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December 19, 2014

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Station Casinos reports wider loss in second quarter

Las Vegas locals gaming leader Station Casinos Inc. today said its second quarter loss widened as revenue slumped and costs associated with its Chapter 11 bankruptcy reorganization came in at nearly $38 million.

Station lost $69.6 million in the quarter ended June 30 vs. a loss of $65.3 million in 2009's second quarter.

Net revenue of $233.6 million fell 12.6 percent as the recession reduced spending at the company's 18 Las Vegas-area casinos, hotels, restaurants and entertainment venues.

Adjusted EBITDA, a profitability measure meaning earnings before interest, taxes, depreciation and amortization, was $61.4 million, down 22.5 percent.

Net bankruptcy reorganization costs were $37.9 million in the second quarter. These were for professional fees ($31.2 million) and adjustments of debt swap carrying values of $6.8 million.

Station's second quarter earnings from its Green Valley Ranch joint venture were $3.2 million representing 50 percent of Green Valley Ranch’s operating income. For the second quarter, Green Valley Ranch generated adjusted EBITDA before management fees of $11.9 million, a decrease of 21.4 percent compared to the same period in the prior year.

Green Valley Ranch reported a net loss of $5.4 million for the second quarter vs. a net loss of $3.8 million in the same period in the prior year.

The Greenspun family, owner of the Las Vegas Sun, is Station's partner in Green Valley Ranch, Aliante Station and three small properties in Henderson: Barley's, the Greens and one of the Wildfire casinos.

Station's net revenue from its major Las Vegas operations, excluding Green Valley Ranch and Aliante Station, was $214.7 million, a 12.7 percent decrease compared to the prior year’s second quarter.

Adjusted EBITDA from those operations decreased 16.6 percent to $59.2 million and their net loss was $19.2 million for the second quarter vs. $15.6 million in the same period in the prior year.

Overall casino revenue tumbled from $190.5 million to $167.1 million.

Station, which is on track to receive approval to emerge from bankruptcy next week, also joined other Las Vegas hotel-casino operators in posting reduced results for its hotels as occupancy levels and room rates fell as the recession continued locally.

Room revenue decreased 15.7 percent to $18.7 million for the three months ended June 30, Station said.

The company said room occupancy of 80 percent was down from 87 percent in last year’s second quarter while the average daily room rate of $62 was down from $69.

While Station is known mainly as a locals casino operator, it has sizable hotel operations at some properties including 1,000 rooms at Palace Station, 815 at Red Rock Resort, 490 at Green Valley Ranch and 457 at Sunset Station.

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