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Friday, Aug. 14, 2009 | 3:25 p.m.
Sun Coverage
Sun Archives
- Boyd still interested in acquiring Station properties (8-5-2009)
- Culinary Union sees shot in Station insolvency (8-3-2009)
- Lenders battling in Station Casinos bankruptcy case (7-30-2009)
- Station Casinos wants out of lease for office space (7-29-2009)
- Station Casinos files for Chapter 11 (7-28-2009)
- Bondholder drops lawsuit against Station Casinos (5-11-2009)
- Station Casinos: Bankruptcy date depends on bondholders (3-18-2009)
- Betting it all on bankruptcy? (2-17-2009)
- Hearing delayed again on Station Casinos site (2-16-2009)
- Boyd responds to Station’s rejection of buyout (3-9-2009)
- Station rejects Boyd’s offer, extends debt deadline (3-3-2009)
- Boyd makes play for Station Properties (2-24-2009)
- Boyd Gaming offers to buy Station (2-23-2009)
- Station responds to lawsuit, misses $15.5M payment (2-17-2009)
With unemployment in the Las Vegas area running at 12.3 percent in June, locals are spending less and Station Casinos Inc. appeared to be hit hard by that trend in the second quarter ended June 30.
The company, which filed for bankruptcy reorganization on July 28, today said second quarter revenue fell 21 percent year to year, from $339.1 million to $267.2 million.
The decline in revenue contributed to a quarterly loss of $65.3 million vs. a profit in the year-earlier quarter of $18.6 million.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), a measure of profitability, for the quarter were $79.2 million, down 38 percent from 2008's second quarter.
The 2009 results include $4.5 million in legal fees related to Station's proposed debt restructuring and other non-recurring costs.
Revenue for the company's big Las Vegas hotel-casinos, excluding its Green Valley Ranch Resort and Aliante Station joint ventures, was $245.9 million, down 20 percent. Adjusted EBITDA decreased 33 percent to $71 million and the net loss was $15.6 million vs. a profit of $1.6 million in the year-earlier quarter.
Station earned $5.6 million from its Green Valley Ranch joint venture with affiliates of the Greenspun family, owner of the Las Vegas Sun.
Station's earnings at the Henderson resort represent a combination of its management fee plus 50 percent of Green Valley Ranch’s operating income.
For the second quarter, Green Valley Ranch generated adjusted EBITDA before management fees of $15.2 million, down 31 percent compared to the same period in the prior year. Green Valley Ranch reported a net loss of $3.8 million for the second quarter vs. a net loss of $1.2 million in the same period in the prior year.
The company said casino revenue in the quarter fell 20 percent and hotel room revenue was off 21 percent as the occupancy rate dipped from 91 percent to 87 percent and the average daily room rate fell from $88 to $69.
Station sought bankruptcy as the recession hurt its ability to service its $5.7 billion in debt and an agreement wasn't reached with lenders on a pre-packaged deal in which they would have made concessions while Station's owners would have pumped additional capital into the company. Court records show the lenders couldn't agree among themselves on potential restructuring deals presented to them.
Station's bankruptcy case is in its initial stages, with the company receiving approval for initial cash handling and spending procedures and now asking for court approval to hire several professionals to assist it and key lenders in the bankruptcy process.
Station and affiliated companies in bankruptcy, controlled by Colony Capital of Los Angeles and members of the Fertitta family, this week asked the court for permission to hire:
--The firm Milbank, Tweed, Hadley & McCloy LLP as counsel for the debtors on bankruptcy, financial restructuring, corporate, tax, litigation and securities matters.
--Lazard Freres & Co. LLP as financial advisor and investment banker.
--The law firm Squire, Sanders & Dempsey LLP as counsel to Station's "Special Litigation Committee to the Board of Directors." Station said the committee was formed in March to investigate and deal with any potential claims, including "derivative claims," arising from the 2007 deal in which Station was taken private by Colony and the Fertittas.
--Odyssey Capital Group LLC as financial advisor and investment banker to the special litigation committee. Station proposes that Odyssey review and analyze the going-private deal to determine if it was reasonable and review and analyze Station's solvency, on a going-concern basis, at the time of and following the transaction.
--The law firm Gibson, Dunn & Crutcher LLP as special counsel for certain lenders.
--FTI Consulting Inc. as financial advisor for certain lenders and Station.
stop throwing your money away at these places. SO many of your friends and neighbors are out of work.
if you got $20.00 to throw away, buy someone that is out of work some groceries or take them out to lunch.
and don't buy into that "support your local economy" nonsense. very, VERY little of the money you spend at a casino filters down to the rank and file worker.
Those law firms.....ALL very expensive and first rate. All are Los Angeles firms.
Thank you, Station Casinos. It would have been nice, being a local casino and all, if you would have hired any one of our fine Las Vegas law firms, some of which are quite capable AND in the same league as the firms you have hired.
Shame on you for not keeping the business in the city you rely upon for your livelihood.
Thanks harry Reid. The economy you, Pelosi and Obama fixed is doing great. How many more unemployed will these numbers cause?
Will they finally remove that unfair "Resort Amenity Fee" from the hotel bill? As if not, more and more Vegas visitors will check-in elsewhere....and play elsewhere. I don't like to be forced to pay for in-room-internet access I don't use or a newspaper on my door in the morning that I still don't read. I need a clean and cheap room without fancy extras and also don't want no additional and hidden charges!!! Only once this unfair policy will stop I will reconsider any of the Station properties to my place to stay. East Side Cannery knows how to treat out-of-town tourists. Station Casinos can learn a lot from them. Or the South Point.
From Switzerland
Southpoint is no big deal. They advertise loose slots but the only loose that I saw was my money going into the slots .I would tell Boris do not gamble and u can help our economy by not coming here.
Perhaps Station Casinos could market free bus tickets and a coupon book to every senior citizen in a 300 mile radius. No joke, this could be a great way to replace the locals that have stopped visiting.
neiman... Glad to see that in this world of ever changing things, we can count on at least one constant. The good news for you is that if you keep saying the same thing long enough you increase your chances of it being relevant and making sense.
chazbean... I'm sure that makes sense in your head, but how on earth is Boris not coming here helping our economy? The whole Vegas thing revolves around people coming here, and face it... they're not. You cemented Boris' point perfectly about not knowing how to treat the out-of-town guests.
The writing on the wall has been around for quite some time. Stations fell right in line with everyone else who thought everything would be up, up, up forever. I'd love to see if there was even one bean counter over the last ten years in this entire town who had the actual thought... "Hmmmm, maybe we should put some of this obscene profit away for slower times instead of continuing to spend like it's burning a hole in our account."
Bottom line is, this town is in trouble. It's worse than people want to believe, and it will likely last longer than people want. But it's no different than most other metropolitan areas in the country. Sure, unemployment is higher, but that's consistent with the industry that drives this place. Nevada is and will be for quite some time one of the leaders in foreclosures. But what do you expect when 4 out of every 5 homes sold from 2001 to 2006 were sold to people who couldn't afford it or were speculators with no vested interest?
Las Vegas is a product of it's environment. It's transient, it's superficial, it's low on natural resources, and it's based on recreation and luxury that most people can live without. Vegas had it's chance to keep people coming, but chose to rape them instead with tight slots and low payouts, reduced middle class amenities, and exhorbitant prices for the privelege of staying here.
Sadly, Stations is reaping the negative rewards of what it's sown for the last few years. Used to be cool, but then it tried to be something it's not and shot for a larger piece of an industry segement it has no business being in. The decisions made by the Fertitta's are directly responsible for the position that they're in. In my humble opinion, the lenders that forced this latest development are due some blame too. Instead of taking a relatively small piece of something, they're probably going to end up with a smaller piece of something smaller, if much at all. It really tells you all you need to know about this organization when instead of hiring local attorneys to represent them here, they hire out-of-towners to represent them. And they're hoping this whole thing happens in Reno! The friggin nerve of these guys!
Stations should have taken Boyd up on the offer they made. You watch... Stations as we know it will not look anything like it does now in 3 years. And that may be the only chance the good people at Stations have at righting the ship.
As a matter of fact, it's definetely a coin flip whether I will visit Vegas or Macau in 2010. To me it's about the same travelling time, but the advantages of visiting the new paradise nearby Hong Kong are about just as good as they are when I fly to Vegas.
In Macao, there are the same gaming options I used to find in Vegas, but in fact, while Vegas has removed all the great bonus slotmachines, has reduced the funbooks and LVA and ACG has less and less interesting coupons in it, Vegas becomes much less of an option to me.
To the contrary, Macau's casinos are offering about the same, plus some extra. While you pay 300-500 usd for an "entertainer" girl in Las Vegas after you get approached at the bar and asked "where do you come from, how about some fun?", the same sort of "fun" can be purchased for a fraction of that amount in Macau, plus, you will get real value for your money!
Vegas' hotel rates must remain low to attract the visitors, but that's not all that counts. I also expect the buffet prices to maintain a low price level and at least a minimum amount of good videopoker in the casinos, as otherwise I will book my next airticket no longer through United Airlines and such, but through Cathay Pacific or Singapore Airlines. Macau is the new rising star of the casino world. Vegas has had its chances and has taken advantage of its monopoly situation for too long. Time for a change.
Vegas- You call it.
From Switzerland
come back stardust!!!!!!
good idea, boomeranddalejr
Instead of constructing this oversized an no more realistic Echelon, how about a "New Stardust"? A nice hotel with tons of Videopoker and double-deck black jack and a nice sportsbook with good odds, 75 cents hot-dogs and in return a little less lcd screens for the spectators ?
I would support your idea :)
From Switzerland
Boris-
Please come back.
harske-
How very true. While I do have hope that Vegas will thrive again, it's only on the condition that we change. Basically, we can no longer be as dependent on gaming/tourism as we are now. We need to diversify our economy, and do so ASAP. The Cleveland Clinic & Ruvo Center will give us a chance to lure more biotech here, and all the sunny, windy desert surrounding us is just screaming for more renewable energy investment. Vegas has a chance to finally enter the 21st century, and I dearly hope we take it.
neiman1 You are an idiot who just never stops. Station Casinos did themselves in without any help from anyone else. They could not stand the scrutiny of Wall Street and went private at a huge cost, not to mention putting a billion dollar casino in a neighborhood did them in.
You are now the laughing stock of the posters with your ridicuous rants that have no meaning what so ever.
You should be thanking the most failed governor in the nation for not accepting stimulus money and now wanting to accept it along with his other miserable failings. but that won't happen he is Republican and you just can't get it right with these Republican failures can you? Grow up!
To bad for Stations! When the economy was doing well and they were buying and building on every corner in the city, things were fine! Now, they're suffering, but, unfortunately, they're not really suffering. It's the little guy that USED TO work there that's suffering. Yes, locals "STAY AWAY FROM THE STATION PROPERTIES, or, just throw your money in the Vegas wind!
Stations casino? We stayed there, played there and lost all the money. No pay on the slots! Received an invitation for a typical slot tournament and a room. Big deal! Also received a call the same day promoting the same thing, agent asked if we received the promotion flyer. Informed caller we would not take up the offer, didn't offer cheap flight, "they haven't done that for about 15 years". Told her that I had just received another offer from another casino for 3 nights stay and RT flight for $99. Love competition. Tossed their promo...it was easy.
The gaming industry could regain bussines if for starters call the industry what made it famous Gambling and assure patrons are not being cheated. I Want of see inside of 21 shoot and I want see all computers tied to roullet and crap tables.
I have refused to stay there due to the "room amenity fee" ----- I have called to book a room and the second I ask and find out about these " add ons" I hang up!!
Harske Your point is well taken, but we don't need a whiner! Let him go to Macao and get ripped off. Las Vegas is still a great place but u have to be selective in where u stay. We have great hotels ,Buffets,entertainment, and weather.
More people should refuse to stay at the Station Casinos properties, and AS WELL AT REFUSE TO STAY AT THE ORLEANS, as they also have the same ridiculous "Resort Fee" rip-off policy. Then when other casinos notice that the tourists appreciate fair business and will be loyal to such places, even Station Casinos will revoke their "Resort Amenity Fee" and charge this only to people that really request hispeed in-room internet and such fancy crap. Somebody who wants to go to Vegas, doesn't need internet. And doesn't need shoe shine (Red Rock), but they're selling it to the hotel guests, whether they want it or not, for 25 Dollars per night!!! Thieves!
From Switzerland
Boris, I agree.
the M resort is another resort fee rip off.
It is dishonest and makes me not trust the hotel.
Regarding Stations, I really don't think the Fertittas have done anything other than make bad business decisions. Given the scrutiny they went under when they went private, and the audits they went through for these latest proceedings, I would have a hard time believing that they're that dumb. A touch greedy, maybe overly egocentric yes, but not enough to try to pull anything illegal. But remember, in business in a capitalistic society... there are all kinds of things that are just this side of illegal that people do every day. I'm sure the Fertittas are no different than most of the guys on Wall Street who got away with all kinds of stuff that's acceptable in business.
And regarding the other companies you named... none of them are in very good shape. LVS is only still around as we know it because Sheldon dipped into his own pocket to keep things running. He's still talking expansion worldwide, so I really don't think he's quite learned yet... so I wouldn't trust that company just yet. MGM has been in a financial decline for the last few years and may not make it through. Don't forget, they managed to lose $212 million in the second quarter this year. Not many companys have that just laying around. We'll see how their management "rearrangement" goes over the short term. Harrah's is in probably the best shape, but they have their own challenges. If you take away the huge one-time gain they were able to take in the second quarter this year, their numbers are right in line with everyone else.
All the companies in town are in the same boat. Losses are starting to pile up. I don't care who you are... you can only endure losses for so many quarters before they become real.
Katie- Did they move Wall Street to LA and not tell anyone? Because those are two white shoe Wall Street firms, which makes sense because that's where the real fight in this bankruptcy is taking place. The bond holders (mostly mutual funds) are only creditors who have any major loss exposure. Stations isn't screwing their employees out of salary or the company which sells them beer.
Boyd was smart enough to put the breaks on Echelon. Now they are going after the company that had none!