Boyd Gaming Reports First-Quarter 2014 Results

LAS VEGAS, April 30, 2014 /PRNewswire/ -- Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the first quarter ended March 31, 2014.  

Boyd Gaming reported first-quarter 2014 net revenues of $708.3 million, compared to $735.6 million during the same quarter in 2013, and total Adjusted EBITDA⁽¹⁾  of $144.5 million, versus $163.5 million in the year-ago quarter.  Adjusted EBITDA was negatively impacted by an estimated $10 million to $12 million during the quarter due to unusually severe winter weather at the Company's operations outside of Nevada.  Additionally, Borgata's online gaming operations recorded a $3.2 million operating loss related to its launch.  

Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: "Boyd Gaming continued to make steady progress in the first quarter, delivering results at the high end of our guidance.  We were particularly encouraged by the performance of our Las Vegas Locals business, which generated its fifth straight quarter of EBITDA growth.  The refinements we have made to our operations are paying clear dividends in all segments of our business, and we expect additional benefits as the economy recovers. We further strengthened our financial position as well, repaying an additional $55 million in debt in the first quarter. We are diligently focused on building long-term value for our shareholders, and I remain confident about our future prospects."

Adjusted Earnings⁽¹⁾ for the first quarter 2014 reflect a loss of $4.1 million, or $0.04 per share, compared to income of $1.4 million, or $0.02 per share, for the same period in 2013.   The calculations of Adjusted Earnings and Adjusted Earnings per share are presented in a table at the end of this press release.

On a GAAP basis, the Company reported a net loss of $6.2 million, or $0.06 per share, for the first quarter 2014, compared to a net loss of $7.3 million, or $0.08 per share, for the year-ago period. 

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

Key Operations Review

Las Vegas Locals

In the Las Vegas Locals segment, first-quarter 2014 net revenues were $151.4 million, compared to $152.8 million in the year-ago quarter.  First-quarter 2014 Adjusted EBITDA increased 2.0% to $40.0 million, compared to $39.2 million in the first quarter of 2013. Growth in non-gaming operations and continued efficiencies helped drive the fifth consecutive quarter of EBITDA gains and margin improvements in the Locals segment.

Downtown                                                                                            

In the Downtown Las Vegas segment, net revenues were $55.7 million in the first quarter of 2014, up 3.1% from $54.1 million in the year-ago period.  Adjusted EBITDA increased 31.2% to $9.3 million, compared to $7.1 million in the first quarter of 2013.  Results benefited from increased traffic from Fremont Street, as well as continued yield improvements in the Company's Hawaiian charter service.

Midwest and South; Peninsula

In the Midwest and South segment, net revenues were $211.6 million, compared to $229.1 million in the first quarter of 2013.  Adjusted EBITDA was $44.1 million versus $49.7 million in the year-ago period.

During the first quarter of 2014, the Peninsula segment reported net revenues of $122.3 million and Adjusted EBITDA of $44.8 million.  This compares to net revenues of $133.9 million and Adjusted EBITDA of $50.7 million in the first quarter of 2013. 

Results were predominately impacted by unusually severe winter weather, as well as continued softness in the casual gaming segment.

Borgata

Borgata, the Company's 50% joint venture, reported first-quarter 2014 net revenues of $167.3 million, including $7.7 million from its online gaming operations, compared to $165.6 million in revenues reported in the year-ago period. Adjusted EBITDA was $20.4 million, compared to $28.4 million in the first quarter of 2013. 

Results reflect reduced visitation due to unusually severe winter weather throughout the quarter.  Adjusted EBITDA was further impacted by a $3.2 million loss in Borgata's online gaming operations related to the launch of this business, primarily as a result of  approximately $2 million in non-recurring marketing and advertising expenses.  

Key Balance Sheet Statistics

As of March 31, 2014, Boyd Gaming had cash on hand of $162.9 million, including $27.9 million related to Peninsula and $29.0 million related to Borgata.

Total debt was $4.37 billion, of which $1.14 billion was related to Peninsula and $809.3 million was related to Borgata. 

Full-Year Guidance

For the full-year 2014, Boyd Gaming currently projects total Adjusted EBITDA of $600 million to $620 million.

Conference Call Information

Boyd Gaming will host its conference call to discuss first-quarter 2014 results today, April 30, at 5:00 p.m. Eastern.  The conference call number is (888) 317-6003, passcode 4440004.  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 http://www.videonewswire.com/event.asp?id=99039

Following the call's completion, a replay will be available by dialing (877) 344-7529 today, April 30, beginning at 7:00 p.m. Eastern and continuing through Thursday, May 8, at 9 a.m. Eastern.  The conference number for the replay will be 10045059.  The replay will also be available on the Internet at www.boydgaming.com.

Non-GAAP Financial Measures

Regulation G, "Conditions for Use of Non-GAAP Financial Measures," prescribes the conditions for use of non-GAAP financial information in public disclosures. We believe that our presentations of the following non-GAAP financial measures are important supplemental measures of operating performance to investors: earnings before interest, taxes, depreciation and amortization (EBITDA), Adjusted EBITDA, Adjusted Earnings and Adjusted Earnings Per Share (Adjusted EPS). The following discussion defines these terms and why we believe they are useful measures of our performance. We do not provide a reconciliation of forward-looking non-GAAP financial measures to the corresponding forward-looking GAAP measure due to our inability to project special charges and certain expenses.

EBITDA and Adjusted EBITDA

EBITDA is a commonly used measure of performance in our industry that we believe, when considered with measures calculated in accordance with accounting principles generally accepted in the United States ("GAAP"), provides our investors a more complete understanding of our operating results before the impact of investing and financing transactions and income taxes and facilitates comparisons between us and our competitors. Management has historically adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide the most accurate measure of our core operating results and as a means to evaluate period-to-period results. We refer to this measure as Adjusted EBITDA. We have chosen to provide this information to investors to enable them to perform more meaningful comparisons of past, present and future operating results and as a means to evaluate the results of core on-going operations. We have historically reported this measure to our investors and believe that the continued inclusion of Adjusted EBITDA provides consistency in our financial reporting. We use Adjusted EBITDA in this press release because we believe it is useful to investors in allowing greater transparency related to a significant measure used by our management in their financial and operational decision-making. Adjusted EBITDA is among the more significant factors in management's internal evaluation of total company and individual property performance and in the evaluation of incentive compensation related to property management. Management also uses Adjusted EBITDA as a measure in the evaluation of potential acquisitions and dispositions. Adjusted EBITDA is also used by management in the annual budget process. Externally, we believe these measures continue to be used by investors in their assessment of our operating performance and the valuation of our company. Adjusted EBITDA reflects EBITDA adjusted for deferred rent, preopening expenses, share-based compensation expense, impairments of assets, asset transactions costs, loss on early extinguishments of debt and other operating charges, net, and Borgata's non-operating expenses, preopening expenses and other items and write-downs, net. In addition, Adjusted EBITDA includes corporate expense.

Adjusted Earnings and Adjusted EPS

Adjusted Earnings is net income (loss) before preopening expenses, asset transactions costs, net gains on insurance settlements, impairments of assets, certain adjustments to property tax accruals, write-downs and other charges, net, accelerated amortization of deferred loan fees, gain or loss on early retirements of debt, other non-recurring adjustments, net, valuation adjustments related to the consolidation of Borgata, and Borgata's preopening expenses and other items and write-downs, net. Adjusted Earnings and Adjusted EPS are presented solely as supplemental disclosures because management believes that they are widely used measures of performance in the gaming industry.

Limitations on the Use of Non-GAAP Measures

The use of EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS and certain other non-GAAP financial measures has certain limitations. Our presentation of EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS or certain other non-GAAP financial measures may be different from the presentation used by other companies and therefore comparability may be limited. Depreciation and amortization expense, interest expense, income taxes and other items have been and will be incurred and are not reflected in the presentation of EBITDA or Adjusted EBITDA. Each of these items should also be considered in the overall evaluation of our results. Additionally, EBITDA and Adjusted EBITDA do not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. We compensate for these limitations by providing the relevant disclosure of our depreciation and amortization, interest and income taxes, capital expenditures and other items both in our reconciliations to the historical GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance.

EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS and certain other non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP. EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS and certain other non-GAAP financial measures should not be considered as an alternative to net income, operating income, or any other operating performance measure prescribed by GAAP, nor should these measures be relied upon to the exclusion of GAAP financial measures. EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS and certain other non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding historical GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. Management strongly encourages investors to review our financial information in its entirety and not to rely on a single financial measure.

Forward-looking Statements and Company Information

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements contain words such as "may," "will," "might," "expect," "believe," "anticipate," "could," "would," "estimate," "continue," "pursue," or the negative thereof or comparable terminology, and may include (without limitation) information regarding the Company's expectations, goals or intentions regarding future performance. In addition, forward-looking statements in this press release include statements regarding: the Company's guidance for the full year 2014; that refinements to the Company's operations are benefitting all segments of the Company's business; the expectation for additional benefits as the economy recovers; that the Company is diligently focused on building long-term shareholder value; and future prospects for the Company. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. These risks and uncertainties include, but are not limited to: fluctuations in the Company's operating results; recovery of its properties in various markets; the state of the economy and its effect on consumer spending and the Company's results of operations; the timing for economic recovery, its effect on the Company's business and the local economies where the Company's properties are located; the receipt of legislative, and other state, federal and local approvals for the Company's development projects in Florida, California and other jurisdictions; whether online gaming will become legalized in various states, the Company's ability to operate online gaming profitably, or otherwise; consumer reaction to fluctuations in the stock market and economic factors; the fact that the Company's expansion, development and renovation projects (including enhancements to improve property performance) are subject to many risks inherent in expansion, development or construction of a new or existing project; the effects of events adversely impacting the economy or the regions from which the Company draws a significant percentage of its customers; competition; litigation; financial community and rating agency perceptions of the Company and its subsidiaries; changes in laws and regulations, including increased taxes; the availability and price of energy, weather, regulation, economic, credit and capital market conditions; and the effects of war, terrorist or similar activity. Additional factors that could cause actual results to differ are discussed under the heading "Risk Factors" and in other sections of the Company's Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, and in the Company's other current and periodic reports filed from time to time with the SEC. All forward-looking statements in this press release are made as of the date hereof, based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement.

About Boyd Gaming

Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD) is a leading diversified owner and operator of 22 gaming entertainment properties located in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi and New Jersey. Boyd Gaming press releases are available at www.prnewswire.com. Additional news and information on Boyd Gaming can be found at www.boydgaming.com.

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SOURCE Boyd Gaming Corporation