Argosy Gaming Company Reports First Quarter 2005 Earnings

Argosy Gaming Company Reports First Quarter 2005 Earnings 


ALTON, Ill., April 28  /PRNewswire-FirstCall/ -- Argosy Gaming Company
(NYSE:AGY) today announced first quarter results for the period ended March 31,
2005.  Earnings per diluted share ("EPS") were $0.71 on net income of $21.3
million, as compared to $0.13 per diluted share on net income of $4.0 million
for the first quarter of 2004.  Included in the results of the first quarter of
2004 are $25.3 million of expenses, or $0.50 per share, associated with the
February 2004 refinancing of the Company's outstanding 10 3/4% notes due 2009. 
Included in the first quarter results of 2005 are $2.7 million of expenses, or
$0.05 per share, associated with the proposed merger with Penn National Gaming.

Net revenues were $271.0 million for the first quarter of 2005, up $6.9 million
from $264.1 million in the first quarter of 2004.  Of note, net revenues at
Argosy's Baton Rouge property were up 18.0%, from first quarter results of
$22.4 million in 2004 to $26.4 million in 2005, in part due to visitors to the
city for a bowling congress that runs from February 12th through July 4th of
this year.  At Argosy Casino - Sioux City, net revenues for the first quarter
were up 16.7%, from $11.3 million in 2004 to $13.2 million in 2005, following
the addition of the renovated boat formerly used at the Company's Riverside
property.

Argosy's EBITDA (earnings before interest, taxes, depreciation and
amortization) for the quarter was $68.6 million for the first quarter 2005,
including the expenses related to the Penn merger, compared to $42.0 million
for the first quarter 2004, including the expenses for the refinancing
mentioned above.  Excluding the merger and financing costs, EBITDA increased
6.0%, primarily due to improved performance at the Company's Baton Rouge and
Alton properties.

The Company's EBITDA margin (EBITDA as a percent of net revenues) for the
quarter was 26.3%, up from 25.5% the same quarter last year, excluding merger
and refinancing costs.  At the property level, the EBITDA margin improved at
every Argosy location except for Empress Casino Joliet.  The Company is
currently accruing for gaming taxes at its Illinois properties using the
existing graduated tax tables.  Current legislation calls for a rollback to
lower rates beginning July 1, 2005.  Had the Company accrued the Illinois
gaming taxes based on a rollback occurring, EPS for the quarter would have been
approximately $0.05 higher.

Argosy reported that debt decreased from $814.1 million as of December 31, 2004
to $803.2 million as of March 31, 2005.  The Company spent $8.3 million in
maintenance capital during the first quarter of 2005.  Project capital for the
quarter, which was primarily for work on the new $75 million hotel and garage
project in Riverside and an expansion at the Company's Lawrenceburg property,
was $8.5 million.

Based on analysis of the potential for the Cincinnati market, the Company has
initiated the approval process to complete a major capital expansion project in
Lawrenceburg.  The project would include the replacement of the existing
three-level boat with a larger single-level boat that would add approximately
1,200 gaming positions to the existing 2,875.  The expansion plan would also
provide a substantial increase in parking by adding a new, 1,500-space garage
as well as surface parking for an additional 350 cars. This nearly doubles the
available on-site parking.  The total cost of the project is estimated to be
approximately $250 million, and would be partially offset by a 10-year, $50
million incentive credit from the City of Lawrenceburg. Pending regulatory
approval, the Company expects to begin construction later this year, with
completion of the garage near the end of 2006 and of the casino in late 2007.

The transaction with Penn National Gaming is on schedule, with an anticipated
closing in the third quarter of this year.  The Company is assisting Penn in
their efforts to divest Argosy's Baton Rouge property to expedite securing
necessary approvals.  Any agreement between Penn and a potential purchaser of
the property would be subject to the closing of the Argosy/Penn merger. 
Pursuant to the merger agreement between Argosy and Penn, Argosy has agreed not
to provide any guidance concerning its expected earnings or other performance.

Argosy will host a conference call for interested parties on April 28, 2005, at
11:00 a.m. EDT to review its first quarter 2005 results. Call participants
should dial [phone] ten to fifteen minutes before the call and reference
ID #5541059.  The call will be broadcast live via the Internet and may be
accessed through our web site at http://www.argosy.com/ .  A replay of the call
will be available at our web site through May 12, 2005.

Argosy Gaming Company is a leading owner and operator of casinos and related
entertainment and hotel facilities in the midwestern and southern United
States. Argosy owns and operates the Argosy Casino-Alton in Illinois, serving
the St. Louis metropolitan market; the Argosy Casino-Riverside in Missouri,
serving the greater Kansas City metropolitan market; the Argosy Casino-Baton
Rouge in Louisiana; the Argosy Casino-Sioux City in Iowa; the Argosy
Casino-Lawrenceburg in Indiana, serving the Cincinnati and Dayton metropolitan
markets; and the Empress Casino Joliet in Illinois serving the greater
Chicagoland market.

This press release contains statements relating to future results, which are
forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995.   These forward-looking statements generally can
be identified by phrases such as the Company or its management "believes,"
"anticipates," "expects," "forecasts," "estimates,"   "foresees," or other
words or phrases of similar import.    Similarly, such statements herein that
describe the Company's business outlook, objectives, strategy, intentions or
goals are also forward-looking statements.  All such forward- looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from those projected, including but not
limited to:

-  competitive and general economic conditions in the markets in which the
Company operates, including locations of competitors and legalization of gaming
in new jurisdictions;

-  construction factors relating to the Company's expansion projects, including
delays, zoning issues, environmental restrictions, weather and other hazards,
site access matters and building permit issues;

-  the ability to effectively implement operational changes at the Company's
properties; litigation outcomes, judicial actions and gaming legislative or
regulatory agency actions (including obtaining the requisite approval of
regulatory authorities for the proposed merger between Argosy and Penn National
Gaming);

-  the effect of economic, credit and capital market conditions on the economy
in general, and on gaming companies in particular;

-  changes in laws (including increased tax rates), regulations or accounting
standards;

-  the effect of future legislation or regulatory changes on the Company's
operations (including legalization of gaming in new jurisdictions);

-  other risks and uncertainties detailed from time to time in the Company's
filings with the Securities and Exchange Commission.

                             -Tables Follow-



                            ARGOSY GAMING COMPANY
                      CONSOLIDATED STATEMENTS OF INCOME
                    (In Thousands, Except Per Share Data)

                                                  Three Months Ended
                                               March 31,      March 31,
                                                 2005           2004
                                             (unaudited)    (unaudited)
  Revenues:
    Casino                                     $274,983       $266,007
    Admissions                                    5,529          5,360
    Food, beverage and other                     28,298         26,460
                                                308,810        297,827
    Less promotional allowances                 (37,793)       (33,738)
  Net revenues                                  271,017        264,089

  Costs and expenses:
    Gaming and admission taxes                   95,826         91,578
    Casino                                       31,531         32,574
    Selling, general and administrative          44,166         44,176
    Food, beverage and other                     20,133         18,601
    Other operating expenses                     10,738          9,863
    Depreciation and amortization                15,626         14,225
    Gain on disposition of asset held for sale      -              -
    Write down of assets                            -              -
                                                218,020        211,017
  Income from operations                         52,997         53,072

  Other income (expense):
    Interest income                                  78             21
    Interest expense                            (14,653)       (18,051)
    Expense on early retirement of debt             -          (25,277)
                                                (14,575)       (43,307)

  Income before income taxes                     38,422          9,765

  Income tax expense                            (17,098)        (5,805)

  Net income                                    $21,324         $3,960

  Basic income per share                          $0.72          $0.13

  Diluted income per share                        $0.71          $0.13

  Weighted average shares outstanding:

  Basic                                      29,556,028     29,345,773

  Diluted                                    29,853,912     29,561,807


                               - more tables -



                      ARGOSY GAMING COMPANY AND SUBSIDIARIES
                          SELECTED FINANCIAL INFORMATION
                              SUMMARY OPERATING DATA
                                  (In Thousands)

                                                  Three Months Ended
                                               March 31,      March 31,
                                                 2005          2004
                                             (unaudited)    (unaudited)
  Casino Revenues
      Argosy Casino - Alton                     $28,306        $27,186
      Argosy Casino - Riverside                  39,787         38,238
      Argosy Casino - Baton Rouge                24,521         21,695
      Argosy Casino - Sioux City                 13,746         11,686
      Argosy Casino - Lawrenceburg              112,371        112,002
      Empress Casino Joliet                      56,252         55,200
                Total                          $274,983       $266,007

  Net Revenues
      Argosy Casino - Alton                     $27,209        $26,044
      Argosy Casino - Riverside                  37,091         37,930
      Argosy Casino - Baton Rouge                26,364         22,351
      Argosy Casino - Sioux City                 13,238         11,346
      Argosy Casino - Lawrenceburg              112,695        112,933
      Empress Casino Joliet                      54,420         53,485
                Total                          $271,017       $264,089

  Income (loss) from operations
      Argosy Casino - Alton                      $4,574         $3,158
      Argosy Casino - Riverside                   7,925          9,384
      Argosy Casino - Baton Rouge                 4,603          2,625
      Argosy Casino - Sioux City                  3,264          2,419
      Argosy Casino - Lawrenceburg               33,212         33,116
      Empress Casino Joliet                      10,537         10,355
      Corporate                                 (11,118)        (7,985)
                Total                           $52,997        $53,072

                                 - more -



                    ARGOSY GAMING COMPANY AND SUBSIDIARIES
                        SELECTED FINANCIAL INFORMATION
                  RECONCILIATION OF NET INCOME TO EBITDA (1)
                          (In Thousands, unaudited)

                                           Three months      Three months
                                              ended             ended
                                          March 31, 2005    March 31, 2004
  Net income (2)                                  $21,324            $3,960
  Income tax expense                               17,098             5,805
  Interest expense, net                            14,575            18,030

  Depreciation and amortization expense:
  Argosy Casino - Alton                    1,634             1,552
  Argosy Casino - Riverside                3,915             2,461
  Argosy Casino - Baton Rouge              2,406             2,266
  Argosy Casino - Sioux City                 972             1,123
  Argosy Casino - Lawrenceburg             3,701             3,412
  Empress Casino Joliet                    2,346             2,800
  Corporate (3)                              652               611
            Total                         15,626   15,626   14,225   14,225

  EBITDA (1):
  Argosy Casino - Alton                    6,208             4,710
  Argosy Casino - Riverside               11,840            11,845
  Argosy Casino - Baton Rouge              7,009             4,891
  Argosy Casino - Sioux City               4,236             3,542
  Argosy Casino - Lawrenceburg            36,913            36,528
  Empress Casino Joliet                   12,883            13,155
  Corporate (2) (3)                      (10,466)          (32,651)
            Total                        $68,623  $68,623  $42,020  $42,020

                                 - more -



                          ARGOSY GAMING COMPANY
                 NOTES TO SELECTED FINANCIAL INFORMATION
                              (in thousands)

  (1) "EBITDA" represents earnings before interest, taxes, depreciation and
      amortization.  EBITDA is presented solely as a supplemental disclosure
      because management believes it is 1) a widely used measure of
      operating performance in the gaming industry, 2) a principal basis for
      valuation of gaming companies and 3) is used as a basis for
      determining compliance with our credit facility.  Management uses
      property-level EBITDA (EBITDA before corporate expense) and EBITDA
      margin (EBITDA as a percent of net revenues) as the primary measures
      of our properties' performance, including the evaluation and
      compensation of operating personnel.  EBITDA should not be construed
      as an alternative to GAAP-based financial measures such as operating
      income, an indicator of our operating performance, or cash flows from
      operating activities, a measure of our liquidity.  We have significant
      uses of cash flows, including capital expenditures, interest payments,
      taxes and debt principal repayments, which are not reflected in
      EBITDA.  We believe the performance of our operating units is more
      appropriately measured before these expenses, since the allocation of
      our capital is decided by corporate management and is subject to the
      approval of the board of directors.  In addition, we manage cash and
      finance our operations at the consolidated level and we file a
      consolidated income tax return.  We do not consider EBITDA in
      isolation.  Our calculation of EBITDA may not be comparable to
      similarly titled measures reported by other companies.

  (2) Includes $25,277 of pre-tax expense on early retirement of debt for
      the three months ended March 31, 2004.

  (3) Because we do not include corporate expense in our computation,
      property-level EBITDA does not reflect all the costs of operating the
      properties as if each were a stand-alone business unit.  Corporate
      expense includes significant expenses necessary to manage a multiple
      casino operation, certain of which, such as corporate executive
      compensation, development, public company reporting, treasury,
      accounting, legal and tax expenses, would also be required of a
      typical stand-alone casino property.



                            ARGOSY GAMING COMPANY
                    CONDENSED CONSOLIDATED BALANCE SHEETS
               (In Thousands, Except Share and Per Share Data)

                                                March 31,       December 31,
                                                  2005             2004
  Current assets:                              (unaudited)
    Cash and cash equivalents                    $77,434           $80,069
    Accounts receivable, net                       4,333             3,534
    Income taxes receivable                          -               8,705
    Deferred income taxes                         14,560            14,224
    Other current assets                          10,077            10,064
      Total current assets                       106,404           116,596

  Net property and equipment                     547,864           544,929
  Other assets:
    Deferred finance costs, net                   18,782            19,576
    Goodwill, net                                727,470           727,470
    Intangible assets, net                        23,696            24,263
    Other                                          6,880             5,622
      Total other assets                         776,828           776,931
  Total assets                                $1,431,096        $1,438,456
  Current liabilities:
    Accounts payable                             $12,131           $10,032
    Accrued payroll and related expenses          24,365            25,447
    Accrued gaming and admission taxes            21,672            12,424
    Other accrued liabilities                     49,173            76,317
    Accrued interest                               7,194            17,627
    Income taxes payable                           2,722               -
    Current maturities of long-term debt           2,559             2,512
      Total current liabilities                  119,816           144,359

  Long-term debt                                 800,622           811,615
  Deferred income taxes                          113,673           107,794
  Other long-term obligations                      2,459             1,926

  Stockholders' equity:
    Common stock, $.01 par; 120,000,000 shares
     authorized; 29,566,639 and 29,553,772 shares
     issued and outstanding at March 31, 2005
     and December 31, 2004, respectively             296               296
    Capital in excess of par                      99,020            98,580
    Retained earnings                            295,210           273,886
      Total stockholders' equity                 394,526           372,762
  Total liabilities and stockholders' equity  $1,431,096        $1,438,456


DATASOURCE: Argosy Gaming Company



CONTACT:  Jim Wise, [phone], or Erin Williams, [phone],

both of Argosy Gaming Company



Web site:  http://www.argosycasinos.com/ 

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