Boyd Gaming Corporation (NYSE: BYD) today reported
financial results for the third quarter ended September 30,
2023.
Keith Smith, President and Chief Executive Officer of Boyd
Gaming, said: “Our third-quarter results reflect the value of our
diversified business model. Continued strength in play from our
core customers, strong results from Sky River and online gaming,
and growth in our non-gaming business all contributed to a solid
performance in the quarter. However, quarterly results were
impacted by declines in play from our retail customers and ongoing
cost pressures, both related to the challenging economic
environment.”
Smith continued: “During the quarter we continued to leverage
our strong free cash flow to pursue a balanced capital allocation
strategy that is creating significant value for our shareholders.
We demonstrated the growth potential of our property reinvestment
initiative, delivering record quarterly results at the Fremont
following its recent expansion project. And we remain committed to
our capital return program, having returned over $1 billion to
shareholders in the last two years through our ongoing share
repurchases and dividends.”
Boyd Gaming reported third-quarter 2023 revenues of $903.2
million, up from $877.3 million in the third quarter of 2022. The
Company reported net income of $135.2 million, or $1.34 per share,
for the third quarter of 2023, versus $157.0 million, or $1.46 per
share, for the year-ago period.
Total Adjusted EBITDAR(1) was $320.8 million in the third
quarter of 2023, compared to $337.7 million in the third quarter of
2022. Adjusted Earnings(1) for the third quarter of 2023 were
$137.3 million, or $1.36 per share, versus $159.2 million, or $1.48
per share, for the same period in 2022.
- See footnotes at the end of the release for additional
information relative to non-GAAP financial measures
Operations Review
In the Company’s property operating segments, core customer play
increased on both a sequential and year-over-year basis, and hotel
and food & beverage revenues rose year-over-year. These gains
were offset by year-over-year softness in retail play, though
business volumes from retail customers have remained consistent
since late last year across all segments. Adjusted EBITDAR and
margin performances reflected higher labor, utilities and property
insurance costs, with Companywide property-level operating margins
of 40%.
The Company’s Online segment benefitted from strong results from
FanDuel’s operations, as well as the addition of Boyd Interactive,
acquired by the Company in November 2022. Strong revenue and
Adjusted EBITDAR growth in our Managed & Other business was
driven by management fees from Sky River Casino, which opened in
August 2022.
Dividend and Share Repurchase Program
Update
Boyd Gaming paid a quarterly cash dividend of $0.16 per share on
October 15, 2023, as previously announced.
As part of its ongoing share repurchase program, the Company
repurchased $106 million in stock during the third quarter of 2023.
As of September 30, 2023, the Company had approximately $426
million remaining under current repurchase authorizations.
Balance Sheet Statistics
As of September 30, 2023, Boyd Gaming had cash on hand of $269.2
million and total debt of $2.9 billion.
Conference Call
Information
Boyd Gaming will host a conference call to discuss its
third-quarter 2023 results today, October 24, at 5:00 p.m. Eastern.
The conference call number is (888) 259-6580, passcode
60390005. 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://events.q4inc.com/attendee/946960080.
Following the call’s completion, a replay will be available by
dialing (877) 674-7070 on Tuesday, October 24, continuing through
Tuesday, October 31. The conference number for the replay will be
390005. The replay will also be available at
https://investors.boydgaming.com.
BOYD GAMING CORPORATION CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS (Unaudited) Three Months
Ended Nine Months Ended September 30,
September 30, (In thousands, except per share data)
2023
2022
2023
2022
Revenues Gaming
$
641,168
$
667,975
$
1,966,205
$
2,020,854
Food & beverage
70,986
67,792
212,936
201,834
Room
48,720
46,672
148,546
138,985
Online
90,288
52,353
298,153
164,203
Management fee
17,153
10,159
54,629
10,159
Other
34,849
32,312
103,611
96,421
Total revenues
903,164
877,263
2,784,080
2,632,456
Operating costs and expenses Gaming
251,536
251,814
751,330
756,356
Food & beverage
59,672
58,502
177,623
169,892
Room
19,180
17,783
54,880
51,058
Online
79,080
45,827
252,478
140,715
Other
11,549
11,370
34,119
33,984
Selling, general and administrative
99,944
92,950
299,333
280,659
Master lease rent expense (a)
27,236
26,828
81,163
79,788
Maintenance and utilities
41,720
40,789
115,337
108,196
Depreciation and amortization
64,797
64,956
188,577
194,191
Corporate expense
27,872
26,375
88,232
90,251
Project development, preopening and writedowns
2,405
9,645
(11,268
)
528
Impairment of assets
—
5,575
4,537
5,575
Other operating items, net
301
(12,610
)
959
(12,324
)
Total operating costs and expenses
685,292
639,804
2,037,300
1,898,869
Operating income
217,872
237,459
746,780
733,587
Other expense (income) Interest income
(1,585
)
(2,073
)
(22,445
)
(2,976
)
Interest expense, net of amounts capitalized
42,352
36,001
128,933
110,125
Loss on early extinguishments and modifications of debt
—
—
—
19,809
Other, net
(30
)
170
596
3,667
Total other expense, net
40,737
34,098
107,084
130,625
Income before income taxes
177,135
203,361
639,696
602,962
Income tax provision
(41,902
)
(46,359
)
(112,278
)
(136,269
)
Net income
$
135,233
$
157,002
$
527,418
$
466,693
Basic net income per common share
$
1.34
$
1.46
$
5.16
$
4.24
Weighted average basic shares outstanding
100,804
107,743
102,139
110,002
Diluted net income per common share
$
1.34
$
1.46
$
5.16
$
4.24
Weighted average diluted shares outstanding
100,850
107,840
102,187
110,135
(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 Nine Months Ended September
30, September 30, (In thousands)
2023
2022
2023
2022
Total Revenues by Segment Las Vegas Locals
$
221,833
$
225,791
$
693,043
$
689,814
Downtown Las Vegas
49,545
49,507
159,093
152,890
Midwest & South
513,028
527,536
1,544,047
1,579,534
Online
90,288
52,353
298,153
164,203
Managed & Other
28,470
22,076
89,744
46,015
Total revenues
$
903,164
$
877,263
$
2,784,080
$
2,632,456
Adjusted EBITDAR by Segment Las Vegas Locals
$
105,985
$
111,733
$
350,540
$
355,762
Downtown Las Vegas
15,857
17,704
57,876
58,216
Midwest & South
190,588
211,292
591,105
642,351
Online
11,005
6,350
45,028
22,916
Managed & Other
18,997
12,553
60,094
17,458
Corporate expense, net of share-based compensation expense (a)
(21,611
)
(21,934
)
(65,314
)
(66,296
)
Adjusted EBITDAR
320,821
337,698
1,039,329
1,030,407
Master lease rent expense (b)
(27,236
)
(26,828
)
(81,163
)
(79,788
)
Adjusted EBITDA
293,585
310,870
958,166
950,619
Other operating costs and expenses Deferred rent
177
192
531
576
Depreciation and amortization
64,797
64,956
188,577
194,191
Share-based compensation expense
8,033
5,653
28,050
28,486
Project development, preopening and writedowns
2,405
9,645
(11,268
)
528
Impairment of assets
—
5,575
4,537
5,575
Other operating items, net
301
(12,610
)
959
(12,324
)
Total other operating costs and expenses
75,713
73,411
211,386
217,032
Operating income
217,872
237,459
746,780
733,587
Other expense (income) Interest income
(1,585
)
(2,073
)
(22,445
)
(2,976
)
Interest expense, net of amounts capitalized
42,352
36,001
128,933
110,125
Loss on early extinguishments and modifications of debt
—
—
—
19,809
Other, net
(30
)
170
596
3,667
Total other expense, net
40,737
34,098
107,084
130,625
Income before income taxes
177,135
203,361
639,696
602,962
Income tax provision
(41,902
)
(46,359
)
(112,278
)
(136,269
)
Net income
$
135,233
$
157,002
$
527,418
$
466,693
(a) Reconciliation of corporate expense:
Three
Months Ended Nine Months Ended September 30,
September 30, (In thousands)
2023
2022
2023
2022
Corporate expense as reported on Condensed Consolidated
Statements of Operations
$
27,872
$
26,375
$
88,232
$
90,251
Corporate share-based compensation expense
(6,261
)
(4,441
)
(22,918
)
(23,955
)
Corporate expense, net, as reported on the above table
$
21,611
$
21,934
$
65,314
$
66,296
(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 Nine Months Ended September
30, September 30, (In thousands, except per share
data)
2023
2022
2023
2022
Net income
$
135,233
$
157,002
$
527,418
$
466,693
Pretax adjustments: Project development, preopening and
writedowns
2,405
9,645
(11,268
)
528
Impairment of assets
—
5,575
4,537
5,575
Other operating items, net
301
(12,610
)
959
(12,324
)
Loss on early extinguishments and modifications of debt
—
—
—
19,809
Interest income (a)
—
—
(14,315
)
—
Other, net
(30
)
170
596
3,667
Total adjustments
2,676
2,780
(19,491
)
17,255
Income tax effect for above adjustments
(629
)
(616
)
3,983
(3,712
)
Impact of tax valuation allowance
—
—
(35,856
)
—
Adjusted earnings
$
137,280
$
159,166
$
476,054
$
480,236
Net income per share, diluted
$
1.34
$
1.46
$
5.16
$
4.24
Pretax adjustments: Project development, preopening and
writedowns
0.03
0.09
(0.11
)
—
Impairment of assets
—
0.05
0.04
0.05
Other operating items, net
—
(0.11
)
0.01
(0.11
)
Loss on early extinguishments and modifications of debt
—
—
—
0.18
Interest income (a)
—
—
(0.14
)
—
Other, net
—
—
0.01
0.03
Total adjustments
0.03
0.03
(0.19
)
0.15
Income tax effect for above adjustments
(0.01
)
(0.01
)
0.04
(0.03
)
Impact of tax valuation allowance
—
—
(0.35
)
—
Adjusted earnings per share, diluted
$
1.36
$
1.48
$
4.66
$
4.36
Weighted average diluted shares outstanding
100,850
107,840
102,187
110,135
(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, the release of
valuation allowances on deferred tax assets 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/20231024123348/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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