Boyd Gaming Reports Fourth-Quarter, Full-Year 2016 Results

LAS VEGAS, Feb. 14, 2017 /PRNewswire/ -- Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the fourth quarter and full year ended December 31, 2016.  

Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: "The fourth quarter was the culmination of an eventful and successful year, as we further positioned our Company for long-term growth.  Our Las Vegas Locals segment grew at a healthy pace in the fourth quarter, with same-store Adjusted EBITDA reaching its highest levels in nearly a decade.  We were also encouraged to see meaningful sequential improvement in our regional operations, which performed in-line with prior-year results after considering the impact of severe winter weather. And in December, we completed the acquisition of the Cannery and Eastside Cannery, further expanding our footprint in the attractive Las Vegas market."

Boyd Gaming reported fourth-quarter 2016 net revenues of $554.8 million, an increase of 2.2% from $542.7 million in the year-ago quarter.  Income from continuing operations, net of tax, for the fourth quarter was $10.7 million, or $0.10 per share, versus a loss of $14.4 million, or $0.13 per share, in the prior-year fourth quarter.  The Company reported net income, including discontinued operations, of $12.2 million, or $0.11 per share, for the fourth quarter of 2016, compared to a net loss of $6.9 million, or $0.06 per share, for the year-ago period.

During the fourth quarter of 2016, the Company reported noncash intangible asset impairment charges of $36.9 million. The Company's fourth quarter results were favorably impacted by $11.1 million of noncash income tax benefits resulting from the release of a previously recorded deferred tax asset valuation allowance.  Discontinued operations for fourth quarter 2016 included $1.5 million in after-tax income for the Company's share of a property tax recovery realized by Borgata Hotel Casino & Spa, which was sold on August 1, 2016. Results for the prior-year period included noncash impairment charges of $17.5 million, primarily due to the impairments of intangible assets. The Company's fourth quarter 2015 results were also impacted by pretax losses of $8.4 million related to the early extinguishments and modification of debt during the quarter.

Total Adjusted EBITDA⁽¹⁾ was $138.8 million, up 5.7% from $131.3 million in the fourth quarter of 2015. Adjusted Earnings⁽¹⁾ for the fourth quarter 2016 were $44.3 million, or $0.38 per share, compared to Adjusted Earnings of $10.3 million, or $0.09 per share, for the same period in 2015.  Adjusted EBITDA and Adjusted Earnings exclude discontinued operations.

Key Operations Review

Las Vegas Locals
In the Las Vegas Locals segment, fourth-quarter 2016 net revenues were $185.7 million, up from $158.8 million in the year-ago quarter.  Fourth-quarter 2016 Adjusted EBITDA rose to $52.8 million, compared to $44.0 million in the fourth quarter of 2015. Segment results include a full quarter of contributions from Aliante, acquired by the Company on September 27, 2016, as well as 12 days of contributions from Cannery and Eastside Cannery, acquired on December 20, 2016.

On a same-store basis, both Adjusted EBITDA and operating margins reached their highest fourth-quarter levels since 2007, as the Company's properties benefited from a strong regional economy.  Ongoing refinements to the Company's marketing programs also continued to drive significant growth in profitability during the quarter.

Downtown Las Vegas
In the Downtown Las Vegas segment, net revenues were $62.0 million in the fourth quarter of 2016, compared to $62.5 million in the year-ago period.  Adjusted EBITDA was $15.5 million, versus $16.2 million in the fourth quarter of 2015.

Despite disruption during the quarter from hotel room renovations at the California, underlying business trends remain strong in the Downtown market, with continued growth in visitation throughout the area.  The Fremont delivered the second-best fourth-quarter Adjusted EBITDA performance in its history, and also set an all-time record for full-year Adjusted EBITDA.

Midwest and South
In the Midwest and South segment, net revenues were $307.2 million, compared to $321.5 million in the fourth quarter of 2015.  Adjusted EBITDA was $86.1 million, versus $86.3 million in the year-ago period.

Adjusted EBITDA in the segment was essentially even with the prior year, after three quarters of declines, as operating trends improved in many regional markets during the quarter.  Adjusted EBITDA included a one-time, favorable property tax adjustment of $2.9 million, a benefit that was offset by the impact of severe winter weather.

Full-Year 2016 Results
For the full year ended December 31, 2016, Boyd Gaming reported net revenues of $2.18 billion, compared to $2.20 billion for the full year 2015.  Income from continuing operations, net of tax, were $205.5 million, or $1.78 per share, up from $10.7 million, or $0.10 per share, in the prior year.  The Company reported net income, including discontinued operations, of $418.0 million, or $3.63 per share, for the full year 2016, compared to net income of $47.2 million, or $0.42 per share, for the year-ago period.

The Company's results for the year ended December 31, 2016, included noncash impairment charges of $38.3 million and pretax losses on the early extinguishments of debt of $42.4 million. In addition, the Company's full year 2016 results were favorably impacted by $201.5 million of noncash income tax benefits resulting from the release of a previously recorded deferred tax asset valuation allowance.  Discontinued operations for both periods include results from the Company's 50% equity interest in Borgata, while full-year 2016 results also include a $181.7 million after-tax gain from the third quarter sale of the equity interest.  Results for the prior year included noncash impairment charges of $18.6 million and pretax losses on the early extinguishments of debt of $40.7 million.  In addition, settlements of previous years' income tax appeals reduced the 2015 income tax provision by $25.1 million. 

For the full year 2016, total Adjusted EBITDA⁽¹⁾ was $536.3 million, up 1.7% from $527.4 million in the prior year. Adjusted Earnings⁽¹⁾ for the full year 2016 were $104.6 million, or $0.91 per share, up from Adjusted Earnings of $49.4 million, or $0.43 per share, for the same period in 2015.  Adjusted EBITDA and Adjusted Earnings exclude discontinued operations.

Balance Sheet Statistics
As of December 31, 2016, Boyd Gaming had cash on hand of $193.9 million, and total debt of $3.28 billion.

Full Year 2017 Guidance
For the full year 2017, Boyd Gaming projects total Adjusted EBITDA of $585 million to $605 million.

Conference Call Information
Boyd Gaming will host a conference call to discuss fourth-quarter and full-year 2016 results today, February 14, at 5:30 p.m. Eastern.  The conference call number is (888) 317-6003, passcode 8569313.  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/964/19582

Following the call's completion, a replay will be available by dialing (877) 344-7529 today, February 14, beginning at 7:30 p.m. Eastern and continuing through Tuesday, February 21, at 11:59 p.m. Eastern.  The conference number for the replay will be 10100867.  The replay will also be available on the Internet at www.boydgaming.com.