 par
Common stock, $.01 par value:
Authorized - 30,000,000 shares
Issued and outstanding -
20,360,000 shares 204 204
Additional paid-in capital 43,043 43,043
Retained earnings 33,259 27,697
---------- ----------
Total stockholders' equity 76,506 70,944
---------- ----------
$ 275,015 $ 270,052
========== ==========
The accompanying notes are an integral part of these condensed
consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
------- ------- ------- -------
<S> <C> <C> <C> <C>
REVENUES:
Casino $43,456 $41,246 $85,649 $78,625
Food and beverage 7,643 5,684 14,850 10,415
Rooms 2,502 1,986 4,666 3,501
General store 669 623 1,220 1,160
Other 1,457 1,370 2,754 2,540
------- ------- ------- -------
55,727 50,909 109,139 96,241
Less: Promotional allowances 3,757 3,099 7,556 5,525
------- ------- ------- -------
Net Revenues 51,970 47,810 101,583 90,716
------- ------- ------- -------
OPERATING EXPENSES:
Casino 19,535 20,000 39,196 37,175
Food and beverage 4,905 2,996 9,485 6,008
Rooms 799 587 1,515 1,115
General store 524 514 1,030 1,011
Other 1,358 1,174 2,604 2,327
Selling, general and
administrative 9,791 8,358 19,091 16,285
Business development 245 379 500 802
Utilities and maintenance 2,561 2,616 4,995 4,937
Depreciation and amortization 4,151 3,531 8,072 6,801
Preopening costs - 291 - 6,146
------- ------- ------- -------
Total operating expenses 43,869 40,446 86,488 82,607
------- ------- ------- -------
Income from operations 8,101 7,364 15,095 8,109
OTHER INCOME (EXPENSE):
Interest income 128 73 167 266
Interest expense (2,731) (1,604) (5,885) (3,513)
Other (655) - (549) 63
------- ------- ------- -------
INCOME BEFORE INCOME TAX PROVISION 4,843 5,833 8,828 4,925
Income tax provision 1,791 2,117 3,266 1,781
------- ------- ------- -------
NET INCOME $ 3,052 $ 3,716 $ 5,562 $ 3,144
======= ======= ======= =======
EARNINGS PER SHARE $ .15 $ .18 $ .27 $ .15
======= ======= ======= =======
WEIGHTED AVERAGE SHARES OUTSTANDING 20,360 20,360 20,360 20,360
======= ======= ======= =======
The accompanying notes are an integral part of these condensed
consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
Six Months
Ended June 30,
1997 1996
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 5,562 $ 3,144
------- -------
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 8,072 6,801
Amortization of preopening costs - 6,146
Net loss (gain) on disposition of
assets 471 (63)
Deferred income taxes 536 (816)
Amortization of debt issuance costs 116 112
Decrease (increase) in other current
assets 348 (628)
Current tax payable 204 147
(Decrease) increase in other current
liabilities (2,308) 3,793
------- -------
Total adjustments 7,439 15,492
------- -------
Net cash provided by operating activities 13,001 18,636
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (11,736) (26,666)
Decrease in construction contracts
payable (2,414) (4,465)
Proceeds from sale of assets 175 63
Decrease in deposits and other non-
current assets (1,356) (4,086)
------- -------
Net cash used in investing activities (15,331) (35,154)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes payable
and long-term debt 19,908 3,525
Restricted security deposit - 11,511
Principal payments of notes payable,
long-term debt and capitalized leases (15,680) (4,573)
------- -------
Net cash provided by financing activities 4,228 10,463
------- -------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 1,898 (6,055)
CASH AND CASH EQUIVALENTS - BEGINNING OF
PERIOD 10,724 14,787
------- -------
CASH AND CASH EQUIVALENTS - END OF PERIOD $12,622 $ 8,732
======= =======
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid during the period for interest
(net of amounts capitalized) $ 4,357 $ 4,378
======= =======
Cash paid for income taxes $ 2,510 $ 2,450
======= =======
Assets purchased with long-term debt $ 1,424 $ 313
======= =======
Assets purchased with capitalized leases $ 3,212 $ 107
======= =======
The accompanying notes are an integral part of these condensed
consolidated financial statements.
</TABLE>
<PAGE>
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements
include the accounts of Ameristar Casinos, Inc. ("Ameristar") and
its wholly owned and majority owned subsidiaries (collectively, the
"Company"). The Company's principal subsidiaries, all of which are
wholly owned, are Cactus Pete's, Inc. ("CPI"), Ameristar Casino
Vicksburg, Inc. ("ACVI"), Ameristar Casino Council Bluffs, Inc.
("ACCBI") and Ameristar Casino Las Vegas, Inc. ("ACLVI"). All
significant intercompany transactions have been eliminated.
CPI owns and operates two casino-hotels in Jackpot, Nevada -
Cactus Petes Resort Casino and The Horseshu Hotel and Casino
(collectively, the "Jackpot Properties"). ACVI owns and operates
Ameristar Vicksburg, a riverboat-themed dockside casino and related
land-based facilities in Vicksburg, Mississippi. ACCBI owns and
operates Ameristar Council Bluffs, a riverboat casino and related
hotel and other land-based facilities in Council Bluffs, Iowa.
ACLVI owns and is developing The Reserve Hotel & Casino ("The
Reserve") in the Henderson-Green Valley suburban area of Las Vegas,
Nevada.
The accompanying condensed consolidated financial statements
have been prepared by the Company, without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission.
Accordingly, the condensed consolidated financial statements do not
include all of the disclosures required by generally accepted
accounting principles. However, the accompanying unaudited
condensed consolidated financial statements do contain all
adjustments that, in the opinion of management, are necessary to
present fairly the financial position and the results of operations
for the interim periods included therein. The interim results
reflected in the condensed consolidated financial statements are
not necessarily indicative of results to be expected for the full
fiscal year.
Certain reclassifications, having no effect on net income,
have been made to the prior periods' condensed consolidated
financial statements to conform to the current period's
presentation.
The accompanying condensed consolidated financial statements
should be read in conjunction with the financial statements and
notes thereto included in the Company's Annual Report on Form 10-K,
as amended, for the fiscal year ended December 31, 1996 and Current
Reports on Form 8-K filed on June 24, 1997 and July 30, 1997.
NOTE 2 - NOTES PAYABLE AND LONG-TERM DEBT
On July 5, 1995, the Company, as borrower, and its principal
operating subsidiaries, as guarantors, entered into a reducing
revolving credit facility (the "1995 Revolving Credit Facility")
with a syndicate of banks. The maximum principal amount available
was increased to $99.0 million in connection with the Company's
acquisition of The Reserve. The maximum amount available reduced
to $94.5 million on January 1, 1997. As of June 30, 1997, the
Company had drawn the maximum amount available under the 1995
Revolving Credit Facility. The Company obtained the approval in
principle of the bank syndicate to waive a $4.7 million principal
reduction scheduled for July 1, 1997, if a new bank credit facility
(the "Revolving Credit Facility") to replace the 1995 Revolving
Credit Facility had not been completed by that date. Accordingly,
the accompanying balance sheets classifies the amount of this
scheduled principal reduction as long-term debt.
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
On March 26, 1997, the Company obtained a $20.0 million short-
term unsecured loan from a bank. The short-term loan bears
interest based either on LIBOR or the bank's prime rate, at the
election of the Company, plus an applicable margin. At June 30,
1997, the applicable interest rate was 8.7% per annum. The loan
was originally scheduled to mature on May 31, 1997. Although the
bank syndicate for the Revolving Credit Facility approved in
principle an increase in the 1995 Revolving Credit Facility that
would provide sufficient funds to repay this short-term loan at
maturity, the Company requested the lender to extend the maturity
date pending the completion of the Revolving Credit Facility.
Based on the bank syndicate's approval in principle, the
accompanying balance sheet at June 30, 1997 classifies this loan as
a long-term obligation.
Notes payable and long-term debt at June 30, 1997 include
notes payable to the former stockholders (the "Gem Stockholders")
of Gem Gaming, Inc. ("Gem"), for merger consideration in connection
with the October 9, 1996 acquisition of The Reserve. Based on the
settlement agreement with the Gem Stockholders, the outstanding
balance of these notes payable at June 30, 1997 was $28.7 million.
NOTE 3 - ACQUISITION OF THE RESERVE
The amount recorded as notes payable in connection with the
Company's acquisition of The Reserve from Gem, the original
developer of the property, exceeds the fair market value of the net
assets acquired by the Company in the merger. The excess of
purchase price over fair market value of net assets acquired, will
be amortized over the estimated 40-year depreciable life beginning
in the period in which the acquired property commences operations.
NOTE 4 - EARNINGS PER SHARE
In March, 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128 ("SFAS
128"), "Earnings Per Share", effective for fiscal years ending
after December 15, 1997. The Company will adopt SFAS 128 for the
year ending December 31, 1997. SFAS 128 requires the computation
and presentation of basic and diluted earnings per share for all
periods for which an income statement is presented. For the three-
and six-month periods ended June 30, 1997 and 1996, the Company had
no material dilutive securities outstanding.
Options to purchase 620,000 and 549,000 shares of common stock
were outstanding at June 30, 1997 and 1996, respectively, at
exercise prices of $5.06-$16.00 and $5.94-$16.00, respectively.
These options were not included in a pro forma computation of
earnings per share assuming dilution because the options' exercise
prices were predominantly greater than the average market price of
the common shares during the respective periods presented.
Therefore, the effect of dilutive securities on earnings per share
was not material.
NOTE 5 - SUBSEQUENT EVENTS
REFINANCING OF LONG-TERM DEBT
In July 1997, the Company completed a refinancing of its long-
term debt through the new $125 million Revolving Credit Facility
and the sale of $100 million aggregate principal amount of 10-1/2%
Senior Subordinated Notes due 2004 Series A (the "Senior
Subordinated Notes"). The Revolving Credit Facility was entered
into on July 8, 1997, pursuant to a Credit Agreement among
Ameristar, CPI, ACVI,
<PAGE>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
ACCBI and ACLVI, a syndicate of banks and Wells Fargo Bank,
National Association as Agent Bank, Arranger and Swingline Lender.
The 1995 Revolving Credit Facility was terminated and repaid upon
the funding of the initial draw under the Revolving Credit
Facility. The Senior Subordinated Notes were issued by Ameristar
at par in a private placement. The net proceeds from the sale of
the Senior Subordinated Notes were used to repay $82.4 million in
borrowings and interest under the Revolving Credit Facility,
$13.1 million in other indebtedness and $800,000 in loan fees for
the Revolving Credit Facility. Following the application of the
net proceeds from the sale of the Senior Subordinated Notes, the
outstanding principal balance of the Revolving Credit Facility was
$32.6 million.
The Revolving Credit Facility will mature on June 30, 2003.
Prior to maturity, the maximum principal available under the
Revolving Credit Facility will reduce semiannually (commencing on
July 1, 1999) by an aggregate of $50.0 million in increasing
increments ranging from $2.5 million to $10.0 million. The
Revolving Credit Facility is secured by substantially all the real
and personal property of the Company.
The Senior Subordinated Notes were issued under an Indenture
dated July 15, 1997. All of Ameristar's current subsidiaries have
guaranteed, or will guarantee, Ameristar's payment obligations on
the Senior Subordinated Notes. The Senior Subordinated Notes will
mature on August 1, 2004, but are subject to earlier redemption in
whole or in part under certain circumstances. The Senior
Subordinated Notes are not secured and are subordinate to all
existing and future Senior Indebtedness (as defined), which
includes the Revolving Credit Facility.
VICKSBURG HOTEL LOAN
In July 1997, AC Hotel Corp., a newly formed wholly owned
subsidiary of ACVI, entered into a loan agreement providing for
borrowings of up to $7.5 million for the purpose of funding a
portion of the construction costs of a 150-room hotel at Ameristar
Vicksburg. This nonrecourse loan from a private lender is secured
by a deed of trust on the hotel and the underlying land senior in
priority to the liens securing the Revolving Credit Facility.
Borrowings under this loan bear interest at 15% per annum, payable
in periodic installments, and the loan matures in July 1998. The
Company is required to pay a non-usage fee at the rate of 3% per
annum on the undrawn loan balance, and draws are subject to the
satisfaction of various conditions typically applicable to
construction loans.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
Ameristar Casinos, Inc. ("Ameristar" or "ACI") develops, owns
and operates casinos and related hotel, food and beverage,
entertainment and other facilities, with four properties in
operation in Nevada, Mississippi and Iowa and a fifth property
under development in Nevada. Ameristar's principal operations are
conducted through four wholly owned subsidiaries: Cactus Petes,
Inc. ("CPI"); Ameristar Casino Vicksburg, Inc. ("ACVI"); Ameristar
Casino Council Bluffs, Inc. ("ACCBI"); and Ameristar Casino Las
Vegas, Inc. ("ACLVI"). Ameristar and its wholly owned and majority
owned subsidiaries are collectively referred to herein as the
"Company."
CPI owns and operates Cactus Petes Resort Casino ("Cactus
Petes") and The Horseshu Hotel and Casino (collectively, the
"Jackpot Properties"), two casino-hotels located in Jackpot, Nevada
at the Idaho border. ACVI owns and operates a riverboat-themed
dockside casino (the "Vicksburg Casino") and related land-based
facilities (collectively, "Ameristar Vicksburg") in Vicksburg,
Mississippi. ACVI is also developing a 150-room hotel at Ameristar
Vicksburg expected to open in April of 1998. ACCBI owns and
operates a riverboat casino (the "Council Bluffs Casino") and
related land-based hotel and other facilities (collectively,
"Ameristar Council Bluffs") in Council Bluffs, Iowa across the
Missouri River from Omaha, Nebraska. Ameristar Council Bluffs was
opened in stages during 1996 and early 1997. The Council Bluffs
Casino opened on January 19, 1996, and most of the land-based
facilities opened during the second and fourth quarters of 1996.
The land-based facilities were completed during the first quarter
of 1997, with the opening of the steakhouse on February 25 and the
indoor swimming pool and spa on March 3, 1997.
ACLVI is developing The Reserve Hotel & Casino ("The Reserve")
in Henderson, Nevada at the intersection of Interstate 515 and Lake
Mead Drive. The Company acquired The Reserve on October 9, 1996,
through the merger of Gem Gaming, Inc. ("Gem"), the initial
developer of The Reserve, into ACLVI. ACLVI has redesigned The
Reserve to expand and enhance the property and will complete
construction of The Reserve and operate the property. The Company
is preparing to accelerate construction of The Reserve, and
management expects that construction will be completed to permit an
opening of Phase I of The Reserve in January 1998. The settlement
agreement between the Company and the former Gem stockholders,
which fixed the form and amount of merger consideration payable by
the Company for The Reserve, became effective on June 20, 1997
following its approval by the Nevada Gaming Commission.
The Company's quarterly and annual operating results may be
affected by competitive pressures, the timing of the commencement
of new gaming operations, the amount of preopening costs incurred
by the Company, construction at existing facilities and general
weather conditions. Consequently, the Company's operating results
for any quarter or year may not be indicative of results to be
expected for future periods.
<PAGE> MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
The following table highlights the results of operations of
Ameristar's operating subsidiaries for its principal properties:
<TABLE>
Three months ended Six months ended
June 30 June 30 June 30 June 30
1997 1996 1997 1996
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net revenues:
Jackpot Properties $14,174 $13,614 $26,552 $25,409
Ameristar Vicksburg 16,751 16,895 32,299 33,183
Ameristar Council Bluffs 21,045 17,325 42,732 32,124
Corporate and other - (24) - -
------- ------- -------- -------
Total Net Revenues $51,970 $47,810 $101,583 $90,716
======= ======= ======== =======
Operating income (1)
Jackpot Properties $ 3,080 $ 2,744 $ 5,301 $ 4,515
Ameristar Vicksburg 4,038 3,800 6,954 6,999
Ameristar Council Bluffs 3,311 2,346 7,411 (119)
Corporate and other (2,328) (1,526) (4,571) (3,286)
------- ------- ------ -------
Total Operating Income $ 8,101 $ 7,364 $15,095 $ 8,109
======= ======= ======= =======
EBITDA (2)
Jackpot Properties $ 3,820 $ 3,352 $ 6,661 $ 5,872
Ameristar Vicksburg 5,558 5,525 10,056 10,445
Ameristar Council Bluffs 5,017 3,826 10,734 8,008
Corporate and other (2,143) (1,517) (4,284) (3,269)
------- ------- ------- -------
Total EBITDA $12,252 $11,186 $23,167 $21,056
======= ======= ======= =======
(1) Income from operations includes the amortization or expensing
of preopening costs of $291,000 and $6.1 million for the three and
six months ended June 30, 1996 related to Ameristar Council Bluffs.
(2) EBITDA consists of income from operations plus depreciation,
amortization and preopening costs. EBITDA should not be construed
as an alternative to income from operations (as determined in
accordance with generally accepted accounting principles) as an
indicator of the Company's operating performance, or as an
alternative to cash flow from operating activities (as determined
in accordance with generally accepted accounting principles) as a
measure of liquidity. In addition, it should be noted that not all
gaming companies that report EBITDA information may calculate
EBITDA in the same manner as the Company.
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Results of Operations
Summary of Operating Results
Ameristar showed continuing overall growth in revenues and
income from operations for the three and six months ended June 30,
1997 compared to the three and six months ended June 30, 1996. A
full three-month period of operations for the Council Bluffs
property with its completed land-based amenities and a full six
months of casino operations in 1997 were the main factors for these
increases. Consolidated net revenues for the three and six months
ended June 30, 1997 showed 8.7% and 12.0% increases, respectively,
to $52.0 million and $101.6 million, respectively, compared to
$47.8 million and $90.7 million respectively for the three and six
months ended June 30, 1996.
Income from operations for the three and six months ended June
30, 1997 was $8.1 million and $15.1 million, respectively, compared
to $7.7 million and $14.3 million before preopening costs for the
same periods in 1996. Total operating expenses before preopening
costs as a percentage of net revenues were relatively stable on a
year-to-year basis, at 84.4% and 84.0% for the three-month periods
ended June 30, 1997 and 1996, respectively, and 85.1% and 84.3% for
the six months ended June 30, 1997 and 1996, respectively.
Net income for the three and six months ended June 30, 1997
was $3.1 million and $5.6 million, respectively, compared to net
income of $3.9 million and $7.1 million, respectively, before
preopening costs in the three and six months ended June 30, 1996.
After taking into account the pretax write-off of $291,000 and $6.1
million, respectively, in preopening costs relating to Ameristar
Council Bluffs in the three- and six-month periods ended June 30,
1996, the Company had net income of $3.7 million and $3.1 million,
respectively, for the three- and six-month periods ended June 30,
1996. The lower net income before preopening costs for the three
and six months ended June 30, 1997 compared to the same periods in
1996 primarily reflects increased interest expense, due to higher
debt levels and the cessation of interest capitalization on
Ameristar Council Bluffs and increased depreciation and
amortization.
Earnings per share for the three and six months ended June 30,
1997 were $0.15 and $0.27, respectively, compared to earnings per
share before preopening costs of $0.19 and $0.35, respectively, for
the three and six months ended June 30, 1996. After the write-off
of preopening costs for Ameristar Council Bluffs, the earnings per
share for the three and six months ended June 30, 1996 were $0.18
and $0.15, respectively.
Revenues
A full six months of operations of the casino and a full three
months of operations with the completed land-based facilities at
Ameristar Council Bluffs in 1997 compared to only casino operations
from mid-January to mid-June 1996 and only casino and two
restaurant operations during late June 1996 propelled Ameristar
Council Bluffs' net revenues to $21.0 million and $42.7 million,
respectively, for the three- and six-month periods ended June 30,
1997, compared to $17.3 million and $32.1 million for the same
periods in 1996, increases of $3.7 million or 21.5% and $10.6
million or 33.0%, respectively. Operating income at Ameristar
Council Bluffs increased from $2.6 million and $6.0 million (before
preopening costs of $291,000 and $6.1 million), respectively, for
the three- and six-month periods ended June 30, 1996 to $3.3
million and $7.4 million for the same periods in 1997, despite an
aggregate increase of $1.3 million and $3.0 million, respectively,
in depreciation and amortization and selling, general and
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
administrative expenses relating primarily to the new land-based
facilities for the three- and six- month periods ended June 30,
1997.
The Jackpot Properties improved for the three- and six-month
periods ended June 30, 1997 compared to the same periods in 1996,
posting 12.2% and 17.4% increases, respectively, in operating
income (from $2.7 million to $3.1 million and $4.5 million to $5.3
million, respectively) on 4.1% and 4.5% increases, respectively, in
revenues (from $13.6 million to 14.2 million and $25.4 million to
$26.6 million, respectively). Management believes that these
increases are the result of the replacement of older slot machines
with 587 state-of-the-art models, as well as the installation of an
enhanced slot player tracking system and an aggressive marketing
strategy. These actions were taken to offset decreases in revenues
experienced in 1996, which management attributed to increased
competition in Jackpot and from Native American and other casinos
in the outer market, including Washington, Oregon and Alberta,
Canada, and a decline in 1996 in the rates of population and
economic growth in southern Idaho.
While Ameristar Vicksburg continued to be the gaming revenue
market leader in Warren County, Mississippi, net revenues decreased
approximately 0.9% and 2.7%, respectively, from $16.9 million and
$33.2 million for the three months and six months ended June 30,
1996 to $16.8 million and 32.3 million for the three and six months
ended June 30, 1997. Management believes that the decrease in 1997
reflects shrinkage in the territorial size of the Vicksburg market
due to competition from casinos in Shreveport and Bossier City,
Louisiana and Philadelphia, Mississippi. Operating income for the
three months ended June 30, 1997 increased by 6.3 % from $3.8
million for the three months ended June 30, 1996 to $4.0 million
for the same period in 1997 while operating income for the six
months ended June 30, 1997 remained stable at $7.0 million for both
years. In an effort to expand the market territory of Ameristar
Vicksburg and encourage longer visits, the Company is constructing
a 150-room hotel across from the main entrance to the casino, which
is expected to open in the second quarter of 1998.
On a consolidated basis for the three and six months ended
June 30, 1997 compared to the same periods in 1996, casino revenues
increased $2.2 million or 5.4% and $7.0 million or 8.9%,
respectively, food and beverage revenues increased $2.0 million or
34.5%, and $4.4 million or 43.0%, respectively, and rooms revenues
increased $0.5 million or 26.0% and $1.2 million or 33.3%,
respectively. The increases in consolidated total net revenues are
attributable to the completed Ameristar Council Bluffs property and
the improvements at the Jackpot Properties partially offset by the
net revenues decrease at Ameristar Vicksburg.
Expenses
For the three- and six-month periods ended June 30, 1997 as
compared to the 1996 periods, casino expenses decreased $0.5
million or 2.3% and increased $2.0 million or 5.4%, respectively,
food and beverage expenses increased $1.9 million or 63.7% and $3.5
million or 57.9%, respectively, and rooms expenses increased $0.2
million or 36.1% and $0.4 million or 35.9%, respectively. The
increases in each of these expenses is primarily attributable to
the expanded operations at Ameristar Council Bluffs.
Selling, general and administrative expenses increased $1.4
million or 17.1 % and $2.8 million or 17.2 %, respectively, for the
three and six months ended June 30, 1997 as compared to the same
periods of the prior year, due primarily to the expanded operations
at Ameristar Council Bluffs and other costs associated with the
Company's continued growth.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Business development costs decreased $0.1 million and $0.3
million for the three- and six- month periods ended June 30, 1997
compared to the same period of the prior year, respectively, as the
Company focused its efforts on current projects, including the
development of The Reserve and the hotel at Ameristar Vicksburg and
the casino enhancements at the Jackpot Properties. The Company
continues to explore gaming development opportunities in other
jurisdictions and potential acquisitions in the gaming industry.
However, pending the availability of adequate funds for the
construction of Phases I and II of The Reserve, the Company does
not anticipate undertaking any additional expansion opportunities
that would require a material amount of capital expenditures by the
Company.
Depreciation expenses for the three and six months ended June
30, 1997 increased due to the inclusion of the completed Ameristar
Council Bluffs facilities in the Company's depreciable asset base,
offset by modest decreases in depreciation expenses at the Jackpot
Properties and Ameristar Vicksburg.
Interest expense was $2.7 million and $5.9 million,
respectively, net of capitalized interest of $0.9 million and $1.8
million, respectively, for the three and six months ended June 30,
1997, an increase of $1.1 million or 70.3% and $2.4 million or
67.5%, respectively, over the same periods in 1996. The increased
interest expense relates primarily to increased debt incurred to
finance construction of Ameristar Council Bluffs.
The Company's effective federal income tax rate for the three
and six months ended June 30, 1997 was 37%, versus the federal
statutory rate of 35%. The excess of the effective rate over the
statutory rate is due to certain expenses deducted in the current
period for financial reporting purposes which are not currently
deductible for tax purposes.
Liquidity and Capital Resources
The Company's cash flow from operations was $13.0 million and
$18.6 million, respectively, for the six months ended June 30, 1997
and 1996. The Company had unrestricted cash of approximately $12.6
million as of June 30, 1997. The Company historically has funded
its daily operations through net cash provided by operating
activities and its significant capital expenditures primarily
through bank debt and other debt financing. The Company's current
assets increased by approximately $1.6 million from December 31,
1996 to June 30, 1997, primarily resulting from an increase in cash
on hand. This increase in cash resulted from a net increase in
borrowings of $4.2 million during the six months and the $13.0
million of cash flow from operations, partially offset by capital
expenditures related to The Reserve (including a $4.0 million
payment to the former Gem stockholders), Ameristar Council Bluffs
and other capital improvement projects.
Until July 15, 1997, Ameristar, as borrower, and its principal
subsidiaries, as guarantors, maintained a Revolving Credit Facility
with Wells Fargo Bank, NA ("WFB") and a syndicate of banks (the
"1995 Revolving Credit Facility"). The maximum principal available
under the 1995 Revolving Credit Facility at June 30, 1997 was $94.5
million. Borrowings under the 1995 Revolving Credit Facility bear
interest at a rate based either on LIBOR or WFB's prime rate, at
the election of the Company, and the ratio of the Company's
consolidated total debt to consolidated cash flow, as measured by
an EBITDA formula. As of June 30, 1997, the Company had one LIBOR
draw outstanding for the entire $94.5 million, with a current
interest rate of approximately 8.72% per annum.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
On March 26, 1997, Ameristar obtained a $20.0 million short-
term unsecured loan from WFB. A portion of the proceeds from this
loan was used to repay other short-term loans in the principal
amount of $12.0 million ($10.0 million on March 28, 1997 and $2.0
million on April 10, 1997). The WFB short-term loan bears interest
based either on LIBOR or the bank's prime rate, at the election of
Ameristar, plus an applicable margin. At June 30, 1997, the
applicable interest rate was 8.7% per annum.
Upon the effectiveness of the settlement agreement with the
former Gem stockholders on June 20, 1997 and as part of the
consideration for the acquisition of The Reserve, Ameristar issued
unsecured subordinated promissory notes to the former Gem
stockholders in an aggregate principal amount of $28.7 million (the
"Gem Notes"). The per annum interest rate on the Gem Notes is 8%,
subject to increases up to a maximum of 18% per annum, following
one or more failures to make payments under the Gem Notes by
scheduled dates. Any interest not paid when scheduled will
thereafter accrue interest as principal. The Gem Notes require
annual principal reduction payments ranging from $2.0 million to
$3.0 million commencing in November 1998. The Gem Notes mature on
December 31, 2004 and may be prepaid in whole or in part without
penalty at any time. The Gem Notes are not subject to acceleration
or other collection efforts upon failure to make a scheduled
payment prior to maturity, and the only remedy for such a failure
to make a scheduled payment is an increase in interest rate as
described above. The Gem Notes are subordinate to the Revolving
Credit Facility (as defined below), the Senior Subordinated Notes
(as defined below) and other long-term indebtedness of Ameristar
specified by Ameristar up to a maximum of $250 million.
At June 30, 1997, the Company had other long-term indebtedness
in an aggregate principal amount of $20.2 million.
In July 1997, the Company refinanced its long-term debt
through a new $125 million revolving bank credit facility (the
"Revolving Credit Facility") and the sale of $100 million aggregate
principal amount of 10-1/2% Senior Subordinated Notes due 2004
Series A (the "Senior Subordinated Notes").
The Revolving Credit Facility was entered into on July 8,
1997, pursuant to a Credit Agreement among Ameristar and CPI, ACVI,
ACCBI and ACLVI (the "Borrowers"), a syndicate of bank lenders and
WFB as Agent Bank, Arranger and Swingline Lender. The Borrowers
made an initial draw of $114.5 million under the Revolving Credit
Facility on July 15, 1997, which was used to repay $94.5 million in
borrowings outstanding under the 1995 Revolving Credit Facility and
the $20.0 million short-term loan from WFB.
The Senior Subordinated Notes were issued by Ameristar at par
in a private placement to certain initial purchasers for resale to
qualified institutional buyers pursuant to the exemption provided
by Rule 144A of the Securities and Exchange Commission. The net
proceeds from the sale of the Senior Subordinated Notes were used
to repay $82.4 million in borrowings and interest under the
Revolving Credit Facility, $13.1 million in other indebtedness and
$800,000 in loan fees for the Revolving Credit Facility. Following
the application of the net proceeds from the sale of the Senior
Subordinated Notes, the outstanding principal balance of the
Revolving Credit Facility was $32.6 million.
Until Phase I of The Reserve is completed, additional draws
under the Revolving Credit Facility may be used only for the
construction of The Reserve, the acquisition of additional land for
the development of The Reserve currently under option and the
replenishment of working capital used to fund the $4.0 million
payment paid in June 1997 to the former Gem stockholders related to
the acquisition of
The Reserve and certain expenses incurred in connection with the
Revolving Credit Facility. Draws for
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
construction of The Reserve will be subject to the satisfaction of
various conditions typically applicable to construction loans.
Following completion of Phase I of The Reserve, Revolving Credit
Facility proceeds may be used only for working capital purposes of
the Borrowers and funding ongoing capital expenditures for existing
facilities, including construction of Phase II of The Reserve and
the acquisition of additional land under option adjacent to The
Reserve site.
Borrowings under the Revolving Credit Facility are designated
by the Borrowers on a quarterly basis as either base rate or London
Interbank Offered Rate ("LIBOR") borrowings. The interest rate
generally will be equal to WFB's per annum prime rate in effect
from time to time or the per annum LIBOR rate, plus in each case an
applicable margin determined by reference to the Borrowers' rolling
four-quarter ratio of total funded debt to EBITDA (as defined
below). The range of the base rate margin is from 0.25 percentage
points to 2.25 percentage points, and the range of the LIBOR margin
is from 1.50 percentage points to 3.50 percentage points.
The Revolving Credit Facility will mature on June 30, 2003.
Prior to maturity, the maximum principal available under the
Revolving Credit Facility will reduce semiannually (commencing on
July 1, 1999) by an aggregate of $50.0 million in increasing
increments ranging from $2.5 million to $10.0 million. The
Revolving Credit Facility includes covenants and conditions that
limit the Borrowers' outstanding borrowings under the Revolving
Credit Facility to not more than the lesser of the Borrowers'
rolling four-quarter EBITDA multiplied by 3.25 and the Borrowers'
total funded debt to not more than the Borrowers' rolling four-
quarter EBITDA multiplied initially by 5.0, which multiplier will
decline to 4.5 commencing March 31, 1999 and to 4.0 commencing
March 31, 2000. For purposes of the Revolving Credit Facility, the
Borrowers' EBITDA is generally defined as net income before
interest expense, income taxes, depreciation and amortization,
preopening costs and certain extraordinary and non-cash items.
The Revolving Credit Facility also includes covenants
requiring the Borrowers to maintain rolling four-quarter gross
fixed charge coverage and adjusted fixed charge coverage ratios (as
defined) of 1.5 to 1.0 and 1.1 to 1.0, respectively. For purposes
of these covenants, principal payments on the Gem Notes will be
included only to the extent actually paid in the applicable period.
The Revolving Credit Facility prohibits Ameristar from making any
dividend or other distribution on its capital stock during any
period in which the Borrowers' rolling four-quarter ratio of total
funded debt to EBITDA is greater than 2.0 to 1.0.
The Revolving Credit Facility is secured by liens on
substantially all of the real and personal property of the
Borrowers. The Revolving Credit Facility prohibits any future
secondary liens on these properties without the prior written
approval of the lenders. Certain changes in control of Ameristar
may constitute a default under the Revolving Credit Facility. The
Revolving Credit Facility also requires the Borrowers to expend 2%
of their consolidated net revenues on capital maintenance annually.
The Revolving Credit Facility binds the Borrowers to a number of
additional affirmative and negative covenants, including promises
to maintain certain financial ratios and tests within defined
parameters.
The Borrowers paid various fees and other loan costs upon the
closing of the Revolving Credit Facility that will be amortized
over the term of the Revolving Credit Facility. In addition,
commencing on the first anniversary of the closing of the Revolving
Credit Facility, the Borrowers will be required to pay quarterly
commitment fees at an annual rate of 0.50% or 0.375% of the unused
portion of the Revolving Credit Facility.
The 1995 Revolving Credit Facility was terminated early in
connection with entering into the Revolving Credit Facility. As a
result, the Company will incur a $1.0 million pre-tax non-cash
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
extraordinary charge ($637,000 or $0.03 per share on an after-tax
basis) during the 1997 third quarter to reflect the accelerated
write-off of unamortized deferred financing costs.
The Senior Subordinated Notes. The Senior Subordinated Notes
were issued under an Indenture dated July 15, 1997 (the
"Indenture"). In addition to Ameristar and the Trustee, certain of
Ameristar's subsidiaries (the "Guarantors") are parties to the
Indenture for the purpose of guaranteeing (the "Guarantees")
payments on the Senior Subordinated Notes. The Guarantors include
ACVI, ACCBI, ACLVI, A.C. Food Services, Inc. (a food purchasing
concern) and AC Hotel Corp. (which will own and develop a 150-room
hotel at Ameristar Vicksburg). CPI is currently a Restricted
Subsidiary (as defined) and will become a Guarantor pursuant to a
Supplemental Indenture subject to the prior approval of the Nevada
Gaming Commission, for which an application has been submitted.
The Senior Subordinated Notes will mature on August 1, 2004.
Interest is payable semiannually on February 1 and August 1,
commencing February 1, 1998, at the per annum rate of 10.5%. The
Senior Subordinated Notes and the Guarantees are not secured and
are subordinate to all existing and future Senior Indebtedness (as
defined), which includes the Revolving Credit Facility.
Ameristar may redeem the Senior Subordinated Notes, in whole
or in part, at any time on or after August 1, 2001, at redemption
prices that decline over time from 105.25% to 101.75%. Senior
Subordinated Notes may also be redeemed if the holder or beneficial
owner thereof is required to be licensed, qualified or found
suitable under applicable Gaming Laws (as defined) and is not so
licensed, qualified or found suitable. Ameristar may also be
required to redeem a portion of the Senior Subordinated Notes in
the event of certain asset sales or the loss of a material gaming
license, and each holder of the Senior Subordinated Notes will have
the right to require Ameristar to redeem such holder's Senior
Subordinated Notes upon a Change of Control (as defined) of
Ameristar. The Senior Subordinated Notes are not subject to any
mandatory redemption or sinking fund obligations.
The Indenture includes covenants that restrict the ability of
Ameristar and the Restricted Subsidiaries from incurring future
Indebtedness (as defined); provided, however, that Ameristar or any
Guarantor may incur Indebtedness if the incurrence thereof would
not result in the Consolidated Coverage Ratio (as defined) being
greater than 2.0 to 1.0 on a rolling four-quarter basis. The
Indenture also permits Ameristar or a Restricted Subsidiary to
incur Indebtedness without regard to the Consolidated Coverage
Ratio test in certain circumstances, including borrowings of up to
$140 million under the Revolving Credit Facility, as amended or
replaced from time to time, up to $15.0 million in recourse FF&E
financings, up to $7.5 million in borrowings for the construction
of the hotel at Ameristar Vicksburg and up to $5.0 million of other
Indebtedness.
The Indenture also includes certain covenants that, among
other things, limit the ability of Ameristar and its Restricted
Subsidiaries to pay dividends or other distributions, make
investments, repurchase subordinated obligations or capital stock,
create certain liens (except those securing Senior Indebtedness),
enter into certain transactions with affiliates, sell assets, issue
or sell subsidiary stock, create or permit restrictions on
distributions from subsidiaries or enter into certain mergers and
consolidations.
Pursuant to a Registration Rights Agreement among Ameristar, its
subsidiaries and the initial purchasers of the Senior Subordinated
Notes, Ameristar and its subsidiaries have agreed to file by
September 15, 1997, a registration statement under the Securities
Act of 1933 with respect to an offer to exchange the Senior
Subordinated Notes for debt securities with terms identical to the
Senior Subordinated Notes (except for provisions relating to
transfer restrictions, registration rights and liquidated damages) and
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
use their best efforts to cause the exchange offer thereunder to be
consummated by January 12, 1998. In certain circumstances,
Ameristar and its subsidiaries have agreed to file a shelf
registration statement for resales of the Senior Subordinated Notes
by the holders thereof. If the registration obligations are not
satisfied, Ameristar will be required to pay liquidated damages to
the holders of the Senior Subordinated Notes under certain
circumstances.
See "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital
Resources" in the Company's Annual Report on Form 10-K, as amended,
for the year ended December 31, 1996 and the Current Report on From
8-K filed on July 30, 1997 for additional information relating to
Company borrowings.
The Company has begun construction of a 150-room hotel at
Ameristar Vicksburg, which is expected to cost approximately $9.8
million, including capitalized construction period interest and
preopening costs. The Company closed a nonrecourse loan for $7.5
million with a private lender for the purpose of funding a portion
of the construction, with the balance expected to be provided out
of operating cash flow. The loan is expected to mature no earlier
than June 1, 1998 and to require monthly or quarterly interest
payments. However, no assurances can be given that this funding
will be completed in a timely manner, if at all.
Capital expenditures for the six months ended June 30, 1997
were approximately $16.4 million, including approximately $7.4
million relating to development of The Reserve, $0.8 million
relating to the development of the Ameristar Vicksburg hotel,
approximately $2.7 million for casino equipment at the Jackpot
Properties, and approximately $3.8 million relating to Ameristar
Council Bluffs in addition to other normal capital improvement
projects. The Company funded these capital expenditures primarily
from net cash provided by operating activities and borrowings.
The Company anticipates making capital expenditures of
approximately $63.1 million in the last half of 1997, including
approximately $54.6 million for the development of The Reserve
(including capitalized construction period interest and preopening
costs), approximately $5.2 million for the development and
construction of a 150-room hotel at Ameristar Vicksburg (including
capitalized construction period interest), and approximately $3.3
million for capital improvements at existing facilities and certain
other purposes. ACCBI and the general contractor for Ameristar
Council Bluffs are currently arbitrating a dispute, the outcome of
which may affect the capital expenditure requirement for this
project. Among other capital expenditures anticipated for 1998,
the Company intends to make capital expenditures of approximately
$16.0 million in connection with the completion and opening of
Phase I of The Reserve and approximately $3.8 million in connection
with the completion of the Ameristar Vicksburg hotel.
Management believes that the above-described minimum capital
expenditure requirements will be funded out of draws under the
Revolving Credit Facility, the proceeds of the $7.5 million loan
for the development of the Ameristar Vicksburg hotel, cash on hand,
operating cash flow and purchase money and lease financing related
to the acquisition of furniture, fixtures and equipment (including
gaming equipment). Although no assurance can be given, the Company
anticipates that it will have sufficient funds to satisfy these
capital expenditure plans. However, an adverse change in the
Company's operations or operating cash flow may affect the
Company's ability to fund these capital expenditures and/or
maintain compliance with the terms of the Revolving Credit
Facility, the Indenture or other debt instruments.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Management anticipates funding the capital expenditures for
the construction of Phase II of The Reserve out of additional draws
under the Revolving Credit Facility and operating cash flow.
Because the amount of borrowing permitted to be drawn under the
Revolving Credit Facility will be determined in part by the
Company's rolling four-quarter EBITDA (as defined), the Company's
planned borrowing under the Revolving Credit Facility to fund a
portion of the construction costs for Phase II of The Reserve will
be dependent upon increases in the Company's aggregate operating
cash flow, which increases will be primarily dependent upon the
operating performance of The Reserve. Management anticipates that
cash flow from at least the first one or two full quarter of
operations at The Reserve and operations at the Company's other
properties will be necessary to provide the borrowing capability
under the Revolving Credit Facility and other capital resources for
the commencement of construction of Phase II of The Reserve.
However, no assurances can be given with respect to the amount of
operating cash flow of the Company for any future period.
Factors Affecting Forward-Looking Information
This Report contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended. Among others, such forward-looking statements include
statements with respect to (i) the availability of operating cash
flow in amounts and at the times anticipated by management, (ii)
the adequacy of budgeted amounts for capital expenditure projects
and the adequacy of the Company's liquidity and capital resources
generally, (iii) the anticipated time of completion of capital
projects and (iv) the ability of the Company to continue to satisfy
covenant and other requirements applicable to the Revolving Credit
Facility, the Senior Subordinated Notes and other debt obligations.
These forward-looking statements involve important risks and
uncertainties, many of which will be beyond the control of the
Company, and which could significantly affect anticipated future
results, both short-term and long-term. As a result, actual
results may differ, in some cases materially, from those
anticipated or contemplated by forward-looking statements in this
Report. In addition to the cautionary statements included in this
section and elsewhere throughout this Report, attention is directed
to the cautionary statements included in the Company's other
publicly available reports filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, including
without limitation the cautionary statements set forth or
referenced in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996, as amended (the "1996 10-K"),
under the caption "Part II. Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations - Factors
Affecting Forward-Looking Statements."
Item 3.Quantitative and Qualitative Disclosures About
Market Risk
Not applicable.
<PAGE>PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
AMERISTAR CASINOS, INC. AND AMERISTAR CASINO LAS VEGAS, INC.
V. STEVEN W. REBEIL AND DOMINIC J. MAGLIARDITI. The arbitration
proceeding commenced on March 26, 1997, by the Company against
Messrs. Rebeil and Magliarditi, the Gem Stockholders, has been
resolved by a settlement agreement, which became effective on June
20, 1997, following its approval by the Nevada Gaming Commission.
Additional information concerning this arbitration proceeding is
set forth in the 1996 10-K under "Part I. Item 1. Business - Terms
of the Merger Agreement; Dispute with Gem Stockholders and the Form
10-Q for the quarter ended March 31, 1997 under "Part II. Other
Information Item 1. Legal Proceedings."
ITEM 4. Submission of Matters to a Vote of Security Holders
a. The Company's Annual Meeting of Stockholders was
held on June 6, 1997.
b. and c. The following table shows the tabulation of votes
for all matters put to vote at the Company's Annual
Meeting of Stockholders.
Abstentions/
Against/ Broker
Matters Put to Vote For Withheld Non-votes
Election of Class B Directors
Paul I. Corddry 20,134,640 20,090
Thomas M. Steinbauer 20,139,430 15,300
Proposal to approve
amendments to the
Company's management
option plan 19,886,454 180,832 87,444
The terms of the following directors have continued after the
meeting:
Class A Directors (term expiring in 1999): John R. Spina and
Larry A. Hodges
Class C Director (term expiring in 1998): Craig H. Neilsen
<PAGE>ITEM 6. Exhibits and Reports on Form 8-K
A. Exhibits filed as a part of this report
4.1 Credit Agreement, dated as of July 8, 1997,
among Ameristar Casinos, Inc., Cactus
Pete's Inc., Ameristar Casino Vicksburg,
Inc., Ameristar Casino Council Bluffs, Inc.
and Ameristar Casino Las Vegas, Inc., as
Borrowers, the Lenders named therein, and
Wells Fargo Bank, National Association as
Arranger, Agent Bank and Swingline Lender.
4.2 Indenture, dated as of July 15, 1997, among
Ameristar Casinos, Inc., Ameristar Casino
Las Vegas, Inc., Ameristar Casino
Vicksburg, Inc., A.C. Food Services, Inc.,
AC Hotel Corp., Ameristar Casino Council
Bluffs, Inc. and First Trust National
Association.
4.3 Registration Rights Agreement, dated as of
July 15, 1997, among Ameristar Casinos,
Inc., Ameristar Casino Council Bluffs,
Inc., A.C. Food Services, Inc., AC Hotel
Corp., Ameristar Casino Las Vegas, Inc.,
Ameristar Casino Vicksburg, Inc., Cactus
Pete's, Inc., Bear, Stearns & Co. Inc., BT
Securities Corporation and First Chicago
Capital Markets, Inc.
27 Financial Data Schedule
B. Reports on Form 8-K
Form 8-K filed on June 27, 1997, reporting under Item 5
(i) the effectiveness of the Gem Settlement Agreement,
(ii) status of the Reserve construction and (iii) the
construction status of the Vicksburg hotel.
<PAGE>SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
AMERISTAR CASINOS, INC.
Registrant
Date: August 29, 1997 /s/ Thomas Steinbauer
Thomas Steinbauer
Senior Vice President of Finance
and Treasurer
(Principal Financial Officer)
<PAGE>
4.1 Credit Agreement, dated as of Incorporated by
July 8, 1997, among Ameristar reference to
Casinos, Inc., Cactus Pete's Exhibits 4.1 and 99.1
Inc., Ameristar Casino to the registrant's
Vicksburg, Inc., Ameristar Current Report on
Casino Council Bluffs, Inc. and Form 8-K dated July 15,
Ameristar Casino Las Vegas, 1997 filed on July 30,
Inc., as Borrowers, the Lenders 1997.
named therein, and Wells Fargo
Bank, National Association as
Arranger, Agent Bank and
Swingline Lender. See also
Exhibit 99.1
4.2 Indenture, dated as of July 15, Incorporated by
1997, among Ameristar Casinos, reference to
Inc., Ameristar Casino Las Exhibit 4.2 to the
Vegas, Inc., Ameristar Casino registrant's Current
Vicksburg, Inc., A.C. Food Report on Form 8-K
Services, Inc., AC Hotel Corp., dated July 15, 1997
Ameristar Casino Council filed on July 30, 1997.
Bluffs, Inc. and First Trust
National Association.
4.3 Registration Rights Agreement, Incorporated by
dated as of July 15, 1997, reference to
among Ameristar Casinos, Inc., Exhibit 4.3 to the
Ameristar Casino Council registrant's Current
Bluffs, Inc., A.C. Food Report on Form 8-K
Services, Inc., AC Hotel Corp., dated July 15, 1997
Ameristar Casino Las Vegas, filed on July 30, 1997.
Inc., Ameristar Casino
Vicksburg, Inc., Cactus Pete's,
Inc., Bear, Stearns & Co. Inc.,
BT Securities Corporation and
First Chicago Capital Markets,
Inc.
27 Financial Data Schedule Filed electronically
herewith.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS DATA SHOULD BE REVIEWED IN CONJUNCTION WITH THE FINANCIAL STATEMENTS
INCLUDED IN THIS REGISTRATION STATEMENT.
</LEGEND>
<CIK> 0000912145
<NAME> AMERISTAR CASINOS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1996
<CASH> 12622
<SECURITIES> 0
<RECEIVABLES> 1048
<ALLOWANCES> 0
<INVENTORY> 2358
<CURRENT-ASSETS> 21713
<PP&E> 294427
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0
<COMMON> 204
<OTHER-SE> 76302
<TOTAL-LIABILITY-AND-EQUITY> 275015
<SALES> 101583
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