Net revenue, meanwhile, was up only 3.2% to $246.6 million, in large part due to the performance of its recently renovated and rebranded Ameristar Black Hawk (formerly Mountain High Casino) property in Colorado. EBITDA rose 0.7% to $63.5 million, including the $2.1 million of stock option compensation expense.
In a separate announcement Wednesday, Ameristar announced a plan to repurchase up to 2.8 million shares of the company's common stock--5% of its outstanding common stock--over the next three years. "We believe that our stock at its current price level represents an attractive investment for the Company," said chairman/CEO Craig Neilsen.
The company's financial results were announced after the close of trading Wednesday, a day its share price rose $0.41 cents to close at $18.97. On Thursday, it fell $0.76 (4%) to close at $18.21. The company's 52-week share price range is $16.73-$30.31.
Net revenues at Ameristar's new rebranded and renovated property in Blackhawk, CO, jumped 53.4% to $21.3 million, increasing its market share by 4.7 percentage points over the prior-year second quarter to 15.4%. The property features an expanded parking garage, refurbished and rebranded dining venues, additional gaming space, 1,600 slot machines and an upscale club for its top spenders. Additionally, the company commenced construction on a complementary 33-story, 536-room "Four Diamond-quality" hotel.Ameristar Vicksburg also posted gains. Net revenue climbed 16.5%. The Mississippi property maintains a 46.5% share of the four-competitor market.
On the downside, the company says it continues to face increased competition in Iowa from a new land-based casino (Harrah's newest Horseshoe Casino (formerly Bluffs Run), which opened in March, and increased competition in Missouri due to aggressive promotional spending by competitors (Harrah's). The market share for Ameristar Council Bluffs declined 6.1 percentage points to 37.3% and Ameristar St. Charles experienced a decrease in market share of 1.4 percentage points to 30.5%.
At St. Charles, the company is constructing a 400-room all-suite hotel, an indoor/outdoor swimming pool, a 7,000 sf full-service spa, 20,000 sf of new meeting facilities and an additional 2,000-space parking garage. The total cost of the projects is approximately $240 million. The meeting facilities will be complete this year and the rest will be completed throughout 2007.
Based on preliminary results of operations in July 2006 and its outlook for the remainder of the quarter, Ameristar is currently estimating third quarter operating income of $36 million to $38 million, EBITDA of $61 million to $63 million (given anticipated depreciation expense of $25 million), interest expense of $12 million and diluted earnings per share of $0.27 to $0.29.
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