Wednesday, March 10, 1999 | 11:19 a.m.
The Reserve hotel-casino in Henderson continues to struggle, dragging down the earnings of parent Ameristar Casinos Inc.
In the fourth quarter of 1998, Ameristar lost $2.5 million, or 12 cents per share, down from earnings of $1.6 million, or 8 cents per share, in the quarter one year ago. Despite lower earnings, revenues grew from $50.6 million in the fourth quarter of 1997 to $67 million.
For the year, Ameristar lost $12.7 million, or 62 cents per share, down from earnings of $9.7 million, or 48 cents per share in 1997. Revenues grew from $206.2 million in 1997 to $264.4 million last year.
The annual results reflect a $10.6 million charge in February 1998 related to the opening of the Reserve at that time.
Las Vegas-based Ameristar today blamed its results on a poor performance at the Reserve.
"The company's overall performance was substantially below expectations due to the Reserve's disappointing results in 1998," said Craig Neilsen, president and chief executive of Ameristar.
While the Reserve generated $11.2 million in sales in the fourth quarter, and $43.6 million for the year, the resort lost $4 million in the fourth quarter and generated negative earnings before interest, taxes, depreciation and amortization -- or cash flow -- of $1.8 million. For the year, the Reserve lost $16.1 million, and generated negative cash flow of $9.5 million.
Despite the poor showing at the Reserve, company resorts in Council Bluffs, Iowa, and Vicksburg, Miss., posted increases in sales, profits and cash flow. Ameristar's two properties in Jackpot, Nev., reported flat sales and cash flow, and slightly lower earnings.
"The balance of the company's performance was above 1997 and reflected a positive performance trend, particularly at our Council Bluffs and Vicksburg facilities," said Neilsen.
Ameristar is taking steps to improve performance at the Reserve, including aggressive direct mail marketing, promotions and cash-back programs, reductions in labor costs and improved operating efficiencies.
"With the prospect for improving results at the Reserve, we expect 1999 to generate improved results," said Neilsen.