Boyd Gaming Reports Third-Quarter 2017 Results

LAS VEGAS, Oct. 26, 2017 /PRNewswire/ -- Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the third quarter ended September 30, 2017.  

Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: "We were pleased with our performance in the third quarter, and the continuation of positive trends throughout the business. Every Las Vegas Locals property grew Adjusted EBITDA at a double-digit pace, and on a same-store basis we reported our best third-quarter results in nearly a decade. Our newly acquired properties once again delivered strong growth, and each has achieved double-digit Adjusted EBITDA increases during every quarter under our ownership.  We saw encouraging results throughout our Midwest and South segment, which would have produced year-over-year Adjusted EBITDA growth had it not been for disruption from Hurricane Harvey. This strong operational performance is further enhancing our free cash flow, allowing us to continue to re-invest in our business, deleverage our balance sheet, and return capital to our shareholders."

Boyd Gaming reported third-quarter 2017 net revenues of $587.7 million, an increase of 10.5% from $531.9 million in the year-ago quarter.  Income from continuing operations, net of tax, for the third quarter was $23.0 million, or $0.20 per share, compared to $161.9 million, or $1.40 per share, in the prior-year third quarter.  Results for the current year include the operations of Aliante, acquired by the Company on September 27, 2016, as well as Cannery and Eastside Cannery, acquired on December 20, 2016. The prior-year third quarter results were favorably impacted by $190.4 million of noncash income tax benefits resulting from the release of a previously recorded deferred tax asset valuation allowance.  Prior-year results were also impacted by pretax losses of $41.5 million related to the early extinguishments and modification of debt.

The Company reported net income, including discontinued operations, of $23.0 million, or $0.20 per share, for the third quarter of 2017, compared to $342.6 million, or $2.97 per share, for the year-ago period.  Discontinued operations for the third quarter of 2016 included a $181.7 million after-tax gain from the sale of the Company's 50% equity interest in Borgata Hotel Casino & Spa.

Total Adjusted EBITDA⁽¹⁾ was $140.3 million, up 15.0% from $121.9 million in the third quarter of 2016. Adjusted Earnings⁽¹⁾ for the third quarter 2017 were $25.5 million, or $0.22 per share, compared to Adjusted Earnings of $16.7 million, or $0.14 per share, for the same period in 2016.  Adjusted EBITDA and Adjusted Earnings exclude the tax benefits from the valuation release, the debt extinguishment charges and income from discontinued operations.

Operations Review

Las Vegas Locals
In the Las Vegas Locals segment, third-quarter 2017 net revenues were $207.3 million, up from $148.9 million in the year-ago quarter.  Third-quarter 2017 Adjusted EBITDA rose to $56.1 million, compared to $36.2 million in the third quarter of 2016, as every property in the segment grew Adjusted EBITDA at a double-digit rate. Current quarter results include a full quarter of contributions from Aliante, Cannery and Eastside Cannery.

On a same-store basis, broad-based revenue gains and nearly 400 basis points of margin improvements drove the 10^th straight quarter of Adjusted EBITDA growth. These results reflect strong economic conditions, operational efficiencies, successful marketing refinements, and improved performance from the Company's recently renovated non-gaming amenities.

The Company's three newly-acquired properties – Aliante, Cannery and Eastside Cannery – each continued their streak of double-digit Adjusted EBITDA growth over their 2016 standalone results, as combined operating margins improved by more than 400 basis points.  Growth at these properties was driven by a strong economy, the execution of synergies, and operational and marketing improvements.

Downtown Las Vegas
In the Downtown Las Vegas segment, net revenues were $58.8 million in the third quarter of 2017, up from $56.6 million in the year-ago period.  Adjusted EBITDA increased to $11.5 million, compared to $10.0 million in the third quarter of 2016.

Revenue and Adjusted EBITDA grew at all three properties, driven by strength in the Company's Hawaiian customer segments, continued growth in visitation throughout the downtown area, and a nearly 200 basis-point improvement in operating margins. Segment results also benefited from the early completion of a room renovation project at the California. 

Midwest and South
In the Midwest and South segment, net revenues were $321.5 million, compared to $326.4 million in the third quarter of 2016.  Adjusted EBITDA was $90.1 million, versus $90.6 million in the year-ago period.

Segment results were impacted by the effects of Hurricane Harvey, primarily at Delta Downs, which saw reduced business volumes for several weeks.  Absent the hurricane, Adjusted EBITDA would have grown year-over-year, as operating trends continued to improve throughout the segment.

Balance Sheet Statistics
As of September 30, 2017, Boyd Gaming had cash on hand of $158.8 million, and total debt of $3.12 billion.

Full Year 2017 Guidance
For the full year 2017, Boyd Gaming reaffirms its previously provided guidance of total Adjusted EBITDA of $585 million to $605 million.

Conference Call Information
Boyd Gaming will host a conference call to discuss third-quarter results today, October 26, at 5:00 p.m. Eastern.  The conference call number is (888) 317-6003, passcode 8038872.  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/964/23155

Following the call's completion, a replay will be available by dialing (877) 344-7529 today, October 26, beginning at 7:00 p.m. Eastern and continuing through Thursday, November 2, at 11:59 p.m. Eastern.  The conference number for the replay will be 10113632.  The replay will also be available on the Internet at www.boydgaming.com