Boyd Gaming Corporation (NYSE: BYD) today reported
financial results for the first quarter ended March 31, 2023.
Keith Smith, President and Chief Executive Officer of Boyd
Gaming, said: “The first quarter was an excellent start to 2023 for
our Company, as we again demonstrated the strength of our business
model and the resilience of our diversified portfolio. We continued
to see increased play from our core customers across the country,
as well as strong growth in our non-gaming operations. Our Nevada
segments delivered outstanding performances, as increased tourism
in southern Nevada and growing play from core customers helped
drive record first-quarter EBITDAR and operating margins in both
our Las Vegas Locals and Downtown Las Vegas segments. Our growth
initiatives also contributed to our record performance, as EBITDAR
from our online operations more than doubled year-over-year, Sky
River Casino continued to perform ahead of expectations, and recent
property investments helped drive incremental revenue and EBITDAR
growth. Our proven business model and experienced team are
delivering strong results for our shareholders, giving us
confidence in our continued ability to successfully navigate the
current economic environment.”
Boyd Gaming reported first-quarter 2023 revenues of $964.0
million, up 12.0% from $860.7 million in the first quarter of 2022.
The Company reported net income of $199.7 million, or $1.93 per
share, for the first quarter of 2023, compared to $162.9 million,
or $1.45 per share, for the year-ago period.
Total Adjusted EBITDAR(1) was $367.1 million in the first
quarter of 2023, increasing 8.4% from $338.8 million in the first
quarter of 2022. Adjusted Earnings(1) for the first quarter of 2023
were $177.4 million, or $1.71 per share, compared to $157.5
million, or $1.40 per share, for the same period in 2022.
(1)
See footnotes at the end of the release
for additional information relative to non-GAAP financial
measures.
Operations Review
During the quarter, the Company changed its segments to
separately report financial results from online and other
activities. Online includes contributions from the Company’s
sports-betting partnership with FanDuel, online market access
agreements with other third parties, and Boyd Interactive, the
Company’s online casino business. Managed & Other includes
management fees from Sky River Casino and results from Lattner
Entertainment, the Company’s Illinois distributed gaming business.
Results from Online and Managed & Other were previously
reported as part of the Midwest & South segment. Prior-year
results were recast in a Form 8-K filed on April 11, 2023.
The Las Vegas Locals segment reported record first-quarter
revenue, Adjusted EBITDAR and operating margins, benefitting from
increased destination business, double-digit growth in non-gaming
revenues, and continued strength in play from core customers. The
Downtown Las Vegas segment also set first-quarter records for
Adjusted EBITDAR and margins, driven by strong visitation
throughout the downtown area, continued growth in play from core
Hawaiian customers, and increased traffic at the Fremont following
its recent expansion. In the Midwest & South segment, core
customer play grew year-over-year; however, segment results were
impacted by continued softness at the Company’s properties in
Louisiana and Mississippi.
Online revenues and Adjusted EBITDAR more than doubled over
prior year, reflecting gains from recently launched sports-betting
operations in Ohio and Kansas, continued growth in existing
markets, and contributions from Boyd Interactive. Managed &
Other revenues and Adjusted EBITDAR were substantially higher than
prior year due to management fees from Sky River Casino, which has
performed ahead of expectations since opening in August 2022.
Dividend and Share Repurchase Program
Update
Boyd Gaming paid a quarterly cash dividend of $0.16 per share on
April 15, 2023, up from the quarterly dividend previously paid by
the Company of $0.15 per share.
As part of its ongoing share repurchase program, the Company
repurchased approximately $106 million in stock during the first
quarter of 2023. As of March 31, 2023, the Company had
approximately $133 million remaining under current repurchase
authorizations.
Balance Sheet Statistics
As of March 31, 2023, Boyd Gaming had cash on hand of $263.5
million, and total debt of $3.0 billion.
Conference Call
Information
Boyd Gaming will host a conference call to discuss its
first-quarter 2023 results today, April 25, at 5:00 p.m. Eastern.
The conference call number is (833) 470-1428, or (833)
950-0062 for Canadian callers and +1-929-526-1599 for international
callers. The conference call passcode is 496715. Please call
up to 15 minutes in advance to ensure you are connected prior to
the start of the call.
The conference call will also be available live on the Internet
at https://investors.boydgaming.com or
https://events.q4inc.com/attendee/331433343.
Following the call’s completion, a replay will be available by
dialing (866) 813-9403 (Canada (226) 828-7578, international +44
204 525 0658) on Tuesday, April 25 after the conclusion of the
call, and continuing through Tuesday, May 2. The conference number
for the replay will be 278606. The replay will also be available at
https://investors.boydgaming.com.
BOYD GAMING CORPORATION CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS (Unaudited) Three Months
Ended March 31, (In thousands, except per share
data)
2023
2022
Revenues Gaming
$
664,308
$
667,954
Food & beverage
71,584
63,743
Room
50,065
42,409
Online
122,863
55,076
Management fee
20,030
—
Other
35,116
31,561
Total revenues
963,966
860,743
Operating costs and expenses Gaming
249,795
250,042
Food & beverage
59,329
53,934
Room
17,120
15,990
Online
102,005
45,989
Other
11,567
10,936
Selling, general and administrative
100,319
92,047
Master lease rent expense (a)
26,828
26,306
Maintenance and utilities
36,026
32,890
Depreciation and amortization
61,560
62,478
Corporate expense
28,655
29,004
Project development, preopening and writedowns
(18,874
)
(10,029
)
Impairment of assets
4,537
—
Other operating items, net
220
98
Total operating costs and expenses
679,087
609,685
Operating income
284,879
251,058
Other expense (income) Interest income
(18,145
)
(420
)
Interest expense, net of amounts capitalized
43,866
37,658
Loss on early extinguishments and modifications of debt
—
3,300
Other, net
104
(253
)
Total other expense, net
25,825
40,285
Income before income taxes
259,054
210,773
Income tax provision
(59,323
)
(47,845
)
Net income
$
199,731
$
162,928
Basic net income per common share
$
1.93
$
1.45
Weighted average basic shares outstanding
103,620
112,195
Diluted net income per common share
$
1.93
$
1.45
Weighted average diluted shares outstanding
103,672
112,358
(a) Rent expense incurred by those properties subject to a
master lease with a real estate investment trust.
BOYD GAMING
CORPORATION SUPPLEMENTAL INFORMATION Reconciliation
of Adjusted EBITDA to Net Income (Unaudited)
Three Months Ended March 31, (In thousands)
2023
2022
Total Revenues by Segment Las Vegas Locals
$
240,270
$
227,562
Downtown Las Vegas
56,557
49,484
Midwest & South
512,173
517,061
Online
122,863
55,076
Managed & Other
32,103
11,560
Total revenues
$
963,966
$
860,743
Adjusted EBITDAR by Segment Las Vegas Locals
$
126,160
$
118,695
Downtown Las Vegas
22,367
18,389
Midwest & South
198,684
212,200
Online
20,623
8,888
Managed & Other
21,551
2,393
Property Adjusted EBITDAR
389,385
360,565
Corporate expense, net of share-based compensation expense (a)
(22,239
)
(21,729
)
Adjusted EBITDAR
367,146
338,836
Master lease rent expense (b)
(26,828
)
(26,306
)
Adjusted EBITDA
340,318
312,530
Other operating costs and expenses Deferred rent
177
191
Depreciation and amortization
61,560
62,478
Share-based compensation expense
7,819
8,734
Project development, preopening and writedowns
(18,874
)
(10,029
)
Impairment of assets
4,537
—
Other operating items, net
220
98
Total other operating costs and expenses
55,439
61,472
Operating income
284,879
251,058
Other expense (income) Interest income
(18,145
)
(420
)
Interest expense, net of amounts capitalized
43,866
37,658
Loss on early extinguishments and modifications of debt
—
3,300
Other, net
104
(253
)
Total other expense, net
25,825
40,285
Income before income taxes
259,054
210,773
Income tax provision
(59,323
)
(47,845
)
Net income
$
199,731
$
162,928
(a) Reconciliation of corporate expense:
Three
Months Ended March 31, (In thousands)
2023
2022
Corporate expense as reported on Condensed Consolidated
Statements of Operations
$
28,655
$
29,004
Corporate share-based compensation expense
(6,416
)
(7,275
)
Corporate expense, net, as reported on the above table
$
22,239
$
21,729
(b) Rent expense incurred by those properties subject to a
master lease with a real estate investment trust.
BOYD GAMING
CORPORATION
SUPPLEMENTAL INFORMATION Reconciliation of Net Income to
Adjusted Earnings and Net Income Per Share to Adjusted
Earnings Per Share (Unaudited)
Three Months Ended
March 31,
(In thousands, except per share data)
2023
2022
Net income
$
199,731
$
162,928
Pretax adjustments: Project development, preopening
and writedowns
(18,874
)
(10,029
)
Impairment of assets
4,537
—
Other operating items, net
220
98
Loss on early extinguishments and modifications of debt
—
3,300
Interest income (a)
(14,315
)
—
Other, net
104
(253
)
Total adjustments
(28,328
)
(6,884
)
Income tax effect for above adjustments
6,030
1,495
Adjusted earnings
$
177,433
$
157,539
Net income per share, diluted
$
1.93
$
1.45
Pretax adjustments: Project development, preopening and
writedowns
(0.18
)
(0.09
)
Impairment of assets
0.04
—
Other operating items, net
—
—
Loss on early extinguishments and modifications of debt
—
0.03
Interest income (a)
(0.14
)
—
Other, net
—
—
Total adjustments
(0.28
)
(0.06
)
Income tax effect for above adjustments
0.06
0.01
Adjusted earnings per share, diluted
$
1.71
$
1.40
Weighted average diluted shares outstanding
103,672
112,358
(a) Adjustment to the expected losses for interest on note
receivable.
Non-GAAP Financial
Measures
Our financial presentations include the following non-GAAP
financial measures:
- EBITDA: earnings before interest, taxes, depreciation
and amortization,
- Adjusted EBITDA: EBITDA adjusted for deferred rent,
share-based compensation expense, project development, preopening
and writedown expenses, impairments of assets, other operating
items, net, gain or loss on early extinguishments and modifications
of debt and other items, net,
- EBITDAR: EBITDA further adjusted for rent expense
associated with master leases with a real estate investment
trust,
- Adjusted EBITDAR: Adjusted EBITDA further adjusted for
rent expense associated with master leases with a real estate
investment trust,
- Adjusted Earnings: net income before project
development, preopening and writedown expenses, impairments of
assets, other operating items, net, gain or loss on early
extinguishments and modifications of debt, adjustments to the
expected losses for interest on note receivable and other
non-recurring adjustments, net, and,
- Adjusted Earnings Per Share (Adjusted EPS): Adjusted
Earnings divided by weighted average diluted shares
outstanding.
Collectively, we refer to these and other non-GAAP financial
measures as the “Non-GAAP Measures”.
The Non-GAAP Measures are commonly used measures of performance
in our industry that we believe, when considered with measures
calculated in accordance with accounting principles generally
accepted in the United States (GAAP), provide our investors with a
more complete understanding of our operating results and
facilitates comparisons between us and our competitors. We provide
this information to investors to enable them to perform comparisons
of our past, present and future operating results and as a means to
evaluate the results of core on-going operations. We have
historically reported these measures to our investors and believe
that the continued inclusion of the Non-GAAP Measures provides
consistency in our financial reporting. We also believe this
information is useful to investors in allowing greater transparency
related to significant measures used by our management in their
financial and operational decision-making, their evaluation of
total company and individual property performance, in the
evaluation of incentive compensation and in the annual budget
process. Management also uses Non-GAAP Measures in the evaluation
of potential acquisitions and dispositions. We believe these
measures continue to be used by investors in their assessment of
our operating performance and the valuation of our company.
The use of Non-GAAP Measures has certain limitations. Our
presentation of the Non-GAAP Measures may be different from the
presentation used by other companies and therefore comparability
may be limited. While excluded from certain of the Non-GAAP
Measures, depreciation and amortization expense, interest expense,
income taxes and other items have been and will be incurred. Each
of these items should also be considered in the overall evaluation
of our results. Additionally, the Non-GAAP Measures do not consider
capital expenditures and other investing activities and should not
be considered as a measure of our liquidity. We compensate for
these limitations by providing the relevant disclosure of our
depreciation and amortization, interest and income taxes, capital
expenditures and other items both in our reconciliations to the
historical GAAP financial measures and in our consolidated
financial statements, all of which should be considered when
evaluating our performance. We do not provide a reconciliation of
forward-looking Non-GAAP Measures to the corresponding
forward-looking GAAP measure due to our inability to project
special charges and certain expenses.
The Non-GAAP Measures are to be used in addition to and in
conjunction with results presented in accordance with GAAP. The
Non-GAAP Measures should not be considered as an alternative to net
income, operating income, or any other operating performance
measure prescribed by GAAP, nor should these measures be relied
upon to the exclusion of GAAP financial measures. The Non-GAAP
Measures reflect additional ways of viewing our operations that we
believe, when viewed with our GAAP results and the reconciliations
to the corresponding historical GAAP financial measures, provide a
more complete understanding of factors and trends affecting our
business than could be obtained absent this disclosure. Management
strongly encourages investors to review our financial information
in its entirety and not to rely on a single financial measure.
Forward-looking Statements and Company
Information
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Such statements contain words such as “may,” “will,”
“might,” “expect,” “believe,” “anticipate,” “could,” “would,”
“estimate,” “continue,” “pursue,” or the negative thereof or
comparable terminology, and may include (without limitation)
information regarding the Company's expectations, goals or
intentions regarding future performance. In addition,
forward-looking statements in this press release, as well as in our
earnings conference call remarks, include statements regarding
continued growth in visitation and spending among the Company’s
core customers, the Company’s views that it will be able to drive
continued revenue and EBITDAR growth throughout its business, the
impacts of COVID-19 on the Company, the Company’s operating
strategy, the Company’s confidence in its long-term growth
trajectory, and the Company’s plans with respect to share
repurchases and returning capital to shareholders. Forward-looking
statements involve certain risks and uncertainties, and actual
results may differ materially from those discussed in any such
statement. Risks also include fluctuations in the Company's
operating results; the political climate and its effects on
consumer spending and its impact on the travel industry; the state
of the economy and its effect on consumer spending; the impact and
effects of the local economies in the markets where the Company
operates; the receipt of legislative, and other state, federal and
local approvals for the Company's development projects;
developments in legalization of online gaming, the Company's
ability to operate online gaming profitably, or otherwise; consumer
reaction to fluctuations in the stock market and economic factors;
the effects of events adversely impacting the economy or the
regions from which the Company draws a significant percentage of
its customers; competition; litigation; financial community and
rating agency perceptions of the Company; changes in laws and
regulations, weather, regulation, economic, credit and capital
market conditions; and the effects of war, terrorist or similar
activity. Additional factors that could cause actual results to
differ are discussed under the heading “Risk Factors” and in other
sections of the Company's Annual Report on Form 10-K, its Quarterly
Reports on Form 10-Q, and in the Company's other current and
periodic reports filed from time to time with the SEC. All
forward-looking statements in this press release are made as of the
date hereof, based on information available to the Company as of
the date hereof, and the Company assumes no obligation to update
any forward-looking statement.
About Boyd Gaming
Founded in 1975, Boyd Gaming Corporation (NYSE: BYD) is a
leading geographically diversified operator of 28 gaming
entertainment properties in 10 states, manager of a tribal casino
in northern California, and owner and operator of Boyd Interactive,
a B2B and B2C online casino gaming business. The Company is also a
strategic partner and 5% equity owner of FanDuel Group, the
nation's leading sports-betting operator. With one of the most
experienced leadership teams in the casino industry, Boyd Gaming
prides itself on offering guests an outstanding entertainment
experience and memorable customer service. Through a long-standing
company philosophy called Caring the Boyd Way, Boyd Gaming is
committed to advancing Environmental, Social and Corporate
Governance (ESG) initiatives that positively impact the Company's
stakeholders and communities. For additional Company information
and press releases, visit https://investors.boydgaming.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230425005129/en/
Financial Contact: Josh Hirsberg (702) 792-7234
joshhirsberg@boydgaming.com
Media Contact: David Strow (702) 792-7386
davidstrow@boydgaming.com
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