Boyd Gaming Reports Second-Quarter Results

LAS VEGAS, July 30, 2013 -  Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the second quarter ended June 30, 2013.  

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Boyd Gaming reported net revenues of $738.7 million, an increase of 20.3% from $614.1 million during the same quarter in 2012.  Total Adjusted EBITDA (1)  grew 40.7% to $160.2 million, compared to $113.8 million in the year-ago quarter.  Results reflect the addition of the operations of Peninsula Gaming, LLC, which was acquired by the Company on November 20, 2012.

Boyd Gaming's wholly-owned business reported second-quarter 2013 net revenues of $565.9 million, up 29.0% from $438.7 million in the second quarter of 2012.  Wholly-owned Adjusted EBITDA was $132.3 million, an increase of 59.3% from $83.1 million in the second quarter of 2012.  Borgata, the Company's 50% joint venture, reported second-quarter 2013 net revenues of $172.9 million, compared to $175.4 million in the year-ago period, while Adjusted EBITDA was $27.8 million, down from $30.7 million in the second quarter of 2012. 

Adjusted Earnings (1) for the second quarter 2013 reflect a loss of $0.1 million, breakeven on a per-share basis, compared to income of $4.2 million, or $0.05 per share, for the same period in 2012.   The calculations of Adjusted Earnings and Adjusted Earnings per share are presented in a table at the end of this press release.

During the second quarter of 2013, the Company completed the sale of Dania Jai-Alai, realizing a pretax gain of $18.9 million.  As a result of the sale, both the gain and the historical operating results of the Dania business are now presented as discontinued operations.  For the second quarter of 2013, the discontinued operations reported income, net of tax, of $11.8 million, as compared to an after-tax loss of $0.7 million in the second quarter of 2012.

On a GAAP basis, and including the discontinued operations, the Company reported net income of $11.6 million, or $0.13 per share, for the second quarter 2013, compared to net income of $1.0 million, or $0.01 per share, for the year-ago period.

"We are making significant progress toward our strategic goals of strengthening our balance sheet and positioning ourselves for continued growth," said Keith Smith, President and Chief Executive Officer of Boyd Gaming. "Operating efficiencies and effective marketing programs drove solid growth across our Las Vegas properties.  And Borgata posted year-over-year gains as well, after factoring out the impact of a tax charge.  Our Company is moving in the right direction, and I am optimistic about the outlook for our business."

(1)   See footnotes at the end of the release for additional information relative to non-GAAP financial measures.

Year-To-Date Results

For the six months ended June 30, 2013, Boyd Gaming reported net revenues of $1.47 billion, an increase of 18.3% from the $1.25 billion in net revenues reported in the year-ago period.  Total Adjusted EBITDA was $323.7 million, up 30.7% from $247.6 million in the prior year.

During the six months ended June 30, 2013, the Company's wholly-owned operations generated net revenues of $1.14 billion, up 27.0% from $894.2 million in the year-ago period, while wholly-owned Adjusted EBITDA increased 50.2% to $267.4 million, compared to $178.0 million in the comparable period 2012.  Borgata reported net revenues of $338.5 million and Adjusted EBITDA of $56.3 million during the six-month period ended June 30, 2013, compared to $351.6 million in revenues and $69.6 million in Adjusted EBITDA in the year-ago period.

Adjusted Earnings for the six months ended June 30, 2013, were $1.3 million, or $0.01 per share, compared to $13.2 million, or $0.15 per share, during the six months ended June 30, 2012.

The discontinued operations reported income, net of tax, of $10.8 million for the six months ended June 30, 2013, as compared to an after-tax loss of $1.5 million in the first six months of 2012.

On a GAAP basis, and including the discontinued operations, the Company reported net income of $4.3 million, or $0.05 per share.  By comparison, Boyd Gaming reported net income of $6.8 million, or $0.08 per share, for the six months ended June 30, 2012.

Key Operations Review

Las Vegas Locals

In the Las Vegas Locals segment, second-quarter 2013 net revenues were $149.7 million, up slightly from $149.0 million in the second quarter of 2012.  Second-quarter 2013 Adjusted EBITDA rose 12.1% to $38.7 million, compared to $34.5 million in the year-ago period, as EBITDA grew for the second consecutive quarter.  EBITDA margins improved by nearly 270 basis points due to refinements in our operations.  We also continued to benefit from new slot marketing initiatives, which drove increased gaming revenue in the Locals segment.

Downtown

The Downtown Las Vegas region reported net revenues of $56.1 million for the second quarter of 2013, a slight increase from $55.9 million in the year-ago period. Adjusted EBITDA grew 14.7% to $9.3 million, compared to $8.1 million in the second quarter of 2012.  Results reflect improved business volumes driven by increased visitor traffic along Fremont Street, as well as new marketing programs directed to Hawaiian customers.  We also posted an improved operating performance at our charter service.

Midwest and South; Peninsula

In the Midwest and South segment, net revenues were $224.3 million, compared to $233.7 million in the second quarter of 2012.  Adjusted EBITDA was $48.6 million versus $51.0 million in the year-ago period. 

During the second quarter 2013, the Peninsula segment contributed net revenues of $135.8 million, and Adjusted EBITDA of $48.3 million. 

Revenues were affected by increased competition throughout the region, particularly at our Gulf Coast properties; however, we were able to mitigate the impact to EBITDA through increased efficiencies in our operations.  Despite the impact of severe weather, Kansas Star achieved significant revenue growth during the quarter, driven by new non-gaming amenities.

Borgata

Borgata, the Company's 50% joint venture, reported second-quarter 2013 net revenues of $172.9 million, compared to $175.4 million in the year-ago period. Adjusted EBITDA was $27.8 million, down from $30.7 million in the second quarter of 2012.  The decline in EBITDA was attributable to a $4.3 million property tax charge for the first six months of 2013 that was recorded in the second quarter.  Absent this charge, Borgata would have generated EBITDA of $32.1 million ? up 4.5% over the prior year ? due to greater efficiencies throughout the business, including more effective marketing programs.

Conference Call Information

Boyd Gaming will host its second-quarter 2013 conference call today, July 30, at 12:00 p.m. Eastern, on which the Company will provide guidance for the third quarter 2013.  The conference call number is (888) 317-6003, passcode 6502739.  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 www.boydgaming.com, or: http://www.videonewswire.com/event.asp?id=95174

Following the call's completion, a replay will be available by dialing (877) 344-7529 today, July 30, beginning at 2:00 p.m. Eastern and continuing through Tuesday, August 6, at 9 a.m. Eastern.  The conference number for the replay will be 10031889.  The replay will also be available on the Internet at www.boydgaming.com.