Station Casinos ends year in black, despite $7.9 million 4th-quarter loss
Station Casinos LLC endured a sluggish fourth quarter to complete 2012 in the black, the company announced today.
The company, which owns 16 Southern Nevada gaming operations, reported in a conference call that it will focus on its tribal casino contracts in Michigan and California and its recently acquired majority stake in Fertitta Interactive, an online poker operation, while the Las Vegas Valley gets healthier economically.
In a filing with the Securities and Exchange Commission, the company reported a fourth-quarter net loss of $7.9 million on net revenue of $303.1 million for the quarter that ended Dec. 31. That compares with a net loss of $4.2 million on revenue of $303.5 million for the same quarter a year earlier.
For 2012, Station showed net income of $13.3 million, compared with a loss of $40.8 million in 2011.
Executives attributed the fourth-quarter lull to uncertainties associated with the election and December’s fiscal cliff issue.
“The macroeconomic backdrop looks positive in the years ahead,” said Marc Falcone, chief financial officer of Las Vegas-based Station in a call with investors this afternoon.
Falcone said the company is encouraged by Southern Nevada’s gradual economic recovery, citing an 18-month reduction in unemployment rates, a positive outlook delivered by a number of major capital projects in Southern Nevada and a population base that is continuing to grow — and spend.
Falcone said year-over-year visitation and spend per visit are up at local properties.
While the company is anticipating slow growth in Southern Nevada over the next few years, much of Station’s efforts are being focused on tribal operations the company manages.
The company refinanced debt for the tribal operation in Gun Lake, Mich., enabling the company to increase its management fee there. It also completed $850 million in new construction financing on the Graton Resort, which, when completed, will become the closest casino to the San Francisco Bay area.
Station also completed negotiations for a compact for North Fork Rancheria near Fresno, Calif. The deal awaits California legislative approval and a sign-off by the Interior Department.
In addition, the company completed the acquisition of a majority stake in Fertitta Interactive, which is licensed by the state and is expected to begin operating a live online poker site by summer.
The company will operate under the Ultimate Gaming and Ultimate Poker brands, a nod to Lorenzo Fertitta’s co-ownership of the Ultimate Fighting Championship franchise.
In response to an investor’s question, Falcone said Ultimate would consider a partnership with a land-based casino operation in New Jersey to enable the company to offer its online poker games to that state’s residents. New Jersey’s recently approved online gaming law requires the state’s operators to have a brick-and-mortar operation in Atlantic City.