Exhibit 99.1
Station Casinos Announces Second Quarter Results
LAS VEGAS--(BUSINESS WIRE)--August 14, 2009--Station Casinos, Inc. ("Station" or the “Company") today announced the results of its operations for the second quarter ended June 30, 2009.
Results of Operations
The Company's net revenues for the second quarter ending June 30, 2009, were approximately $267.2 million, a decrease of 21% compared to the prior year's second quarter. The Company reported Adjusted EBITDA for the quarter of $79.2 million, a decrease of 38% compared to the prior year's second quarter. For the second quarter, the Company reported a net loss of $65.3 million as compared to net earnings of $18.6 million in the prior year’s second quarter.
During the second quarter, the Company incurred $0.6 million in write-downs and other charges, which included losses on asset disposals and severance expense. The Company also incurred $0.6 million in costs to develop new gaming opportunities, $2.7 million of expense related to equity-based awards, $1.4 million of preopening expenses, $4.5 million in legal fees related to the proposed debt restructuring and other non-recurring costs, and a gain of $1.5 million related to its deferred compensation plan.
The Company’s second quarter earnings from its Green Valley Ranch joint venture were $5.6 million, which represents a combination of the Company's management fee plus 50% of Green Valley Ranch’s operating income. For the second quarter, Green Valley Ranch generated Adjusted EBITDA before management fees of $15.2 million, a decrease of 31% compared to the same period in the prior year. Green Valley Ranch reported a net loss of $3.8 million for the second quarter as compared to a net loss of $1.2 million in the same period in the prior year.
Las Vegas Market Results
For the second quarter, net revenues from the Major Las Vegas Operations, excluding Green Valley Ranch and Aliante Station, were $245.9 million, a 20% decrease compared to the prior year’s second quarter, while Adjusted EBITDA from those operations decreased 33% to $71.0 million from $106.1 million in the same period in the prior year. The Major Las Vegas Operations reported a net loss of $15.6 million for the second quarter as compared to net income of $1.6 million in the same period in the prior year.
Adjusted EBITDA is not a generally accepted accounting principle (“GAAP”) measurement and is presented solely as a supplemental disclosure because the Company believes that it is a widely used measure of operating performance in the gaming industry and is a principal basis for the valuation of gaming companies. EBITDA and Adjusted EBITDA are further defined in footnote 1.
Balance Sheet and Capital Expenditures
Long-term debt was $5.7 billion as of June 30, 2009. Total capital expenditures were $17.1 million for the second quarter which consisted primarily of maintenance capital purchases and other projects. Equity contributions to joint ventures during the second quarter were $14.0 million.
Voluntary Chapter 11 Petition
As described more fully in our 8-K and press release dated July 28, 2009, Station and certain of its non-casino subsidiaries filed voluntary petitions to reorganize under Chapter 11 of the United States Bankruptcy Code.
Company Information and Forward Looking Statements
Station Casinos, Inc. is the leading provider of gaming and entertainment to the residents of Las Vegas, Nevada. Station's properties are regional entertainment destinations and include various amenities, including numerous restaurants, entertainment venues, movie theaters, bowling and convention/banquet space, as well as traditional casino gaming offerings such as video poker, slot machines, table games, bingo and race and sports wagering. Station owns and operates Red Rock Casino Resort Spa, Palace Station Hotel & Casino, Boulder Station Hotel & Casino, Santa Fe Station Hotel & Casino, Wildfire Rancho and Wild Wild West Gambling Hall & Hotel in Las Vegas, Nevada, Texas Station Gambling Hall & Hotel and Fiesta Rancho Casino Hotel in North Las Vegas, Nevada, and Sunset Station Hotel & Casino, Fiesta Henderson Casino Hotel, Wildfire Boulder, Gold Rush Casino and Lake Mead Casino in Henderson, Nevada. Station also owns a 50% interest in Green Valley Ranch Station Casino, Barley's Casino & Brewing Company, The Greens and Wildfire Lanes in Henderson, Nevada, a 50% interest in Aliante Station Casino + Hotel in North Las Vegas, Nevada and a 6.7% interest in the joint venture that owns the Palms Casino Resort in Las Vegas, Nevada. In addition, Station manages Thunder Valley Casino near Sacramento, California on behalf of the United Auburn Indian Community.
This press release contains certain forward-looking statements with respect to the Company and its subsidiaries which involve risks and uncertainties that cannot be predicted or quantified, and consequently, actual results may differ materially from those expressed or implied herein. Such risks and uncertainties include, but are not limited to, the ability to effect a successful restructuring; the impact of the bankruptcy filing on our operations; our ability to finance operations and expenses associated with the pending bankruptcy proceeding; the impact of the substantial indebtedness incurred to finance the consummation of the going private transaction in November 2007; the effects of local and national economic, credit and capital market conditions on the economy in general, and on the gaming and hotel industries in particular; changes in laws, including increased tax rates, regulations or accounting standards, third-party relations and approvals, and decisions of courts, regulators and governmental bodies; litigation outcomes and judicial actions, including gaming legislative action, referenda and taxation; acts of war or terrorist incidents or natural disasters; the effects of competition, including locations of competitors and operating and market competition; and other risks described in the filings of the Company with the Securities and Exchange Commission, including, but not limited to, the Company's Annual Report on Form 10-K, as amended, for the year ended December 31, 2008, and its Registration Statement on Form S-3ASR File No. 333-134936. All forward-looking statements are based on the Company’s current expectations and projections about future events. All forward-looking statements speak only as of the date hereof and the Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
Development of the proposed gaming and entertainment projects with the Gun Lake Tribe, the Federated Indians of Graton Rancheria, the Mechoopda Indian Tribe of Chico Rancheria and the North Fork Rancheria of Mono Indians and the operation of Class III gaming at each of the projects is subject to certain governmental and regulatory approvals, including, but not limited to, approval of state gaming compacts with the State of Michigan or the State of California, the Department of the Interior completing the process of taking land into trust for the benefit of the tribes and approval of the management agreements by the National Indian Gaming Commission. No assurances can be given as to when, or if, these governmental and regulatory approvals will be received.
(1) EBITDA, earnings before interest, taxes, depreciation and amortization, is a widely used measure of operating performance in the gaming industry and is a principal basis for the valuation of gaming companies. The Company has traditionally adjusted EBITDA when evaluating its own operating performance because it believes that the inclusion or exclusion of certain non-cash recurring and non-recurring items is necessary to present the most accurate measure of its principal operating results and as a means to assess results period over period. The Company refers to the financial measure that adjusts for these items as Adjusted EBITDA. The Company believes, when considered with measures calculated in accordance with United States Generally Accepted Accounting Principles (“GAAP”), Adjusted EBITDA is a useful financial performance measurement for assessing the operating performance of the Company and is used by management in making financial and operational decisions. In this regard, Adjusted EBITDA is a key metric used by the Company in its individual property budgeting process, when calculating returns on investment on existing and proposed projects and in the evaluation of incentive compensation related to property management. Adjusted EBITDA consists of net income (loss) plus income tax (provision) benefit, interest and other expense, net, write-downs and other charges, net, preopening expenses, equity-based compensation expense, management agreement/lease termination costs, other non-recurring and non-cash costs, depreciation, amortization and development expense. The Company has historically reported this measure and management believes that the continued inclusion of Adjusted EBITDA provides the consistency in our financial reporting required by our stakeholders. In addition, management believes that our debt stakeholders use Adjusted EBITDA as an appropriate financial measure in determining the value of their investment. To evaluate Adjusted EBITDA and the trends it depicts, the components should be considered. The impact of income tax (provision) benefit, interest and other expense, net, write-downs and other charges, net, preopening expenses, equity-based compensation expense, management agreement/lease termination costs, other non-recurring and non-cash costs, depreciation, amortization and development expense, each of which can significantly affect the Company’s results of operations and liquidity and should be considered in evaluating the Company’s operating performance, cannot be determined from EBITDA. Adjusted EBITDA is used in addition to and in conjunction with GAAP measures and should not be considered as an alternative to net income (loss), or any other GAAP operating performance measure.
To compensate for the inherent limitations of the disclosure of Adjusted EBITDA, the Company provides relevant disclosure of its depreciation and amortization, interest and income taxes, capital expenditures and other items in its reconciliations to GAAP financial measures and consolidated financial statements, all of which should be considered when evaluating the Company’s performance. In addition, it should be noted that not all gaming companies that report Adjusted EBITDA or adjustments to such measures may calculate Adjusted EBITDA or such adjustments in the same manner as the Company, and therefore, the Company’s measure of Adjusted EBITDA may not be comparable to similarly titled measures used by other gaming companies. A reconciliation of Adjusted EBITDA to EBITDA to net income (loss) is included in the financial schedules accompanying this release.
| Station Casinos, Inc. | ||||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||||
| (amounts in thousands) | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| June 30, | June 30, | |||||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||||
| Operating revenues: | ||||||||||||||||||
| Casino | $ | 190,488 | $ | 238,222 | $ | 393,610 | $ | 487,664 | ||||||||||
| Food and beverage | 50,625 | 58,765 | 104,000 | 119,730 | ||||||||||||||
| Room | 22,147 | 27,981 | 44,078 | 58,281 | ||||||||||||||
| Other | 16,060 | 19,755 | 31,215 | 39,082 | ||||||||||||||
| Management fees | 12,279 | 19,326 | 26,298 | 38,072 | ||||||||||||||
Gross revenues |
| 291,599 | 364,049 | 599,201 | 742,829 | |||||||||||||
| Promotional allowances | (24,438 | ) | (24,947 | ) | (49,292 | ) | (51,410 | ) | ||||||||||
Net revenues |
| 267,161 | 339,102 | 549,909 | 691,419 | |||||||||||||
| Operating costs and expenses: | ||||||||||||||||||
| Casino | 82,065 | 91,440 | 165,067 | 187,211 | ||||||||||||||
| Food and beverage | 31,156 | 40,276 | 62,385 | 81,962 | ||||||||||||||
| Room | 8,847 | 10,202 | 17,431 | 20,565 | ||||||||||||||
| Other | 5,203 | 8,661 | 9,589 | 15,977 | ||||||||||||||
| Selling, general and administrative | 55,309 | 63,400 | 110,383 | 126,587 | ||||||||||||||
| Corporate | 13,107 | 8,622 | 24,693 | 20,390 | ||||||||||||||
| Development | 556 | 612 | 1,204 | 1,339 | ||||||||||||||
| Depreciation and amortization | 53,020 | 58,416 | 106,537 | 115,655 | ||||||||||||||
| Preopening | 1,420 | 2,720 | 3,162 | 4,850 | ||||||||||||||
| Write-downs and other charges, net | 590 | 3,803 | 5,840 | 6,012 | ||||||||||||||
| 251,273 | 288,152 | 506,291 | 580,548 | |||||||||||||||
| Operating income | 15,888 | 50,950 | 43,618 | 110,871 | ||||||||||||||
| Earnings from joint ventures | 1,044 | 6,641 | 2,707 | 15,167 | ||||||||||||||
| Operating income and earnings from joint ventures | 16,932 | 57,591 | 46,325 | 126,038 | ||||||||||||||
| Other income (expense): | ||||||||||||||||||
| Interest expense, net | (92,344 | ) | (94,003 | ) | (184,394 | ) | (191,349 | ) | ||||||||||
| Interest and other expense from joint ventures | (14,642 | ) | (7,787 | ) | (22,275 | ) | (17,041 | ) | ||||||||||
| Change in fair value of derivative instruments | 14,563 | 65,140 | 33,581 | 6,708 | ||||||||||||||
| Gain on early retirement of debt | - | - | 40,348 | - | ||||||||||||||
| (92,423 | ) | (36,650 | ) | (132,740 | ) | (201,682 | ) | |||||||||||
| (Loss) income before income taxes | (75,491 | ) | 20,941 | (86,415 | ) | (75,644 | ) | |||||||||||
| Income tax benefit (provision) | 10,160 | (2,352 | ) | (12,625 | ) | 23,369 | ||||||||||||
| Net (loss) income | $ | (65,331 | ) | $ | 18,589 | $ | (99,040 | ) | $ | (52,275 | ) | |||||||
| Station Casinos, Inc. | |||||||||||||||||
| Summary Information and | |||||||||||||||||
| Reconciliation of Net (Loss) Income to EBITDA to Adjusted EBITDA | |||||||||||||||||
| (amounts in thousands, except occupancy percentage and ADR) | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| June 30, | June 30, | ||||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||||
Major Las Vegas Operations (a): | |||||||||||||||||
| Net revenues | $ | 245,942 | $ | 307,029 | $ | 504,707 | $ | 627,419 | |||||||||
| Net (loss) income | $ | (15,614 | ) | $ | 1,642 | $ | (21,267 | ) | $ | 8,374 | |||||||
| Income tax (benefit) provision | (8,407 | ) | (1,207 | ) | (11,451 | ) | 3,097 | ||||||||||
| Interest and other expense, net | 6,433 | 7,513 | 13,135 | 15,366 | |||||||||||||
| Depreciation and amortization | 25,508 | 33,362 | 51,446 | 65,224 | |||||||||||||
| EBITDA | 7,920 | 41,310 | 31,863 | 92,061 | |||||||||||||
| Rent expense (b) | 62,362 | 62,362 | 124,725 | 124,725 | |||||||||||||
| Write-downs and other charges, net | 109 | 1,762 | 290 | 2,186 | |||||||||||||
| Equity-based compensation expense | 565 | 628 | 1,153 | 1,332 | |||||||||||||
| Adjusted EBITDA | $ | 70,956 | $ | 106,062 | $ | 158,031 | $ | 220,304 | |||||||||
Green Valley Ranch (50% owned): | |||||||||||||||||
| Net revenues | $ | 49,254 | $ | 61,225 | $ | 99,753 | $ | 125,608 | |||||||||
| Net (loss) income | $ | (3,821 | ) | $ | (1,171 | ) | $ | (2,481 | ) | $ | 268 | ||||||
| Interest and other expense, net | 13,143 | 16,753 | 23,112 | 34,251 | |||||||||||||
| Depreciation and amortization | 5,788 | 6,324 | 11,507 | 12,629 | |||||||||||||
| EBITDA | 15,110 | 21,906 | 32,138 | 47,148 | |||||||||||||
| Write-downs and other charges, net | 55 | 162 | 456 | 162 | |||||||||||||
| Loss on early retirement of debt | - | - | - | 122 | |||||||||||||
| Equity-based compensation expense | 3 | 9 | 6 | 31 | |||||||||||||
| Adjusted EBITDA | $ | 15,168 | $ | 22,077 | $ | 32,600 | $ | 47,463 | |||||||||
Major Las Vegas Operations including Green Valley Ranch: | |||||||||||||||||
| Net revenues | $ | 295,196 | $ | 368,254 | $ | 604,460 | $ | 753,027 | |||||||||
| Net (loss) income | $ | (19,435 | ) | $ | 471 | $ | (23,748 | ) | $ | 8,642 | |||||||
| Income tax (benefit) provision | (8,407 | ) | (1,207 | ) | (11,451 | ) | 3,097 | ||||||||||
| Interest and other expense, net | 19,576 | 24,266 | 36,247 | 49,617 | |||||||||||||
| Depreciation and amortization | 31,296 | 39,686 | 62,953 | 77,853 | |||||||||||||
| EBITDA | 23,030 | 63,216 | 64,001 | 139,209 | |||||||||||||
| Rent expense (b) | 62,362 | 62,362 | 124,725 | 124,725 | |||||||||||||
| Write-downs and other charges, net | 164 | 1,924 | 746 | 2,348 | |||||||||||||
| Loss on early retirement of debt | - | - | - | 122 | |||||||||||||
| Equity-based compensation expense | 568 | 637 | 1,159 | 1,363 | |||||||||||||
| Adjusted EBITDA | $ | 86,124 | $ | 128,139 | $ | 190,631 | $ | 267,767 | |||||||||
Total Station Casinos, Inc. (c): | |||||||||||||||||
| Net (loss) income | $ | (65,331 | ) | $ | 18,589 | $ | (99,040 | ) | $ | (52,275 | ) | ||||||
| Income tax (benefit) provision | (10,160 | ) | 2,352 | 12,625 | (23,369 | ) | |||||||||||
| Interest and other expense, net | 92,423 | 36,650 | 173,088 | 201,682 | |||||||||||||
| Gain on early retirement of debt | - | - | (40,348 | ) | - | ||||||||||||
| Depreciation and amortization | 53,020 | 58,416 | 106,537 | 115,655 | |||||||||||||
| EBITDA | 69,952 | 116,007 | 152,862 | 241,693 | |||||||||||||
| Write-downs and other charges, net | 590 | 3,803 | 5,840 | 6,012 | |||||||||||||
| Write-downs and other charges, net at joint ventures (50%) | 53 | 22 | 702 | 25 | |||||||||||||
| Development expense | 556 | 612 | 1,204 | 1,339 | |||||||||||||
| Preopening expenses | 1,420 | 2,720 | 3,162 | 4,850 | |||||||||||||
| Preopening expenses at joint ventures (50%) | (64 | ) | 1,082 | (130 | ) | 1,947 | |||||||||||
| Equity-based compensation expense | 2,666 | 2,285 | 5,460 | 4,787 | |||||||||||||
| Depreciation and amortization of investments in joint ventures | 29 | - | 58 | - | |||||||||||||
| Other non-recurring costs | 3,113 | 1,834 | 7,128 | 2,329 | |||||||||||||
| Executive buyout at Thunder Valley (24%) | 930 | - | 930 | - | |||||||||||||
| Referendum expense at Thunder Valley (24%) | - | - | - | 1,560 | |||||||||||||
| Adjusted EBITDA | $ | 79,245 | $ | 128,365 | $ | 177,216 | $ | 264,542 | |||||||||
| Occupancy percentage | 87 | % | 91 | % | 86 | % | 90 | % | |||||||||
| ADR | $ | 69 | $ | 88 | $ | 71 | $ | 93 | |||||||||
| (a) | Includes the wholly-owned properties of Red Rock, Palace Station, Boulder Station, Texas Station, Sunset Station, Santa Fe Station, Fiesta Rancho and Fiesta Henderson. | |
| (b) | Rent expense refers to intercompany rent expense paid by the CMBS properties to another consolidated entity. Because this expense is eliminated upon consolidation, it has been excluded from Adjusted EBITDA in the Major Las Vegas Operations table. | |
| (c) | Includes the Major Las Vegas Operations, Wild Wild West, Wildfire Rancho, Wildfire Boulder, Gold Rush, Lake Mead Casino, the Company's earnings from joint ventures, management fees and corporate expense. |
CONTACT:
Station Casinos, Inc., Las Vegas
Thomas M. Friel, 800-544-2411 or 702-495-4210
Executive Vice President, Chief Accounting Officer and Treasurer
Lori B. Nelson, 800-544-2411 or 702-495-4248
Director of Corporate Communications
