LAS VEGAS, April 25, 2019 /PRNewswire/ -- Boyd Gaming
Corporation (NYSE: BYD) today reported financial results for the
first quarter ended March 31,
2019.
Keith Smith, President and Chief
Executive Officer of Boyd Gaming, said: "This was another great
quarter for our Company, as the successful execution of our
strategy continues to deliver growth and margin improvement across
every segment of our business. Both of our Nevada segments continued to achieve solid
growth in profitable revenues, Adjusted EBITDAR and operating
margins, driven by a robust regional economy and operational and
marketing refinements. Our Midwest and South business
produced its fourth consecutive quarter of same-store Adjusted
EBITDAR gains, overcoming severe winter weather early in the
quarter with an exceptionally strong March performance. We
also made substantial progress integrating our recent acquisitions
and realizing synergies, positioning us to take advantage of the
long-term potential of our new properties. In all, we remain
confident in the direction of our Company, and committed to
creating long-term value for our shareholders."
Boyd Gaming reported first-quarter revenues of $827.3 million, a 36.5% increase from
$606.1 million in the first quarter
of 2018. The Company reported net income of $45.5 million, or $0.40 per share, for the first quarter of 2019,
compared to $41.4 million, or
$0.36 per share, for the year-ago
period.
Total Adjusted EBITDAR(1) was $223.0 million in the first quarter of 2019, up
39.0% from $160.5 million in the
first quarter of 2018. Adjusted Earnings(1) for the
first quarter of 2019 were $48.9
million, or $0.43 per share,
compared to Adjusted Earnings of $45.2
million, or $0.39 per share,
for the same period in 2018.
Results for the first quarter of 2019 include $213.0 million in revenues and $59.5 million in Adjusted EBITDAR from Ameristar
Kansas City, Ameristar St. Charles, Belterra Resort and Belterra
Park, acquired on October 15, 2018;
Valley Forge Casino Resort, acquired by the Company on September 17, 2018; and Lattner Entertainment,
acquired on June 1, 2018.
(1)
|
See footnotes at
the end of the release for additional information relative to
non-GAAP financial measures.
|
Operations Review
Las Vegas Locals
In the Las Vegas Locals
segment, first-quarter 2019 revenues were $222.9 million, up from $222.2 million in the year-ago quarter.
First-quarter 2019 Adjusted EBITDAR was $74.2 million, improving 4.5% from $71.0 million in the first quarter of 2018.
A strong regional economy, as well as continued operational
efficiencies and marketing refinements, contributed to revenue and
Adjusted EBITDAR growth across the Las Vegas Locals segment.
Operating margins improved more than 130 basis points
year-over-year, as the segment recorded its highest first-quarter
Adjusted EBITDAR since 2007.
Downtown Las
Vegas
In the Downtown
Las Vegas segment, revenues were $63.0 million in the first quarter of 2019,
growing from $60.5 million in the
year-ago period. Adjusted EBITDAR was $15.0 million in the first quarter of 2019,
increasing 13.7% from $13.2 million
in the year-ago quarter.
Strong revenue and EBITDAR growth at all three downtown
properties drove a record first-quarter Adjusted EBITDAR
performance for the segment, as operating margins rose nearly 200
basis points. Segment operations continued to benefit from
strength in the Company's Hawaiian customer base, as well as
long-term growth in visitation to the downtown area.
Midwest and South
In the Midwest and South
segment, revenues were $541.4
million, up from $323.5
million in the first quarter of 2018. Adjusted EBITDAR
was $156.5 million, growing from
$94.2 million in the year-ago period.
Results for the segment include contributions from the Company's
newly acquired properties.
Despite severe winter weather, the segment achieved its fourth
consecutive quarter of same-store Adjusted EBITDAR growth, driven
by operational and marketing refinements, as well as healthy
economic conditions across the Company's regional markets. On
a combined basis, the Company's newly acquired properties also
produced strong results for the quarter, growing both revenue and
Adjusted EBITDAR compared to their year-ago performance on a
standalone basis.
Balance Sheet Statistics
As of March 31, 2019, Boyd Gaming had cash on hand of
$247.7 million, and total debt of
$4.0 billion.
Full-Year 2019 Guidance
For the full year 2019, Boyd
Gaming reaffirms its previously provided guidance of total Adjusted
EBITDAR of $885 million to
$910 million.
Conference Call Information
Boyd Gaming will host a
conference call to discuss first-quarter 2019 results today,
April 25, at 5:00 p.m. Eastern. The conference call
number is (888) 317-6003, passcode 3108761.
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/964/30205.
Following the call's completion, a replay will be available by
dialing (877) 344-7529 today, April
25, beginning at 7:00 p.m.
Eastern and continuing through Thursday, May
2, at 11:59 p.m.
Eastern. The conference number for the replay will be
10130517. 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)
|
2019
(a)
|
|
2018
(b)
|
Revenues
|
|
|
|
Gaming
|
$
|
620,253
|
|
|
$
|
440,463
|
|
Food &
beverage
|
111,090
|
|
|
85,399
|
|
Room
|
57,244
|
|
|
47,912
|
|
Other
|
38,701
|
|
|
32,344
|
|
Total
revenues
|
827,288
|
|
|
606,118
|
|
Operating costs
and expenses
|
|
|
|
Gaming
|
276,421
|
|
|
188,863
|
|
Food &
beverage
|
102,114
|
|
|
82,657
|
|
Room
|
26,864
|
|
|
20,918
|
|
Other
|
23,880
|
|
|
20,805
|
|
Selling, general and
administrative
|
114,424
|
|
|
86,711
|
|
Master lease rent
expense (c)
|
23,962
|
|
|
—
|
|
Maintenance and
utilities
|
38,100
|
|
|
27,926
|
|
Depreciation and
amortization
|
67,253
|
|
|
51,276
|
|
Corporate
expense
|
22,705
|
|
|
18,022
|
|
Share-based
compensation expense
|
9,709
|
|
|
8,927
|
|
Project development,
preopening and writedowns
|
4,031
|
|
|
3,440
|
|
Other operating
items, net
|
199
|
|
|
1,799
|
|
Total operating
costs and expenses
|
709,662
|
|
|
511,344
|
|
Operating
income
|
117,626
|
|
|
94,774
|
|
Other expense
(income)
|
|
|
|
Interest
income
|
(106)
|
|
|
(457)
|
|
Interest expense, net
of amounts capitalized
|
61,330
|
|
|
44,259
|
|
Loss on early
extinguishments and modifications of debt
|
—
|
|
|
61
|
|
Other, net
|
115
|
|
|
(380)
|
|
Total other
expense, net
|
61,339
|
|
|
43,483
|
|
Income before
income taxes
|
56,287
|
|
|
51,291
|
|
Income tax
provision
|
(10,836)
|
|
|
(9,892)
|
|
Net
income
|
$
|
45,451
|
|
|
$
|
41,399
|
|
|
|
|
|
Basic net income
per common share
|
$
|
0.40
|
|
|
$
|
0.36
|
|
Weighted average
basic shares outstanding
|
113,340
|
|
|
114,375
|
|
|
|
|
|
Diluted net income
per common share
|
$
|
0.40
|
|
|
$
|
0.36
|
|
Weighted average
diluted shares outstanding
|
113,871
|
|
|
115,154
|
|
__________________________________________
|
(a)
|
Results for the three
months ended March 31, 2019 include Lattner Entertainment, acquired
on June 1, 2018, Valley Forge Casino Resort, acquired
on September 17, 2018, and Ameristar Casino
Kansas City, Ameristar Casino St. Charles, Belterra Resort and
Belterra Park, acquired on October 15, 2018 (collectively, the
"Acquired Businesses"). See Boyd Gaming's Form 10-K for the period
ended December 31, 2018, for further information regarding the
Acquired Businesses.
|
(b)
|
Prior year operating
costs and expense amounts reflect the reclassification of
share-based compensation expense to conform with the current year
presentation of this expense as a single line item.
|
(c)
|
Rent expense incurred
by those properties subject to a master lease with a real estate
investment trust.
|
BOYD GAMING
CORPORATION
|
SUPPLEMENTAL
INFORMATION
|
Reconciliation of
Adjusted EBITDA to Net Income
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
March
31,
|
(In
thousands)
|
2019
(a)
|
|
2018
|
Total Revenues by
Reportable Segment
|
|
|
|
Las Vegas
Locals
|
$
|
222,850
|
|
|
$
|
222,175
|
|
Downtown Las
Vegas
|
63,026
|
|
|
60,468
|
|
Midwest and
South
|
541,412
|
|
|
323,475
|
|
Total
revenues
|
$
|
827,288
|
|
|
$
|
606,118
|
|
|
|
|
|
Adjusted EBITDAR
by Reportable Segment
|
|
|
|
Las Vegas
Locals
|
$
|
74,234
|
|
|
$
|
71,030
|
|
Downtown Las
Vegas
|
15,025
|
|
|
13,218
|
|
Midwest and
South
|
156,471
|
|
|
94,246
|
|
Property Adjusted
EBITDAR
|
245,730
|
|
|
178,494
|
|
Corporate
expense
|
(22,705)
|
|
|
(18,022)
|
|
Adjusted
EBITDAR
|
223,025
|
|
|
160,472
|
|
Master lease rent
expense (b)
|
(23,962)
|
|
|
—
|
|
Adjusted
EBITDA
|
199,063
|
|
|
160,472
|
|
|
|
|
|
Other operating
costs and expenses
|
|
|
|
Deferred
rent
|
245
|
|
|
256
|
|
Depreciation and
amortization
|
67,253
|
|
|
51,276
|
|
Share-based
compensation expense
|
9,709
|
|
|
8,927
|
|
Project development,
preopening and writedowns
|
4,031
|
|
|
3,440
|
|
Other operating
items, net
|
199
|
|
|
1,799
|
|
Total other
operating costs and expenses
|
81,437
|
|
|
65,698
|
|
Operating
income
|
117,626
|
|
|
94,774
|
|
Other expense
(income)
|
|
|
|
Interest
income
|
(106)
|
|
|
(457)
|
|
Interest expense, net
of amounts capitalized
|
61,330
|
|
|
44,259
|
|
Loss on early
extinguishments and modifications of debt
|
—
|
|
|
61
|
|
Other, net
|
115
|
|
|
(380)
|
|
Total other
expense, net
|
61,339
|
|
|
43,483
|
|
Income before
income taxes
|
56,287
|
|
|
51,291
|
|
Income tax
provision
|
(10,836)
|
|
|
(9,892)
|
|
Net
income
|
$
|
45,451
|
|
|
$
|
41,399
|
|
__________________________________________
|
(a)
|
Results for the three
months ended March 31, 2019 include the Acquired Businesses, which
are included in the Midwest and South segment.
|
(b)
|
Rent expense incurred
by those properties subject to a master lease with a real estate
investment trust.
|
BOYD GAMING
CORPORATION
|
SUPPLEMENTAL
INFORMATION
|
Reconciliations of
Net Income to Adjusted Earnings
|
and Net Income Per
Share to Adjusted Earnings Per Share
|
(Unaudited)
|
|
Three Months
Ended
|
|
March
31,
|
(In thousands,
except per share data)
|
2019
(a)
|
|
2018
|
Net
income
|
$
|
45,451
|
|
|
$
|
41,399
|
|
Pretax
adjustments:
|
|
|
|
Project development,
preopening and writedowns
|
4,031
|
|
|
3,440
|
|
Other operating
items, net
|
199
|
|
|
1,799
|
|
Loss on early
extinguishments and modifications of debt
|
—
|
|
|
61
|
|
Other, net
|
115
|
|
|
(380)
|
|
Total
adjustments
|
4,345
|
|
|
4,920
|
|
|
|
|
|
Income tax
effect for above adjustments
|
(933)
|
|
|
(1,107)
|
|
Adjusted
earnings
|
$
|
48,863
|
|
|
$
|
45,212
|
|
|
|
|
|
Net income per
share, diluted
|
$
|
0.40
|
|
|
$
|
0.36
|
|
Pretax
adjustments:
|
|
|
|
Project development,
preopening and writedowns
|
0.04
|
|
|
0.03
|
|
Other operating
items, net
|
—
|
|
|
0.01
|
|
Loss on early
extinguishments and modifications of debt
|
—
|
|
|
—
|
|
Other, net
|
—
|
|
|
—
|
|
Total
adjustments
|
0.04
|
|
|
0.04
|
|
|
|
|
|
Income tax
effect for above adjustments
|
(0.01)
|
|
|
(0.01)
|
|
Adjusted earnings
per share, diluted
|
$
|
0.43
|
|
|
$
|
0.39
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
113,871
|
|
|
115,154
|
|
__________________________________________
|
(a)
|
Results for the three
months ended March 31, 2019 include the Acquired
Businesses.
|
Non-GAAP Financial Measures
Regulation G, "Conditions
for Use of Non-GAAP Financial Measures," prescribes the conditions
for use of non-GAAP financial information in public disclosures. We
believe that our presentations of the following non-GAAP financial
measures are important supplemental measures of operating
performance to investors: earnings before interest, taxes,
depreciation and amortization (EBITDA), Adjusted EBITDA, EBITDAR
(EBITDA further adjusted for rent expense associated with a master
lease), Adjusted EBITDAR, Adjusted Earnings and Adjusted
Earnings Per Share (Adjusted EPS). The following discussion defines
these terms and why we believe they are useful measures of our
performance. We do not provide a reconciliation of
forward-looking non-GAAP financial measures to the corresponding
forward-looking GAAP measure due to our inability to project
special charges and certain expenses.
EBITDA, Adjusted EBITDA, EBITDAR and Adjusted EBITDAR
EBITDA and EBITDAR are commonly used measures of performance in our
industry that we believe, when considered with measures calculated
in accordance with accounting principles generally accepted in
the United States ("GAAP"),
provide our investors a more complete understanding of our
operating results before the impact of investing and financing
transactions and income taxes and facilitates comparisons between
us and our competitors. Management has historically adjusted EBITDA
and EBITDAR when evaluating operating performance because we
believe that the inclusion or exclusion of certain recurring and
non-recurring items is necessary to provide a full understanding of
our core operating results and as a means to evaluate
period-to-period results. We refer to this measure as Adjusted
EBITDA or Adjusted EBITDAR. We have chosen to provide this
information to investors to enable them to perform comparisons of
past, present and future operating results and as a means to
evaluate the results of core on-going operations. We have
historically reported these measures to our investors and believe
that the continued inclusion of Adjusted EBITDA and Adjusted
EBITDAR provides consistency in our financial reporting. We use
Adjusted EBITDA and Adjusted EBITDAR in this press release because
we believe this information is useful to investors in allowing
greater transparency related to significant measures used by our
management in their financial and operational decision-making.
Adjusted EBITDA and Adjusted EBITDAR are among the more significant
factors in management's internal evaluation of total company and
individual property performance and in the evaluation of incentive
compensation related to property management. Management also uses
Adjusted EBITDA and Adjusted EBITDAR as measures in the evaluation
of potential acquisitions and dispositions. Adjusted EBITDA and
Adjusted EBITDAR are also used by management in the annual budget
process. Externally, we believe these measures continue to be used
by investors in their assessment of our operating performance and
the valuation of our company. Adjusted EBITDA reflects EBITDA
adjusted for deferred rent, share-based compensation expense,
project development, preopening and writedown expenses, impairments
of assets, loss on early extinguishments and modifications of debt
and other operating items, net. Adjusted EBITDAR reflects Adjusted
EBITDA further adjusted for rent expense associated with a master
lease with a real estate investment trust.
Adjusted Earnings and Adjusted EPS
Adjusted Earnings
is net income before project development, preopening and writedown
expenses, impairments of assets, other items, net, gain or loss on
early extinguishments and modifications of debt, other
non-recurring adjustments, net, and income from discontinued
operations, net of tax. Adjusted Earnings and Adjusted EPS are
presented solely as supplemental disclosures because management
believes that they are widely used measures of performance in the
gaming industry.
Limitations on the Use of Non-GAAP Measures
The use of
EBITDA, Adjusted EBITDA, EBITDAR, Adjusted EBITDAR, Adjusted
Earnings, Adjusted EPS and certain other non-GAAP financial
measures has certain limitations. Our presentation of EBITDA,
Adjusted EBITDA, EBITDAR, Adjusted EBITDAR, Adjusted Earnings,
Adjusted EPS or certain other non-GAAP financial measures may be
different from the presentation used by other companies and
therefore comparability may be limited. Depreciation and
amortization expense, interest expense, income taxes and other
items have been and will be incurred and are not reflected in the
presentation of EBITDA, Adjusted EBITDA, EBITDAR and Adjusted
EBITDAR. Each of these items should also be considered in the
overall evaluation of our results. Additionally, EBITDA, Adjusted
EBITDA, EBITDAR and Adjusted EBITDAR do not consider capital
expenditures and other investing activities and should not be
considered as a measure of our liquidity. We compensate for these
limitations by providing the relevant disclosure of our
depreciation and amortization, interest and income taxes, capital
expenditures and other items both in our reconciliations to the
historical GAAP financial measures and in our consolidated
financial statements, all of which should be considered when
evaluating our performance.
EBITDA, Adjusted EBITDA, EBITDAR, Adjusted EBITDAR, Adjusted
Earnings, Adjusted EPS and certain other non-GAAP financial
measures are used in addition to and in conjunction with results
presented in accordance with GAAP. EBITDA, Adjusted EBITDA,
EBITDAR, Adjusted EBITDAR, Adjusted Earnings, Adjusted EPS and
certain other non-GAAP financial measures should not be considered
as an alternative to net income, operating income, or any other
operating performance measure prescribed by GAAP, nor should these
measures be relied upon to the exclusion of GAAP financial
measures. EBITDA, Adjusted EBITDA, EBITDAR, Adjusted EBITDAR,
Adjusted Earnings, Adjusted EPS and certain other non-GAAP
financial measures reflect additional ways of viewing our
operations that we believe, when viewed with our GAAP results and
the reconciliations to the corresponding historical GAAP financial
measures, provide a more complete understanding of factors and
trends affecting our business than could be obtained absent this
disclosure. Management strongly encourages investors to review our
financial information in its entirety and not to rely on a single
financial measure.
Forward-looking Statements and Company
Information
This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Such statements contain words such as "may,"
"will," "might," "expect," "believe," "anticipate," "could,"
"would," "estimate," "continue," "pursue," or the negative thereof
or comparable terminology, and may include (without limitation)
information regarding the Company's expectations, goals or
intentions regarding future performance. In addition,
forward-looking statements in this press release include statements
regarding: the benefits from the Company's recently completed
acquisitions, progress on its strategic plan, and the overall
direction of the Company, continuing to create significant
shareholder value, and all of the statements under the heading
"Full-Year 2019 Guidance." Forward-looking statements involve
certain risks and uncertainties, and actual results may differ
materially from those discussed in any such statement. These risks
and uncertainties include, but are not limited to: fluctuations in
the Company's operating results; the results of operations of its
properties in various markets; the political climate and its
effects on consumer spending and its impact on the travel industry;
the state of the economy and its effect on consumer spending and
the Company's results of operations; the impact and effects of the
local economies in the markets where the Company has operations;
the receipt of legislative, and other state, federal and local
approvals for the Company's development projects; whether online
gaming will become legalized in various states, the Company's
ability to operate online gaming profitably, or otherwise; consumer
reaction to fluctuations in the stock market and economic factors;
the fact that the Company's expansion, development and renovation
projects (including enhancements to improve property performance)
are subject to many risks inherent in expansion, development or
construction of a new or existing project; the effects of events
adversely impacting the economy or the regions from which the
Company draws a significant percentage of its customers;
competition; litigation; financial community and rating agency
perceptions of the Company and its subsidiaries; changes in laws
and regulations, including increased taxes; the availability and
price of energy, weather, regulation, economic, credit and capital
market conditions; and the effects of war, terrorist or similar
activity. Additional factors that could cause actual results to
differ are discussed under the heading "Risk Factors" and in other
sections of the Company's Annual Report on Form 10-K, its Quarterly
Reports on Form 10-Q, and in the Company's other current and
periodic reports filed from time to time with the SEC. All
forward-looking statements in this press release are made as of the
date hereof, based on information available to the Company as of
the date hereof, and the Company assumes no obligation to update
any forward-looking statement.
About Boyd Gaming
Founded in 1975, Boyd Gaming
Corporation (NYSE: BYD) is a leading geographically
diversified operator of 29 gaming entertainment properties in 10
states. The Company currently operates 1.77 million square
feet of casino space, more than 38,000 gaming machines, 815 table
games, more than 11,000 hotel rooms, and 320 food and beverage
outlets. With one of the most experienced leadership teams in
the casino industry, Boyd Gaming prides itself on offering its
guests an outstanding entertainment experience, delivered with
unwavering attention to customer service. For additional
Company information and press releases, visit
www.boydgaming.com.
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SOURCE Boyd Gaming Corporation