Boyd reports results

26 April 2007

LAS VEGAS, Nevada -- (PRESS RELEASE) -- Boyd Gaming Corporation (NYSE:BYD) today reported financial results for the first quarter ended March 31, 2007. With the addition of Dania Jai-Alai in south Florida on March 1, the Company will refer to its Central Region as the Midwest and South region.


    Recent Highlights

    *  Company's Las Vegas Locals segment continues improvement trend as first
       quarter 2007 operating results for three of the four main Locals
       properties nearly match first quarter 2006 net revenues and Adjusted
       EBITDA(1) levels.
    *  Company's Midwest and South region operating results reflect continued
       normalization of operating results at Treasure Chest, as well as at
       Blue Chip, where in the first quarter 2006, the opening of its
       expansion drove unusually high customer trial.
    *  Company's Downtown Las Vegas segment continues to outperform the
       market, nearly matching record first quarter 2006 net revenues and
       Adjusted EBITDA levels.
    *  Company completes the trade of the Barbary Coast for 24 acres adjacent
       to its Echelon development on the Las Vegas Strip, resulting in a
       pre-tax gain of $285 million.
    *  Company completes its acquisition of Dania Jai-Alai in Dania Beach,
       Florida, one of four pari-mutuel facilities approved under Florida law
       to operate 1,500 Class III slot machines.
    *  Company prepares for June 19th groundbreaking on its Echelon
    *  Company declares quarterly dividend of $0.15 per share, an increase of

    (1) See footnotes at the end of the release for additional information
        relative to non-GAAP financial measures.

First Quarter Results

We reported first quarter 2007 income from continuing operations of $33.5 million, or $0.38 per share, compared with $65.3 million, or $0.72 per share, in the same period 2006. Including discontinued operations, we reported net income for the first quarter 2007 of $216.3 million, or $2.44 per share, compared to net income of $63.2 million, or $0.70 per share, reported in the same period 2006. The first quarter 2007 results include a $285 million pre-tax gain, classified as part of discontinued operations, recorded upon the disposition of Barbary Coast. Per share earnings discussed throughout this release are reported on a diluted basis.

Adjusted Earnings(1) from continuing operations for the first quarter 2007 were $44.0 million, or $0.50 per share, compared to $72.2 million, or $0.79 per share, for the same period in 2006. During the first quarter 2007, certain pre-tax adjustments that reduced income from continuing operations by $16.5 million ($10.5 million, net of tax, or $0.12 per share) were as follows:

    *  $11.5 million for write-downs and other charges, net, that consist
       mainly of an $8.0 million charge for closure costs at Stardust and
       $3.4 million for acquisition related expenses incurred in connection
       with our purchase of Dania Jai-Alai.
    *  $5.0 million for other items, primarily consisting of preopening
       expenses associated with our Echelon development.

By comparison, the first quarter 2006 included pre-tax adjustments that reduced income from continuing operations by $10.7 million ($6.9 million, net of tax, or $0.07 per share).

Net revenues were $517.0 million for the first quarter 2007, a decrease of 12.3% from the same quarter in 2006. Total Adjusted EBITDA was $155.4 million in the first quarter 2007, as compared to $202.5 million for the same period last year. The decreases were due to a number of factors, including the closure of the Stardust, normalization of operating results at Treasure Chest, unusually high customer trial at Blue Chip related to the opening of its 2006 expansion, and heightened competitive environments in the Las Vegas Locals and Atlantic City markets.

Keith Smith, President and Chief Operating Officer of Boyd Gaming, commented, "Although we faced some tough comparisons, the first quarter was highlighted by the resiliency of our Las Vegas Locals segment. Importantly, we were able to maintain the marked improvement we saw in the fourth quarter, nearly matching tough comparisons from our strong first quarter 2006 performances at Sam's Town, The Orleans and Gold Coast in the face of a significant capacity increase in the market. Our Downtown business continues to achieve outstanding results, almost equaling last year's first quarter record levels in both net revenues and Adjusted EBITDA."

    (1) See footnotes at the end of the release for additional information
        relative to non-GAAP financial measures.

Key Operations Review

In our Las Vegas Locals segment, first quarter net revenues were $218.7 million versus $224.1 million for the first quarter 2006. First quarter 2007 Adjusted EBITDA was $74.6 million compared to $82.0 million in the same quarter 2006.

In our Midwest and South region, we recorded $234.5 million in net revenues for the first quarter 2007, compared to $262.0 million for the same period in 2006. Adjusted EBITDA for the period was $57.3 million versus $83.9 million for the first quarter 2006.

Our Downtown Las Vegas properties continued to report strong results, generating net revenues of $63.8 million and Adjusted EBITDA of $13.9 million for the first quarter 2007, versus $64.5 million and $14.0 million, respectively, for the first quarter 2006.

In Atlantic City, Borgata's gaming revenue rose 7.5% over last year's first quarter, as the property continued to lead the market. Non-gaming revenue increased by 19.0% over the same period in the previous year and was fueled largely by Borgata's public space expansion, which added significant non-gaming amenities. However, net income for Borgata was $35.3 million for the first quarter 2007, compared to $44.7 million in the same period last year. Adjusted EBITDA was $60.6 million, compared to $65.3 million for the first quarter 2006. These first quarter declines were mainly attributable to the continued heightened competitive environment, as well as higher fixed costs related to its public space expansion.

Development Update

We have numerous development initiatives underway, all providing a healthy growth pipeline for the Company:

    *  In Atlantic City, Borgata is adding The Water Club, an 800-room
       boutique hotel directly connected to the property.  The project remains
       on-budget and construction of the 43-story tower is expected to top-off
       in June.  We anticipate that The Water Club will open in early 2008.
    *  At Blue Chip, we have begun construction of our new hotel.  This
       $130 million project will include 300 new guest rooms, a spa and
       fitness center, additional meeting and event space, new dining and
       nightlife experiences, and a new entrance and porte cochere.  The
       project is scheduled to open in late 2008.
    *  In Florida, we closed on our acquisition of Dania Jai-Alai last month.
       We continue to work on the design of the new casino facility and plan
       to begin construction later this year.  We anticipate opening the
       casino operation around the end of 2008.
    *  On the Las Vegas Strip, we are nearly complete with the demolition
       phase of our Echelon development.  Groundbreaking is scheduled for
       June 19.

Bill Boyd, Chairman and Chief Executive Officer, said, "Our growth pipeline remains as strong as ever. With Echelon breaking ground in June, the Water Club at Borgata opening early next year, followed by Blue Chip's new expansion and our new casino operation in Florida, our Company is well-positioned for sustainable, long-term growth."

Boyd Gaming Branding Initiative

Work continues on a company-wide branding initiative that will position our individual properties as part of a larger network, creating additional synergies and further leveraging Boyd Gaming's highly regarded blend of gaming excitement and personal service. The main goals of our branding initiative are to increase customer loyalty, drive more cross-property visitation, and grow our database.

The foundation of our branding initiative will be a nationwide loyalty program, built on three regional reward cards. Each regional card will be distinct from the others, tailored to meet the different expectations of customers from each of our markets, and giving us more flexibility in adapting to regional market conditions. Implementation of our branding initiative remains on schedule for a phased rollout in the second half of this year.

New Bank Credit Facility

We expect to complete the syndication of a $4 billion revolving credit facility in the second quarter, subject to the necessary gaming and other approvals, as well as the satisfaction of customary closing conditions. The new credit facility will be used to finance our development initiatives, reduce interest costs, and provide greater financial flexibility to the Company. Variable rate pricing on the facility will be based upon our total leverage ratio and range between LIBOR +62.5 bps and 162.5 bps, with initial pricing set at LIBOR +100 bps. The joint lead arrangers for the credit facility are Bank of America, Citi, Deutsche Bank, JP Morgan, Merrill Lynch, Wachovia and Wells Fargo.


We declared a quarterly dividend of $0.15 per share, an increase of 11.1% from the previous rate. This dividend is payable June 1, 2007 to shareholders of record as of the close of business on May 11, 2007. This is the fourth increase to the dividend in less than three years.

Key Financial Statistics

The following is additional information as of and for the three months ended March 31, 2007:

    *  March 31 debt balance: $2.16 billion
    *  March 31 cash: $157.3 million
    *  Dividends paid in the quarter: $11.8 million
    *  Maintenance capital expenditures during the quarter: $9.5 million
    *  Expansion capital expenditures during the quarter: $41.0 million
    *  Capitalized interest during the quarter: $1.7 million
    *  Cash distribution to the Company from Borgata in the quarter:
       $14.6 million
    *  March 31 debt balance at Borgata: $555.4 million

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