EXHIBIT 99.1
BOYD GAMING REPORTS SECOND QUARTER RESULTS
- Borgata Continues to Lead Market -
- Unveils Expansion Plans -
LAS VEGAS, NV – July 28, 2004– Boyd Gaming Corporation (NYSE:BYD) today reported its financial results for the second quarter 2004. The Company reported adjusted earnings(1) of $.27 per share for the second quarter versus adjusted earnings of $.21 per share reported for the second quarter 2003. Adjusted earnings for the current quarter exclude expenses related to the acquisition of Sam’s Town Shreveport of $5.9 million, or $.05 per share, and a gain on the sale of undeveloped land of $1.4 million, or $.01 per share. Adjusted earnings for the comparable quarter last year exclude the Company’s share of preopening expenses related to Borgata of $11.9 million, or $.11 per share, and a charge of $3.5 million, or $.03 per share, for a one-time retroactive gaming tax imposed by the State of Indiana. This year’s results include the operations of Borgata, which opened in July 2003, and Sam’s Town Shreveport, which the Company acquired in May 2004 and operated for 41 days in the second quarter. Per share amounts are reported on a diluted basis.
The Company reported EBITDA for the second quarter of $85.3 million versus $63.1 million (before the one-time Indiana charge) reported last year. The increase was attributable to the addition of the two new properties mentioned above in this year’s results. One of those, Borgata, had a particularly strong performance in the quarter, reporting its best-ever quarterly revenue, EBITDA, and EBITDA margin. Same-store EBITDA (before the one-time Indiana charge) was essentially even with the prior year, despite the continuing negative impact of the gaming tax increase in Illinois, which reduced Par-A-Dice EBITDA by $3.1 million in the quarter.
Revenues for the second quarter were $341.9 million versus $312.5 million reported last year. The increase was attributable to the addition of Sam’s Town Shreveport and a 3.7% increase in same-store revenues driven particularly by strong revenue gains at the Stardust and Sam’s Town Las Vegas. Net income in the second quarter was $15.5 million, or $.23 per share, versus $4.4 million, or $.07 per share, reported in the second quarter last year.
In footnote (1), you will find a discussion of how and why the Company uses adjusted earnings, adjusted earnings per share, EBITDA (non-GAAP measures of earnings as defined in footnote (1)) and EBITDA margin, performance measurements widely used in the gaming industry. As used in this release, EBITDA for a particular property (adjusted EBITDA) is before corporate expense. Further in this release you will also find tables that reconcile certain non-GAAP measurements to GAAP financial information.
Six-month Results
Revenues for the first half of 2004 were $672 million, an increase of 5.9% over the $634 million reported in the first six months of 2003. The increase was primarily attributable to the addition of Sam’s Town Shreveport and strong gains in revenues at Stardust and Sam’s Town Las Vegas. EBITDA for the six months was $166 million versus $135 million (before the one-time Indiana charge) reported in the same period last year. The increase was principally attributable to the addition of both Borgata and Sam’s Town Shreveport, neither of which operated in the first half of 2003. Adjusted earnings for the first half were $.55 per share versus $.50 per share for the comparable period in 2003. Net income for the first half of 2004 was $29.0 million, or $.43 per share, versus $20.9 million, or $.32 per share, in the first half of 2003. Net income for the first half of 2004 includes a $5.7 million, or $.08 per share, charge to the Company’s income tax provision associated with an adverse tax ruling in Indiana that related primarily to prior periods.
Borgata
The Company also reported second quarter results for Borgata Hotel Casino and Spa, the Company’s joint venture property in Atlantic City. As an unconsolidated joint venture, Borgata’s results appear in only two lines of the Company’s consolidated statements of operations; therefore, more detailed financial information is presented in tables later in this release.
In the second quarter 2004, Borgata reported record quarterly gaming revenue of $150 million and record quarterly non-gaming revenue of $57 million. Net revenues in the second quarter were $165 million, the highest quarterly result since the property opened. Borgata’s EBITDA in the second quarter was $52.3 million and its EBITDA margin was 31.7%, both record results. Borgata’s second quarter EBITDA was the highest of any property in the Atlantic City market by a wide margin.
William S. Boyd, Chairman and Chief Executive Officer of Boyd Gaming, commented, “Borgata has now operated for four
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quarters, and every quarter since its opening has been better than the quarter before in both EBITDA and EBITDA margin. In fact, the current quarter EBITDA represents a 30% increase from the EBITDA results in the previous quarter. When we developed Borgata, we knew we were building the right product for Atlantic City and the Northeast gaming market, but it is exceeding our expectations both in how fast its revenues and earnings are ramping up and in how quickly we need to expand the property.”
Borgata continued to show strength in all revenue categories. For the second quarter, the property reported the highest table game win in the Atlantic City market, again by a wide margin. Table game win per unit per day in the quarter was $4,184, which beat the second place property by $916. By way of comparison, the average table in Atlantic City won $2,660 per day in the second quarter. In slot win per unit per day, Borgata reported the highest result in the Atlantic City market at $310, which is $9 above the property in second place. The average Atlantic City slot machine win was $237 per day in the second quarter. In this important measure, Borgata, in the last three quarters, has moved from fifth place to second place to first place. Hotel occupancy in the quarter was 94% and the average daily room rate was $119. The property reported strong results in non-gaming revenue in both absolute amounts, at an average of $622,000 per day, and as a percentage of total gross revenue, at 27% for the quarter. Also, the Company believes that the property’s percentage of cash revenue to total non-gaming revenue continues to be the highest in the Atlantic City market.
Borgata Expansion
The Company announced a major expansion of Borgata. Bob Boughner, Chief Executive Officer of Borgata, said, “In many areas, we simply cannot meet the strong demand for our facilities. Our revenues, EBITDA and EBITDA margins have increased steadily and significantly since our opening. We are capacity constrained in nearly every major product offering and our customer research clearly signals that demand for our products is strong and growing.
“We realized early on that we needed to add supply and began planning and design work on an expansion of Borgata. The project, which requires various government and regulatory approvals, consists of substantial additions of both gaming and non-gaming amenities.”
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Borgata announced that its expansion plans include the following:
• | 600 additional slot machines, bringing the total to 4,100 |
• | 36 additional gaming tables, bringing the total to 175 |
• | 56 additional poker tables, bringing the total to 90 |
• | 46 additional race book positions, bringing the total to 90 |
• | 2 additional fine dining restaurants |
• | 1 additional casual dining restaurant |
• | 1 large, multi-concept, quick-service restaurant |
• | 2 additional nightclubs |
• | 9 additional spa treatment rooms |
• | 6 additional retail shops |
Bob Boughner continued, “We estimate the cost of the expansion to be approximately $200 million and expect construction to start in December 2004 with completion to occur in the second quarter 2006. Boyd Gaming and MGM MIRAGE have approved the project, which will be built on land leased from MGM MIRAGE.”
Borgata expects to renegotiate its bank credit facility, which has been paid down significantly from its original level, to provide funding for the project. Boyd Gaming and MGM MIRAGE do not expect to make further capital contributions to Borgata for the expansion project.
Wholly-owned Properties
The Company’s ten wholly-owned operating units reported total property EBITDA (before corporate expense) for the second quarter of $73.9 million versus $70.2 million (before the one-time Indiana charge) reported in the second quarter last year. This quarter’s results include EBITDA of $3.7 million from Sam’s Town Shreveport, which operated for 41 days in the second quarter following the Company’s acquisition of the property from Harrah’s. Keith Smith, Boyd Gaming’s Chief Operating Officer, commented, “We are pleased with our progress since the transition. The Shreveport/Bossier City market, which has seen a lot of changes in the last couple of months, remains solid, and we will promote aggressively to build market share under the Sam’s Town banner.”
Both Stardust and Sam’s Town Las Vegas continued to turn in strong performances in the second quarter. Stardust reported a 16.4% revenue gain and a 62% EBITDA gain in the second quarter versus the prior year. By the end of May 2004, Stardust had
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produced EBITDA equal to its EBITDA for all of 2003. Sam’s Town Las Vegas reported a 12.2% increase in revenue and a 20% increase in EBITDA in the second quarter versus the comparable quarter in 2003. Sam’s Town Tunica, Treasure Chest, and Blue Chip each exceeded prior year EBITDA results in the second quarter. On the other hand, Par-A-Dice reported a $3.7 million EBITDA decline, principally due to the July 2003 gaming tax increase in Illinois; the Downtown Las Vegas properties reported a 12.1% decline in EBITDA principally resulting from a fuel surcharge in its Honolulu to Las Vegas air charter operations; and Delta Downs reported a slight EBITDA decline related to both construction disruption and excessive wet weather in southwest Louisiana during the quarter.
Coast Casinos
On July 1, 2004, Boyd Gaming completed its merger with Coast Casinos, which is now a wholly-owned subsidiary of Boyd Gaming and which will be reported as part of Boyd Gaming’s consolidated group starting with the third quarter. Because Coast, which was not part of Boyd Gaming in the second quarter, will no longer publish financial statements and its second quarter results would otherwise be unreported, Boyd Gaming is providing certain of Coast’s historical financial information ($ in millions):
Three Months June 30, | Six Months June 30, | Latest Twelve Ended June 30, | ||||||||||||||||
2004 | 2003 | 2004 | 2003 | 2004 | 2003 | |||||||||||||
Net Revenues | $ | 163 | $ | 145 | $ | 327 | $ | 292 | $ | 628 | $ | 565 | ||||||
Property Adjusted EBITDA(2) | $ | 46 | $ | 40 | $ | 99 | $ | 84 | $ | 179 | $ | 144 |
A table reconciling property adjusted EBITDA to net income for the three and six month periods appears later in this release. Coast Casinos’ results are shown on a historical basis only and are not necessarily indicative of future results.
Looking forward, Boyd Gaming expects, solely due to the Coast merger and excluding the effects of the acquisition of Sam’s Town Shreveport and other potential factors, its corporate expense to increase approximately $2.0 million per quarter;
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its depreciation to increase approximately $13 million to $15 million per quarter; and its interest expense to increase approximately $9 million to $10 million per quarter.
Financial Statistics
The Company provided the following additional information for the second quarter ended June 30, 2004 and certain updated information:
• | June 30 debt balance: $1.277 billion |
• | June 30 debt balance proforma for the merger with Coast Casinos: $2.236 billion |
• | June 30 cash: $84.6 million |
• | Dividends paid in the quarter: $5.0 million |
• | Maintenance capital expenditures during the quarter: $21.0 million |
• | Expansion capital expenditures for Delta Downs and Blue Chip during the quarter: $19.5 million |
• | Number of shares outstanding on June 30: 67.3 million |
• | Number of shares outstanding immediately after the merger: 86.7 million |
• | Approximate number of diluted shares immediately after the merger: 88.4 million |
(1) | Adjusted Earnings are earnings before preopening expenses, acquisition related expenses, the gain on sale of undeveloped land, and the charges associated with the Indiana state tax assessment and the Indiana retroactive gaming tax. Adjusted Earnings (and Adjusted EPS) are presented solely as a supplemental disclosure because management believes that it is a widely used measure of performance in the gaming industry and as this measure is considered by many to be a better measure on which to base expectations of future results than net income computed in accordance with generally accepted accounting principles (“GAAP”). Reconciliations of net income and net income per share, each based upon GAAP, to Adjusted Earnings and Adjusted EPS are included in the financial schedules accompanying this release. EBITDA is earnings before interest, taxes, depreciation, amortization, preopening expenses, acquisition related expenses, and the gain on sale of undeveloped land. EBITDA and EBITDA margin are presented solely as supplemental disclosures because the Company believes that they are widely used measures of operating performance in the gaming industry and EBITDA is a principal basis for valuation of gaming companies. Specifically, EBITDA is presented before preopening expenses as it represents a measure of performance of the Company’s existing operational activities. The Company uses property EBITDA (EBITDA before |
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corporate expense) as the primary measure of the operating performance of its properties, including the evaluation of operating personnel. EBITDA should not be construed as an alternative to operating income, as an indicator of the Company’s operating performance or as an alternative to cash flow from operating activities, as a measure of liquidity, or as any other measure determined in accordance with GAAP. The Company has significant uses of cash flows, including capital expenditures, interest payments, income taxes and debt principal repayments which are not reflected in EBITDA. Also, other gaming companies that report EBITDA information may calculate EBITDA in a different manner than the Company.
(2) | EBITDA reported for Coast Casinos is earnings before interest, taxes, depreciation, amortization, preopening expenses, merger related expenses, gain on sale of asset and deferred rent. EBITDA 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. |
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The following tables report June quarterly and year to date results. Downtown properties include the California Hotel and Casino, the Fremont Hotel and Casino, and Main Street Station.
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
($ in thousands, except footnotes) | 2004 | 2003 | 2004 | 2003 | ||||||||||
Net Revenues | ||||||||||||||
Stardust | $ | 38,174 | $ | 32,783 | $ | 76,928 | $ | 68,721 | ||||||
Sam’s Town Las Vegas | 36,658 | 32,679 | 75,361 | 68,398 | ||||||||||
Eldorado & Jokers Wild | 7,632 | 7,984 | 16,092 | 16,898 | ||||||||||
Downtown Properties (a) | 58,967 | 57,625 | 118,603 | 117,250 | ||||||||||
Sam’s Town Tunica | 29,927 | 27,028 | 59,460 | 54,020 | ||||||||||
Par-A-Dice | 33,342 | 36,179 | 68,092 | 72,427 | ||||||||||
Treasure Chest | 28,014 | 26,497 | 55,544 | 53,667 | ||||||||||
Blue Chip | 58,999 | 57,444 | 114,695 | 111,781 | ||||||||||
Delta Downs | 32,493 | 34,284 | 69,469 | 71,197 | ||||||||||
Sam’s Town Shreveport | 17,689 | — | 17,689 | — | ||||||||||
Net revenues | $ | 341,895 | $ | 312,503 | $ | 671,933 | $ | 634,359 | ||||||
Adjusted EBITDA | ||||||||||||||
Stardust | $ | 4,600 | $ | 2,832 | $ | 10,087 | $ | 7,607 | ||||||
Sam’s Town Las Vegas | 10,182 | 8,467 | 22,612 | 19,051 | ||||||||||
Eldorado & Jokers Wild | 1,099 | 1,370 | 2,767 | 3,095 | ||||||||||
Downtown Properties | 8,798 | 10,012 | 18,853 | 21,249 | ||||||||||
Sam’s Town Tunica | 3,304 | 1,750 | 6,227 | 4,361 | ||||||||||
Par-A-Dice | 8,335 | 12,019 | 16,581 | 24,256 | ||||||||||
Treasure Chest | 4,959 | 4,672 | 9,972 | 10,440 | ||||||||||
Blue Chip (b) | 22,553 | 18,419 | 42,712 | 38,687 | ||||||||||
Delta Downs | 6,382 | 7,254 | 14,213 | 15,531 | ||||||||||
Sam’s Town Shreveport | 3,712 | — | 3,712 | — | ||||||||||
Wholly-owned property adjusted EBITDA | 73,924 | 66,795 | 147,736 | 144,277 | ||||||||||
Corporate expense | 7,563 | 7,193 | 13,831 | 12,765 | ||||||||||
Wholly-owned adjusted EBITDA | 66,361 | 59,602 | 133,905 | 131,512 | ||||||||||
Our share of Borgata’s operating income before preopening expenses (e) | 18,918 | — | 32,062 | — | ||||||||||
Total adjusted EBITDA | 85,279 | 59,602 | 165,967 | 131,512 | ||||||||||
Other operating costs and expenses | ||||||||||||||
Depreciation and amortization | 26,585 | 23,162 | 51,559 | 46,095 | ||||||||||
Acquisition related expenses | 5,909 | — | 5,909 | — | ||||||||||
Our share of Borgata’s preopening expenses | — | 11,900 | — | 16,125 | ||||||||||
Total other operating costs and expenses | 32,494 | 35,062 | 57,468 | 62,220 | ||||||||||
Operating income | 52,785 | 24,540 | 108,499 | 69,292 | ||||||||||
Other non-operating costs and expenses | ||||||||||||||
Interest expense, net (c) | 21,840 | 17,160 | 39,635 | 35,609 | ||||||||||
Gain on sale of undeveloped land | (1,420 | ) | — | (1,420 | ) | — | ||||||||
Our share of Borgata’s non-operating expense, net | 6,690 | — | 13,150 | — | ||||||||||
Total other non-operating costs and expenses | 27,110 | 17,160 | 51,365 | 35,609 | ||||||||||
Income before provision for income taxes | 25,675 | 7,380 | 57,134 | 33,683 | ||||||||||
Provision for income taxes (d) | 10,142 | 2,936 | 28,136 | 12,800 | ||||||||||
Net income | $ | 15,533 | $ | 4,444 | $ | 28,998 | $ | 20,883 | ||||||
(a) | Includes revenues related to Vacations Hawaii, the Company’s Honolulu travel agency, of $11.2 million and $12.1 million, respectively, for the three months ended June 30, 2004 and 2003 and $22.4 million and $23.9 million, respectively, for the six months ended June 30, 2004 and 2003. |
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(b) | Adjusted EBITDA results for the three and six month periods ended June 30, 2003 include a one-time charge for a retroactive gaming tax imposed by the State of Indiana of $3.5 million. |
(c) | Net of interest income and amounts capitalized. |
(d) | Results for the six months ended June 30, 2004 include $5.7 million of tax expense, net of federal tax benefit, related to the Indiana Department of Revenue’s assessment for state income taxes. |
(e) | The following table reconciles the presentation of our share of Borgata’s operating results in our consolidated statement of operations to the presentation of our share of Borgata’s results in the above table: |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||
Our share of Borgata’s operating income (loss) | $ | 18,918 | $ | (11,900 | ) | $ | 32,062 | $ | (16,125 | ) | ||||
Add back our share of Borgata’s preopening expenses (1) | — | 11,900 | — | 16,125 | ||||||||||
Our share of Borgata’s operating income before preopening expenses | $ | 18,918 | $ | — | $ | 32,062 | $ | — | ||||||
(1) | Borgata’s preopening expenses are included in Borgata’s operating loss and are deducted for the presentation of total adjusted EBITDA. Adjusted EBITDA is presented before preopening expenses as it represents a measure of performance of our existing operational activities. |
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The following table reports June quarterly and year to date results for Coast Casinos, Inc. On July 1, 2004, Boyd Gaming completed its merger with Coast Casinos, which is now a wholly-owned subsidiary of Boyd Gaming and which will be reported as part of Boyd Gaming’s consolidated group starting with the third quarter. Because Coast, which was not part of Boyd Gaming in the second quarter, will no longer publish financial statements and its second quarter results would otherwise be unreported, Boyd Gaming is providing certain of Coast’s historical financial information. Coast Casinos’ results are shown on a historical basis only and are not necessarily indicative of future results.
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
(In thousands) | 2004 | 2003 | 2004 | 2003 | ||||||||||
Property adjusted EBITDA | $ | 46,378 | $ | 40,370 | $ | 99,192 | $ | 83,661 | ||||||
Corporate expense | 2,314 | 1,651 | 4,396 | 3,248 | ||||||||||
Adjusted EBITDA | 44,064 | 38,719 | 94,796 | 80,413 | ||||||||||
Other operating costs and expenses | ||||||||||||||
Depreciation and amortization | 12,574 | 12,125 | 25,250 | 23,563 | ||||||||||
Gain on sale of asset | (1,653 | ) | — | (1,653 | ) | — | ||||||||
Merger related expenses | 14,642 | — | 15,885 | — | ||||||||||
Preopening expenses | 654 | 119 | 1,047 | 242 | ||||||||||
Deferred rent | 764 | 780 | 1,528 | 1,559 | ||||||||||
Total other operating costs and expenses | 26,981 | 13,024 | 42,057 | 25,364 | ||||||||||
Operating income | 17,083 | 25,695 | 52,739 | 55,049 | ||||||||||
Other non-operating costs and expense — | ||||||||||||||
Interest expense, net | 9,041 | 9,069 | 18,266 | 17,450 | ||||||||||
Income before provision for income taxes | 8,042 | 16,626 | 34,473 | 37,599 | ||||||||||
Provision for income taxes | 2,961 | 5,739 | 12,132 | 13,006 | ||||||||||
Net income | $ | 5,081 | $ | 10,887 | $ | 22,341 | $ | 24,593 | ||||||
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BOYD GAMING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(In thousands, except per share data) | 2004 | 2003 | 2004 | 2003 | ||||||||||||
Revenues | ||||||||||||||||
Gaming | $ | 292,811 | $ | 267,279 | $ | 575,530 | $ | 544,781 | ||||||||
Food and beverage | 44,643 | 41,405 | 88,352 | 83,366 | ||||||||||||
Room | 22,187 | 19,335 | 42,808 | 38,969 | ||||||||||||
Other | 19,806 | 19,710 | 39,065 | 39,114 | ||||||||||||
Gross revenues | 379,447 | 347,729 | 745,755 | 706,230 | ||||||||||||
Less promotional allowances | 37,552 | 35,226 | 73,822 | 71,871 | ||||||||||||
Net revenues | 341,895 | 312,503 | 671,933 | 634,359 | ||||||||||||
Costs and expenses | ||||||||||||||||
Gaming | 145,078 | 133,683 | 285,187 | 267,139 | ||||||||||||
Food and beverage | 25,777 | 23,956 | 50,307 | 47,635 | ||||||||||||
Room | 6,446 | 5,523 | 12,340 | 10,633 | ||||||||||||
Other | 20,379 | 20,916 | 40,124 | 41,527 | ||||||||||||
Selling, general and administrative | 55,334 | 47,617 | 108,017 | 95,557 | ||||||||||||
Maintenance and utilities | 14,957 | 14,013 | 28,222 | 27,591 | ||||||||||||
Depreciation and amortization | 26,585 | 23,162 | 51,559 | 46,095 | ||||||||||||
Corporate expense | 7,563 | 7,193 | 13,831 | 12,765 | ||||||||||||
Acquisition related expenses | 5,909 | — | 5,909 | — | ||||||||||||
Total | 308,028 | 276,063 | 595,496 | 548,942 | ||||||||||||
Operating income (loss) from Borgata | 18,918 | (11,900 | ) | 32,062 | (16,125 | ) | ||||||||||
Operating income | 52,785 | 24,540 | 108,499 | 69,292 | ||||||||||||
Other income (expense) | ||||||||||||||||
Interest income | 47 | 53 | 94 | 216 | ||||||||||||
Interest expense, net of amounts capitalized | (21,887 | ) | (17,213 | ) | (39,729 | ) | (35,825 | ) | ||||||||
Gain on sale of undeveloped land | 1,420 | — | 1,420 | — | ||||||||||||
Other expense from Borgata, net | (6,690 | ) | — | (13,150 | ) | — | ||||||||||
Total | (27,110 | ) | (17,160 | ) | (51,365 | ) | (35,609 | ) | ||||||||
Income before provision for income taxes | 25,675 | 7,380 | 57,134 | 33,683 | ||||||||||||
Provision for income taxes | 10,142 | 2,936 | 28,136 | 12,800 | ||||||||||||
Net income | $ | 15,533 | $ | 4,444 | $ | 28,998 | $ | 20,883 | ||||||||
Basic Net Income Per Common Share | $ | 0.23 | $ | 0.07 | $ | 0.44 | $ | 0.33 | ||||||||
Average Basic Shares Outstanding | 66,743 | 63,802 | 66,004 | 64,143 | ||||||||||||
Diluted Net Income Per Common Share | $ | 0.23 | $ | 0.07 | $ | 0.43 | $ | 0.32 | ||||||||
Average Diluted Shares Outstanding | 68,456 | 65,715 | 67,559 | 66,016 | ||||||||||||
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The following table reconciles net income and net income per share (each based upon generally accepted accounting principles, or “GAAP”) to adjusted net income and adjusted net income per share.
(In thousands, except per share data) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||
Net income | $ | 15,533 | $ | 4,444 | $ | 28,998 | $ | 20,883 | ||||||||
Adjustments: | ||||||||||||||||
Gain on sale of undeveloped land | (1,420 | ) | — | (1,420 | ) | — | ||||||||||
Acquisition related expenses | 5,909 | — | 5,909 | — | ||||||||||||
Preopening expenses from Borgata | — | 11,900 | — | 16,125 | ||||||||||||
One-time Indiana gaming tax charge | — | 3,452 | — | 3,452 | ||||||||||||
Indiana state income tax assessment | — | — | 5,725 | — | ||||||||||||
Income tax effect for above adjustments | (1,773 | ) | (6,108 | ) | (1,760 | ) | (7,439 | ) | ||||||||
Adjusted net income | $ | 18,249 | $ | 13,688 | $ | 37,452 | $ | 33,021 | ||||||||
Net income per diluted share | $ | 0.23 | $ | 0.07 | $ | 0.43 | $ | 0.32 | ||||||||
Gain on sale of undeveloped land, net of tax | (0.01 | ) | — | (0.01 | ) | — | ||||||||||
Acquisition related expenses, net of tax | 0.05 | — | 0.05 | — | ||||||||||||
Preopening expenses from Borgata, net of tax | — | 0.11 | — | 0.15 | ||||||||||||
One-time Indiana gaming tax charge, net of tax | — | 0.03 | — | 0.03 | ||||||||||||
Indiana state income tax assessment | — | — | 0.08 | — | ||||||||||||
Adjusted net income per diluted share | $ | 0.27 | $ | 0.21 | $ | 0.55 | $ | 0.50 | ||||||||
The following table reconciles operating income to EBITDA.
(In thousands) | Three Months Ended June 30, 2004 | |||||||||||||
Operating Income (Loss) | Depreciation and Amortization | Acquisition Related Expenses | EBITDA | |||||||||||
Stardust | $ | 913 | $ | 3,687 | $ | — | $ | 4,600 | ||||||
Sam’s Town Las Vegas | 5,863 | 4,319 | — | 10,182 | ||||||||||
Eldorado & Jokers Wild | 619 | 480 | — | 1,099 | ||||||||||
Downtown Properties | 5,085 | 3,713 | — | 8,798 | ||||||||||
Sam’s Town Tunica | (117 | ) | 3,421 | — | 3,304 | |||||||||
Par-A-Dice | 6,959 | 1,376 | — | 8,335 | ||||||||||
Treasure Chest | 3,024 | 1,935 | — | 4,959 | ||||||||||
Blue Chip | 19,660 | 2,893 | — | 22,553 | ||||||||||
Delta Downs | 4,453 | 1,929 | — | 6,382 | ||||||||||
Sam’s Town Shreveport | (3,697 | ) | 1,500 | 5,909 | 3,712 | |||||||||
Corporate | (8,895 | ) | 1,332 | — | (7,563 | ) | ||||||||
Totals for wholly-owned properties | 33,867 | 26,585 | 5,909 | 66,361 | ||||||||||
Our share of Borgata results | 18,918 | — | — | 18,918 | ||||||||||
Consolidated | $ | 52,785 | $ | 26,585 | $ | 5,909 | $ | 85,279 | ||||||
Three Months Ended June 30, 2003 | ||||||||||||||
Operating Income (Loss) | Depreciation and Amortization | Preopening Expenses | EBITDA | |||||||||||
Stardust | $ | (588 | ) | $ | 3,420 | $ | — | $ | 2,832 | |||||
Sam’s Town Las Vegas | 4,178 | 4,289 | — | 8,467 | ||||||||||
Eldorado & Jokers Wild | 919 | 451 | — | 1,370 | ||||||||||
Downtown Properties | 6,151 | 3,861 | — | 10,012 | ||||||||||
Sam’s Town Tunica | (1,537 | ) | 3,287 | — | 1,750 | |||||||||
Par-A-Dice | 10,713 | 1,306 | — | 12,019 | ||||||||||
Treasure Chest | 3,094 | 1,578 | — | 4,672 | ||||||||||
Blue Chip | 15,976 | 2,443 | — | 18,419 | ||||||||||
Delta Downs | 5,628 | 1,626 | — | 7,254 | ||||||||||
Corporate | (8,094 | ) | 901 | — | (7,193 | ) | ||||||||
Totals for wholly-owned properties | 36,440 | 23,162 | — | 59,602 | ||||||||||
Our share of Borgata results | (11,900 | ) | — | 11,900 | — | |||||||||
Consolidated | $ | 24,540 | $ | 23,162 | $ | 11,900 | $ | 59,602 | ||||||
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Six Months Ended June 30, 2004 | ||||||||||||||
(In thousands) | Operating Income (Loss) | Depreciation and Amortization | Acquisition Related Expenses | EBITDA | ||||||||||
Stardust | $ | 2,718 | $ | 7,369 | $ | — | $ | 10,087 | ||||||
Sam’s Town Las Vegas | 14,054 | 8,558 | — | 22,612 | ||||||||||
Eldorado & Jokers Wild | 1,847 | 920 | — | 2,767 | ||||||||||
Downtown Properties | 11,424 | 7,429 | — | 18,853 | ||||||||||
Sam’s Town Tunica | (729 | ) | 6,956 | — | 6,227 | |||||||||
Par-A-Dice | 13,798 | 2,783 | — | 16,581 | ||||||||||
Treasure Chest | 6,174 | 3,798 | — | 9,972 | ||||||||||
Blue Chip | 36,968 | 5,744 | — | 42,712 | ||||||||||
Delta Downs | 10,396 | 3,817 | — | 14,213 | ||||||||||
Sam’s Town Shreveport | (3,697 | ) | 1,500 | 5,909 | 3,712 | |||||||||
Corporate | (16,516 | ) | 2,685 | — | (13,831 | ) | ||||||||
Totals for wholly-owned properties | 76,437 | 51,559 | 5,909 | 133,905 | ||||||||||
Our share of Borgata results | 32,062 | — | — | 32,062 | ||||||||||
Consolidated | $ | 108,499 | $ | 51,559 | $ | 5,909 | $ | 165,967 | ||||||
Six Months Ended June 30, 2003 | ||||||||||||||
Operating Income (Loss) | Depreciation and Amortization | Preopening Expenses | EBITDA | |||||||||||
Stardust | $ | 760 | $ | 6,847 | $ | — | $ | 7,607 | ||||||
Sam’s Town Las Vegas | 10,503 | 8,548 | — | 19,051 | ||||||||||
Eldorado & Jokers Wild | 2,178 | 917 | — | 3,095 | ||||||||||
Downtown Properties | 13,553 | 7,696 | — | 21,249 | ||||||||||
Sam’s Town Tunica | (2,208 | ) | 6,569 | — | 4,361 | |||||||||
Par-A-Dice | 21,666 | 2,590 | — | 24,256 | ||||||||||
Treasure Chest | 7,291 | 3,149 | — | 10,440 | ||||||||||
Blue Chip | 33,919 | 4,768 | — | 38,687 | ||||||||||
Delta Downs | 12,305 | 3,226 | — | 15,531 | ||||||||||
Corporate | (14,550 | ) | 1,785 | — | (12,765 | ) | ||||||||
Totals for wholly-owned properties | 85,417 | 46,095 | — | 131,512 | ||||||||||
Our share of Borgata results | (16,125 | ) | — | 16,125 | — | |||||||||
Consolidated | $ | 69,292 | $ | 46,095 | $ | 16,125 | $ | 131,512 | ||||||
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The following table reports Borgata financial results.
For the Three Months Ended June 30, 2004 | For the Three Months Ended June 30, 2003 | |||||||||||||||
(In thousands) | 100% of Borgata | Our Share of Borgata | 100% of Borgata | Our Share of Borgata | ||||||||||||
Gaming revenue | $ | 149,965 | $ | — | ||||||||||||
Non-gaming revenue | 56,562 | — | ||||||||||||||
Gross revenues | 206,527 | — | ||||||||||||||
Less promotional allowances | 41,586 | — | ||||||||||||||
Net revenues | 164,941 | $ | 82,470 | — | $ | — | ||||||||||
Expenses | 112,644 | 56,322 | — | — | ||||||||||||
Depreciation | 14,254 | 7,127 | — | — | ||||||||||||
Preopening expenses | — | — | 23,799 | 11,900 | ||||||||||||
Loss on asset disposal | 207 | 103 | — | — | ||||||||||||
Operating income (loss) | 37,836 | 18,918 | (23,799 | ) | (11,900 | ) | ||||||||||
Interest and other expenses, net | (8,913 | ) | (4,456 | ) | — | — | ||||||||||
Provision for income taxes | (4,467 | ) | (2,234 | ) | — | — | ||||||||||
Subtotal | (13,380 | ) | (6,690 | ) | — | — | ||||||||||
Net income (loss) | $ | 24,456 | $ | 12,228 | $ | (23,799 | ) | $ | (11,900 | ) | ||||||
For the Six Months Ended June 30, 2004 | For the Six Months Ended June 30, 2003 | |||||||||||||||
(In thousands) | 100% of Borgata | Our Share of Borgata | 100% of Borgata | Our Share of Borgata | ||||||||||||
Gaming revenue | $ | 290,169 | $ | — | ||||||||||||
Non-gaming revenue | 106,991 | — | ||||||||||||||
Gross revenues | 397,160 | — | ||||||||||||||
Less promotional allowances | 86,330 | — | ||||||||||||||
Net revenues | 310,830 | $ | 155,415 | — | $ | — | ||||||||||
Expenses | 218,428 | 109,214 | — | — | ||||||||||||
Depreciation | 28,071 | 14,036 | — | — | ||||||||||||
Preopening expenses | — | — | 32,249 | 16,125 | ||||||||||||
Loss on asset disposal | 207 | 103 | — | — | ||||||||||||
Operating income (loss) | 64,124 | 32,062 | (32,249 | ) | (16,125 | ) | ||||||||||
Interest and other expenses, net | (19,369 | ) | (9,684 | ) | — | — | ||||||||||
Provision for income taxes | (6,932 | ) | (3,466 | ) | — | — | ||||||||||
Subtotal | (26,301 | ) | (13,150 | ) | — | — | ||||||||||
Net income (loss) | $ | 37,823 | $ | 18,912 | $ | (32,249 | ) | $ | (16,125 | ) | ||||||
The following table reconciles operating income to Adjusted EBITDA for Borgata.
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||
(In thousands) | 2004 | 2003 | 2004 | 2003 | ||||||||||
Operating income (loss) | $ | 37,836 | $ | (23,799 | ) | $ | 64,124 | $ | (32,249 | ) | ||||
Depreciation | 14,254 | — | 28,071 | — | ||||||||||
Preopening expenses | — | 23,799 | — | 32,249 | ||||||||||
Loss on asset disposal | 207 | — | 207 | — | ||||||||||
Adjusted EBITDA | $ | 52,297 | $ | — | $ | 92,402 | $ | — | ||||||
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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 include information regarding the Company’s expectations, goals or intentions regarding the future, including but not limited to statements regarding the Company’s strategy, expenses (including the anticipated increase in expenses due to the Coast merger), revenue, earnings, taxes and accruals related to taxes, cash flow and the growth of certain gaming markets and the Company’s ability to build market share. In addition, forward-looking statements include statements regarding Borgata, including its continued strong performance, the strength and growth of demand, its achievement of market share premiums, market rankings for gaming revenue (including cash revenue to non-gaming revenue), table game win and slot win, increased revenue, earnings and margins and the expansion of Borgata, including the timing and cost of the expansion, the number of slot machines, table games and other amenities to be added and the ability for Borgata to renegotiate its credit facility. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. In particular, the Company can provide no assurances that its ability to achieve increased margins and market share premiums, grow revenues, or meet other identified expectations for the Company or Borgata will be achieved or that Borgata’s current estimated rankings in the Atlantic City market will continue in future periods. In addition, the Company can provide no assurances that the Borgata expansion will yield the estimated number of slot machines, table games or other amenities, will be completed within the estimated time frame and budget, or that Borgata will be able to renegotiate its bank credit facility on favorable terms, or at all. Among the factors that could cause actual results to differ materially are the following: competition, increased costs (including marketing costs) and uncertainties relating to new developments and expansion (including enhancements to improve property performance), 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 “Investment Considerations” and in other sections of the Company’s Form 10-K for the fiscal year ended December 31, 2003 on file with the Securities and Exchange Commission, and in its other current and periodic reports filed from time to time with the Commission. In addition, factors that could cause actual
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results to differ are discussed under the heading “Risk Factors” and in other sections of the Company’s registration statement on Form S-4 filed with the Commission on June 25, 2004. All forward-looking statements in this document 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.
Boyd Gaming will host a webcast at 4:30 p.m. EDT on Wednesday, July 28, 2004 to review the second quarter results. The Webcast will be available on the Company’s website atwww.boydgaming.com and at www.firstcallevents.com/service/ajwz407914634gf12.html
Headquartered in Las Vegas, Boyd Gaming Corporation(NYSE: BYD) is a leading diversified owner and operator of 18 gaming entertainment properties, plus one under development, located in Nevada, New Jersey, Mississippi, Illinois, Indiana and Louisiana. Boyd Gaming press releases are available atwww.prnewswire.com. Additional news and information on Boyd Gaming can be found atwww.boydgaming.com .
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