Pinnacle Entertainment posts first-quarter profit

By Las Vegas Sun Staff (contact)

Friday, April 24, 2009 | 8:11 a.m.

Regional casino operator Pinnacle Entertainment Inc. of Las Vegas today said revenue increased in the first quarter and it posted a profit, reversing a loss in the same quarter of 2008.

The company reported a profit from continuing operations of $1.2 million or 2 cents per share vs. a loss one year ago of $15.8 million or 26 cents. Revenue advanced from $256.6 million to $269 million.

Pinnacle said the 2009 quarterly results reflect the ramp-up of operations at Lumiere Place in downtown St. Louis, better hotel results at L'Auberge du Lac in Lake Charles, La., and efforts to control costs.

Pinnacle stock traded this morning at $11.71, up $1 or 9.4 percent.

"Our properties continued to perform well overall in the first quarter," said Daniel Lee, Pinnacle's chairman and chief executive.

Highlights by property, as reported by Pinnacle, included:

L'Auberge du Lac (Louisiana) -- Revenue for the 2009 first quarter was $88.4 million, an 8.7 percent increase from $81.3 million in the prior-year period. Adjusted cash flow (EBITDA) increased 33.2 percent to $23.5 million in the 2009 first quarter from $17.7 million in the prior-year period. The expansion opened in late 2007 and early 2008 and became increasingly additive to the property's results in the ensuing quarters.

Boomtown New Orleans -- Revenue at Boomtown New Orleans was $38.3 million in the 2009 first quarter compared to $42.4 million in the prior-year period, reflecting the effects of significant marketing from competitors after the expansion of a racetrack casino located on the opposite side of the Mississippi River. Customer traffic in the 2009 period was also affected by levee construction along the major access road to the property. Adjusted EBITDA of $13.5 million in the 2009 first quarter compares to $15.3 million in the 2008 period.

Lumiere Place (St. Louis) -- The Lumiere Place complex consists of the Lumiere Place Casino, Four Seasons Hotel St. Louis and HoteLumiere. Revenue increased in the 2009 first quarter to $53.1 million from $38 million in the prior-year period. The 2008 period represented a partial quarter of operations for the complex's two hotels, and the elimination of some gaming restrictions in November 2008 helped support the 2009 first-quarter results. Consistent with most new casino openings, operations at Lumiere Place continued to improve in the first quarter of 2009 as it entered its second year of operations. Adjusted EBITDA increased to $10.6 million in the 2009 first quarter from $6.3 million in the 2008 fourth quarter and an adjusted EBITDA loss of $562,000 in the 2008 first quarter.

The Admiral Riverboat Casino (St. Louis) -- Beginning in late 2008, management eliminated mid-week table games operations at The Admiral and reduced operating hours for the entire casino mid-week. Due to these changes, as well as competition from the company's neighboring Lumiere Place, revenue for the first quarter of 2009 declined to $6 million from $9.3 million for the prior-year quarter. While revenue at the Admiral has declined since the implementation of these changes, the adjusted EBITDA losses have also declined. For the 2009 first quarter, the adjusted EBITDA loss was $168,000 compared to an adjusted EBITDA loss of $244,000 in the 2008 first quarter. The company intends to seek approvals to relocate the Admiral to a different berthing location. There is no certainty that such approvals will be granted.

Belterra (Indiana) Casino Resort -- Revenue at Belterra was $41 million in the 2009 first quarter versus $42 million in the 2008 period. Despite a reduction in revenue, adjusted EBITDA increased 6.3 percent to $7.8 million in the first quarter of 2009 from $7.3 million in the prior-year period due to a refocusing of the property's marketing efforts and cost structure. In mid-March 2009, a competing racetrack replaced its temporary casino with a permanent facility. Another riverboat competitor plans to open a new, expanded casino in mid-2009.

Boomtown Bossier City (Shreveport, La.) -- Revenue at Boomtown Bossier City for the 2009 first quarter was $24.8 million compared to $23.7 million in the prior-year period. Adjusted EBITDA was $6.2 million in the 2009 period, a 30.2 percent improvement from $4.7 million in the 2008 first quarter, reflecting a focus on the property's marketing and cost structure, as well as a relatively stable economy for the Northwest Louisiana/East Texas area.

Casino Magic Argentina -- Casino Magic Argentina consists of a sizable casino-hotel facility in the city of Neuquen and several smaller casinos in other parts of the province of Neuquen. Revenue for the first quarter of 2009 increased to $9.5 million from $9.2 million in the prior-year quarter. Adjusted EBITDA was $2.8 million and $3.2 million for the first quarters of 2009 and 2008, respectively.

Boomtown Reno -- In the 2009 first quarter, revenue was $7.6 million and adjusted EBITDA loss was $1.3 million. For the comparable period in 2008, revenue was $10.7 million and adjusted EBITDA loss was $2.3 million. Historically, the fourth and first quarters are seasonally slow periods for the Reno market, primarily due to winter weather that can significantly affect traffic flow along Interstate 80. While the casino is not a contributor to net income, Pinnacle said it believes there is substantial value in the surrounding 500 acres of land owned by the company alongside Interstate 80.