Argosy Gaming Outlk to Stable by S&P; Rtgs Affirmed.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 10/29/98--Standard & Poor's today revised its ratings outlook on Argosy Gaming Co. to stable from negative, following third-quarter 1998 operating performance that showed continued strong results from its Lawrenceburg, Ind. property and improved results at its Alton, Ill. and Riverside, Mo. casinos. The single-'B'-plus corporate credit rating for the company was affirmed. The single-'B'-plus rating on Argosy's first mortgage bonds and the single-'B'-minus rating on the company's convertible subordinated notes also were affirmed. Argosy currently operates riverboats in Alton, Ill., Riverside, Mo., Baton Rouge Baton Rouge (băt`ən r  zh) [Fr.,=red stick], city (1990 pop. 219,531), state capital and seat of East Baton Rouge parish, SE La. , La., Sioux City, Iowa <noinclude></noinclude>Sioux City (IPA: [su: 'sɪti]) is a city located in northwest Iowa in the United States. As of the 2000 census, the city had a total population of 85,013. , and Lawrenceburg, Ind. The permanent casino in Lawrenceburg, which opened at the beginning of the year, has been a strong cash flow generator. During the first nine months of 1998, the property produced $72 million in earnings before interest, taxes, depreciation, and amortization Earnings before interest, taxes, depreciation, and amortization (EBITDA) A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ), of which Argosy receives 57.5%. Competition from a new Caesars boat in late November 1998 is expected to have some impact on performance, but Argosy's proximity to Cincinnati, its quality facility and hotel amenities, and the depth of the overall market should mitigate downside risk Downside Risk An estimation of a security's potential to suffer a decline in price if the market conditions turn bad. Notes: You can think of this as an estimate of the amount that you could lose on a stock or other investment. . Hollywood Park's proposed riverboat riv·er·boat n. A boat suitable for use on a river. on the Ohio River Ohio River Major river, eastern central U.S. Formed by the confluence of the Allegheny and Monongahela rivers, it flows northwest out of Pennsylvania, and west and southwest to form the state boundaries of Ohio–West Virginia, Ohio-Kentucky, Indiana-Kentucky, and will not be operational for a few years. In addition to the Lawrenceburg property, management has done a good job reducing costs and enhancing marketing efforts at Alton and Riverside. This has resulted in improved profitability at these facilities, and a greater degree of confidence in the consistency of future cash flow levels. Baton Rouge remains a problem, but will likely benefit from the elimination of video poker in the East Baton Rouge parish by mid next year Based on current operating trends, EBITDA coverage of interest expense is expected to be about 1.7 times (x). Liquidity is improving, with cash balances of about $74 million at Sept. 30 1998, and the company is generating cash flow in excess of operating needs. OUTLOOK: STABLE Operations have improved materially over the last few quarters, and Standard & Poor's expects overall performance to continue to improve in 1999. -- CreditWire |
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