Boyd Gaming Reports Second Quarter Results

. October 14, 2008

LAS VEGAS, NV, Juuly 27, 2005. Boyd Gaming Corporation today reported its financial results for the second quarter 2005. The Company reported adjusted earnings(1) of $.56 per share, an increase of 107% over the $.27 per share reported in the second quarter last year. This result represents the fourth quarter in a row in which adjusted earnings per share were more than double the comparable quarter in the prior year. The adjustment to earnings per share for this year's second quarter was preopening expenses, and the adjustments for last year's second quarter were certain acquisition costs and a gain on the sale of land. This quarter's results include the operations of the four properties of Coast Casinos, which the Company acquired on July 1, 2004, and a full quarter's results from Sam's Town Shreveport, which the Company acquired on May 19, 2004. Per share amounts are reported on a diluted basis.

Second Quarter Results

The Company reported EBITDA of $159 million for the second quarter, an increase of 87% over the $85 million reported for the second quarter last year. On a same-store basis (properties operated by the Company fully in both quarters), EBITDA for the quarter was 14.1% above the second quarter 2004. All six of the Company's operating units reported year-over-year increases in quarterly revenue and EBITDA. In fact, the second quarter was the fourth quarter in a row that every operating unit reported a quarter-over-quarter EBITDA gain. The widespread nature of the EBITDA gains in this year's second quarter versus the prior year is evidenced by the following statistics:

-- Boulder Strip EBITDA increased 32% -- Coast Casinos EBITDA, as compared to its second quarter results when it operated as an independent company, increased 32% -- Stardust EBITDA increased 23% -- Downtown Properties EBITDA increased 63% -- Central Region EBITDA increased 7.8% (a 5.8% increase on a same-store basis) -- The Company's share of Borgata's operating income (before amortization expenses) increased 13.5%

Revenues for the second quarter were $554 million, an increase of 62% over the $342 million reported for the second quarter last year, principally due to the addition of Coast Casinos' revenues in the current quarter. On a same- store basis, revenues were up 4.7% for the quarter versus the comparable quarter in the prior year. Net income for the second quarter was $48.6 million, or $.54 per share, versus $15.5 million, or $.23 per share, reported for the second quarter 2004. In this year's second quarter, the Company's weighted average diluted shares were 22.1 million greater than last year's average for the comparable quarter, due principally to shares issued in the Coast Casinos merger.

Bill Boyd, Chairman and Chief Executive Officer of Boyd Gaming, commented, "Once again I can report how very pleased I am with our Company's performance. Doubling earnings per share four quarters in a row is quite an accomplishment. Our Las Vegas locals business, represented by our Boulder Strip and Coast Casino units, again delivered excellent results with second quarter combined revenues and EBITDA growing 10.4% and 32%, respectively, when compared to the prior year's second quarter. And we're building to our strength with South Coast, a major addition to our Las Vegas locals franchise expected to open sometime after the start of 2006. Our Downtown Las Vegas properties also had a great quarter, producing record results despite continuing high fuel costs in our Hawaiian air charter operations. Delta Downs reported excellent results in its first full quarter after the opening of its new hotel, event center, lounge and food court. And Borgata had another strong quarter, with revenues at the property up 11.8% and EBITDA up 8.5% in the quarter versus the second quarter 2004."

In footnote (1), you will find a discussion of how and why the Company uses adjusted earnings, adjusted earnings per share, EBITDA (non-GAAP measures of earnings as defined in footnote (1)) and EBITDA margin, performance measurements widely used in the gaming industry. As used in this release, EBITDA for a particular operating segment (adjusted EBITDA) is before corporate expense. Further in this release you will also find tables that reconcile certain non-GAAP measurements to GAAP financial information.

Six-month Results

Revenues for the first six months of 2005 were $1.121 billion, an increase of 67% over the $672 million reported in the first six months of 2004. The increase was primarily attributable to the addition of Coast Casinos and Sam's Town Shreveport in 2004; on a same-store basis, revenues in the first six months increased 3.9% over the first six months of 2004. EBITDA for the first six months was $330 million versus $166 million reported in the same period last year, an increase of 99%. On a same-store basis, six-month EBITDA rose 15.6% versus the comparable six months in 2004, with all units reporting strong gains when comparing both six-month periods. Adjusted earnings for the first six months were $1.19 per share versus $.55 per share for the comparable period in 2004, an increase of 116%. Net income for the first six months of 2005 was $88.7 million, or $.98 per share, versus $29.0 million, or $.43 per share, in the first six months of 2004. In addition to the earnings adjustments described in the first paragraph of this report, net income for the first six months of 2005 includes, and adjusted earnings for that period exclude, a cumulative effect of a change in accounting principle. Net income for the first six months of 2004 includes, and adjusted earnings for that period exclude, an Indiana State income tax assessment.

Borgata

The Company also reported second quarter results for Borgata Hotel Casino and Spa, the Company's joint venture property in Atlantic City. As an unconsolidated joint venture, Borgata's results appear in only two lines of the Company's consolidated statements of operations; therefore, more detailed financial information is presented in tables later in this release.

For the second quarter, Borgata reported gaming revenue of $170 million, an increase of 13.1% over the second quarter 2004, and non-gaming revenue of $61.0 million, an increase of 7.8% over the second quarter last year. Net revenues for the quarter were $184 million, a gain of 11.8% over last year's second quarter. Borgata reported EBITDA for the second quarter of $56.7 million, an 8.5% increase over the $52.3 million reported in last year's second quarter. Borgata's EBITDA margin for the quarter was 30.8% versus 31.7% reported in the prior period. Hotel occupancy for the quarter was 96% and the average daily room rate was $132, both well ahead of the same measures reported for last year's second quarter.

Borgata's casino win for the second quarter was the highest in the Atlantic City market, $11.2 million more than the much larger Bally's, which had the second highest casino win. Borgata's market-leading table game win for the quarter was up 14.1% over the same quarter last year, and the property's slot win for the quarter gained 9.8%. In win per unit, Borgata's tables won $4,737 per day for the quarter and its slots won $334 per day for the quarter, both leading the market by wide measures.

Bob Boughner, Chief Executive Officer of Borgata, said, "It is gratifying that after two years of operations, Borgata continues to both lead and grow the Atlantic City market, while producing strong and growing earnings for our Company. We are very proud to report that the property produced EBITDA of $237 million in its second four quarters of operation ended June 30, 2005 versus EBITDA of $157 million in its first four quarters, an increase of 51%.

"Borgata's commitment to continuing growth is evidenced by our two expansions. The $200 million public space expansion is on budget and on schedule for a second quarter 2006 opening. We are looking forward to providing more of the excellent casino, dining and entertainment experiences that have been Borgata's hallmark. Around the start of 2006, we expect to begin construction of a new $325 million hotel and spa at Borgata. Current plans call for 800 hotel rooms, including 50 suites, a new spa and three swimming pools to complement our popular existing spa and pool complex. Completion is expected in the fourth quarter 2007. We believe Borgata will continue to be the leading gaming entertainment resort in the mid-Atlantic region for years to come."

Wholly-owned Properties

The Company reports results from its wholly-owned properties in five segments. For a listing of the specific properties in each unit, see the introduction to the tables appearing after the text of this release.

Boulder Strip

The Las Vegas locals-oriented Boulder Strip properties, principally Sam's Town, continued to benefit from a strong Las Vegas economy and reported its second-best EBITDA and EBITDA margin ever, surpassed only by the seasonally stronger previous quarter. For this year's second quarter, revenues were up 8.4%, EBITDA was up 32% and EBITDA margin was up 5.6 percentage points, all as compared to the second quarter 2004. Notably, virtually all of the second quarter revenue gains versus the prior year were brought to the EBITDA line.

Coast Casinos

As the merger with Coast Casinos was completed on July 1, 2004, there are no results for Coast for the second quarter 2004 in the Company's financial statements. Therefore, all comparisons presented here are with Coast's pre- merger results of operations when they were an independent company, which results are reconciled in a table later in this release. Coast's revenues for the second quarter were $180 million, an increase of 10.9% over the second quarter last year. EBITDA for the second quarter was $61.2 million, a 32% increase over the prior period. EBITDA margin for the second quarter was 34.0%, up from 28.5% for the second quarter 2004, as 84% of incremental revenue flowed through to the EBITDA line. These results continue to demonstrate the strength of the Las Vegas economy. An additional factor contributing to the unit's strong performance was the 461 new hotel rooms at The Orleans that came on line in the fourth quarter 2004.

Stardust

The Stardust reported a 0.9% revenue gain in the second quarter versus the second quarter last year. Negatively affecting total revenue was lower showroom revenue due to a change in entertainment policy, an action that enhanced profitability. EBITDA for the quarter was $5.7 million, a 23% gain over the second quarter 2004. The second quarter marked the sixth straight quarter of EBITDA increases versus the comparable quarter in the prior year.

Downtown Properties

Revenues for the Downtown Properties increased 13.9% for the second quarter as compared to last year's second quarter. EBITDA for the second quarter was $14.3 million, a 63% increase over the prior year's quarter and a record EBITDA for the Downtown unit. All three casino hotels, while increasing revenues, reduced expenses in the second quarter versus the prior year to produce large increases in EBITDA margins. Including the travel agency, which experienced a $1.5 million increase in fuel costs in its air charter operations in the quarter versus the prior year's second quarter, the unit's EBITDA margin grew 6.4 percentage points in the second quarter versus the second quarter 2004.

Central Region

The six Central Region properties reported a 9.9% increase in revenues and a 7.8% increase in EBITDA for the second quarter versus the comparable quarter in 2004. This quarter's results include a full quarter of Sam's Town Shreveport, which the Company acquired in mid-May 2004. On a same-store basis, second quarter revenues increased 1.6% and EBITDA rose 5.8% over the second quarter 2004. The significant contributor to the EBITDA increase was Delta Downs, where EBITDA rose 45% in the second quarter versus the prior year due to a 24% increase in slot revenue following the opening of the new hotel and other amenities in March 2005. The only other significant variance in comparable quarter-over quarter results was at Sam's Town Tunica where EBITDA declined $2.2 million in the second quarter due to a decline in revenues.

Financial Statistics

The Company provided the following additional information for the second quarter ended June 30, 2005:

June 30 debt balance: $2.360 billion -- June 30 cash: $149 million -- Dividends paid in the quarter: $11.0 million -- Maintenance capital expenditures during the quarter: $26 million -- Expansion capital expenditures for projects during the quarter: Blue Chip - $26 million South Coast - $87 million -- Number of shares outstanding on June 30: 88.6 million -- Capitalized interest during the quarter: $5.0 million -- The Company received its second distribution from Borgata during the quarter: $6.6 million, representing 35% of the Company's half of Borgata's pre-tax income for the first quarter 2005 -- June 30 debt balance for Borgata: $366 million

Adjusted Earnings are earnings before preopening expenses, gain on sales of undeveloped land, acquisition and transition related expenses, charges associated with an Indiana state tax assessment and a cumulative effect of a change in accounting principle. Adjusted Earnings (and Adjusted EPS) are presented solely as a supplemental disclosure because management believes that it is a widely used measure of performance in the gaming industry and as this measure is considered by many to be a better measure on which to base expectations of future results than net income computed in accordance with generally accepted accounting principles ("GAAP"). A reconciliation of net income, based upon GAAP, to Adjusted Earnings and the presentation of Adjusted EPS are each included in the financial schedules accompanying this release. EBITDA is earnings before interest, taxes, depreciation, amortization, preopening expenses, deferred rent, merger, acquisition and transition related expenses, the gain on sales of undeveloped land, our share of Borgata's non-operating expenses, and a cumulative effect of a change in accounting principle. EBITDA and EBITDA margin are presented solely as supplemental disclosures because the Company believes that they are widely used measures of operating performance in the gaming industry and EBITDA is a principal basis for valuation of gaming companies. Specifically, EBITDA is presented before preopening expenses as it represents a measure of performance of the Company's existing operational activities. The Company uses property EBITDA (EBITDA before corporate expense) as the primary measure of the operating performance of each of its properties, including the evaluation of operating personnel. EBITDA should not be construed as an alternative to operating income, as an indicator of the Company's operating performance or as an alternative to cash flow from operating activities, as a measure of liquidity, or as any other measure determined in accordance with GAAP. The Company has significant uses of cash flows, including capital expenditures, interest payments, income taxes and debt principal repayments which are not reflected in EBITDA. Also, other gaming companies that report EBITDA information may calculate EBITDA in a different manner than the Company. EBITDA from Coast Casinos for the three months ended June 30, 2004 is reconciled in a table later in this release.

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