Boyd Gaming Reports Fourth-Quarter, Full-Year 2018 Results

LAS VEGAS, Feb. 21, 2019 /PRNewswire/ -- Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the fourth quarter and full year ended December 31, 2018.  

Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: "The strategic initiatives we have executed over the past several years continued to pay off in the fourth quarter of 2018.  Our recent acquisitions, efficiency programs and marketing refinements all contributed to strong results.  We delivered revenue, Adjusted EBITDAR and margin growth in every segment of our business in the fourth quarter as well as the full year.  Our consumer remains healthy, and we believe we are in a solid position to continue creating value for shareholders in 2019 and beyond."

Smith continued: "During the full year 2018 we diversified our nationwide portfolio and significantly enhanced our free cash flow profile with the acquisition of six new assets across five states.  We also entered into a strategic partnership with FanDuel Group, providing us a market-leading partner to pursue sports-betting and mobile wagering opportunities now emerging across the United States. And we continued to successfully execute a balanced approach to capital allocation, returning capital to shareholders while actively investing in strategic growth opportunities and prudently controlling leverage."

Boyd Gaming reported fourth-quarter revenues of $791.6 million, up 33.0% from $595.1 million in the fourth quarter of 2017.  The Company reported net income of $22.9 million, or $0.20 per share, for the fourth quarter of 2018, compared to $82.1 million, or $0.71 per share, for the year-ago period. The Company's fourth-quarter 2017 tax provision included a $60.1 million noncash income tax benefit to recognize the impact of the federal tax legislation on its deferred tax liabilities.  Project development, preopening and writedown expenses increased $12.1 million in the fourth quarter of 2018 over the prior-year period due to acquisition and development-related activities, and the launch of the Company's redesigned player loyalty program. Corporate expense increased as compared to the fourth quarter of 2017, primarily due to the recent acquisitions. 

Total Adjusted EBITDAR⁽¹⁾ was $208.6 million in the fourth quarter of 2018, up 40.7% from $148.3 million in the fourth quarter of 2017. Adjusted Earnings⁽¹⁾ for the fourth quarter of 2018 were $37.0 million, or $0.32 per share, compared to Adjusted Earnings of $25.5 million, or $0.22 per share, for the same period in 2017.

Results for the fourth quarter of 2018 include $186.8 million in revenues and $48.0 million in Adjusted EBITDAR from Ameristar Kansas City, Ameristar St. Charles, Belterra Resort and Belterra Park, acquired on October 15, 2018; Valley Forge Casino Resort, acquired by the Company on September 17, 2018; and Lattner Entertainment, acquired on June 1, 2018. 

_{(1)      See footnotes at the end of the release for additional information relative to non-GAAP financial measures.}

Operations Review

Las Vegas Locals

In the Las Vegas Locals segment, fourth-quarter 2018 revenues were $222.6 million, increasing from $219.8 million in the year-ago quarter. Fourth-quarter 2018 Adjusted EBITDAR was $73.0 million, up 13.4% from $64.4 million in the fourth quarter of 2017.

Continued operating efficiencies, marketing refinements, enhancements to the Company's player loyalty program and strong economic conditions contributed to the 15^th consecutive quarter of Adjusted EBITDAR growth in the Las Vegas Locals segment.  Operating margins improved by more than 350 basis points across the segment, as every major Locals property recorded year-over-year Adjusted EBITDAR growth.

Downtown Las Vegas

In the Downtown Las Vegas segment, revenues were $67.3 million in the fourth quarter of 2018, up from $65.1 million in the year-ago period.  Adjusted EBITDAR was $18.4 million in the fourth quarter of 2018, growing 9.6% from $16.8 million in the year-ago quarter.

Strong operating trends continued throughout the segment, with further gains in pedestrian traffic as well as increased visitation from Hawaiian customers.  Operational efficiencies and marketing improvements also contributed to an increase of more than 155 basis points in operating margins.

Midwest and South

In the Midwest and South segment, revenues were $501.8 million, up from $310.2 million in the fourth quarter of 2017.  Adjusted EBITDAR increased 64.3% to $141.8 million, compared to $86.3 million in the year-ago period.

Fourth-quarter 2018 results for the segment include $186.8 million in revenues and $48.0 million in Adjusted EBITDAR from Ameristar Kansas City, Ameristar St. Charles, Belterra Resort, Belterra Park, Valley Forge, and Lattner Entertainment.  Adjusted EBITDAR was also positively impacted in the fourth quarter of 2018 by a one-time favorable property tax benefit of $2.7 million at Kansas Star.

Segment results reflect broad-based same-store revenue and Adjusted EBITDAR gains, as nearly all of the Company's same-store properties grew Adjusted EBITDAR during the quarter.  Same-store operating margins rose more than 110 basis points year-over-year, driven by continued operating efficiencies and marketing refinements, as well as widespread economic strength. 

Full-Year 2018 Results

For the full year ended December 31, 2018, Boyd Gaming reported revenues of $2.63 billion, compared to $2.40 billion for the full year 2017. Total Adjusted EBITDAR for the full year 2018 was $681.3 million, up from $595.9 million for the full year 2017.   Full-year 2018 net income was $115.0 million, or $1.00 per share, compared to $189.4 million, or $1.64 per share, for the full year 2017. The Company's prior-year tax provision included a $60.1 million noncash income tax benefit to recognize the impact of the federal tax legislation on its deferred tax liabilities.  Project development, preopening and writedown expenses for the full year 2018 increased $31.2 million over the prior-year period due to acquisition and development-related activities, and the launch of the Company's redesigned player loyalty program.  Corporate expense increased as compared to the prior year primarily due to incremental costs arising from the 2018 acquisitions.  Share-based compensation expense also increased year-over-year due primarily to higher incentive stock program costs. 

Full-year 2018 Adjusted Earnings were $152.9 million, or $1.33 per share, up from Adjusted Earnings of $119.0 million, or $1.03 per share, for the full year 2017. 

Results for the full year 2018 include $206.6 million in revenues and $52.3 million in Adjusted EBITDAR from Ameristar Kansas City, Ameristar St. Charles, Belterra Resort and Belterra Park, acquired on October 15, 2018; Valley Forge Casino Resort, acquired on September 17, 2018; and Lattner Entertainment, acquired on June 1, 2018.

Balance Sheet Statistics

As of December 31, 2018, Boyd Gaming had cash on hand of $249.4 million, and total debt of $4.03 billion. 

Full-Year 2019 Guidance

For the full year 2019, Boyd Gaming projects total Adjusted EBITDAR of $885 million to $910 million.

Conference Call Information

Boyd Gaming will host a conference call to discuss fourth-quarter 2018 results today, February 21, at 5:00 p.m. Eastern.  The conference call number is (888) 317-6003, passcode 0629569.  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/964/29410

Following the call's completion, a replay will be available by dialing (877) 344-7529 today, February 21, beginning at 7:00 p.m. Eastern and continuing through Thursday, February 28, at 11:59 p.m. Eastern.  The conference number for the replay will be 10128817.  The replay will also be available on the Internet at www.boydgaming.com.