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Boyd Gaming Reports First-Quarter 2016 Results

LAS VEGAS, April 26, 2016 /PRNewswire/ --Boyd Gaming Corporation BYD, +2.08% today reported financial results for the first quarter ended March 31, 2016.

Boyd Gaming reported first-quarter 2016 net revenues of $552.4 million, up from $550.6 million in the year-ago quarter. Total Adjusted EBITDA [(1) ] was $160.4 million, up 7.5% from $149.2 million in the first quarter of 2015.

Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: "Our Company continues to perform at a high level and deliver strong results, as the positive trends we saw in 2015 carried into the first quarter of 2016. Thanks to a strengthening southern Nevada economy, growth accelerated throughout our Las Vegas Locals business, which achieved its best year-over-year revenue comparisons in more than a decade. Recent investments across our portfolio delivered strong returns, driving increases in both visitation and revenues. And we used our substantial free cash flow to further deleverage our balance sheet, paying down nearly $125 million in debt during the quarter. In all, this was another great quarter for our Company as we continued to successfully execute our strategy, and we remain optimistic about our long-term growth potential."

Commenting on the Company's recently announced acquisitions of Aliante Casino Hotel & Spa and the Las Vegas assets of Cannery Casino Resorts, Smith added: "The Las Vegas Valley's growth prospects are compelling. We are excited to add three more assets that will expand and further diversify our presence in this high-growth market, and believe these acquisitions will deliver strong long-term returns for our shareholders."

Adjusted Earnings [(1)] for the first quarter 2016 were $34.0 million, or $0.30 per share, compared to earnings of $14.2 million, or $0.13 per share, for the same period in 2015.

On a GAAP basis, the Company reported net income of $33.2 million, or $0.29 per share, for the first quarter 2016, compared to net income of $35.1 million, or $0.31 per share, for the year-ago period. Settlements of previous years' income tax appeals reduced the first-quarter 2015 income tax provision by $23.2 million. The impact of the settlements is not included in the prior year's Adjusted Earnings or Adjusted Earnings per share.

(1)

See footnotes at the end of the release for additional information relative to non-GAAP financial measures

Key Operations Review

Las Vegas Locals In the Las Vegas Locals segment, first-quarter 2016 net revenues were $158.4 million, an increase of 5.4% from $150.3 million in the year-ago quarter. First-quarter 2016 Adjusted EBITDA was $44.3 million, up 13.9% from $38.9 million in the first quarter of 2015.

The first quarter of 2016 marked the fourth consecutive quarter of revenue and double-digit Adjusted EBITDA gains for the segment, as all major Locals properties achieved both higher revenues and Adjusted EBITDA. A strengthening local economy and recent investments in property amenities drove growth in visitation, gaming revenues and non-gaming revenues. Adjusted EBITDA gains reflect strong flow-through of incremental revenues, as operating margins improved more than 200 basis points.

Downtown Las VegasIn the Downtown Las Vegas segment, net revenues were $58.6 million in the first quarter of 2016, up 3.5% from $56.6 million in the year-ago period. Adjusted EBITDA increased 18.8% to $12.7 million, compared to $10.7 million in the first quarter of 2015.

All properties in the segment grew revenue and Adjusted EBITDA during the quarter – led by a record first-quarter Adjusted EBITDA performance at the Fremont – as operating margins improved 280 basis points across the segment. Positive results reflect continued growth in visitation throughout the Downtown area, as well as strengthening business volumes from the Company's Hawaiian customer segments.

Midwest and South; Peninsula In the Midwest and South segment, net revenues were $209.2 million, compared to $217.8 million in the first quarter of 2015. Adjusted EBITDA was $48.8 million versus $51.0 million in the year-ago period.

The Peninsula segment reported net revenues of $126.2 million, compared to $125.9 million in the first quarter of 2015. Adjusted EBITDA rose 1.6% to $47.1 million, versus $46.4 million in the year-ago period.

Improved operating trends continued at a number of properties in the segments, with both revenue and Adjusted EBITDA growth at Blue Chip, Diamond Jo Dubuque, Diamond Jo Worth, Treasure Chest and Kansas Star. Strong performances at these properties were offset by the impact of severe regional flooding in March, which affected operations in portions of Louisiana and Mississippi. Additionally, results at the IP reflect the short-term impact of the recent opening of a new competitor in the Biloxi market.

Borgata Borgata reported first quarter 2016 net revenues of $190.3 million, an increase of 4.2% from $182.6 million in revenues in the year-ago period. Adjusted EBITDA at Borgata was $45.3 million, an increase of 19.9% from $37.8 million in the first quarter of 2015.

Borgata recorded its strongest first-quarter Adjusted EBITDA performance since 2009, led by significant growth in slot volumes. The property continued to successfully maintain operating efficiencies, improving operating margins by more than 300 basis points.

The Company accounts for its 50% investment in Borgata by applying the equity method of accounting. The Company's share of Borgata's Adjusted EBITDA was $22.7 million for the first quarter of 2016, compared to $18.9 million in the year-ago period.

Balance Sheet Statistics Including operating cash balances and excess cash proceeds from its recent bond offering, Boyd Gaming had cash on hand of $616.2 million, including $27.2 million related to Peninsula, as of March 31, 2016. Total debt was $3.75 billion, of which $0.99 billion was related to Peninsula.

Borgata's cash and debt balances are not included in the Company's balance sheet. Borgata had cash on hand of $29.8 million and total debt of $651.5 million at March 31, 2016.

Full Year 2016 Guidance For the full year 2016, the Company is re-affirming its previously provided guidance of total Adjusted EBITDA, including Peninsula and 50% of Borgata's Adjusted EBITDA, of $635 million to $655 million. This guidance excludes the Company's recently announced acquisitions.

Conference Call Information Boyd Gaming will host its conference call to discuss first-quarter 2016 results today, April 26, at 5:00 p.m. Eastern. The conference call number is (888) 317-6003, passcode 1870859. Please call up to 15 minutes in advance to ensure you are connected prior to the start of the call.

The conference call will also be available live on the Internet at www.boydgaming.com, or: https://www.webcaster4.com/Webcast/Page/964/14670

Following the call's completion, a replay will be available by dialing (877) 344-7529 today, April 26, beginning at 7:00 p.m. Eastern and continuing through Tuesday, May 3, at 11:59 p.m. Eastern. The conference number for the replay will be 10084676. The replay will also be available on the Internet at www.boydgaming.com.

BOYD GAMING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)










Three Months Ended


March 31,

(In thousands, except per share data)

2016


2015

Revenues




Gaming

$

462,551



$

464,757


Food and beverage

76,800



76,296


Room

41,875



39,353


Other

31,466



29,685


Gross revenues

612,692



610,091


Less promotional allowances

60,314



59,513


Net revenues

552,378



550,578


Operating costs and expenses




Gaming

223,525



226,697


Food and beverage

41,803



41,567


Room

10,499



10,047


Other

19,332



19,646


Selling, general and administrative

81,851



81,689


Maintenance and utilities

23,848



25,319


Depreciation and amortization

47,653



51,942


Corporate expense

17,907



19,652


Project development, preopening and writedowns

1,841



955


Impairments of assets

1,440



1,065


Other operating items, net

429



116


Total operating costs and expenses

470,128



478,695


Boyd's share of Borgata's operating income

18,836



11,675


Operating income

101,086



83,558


Other expense (income)




Interest income

(497)



(471)


Interest expense, net of amounts capitalized

53,065



56,935


Loss on early extinguishments of debt

427



508


Other, net

77



618


Boyd's share of Borgata's non-operating items, net

7,206



7,661


Total other expense, net

60,278



65,251


Income before income taxes

40,808



18,307


Income taxes benefit (provision)

(7,618)



16,796


Net income

$

33,190



$

35,103






Basic net income per common share

$

0.29



$

0.31


Weighted average basic shares outstanding

114,109



111,446






Diluted net income per common share

$

0.29



$

0.31


Weighted average diluted shares outstanding

114,868



112,358


BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Reconciliation of Adjusted EBITDA to Operating Income

(Unaudited)










Three Months Ended


March 31,

(In thousands)

2016


2015

Net Revenues by Reportable Segment




Las Vegas Locals

$

158,398



$

150,302


Downtown Las Vegas

58,605



56,603


Midwest and South

209,185



217,764


Peninsula

126,190



125,909


Net revenues

$

552,378



$

550,578






Adjusted EBITDA by Reportable Segment




Las Vegas Locals

$

44,271



$

38,877


Downtown Las Vegas

12,681



10,677


Midwest and South

48,813



50,984


Peninsula

47,112



46,363


Wholly owned property Adjusted EBITDA

152,877



146,901


Corporate expense (a)

(15,185)



(16,642)


Wholly owned...


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