Boyd Gaming Corporation (NYSE: BYD) today reported
financial results for the second quarter ended June 30, 2023.
Keith Smith, President and Chief Executive Officer of Boyd
Gaming, said: “During the second quarter we once again proved our
ability to deliver solid results in a challenging environment,
thanks to our effective operating model, strong management teams
and successful growth initiatives. We maintained our focus on
building loyalty among our core customers while our operating teams
continued to effectively manage expenses throughout the business,
achieving strong companywide margins consistent with recent
quarters. Property operating results were impacted by difficult
year-over-year comparisons early in the quarter, while overall
results were strengthened by our key growth initiatives, including
online gaming and Sky River Casino. We remain confident in the
overall direction of our business and our ability to create
long-term value for our shareholders.”
Boyd Gaming reported second-quarter 2023 revenues of $917.0
million, up from $894.5 million in the second quarter of 2022. The
Company reported net income of $192.5 million, or $1.89 per share,
for the second quarter of 2023, increasing from $146.8 million, or
$1.33 per share, for the year-ago period.
Total Adjusted EBITDAR(1) was $351.4 million in the second
quarter of 2023, compared to $353.9 million in the second quarter
of 2022. Adjusted Earnings(1) for the second quarter of 2023 were
$161.3 million, or $1.58 per share, compared to $163.5 million, or
$1.48 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
In the Las Vegas Locals segment, core customer trends remained
solid while operating margins once again exceeded 50%; however,
revenues and Adjusted EBITDAR declined year-over-year due to
difficult comparisons to prior year. The Downtown Las Vegas segment
continued to benefit from growth in visitation throughout the
downtown area, while second-quarter results were impacted by
construction disruption at both the Fremont and Main Street
Station. In the Midwest & South segment, while revenue and
Adjusted EBITDAR were down year-over-year, both grew sequentially
over the first quarter of 2023, as business trends continued to
improve.
The Company’s Online segment benefitted from strong results at
FanDuel’s operations in Ohio and Pennsylvania, as well as the
addition of Boyd Interactive. Results in our Managed & Other
business were driven by continued strength at 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
July 15, 2023, as previously announced.
As part of its ongoing share repurchase program, the Company
repurchased $100 million in stock during the second quarter of
2023. As of June 30, 2023, the Company had approximately $533
million remaining under current repurchase authorizations.
Balance Sheet Statistics
As of June 30, 2023, Boyd Gaming had cash on hand of $260.8
million, and total debt of $3.0 billion.
Conference Call
Information
Boyd Gaming will host a conference call to discuss its
second-quarter 2023 results today, July 27, at 5:00 p.m. Eastern.
The conference call number is (888) 886-7786, passcode
91078497. 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/634511924.
Following the call’s completion, a replay will be available by
dialing (877) 674-7070 on Thursday, July 27, continuing through
Thursday, August 3. The conference number for the replay will be
078497. The replay will also be available at
https://investors.boydgaming.com.
BOYD GAMING CORPORATION CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS (Unaudited) Three Months
Ended Six Months Ended June 30, June 30,
(In thousands, except per share data)
2023
2022
2023
2022
Revenues Gaming
$
660,729
$
684,925
$
1,325,037
$
1,352,879
Food & beverage
70,366
70,299
141,950
134,042
Room
49,761
49,904
99,826
92,313
Online
85,002
56,774
207,865
111,850
Management fee
17,446
—
37,476
—
Other
33,646
32,548
68,762
64,109
Total revenues
916,950
894,450
1,880,916
1,755,193
Operating costs and expenses Gaming
249,999
254,500
499,794
504,542
Food & beverage
58,622
57,456
117,951
111,390
Room
18,580
17,285
35,700
33,275
Online
71,393
48,899
173,398
94,888
Other
11,003
11,678
22,570
22,614
Selling, general and administrative
99,070
95,662
199,389
187,709
Master lease rent expense (a)
27,099
26,654
53,927
52,960
Maintenance and utilities
37,591
34,517
73,617
67,407
Depreciation and amortization
62,220
66,757
123,780
129,235
Corporate expense
31,705
34,872
60,360
63,876
Project development, preopening and writedowns
5,201
912
(13,673
)
(9,117
)
Impairment of assets
—
—
4,537
—
Other operating items, net
438
188
658
286
Total operating costs and expenses
672,921
649,380
1,352,008
1,259,065
Operating income
244,029
245,070
528,908
496,128
Other expense (income) Interest income
(2,715
)
(483
)
(20,860
)
(903
)
Interest expense, net of amounts capitalized
42,715
36,466
86,581
74,124
Loss on early extinguishments and modifications of debt
—
16,509
—
19,809
Other, net
522
3,750
626
3,497
Total other expense, net
40,522
56,242
66,347
96,527
Income before income taxes
203,507
188,828
462,561
399,601
Income tax provision
(11,053
)
(42,065
)
(70,376
)
(89,910
)
Net income
$
192,454
$
146,763
$
392,185
$
309,691
Basic net income per common share
$
1.89
$
1.33
$
3.81
$
2.79
Weighted average basic shares outstanding
102,025
110,118
102,818
111,151
Diluted net income per common share
$
1.89
$
1.33
$
3.81
$
2.78
Weighted average diluted shares outstanding
102,071
110,259
102,867
111,303
(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 Six Months Ended June 30,
June 30, (In thousands)
2023
2022
2023
2022
Total Revenues by Segment Las Vegas Locals
$
230,940
$
236,461
$
471,210
$
464,023
Downtown Las Vegas
52,991
53,899
109,548
103,383
Midwest & South
518,846
534,937
1,031,019
1,051,998
Online
85,002
56,774
207,865
111,850
Managed & Other
29,171
12,379
61,274
23,939
Total revenues
$
916,950
$
894,450
$
1,880,916
$
1,755,193
Adjusted EBITDAR by Segment Las Vegas Locals
$
118,395
$
125,334
$
244,555
$
244,029
Downtown Las Vegas
19,652
22,123
42,019
40,512
Midwest & South
201,833
218,859
400,517
431,059
Online
13,400
7,678
34,023
16,566
Managed & Other
19,546
2,512
41,097
4,905
Corporate expense, net of share-based compensation expense (a)
(21,464
)
(22,633
)
(43,703
)
(44,362
)
Adjusted EBITDAR
351,362
353,873
718,508
692,709
Master lease rent expense (b)
(27,099
)
(26,654
)
(53,927
)
(52,960
)
Adjusted EBITDA
324,263
327,219
664,581
639,749
Other operating costs and expenses Deferred rent
177
192
354
384
Depreciation and amortization
62,220
66,757
123,780
129,235
Share-based compensation expense
12,198
14,100
20,017
22,833
Project development, preopening and writedowns
5,201
912
(13,673
)
(9,117
)
Impairment of assets
—
—
4,537
—
Other operating items, net
438
188
658
286
Total other operating costs and expenses
80,234
82,149
135,673
143,621
Operating income
244,029
245,070
528,908
496,128
Other expense (income) Interest income
(2,715
)
(483
)
(20,860
)
(903
)
Interest expense, net of amounts capitalized
42,715
36,466
86,581
74,124
Loss on early extinguishments and modifications of debt
—
16,509
—
19,809
Other, net
522
3,750
626
3,497
Total other expense, net
40,522
56,242
66,347
96,527
Income before income taxes
203,507
188,828
462,561
399,601
Income tax provision
(11,053
)
(42,065
)
(70,376
)
(89,910
)
Net income
$
192,454
$
146,763
$
392,185
$
309,691
(a) Reconciliation of corporate expense:
Three
Months Ended Six Months Ended June 30, June
30, (In thousands)
2023
2022
2023
2022
Corporate expense as reported on Condensed Consolidated
Statements of Operations
$
31,705
$
34,872
$
60,360
$
63,876
Corporate share-based compensation expense
(10,241
)
(12,239
)
(16,657
)
(19,514
)
Corporate expense, net, as reported on the above table
$
21,464
$
22,633
$
43,703
$
44,362
(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 Six Months Ended June 30,
June 30, (In thousands, except per share data)
2023
2022
2023
2022
Net income
$
192,454
$
146,763
$
392,185
$
309,691
Pretax adjustments: Project development, preopening and
writedowns
5,201
912
(13,673
)
(9,117
)
Impairment of assets
—
—
4,537
—
Other operating items, net
438
188
658
286
Loss on early extinguishments and modifications of debt
—
16,509
—
19,809
Interest income (a)
—
—
(14,315
)
—
Other, net
522
3,750
626
3,497
Total adjustments
6,161
21,359
(22,167
)
14,475
Income tax effect for above adjustments
(1,418
)
(4,591
)
4,612
(3,096
)
Impact of tax valuation allowance
(35,856
)
—
(35,856
)
—
Adjusted earnings
$
161,341
$
163,531
$
338,774
$
321,070
Net income per share, diluted
$
1.89
$
1.33
$
3.81
$
2.78
Pretax adjustments: Project development, preopening and
writedowns
0.05
0.01
(0.13
)
(0.08
)
Impairment of assets
—
—
0.04
—
Other operating items, net
—
—
0.01
—
Loss on early extinguishments and modifications of debt
—
0.15
—
0.18
Interest income (a)
—
—
(0.14
)
—
Other, net
0.01
0.03
0.01
0.03
Total adjustments
0.06
0.19
(0.21
)
0.13
Income tax effect for above adjustments
(0.02
)
(0.04
)
0.04
(0.03
)
Impact of tax valuation allowance
(0.35
)
—
(0.35
)
—
Adjusted earnings per share, diluted
$
1.58
$
1.48
$
3.29
$
2.88
Weighted average diluted shares outstanding
102,071
110,259
102,867
111,303
(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/20230727778068/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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