Profits up for two Nevada gaming companies

John Wilen

Thursday, April 16, 1998 | 10:47 a.m.

Two Nevada gaming companies today reported strong first quarter earnings.

Boyd Gaming Corp. of Las Vegas reported earnings of $9.3 million, or 15 cents per share, a dramatic improvement over a loss of $77.7 million, or $1.27 per share, the company reported in the first quarter of 1997. The 1997 loss was due to a one-time impairment charge of $125.7 million to write down the value of its operation in ultra-competitive Kansas City.

International Game Technology of Reno reported net income of $35.5 million, or 31 cents per share, in its second fiscal quarter ending March 31, a 28 percent improvement over the $27.7 million, or 22 cents per share, in the same quarter last year.

Boyd reported record earnings before interest, taxes, depreciation and amortization and before corporate expenses (EBITDA) of $58.7 million, a 17.8 percent jump over EBITDA of $49.9 million before the one-time charge in 1997.

Most of Boyd's EBITDA increase came from the company's midwestern properties -- the company attributed a full 75 percent of the increase to its purchase of the Treasure Chest riverboat casino in Kenner, La. EBITDA from Boyd's Boulder Strip casinos fell 10 percent, possibly because of new competition in Henderson; and EBITDA from the Stardust hotel-casino on the Strip fell 30 percent.

Boyd revenues increased to $250 million in the first quarter from $219.2 million in the first quarter of 1997. But like the EBITDA figures, revenues from the company's Stardust and Boulder Strip properties fell while revenues from its downtown Las Vegas and midwestern properties rose.

Revenues from the Stardust fell from $46 million in the first quarter of 1997 to $41.3 million this year. Boyd has said it is considering a major redevelopment of the Stardust.

Revenues from the company's central region, which includes properties in Mississippi, Illinois, Louisiana and Missouri, rose to $109.8 million in the first quarter from $80.3 million in the first quarter of 1997.

William S. Boyd, Boyd's chairman and chief executive, attributed the overall increases to the company's "broadly diversified property base as well as to the successful execution of our corporate strategy which includes expanding existing operations and acquiring attractively valued properties."

Boyd said it had reduced its debt by $32 million in the first quarter.

International Game Technology's profits rode the crest of a strong revenue increase. Total revenues increased to $184.1 million in the quarter from $164.4 million in the first quarter of 1997.

IGT revenue growth was strongest in the area of gaming operations, while product sales fell more than $6 million. Gaming operation revenues were $90.4 million, a sharp jump from the $66.1 million gaming operations brought in in the second fiscal quarter of 1997. Meanwhile, revenues from product sales fell from $98.2 million in the same quarter in 1997 to $91.6 million this year.

Tom Baker, IGT's president and chief operating officer, attributed the growth in gaming operation revenues to the success of the company's MegaJackpot games. The installed base of MegaJackpot games grew from 9,700 in the first calendar quarter of 1997 to 13,100 in this year's first quarter.

Falling product sale revenues were due to a flattening-out of the market for machines, which benefitted in 1997 from new casino operations and sales, IGT said. Unit sales declined to 12,600 in the first quarter from 16,300 a year earlier.

IGT said its acquisitions of Olympic Amusements Pty. Ltd. and Barcrest Ltd. late in the second fiscal quarter occurred too late to affect earnings.