PHOENIX, July 19 /PRNewswire-FirstCall/ -- Aztar Corporation
(NYSE:AZR) today reported financial results for its 2006 second
quarter, including property EBITDA from continuing operations of
$60.2 million, compared with $57.9 million in the year-earlier
quarter. Second-quarter 2006 revenue was $221.9 million, compared
with $221.4 million in the comparable 2005 quarter. The company
reported a net loss of $66.1 million for the 2006 quarter, largely
attributable to payment of a fee and associated expenses totaling
$78.0 million related to termination of its merger agreement with
Pinnacle Entertainment, Inc.; net income was $15.5 million in the
2005 second quarter. Reported diluted net loss per share was $1.84
in the 2006 second quarter, compared with diluted net income per
share of 41 cents in the 2005 quarter. Adjusted diluted net income
per share was 35 cents in the 2006 second quarter, which is after
stock option compensation expense equivalent to two cents per
share, compared with 38 cents in the 2005 second quarter.
Merger-Related Expenses On May 19, 2006, the company announced it
had signed a merger agreement with Wimar Tahoe Corporation d/b/a
Columbia Entertainment, the gaming affiliate of Columbia Sussex
Corporation. Prior to signing that merger agreement, the company
terminated its earlier merger agreement with Pinnacle and paid to
Pinnacle a termination fee of $52.16 million and termination
expenses of $25.84 million. The payment is not deductible for tax
purposes. The payment to Pinnacle and certain other costs,
consisting mainly of professional fees, are reported as
merger-related expenses. Property EBITDA Property EBITDA in the
2006 second quarter includes construction accident related expenses
of $2.0 million and insurance recoveries of $3.6 million, compared
with expenses of $0.9 million and recoveries of $0.3 million in the
2005 second quarter. Other income (expense) of ($0.4) million
consists of insurance recoveries for the rebuilding of the damaged
portion of the Tropicana Atlantic City expansion after the
construction accident that occurred on October 30, 2003, net of
direct costs to obtain the recoveries, compared to $2.9 million in
the comparable 2005 quarter. Discontinued Operations Results for
Casino Aztar in Caruthersville, Missouri, are reported as
discontinued operations, net of income taxes, reflecting our
commitment to sell or close that property as part of our merger
agreement with Columbia Entertainment. Capital Expenditures In the
second quarter of 2006, purchases of property and equipment totaled
$18 million. Approximately $12 million of the total was spent on
routine capital expenditures, and $6 million went for development.
Year-to-Date Results Consolidated revenue was $443.2 million in the
first half of 2006, compared with $437.3 million in the first half
of 2005. Property EBITDA from continuing operations was $120.8
million in the 2006 period, compared with $109.8 million a year
earlier. First-half 2006 net loss was $62.9 million, equivalent to
$1.77 per diluted share, compared with net income of $25.4 million,
equivalent to 68 cents per diluted share, in the first half of
2005. Adjusted diluted net income per share was 72 cents in the
2006 first half, which is after stock option compensation expense
equivalent to four cents per share, compared with 67 cents in the
2005 first half. Fiscal Year Change The company changed its fiscal
year to the calendar year, effective December 31, 2005. The company
previously used a 52/53 week fiscal year ending on the Thursday
nearest December 31. The information in this release for the 2006
first half reflects the company's results of operations for a
181-day period beginning January 1, 2006 and ending June 30, 2006.
The 2005 first half contained 182 days, beginning on December 31,
2004, and ending on June 30, 2005. Status of Merger with Columbia
Entertainment Our merger with Columbia Entertainment is subject to
approval by Aztar shareholders and the satisfaction of customary
closing conditions, including the receipt of necessary gaming and
other regulatory approvals. On June 21, 2006, Aztar and Columbia
Entertainment filed the required notifications and report forms
under the Hart-Scott-Rodino Act. On July 14, 2006, the company
filed with the SEC a preliminary proxy statement in connection with
the approval of the transaction by Aztar shareholders. Initial
filings regarding approval of the transaction have been made by
Columbia Entertainment in each of New Jersey, Nevada and Indiana.
Columbia Entertainment is also in the process of preparing filings
relating to their financing of the transaction in each of Louisiana
and Mississippi. The merger is presently expected to close in the
fourth quarter of 2006. In our merger agreement with Columbia
Entertainment, we agreed to use commercially reasonable efforts to
sell our Missouri property, Casino Aztar Caruthersville. To assist
us in those efforts, we have retained an investment banking firm.
We are currently in discussions with, and have received indications
of interest from, several potential buyers. Approval by Missouri
gaming authorities will be required for any transaction involving
the sale of our Missouri property. Conference Call Our
second-quarter 2006 earnings conference call is scheduled to be
broadcast live on the Internet beginning at 4:30 p.m. Eastern Time
on Wednesday, July 19, 2006. Individuals may access the live audio
webcast through our website at http://www.aztar.com/. The call also
will be available on replay through that website following the
call. Selected Results ($ in millions, except ADR, which is Average
Daily Rate) Second Quarter Year to Date 2006 2005 2006 2005
(unaudited) (unaudited) Tropicana Atlantic City Revenue $124.9
$122.7 $241.7 $234.5 EBITDA $36.3 $30.9 $67.6 $52.0 Depreciation
and amortization $12.0 $10.9 $25.1 $21.6 Operating income $24.3
$20.0 $42.5 $30.4 EBITDA margin 29.1% 25.2% 28.0% 22.2% Operating
income margin 19.5% 16.3% 17.6% 13.0% Occupancy 95.6% 91.9% 91.9%
86.5% ADR $104.70 $94.74 $101.15 $89.81 Tropicana Las Vegas Revenue
$39.6 $41.8 $80.5 $84.0 EBITDA $8.2 $10.7 $17.7 $21.7 Depreciation
and amortization $1.4 $1.5 $2.7 $2.9 Operating income $6.8 $9.2
$15.0 $18.8 EBITDA margin 20.7% 25.6% 22.0% 25.8% Operating income
margin 17.2% 22.0% 18.6% 22.4% Occupancy 96.1% 100.0% 95.8% 98.8%
ADR $87.90 $92.17 $90.16 $95.78 Ramada Express Laughlin Revenue
$24.6 $23.4 $52.0 $49.9 EBITDA $6.3 $6.0 $15.0 $14.8 Depreciation
and amortization $1.8 $1.6 $3.8 $3.3 Operating income $4.5 $4.4
$11.2 $11.5 EBITDA margin 25.6% 25.6% 28.8% 29.7% Operating income
margin 18.3% 18.8% 21.5% 23.0% Occupancy 67.5% 70.2% 74.9% 75.7%
ADR $40.02 $38.12 $36.13 $34.19 Casino Aztar Evansville Revenue
$32.8 $33.5 $69.0 $68.9 EBITDA $9.4 $10.3 $20.5 $21.3 Depreciation
and amortization $1.8 $1.9 $3.6 $3.7 Operating income $7.6 $8.4
$16.9 $17.6 EBITDA margin 28.7% 30.7% 29.7% 30.9% Operating income
margin 23.2% 25.1% 24.5% 25.5% Occupancy 89.8% 93.2% 89.2% 88.8%
ADR $64.41 $63.92 $63.07 $63.83 Property Revenue $221.9 $221.4
$443.2 $437.3 EBITDA $60.2 $57.9 $120.8 $109.8 Depreciation and
amortization $17.0 $15.9 $35.2 $31.5 Operating income $43.2 $42.0
$85.6 $78.3 EBITDA margin 27.1% 26.2% 27.3% 25.1% Operating income
margin 19.5% 19.0% 19.3% 17.9% Corporate EBITDA $(85.3) $(5.2)
$(91.7) $(13.2) Depreciation and amortization $0.0 $0.0 $0.0 $0.0
Tropicana Las Vegas capitalized development costs write-off $0.0
$0.0 $26.0 $0.0 Operating income (loss) $(85.3) $(5.2) $(117.7)
$(13.2) Consolidated Revenue $221.9 $221.4 $443.2 $437.3 EBITDA
$(25.1) $52.7 $29.1 $96.6 Depreciation and amortization $17.0 $15.9
$35.2 $31.5 Tropicana Las Vegas capitalized development costs
write-off $0.0 $0.0 $26.0 $0.0 Operating income (loss) $(42.1)
$36.8 $(32.1) $65.1 Income (loss) from continuing operations
$(67.0) $14.9 $(64.5) $24.1 EBITDA margin -11.3% 23.8% 6.6% 22.1%
Operating income (loss) margin -19.0% 16.6% -7.2% 14.9% Income
(loss) from continuing operations margin -30.2% 6.7% -14.6% 5.5%
Margins Margins are calculated as a percentage of revenue. EBITDA
Explanation and Reconciliation EBITDA is net income (loss) before
discontinued operations, income taxes, interest expense, interest
income, other income (expense), Tropicana Las Vegas capitalized
development costs write-off and depreciation and amortization.
EBITDA should not be construed as a substitute for either operating
income (loss) or net income (loss) as they are determined in
accordance with generally accepted accounting principles (GAAP).
Management uses EBITDA as a measure to compare operating results
among our properties and between accounting periods. We manage cash
and finance our operations at the corporate level. We manage the
allocation of capital among properties at the corporate level. We
also file a consolidated income tax return. Management accordingly
believes EBITDA is useful as a measure of operating results at the
property level because it reflects the results of operating
decisions at that level separated from the effects of tax and
financing decisions that are managed at the corporate level. We
also use EBITDA as the primary operating performance measure in our
bonus programs for executive officers. Management also believes
that EBITDA is a commonly used measure of operating performance in
the gaming industry and is an important basis for the valuation of
gaming companies. Our calculation of EBITDA may not be comparable
to similarly titled measures reported by other companies and,
therefore, any such differences must be considered when comparing
performance among different companies. While management believes
EBITDA provides a useful perspective for some purposes, EBITDA has
material limitations as an analytical tool. For example, among
other things, although depreciation and amortization are non-cash
charges, the assets being depreciated and amortized may have to be
replaced in the future, and EBITDA does not reflect the
requirements for such replacements. Tropicana Las Vegas capitalized
development costs write-off, other income (expense), interest
expense, net of interest income, income taxes and discontinued
operations are also not reflected in EBITDA. Therefore, management
does not consider EBITDA in isolation, and it should not be
considered as a substitute for measures determined in accordance
with GAAP. A reconciliation of EBITDA with operating income (loss)
and net income (loss) as determined in accordance with GAAP is
shown below (in millions). Second Quarter Year to Date 2006 2005
2006 2005 (unaudited) (unaudited) EBITDA Tropicana Atlantic City
$36.3 $30.9 $67.6 $52.0 Tropicana Las Vegas 8.2 10.7 17.7 21.7
Ramada Express Laughlin 6.3 6.0 15.0 14.8 Casino Aztar Evansville
9.4 10.3 20.5 21.3 Property EBITDA 60.2 57.9 120.8 109.8 Corporate
(85.3) (5.2) (117.7) (13.2) Depreciation and amortization (17.0)
(15.9) (35.2) (31.5) Operating income (loss) (42.1) 36.8 (32.1)
65.1 Other income (expense) (0.4) 2.9 2.2 4.4 Interest income 0.5
0.3 0.9 0.5 Interest expense (14.1) (14.2) (28.3) (28.0) Income
taxes (10.9) (10.9) (7.2) (17.9) Income (loss) from continuing
operations (67.0) 14.9 (64.5) 24.1 Discontinued operations, net of
income taxes 0.9 0.6 1.6 1.3 Net income (loss) $(66.1) $15.5
$(62.9) $25.4 Adjusted Diluted Earnings Per Share Second Quarter
Year to Date 2006 2005 2006 2005 (unaudited) (unaudited) Net income
(loss) per common share assuming dilution: As reported $(1.84) $.41
$(1.77) $.68 Adjustments: Construction accident related expenses
.03 .02 .06 .02 Construction accident insurance recoveries (.06)
(.01) (.13) (.01) Other income (expense) .01 (.04) (.04) (.07)
Defined benefit plan settlement loss -- -- -- .05 Merger related
expenses 2.13 -- 2.16 -- Tropicana Las Vegas capitalized
development costs write-off -- -- .45 -- Nonrecurring income tax
benefits -- -- (.09) -- Effect of dilution on net loss .08 -- .08
-- As adjusted $.35 $.38 $.72 $.67 Aztar is a publicly traded
company that operates Tropicana Casino and Resort in Atlantic City,
New Jersey, Tropicana Resort and Casino in Las Vegas, Nevada,
Ramada Express Hotel and Casino in Laughlin, Nevada, Casino Aztar
in Caruthersville, Missouri, and Casino Aztar in Evansville,
Indiana. Forward-Looking Information This release contains
"forward-looking statements" within the meaning of the safe harbor
provisions of the United States Private Securities Litigation
Reform Act of 1995. The statements in this release that are not
historical facts are forward-looking statements and may involve a
number of risks and uncertainties. When used in this release, the
terms "anticipate," "believe," "could," "continue," "estimate,"
"expect," "intend," "may," "objective," "plan," "possible,"
"potential," "pursue," "project," "will," "would" and similar
expressions, or the negative formulation of these expressions,
generally identify forward-looking statements. Similarly,
statements that describe our business strategy, outlook,
objectives, plans, intentions or goals are also forward-looking
statements. Generally, forward-looking statements express
expectations for or about the future, rather than historical fact.
Forward-looking statements are subject to inherent risks and
uncertainties that may cause actual results or events to differ
materially from those contemplated by such statements. In addition
to the risk factors identified elsewhere, important factors that
could cause actual results or events to differ materially from
those contemplated by such statements include, without limitation:
* the financial performance of each of Aztar and Columbia
Entertainment through the completion of the merger; * the ability
of Columbia Entertainment to obtain the acquisition financing
pursuant to its financing commitment letter agreement; * any delays
in securing the adoption of the merger agreement by our
stockholders, and the risk that our stockholders do not adopt the
merger agreement; * the timing (including any possible delays) and
receipt of regulatory approvals from various federal and state
governmental entities (including any conditions, limitations or
restrictions placed on these approvals) and the risk that one or
more governmental authorities may deny approval of the merger; *
the possibility that the merger agreement is terminated and the
merger is not completed, resulting in disruptions to our business
and, under certain circumstances, requiring us to pay to Columbia
Entertainment a termination fee of $55,228,000 and to reimburse
Columbia Entertainment for its fees and expenses incurred in
connection with the merger up to a maximum of $27,360,000 and to
reimburse Columbia Sussex Corporation the $78,000,000 that was paid
to Pinnacle in connection with the termination of the Pinnacle
merger agreement; * legislative and regulatory matters, changes in
government regulation, and regulatory action resulting from market
conduct activity, including the potential (1) legalization of
gaming in additional states, (2) tax increases in our states of
operation or (3) proscription or prohibition of smoking in our
gaming facilities in our states of operation; * increased
competition in our markets, including from the potential
legalization of gaming in additional states; * general business
conditions, including competitive practices and changes in customer
demand, and general economic conditions that impact the performance
of our operations; * the potential impact of the announcement of
the merger, and the merger, on relations with customers, partners,
suppliers, vendors and other third parties; * the cyclical nature
of the gaming and hospitality business; * the effects of weather; *
those factors relating to terrorism and the uncertainty of war and
fuel costs and other factors affecting discretionary consumer
spending; * adverse outcomes of legal proceedings and development
of and changes in claims or litigation reserves, including those
related to the extent and timing of our recoveries from our
insurance carriers for our various losses suffered in connection
with the accident on October 30, 2003 on the site of the Tropicana
Casino and Resort in Atlantic City, New Jersey; * the potential
relative underperformance of the Tropicana Resort and Casino in Las
Vegas, Nevada, due to our reduced efforts to engage in marketing
of, and accepting reservations at, this property until the date of
the merger agreement, in light of our previously contemplated
redevelopment of the site; * the potential inability of us or
Columbia Entertainment to satisfy the closing conditions in the
merger agreement; * reliance on key personnel; and * other risks
and uncertainties that may be referred to in our reports and other
documents filed with the SEC from time to time. Forward-looking
statements made in this release express expectations only as of the
date they are made. We do not undertake any obligation to update or
revise such statements to reflect events or circumstances after the
date of this proxy statement or to reflect the occurrence of
unanticipated events, except as required by applicable law.
Additional Information and Where to Find It This release may be
deemed to be solicitation material in respect of the proposed
merger of Aztar and Columbia Entertainment. In connection with the
proposed merger, Aztar plans to file a proxy statement with the
SEC. On July 14, 2006, Aztar filed a preliminary proxy statement
with the SEC. INVESTORS AND SECURITY HOLDERS OF AZTAR ARE ADVISED
TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED
WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THOSE DOCUMENTS
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. The
final proxy statement will be mailed to stockholders of Aztar.
Investors and security holders may obtain a free copy of the proxy
statement, when it becomes available, and other documents filed by
Aztar with the SEC, at the SEC's web site at http://www.sec.gov/.
Free copies of the proxy statement, when it becomes available, and
Aztar's other filings with the SEC may also be obtained from Aztar.
Free copies of Aztar's filings may be obtained by directing a
request to Aztar Corporation, 2390 East Camelback Road, Suite 400,
Phoenix, Arizona 85016, Attention: Secretary. Aztar, Columbia
Entertainment and their respective directors, executive officers
and other members of their management and employees may be deemed
to be soliciting proxies from Aztar's stockholders in favor of the
proposed merger. Information regarding Aztar's directors and
executive officers is available in Aztar's proxy statement for its
2006 annual meeting of stockholders, which was filed with the SEC
on April 10, 2006. Additional information regarding the interests
of such potential participants will be included in the proxy
statement and the other relevant documents filed with the SEC when
they become available. Contact: Joe Cole, Aztar Corporation,
602-381-4111 Aztar Corporation and Subsidiaries Consolidated
Statements of Operations (unaudited) For the periods ended June 30,
2006 and June 30, 2005 (in thousands, except per share data) Second
Quarter Six Months 2006 2005 2006 2005 Revenues Casino $165,686
$166,142 $335,118 $330,804 Rooms 27,911 28,098 53,258 53,226 Food
and beverage 14,914 14,976 29,815 29,793 Other 13,415 12,183 25,005
23,491 221,926 221,399 443,196 437,314 Costs and expenses Casino
66,137 65,865 133,787 132,395 Rooms 12,639 12,696 24,258 23,694
Food and beverage 14,726 14,334 29,255 28,365 Other 7,390 7,574
14,632 14,909 Marketing 20,527 23,429 40,634 47,815 General and
administrative 22,180 21,875 45,796 47,075 Utilities 5,647 5,822
11,850 12,084 Repairs and maintenance 7,076 6,551 13,937 13,008
Provision for doubtful accounts 585 329 1,078 707 Property taxes
and insurance 8,843 7,559 17,465 15,875 Rent 2,408 2,085 4,738
4,023 Construction accident related 1,997 860 3,641 1,269
Construction accident insurance recoveries (3,569) (301) (8,358)
(526) Merger related 80,476 -- 81,360 -- Depreciation and
amortization 17,003 15,906 35,242 31,497 Tropicana Las Vegas
capitalized development costs write-off -- -- 26,021 -- 264,065
184,584 475,336 372,190 Operating income (loss) (42,139) 36,815
(32,140) 65,124 Other income (expense) (398) 2,855 2,242 4,428
Interest income 526 294 920 536 Interest expense (14,147) (14,206)
(28,283) (28,068) Income (loss) from continuing operations before
income taxes (56,158) 25,758 (57,261) 42,020 Income taxes (10,880)
(10,848) (7,267) (17,954) Income (loss) from continuing operations
(67,038) 14,910 (64,528) 24,066 Discontinued operations, net of
income taxes 931 543 1,635 1,298 Net income (loss) $(66,107)
$15,453 $(62,893) $25,364 ======= ======= ======= ======= Earnings
per common share assuming no dilution: Income (loss) from
continuing operations $(1.87) $.42 $(1.82) $.67 Discontinued
operations, net of income taxes .03 .01 .05 .04 Net income (loss)
$(1.84) $.43 $(1.77) $.71 Earnings per common share assuming
dilution: Income (loss) from continuing operations $(1.87) $.40
$(1.82) $.64 Discontinued operations, net of income taxes .03 .01
.05 .04 Net income (loss) $(1.84) $.41 $(1.77) $.68
Weighted-average common shares applicable to: Earnings per common
share assuming no dilution 36,150 35,141 36,014 34,965 Earnings per
common share assuming dilution 36,150 36,980 36,014 36,929 Aztar
Corporation and Subsidiaries Consolidated Balance Sheet Summaries
(unaudited) (in thousands) June 30, 2006 December 31, 2005 Assets
Cash and cash equivalents $75,322 $86,361 Other current assets
76,348 62,476 Total current assets 151,670 148,837 Assets held for
sale 33,513 33,559 Investments 26,764 25,215 Property and equipment
1,207,706 1,211,887 Intangible assets 33,069 33,331 Other assets
86,039 102,505 $1,538,761 $1,555,334 ========= =========
Liabilities and Shareholders' Equity Current portion of long-term
debt $1,283 $1,293 Other current liabilities 130,009 126,295 Merger
termination fee reimbursement 78,000 -- Liabilities related to
assets held for sale 2,064 2,495 Total current liabilities 211,356
130,083 Long-term debt 675,037 721,676 Other long-term liabilities
60,105 62,425 Series B convertible preferred stock 4,382 4,620
Shareholders' equity 587,881 636,530 $1,538,761 $1,555,334
========= ========= DATASOURCE: Aztar Corporation CONTACT: Joe Cole
of Aztar Corporation, +1-602-381-4111 Web site:
http://www.aztar.com/
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