Aztar, Alliance Gaming earnings up

David Strow

Tuesday, Oct. 17, 2000 | 11:11 a.m.

Alliance Gaming Corp. and Aztar Corp. kicked off the gaming industry's earnings season today, with both companies reporting big increases in earnings for the quarter ending Sept. 30.

Las Vegas-based Alliance Gaming posted earnings of $3.4 million, or 32 cents per share, a record for the company. The results represented a substantial increase over earnings of $445,000, or 4 cents per share, posted in the year-ago period.

Alliance's revenues increased more modestly, rising 2 percent to $120 million. Cash flow rose 33 percent to $14.7 million. The company attributed its improved results to continuing efforts to reduce overhead costs.

Cash flow rose at all of Alliance's business units, including long-struggling Bally Wulff, the company's German subsidiary. Bally Wulff posted cash flow of $1.9 million, up from negative cash flow of $600,000 a year ago. Bally Gaming & Systems, Alliance's slot manufacturing unit, reported cash flow of $7.7 million, up 13 percent, despite a 15 percent decline in revenues. The company attributed Bally's performance to strength in proprietary gaming operations, despite sales of just 2,100 units in the quarter.

Alliance's slot route operations reported cash flow of $5.9 million, up 9 percent, while revenues rose 15 percent to $52.9 million. Alliance's Nevada route operations, operating as United Coin Co., are scheduled to be sold to reduce debt.

Alliance's casino operations, which consist of casinos in Sparks, Nev. and Vicksburg, Miss., reported revenues of $18.6 million, up 11 percent. Cash flow increased 4 percent to $6.7 million.

Alliance stock was trading at $5.50 in midday trading today, down 6 cents.

Also posting a big increase in earnings was Phoenix-based Aztar, operator of the Tropicana hotel-casino on the Strip. Aztar reported earnings of 34 cents per share, a 100 percent increase over its performance in the year-ago quarter. The report beat analysts' consensus expectation of 31 cents per share.

Aztar reported revenues of $222.2 million, up 6 percent from the year-ago quarter, while cash flow rose 15 percent to $51.8 million. The company reduced its debt to $445 million in the quarter, down $9 million in the last three months, and repurchased 1.3 million shares of stock at an average price of $15.04 per share.

At the Tropicana on the Strip, revenues rose 6 percent to $38.3 million, while cash flow hit $7 million, up from $2.9 million in the year-ago quarter. Although occupancy fell slightly to 97.8 percent, the Tropicana's average daily room rate rose 12 percent to $65.85. The property recorded operating income of $2.1 million, compared to an operating loss of $2 million in the year-ago period.

Aztar's strongest gain came at the Tropicana Atlantic City, where revenues rose 8 percent to $126.6 million. Cash flow also rose 8 percent, to $34.3 million.

Aztar's property in Evansville, Ind., also posted improved results, as revenues rose 6 percent to $28.8 million, while cash flow rose 2 percent to $9 million. At Aztar's property in Caruthersville, Mo., revenue fell 8 percent to $6.1 million, while cash flow rose 4 percent to $725,000.

At Aztar's second Nevada property, Ramada Express Laughlin, revenues rose 3 percent to $22.4 million, while cash flow rose 3 percent to $3.8 million.

By midday, Aztar's shares had risen 88 cents to $14, a 6.7 percent surge.