Boyd narrows losses amid solid performance by local casinos

Boyd Gaming Corp. reported Tuesday that its losses shrank in the fourth quarter of 2011 as results improved at its Las Vegas locals casinos.

Boyd said it lost $491,000, or 1 cent per share, compared with a loss of nearly $7.1 million, or 8 cents, in the final quarter of 2010.

Net revenue in the 2011 quarter increased 9.9 percent, to $606.7 million, in part because of Boyd’s purchase of the IP Casino Resort Spa in Biloxi, Miss., in October.

Boyd has 17 casinos in the Las Vegas area, New Jersey, Mississippi, Illinois, Indiana, and Louisiana.

The fourth quarter results include net revenue of $152.7 million from the company's Las Vegas locals’ properties Sam’s Town, Gold Coast, the Orleans and the Suncoast. That’s up slightly from $152.12 million in the same quarter in 2010.

Revenue at Las Vegas locals casinos has been depressed by the recession and accompanying foreclosures and high unemployment, now at 12.7 percent.

Adjusted EBITDA – a key profitability measure – increased at Boyd’s Las Vegas locals casinos to $36.8 million from $34.1 million. Boyd said in a financial report it improved operating margins at the locals’ properties – an indication it’s keeping costs in check – "despite a heightened promotional environment."

That’s an apparent reference to competitor Station Casinos' aggressive advertising campaign that for months has been touting that company's “We Love Locals” theme and car giveaways.

At Boyd’s downtown Las Vegas casinos – the Fremont, California and Main Street Station – net revenue of $58.7 million was up 2.7 percent. Adjusted EBITDA of $10.8 million was flat because of higher fuel costs for Boyd’s Hawaiian aircraft charter service.

EBITDA means earnings before interest, taxes, depreciation and amortization.

"We continued to produce consistent growth across the business in the fourth quarter. Our focus on profitable revenue growth and creating efficiencies allowed us to produce gains in EBITDA every quarter in 2011 and, for the first time in several years, we reported revenue increases in each of our business segments during the quarter. As economic conditions strengthen in our core markets, we are confident that our strategy of keeping a tight rein on costs, generating profitable new revenues and diversifying our sources of cash flow will deliver bottom-line results," Boyd CEO Keith Smith said in a statement.

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