Argosy Gaming Company Reports First Quarter 2004 Earnings

Argosy Gaming Company Reports First Quarter 2004 Earnings 


ALTON, Ill., April 27  /PRNewswire-FirstCall/ -- Argosy Gaming Company  today
announced first quarter results for the period ended March 31, 2004.  Earnings
per diluted share ("EPS") were $0.13 on net income of $4.0 million, as compared
to $0.50 per diluted share on net income of $14.7 million for the first quarter
of 2003.   Included in the results of the first quarter of 2004 are after-tax
expenses of $14.8 million, or $0.50 per share, associated with the February
2004 refinancing of the Company's outstanding 10-3/4% notes due 2009.

Net revenues were $264.1 million for the first quarter of 2004, up $27.8
million, or 12% from $236.3 million in the first quarter of 2003.  Of note, net
revenues at Argosy's Riverside property increased 62%, or $14.6 million, from
the first quarter of the prior year.  At Argosy's Lawrenceburg property, net
revenues also grew by $14.6 million, or 15% over the first quarter of 2003. 
Net revenues at the Company's Illinois properties declined 5%, or $4.2 million,
primarily as a result of actions taken by the Company following the increase in
the gaming and admission tax rates there.

Argosy's EBITDA (earnings before interest, taxes, depreciation and
amortization) for the quarter was up 16% year over year, at $67.3 million for
the first quarter 2004 compared to $58.2 million for the first quarter 2003.
The increase is primarily related to improved results at the Company's
Lawrenceburg and Riverside properties, partially offset by increased gaming and
admission tax rates.  EBITDA improved at each of the Company's properties
compared to the same quarter in 2003, with the exception of the Company's two
Illinois properties, where increased gaming and admission tax rates more than
offset operational efficiencies.

"We're thrilled by the response to our investment in Riverside.  To have EBITDA
more than double from the same quarter last year is outstanding," said Richard
J. Glasier, President and CEO of Argosy.  "We're especially pleased that the
new facility has been successful not only in bringing back guests who decided
to forego playing at Argosy while the construction was underway, but in growing
the entire Kansas City market, as new visitors are attracted to the property."

The Company's EBITDA margin (EBITDA as a percent of net revenues) for the
quarter was 26%, up from 25% the same quarter last year.  This improvement was
achieved despite the increase in gaming and admission taxes as a percent of net
revenues from 34% in the first quarter of 2003 to 35% in 2004.  At Argosy's
Riverside property, EBITDA margin increased almost eight percentage points for
the first quarter of 2004, from 23.3% to 31.2%, and matched the 31.2% EBITDA
margin achieved at the Company's Sioux City property.  The highest EBITDA
margin performance for the Company was achieved in Lawrenceburg, where it was
32.3% for the first quarter of 2004, up from 29.8% during the same quarter in
2003.  The Empress Casino Joliet was also able to improve its EBITDA margin,
from 24.0% in 2003 to 24.6% for the first quarter of this year, despite a
decrease in revenues and increase in gaming and admission taxes at the
property.

"Our management teams did an excellent job of translating revenue growth into
EBITDA growth this quarter," said Glasier.  "In several cases, the percentage
increase in EBITDA was more than twice the percentage increase in casino
revenues."

Capital Structure

Capital spending during the quarter ended March 31, 2004 was $30.7 million and
consisted of maintenance capital and residual payments for construction of the
new casino at the Company's Riverside property, which opened in December 2003.

The Company has decided to move the riverboat formerly used in Riverside to
Sioux City to replace the boat currently in use there.  Argosy expects to spend
approximately $8 million to $10 million for relocation and renovation of the
vessel.  Completion is anticipated at the end of the third quarter of 2004, and
will include a 150-unit increase in the number of slot machines. The Company is
also considering additional capital investment at its Riverside and
Lawrenceburg properties.

Argosy continues to transition to Ticket-In, Ticket-Out ("TITO") slot machines
as part of its maintenance capital plan based on the anticipated operating
efficiencies afforded by the technology, as well as consumer preference for the
product.  Approximately 55% of the Company's slot machines are currently
operating with TITO technology, and an additional 30% are TITO- ready and
available for use, pending regulatory approval.  The Company began utilizing
TITO machines in Alton and Joliet earlier this month.  Subject to receiving
final approval from the state of Illinois, the Company expects to be
essentially 100% TITO-operational by the end of the year.

In February of 2004, the Company refinanced $329 million out of a total of $350
million of the Company's 10-3/4% Notes due 2009 with a new issue of $350
million in notes at a rate of 7%.  The new notes mature in 2014.  Because
capital spending and the costs associated with the refinancing exceeded the
free cash flow generated by operations during the quarter, Company debt
increased from $870.2 million as of December 31, 2003 to $894.6 million as of
March 31, 2004.

Guidance

Argosy announced the following updates to its previously issued earnings
guidance:

  -- The Company is redeeming the remaining outstanding $21 million in
     10-3/4% Notes due 2009 on June 1, 2004.  The Company expects to incur
     an after-tax charge of approximately $0.02 per share in the second
     quarter related to this transaction.
  -- The Company expects capital spending for the balance of 2004 to be
     between $40 million and $45 million, including final payments for the
     new casino at Riverside and the renovation and transfer of the
     Riverside boat to Sioux City.  Capital spending for the full year of
     2004 is expected to between $70 million and $75 million.
  -- On an annualized basis, the positive impact of additional capacity in
     Sioux City and the efficiencies of dockside operations are expected to
     offset the recently passed gaming tax increase in Iowa.  However, the
     tax increase is expected to have a small negative impact on the 2004
     results.



Based on these factors and the Company's stronger than expected first quarter
performance, Argosy now estimates EPS for 2004, after deduction of $0.52 in
charges to EPS in connection with the refinancing of the Company's $350 million
of 10 3/4% notes, to be in the range of $1.73 to $1.83.

Argosy will host a conference call for interested parties on April 27, 2004, at
11:00 a.m. EDT to review its first quarter 2004 results. Call participants
should dial [phone] ten to fifteen minutes before the call and reference
ID #6681757.  The call will be broadcast live via the Internet and may be
accessed through our web site at http://www.argosycasinos.com/ .  A replay of
the call will be available at our web site through May 2, 2003.

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 Alton Belle Casino in Alton, 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 timing of the transition to cashless slots at the Company's
    properties;
  - the ability to effectively implement operational changes at the
    Company's properties;
  - litigation outcomes and judicial actions, including gaming legislative
    action, referenda and taxation;
  - 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.


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

                                                    Three Months Ended
                                                Mar 31,           Mar 31,
                                                  2004              2003
                                              (unaudited)       (unaudited)
  Revenues:
    Casino                                      $266,007          $240,857
    Admissions                                     5,360             3,005
    Food, beverage and other                      26,460            24,760
                                                 297,827           268,622
      Less promotional allowances                (33,738)          (32,290)
  Net revenues                                   264,089           236,332

  Costs and expenses:
    Gaming and admission taxes                    91,578            79,857
    Casino                                        32,574            34,146
    Selling, general and administrative           44,176            35,789
    Food, beverage and other                      18,601            17,798
    Other operating expenses                       9,863            10,506
    Depreciation and amortization                 14,225            12,683
                                                 211,017           190,779
  Income from operations                          53,072            45,553

  Other income (expense):
    Interest income                                   21                51
    Interest expense                             (18,051)          (18,947)
    Expense on early retirement of debt          (25,277)              -
                                                 (43,307)          (18,896)

  Income before income taxes                       9,765            26,657

  Income tax expense                              (5,805)          (11,996)

  Net income                                      $3,960           $14,661

  Basic income per share                           $0.13             $0.51

  Diluted income per share                         $0.13             $0.50


                  ARGOSY GAMING COMPANY AND SUBSIDIARIES
                      SELECTED FINANCIAL INFORMATION
                         CASINO AND NET REVENUES
                              (In Thousands)

                                                    Three Months Ended
                                                 Mar 31,           Mar 31,
                                                  2004              2003
                                              (unaudited)       (unaudited)
  Casino Revenues
     Alton Belle Casino                          $27,186           $29,387
     Argosy Casino - Riverside                    38,238            24,458
     Argosy Casino -  Baton Rouge                 21,695            20,059
     Argosy Casino - Sioux City                   11,686            10,389
     Argosy Casino - Lawrenceburg                112,002            97,061
     Empress Casino Joliet                        55,200            59,503
               Total                            $266,007          $240,857

  Net Revenues
     Alton Belle Casino                          $26,044           $28,225
     Argosy Casino - Riverside                    37,930            23,364
     Argosy Casino -  Baton Rouge                 22,351            20,835
     Argosy Casino - Sioux City                   11,346            10,100
     Argosy Casino - Lawrenceburg                112,933            98,338
     Empress Casino Joliet                        53,485            55,470
               Total                            $264,089          $236,332


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

                                   For the three months ended March 31, 2004
                                             Income  Depreciation and
                                             (loss)    amortization
                                        from operations  expense   EBITDA(1)

  Alton Belle Casino                         $3,158       $1,552     $4,710
  Argosy Casino - Riverside                   9,384        2,461     11,845
  Argosy Casino -  Baton Rouge                2,625        2,266      4,891
  Argosy Casino - Sioux City                  2,419        1,123      3,542
  Argosy Casino - Lawrenceburg               33,116        3,412     36,528
  Empress Casino Joliet                      10,355        2,800     13,155
  Corporate(2)                               (7,985)         611     (7,374)
            Total                           $53,072      $14,225    $67,297

                                  For the three months ended March 31, 2003
                                            Income    Depreciation and
                                            (loss)      amortization
                                        from operations   expense  EBITDA(1)

  Alton Belle Casino                         $6,714       $1,771     $8,485
  Argosy Casino - Riverside                   3,994        1,445      5,439
  Argosy Casino -  Baton Rouge                1,789        2,062      3,851
  Argosy Casino - Sioux City                  1,759        1,046      2,805
  Argosy Casino - Lawrenceburg               26,066        3,237     29,303
  Empress Casino Joliet                      10,708        2,610     13,318
  Corporate(2)                               (5,477)         512     (4,965)
            Total                           $45,553      $12,683    $58,236

           See accompanying notes to selected financial information


                          ARGOSY GAMING COMPANY
                 NOTES TO SELECTED FINANCIAL INFORMATION

  (1)  "EBITDA" is defined as earnings before interest (including expense on
       early retirement of debt), 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)  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,
                                                   2004             2003
                                               (unaudited)
  Current assets:
    Cash and cash equivalents                    $71,779           $67,205
    Accounts receivable, net                       3,832             4,292
    Income taxes receivable                        2,675             1,015
    Deferred income taxes                         12,924            13,295
    Other current assets                           7,309             7,196
       Total current assets                       98,519            93,003

  Net property and equipment                     551,179           548,120
  Other assets:
    Deferred finance costs, net                   17,513            16,748
    Goodwill, net                                727,470           727,470
    Intangible assets, net                        25,501            26,092
    Other                                            569               439
      Total other assets                         771,053           770,749
  Total assets                                $1,420,751        $1,411,872

  Current liabilities:
    Accounts payable                             $15,924           $26,955
    Accrued payroll and related expenses          22,072            24,125
    Accrued gaming and admission taxes            31,957            44,570
    Other accrued liabilities                     41,229            39,986
    Accrued interest                               5,760             9,296
    Current maturities of long-term debt           3,748             4,648
      Total current liabilities                  120,690           149,580

  Long-term debt                                 890,827           865,510
  Deferred income taxes                           99,461            93,119
  Other long-term obligations                        416               419

  Stockholders' equity:
    Common stock, $.01 par; 120,000,000 shares
      authorized; 29,399,845 and 29,314,542
      shares issued and outstanding at March 31,
      2004 and December 31, 2003, respectively       294               293
    Capital in excess of par                      94,146            92,551
    Accumulated other comprehensive (loss)        (1,384)           (1,941)
    Retained earnings                            216,301           212,341
      Total stockholders' equity                 309,357           303,244
  Total liabilities and stockholders'
    equity                                    $1,420,751        $1,411,872


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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