Boyd Gaming (US:BYD)2022-04-26 23:45Financial Data and Key Metrics Changes - Company-wide revenues increased by over 14% year-over-year, with EBITDAR growing nearly 16% and operating margins surpassing last year's record by more than 50 basis points [6][19] - The company ended the first quarter with leverage at 2.2 times and lease-adjusted leverage of 2.7 times [22] Business Line Data and Key Metrics Changes - In the Las Vegas Locals business, revenues rose nearly 25%, EBITDAR increased by 31%, and margins reached a new first quarter record of over 52% [7] - Downtown Las Vegas business delivered record first quarter EBITDAR with margins of 37% [8] - The Midwest and South segment continued to perform well, growing revenues and EBITDAR over last year's record performances [8] Market Data and Key Metrics Changes - Customer trends remained consistent with the previous quarters, including rated guest counts, frequency, and spend, despite some macroeconomic challenges [8][9] - The company noted no meaningful shift in customer behavior in the first three weeks of April, with business trends continuing at levels seen in the last three quarters [9] Company Strategy and Development Direction - The company is investing in long-term growth opportunities, including a new land-based facility at Treasure Chest in Louisiana, expected to open in late 2023 [11] - Expansion plans for Downtown Las Vegas include enhancing the Fremont's casino space and dining options, with a food hall concept to attract more visitors [12] - The company is also advancing its online gaming strategy through the acquisition of Pala Interactive, which will enhance its iGaming capabilities [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow, citing strong performance from core customers and consistent trends across demographics [30] - The company anticipates challenges in year-over-year comparisons due to significant government stimulus impacts last spring but remains optimistic about growth opportunities [19][67] - Management acknowledged potential inflationary pressures but emphasized the importance of maintaining high margins and operational efficiency [39][44] Other Important Information - The company resumed its quarterly dividend with a payment of $0.15 per share, more than double the previous payment [15] - A capital return program is in place, targeting approximately $500 million to shareholders this year through dividends and share repurchases [16][21] Q&A Session Summary Question: Impact of higher gas prices on downtown segment and charter business strategy - Management noted that downtown has performed well, and they are not running their own charter currently, thus avoiding risks associated with fuel price fluctuations [25] Question: Update on void pay adoption and its impact on spending - Adoption of void pay has been slow but positive, with active use in 13 properties, and while it hasn't significantly increased spending, users appreciate its convenience [27] Question: Trends across the portfolio and consumer spending - Management reported consistent performance across all customer tiers, with no discernible degradation in play despite potential economic concerns [30] Question: Return of capital program amidst economic concerns - Management emphasized flexibility in their capital return program, allowing for adjustments based on economic conditions while maintaining a strong balance sheet [32] Question: Observations on regional market behaviors - Management indicated that business trends have remained consistent, with no significant changes across different markets, despite some one-off issues [36] Question: Margin sustainability and inflationary pressures - Management expects to maintain high margins but acknowledged that some payroll and marketing costs will return, balanced by revenue opportunities [39] Question: Promotional environment across segments - The promotional environment has remained stable, with no significant changes in competitive responses across markets [78]