Boyd Gaming losses narrowing

By Richard N. Velotta, Las Vegas Sun
6 May 2009

LAS VEGAS, Nevada -- Boyd Gaming, which operates three downtown Las Vegas properties and four locals resorts in Southern Nevada, today added evidence to the outlook that the gaming industry may have hit bottom in the recession.

The company, which also has riverboat casinos in the South and Midwest and a 50 percent stake in Atlantic City's Borgata property, narrowed its losses in the first quarter and executives said they liked the trends they were seeing.

"The recession continues to impact our business, but we're encouraged by some positive trends that developed during the quarter," Keith Smith, president and CEO of Boyd, said in a statement preceding a conference call with investors this morning.

The company reported a loss of $13.8 million, 16 cents a share, on revenue of $434.8 million for the quarter that ended March 31. In the same quarter a year earlier, the company had a loss of $32.6 million, 37 cents a share, on revenue of $471.1 million.

The loss included a charge of $28.4 million in connection with a write-off involving the company's purchase of the Dania Jai-Alai fronton in Florida in January. Excluding the charge, the company would have posted a 15-cents-a-share profit. Analysts had projected the company would earn 8 cents a share.

Boyd was the third casino company this week to express optimism with financial developments that occurred late in the quarter. MGM Mirage on Monday and Wynn Resorts on Tuesday reported similar patterns.

"In our Las Vegas Locals region, we began to see signs of stabilization, while Borgata continued to outperform a severely challenged Atlantic City market," Smith said in his statement. "Results were especially encouraging in our Midwest and South and Downtown Las Vegas regions, both of which posted gains for the quarter. These regional performances helped to offset difficult economic climates in Las Vegas and Atlantic City, and demonstrate the value of geographic diversification to our Company."

The company said weakened consumer spending and reduced room rates affected revenue in the Las Vegas locals market, which includes the Sam's Town, Suncoast, Gold Coast and Orleans. The company had net revenue of $170.1 million in that marketed compared with $206.5 million a year earlier. Cash flow suffered a 32 percent decline to $45.3 million.

But downtown Las Vegas, where the company operates the California, Fremont and Main Street Station, the company generated revenue of $58.7 million compared with $60.9 million a year ago. Cash flow jumped to $13.4 million from $10.2 million.

The company said streamlining operations and reducing costs have helped lessen the recession's impact. At the end of the quarter, the company had $2.7 billion in debt and $98.2 million cash on hand. It spent $19.5 million on expansion, including $10.9 million in payments on the mothballed Echelon project on the Las Vegas Strip.

Boyd's statement prior to its earnings conference call did not address the status of Echelon, a $4 billion project on 67 acres where the Stardust once stood. Boyd shut down construction on the project in August and did not specify when work would continue, but company officials have said it could be at least 2010 before a startup.


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Copyright © Las Vegas Sun. Inc. Republished with permission.
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