Boyd Gaming reports mixed results for first quarter
Boyd Gaming Corp. of Las Vegas today posted mixed first quarter results for its big Las Vegas market, with revenue growing from its downtown casinos but falling in the suburbs.
Overall, net revenue nationwide of $564.9 million was down 1.5 percent and the company lost $3.5 million, or 4 cents per share; compared to net income of $8.4 million, or 10 cents per share, in the same period last year.
Boyd's Las Vegas locals segment generated first quarter net revenue of $154.5 million, down 1.3 percent from $156.6 million for the first quarter of 2010. First-quarter 2011 adjusted EBITDA in the segment was $39.6 million, a decline of 2 percent from the $40.4 million reported in the same quarter of 2010. EBITDA is a profitability measure meaning earnings before interest, taxes, depreciation and amortization.
With the Southern Nevada economy struggling with unemployment running at 13.3 percent, Boyd's Las Vegas locals region posted nearly flat year-over-year results for the second consecutive quarter. This division includes Sam's Town, the Orleans, the Gold Coast and the Suncoast.
The firm's downtown Las Vegas properties, however, generated net revenue of $55.7 million for the first quarter 2011, up 3.1 percent from $54 million in the first quarter of 2010. Adjusted EBITDA was $9 million, an increase of 7.1 percent from $8.4 million in the same quarter last year.
"Regional results reflect higher spend among our Hawaiian customers and greater efficiencies in our operations, offset by significantly higher fuel costs at our Hawaiian charter service," Boyd said of the downtown results. These properties include Main Street Station, the California and the Fremont.
In Boyd's Midwest and South regions, net revenue was $184.1 million, down 0.9 percent. At the half-owned Borgata resort in Atlantic City, net revenue of $169.1 million was down 3.4 percent.
Despite the nationwide decline in revenue, CEO Keith Smith said in a statement: "We continued to see improvement in our business during the quarter. Our wholly-owned operations achieved quarterly EBITDA growth for the first time since the recession began, giving us confidence that we have reached a turning point for our company. We expect to see further growth through the remainder of this year."
Smith said during a conference call that despite widespread concern about rising gasoline prices, they have not caused consumers to reduce visitation to the company’s Las Vegas properties.
"While concerns have been raised about high commodity prices including gasoline, we have not seen an impact on our business to date," Smith said. "The transitory spike in gas prices did not have a significant impact on our business several years ago and we do not believe the current spike in prices represents a substantial long-term threat to the recovery of our business."
Despite the first quarter decline in the Las Vegas locals properties’ revenue, Smith said local economic conditions are improving and business is picking up nationwide.
"We were especially encouraged by our March results, when 11 of our 13 major wholly-owned properties reported increases from March 2010, including all seven of our major Las Vegas properties," Smith said. "Our wholly-owned EBITDA was up in the low double digits for March.
"The second quarter was off to a good start as well as our properties reported solid results in April. Our results for the first four months of this year give us confidence we have reached a turning point. Based on these results, we expect to continue seeing year-over-year growth in our wholly-owned business for the remainder of the year.
"One of the key reasons for improvement is continued improvement in the Las Vegas market. Visitor counts continue to increase and have now risen for 17 of the last 18 months," he said.
Smith noted improvements in Las Vegas in the convention industry, in local taxable sales and in the job market.