Boyd Gaming Reports First-Quarter 2016 Results

LAS VEGAS, April 26, 2016 /PRNewswire/ -- Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the first quarter ended March 31, 2016.  

Boyd Gaming reported first-quarter 2016 net revenues of $552.4 million, up from $550.6 million in the year-ago quarter.  Total Adjusted EBITDA⁽¹⁾ was $160.4 million, up 7.5% from $149.2 million in the first quarter of 2015.

Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: "Our Company continues to perform at a high level and deliver strong results, as the positive trends we saw in 2015 carried into the first quarter of 2016.  Thanks to a strengthening southern Nevada economy, growth accelerated throughout our Las Vegas Locals business, which achieved its best year-over-year revenue comparisons in more than a decade. Recent investments across our portfolio delivered strong returns, driving increases in both visitation and revenues.  And we used our substantial free cash flow to further deleverage our balance sheet, paying down nearly $125 million in debt during the quarter.  In all, this was another great quarter for our Company as we continued to successfully execute our strategy, and we remain optimistic about our long-term growth potential."

Commenting on the Company's recently announced acquisitions of Aliante Casino Hotel & Spa and the Las Vegas assets of Cannery Casino Resorts, Smith added: "The Las Vegas Valley's growth prospects are compelling.  We are excited to add three more assets that will expand and further diversify our presence in this high-growth market, and believe these acquisitions will deliver strong long-term returns for our shareholders."

Adjusted Earnings⁽¹⁾ for the first quarter 2016 were $34.0 million, or $0.30 per share, compared to earnings of $14.2 million, or $0.13 per share, for the same period in 2015. 

On a GAAP basis, the Company reported net income of $33.2 million, or $0.29 per share, for the first quarter 2016, compared to net income of $35.1 million, or $0.31 per share, for the year-ago period.  Settlements of previous years' income tax appeals reduced the first-quarter 2015 income tax provision by $23.2 million.  The impact of the settlements is not included in the prior year's Adjusted Earnings or Adjusted Earnings per share.

Key Operations Review

Las Vegas Locals
In the Las Vegas Locals segment, first-quarter 2016 net revenues were $158.4 million, an increase of 5.4% from $150.3 million in the year-ago quarter.  First-quarter 2016 Adjusted EBITDA was $44.3 million, up 13.9% from $38.9 million in the first quarter of 2015.

The first quarter of 2016 marked the fourth consecutive quarter of revenue and double-digit Adjusted EBITDA gains for the segment, as all major Locals properties achieved both higher revenues and Adjusted EBITDA.   A strengthening local economy and recent investments in property amenities drove growth in visitation, gaming revenues and non-gaming revenues.  Adjusted EBITDA gains reflect strong flow-through of incremental revenues, as operating margins improved more than 200 basis points.

Downtown Las Vegas
In the Downtown Las Vegas segment, net revenues were $58.6 million in the first quarter of 2016, up 3.5% from $56.6 million in the year-ago period.  Adjusted EBITDA increased 18.8% to $12.7 million, compared to $10.7 million in the first quarter of 2015.

All properties in the segment grew revenue and Adjusted EBITDA during the quarter – led by a record first-quarter Adjusted EBITDA performance at the Fremont – as operating margins improved 280 basis points across the segment.  Positive results reflect continued growth in visitation throughout the Downtown area, as well as strengthening business volumes from the Company's Hawaiian customer segments.

Midwest and South; Peninsula
In the Midwest and South segment, net revenues were $209.2 million, compared to $217.8 million in the first quarter of 2015.  Adjusted EBITDA was $48.8 million versus $51.0 million in the year-ago period.

The Peninsula segment reported net revenues of $126.2 million, compared to $125.9 million in the first quarter of 2015. Adjusted EBITDA rose 1.6% to $47.1 million, versus $46.4 million in the year-ago period.

Improved operating trends continued at a number of properties in the segments, with both revenue and Adjusted EBITDA growth at Blue Chip, Diamond Jo Dubuque, Diamond Jo Worth, Treasure Chest and Kansas Star.  Strong performances at these properties were offset by the impact of severe regional flooding in March, which affected operations in portions of Louisiana and Mississippi.  Additionally, results at the IP reflect the short-term impact of the recent opening of a new competitor in the Biloxi market.

Borgata
Borgata reported first quarter 2016 net revenues of $190.3 million, an increase of 4.2% from $182.6 million in revenues in the year-ago period. Adjusted EBITDA at Borgata was $45.3 million, an increase of 19.9% from $37.8 million in the first quarter of 2015. 

Borgata recorded its strongest first-quarter Adjusted EBITDA performance since 2009, led by significant growth in slot volumes.  The property continued to successfully maintain operating efficiencies, improving operating margins by more than 300 basis points. 

The Company accounts for its 50% investment in Borgata by applying the equity method of accounting. The Company's share of Borgata's Adjusted EBITDA was $22.7 million for the first quarter of 2016, compared to $18.9 million in the year-ago period.

Balance Sheet Statistics
Including operating cash balances and excess cash proceeds from its recent bond offering, Boyd Gaming had cash on hand of $616.2 million, including $27.2 million related to Peninsula, as of March 31, 2016.  Total debt was $3.75 billion, of which $0.99 billion was related to Peninsula.

Borgata's cash and debt balances are not included in the Company's balance sheet. Borgata had cash on hand of $29.8 million and total debt of $651.5 million at March 31, 2016. 

Full Year 2016 Guidance
For the full year 2016, the Company is re-affirming its previously provided guidance of total Adjusted EBITDA, including Peninsula and 50% of Borgata's Adjusted EBITDA, of $635 million to $655 million. This guidance excludes the Company's recently announced acquisitions.

Conference Call Information
Boyd Gaming will host its conference call to discuss first-quarter 2016 results today, April 26, at 5:00 p.m. Eastern.  The conference call number is (888) 317-6003, passcode 1870859.  Please call up to 15 minutes in advance to ensure you are connected prior to the start of the call. 

The conference call will also be available live on the Internet at www.boydgaming.com, or: https://www.webcaster4.com/Webcast/Page/964/14670

Following the call's completion, a replay will be available by dialing (877) 344-7529 today, April 26, beginning at 7:00 p.m. Eastern and continuing through Tuesday, May 3, at 11:59 p.m. Eastern.  The conference number for the replay will be 10084676.  The replay will also be available on the Internet at www.boydgaming.com.