Wednesday, Oct. 21, 1998 | 11:14 a.m.
The Stardust hotel-casino, which recently suffered another weak quarter, will get a $24 million "significant refurbishing."
The announcement came as part of Boyd Gaming Corp.'s earnings announcement Tuesday. Overall, Boyd reported flat earnings and cash flows on slightly higher revenues in the quarter ending Sept. 30.
The company earned $5.94 million, or 10 cents per share, on revenues of $234.6 million, up slightly from $5.88 million, also 10 cents per share, on revenues of $217.7 million one year ago. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased slightly, to $49.881 million from $49.876 million.
While most Boyd properties posted stronger results in the quarter, the Stardust and Sam's Town Tunica, the company's Mississippi casino, posted "disappointing" results that put a drag on overall earnings, according to Boyd Chairman and Chief Executive William S. Boyd.
"Concerning the two disappointing property reports, we are focusing our energies and redoubling our efforts to improve results at both locations, both of which are in very competitive markets," said Boyd.
At the Stardust, Boyd plans a $24 million "dressing-up of the property," said spokesman Rob Stillwell. The renovation will include new signs, a new facade, remodeled rooms and a remodeled casino, but no structural changes.
"It won't be distinctly different, but it certainly will be noticeable," said Stillwell.
The renovation, coming at the end of a $9 million renovation of all Stardust suites, is intended to keep existing Stardust customers coming back for more, said Stillwell.
Revenues at Stardust fell from $41.6 million one year ago to $38 million in the third quarter. EBITDA fell more significantly, from $7 million last year to $2.4 million. The number of occupied rooms at the Stardust fell 15.1 percent from last year, due partly to "competitive factors," and partly to a 10.9 percent decline in available rooms due to suite conversion construction.
Overall occupancy at the Stardust was 90 percent in the quarter, while room rates rose 6.7 percent. Table game earnings were down, slot earnings were flat, and sports book win declined due to a lower hold percentage, despite a 27 percent increase in wagering volume. The Stardust's "Enter the Night" show saw a $1.5 million reduction in earnings due to reduced revenues and increased expenses related to a summer reformat.
Also as part of the earnings report, Boyd reiterated the company's decision to delay a complete redevelopment of the Stardust site.
"We have postponed plans to develop a new property on the site until we have a clearer picture of Strip conditions after several new resorts open," said Boyd.
Sam's Town Tunica reported lower revenues due to increased marketing costs and lower room rates. Over the past year, competition in Tunica has heated up as many new companies have entered the market. Boyd plans for its Tunica resort include property enhancements and a new golf course.
Bright spots for Boyd include its downtown Las Vegas properties, its Sam's Town hotel-casino on the Boulder Strip, and its Treasure Chest Casino, in Kenner, La., which performed well despite being close for three days in September due to Hurricane Georges.
"Despite two of our eleven properties reporting significant year-over-year EBITDA shortfalls in the quarter, which cost us 8 cents per share, we were able to equal last year's bottom line," said Boyd.