Boyd Gaming (US:BYD)2024-10-31 20:07PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) This section presents Boyd Gaming Corporation's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, cash flows, and notes on key events Condensed Consolidated Balance Sheets As of September 30, 2024, total assets increased to $6.30 billion, total liabilities rose to $4.67 billion due to higher debt, and stockholders' equity declined to $1.63 billion from share repurchases Condensed Consolidated Balance Sheet Highlights (in millions) | Account | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | $6,302.4 | $6,273.1 | | Total current assets | $501.9 | $529.3 | | Property and equipment, net | $2,633.2 | $2,542.5 | | Goodwill, net | $958.0 | $947.3 | | Total Liabilities | $4,670.6 | $4,529.0 | | Total current liabilities | $610.5 | $596.3 | | Long-term debt, net | $3,025.0 | $2,871.2 | | Total Stockholders' Equity | $1,631.8 | $1,744.1 | Condensed Consolidated Statements of Operations Q3 2024 total revenues increased to $961.2 million with Online revenue growth, while net income slightly decreased to $131.1 million; nine-month revenues grew to $2.89 billion, but net income significantly fell to $407.4 million due to lower operating income Q3 2024 vs Q3 2023 Performance (in millions, except per share data) | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Total Revenues (in millions) | $961.2 | $903.2 | | Operating Income (in millions) | $219.9 | $217.9 | | Net Income (in millions) | $131.1 | $135.2 | | Diluted EPS | $1.43 | $1.34 | Nine Months 2024 vs 2023 Performance (in millions, except per share data) | Metric | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | | Total Revenues (in millions) | $2,889.3 | $2,784.1 | | Operating Income (in millions) | $666.5 | $746.8 | | Net Income (in millions) | $407.4 | $527.4 | | Diluted EPS | $4.30 | $5.16 | Condensed Consolidated Statements of Cash Flows For the nine months ended September 30, 2024, net cash from operating activities was $695.0 million, while investing activities used $320.5 million and financing activities used $392.2 million, primarily for share repurchases and dividends Cash Flow Summary for Nine Months Ended Sept 30 (in millions) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities (in millions) | $695.0 | $697.3 | | Net cash used in investing activities (in millions) | ($320.5) | ($199.6) | | Net cash used in financing activities (in millions) | ($392.2) | ($521.1) | | Change in cash, cash equivalents and restricted cash (in millions) | ($17.7) | ($23.4) | Notes to Condensed Consolidated Financial Statements The notes detail accounting policies, financial statement line items, and key disclosures including the $34.0 million Resorts Digital Gaming acquisition, debt structure, share repurchase programs, and a $10.5 million impairment charge - On September 1, 2024, the company acquired Resorts Digital Gaming, LLC for $34.0 million to expand its online casino business4648 - During the first nine months of 2024, the company recorded a non-cash impairment charge of $10.5 million for a gaming license right in its Midwest & South segment63 - As of September 30, 2024, $343.1 million remained available under the company's Share Repurchase Program, with an additional $500.0 million authorized on May 9, 202476 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial performance, strategic initiatives, and liquidity, noting Q3 revenue growth from Online, nine-month revenue increase with declining operating and net income, and a balanced capital allocation strategy - The company's strategy focuses on growing revenues, operating efficiently, maintaining a strong balance sheet, and evaluating strategic acquisition and growth opportunities124125126 Financial Highlights (in millions) | Metric | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues (in millions) | $961.2 | $903.2 | $2,889.3 | $2,784.1 | | Operating Income (in millions) | $220.0 | $217.9 | $666.5 | $746.8 | | Net Income (in millions) | $131.1 | $135.2 | $407.4 | $527.4 | - The nine-month decline in net income was primarily due to an $80.3 million decrease in operating income, a $21.2 million decrease in interest income, and a $16.2 million increase in the income tax provision139 Results of Operations Q3 2024 revenues increased 6.4% to $961.2 million driven by Online growth, while nine-month revenues grew 3.8% to $2.89 billion but operating income fell 10.8% to $666.5 million due to gaming revenue decline and increased costs Revenues by Source (in millions) | Revenue Source | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Gaming (in millions) | $640.5 | $641.2 | $1,925.5 | $1,966.2 | | Food & beverage (in millions) | $72.7 | $71.0 | $222.4 | $212.9 | | Room (in millions) | $50.2 | $48.7 | $151.8 | $148.6 | | Online (in millions) | $141.3 | $90.3 | $417.4 | $298.2 | | Management fee (in millions) | $21.1 | $17.2 | $64.5 | $54.6 | Adjusted EBITDAR by Segment (in millions) | Segment | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Las Vegas Locals (in millions) | $96.4 | $106.0 | $316.1 | $350.5 | | Downtown Las Vegas (in millions) | $16.5 | $15.8 | $56.3 | $57.9 | | Midwest & South (in millions) | $196.9 | $190.6 | $573.3 | $591.1 | | Online (in millions) | $26.0 | $11.0 | $63.5 | $45.0 | - The Las Vegas Locals segment revenue decreased 4.5% in Q3 and 4.4% in the nine-month period, primarily due to competitive pressures and Q1 market softness156158 Liquidity and Capital Resources As of September 30, 2024, the company held $286.3 million in cash, a $108.7 million working capital deficit, and $3.1 billion in long-term debt, while generating $695.0 million in operating cash flow and allocating capital to share repurchases, dividends, and estimated $400-$425 million in capital expenditures - The company repurchased 8.3 million shares for $483.2 million in the first nine months of 2024, with $343.1 million remaining available under the repurchase program as of September 30, 2024207 - A quarterly dividend of $0.17 per share was declared on August 20, 2024211 - Estimated capital expenditures for 2024 are between $400 million and $425 million for maintenance, renovations, and growth projects, with approximately $289 million spent in the first nine months213214215 Quantitative and Qualitative Disclosures about Market Risk The company's primary market risk is interest rate exposure, with 38.6% of long-term debt being variable-rate, where a 100 basis point change would alter annual interest costs by approximately $11.9 million - The company's primary market risk is interest rate risk associated with its variable-rate borrowings, which constitute 38.6% of total long-term debt226227 - A hypothetical 100 basis point change in interest rates would alter the company's annual interest costs by approximately $11.9 million227 Controls and Procedures Management concluded that disclosure controls and procedures were not effective as of September 30, 2024, due to an un-remediated material weakness in segregation of duties over journal entries, despite ongoing remediation efforts - Disclosure controls and procedures were deemed not effective as of September 30, 2024, due to a material weakness in internal control over financial reporting identified in Q4 2023229230 - The material weakness pertains to a lack of segregation of duties over the preparation, review, and recording of journal entries230 - Remediation efforts, including enhanced training, attestations, and monitoring controls, were implemented in Q1 2024 and continue to be monitored for operating effectiveness231 PART II. OTHER INFORMATION Legal Proceedings The company is involved in various ordinary course legal proceedings, which management believes will not have a material adverse effect on its business, financial position, or cash flows - The company states that pending legal proceedings arising from the ordinary course of business are not expected to have a material adverse effect on its financials232 Risk Factors No material changes to the risk factors previously disclosed in the company's 2023 Annual Report on Form 10-K were reported - No material changes to the risk factors disclosed in the 2023 Form 10-K were reported for the quarter233 Unregistered Sales of Equity Securities and Use of Proceeds During Q3 2024, the company repurchased 3,461,140 shares of common stock at an average price of $58.37 per share under its share repurchase program Share Repurchases for Q3 2024 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | July 2024 | 630,935 | $57.44 | | August 2024 | 2,115,865 | $57.66 | | September 2024 | 714,340 | $61.31 | | Total | 3,461,140 | $58.37 | Other Information No director or officer trading arrangements under Rule 10b5-1 were adopted, modified, or terminated during the third quarter of 2024 - No director or officer trading plans under Rule 10b5-1 were adopted, modified, or terminated during the fiscal quarter ended September 30, 2024235 Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and iXBRL data files - The report includes a list of exhibits filed, such as CEO/CFO certifications and financial data formatted in iXBRL237