Thursday, March 31, 2011 | 5:17 p.m.
Las Vegas-based casino operator Herbst Gaming on Thursday posted a fourth quarter profit of $371 million, reversing a year-earlier loss of $32 million.
The numbers were reported by Herbst Gaming LLC, which acquired the assets of bankrupt Herbst Gaming Inc. on Dec. 31.
The turnaround came thanks to a gain in 2010 of $634 million for the reorganization of debt, which was somewhat offset by fresh start accounting adjustments of a negative $185 million.
Through the bankruptcy, $808.8 million in debt was extinguished, the company said.
Net revenue for the quarter of $150 million was down from $155 million.
On an operating income basis, Herbst lost about $74 million in the fourth quarter vs. an operating loss in the 2009 quarter of $8.6 million.
With 15 casinos -- 12 in Nevada -- the company commented today: "While the economy has recently shown signs of improvement, many of our customers are still facing difficulties and we expect that discretionary spending will remain at reduced levels over the near term."
The company's biggest revenue-generator, its three-casino complex at Primm on I-15 on the California border, struggled in 2010 due to intense competition for its value-oriented customers, Herbst said.
Gross revenue at Primm in 2010 was $201 million, down from about $222 million in 2009.
"Primm casino revenues declined $9.8 million, or 10 percent due to reduced visitor volume and reduced amount spent per visitor," Herbst said today. "Hotel revenues declined $1 million due to continued demand for lower room rates and intense promotional competition from Las Vegas Strip resorts."
Hotel occupancy at Primm was 48.4 percent in 2010 compared to 53.6 percent in 2009 and the average daily rate was $38.25 in 2010 compared to $35.59 in 2009.
Thanks to cost-cutting, though, EBITDA for the Primm properties increased in 2010 by $5 million from 2009, to $12.2 million.
EBITDA is a profitability measure meaning earnings before interest, taxes, depreciation and amortization.
The company said that outside of Primm, its Southern Nevada properties, including Terrible’s Las Vegas, generated gross revenue in 2010 of $80.2 million, down 1 percent from 2009.
"Southern Nevada continues to see record high unemployment and foreclosure rates affecting our local customer base. In addition, Terrible’s Las Vegas, which attracts Las Vegas visitors, continues to face an intense promotional environment and cautious consumer spending, resulting in a noticeable decline in amount spent per visitor," Herbst said in its annual report.
Despite revenue declines, Southern Nevada EBITDA increased by $5.4 million, or 50 percent, to $16.1 million in 2010 thanks to "significant cost savings measures," the company said.