Exhibit 99.1
Station Casinos Announces Second Quarter Results
LAS VEGAS--(BUSINESS WIRE)--Aug. 8, 2007--Station Casinos, Inc.
(NYSE: STN; "Station" or the "Company") today announced the results of
its operations for the second quarter ended June 30, 2007 and other
Company-related news.
Notable events include:
-- Second quarter EBITDA (1) of $144.0 million, an increase of 7%
over the prior year's second quarter.
-- Net revenues from its Major Las Vegas Operations, excluding
Green Valley Ranch, increased 7% from the prior year's second
quarter.
-- Adjusted for non-recurring items and development expenses,
diluted earnings per share ("EPS") of $0.41 compared to $0.61
in the prior year's second quarter, a decrease of 33%.
Results of Operations
The Company's net revenues for the second quarter ended June 30,
2007 were approximately $362.9 million, an increase of 6% compared to
the prior year's second quarter. The Company reported EBITDA for the
quarter of $144.0 million, an increase of 7% compared to the prior
year's second quarter. This marks the twenty-second consecutive
quarter of year-over-year growth of Adjusted EBITDA. For the second
quarter, Adjusted Earnings (2) applicable to common stock were $23.3
million, or $0.41 per diluted share, compared to the prior year's
$0.61 per diluted share on a comparable basis.
During the second quarter, the Company incurred $1.9 million in
costs to develop new gaming opportunities, primarily related to Native
American gaming, $6.1 million related to costs associated with the FCP
transaction noted below, $1.0 million of preopening expenses, $1.7
million gain on asset sales, $3.8 million in management
agreement/lease termination costs and $0.1 million of other
non-recurring credits. Including these items, the Company reported net
income of $15.1 million and diluted earnings applicable to common
stock of $0.27 per share.
The Company's earnings from its Green Valley Ranch joint venture
for the second quarter were $11.0 million, which represents a
combination of the Company's management fee plus 50% of Green Valley
Ranch's operating income. For the quarter, Green Valley Ranch
generated EBITDA before management fees of $28.3 million, a 7%
increase compared to the prior year's second quarter.
Las Vegas Market Results
For the second quarter, net revenues from the Major Las Vegas
Operations, excluding Green Valley Ranch, increased to $327.1 million,
a 7% increase compared to the prior year's quarter, while EBITDA from
those operations increased 4% to $118.5 million.
EBITDA and Adjusted Earnings are not generally accepted accounting
principles ("GAAP") measurements and are presented solely as a
supplemental disclosure because the Company believes that they are
widely used measures of operating performance in the gaming industry
and as a principal basis for valuation of gaming companies. EBITDA and
Adjusted Earnings are further defined in footnotes 1 and 2,
respectively.
Balance Sheet Items and Capital Expenditures
Long-term debt was $3.44 billion as of June 30, 2007. Total
capital expenditures were $74.7 million for the second quarter.
Expansion and project capital expenditures included $6.1 million for
Phase III of Red Rock, $6.8 million for the expansion of Fiesta
Henderson, $18.4 million for the corporate office building and $10.2
million for the purchase of land. As of June 30, 2007, the Company's
debt to cash flow ratio, as defined in its bank credit facility, was
5.7 to 1.
Proposed Merger
On February 23, 2007, the Company entered into a definitive merger
agreement with Fertitta Colony Partners LLC ("FCP"), pursuant to which
FCP agreed to acquire all of Station's outstanding common stock for
$90 per share in cash. FCP is a new company formed by Frank J.
Fertitta III, Chairman and Chief Executive Officer of Station, Lorenzo
J. Fertitta, Vice Chairman and President of Station and Colony Capital
Acquisitions, LLC, an affiliate of Colony Capital, LLC. On July 9,
2007, Station filed a definitive proxy statement and related materials
with the Securities and Exchange Commission that provides details
about the pending sale of the Company. Station will hold a special
meeting of its stockholders on Monday, August 13, 2007, at 2:00 p.m.
local time, at Red Rock Casino Resort Spa, 11011 West Charleston
Boulevard, Las Vegas, Nevada, at which holders of record at the close
of business on June 14, 2007 of Station's common stock will be asked
to consider and vote upon a proposal to approve the merger agreement
with FCP.
IMPORTANT ADDITIONAL INFORMATION REGARDING THE MERGER HAS BEEN
FILED WITH THE SEC.
In connection with the proposed merger, the Company has filed a
definitive proxy statement and related materials with the Securities
and Exchange Commission. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO
READ THE DEFINITIVE PROXY STATEMENT BECAUSE IT CONTAINS IMPORTANT
INFORMATION ABOUT THE MERGER AND THE PARTIES THERETO. Investors and
security holders may obtain a free copy of the definitive proxy
statement and other documents filed by the Company at the Securities
and Exchange Commission's website at http://www.sec.gov. The
definitive proxy statement and such other documents may also be
obtained for free from the Company by directing such request to
Station Casinos, Inc. Investor Relations, 2411 W. Sahara Avenue, Las
Vegas, NV 89102, telephone: (800) 544-2411.
Station and its directors, executive officers and certain other
members of its management and employees may be deemed to be
participants in the solicitation of proxies from its stockholders in
connection with the proposed merger. Information regarding the
interests of Station's participants in the solicitation is included in
the definitive proxy statement.
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
Casino 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, Magic Star Casino, 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
and The Greens in Henderson, 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 occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
agreement with FCP; the outcome of any legal proceedings that have
been, or will be, instituted against the Company related to the merger
agreement; the inability to complete the merger due to the failure to
obtain stockholder approvals for the merger or the failure to satisfy
other conditions to complete the merger, including the receipt of all
regulatory approvals related to the merger; the failure to obtain the
necessary financing arrangements set forth in the debt and equity
commitment letters delivered pursuant to the merger agreement; risks
that the proposed transaction disrupts current plans and operations
and the potential difficulties in employee retention as a result of
the merger; the ability to recognize the benefits of the merger; the
amount of the costs, fees, expenses and charges related to the merger
and the actual terms of certain financings that will be obtained for
the merger; the impact of the substantial indebtedness to be incurred
to finance the consummation of the merger; 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, 2006, 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. Additional financial information,
including presentations from recent investor conferences, is available
in the "Investor Relations" section of the Company's website at
www.stationcasinos.com.
Construction projects such as the master-planned expansions of Red
Rock and Fiesta Henderson and the development of Aliante entail
significant risks, including shortages of materials or skilled labor,
unforeseen regulatory problems, work stoppages, weather interference,
floods and unanticipated cost increases. The anticipated costs and
construction periods are based on budgets, conceptual design documents
and construction schedule estimates. There can be no assurance that
the budgeted costs or construction period will be met.
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 consists of net income plus income tax provision,
interest and other expense, net, loss on early retirement of debt,
loss or gain on asset disposals, net, preopening expenses, management
agreement/lease termination costs, other non-recurring costs,
depreciation, amortization and development expense. 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 and as a principal basis for valuation of gaming
companies. The Company believes that in addition to cash flows and net
income, EBITDA is a useful financial performance measurement for
assessing the operating performance of the Company. Together with net
income and cash flows, EBITDA provides investors with an additional
basis to evaluate the ability of the Company to incur and service debt
and incur capital expenditures. To evaluate EBITDA and the trends it
depicts, the components should be considered. The impact of income tax
provision, interest and other expense, net, loss on early retirement
of debt, loss or gain on asset disposals, net, preopening expenses,
management agreement/lease termination costs, other non-recurring
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. Further,
EBITDA does not represent net income or cash flows from operating,
financing and investing activities as defined by generally accepted
accounting principles ("GAAP") and does not necessarily indicate cash
flows will be sufficient to fund cash needs. It should not be
considered as an alternative to net income, as an indicator of the
Company's operating performance or to cash flows as a measure of
liquidity. In addition, it should be noted that not all gaming
companies that report EBITDA or adjustments to such measures may
calculate EBITDA or such adjustments in the same manner as the
Company, and therefore, the Company's measure of EBITDA may not be
comparable to similarly titled measures used by other gaming
companies. A reconciliation of EBITDA to net income is included in the
financial schedules accompanying this release.
(2) Adjusted Earnings excludes development expense, preopening
expenses, management agreement/lease termination costs, loss or gain
on asset disposals, net, loss on early retirement of debt and other
non-recurring costs. Adjusted Earnings 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 as a principal basis for valuation of gaming companies, as this
measure is considered by the Company to be a better measure on which
to base expectations of future results than GAAP net income. A
reconciliation of Adjusted Earnings and EPS to GAAP net income and EPS
is included in the financial schedules accompanying this release.
Station Casinos, Inc.
Condensed Consolidated Balance Sheets
(amounts in thousands)
(unaudited)
June 30, December 31,
2007 2006
--------------- ---------------
Assets:
Cash and cash equivalents $ 105,149 $ 116,898
Receivables, net 36,313 40,762
Other current assets 53,892 43,891
--------------- ---------------
Total current assets 195,354 201,551
Property and equipment, net 2,696,436 2,586,473
Other long-term assets 853,612 928,672
--------------- ---------------
Total assets $ 3,745,402 $ 3,716,696
=============== ===============
Liabilities and stockholders' deficit:
Current portion of long-term debt $ 580 $ 341
Other current liabilities 256,430 251,565
--------------- ---------------
Total current liabilities 257,010 251,906
Revolving credit facility 1,023,100 1,155,800
Senior and senior subordinated notes 2,304,586 2,304,737
Other debt 8,570 8,855
Interest rate swaps, mark-to-market (4,855) (905)
Due to unconsolidated affiliate 100,000 -
Other long-term liabilities 224,188 183,161
--------------- ---------------
Total liabilities 3,912,599 3,903,554
Stockholders' deficit (167,197) (186,858)
--------------- ---------------
Total liabilities and stockholders'
deficit $ 3,745,402 $ 3,716,696
=============== ===============
Station Casinos, Inc.
Condensed Consolidated Statements of Operations
(amounts in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- --------------------
2007 2006 2007 2006
----------- ---------- ---------- ---------
Operating revenues:
Casino $ 256,459 $ 245,137 $ 521,154 $461,360
Food and beverage 62,865 56,276 124,428 95,147
Room 28,556 21,619 59,304 38,640
Other 19,515 17,862 36,943 31,834
Management fees 23,614 23,984 48,442 49,884
----------- ---------- ---------- ---------
Gross revenues 391,009 364,878 790,271 676,865
Promotional allowances (28,113) (23,087) (54,937) (42,604)
----------- ---------- ---------- ---------
Net revenues 362,896 341,791 735,334 634,261
----------- ---------- ---------- ---------
Operating costs and
expenses:
Casino 96,982 86,949 192,282 161,129
Food and beverage 43,992 41,423 87,054 67,999
Room 9,130 7,839 18,546 13,383
Other 7,493 6,820 13,720 11,403
Selling, general and
administrative 60,896 58,157 122,824 102,780
Corporate 17,403 16,472 38,713 32,759
Development 1,893 2,549 4,152 4,681
Depreciation and
amortization 39,975 31,363 80,197 57,027
Preopening 1,009 13,566 1,013 27,688
(Gain) loss on asset
disposals, net (1,693) 65 (1,739) (778)
Management
agreement/lease
termination 3,800 - 3,800 500
----------- ---------- ---------- ---------
280,880 265,203 560,562 478,571
----------- ---------- ---------- ---------
Operating income 82,016 76,588 174,772 155,690
Earnings from joint
ventures 9,353 9,917 20,869 21,840
----------- ---------- ---------- ---------
Operating income and
earnings from joint
ventures 91,369 86,505 195,641 177,530
----------- ---------- ---------- ---------
Other expense:
Interest expense, net (57,263) (41,345) (113,793) (65,161)
Interest and other
expense from joint
ventures (6,955) (1,480) (12,853) (3,048)
----------- ---------- ---------- ---------
(64,218) (42,825) (126,646) (68,209)
----------- ---------- ---------- ---------
Income before income taxes 27,151 43,680 68,995 109,321
Income tax provision (12,078) (16,887) (30,872) (41,406)
----------- ---------- ---------- ---------
Net income $ 15,073 $ 26,793 $ 38,123 $ 67,915
=========== ========== ========== =========
Earnings per common share:
Basic $ 0.28 $ 0.46 $ 0.70 $ 1.10
Diluted $ 0.27 $ 0.44 $ 0.68 $ 1.07
Weighted average common
shares outstanding
Basic 54,523 58,851 54,454 61,463
Diluted 56,543 60,921 56,419 63,458
Dividends paid per common
share $ 0.29 $ 0.25 $ 0.58 $ 0.50
Station Casinos, Inc.
Summary Information and
Reconciliation of Net Income to EBITDA
(amounts in thousands, except occupancy percentage and ADR)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Major Las Vegas Operations
(a):
--------------------------
Net revenues $327,141 $305,256 $662,145 $559,976
Net income $ 24,327 $ 39,091 $ 62,801 $ 83,559
Income tax provision 23,410 23,148 46,991 49,489
Interest and other
expense, net 28,229 22,574 57,881 37,206
Depreciation and
amortization 38,012 29,806 76,318 53,707
Gain on asset disposals,
net - (151) (32) (405)
Preopening expenses 748 - 564 -
Management
agreement/lease
termination 3,800 - 3,800 -
--------- --------- --------- ---------
EBITDA $118,526 $114,468 $248,323 $223,556
========= ========= ========= =========
Green Valley Ranch (50%
owned):
--------------------------
Net revenues $ 69,577 $ 63,001 $139,018 $130,095
Net income $ 3,989 $ 14,588 $ 14,965 $ 32,423
Interest and other
expense, net 15,028 5,716 25,869 11,910
Depreciation and
amortization 5,912 6,105 11,594 12,103
(Gain) loss on asset
disposals, net (17) 2 (17) 25
Loss on early retirement
of debt - - 1,655 -
Preopening expenses 99 - 102 -
Management
agreement/lease
termination 3,300 - 3,300 -
--------- --------- --------- ---------
EBITDA $ 28,311 $ 26,411 $ 57,468 $ 56,461
========= ========= ========= =========
Major Las Vegas Operations
including Green Valley
Ranch:
--------------------------
Net revenues $396,718 $368,257 $801,163 $690,071
Net income $ 28,316 $ 53,679 $ 77,766 $115,982
Income tax provision 23,410 23,148 46,991 49,489
Interest and other
expense, net 43,257 28,290 83,750 49,116
Depreciation and
amortization 43,924 35,911 87,912 65,810
Gain on asset disposals,
net (17) (149) (49) (380)
Loss on early retirement
of debt - - 1,655 -
Preopening expenses 847 - 666 -
Management
agreement/lease
termination 7,100 - 7,100 -
--------- --------- --------- ---------
EBITDA $146,837 $140,879 $305,791 $280,017
========= ========= ========= =========
Total Station Casinos,
Inc. (b):
--------------------------
Net income $ 15,073 $ 26,793 $ 38,123 $ 67,915
Income tax provision 12,078 16,887 30,872 41,406
Interest and other
expense, net 64,218 42,825 126,646 68,209
Depreciation and
amortization 39,975 31,363 80,197 57,027
Development expense 1,893 2,549 4,152 4,681
(Gain) loss on asset
disposals, net (1,693) 65 (1,739) (778)
Preopening expenses 1,009 13,566 1,013 27,688
Management
agreement/lease
termination 3,800 - 3,800 500
Management
agreement/lease
termination at Green
Valley Ranch (50%) 1,650 - 1,650 -
Other non-recurring costs 6,018 - 11,619 -
--------- --------- --------- ---------
EBITDA $144,021 $134,048 $296,333 $266,648
========= ========= ========= =========
Occupancy percentage 92% 96% 93% 97%
ADR $ 94 $ 75 $ 95 $ 71
(a)Includes the wholly owned properties of Red Rock (since April 18,
2006), Palace Station, Boulder Station, Texas Station, Sunset
Station, Santa Fe Station, Fiesta Rancho and Fiesta Henderson.
(b)Includes the Major Las Vegas Operations, Wild Wild West, Wildfire,
Magic Star Gold Rush, Lake Mead Casino (since October 2006), the
Company's earnings from joint ventures, management fees and
corporate expense.
Station Casinos, Inc.
Reconciliation of GAAP Net Income and EPS
to Adjusted Earnings and EPS
(amounts in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2007 2006 2007 2006
-------- --------- --------- --------
Adjusted Earnings (a):
Net income $15,073 $ 26,793 $ 38,123 $67,915
Development expense 1,231 1,657 2,699 3,043
Preopening expenses 655 8,818 658 17,997
Management agreement/lease
termination 2,470 - 2,470 325
(Gain) loss on asset disposals (1,100) 42 (1,130) (506)
Other non-recurring costs 3,911 - 7,552 -
Management agreement/lease
termination at Green Valley
Ranch (50%) 1,073 - 1,073 -
Preopening at Green Valley
Ranch (50%) 33 - 33 -
Loss on early retirement of
debt at Green Valley Ranch
(50%) - - 538 -
-------- --------- --------- --------
Adjusted Earnings $23,346 $ 37,310 $ 52,016 $88,774
======== ========= ========= ========
Adjusted basic earnings per
common share(a):
Net income $ 0.28 $ 0.46 $ 0.70 $ 1.10
Development expense 0.02 0.03 0.05 0.05
Preopening expenses 0.01 0.14 0.01 0.29
Management agreement/lease
termination 0.05 - 0.05 0.01
Gain on asset disposals (0.02) - (0.02) (0.01)
Other non-recurring costs 0.07 - 0.14 -
Management agreement/lease
termination at Green Valley
Ranch (50%) 0.02 - 0.02 -
Preopening at Green Valley
Ranch (50%) - - - -
Loss on early retirement of
debt at Green Valley Ranch
(50%) - - 0.01 -
-------- --------- --------- --------
Adjusted basic earnings per
common share $ 0.43 $ 0.63 $ 0.96 $ 1.44
======== ========= ========= ========
Weighted average common shares
outstanding - basic 54,523 58,851 54,454 61,463
Adjusted diluted earnings per
common share (a):
Net income $ 0.27 $ 0.44 $ 0.68 $ 1.07
Development expense 0.02 0.03 0.05 0.05
Preopening expenses 0.01 0.14 0.01 0.28
Management agreement/lease
termination 0.04 - 0.04 0.01
Gain on asset disposals (0.02) - (0.02) (0.01)
Other non-recurring costs 0.07 - 0.13 -
Management agreement/lease
termination at Green Valley
Ranch (50%) 0.02 - 0.02 -
Preopening at Green Valley
Ranch (50%) - - - -
Loss on early retirement of
debt at Green Valley Ranch
(50%) - - 0.01 -
-------- --------- --------- --------
Adjusted diluted earnings per
common share $ 0.41 $ 0.61 $ 0.92 $ 1.40
======== ========= ========= ========
Weighted average common shares
outstanding - diluted 56,543 60,921 56,419 63,458
(a) All dollar and per share amounts are shown net of tax.
CONTACT: Station Casinos, Inc., Las Vegas
Thomas M. Friel, 800-544-2411 or 702-495-4210
Executive Vice President, Chief Accounting Officer and
Treasurer
or
Lori B. Nelson, 800-544-2411 or 702-495-4248
Director of Corporate Communications