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StumbleBoyd still interested in acquiring Station properties
Company reports 41 percent drop in net income in second quarter
Published Wednesday, Aug. 5, 2009 | 5:50 a.m.
Updated Wednesday, Aug. 5, 2009 | 11:55 a.m.
Boyd Gaming Financial Information
| 2Q 2009 | 2Q 2008 | % Change | 1Q 2009 | |
|---|---|---|---|---|
| Revenue | $423 million | $460.8 million | -8.2% | $434.8 million |
| Net income | $12.8 million | $21.7 million | -41% | ($13.8 million) |
| Net income per share | 15 cents | 25 cents | -40% | (16 cents) |
Boyd Gaming reported a 41 percent drop in net income for the second quarter of 2009, citing the continuing economic strain on the Las Vegas market, the company said today in its quarterly report.
During a conference call with investors and analysts today, Boyd reaffirmed its interest in buying Station Casinos assets and commented on the standing of its suspended Echelon project.
The Las Vegas-based casino operator reported net income of $12.8 million, or 15 cents per share, compared to net income of $21.7 million, or 25 cents per share, in the same period last year.
"While business conditions remained difficult in each of our regions, our results were in line with our expectations. The uncertainty which exists in the economy today continues to negatively impact consumer spending,” Boyd Gaming President and CEO Keith Smith said.
Net revenue for the quarter fell 8.2 percent from $460.8 million to $423 million during the year-over-year period.
Boyd Gaming’s locals-oriented properties generated $166.1 million in net revenue vs. $197.9 million a year ago due to reduced consumer spending and continued pressure on room rates. The company’s downtown properties’ net revenue fell to $57.6 million during the quarter from $63 million in the same period of 2008.
The company said during its earnings call that customers are still visiting properties in large numbers but spending significantly less. Rooms are being filled but only at large discounts.
Overall gaming revenue fell 7.2 percent while room revenue declined 11 percent.
But despite revenue and profit declines, Boyd said it is still actively looking to purchase some of its competitor’s assets. Smith said Boyd could play a key role in helping to expedite Station’s bankruptcy process.
“This filing does not change the fact that we are extremely interested in obtaining Station’s assets,” Smith said. “When we look at those assets, we think it’s a good fit.”
Smith would not comment on the specifics on conversations with Station Casinos executives and creditors but confirmed Boyd is in talks.
In February, the company offered to acquire several Station Casinos properties for $950 million but the offer was rejected.
On the Strip, Smith said the company is still re-evaluating the scope of its Echelon project, which it suspended construction on last August.
“We continue to review our options for our site and are investigating our design options. Until then, construction remains suspended,” Smith said.
When asked by an analyst if Boyd was looking to sell Echelon, Smith said the company was not looking at that option.
“When we suspended construction a year ago, we talked about the option of phasing, other partners, other ventures … we continue to look at all of those options,” he said.
Smith said decisions at Echelon will be based on the general health of the economy and credit market. The impact of CityCenter on the Strip’s room count later this year is also a factor, Smith added.
“We certainly wish MGM Mirage success with CityCenter. We’re rooting for them. We’re going to need quite an increase in visitors to absorb the market,” Smith said of the addition of CityCenter.
Boyd Chief Operating Officer Paul Chakmak said the company sees CityCenter as a net positive for its own business. The project is expected to bring more than 12,000 permanent jobs to the Las Vegas job market, which means an increase in consumer spending and stability in Boyd’s locals market.
“We know those local workers are our customers,” Chakmak said.
Net revenues at the Borgata in Atlantic City, Boyd’s joint venture with MGM Mirage, were $191.5 million for the second quarter of 2009, compared to $205.1 million recorded in the same quarter in 2008.
Last week Boyd and MGM Mirage said New Jersey regulators were moving ahead with plans for a hearing on whether MGM Mirage's partner in Macau is a suitable business partner for the gaming company.
When asked about details of the companies’ joint venture and if MGM Mirage would need to exit the agreement, Smith said he wouldn’t comment.
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There are lies, damned lies, then there are statistics! 2nd quarter 2009 revenus actually rose from $423.3 million in 2008 to $460.8 million this year but somehow the story is that Boyd lost money! HUH?
This is the answer to my prayers, by the way. Demolishing the Stardust, which was a perfectly good hotel-casino and made money hand over fist, was the stupidest thing I ever saw. Reminds me of the cash for clunkers program. You don't create wealth by destroying it!
Yes I agree. I come to Vegas from Chicago every year and the "Dust" was one of my favorite hotels. I really just don't care for the big glitzy hotels.
If these downtown hotels can hold out until the recovery yhey will be blasted with months/years of pent-up demand!
The net income is the only thing that matters. Employment losses will increase with the lower net and with city center about to take a share of the business many more layoffs are in store for all the other properties.
Boyd Gaming is a respectable gaming company led by individuals that exemplify integrity in this industry. I hope things turn around for them and that they are subsequently able to gobble up some or all of Stations assets at a good price. Las Vegas would be better off with more involvement by responsible companies such as Boyd. They are good to their employees, their customers and communities where ever they operate.
enteaser wrote
"There are lies, damned lies, then there are statistics! 2nd quarter 2009 revenus actually rose from $423.3 million in 2008 to $460.8 million this year "
You didnt read it right...it was 460.8 million in 2008 and 423 million in 2009
pacman720.
I read it right....they had the figures wrong....they just changed them without admitting their error...but that's to be expected for a Democratic rag.
the downward spiral continues.
at some point there will be a major resort on the strip that will close its doors before this is all over.
Boyd Gaming needs another property like a basketball team needs a place kicker. There is too much consolidation in the gaming industry ast it is.
enteaser.
Sorry you're wrong. I've checked multiple sources including Boyd's online filing with the SEC and Q2 2009 revenue was 423m versus Q2 2008 revenue of 461m. Besides in the current climate revenue numbers aren't as important as income per share 15-cents this quarter versus 25-cents a share a year ago. Many companies are coming out with lower revenue numbers but posting equal or better income numbers.
The other thing is "Cash for Clunkers" has nothing to do with wealth creation. Like the comedian Lewis Blacks says "the Democrats are a party with with NO ideas, but the Republicans are a party of BAD ideas'.
Although I don't believe more consolidation is good for Vegas, I do believe that anyone would serve Vegas better than the current Station heads. Stations WAS a well run outfit back in the day, but the young ones (Fertitas) got greedy and screwed and gouged the locals. Boyd STILL gives locals better value than Stations.
BOY O BOY - what a great subject:
Stardust - was the best - My 1st host was there - let me call him John (that is his real name) no last name. He gave me everything - I had a gold card - went to the bar and got those frozen drinks for free - even got one for a lady that liked the glass - The suites were still beautiful - no crap there. The casino still had alot of room - plus they didnt have any bonds to pay and owned the place - HEY - just put up another tower for more rooms and a parking garage. I was even lucky there a few times - won a few small jackpots - loved the people - when you came back - the people would remember you and say hi... Luved the William B place to eat - Had lobster for dinner and had 2 of them - wine - wow - even still I can see the place - What a bad move. My host even told them not to take it down - when they had decided to - economy was still pretty good - by the time it went to dust - then the bottom fell out - Think they should use that corner and just put up a 1 story building for the homeless - maybe he can get some tax credits from it. Or let the tent city move in - call it Dust City - Boyd Gaming has no clue - plus the stations are stupid also. My host now is at the palace station - not a host - due to the fact - they have to bring in so much $$$ and people he decided on his own to move into pit boss area - they still need that - I myself is sick of the big places - cry cry cry about money - I am going back in October and back to my old place of gambline - downtown - las vegas club - plaza and such...
I will not go back to the stations - unless Boyd gets some and its like the stardust again....
BUGSY has to be rolling in his grave as to the outcome of his ideas?Just go's to show you that CORPRATE AMERICA DOSENT HAVE A CLUE!!!
kaztec,
When I posted at 8:26 AM yesterday, the Sun had the 2008 and 2009 figures reversed. They corrected the figures without acknowledging their mistake. Sorry, but I was NOT wrong!
And thank you for agreeing with me that you don't create wealth by destroying it, and that's exactly why I mentioned the "cash for clunkers" program. I have no idea why you felt the need to mention it also.
Thumper is right about Boyd Gaming and the outrageous way they've treated the families of those boys they killed. On a separate point, I interviewed for a position at Boyd a few years back, was offered the job, but then declined it when they flabbergasted me with how poorly they paid. Without going into specifics, it was a white-collar, salaried postion, but the pay worked out to be $5.15 an hour, which was less than minimun wage, at the time! I also chatted up some employees at some of their downtown properties. Let's just say that these people on the inside did NOT give Boyd a ringing endorsement. I don't doubt that others have good experiences working for Boyd. But I'm not impressed with this company.
rumrunner-right on. ceo's don't realize if you spread the wealth around more at the bottom and middle, there will be more for them. it's like 1 company running vegas.