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Wednesday October 20, 3:02 pm Eastern Time
Company Press Release
SOURCE: Boyd Gaming Corporation
Boyd Gaming Reports 70% Increase in Third Quarter Earnings Per Share; Strong Quarter Boosts Year-To-Date Earnings Gains to 42%
LAS VEGAS, Oct. 20 /PRNewswire/ -- Boyd Gaming Corporation (NYSE: BYD - news) today announced that in the third quarter ended September 30, 1999, the Company earned $.17 per share, a 70% increase over the $.10 per share reported in the third quarter last year. Per share amounts are presented on a diluted basis. The $.17 per share represents the Company's second highest quarterly earnings in 3-1/2 years, exceeded only by the $.18 reported in the first quarter 1999. The increased earnings were driven by strong year-over-year gains in four areas: a 60% increase in Downtown Las Vegas operating cash flow; a 43% increase in Par-A-Dice operating cash flow; a 38% increase in the Silver Star management fee; and a 10.3% decline in interest expense as a result of the Company's strategy to reduce indebtedness.
The Company continued to reduce its debt in the third quarter. The $18 million reduction in the quarter brings to $129 million the amount of debt the Company has retired in the last seven quarters. This year's debt reduction through September 30 has been $61 millon, which amounts to an average of $1.6 million per week for the first 39 weeks of the year. At quarter's end, the Company's debt to trailing 12-month EBITDA stood at 3.4 times.
The Company reported operating cash flow from property operations (as defined by earnings before interest, taxes, depreciation and amortization, or EBITDA) in the quarter of $56.9 million, a 14.2% increase over the $49.9 million reported in the third quarter last year. The strong results in Downtown Las Vegas, Par-A-Dice, and Silver Star, which produced combined year-over-year operating cash flow gains of $11.0 million, were partially offset by the effects of construction disruption at the Stardust and Sam's Town Las Vegas.
Revenues for the quarter were $240 million, up 2.1% from the $235 million reported in the third quarter last year. Net income for the quarter was $10.3 million, up 74% from the $5.9 million reported in the comparable quarter in 1998.
For the first nine months of 1999, earnings per share before preopening expenses were $.51, an increase of 42% over the $.36, before a restructuring charge, reported in the same period last year. Operating cash flow from the Company's properties was $176 million in the nine months, up 7.2% from the first nine months of 1998. Revenues for the nine month period were $725 million, down from $730 million reported last year which included 6-1/2 months of operations of Sam's Town Kansas City.
Commenting on the quarterly results, William S. Boyd, Chairman and Chief Executive Officer of Boyd Gaming said, ``I am most gratified with the earnings increases that our Company has achieved this year -- a 70% increase over last year in earnings per share in the most recent quarter and a 42% increase for the first nine months of the year. I am very pleased with the combined achievements of strong growth in property cash flows and our continued debt and interest expense reduction. We believe we are positioned well for the fourth quarter with the pending acquisition of Blue Chip Casino and the resumption of more normal business levels at the Stardust as its renovation program winds down.'
Quarterly Property Highlights
In Nevada, the Downtown Properties once again produced strong results: revenues up 7.9% from the prior year, operating cash flow exceeding the $9 million level for the fourth quarter in a row, operating income margins up 5.7 percentage points from last year, and hotel occupancy of 95% for the quarter. The Stardust reported a $5.8 million decline in revenue and a $2.3 million decline in operating cash flow as a result of both increased competition on the Las Vegas Strip and substantial disruption to both guest rooms and public areas from the ongoing renovation project, which is scheduled for completion before the end of 1999. The nature and scope of the renovation work performed in the seasonally slow third quarter resulted in the highest level of business disruption of the entire project. Sam's Town Las Vegas reported year-over-year declines in both revenue and operating cash flow of $2.1 million and $1.2 million, respectively, primarily due to substantial renovation in the casino and valet areas. The renovation of the existing building is expected to continue until the spring of next year, while the major expansion of the property is expected to take place during 2000.
The Company's Central Region properties reported operating cash flow of $40.7 million, up 21% from the $33.7 million reported in the third quarter of 1998. The increase was the result of strong earnings gains from Par-A-Dice and Silver Star. Par-A-Dice experienced its first full quarter of dockside gaming which began in Illinois on June 26. Revenues at the property were up 26%, operating cash flow was up 43% and operating cash flow margin was up 4.6 percentage points from last year. The Silver Star management fee increased to 40% of operating income from 30% on July 1, 1999 pursuant to the terms of the management agreement, accounting for most of the 38% increase in fee income to the Company. Sam's Town Tunica experienced lower business levels in the quarter versus the comparable quarter in the prior year due to a continuing competitive environment. Its revenue declined $3.1 million, or 9.3%, versus last year and operating cash flow fell $1.0 million, or 13.0%, from last year. Treasure Chest continued to perform well in the quarter as revenue rose $1.9 million, or 6.4%, over last year, and operating cash flow rose $0.1 million, or 1.7%, from last year.
The following table reports net revenues and EBITDA for the Company's properties for the three and nine month periods ended September 30, 1999 and 1998. Boulder Strip Properties include Sam's Town Las Vegas, the Eldorado Casino and Jokers Wild Casino; Downtown Properties include the California Hotel and Casino, the Fremont Hotel and Casino, and Main Street Station; Central Region includes Sam's Town Tunica, Sam's Town Kansas City (closed July 1998), Par-A-Dice Hotel and Casino, Treasure Chest Casino; and management fee income from Silver Star Resort and Casino:
($000 in thousands) Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
Net Revenues
Stardust $ 32,239 $ 38,024 $109,360 $120,459
Boulder Strip Prop. 44,008 45,746 140,555 140,050
Downtown Prop. (a) 53,824 49,893 163,427 153,413
Nevada Region 130,071 133,663 413,342 413,922
Central Region 109,444 100,930 311,367 316,198
Total Properties $239,515 $234,593 $724,709 $730,120
EBITDA
Stardust $106 $2,356 $ 10,335 $ 15,925
Boulder Strip Prop. 6,713 7,953 26,863 28,491
Downtown Properties 9,389 5,857 28,319 18,987
Nevada Region 16,208 16,166 65,517 63,403
Central Region 40,741 33,715 110,726 100,955
Total Properties $ 56,949 $ 49,881 $176,243 $164,358
(a) Includes revenues related to Vacations Hawaii, a Honolulu travel
agency, of $9,760 and $8,525, respectively, for the quarters ended
September 30, 1999 and 1998, and revenues of $28,633 and $24,069,
respectively, for the nine-month periods ended September 30, 1999
and 1998.
This press release contains forward-looking statements regarding operating trends, the pending acquisition of Blue Chip Casino and the completion of renovation projects, which are subject to change. The actual results may differ materially from those described in any forward-looking statements. Additional information concerning potential factors that could affect the Company's financial results are included in the Company's Form 10-K for the year ended December 31, 1998.
Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD - news) is a leading diversified owner or operator of 11 casino entertainment properties located in Nevada, Mississippi, Illinois and Louisiana. Boyd Gaming recently agreed to acquire the Blue Chip Casino, a riverboat casino in Michigan City, Indiana, subject to regulatory approval. Boyd Gaming is also developing ``The Borgata' (AOL keyword: borgata or theborgata.com), a $750 million casino resort in the Marina district of Atlantic City, through a joint venture with Mirage Resorts, Incorporated.
Boyd Gaming press releases are available by facsimile through Company News On-Call (800) 758-5480, extension 104550, or at prnewswire.com. Additional news and information on Boyd Gaming can be found at boydgaming.com.
BOYD GAMING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
Revenues
Casino $175,778 $173,466 $533,533 $541,003
Food and beverage 37,834 38,589 118,779 121,097
Room 17,038 18,232 53,812 55,110
Other 17,469 16,410 53,560 52,151
Management fee 13,976 10,247 34,820 30,606
Gross revenues 262,095 256,944 794,504 799,967
Less promotional
allowances 22,580 22,351 69,795 69,847
Net revenues 239,515 234,593 724,709 730,120
Costs and expenses
Casino 89,412 89,174 268,777 276,149
Food and beverage 25,216 26,105 77,242 79,514
Room 5,795 6,161 17,978 18,643
Other 16,339 16,671 48,843 48,947
Selling, general
and administrative 34,375 35,645 104,652 111,440
Maintenance and
utilities 11,429 10,956 30,974 31,069
Depreciation and
amortization 17,478 17,940 54,744 54,938
Corporate expense 5,409 3,169 18,098 13,755
Preopening expense 354 -- 1,208 --
Restructuring charge -- -- -- 5,925
Total 205,807 205,821 622,516 640,380
Operating income 33,708 28,772 102,193 89,740
Other income (expense)
Interest income 137 87 240 293
Interest expense,
net of amounts
capitalized (16,539) (18,443) (50,332) (56,462)
Total (16,402) (18,356) (50,092) (56,169)
Income before provision
for income taxes and
cumulative effect
of a change in
accounting principle 17,306 10,416 52,101 33,571
Provision for
income taxes 6,969 4,479 21,419 14,276
Income before
cumulative effect of a
change in accounting
principle 10,337 5,937 30,682 19,295
Cumulative effect of a
change in accounting for
start-up activities, net
of tax benefit of $936 -- -- 1,738 --
Net income $10,337 $5,937 $28,944 $19,295
Basic and Diluted Net income per common share
Income before cumulative
effect of a change in
accounting principle $0.17 $0.10 $0.50 $0.31
Cumulative effect of a
change in accounting
for start-up activities,
net of tax -- -- (0.03) --
Net income $0.17 $0.10 $0.47 $0.31
Average Basic Shares
Outstanding 62,213 61,826 62,091 61,723
Average Diluted Shares
Outstanding 62,431 61,831 62,201 61,857
SOURCE: Boyd Gaming Corporation |
