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Published Tuesday, Aug. 3, 2010 | 8:08 a.m.
Updated Tuesday, Aug. 3, 2010 | 12:28 p.m.
Boyd Gaming Financial Information
| 2Q 2010 | 2Q 2009 | % Change | 1Q 2010 | |
|---|---|---|---|---|
| Revenue | $578.4 million | $614.5 million | -5.9% | $415.1 million |
| Net income | $3.4 million | $12.8 million | -73.4% | $9.7 million |
| Net income per share | 4 cents | 15 cents | -73.3% | (10 cents) |
Las Vegas-based Boyd Gaming, which operates three downtown Las Vegas properties and four locals resorts in Southern Nevada, said its earnings and revenue fell in the second quarter as customers spent less because of economic worries.
The company, which also has riverboat casinos in the South and Midwest and a 50 percent stake in Atlantic City’s Borgata property, had weaknesses in every sector, including New Jersey, which is seeing new competition in table game play from new Pennsylvania casinos and racinos.
Net income of $3.4 million, or 4 cents per share compared to net income of $12.8 million, or 15 cents per share, in the same period last year.
Net revenue of $578.4 million fell 5.9 percent.
Following today’s earnings announcement, Fitch Ratings downgraded Boyd Gaming’s Issuer Default Rating as well as its senior secured credit rating facility rating and its senior subordinated debt rating. The company’s rating outlook remains at “Negative.”
Boyd’s Issuer Default Rating fell to “B” from “B+” and Fitch officials said the continued negative outlook reflects the operating trend reversal in recent results and Fitch’s increasing concern regarding the refinancing of 2012 maturities, which includes a sizable credit facility and a small subordinated note.
In a conference call with investors today, Boyd executives said they continue to view Las Vegas as the core of its business and will continue to steer customers to the market from its other properties.
Boyd CEO Keith Smith said the company’s decision not to pursue Station Casino assets that are being auctioned in Bankruptcy Court later this week doesn’t represent a lack of confidence in the Las Vegas market. Boyd announced last week it would be pointless for the company to pursue any of the 11 Station properties because Station insiders would have an advantage in the bid process.
Boyd attempted to acquire several Station properties over the last 18 months.
The company said adjusted cash flow fell 16.2 percent at Boyd’s Las Vegas locals properties and revenue was down $13 million to $153.1 million from 2009’s second quarter in the locals segment. The company said while the decline was greater than in the first quarter, it was an improvement over the declines experienced throughout 2009.
The company’s downtown markets also were off from the second quarter of 2009 with revenue down $2.4 million to $55.2 million and adjusted cash flow off 21.2 percent.
In an interview today, Smith said the company’s downtown niche is continuing to hold up because consumers are seeking value and feel they can get it downtown. The company saw sequential quarterly improvement despite reduced visitor volumes and lower spending per visit.
While the locals and downtown markets are showing signs of improvement, the same can’t be said of the outlook for Boyd’s stalled Echelon project on the Strip.
Last October, the company said it thought Echelon could be delayed for three to five years. Smith said the outlook hasn’t changed.
He said the company continues to monitor key factors – visitor volume, spend per visitor, auto traffic volumes and airline traffic – regarding the future of Echelon.
But additional capacity on the Strip with the opening of CityCenter late last year, Cosmopolitan coming online at the end of this year and the status of the Fontainebleau unknown, Boyd isn’t changing its Echelon strategy.
Is Boyd positioning itself to take a greater stake with the Borgata in Atlantic City? Smith said for now, the ball is in MGM Resorts International’s court.
Boyd is in a joint-venture partnership with MGM on the ownership of the Borgata and has a first right of refusal for any deal on the horizon.
In March, MGM reported it was given 18 months to exit the market by New Jersey gaming regulators who did not approve the suitability of its associations with Pansy Ho, MGM’s business partner in Macau.
“We really don’t need to do anything until MGM presents us with something,” Smith said.
The agreement in place allows Boyd to match any offer it would get from a third party for a buyout of the Borgata. Smith said it’s also possible that a third party could acquire MGM’s investment and Boyd would become a partner of another operator.
In the conference call with investors, Smith praised New Jersey Gov. Chris Christie for the state’s efforts to improve Atlantic City in the face of greater competition from Pennsylvania.
Company officials also commented that it’s too early to determine whether the BP oil disaster in the Gulf of Mexico would have an effect on Boyd’s southern properties on the Gulf Coast and in Louisiana.
The company urged caution on efforts to curtail oil production and exploration in the gulf.
“If you put a moratorium on drilling and exploration, it impacts the economic engine of the region and the livelihoods of people in the area,” Smith said by phone. “The oil industry has been a tremendous source of jobs and throughout history has helped drive the economy there.”
Lately Boyd has been tightening comps and giving crappier deals at it's buffets.
Good luck with that strategy.....
Boyd will never get it ...it is not the economy ..it is Boyd management.
Congratulations are in order for Boyd Gaming for actually turning a profit in this dreadful economy. I love the Downtown Boyd hotels as well as Sam's Town. It is so refreshing to see a well-run gaming company still manage to make money, even if the size of the profit declines.
for the life of me how can a casino loose money???????????????????????????????????????????????????????????????
It's all smoke and mirrors, Rocco. Watch Stations profits soar as soon as the bankruptcy proceedings end.
MGM should buy Boyd for 4.9 Billion.
Then MGM would have $46,000,000 billion in debt
but then in 2086, they would turn things around
Once boyd sells, they should buy Circus Circus and give away
free popcorn to high rollers ($5 dollar craps)
People are not coming and if they are they are not spending alot because the Air Fare to Las Vegas are too high to buy or if they do buy they have little money to spend.. Get the Airlines to come off their high price tickets to Las Vegas and it will bring back a boom.
They should finish their property on the strip and sell it, bunch of thugs.
Folks can't win anything. It was one thing to put in $100 and get back $50 to $80 but now can't win anything including the $20 on the nickel machine. At least build the Casino on the Strip, throw in some Palm Trees or sell the property. How could they be fooking around trying to buy Stations when that mess is still on the strip.
Boyd is still better than Station, but there's only one and only super casino: THE SOUTHPOINT. They don't charge resort fee, and they get a lot of action. the comp value is still good there. the other locals casinos should take the S-P as an example how things are being done properly.
From Switzerland
BorisR- I second your statement of only 1 super casino being THE SOUTHPOINT.
Hey Boris, airfares from Switzerland are discounted this week: $845 rt.
Come to Vegas and enjoy the fun.
Boomer from Iran
Boomer
I have already booked my next trip to Vegas. Right now, however, it's a LITTLE BIT TOO HOT for my means. I wait a couple of months but I'll be there this fall :) Everything is booked. I found pretty good deals this time.
Greetings from Switzerland
BoreUS-
LMAO!!!!!!!!!!!!!!!!
Boyd Gaming should go bankrupt! They treat their employees like sh*t and their know-it-all upper management thinks they know how to operate casinos. Prime examples are the Coast Properties that were very profitable (obviously or they wouldn't have bought them) and they had to put their 'signature' on them and turned them into slums, especially Gold Coast. I know the economy took a dive, but their 'Boyd Style' didn't help. Michael Gaughan is smiling big time :-) He does have a great property. Maybe he can 'steal' some of those properties back and turn them in to nice, make-you-feel welcomed properties.
Boyd Gaming is stuck in the same rut as everyone else operating here in Las Vegas. They have lost sight of what draws tourists to their properties. VALUE loose slots, giveaway rooms and meals, good comps, and good quality free entertainment. My friends this is the formula which gambling must operate on, or it lights out!!!
What's up with this lovefest with the South Point?
South Point is no friend to skilled blackjack players. They have very sweaty and rude PB's -- they tolerate little in the way of bet spreads and just about anyone who wins at blackjack gets serious heat. They may have the most paranoid pit in the city.
For a locals joint you would think they would treat blackjack players better. I understand they have a business to run and need to have game protection, but they don't need to be SOB's at their blackjack pit. Backing off blackjack players who go from $15 to $60 on a bet is really pathetic.
Check out my LV blog where I discuss my run ins at the SP:
http://jimmyhoofa-lv.blogspot.com/
I really tire of comments like "They treat their employees like sh*t."
If they treat their employees that bad, why don't the employees just quit and move on to greener pastures? It's not like the employees have a stake in the place, right?
Jimmyhoofa
it's the casino hotel in total. Southpoint offers really fantastic rooms at reasonable rates, a great pool, spa, buffet is good, too. Seattle's Best in the morning, gym, cinema, poker room. That's all I need. I don't play much black jack so your comments don't really affect me while I am there. IT's the general experience I have when I am there, and the recurring opportunity to hit the progressive at the center bars. Due to extremely many machines linked together this jackpot grows at a high pace and gives you oftentimes an over 100 per cent play. Last time I was there the jackpot was over 3000 dollars, which is pretty hard to find in Vegas on a quarter progressive...
From Switzerland
If they treat their employees that bad, why don't the employees just quit and move on to greener pastures?
Hey Sheetwise, perhaps you haven't heard about the 14% unemployment in Las Vegas. Not too wise to just up and quit when you consider there are thousands of unemployed people in Las Vegas.
I quit visiting their properties after they bought the coast casinos. They increased the prices, reduced staff and reduced the quality of the food. To save a buck, they shot themselves in the foot. Even though i have stock, i would love to see them and all the other publicly traded casino operators tank and get back to the days of single owners who actually care about the staff and the property and are not there to just move the ticker.
StreetWise & kenodave.....what I should have said is they get rid of employees for absolutely NO REASONS, especially the Coast employees that were 'stuck' with Boyd when they bought Coast out. Coast employees' pay rates were much higher than Boyd cared to pay, so they simply found frivolous reasons to terminate them. In the end, it's proving to be their loss, as their profits continue to decline.
ConcernedNative...exactly why those properties will never be as profitable as when Coast operated them. Big-headed egotist is Boyd Management.
The Hedgefund Billionaire Paulsen must be investigated as well as Gov. Gibbons who stops at nothing to take care of his bankster buddies & who has handed over the NV budget to L-1 Identity Solutions.
Sam's Town has clearly the best videopoker machines of the entire group in Las Vegas. The very best machines are at the 2nd level but must be found first. They are not marked. Only at the ground level near by the rear entrance I found a bank of deuces wild full pay (100.73 per cent) and hopefully the casino did not take out these machines yet. Will definetely have to check out if they're stil there on my next visit.
The other Boyd operated casinos, Gold Coast, Suncoast, Orleans are pretty much the same, with the Suncoast being the most beautiful casino of all, but the Orleans being the busiest of them. They have a very strong marketing tool which is always worth checking, as sometimes you can get rooms at incredibly low rates. The tournament 3 day stay is a trick to draw in the people, of course. Nobody really cares about a slot tournament and would never fly into VEgas for such a child play, but the room rates are convincing and while you're there, you can sit on a slotmachine for 15 minutes and try your luck. Nothing to complain about that.
Last time while at the Orleans, I hit something I hit never before in my life: I got dealt all race cars on the scree on the Super 8 Race machine! I won about 140 dollars for a 8 cent bet. First the 85 dollars for the race cars plus then the race started, which gave me another 40 or so. It was really amazing. Never happened to me before in my life.
From Switzerland
try "openvegas.com" some intresting forums there. no its not my site, just a member and theres wide variety of topics to choose from.
I can tell that a lot of folks who comment do not read the articles... Boyd Group did NOT lose money... They just did not make as much as last year....The figure is NET INCOME which, as far as I know, is after expenses, taxes, wages, advertising, maintenance, etc. etc.
Before commenting PLEASE read the articles so you won't make an A_ _ out of yourself...
You do not need to be rocket scientist to see they are cutting back on the food served in the buffets;restaurants could be better too. Competition is good as they will soon see that they have must have better odds for the slots players and quality food in the restaurants.