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StumbleBoyd Gaming returns to profit, notes improving economy
Published Tuesday, May 4, 2010 | 7:39 a.m.
Updated Tuesday, May 4, 2010 | 10:06 a.m.
Boyd Gaming swung to a profit during the first quarter of 2010, citing improving business trends in some of its markets.
The Las Vegas-based casino operator reported net income of $8.4 million, or 10 cents per share, during the first quarter of 2010 compared to a loss of $13.8 million, or 16 cents per share, in the same period last year. Tuesday’s quarterly report shows the company cut costs and expenses across several parts of its business.
Net revenue fell 8.4 percent during the quarter to $398.4 million from to $434.8 million in 2009.
“We continue to be encouraged by improving trends in our business, which clearly reflect the signs of an emerging recovery. Our Las Vegas locals market reported the best year-over-year comparison in nearly two years, and business levels are returning to normal seasonal patterns in this region. Given the positive developments in our business, combined with continued improvement in the national economy, we expect to generate year-over-year growth during the second half of 2010,” Keith Smith, president and chief executive officer of Boyd Gaming, said in the quarterly report.
In its Las Vegas locals market, net revenue was $156.6 million during the first quarter of 2010 versus $170.1 million in the first quarter 2009. Earnings before interest, taxes, depreciation and amortization fell 10 percent to $40.4 million from $45.3 million.
Boyd's Las Vegas properties outside of downtown include Sam's Town, the Orleans, Gold Coast and Suncoast.
At Boyd’s downtown Las Vegas casinos, which include the Fremont, California and Main Street Station, net revenue fell to $54 million from $58.7 million during the year-over-year period. EBITDA for the first quarter of 2010 fell 37.3 percent to $8.4 million from $13.4 million in the first quarter of 2009. The company said the results reflect lower ticket pricing and higher fuel costs associated with its Hawaiian charter operation, as well as lower downtown visitor numbers.
In its Midwest and South region, Boyd said it recorded $187.8 million in net revenue for the first quarter 2010, compared to $206.1 million for the same period in 2009.
At the Borgata in Atlantic City, net revenue was $175.1 million for the first quarter 2010, compared to $187.9 million recorded in the same quarter in 2009. Boyd Gaming owns 50 percent of the New Jersey property. Smith said on March 24 that MGM Mirage officially transferred its 50 percent ownership of the Borgata into a divesture trust. The company agreed to sell its interest in the casino after disagreements with New Jersey gaming regulators on its business partner in Macau.
“Our partnership agreement with MGM Mirage gives us the right of first refusal on sales or interest and we will monitor this situation and act in the best interest of our company,” Smith said.
During Tuesday’s conference call, Smith said Boyd is still aggressively pursuing the acquisition of Station Casinos’ assets.
In December, Boyd made an offer to purchase Station Casinos’ assets in an effort to expand its locals market. The offer was $2.45 billion for the company’s 18 casinos and casino-hotels in Southern Nevada.
“We welcome the opportunity to compete for Station [Casinos] assets so long as the process is competitive, open and fair and as long as the assets have not been devalued to a point where it no longer makes financial sense,” Smith said.
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More good news.
Will they now finish the Echelon Palace Or, will they leave the property as an eye soar on the Strip?
That's great news, indeed. I have been a longterm fan of the Orleans. I like these 3 funny musician aligators by the main entrance. And the casino seemed to be full again. And people gamble. I was less excited about the action at the Suncoast casino. Downtown was doing ok. The Hawaiians seem to have money, still.
Anyway, Southpoint Number One, followed by the Orleans (runner-up casino).
From Switzerland
Congratulations to Boyd Gaming on returning to profitability. I love their Downtown casinos, and noticed when I was there in March that they seemed very busy.
The numbers given are confusing, however. Perhaps the Las Vegas Sun can amend the article a bit to explain what overhead Boyd was able to slash in order to show a profit despite declining revenue at all of its casinos as compared to the first quarter of 2009.
Dear Boyd,
2005 called, the Stardust wants to come back.
I can't believe its been this long since the Stardust went dark (tears)....
Why would they restart Echelon Place? By and large, the mothballing of that project, pretty much saved them from financial meltdown. If I work at Boyd Gaming, I'll take having an eye sore on the Strip in place of having no company at all, rather than building something so your pretty little eyes have something to look at.
Agreed, tear down the Echelon and built a gambling and pub strip mall. No ultra lounges, old school casinos with new technology.
build echelon now, it's cheaper than it will be after crisis. why nobody can understand?
Its too bad that the other casinos in town cannot run a more efficient operation. It proves, make it affordable than they will come.
I agree with solar, Boyd saved themselves by stopping the Echelon project. You only have to look at the financial catastrophe of CityCenter to understand that. 63% occupancy at Aria and trainloads of unsold condos.
As for what they do with the Echelon site now, that's a tougher question. It may sound looney, but how about swapping the whole echelon acreage with Icahn for the Fountainblue, then renaming it the "New Stardust"?
Limbaugh, Hannity and the local nut talk radio stations say the economy is bad, therefore I guess I better not buy anything they advertise??
since the economy is so bad????
What this city needs is more high end casinos with expensive clubs, rooms and tables. Echelon will be rust and dust and will never see the light of day. Echelon? Isn't that a military term?
FOR SALE: Partially built hotel and casino on the Vegas Strip on the former site of New Frontier and Stardust casinos. Current owner has gotten smart and has other plans.
Coming soon to it's rightful place on Las Vegas Boulevard, the all new Stardust Hotel and Casino and Water Amusement Park !! C'mon Boyd get on board!!!
Ah, what to do with Echelon. First of all they should realize that it is going to be 10 plus years that a new development such as Echelon is going to be viable. So the best strategy is to get some revenue flowing from the project as quickly and cheaply as possible. At the same time they shouldn't jeopardize the design and construction that has already gone up. This means covering but not finishing the hotel towers, developing a large casino with the already built structures. Offer free surface parking. If space allows put in a large nicely landscaped RV park. Keep the design simple but elegant i.e. mid century modern. If any room is left have a leasee put in a water park. Enhance design by using painted surfaces and and keep costs as low as possible. Name the place the new Stardust, put a new version of the old sign up. Offer a free shuttle to the Orleans. This won't recoup all of the costs of the property but at least it will contribute a little to the bottom line. Give the best odds on the strip and this place will generate positive cash flow from day one.
U.S. GDP grew in each of the last 3 quarters. Some declared the stimulus a failure, when they did not see instant results. The fact is jobs are always lagging the numbers recovery in each recession. But those focused on long-term recovery, know the enviroment will be a big winner in the conversion to biofuels & biopower.
Balkingpoints / www
Saying stimulus is a success is saying that someone who took out a home equity line to pay their mortgage is solvent.
What? How come I don't see any comments blaming President Obama, Harry Reid or Nancy Pelosi for the IMPROVING economy? Oh...now I get it; they're only responsible for the bad stuff and none of the good stuff! I guess they're doomed to failure then...
It is quite possible that Boyd is not Stations ONLY because they didn't go forward with Echelon... They would have been in GREAT shape had they waited a year before bringing the Stardust down (for which I will never be able to fully forgive).. I love the idea of an old time Vegas theme for that location... i've stated it on previous posts. 11/3/09 "Vegas will be back, the economy will return, if not, none of this really matters anyway. If Boyd is listening, think of how much ahead of the game you would have been if you left the Stardust alone, fixed her up, instead of paying XX million a month to secure her remains. Did you REALLY need to place a 5.5 billion dollar city in her place? Here's an idea for those of use who miss 'old' Vegas... Take the Stardust property, and build a multi themed replica of the Stardust, Landmark, Dunes, Hacienda, The Barbary Coast and a few others. Have them in a circle with a massive pool in the middle along with some open space,,,, concerts, food courts, etc.. I think you'd be surprised at how much business you'd get by going back to old Vegas. That would be a new and exciting theme for the New Vegas, Old Vegas! Give me a call.. i'd love to help be a part of it!"
We will know "old Vegas" is dead when someone builds a casino "themed" like "old Vegas."
Agreeing with burnemandturnem. I suggested way back before Carl Icahn's purchase of the Fountainblu, that Boyd should put in an offer to buy. It made more sense than hassleing with Stations (which could drag on forever). Now it's too late, or is it? Trade the land and unfinished Echelon to Icahn, and gussy up the 70% completed Fontainblu..and start making a profit now, not 5 or more years down the road.
Why not to remake the Stardust exactly like it was in 1958 with that jagged logo you see in photos....
After all Aladdin was remade but much more elaborate and expensive.
The destruction of the Stardust was a total loss to Las Vegas and to its devoted patrons who visited it. Never again will we find a casino that enveloped another casino (Royal Nevada) to become 'one'.
We have a variety of different casinos with different themes: Paris, MGM, Sahara, NY, Flamingo, Luxor....why not an outerspace theme again. Bring the S T A R D U S T back..I cried and said "good bye Stardust" when I visited it the last day the hotel was shutting down.
The Stardust was simply the greatest Hotel/Casino, along with the old Aladdin. Dunes, Horseshoe, Sahara, Maxim, Desert Inn, and Frontier!!!
You can say that again 'environprotector'. I agree with you 100% completely. When I first visited the Stardust I was simply in love with it. It was rather old fashioned and very easy to wander around as compared to the newer casinos that are so confusing. The Stardust was indeed the 'grand daddy' of old Las Vegas before 1989. Once the new casinos starting springing up on the strip and the old ones started being demolished that was, sadly, the begining of the end of the history of Las Vegas.
Preserve the Sahara, Riviera, Tropicana.
Hey whatever happened to the camels at the front of the Sahara?? Anybody know??
I heard they got thrown away.. Sick huh?
yes - stardust is missed - bet he is kicking himself that they took it down -
FromBellevilleCanada asked a question how they managed to turn a profit if every line of business decreased. He (She) asked what kind of cost cutting they did.
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The answer is there was no cost cutting. In 2009 they took a pre-tax impairment charge of $28.4 million related to the write-off of goodwill incurred as a result of the finalization of the purchase price for Dania Jai-Alai in January 2009.
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In reality Boyd had a much worse quarter in 2010 then they did in 2009. There was a 20% drop in adjusted EBITDA.
Wonderful news and magnificent comments concerning Boyd Gaming and particularly, the old Stardust (my absolute once-favorite place to stay and play). I certainly hope Boyd finds a way to make the "Echelon dream" into a new "Stardust reality". It is evident that the introduction of a new high-end hotel/casino complex is totally unacceptable and grossly not needed; are you listening Boyd Gaming? Boyd would be a worldwide SMASH hit it they developed a property similar to the one proposed by 'LittleCaesars'... what a concept!
I was in Vegas from 05/02 to 05/08 of this year and stayed at the Rio (3 days comp) and the Gold Coast (2 days comp). This was the busiest I've seen Vegas in 4 years. It was awesome. People are returning to the Entertainment Capital of the world. Build a new Stardust (and whatever else), Boyd. We visitors are anxiously and patiently waiting.
The announcement that the Stardust would close was made in Jan 2006 so the plans were probably a year old by then. It is hard to go back that far in time. Bill Boyd was in the Forbes #400 as a billionaire for that year. It is impossible to go back in time.
Building the Echelon right now would be a mistake....whether they stick with the original plans or some 1/2 assed Stardust concept that's being floated around here. The best move for them is to keep it mothballed until the economy can support another resort.
S711