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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q/A
(AMENDMENT NUMBER 1)
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number 1-12168
BOYD GAMING CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 88-0242733
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2950 SOUTH INDUSTRIAL ROAD
LAS VEGAS, NEVADA
89109
(Address of principal executive offices)
(Zip Code)
(702) 792-7200
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
filing requirements for the past 90 days.
Yes X No
----- -----
Shares outstanding of each of the Registrant's classes of common stock as of
October 31, 1995
Class Outstanding
----- -----------
Common stock, $.01 par value 56,999,018
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated certain Income
Statement Data for the Company's properties. As used herein, "Boulder Strip
Properties" consist of Sam's Town Las Vegas, the Eldorado Casino and Jokers Wild
Casino; "Downtown Properties" consist of the California Hotel and Casino and the
Fremont Hotel and Casino; and the "Central Region" consist of Sam's Town Tunica,
Sam's Town Kansas City (opened September 1995), management fee income from
Silver Star Hotel and Casino, and management fee and joint venture income from
Treasure Chest Casino (opened September 1994).
THREE MONTHS ENDED
SEPTEMBER 30,
-----------------------------------
INCOME STATEMENT DATA 1995 1994
-----------------------------------
NET REVENUES (IN THOUSANDS)
Stardust $ 47,794 $ 48,156
Boulder Strip Properties 42,912 39,730
Downtown Properties 32,451 32,896
Central Region 55,903 35,937
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Total Properties 179,060 156,719
--------- --------
OPERATING INCOME
Stardust 5,803 6,532
Boulder Strip Properties 2,893 1,562
Downtown Properties 2,984 4,371
Central Region 23,141 12,344
Preopening expense (10,004) --
--------- --------
Total Properties 24,817 24,809
--------- --------
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Consolidated net revenues increased 14.3% for the three-month period
ended September 30, 1995 compared to the same period in the prior fiscal year.
The Company's Central Region Properties, which consist of Sam's Town Tunica,
Sam's Town Kansas City, Silver Star Hotel and Casino and the Treasure Chest
Casino accounted for approximately 90% of the increase in revenues in the first
three months of the current fiscal year. Revenues at Sam's Town Tunica increased
34% for the three month period while management fee and joint venture income
from Silver Star Hotel and Casino and Treasure Chest Casino increased 85%. In
addition, revenues in the Central Region were enhanced as a result of the
opening of Sam's Town Kansas City on September 13, 1995. In the Company's Nevada
Region, which consists of the Stardust Resort and Casino, Sam's Town Las Vegas,
the Eldorado Casino, Jokers Wild Casino, the California Hotel and Casino and the
Fremont Hotel and Casino, revenues increased 2.0% for the three month period
ended September 30, 1995 compared to the same period in the prior fiscal year.
Revenues at the Boulder Strip Properties increased 8.0% primarily as a result of
increases at Sam's Town Las Vegas while revenues at the Stardust and the
Downtown Properties declined 0.8% and 1.4%, respectively, versus the comparable
period of the prior year. Revenue growth was achieved in all areas of the
Company's operations with casino revenue up 12.3%, rooms revenue up 22% and food
and beverage revenue up 3.2%. Slot revenue, the largest component of casino
revenue, increased 17.7% for the three month period and accounted for nearly
three-fourths of total casino revenue. Table games revenue, the only other
significant component of casino revenue, increased slightly. Company wide
occupied rooms increased 9.4% primarily as a result of the Sam's Town Tunica
expansion (300 rooms, opened in December 1994) and the opening of the California
Hotel and Casino rooms expansion (146 rooms, opened in December 1994), both of
which were open for the full fiscal quarter ended September 30, 1995. In
addition, the Company's average room rate rose 13.1% for the first fiscal
quarter of 1996 compared to the prior year's first quarter primarily as a result
of a 17.8% average room rate increase at the Stardust. Occupancy statistics do
not include Main Street Station rooms which the Company uses to augment the room
base at the California and the Fremont.
Consolidated operating income for the first quarter of fiscal 1996 was
$18.7 million versus $20.9 million for the prior year's first quarter, a
decrease of 10.2%. The decrease in consolidated operating income was the result
of a preopening expense write-off of $10.0 million related to the opening of
Sam's Town Kansas City on September 13, 1995. Consolidated operating income
before the effect of the preopening expense write-off increased $7.8 million
(38%) to $28.7 million. This increase in consolidated operating income was the
result of increased operating income in the Central Region offset by a decline
in operating income in the Nevada Region. Operating income in the Central Region
includes management fee and joint venture income related to the Company's Silver
Star Hotel and Casino and Treasure Chest Casino operations. Consolidated
operating income margin before the preopening expense write-off related to
Kansas City increased to 16.0% from 13.3% for the first three months of fiscal
1996. This increase resulted from operating margins in the Central Region
increasing to 41% from 34%, respectively, and operating income in Nevada Region
declining to 9.5% from 10.3%,
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respectively, for the first quarter of fiscal 1996 compared to the prior years'
first quarter. Consolidated operating income margin after the preopening expense
write-off related to Sam's Town Kansas City was 10.5% for first quarter of
fiscal 1996.
Net revenue at the Stardust decreased 0.8% for the first quarter of
fiscal 1996 versus the first quarter in the prior fiscal year. Casino and food
and beverage revenue declined 3.3% and 0.9%, respectively, while rooms revenue
increased 15.0%. Slot and table games revenue, the largest components of casino
revenue, declined 4.3% and 1.0%, respectively, as a result of declines in
wagering of 5.3% and 2.8%, respectively, offset by higher net winnings. Room
revenue for the three months increased 15.0% with a 3.1% decrease in occupied
rooms offset by a 17.8% increase in the average daily room rate. Operating
income margin for the quarter was 12.1% versus 13.6% in the prior year's first
quarter. The decline in operating income and operating income margin is
attributable primarily to increased operating income and operating income
margins in the rooms department not fully offsetting higher advertising and
promotional expenses.
Net revenues at the Boulder Strip Properties increased 8.0% for the
three months ended September 30, 1995 compared to the same period in the prior
year primarily as a result of an 8.1% increase in revenues at Sam's Town Las
Vegas. Net revenues at the Eldorado Casino and Jokers Wild Casino increased 4.7%
and 10.5%, respectively. Casino revenues at the Boulder Strip Properties
increased 10.8% for the three months ended September 30, 1995, while rooms
revenue increased 11.9% and food and beverage revenue declined 1.4%. The
operating income margin at the Boulder Strip Properties increased to 6.7% from
3.9% for the three months ended September 30, 1995 versus the same period in the
prior fiscal year. Both Sam's Town Las Vegas and the Eldorado Casino posted
increased operating income margins, up 3.3 and 2.5 percentage points,
respectively, while operating income margin at the Jokers Wild Casino declined
slightly.
Net revenues at the Downtown Properties (California and Fremont)
decreased 1.4% for the three months ended September 30, 1995 compared to the
corresponding period in the prior year. Net revenues at the California increased
3.2% for the first three months of fiscal 1996 with casino revenue increasing
1.8%, rooms revenue increasing 17.2% and food and beverage revenue increasing
6.3%. The increase in casino revenue at the California for the three month
period was the result of a 10.7% increase in slot revenue offset by a 12.7%
decline in table games revenue. The decline in table games revenue was caused by
a 9.8% increase in wagering that was offset by lower net winnings. At the
Fremont, net revenues declined 6.1% for the three months ended September 30,
1995 versus the comparable period in the prior fiscal year with casino revenue
declining 8.4% and rooms and food and beverage declining 0.8% and 3.9%,
respectively. The Fremont continued to be negatively impacted by the
construction of the Fremont Street Experience. The construction of this project,
as well as work on several adjacent streets, has impeded the free flow of both
vehicular and pedestrian traffic through downtown Las Vegas. The Company expects
to be negatively impacted by this construction until the project's completion
which is expected to be in December 1995. Operating income margins at the
Downtown Properties were 9.2% for the three months ended September 30, 1995
versus 13.3% in the
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comparable period in the prior fiscal year. Operating income margins at the
California and Fremont declined to 9.8% and 8.5%, respectively, for the three
months ended September 30, 1995 versus 13.2% and 13.4%, respectively, for the
same period in the prior fiscal year.
The Central Region produced net revenues of $55.9 million in the first
quarter of fiscal 1996 versus $35.9 million in last year's first quarter. Sam's
Town Tunica net revenues increased 34% to $40.6 million in the first quarter
versus $30.3 million in the first quarter of the prior fiscal year. Management
fee and joint venture income from Silver Star and Treasure Chest totaled $10.5
million for the three months ended September 30, 1995 compared to $5.7 million
in the prior year's first fiscal quarter. In addition revenues were enhanced by
the opening of Sam's Town Kansas City on September 13, 1995. Operating income
and operating income margin, excluding preopening expense related to Sam's Town
Kansas City, increased to $23.1 million and 41% for the first quarter of fiscal
1996 versus $12.3 million and 34% in the comparable period in the prior fiscal
year. Upon commencement of operations at Sam's Town Kansas City, preopening
expenses of $10.0 million were written-off. Operating income and operating
income margin after the effect of the preopening expense write-off related to
Sam's Town Kansas City were $13.1 and 24%, respectively. The Central Region
results include the full revenues and income from Sam's Town Tunica and Sam's
Town Kansas City (opened September 13,1995), management fee income from Silver
Star Hotel and Casino and management fee and joint venture income from Treasure
Chest Casino opened in September of 1994.
Interest expense, net of amounts capitalized was $12.2 million for the
first quarter of fiscal 1996 compared to $12.3 million in the first quarter of
the prior year. The Company incurred increased interest expense for the quarter
ended September 30, 1995 as a result of increased borrowings and higher interest
rates compared to the first quarter of the prior fiscal year. These increased
interest costs were offset by increased capitalized interest during the first
quarter of fiscal 1996 compared to the comparable period in the prior year.
Depreciation expense increased $1.0 million primarily as a result of the opening
of Sam's Town Kansas City and the opening of the California Hotel and Casino
rooms addition and the Sam's Town Tunica rooms addition.
As a result of these factors, net income decreased $1.3 million or 24%
for the first fiscal quarter of 1996 compared to the first fiscal quarter of the
prior year.
FINANCIAL CONDITION AND CAPITAL RESOURCES
For the three months ended September 30, 1995 the Company's net cash
provided by operating activities was $25.0 million versus net cash used in
operating activities of $6.2 million in last year's first fiscal quarter. This
increase was primarily a result of the timing of payments related to current
liabilities. As of September 30, 1995, the Company had balances of cash and cash
equivalents of approximately $46 million and had approximately $26.5 million of
credit available under a bank credit agreement.
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The Company has completed Sam's Town Kansas City which opened on
September 13, 1995 at a cost of approximately $145 million. At September 30,
1995, approximately $7.7 million of the total project cost remained outstanding
and is expected to be paid during the Company's second quarter of fiscal 1996.
In connection with the opening of the Fremont Street Experience, the Company is
committed to opening Main Street Station Hotel and Casino by the middle of 1996.
This project is expected to include a refurbishment of rooms, a redesign of the
property's public space and the construction of a parking garage. The Company is
in the design and planning stages of this project and has not yet developed a
definitive budget. The Company has also identified a potential casino/hotel site
in Reno, Nevada. The Company is working to resolve certain zoning matters before
this project can commence. The Company has applied for a license to operate a
riverboat casino in Hammond, Indiana. The Indiana Gaming Commission is expected
to award the Hammond license during the Company's second fiscal quarter. The
Company, which has been selected by the City of Cape Girardeau, Missouri to be
the developer and operator of a riverboat casino facility in downtown Cape
Girardeau, is proceeding in the planning and design process of its facility
there. The source of funds required to complete these projects and for the
Company's ongoing maintenance capital expenditure program is expected to be cash
on hand, cash flow from operations, availability under existing credit
agreements, new borrowings to the extent permitted under existing debt
agreements, the issuance of additional equity and vendor and other financing.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
BOYD GAMING CORPORATION
(Registrant)
Date: June 7, 1996 By /s/ Keith E. Smith
-----------------------------
Keith E. Smith
Vice President and Controller
(Chief Accounting Officer)