Published Wednesday, Aug. 5, 2009 | 5:50 a.m.
Updated Wednesday, Aug. 5, 2009 | 11:55 a.m.
Boyd Gaming Financial Information
|2Q 2009||2Q 2008||% Change||1Q 2009|
|Revenue||$423 million||$460.8 million||-8.2%||$434.8 million|
|Net income||$12.8 million||$21.7 million||-41%||($13.8 million)|
|Net income per share||15 cents||25 cents||-40%||(16 cents)|
Boyd Gaming reported a 41 percent drop in net income for the second quarter of 2009, citing the continuing economic strain on the Las Vegas market, the company said today in its quarterly report.
During a conference call with investors and analysts today, Boyd reaffirmed its interest in buying Station Casinos assets and commented on the standing of its suspended Echelon project.
The Las Vegas-based casino operator reported net income of $12.8 million, or 15 cents per share, compared to net income of $21.7 million, or 25 cents per share, in the same period last year.
"While business conditions remained difficult in each of our regions, our results were in line with our expectations. The uncertainty which exists in the economy today continues to negatively impact consumer spending,” Boyd Gaming President and CEO Keith Smith said.
Net revenue for the quarter fell 8.2 percent from $460.8 million to $423 million during the year-over-year period.
Boyd Gaming’s locals-oriented properties generated $166.1 million in net revenue vs. $197.9 million a year ago due to reduced consumer spending and continued pressure on room rates. The company’s downtown properties’ net revenue fell to $57.6 million during the quarter from $63 million in the same period of 2008.
The company said during its earnings call that customers are still visiting properties in large numbers but spending significantly less. Rooms are being filled but only at large discounts.
Overall gaming revenue fell 7.2 percent while room revenue declined 11 percent.
But despite revenue and profit declines, Boyd said it is still actively looking to purchase some of its competitor’s assets. Smith said Boyd could play a key role in helping to expedite Station’s bankruptcy process.
“This filing does not change the fact that we are extremely interested in obtaining Station’s assets,” Smith said. “When we look at those assets, we think it’s a good fit.”
Smith would not comment on the specifics on conversations with Station Casinos executives and creditors but confirmed Boyd is in talks.
In February, the company offered to acquire several Station Casinos properties for $950 million but the offer was rejected.
On the Strip, Smith said the company is still re-evaluating the scope of its Echelon project, which it suspended construction on last August.
“We continue to review our options for our site and are investigating our design options. Until then, construction remains suspended,” Smith said.
When asked by an analyst if Boyd was looking to sell Echelon, Smith said the company was not looking at that option.
“When we suspended construction a year ago, we talked about the option of phasing, other partners, other ventures … we continue to look at all of those options,” he said.
Smith said decisions at Echelon will be based on the general health of the economy and credit market. The impact of CityCenter on the Strip’s room count later this year is also a factor, Smith added.
“We certainly wish MGM Mirage success with CityCenter. We’re rooting for them. We’re going to need quite an increase in visitors to absorb the market,” Smith said of the addition of CityCenter.
Boyd Chief Operating Officer Paul Chakmak said the company sees CityCenter as a net positive for its own business. The project is expected to bring more than 12,000 permanent jobs to the Las Vegas job market, which means an increase in consumer spending and stability in Boyd’s locals market.
“We know those local workers are our customers,” Chakmak said.
Net revenues at the Borgata in Atlantic City, Boyd’s joint venture with MGM Mirage, were $191.5 million for the second quarter of 2009, compared to $205.1 million recorded in the same quarter in 2008.
Last week Boyd and MGM Mirage said New Jersey regulators were moving ahead with plans for a hearing on whether MGM Mirage's partner in Macau is a suitable business partner for the gaming company.
When asked about details of the companies’ joint venture and if MGM Mirage would need to exit the agreement, Smith said he wouldn’t comment.