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Boyd Gaming Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 9, 2011 03:18PM
Boyd Gaming Corp. (BYD) filed Quarterly Report for the period ended 2011-09-30.
Highlight of Business Operations:We derive the majority of our gross revenues from our gaming operations, which produced approximately 72% of gross revenues for each of the three months ended September 30, 2011 and 2010, and 72% and 73% of gross revenues for the nine months ended September 30, 2011 and 2010, respectively. Food and beverage gross revenues, which produced approximately 14% of gross revenues for each of the three and nine months ended September 30, 2011 and 2010, respectively, represent the next most significant revenue source, followed by room and other, both of which separately contributed less than 10% of gross revenues during these respective periods.
Gaming revenues are significantly comprised of the net win from our slot machine operations and table games. The $2.9 million, or 0.6% decrease in gaming revenues during the three months ended September 30, 2011 as compared to the corresponding period of the prior year was due primarily to a 1.0% decrease in slot win, on a 0.6% decrease in slot handle, offset by a 5.3% increase in table game win on a 1.1% increase in table game drop. Our gaming revenues were also unfavorably impacted by losses on sports
Gaming revenues decreased by $12.8 million, or 0.9%, during the nine months ended September 30, 2011 as compared to the corresponding pro forma amount from the prior year period, due primarily to a 0.1% decrease in slot win, on a 0.9% decrease in slot coin-in, coupled with a 0.6% decrease in table game win on a 1.0% decrease in table game drop. Gaming related costs have correspondingly decreased by $14.9 million, or 2.1% based on lower revenues and enhanced cost containment measures.
Food and beverage revenues decreased by $0.5 million, or 0.2% during the nine months ended September 30, 2011 as compared to the corresponding period of the prior year, due to a 1.6% increase in average guest check, which more than offset a 1.4% decrease in the number of guests served. The increase in food and beverage cost of $2.5 million, or 1.7%, is due to a 2.9% increase in cost per guest served.
Results were not consolidated fully during the nine months ended September 30, 2010, however, on a comparable pro forma basis, net revenues declined 2.8% to $553.9 million from $569.6 million and Adjusted EBITDA declined 10.8% to $120.6 million from $135.3 million during the nine months ended September 30, 2011 and 2010, respectively. Overall, results during the current nine months were negatively impacted by the closure of the property during Hurricane Irene, which cost the property three days of business volume during a relatively busy summer month. Also, throughout the year, Borgata has been adversely impacted by promotional spend, which increased to 23.6% of gross gaming revenue for the nine months ended September 30, 2011 from 22.0% for the nine months ended September 30, 2010. This spend represents increased promotional incentives in response to the competitive environment in the Atlantic City and Eastern Pennsylvania gaming markets.