Boyd Gaming (BYD)2019-11-07 21:11Financial Performance - Total revenues increased by $207.4 million, or 33.9%, for the three months ended September 30, 2019, primarily due to the Midwest & South segment's increase of $201.4 million [172]. - Operating income rose by $43.8 million, or 63.0%, for the three months ended September 30, 2019, and by $97.1 million, or 37.3%, for the nine months ended September 30, 2019, mainly due to acquisitions and cost control efforts [177]. - Income from continuing operations, net of tax, for the three months ended September 30, 2019, was $39.4 million, compared to $11.8 million in the prior year, reflecting an increase of $27.6 million [178]. - Gaming revenues increased by $166.7 million, or 37.3%, during the three months ended September 30, 2019, primarily driven by the Midwest & South segment [186]. - The Midwest & South segment generated $523.4 million of gaming revenue for the nine months ended September 30, 2019, contributing to a total gaming revenue increase of $532.4 million, or 39.9% [187]. - Total revenues for the nine months ended September 30, 2019, reached $2,493.0 million, up from $1,835.1 million in the prior year, marking a 35.8% increase [172]. - The company’s gaming operations produced approximately 75% of total revenues for the three months ended September 30, 2019 [182]. Revenue Breakdown - Food & beverage revenues increased by $22.1 million, or 25.7%, during the three months ended September 30, 2019, primarily due to growth in the Midwest & South segment attributed to acquisitions [188]. - Room revenues increased by $12.7 million, or 26.5%, during the three months ended September 30, 2019, also primarily due to acquisitions [190]. - Other revenues increased by $5.9 million, or 18.6%, during the three months ended September 30, 2019, driven by acquisitions [192]. - Total revenues increased by $201.4 million, or 58.5%, during the three months ended September 30, 2019, due to acquisitions [202]. - Adjusted EBITDAR increased by $58.4 million, or 59.7%, for the three months ended September 30, 2019, primarily due to acquisitions [202]. Expenses and Margins - Overall food & beverage margins increased to 5.6% from 4.4% year-over-year, driven by an 8.5% increase in average check [188]. - Room margins decreased to 53.6% from 55.3% year-over-year, due to a 13.2% increase in cost per room [191]. - Corporate expenses represented 2.6% of revenues during the three months ended September 30, 2019, down from 4.1% in the prior year [207]. - Selling, general and administrative expenses were 14.3% of revenues during the three months ended September 30, 2019, compared to 14.4% in the prior year [203]. - Maintenance and utilities expenses were consistent at 5.0% of revenues during the three months ended September 30, 2019, compared to 5.4% in the prior year [205]. Debt and Interest - The average long-term debt balance increased by $332.1 million, reflecting additional debt issued to fund acquisitions, impacting interest expenses [178]. - Interest expense for the three months ended September 30, 2019 increased by $6.7 million or 12.9% compared to the prior year, and for the nine months, it increased by $40.1 million or 28.5% [213]. - Average long-term debt balance increased by $332.1 million for the three months and $740.7 million for the nine months ended September 30, 2019, driven by the issuance of $700.0 million senior notes [213]. - Long-term variable-rate borrowings represented approximately 41.4% of total long-term debt as of September 30, 2019 [246]. - A 100 basis point change in interest rates would result in an annual interest cost change of approximately $15.9 million based on September 30, 2019 debt levels [246]. Cash Flow and Capital Requirements - Cash and cash equivalents were $235.1 million as of September 30, 2019, down from $249.4 million at December 31, 2018 [215]. - Net cash provided by operating activities for the nine months ended September 30, 2019 was $415.4 million, an increase from $332.2 million in 2018 [219]. - Net cash outflows for investing activities were $195.6 million for the nine months ended September 30, 2019, compared to $485.6 million in 2018 [221]. - Total long-term debt decreased to $3,850.7 million as of September 30, 2019, from $4,030.0 million at December 31, 2018 [223]. - The company plans to fund capital requirements using cash on hand, cash flows from operations, and availability under the Revolving Credit Facility for the next twelve months [234]. - The annual cash capital requirements for ongoing refurbishment and maintenance at properties are estimated to range from $170 million to $190 million [235]. Strategic Initiatives - The company aims to strengthen its balance sheet by diversifying and increasing cash flow to reduce debt [168]. - The company is committed to evaluating acquisition opportunities that align with its strategic goals and deliver solid returns for shareholders [170]. - The company continues to pursue expansion opportunities in both current and new gaming jurisdictions, contingent on gaming license approvals and suitable investment opportunities [237]. - The company may seek additional funding through public or private equity or debt financings if cash flow from operations and bank credit facilities are insufficient [238]. - The company funded the acquisition of land for the Wilton Rancheria casino for $35.1 million, which will be reimbursed from the cash flows of the business after the facility opens [236]. - The construction timeline for the Wilton Rancheria casino project is expected to span 18 to 24 months once financing is secured [236]. Legal and Compliance - The company believes that all pending legal claims will not have a material adverse effect on its business or financial position [239]. - There have been no material changes to off-balance sheet arrangements as of the latest report [240]. - The effectiveness of the company's disclosure controls and procedures was confirmed by the Chief Executive Officer and Chief Financial Officer as of the end of the reporting period [247].