Boyd Gaming Corp (BYD)

[MCArmel1]

Boyd Gaming beats by $0.15, beats on revenue

Oct 22 2015, 16:08 ET | About: Boyd Gaming Corporation (BYD) | By: Niloofer Shaikh, SA News Editor

Boyd Gaming (NYSE:BYD): Q3 EPS of $0.27 beats by $0.15.

Revenue of $546.31M (-26.1% Y/Y) beats by $4.86M.

Press Release

http://seekingalpha.com/news/2850156-boyd-gaming-beats-by-0_15-beats-on-revenue?uprof=45#email_link


Boyd Gaming Reports Third-Quarter 2015 Results
Thu October 22, 2015 4:05 PM|PR Newswire | About: BYD

LAS VEGAS, Oct. 22, 2015 /PRNewswire/ -- Boyd Gaming Corporation (BYD) today reported financial results for the third quarter ended September 30, 2015.
photos.prnewswire.com/prnvar/20030219/BOYDLOGO
Boyd Gaming reported third-quarter 2015 net revenues of $546.3 million, an increase of 3.3% from pro forma net revenues of $528.9 million for the same quarter in 2014. Total Adjusted EBITDA(1) was $163.2 million, up 20.5% from the comparable pro forma amount of $135.4 million for the year-ago period. Effective September 30, 2014, the Company deconsolidated Borgata and is accounting for its 50% investment in Borgata by applying the equity method for periods subsequent to that date. The prior-year pro forma amounts reflect the results for Borgata on a comparable equity method basis.

Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: "The positive momentum that began late last year carried into the third quarter, as we continued to deliver strong growth in revenues and profitability. Increased consumer spending and effective marketing programs drove revenue growth across the portfolio, and our efficiency efforts delivered strong flow-through to the bottom line. Additionally, our long-term strategic initiative to enhance amenities in key markets resulted in continued non-gaming revenue growth. In all, this was another successful quarter for our Company, as we continued to generate increased value for our shareholders."

Adjusted Earnings(1) for the third quarter 2015 were $30.4 million, or $0.27 per share, compared to $0.3 million, or breakeven on a per-share basis, for the same period in 2014. The calculations of Adjusted Earnings, Adjusted Earnings per share, and pro forma results reflecting Borgata on a comparable basis for all periods are presented in tables at the end of this press release.

On a GAAP basis, the Company reported net income of $25.4 million, or $0.22 per share, for the third quarter 2015. By comparison, the Company reported a net loss of $15.1 million, or $0.14 per share, for the year-ago period. The prior-year third quarter included a pretax impairment charge of $12.1 million to adjust the value of the Company's equity ownership in Borgata as a result of its deconsolidation, and a $6.2 million pretax impairment charge to write down certain non-operating assets to their estimated recoverable value. These prior-year charges are not included in 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, third-quarter 2015 net revenues increased 4.8% to $148.0 million, compared to $141.2 million in the year-ago quarter. Third-quarter 2015 Adjusted EBITDA grew 15.0% to $32.3 million, compared to $28.1 million in the third quarter of 2014. Gaming revenue growth continued, while non-gaming revenues increased for the ninth consecutive quarter. Adjusted EBITDA benefited from continued operating efficiencies, as margins improved by nearly 200 basis points across the segment. All four major Locals properties achieved year-over-year revenue and Adjusted EBITDA gains, led by particularly strong performances at The Orleans and Gold Coast.

Downtown Las Vegas
In the Downtown Las Vegas segment, net revenues rose $3.3 million to $56.7 million, compared to $53.4 million in the third quarter of 2014. Adjusted EBITDA was $10.1 million, up $3.8 million from $6.3 million in the year-ago quarter. Revenue growth was driven by continued gains in pedestrian traffic throughout the area, as well as strength in the Company's Hawaiian business. Adjusted EBITDA benefitted from revenue growth, strong flow-through, and the positive impact of lower fuel costs at the Company's Hawaiian charter service.

Midwest and South; Peninsula
In the Midwest and South segment, net revenues were $215.8 million, an increase of 2.4% from $210.7 million in the third quarter of 2014. Adjusted EBITDA increased 16.3% to $50.7 million, compared to $43.6 million in the year-ago period.

The Peninsula segment reported net revenues of $125.8 million, up 1.8% from $123.6 million in the third quarter of 2014. Adjusted EBITDA was $45.6 million, increasing 6.4% from $42.9 million in the year-ago period.

Continued growth in customer spending drove increased revenues and Adjusted EBITDA across the two business segments. Additionally, refinements to operations and marketing programs led to margin improvement of more than 230 basis points across the Midwest and South and Peninsula segments.

Borgata
Borgata reported third-quarter 2015 net revenues of $237.5 million, increasing 13.1% from $209.9 million in the year-ago period. Adjusted EBITDA was $76.0 million, up 33.5% from $56.9 million in the third quarter of 2014.

Due to its deconsolidation, the Company now applies the equity method of accounting to its 50% investment in Borgata. The Company's share of Borgata's Adjusted EBITDA was $38.0 million for the third quarter of 2015 as compared to pro forma Adjusted EBITDA of $28.4 million in the prior-year period.

Borgata achieved its highest quarterly Adjusted EBITDA ever, driven by revenue growth throughout the operations, strong flow-through, and higher table game hold. Gross gaming revenue increased nearly 14%, including an 11% increase in slot volume. Additionally, online gaming contributed $3.4 million to Adjusted EBITDA during the quarter.

Borgata's third-quarter results were impacted by pretax losses on the early extinguishment of debt of $17.8 million, primarily related to the redemption of its 9.875% Senior Secured Notes due 2018. In addition, Borgata's income tax provision for the third quarter of 2015 was favorably impacted by the resolution of certain state income tax issues, which resulted in a $9.5 million reduction in the provision.

Balance Sheet Statistics
As of September 30, 2015, Boyd Gaming had cash on hand of $125.0 million, including $26.2 million related to Peninsula. Total debt was $3.34 billion, of which $1.02 billion was related to Peninsula. As a result of the deconsolidation, Borgata's cash and debt balances are no longer included in the Company's balance sheet. Borgata had cash on hand of $28.1 million and total debt of $677.2 million at September 30, 2015.

Full Year 2015 Guidance
Based on third-quarter results and continued positive trends in the business, the Company is raising its previously provided guidance for the full year 2015. The Company now projects Adjusted EBITDA, including 50% of Borgata's Adjusted EBITDA, of $610 million to $620 million.

Conference Call Information
Boyd Gaming will host its conference call to discuss third-quarter 2015 results today, October 22, at 5:00 p.m. Eastern. The conference call number is [phone], passcode 7474076. 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/964/11099

Following the call's completion, a replay will be available by dialing [phone] today, October 22, beginning at 7:00 p.m. Eastern and continuing through Thursday, October 29, at 11:59 p.m. Eastern. The conference number for the replay will be 10074443. The replay will also be available on the Internet at www.boydgaming.com

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