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Boyd Gaming Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 6, 2012 04:27PM
Boyd Gaming Corp. (BYD) filed Quarterly Report for the period ended 2012-06-30. Boyd Gaming Corporation has a market cap of $499.6 million; its shares were traded at around $5.84 with a P/E ratio of 36.1 and P/S ratio of 0.2. Boyd Gaming Corporation had an annual average earning growth of 3.9% over the past 5 years.
Highlight of Business Operations:Gaming revenues are significantly comprised of the net win from our slot machine operations and table games. The $28.5 million, or 5.9% increase in gaming revenues during the three months ended June 30, 2012 as compared to the corresponding period of the prior year, was due primarily to $39.1 million of gaming revenues from IP, largely offset by a $9.7 million decrease in gaming revenues at Borgata. Additionally, we experienced an overall 2.7% decrease in slot drop and 11.0% decrease in table game drop respectively. Gaming costs increased $17.1 million, or 7.7%, due to the incremental expenses of $10.1 million associated with IP and other increased gaming volume.
The $82.3 million, or 8.5% increase in gaming revenues during the six months ended June 30, 2012, was due primarily to $80.2 million of gaming revenues from IP as compared to the corresponding period of the prior year. Additionally, we experienced a 1.4% increase in slot hold partially offset by an 1.6% decrease in slot handle. Table game hold increased 5.4% which was offset by a 6.7% decrease in table game drop. Although gaming costs increased $39.4 million, or 8.8%, due to the addition of IP, the operating margin remained relatively unchanged due to cost containment initiatives and targeted marketing spend.
Net revenues decreased slightly by 1.1% and Adjusted EBITDA decreased 13.4%, during the three months ended June 30, 2012, as compared to the corresponding period of the prior year, due primarily to a 6.7% decrease in table game drop while table game win remained unchanged, and a 6.0% decrease in slot drop combined with a 3.8% decrease in slot win. Hotel occupancy rates decreased 6.1%, mainly due to a 4.7% decrease from our Hawaiian market and food covers decreased 2.1% due to fewer hotel guests compared to the same period in the prior year. During the three months ended June 30, 2012, our Hawaiian market represented approximately 56% of our business in this segment compared to 61% in the corresponding period of the prior year.
Net revenues increased 30.5% during the six months ended June 30, 2012, as compared to the six months ended June 30, 2011, while Adjusted EBITDA increased by 30.7% during the same respective periods. The IP contributed $96.4 million in net revenues and $24.2 million in Adjusted EBITDA during the six months ended June 30, 2012. Collectively, our Louisiana properties continue to post stronger results within the region. Excluding IP, table game drop decreased 2.3%, offset by a 7.2% increase in table game hold and a 4.7% increase in table game win respectively and slot drop increased 2.0%, slot hold increased 1.3% and slot win increased 3.4% respectively. Excluding IP, food covers increased 2.5% and the average guest check increased 4.0% and the hotel occupancy rate decreased 4.8%, offset by a 2.5% increase in the ADR. We began to introduce our B Connected player loyalty program at the IP during the quarter, and expect to start driving additional profitable business to the property yet this year.
Borgata's net revenues decreased by 4.0% during the three months ended June 30, 2012 as compared to the three months ended June 30, 2011, and Adjusted EBITDA decreased 20.5% during the same respective periods. Despite a 1.5% increase in table game hold, table game drop decreased 13.0%, or $49.2 million respectively. The decrease in table game drop is relatively consistent with the 12.2% decrease in table game drop experienced by the total Atlantic City market due to lower discretionary spending. Slot drop decreased 4.2%, resulting in a 3.8% decrease in slot win, while slot hold remained relatively unchanged. The 4.2% decrease in slot was favorable compared to the total Atlantic City market which experienced a 6.9% decrease in total slots handle. Adjusted EBITDA was impacted by the other operating items, net and the tax effect of the adjustments. Borgata continues to be the leader in table games and slot market share and achieved 22.3% of the table game drop and 19.4% of the slot handle market share respectively, for the three months ended June 30, 2012.
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