Boyd Gaming (US:BYD)2019-04-26 02:41Financial Data and Key Metrics Changes - The first quarter marked a strong start to 2019 with continued growth in same-store revenues, EBITDAR, and operating margins across all segments [7][21] - At quarter end, debt-to-EBITDA was 5.1x and lease adjusted leverage was 5.5x, with a target leverage of 4x to 5x EBITDA expected to be achieved later this year [23][24] - Capital expenditures were $89 million for the quarter, driven by the purchase of a new slot system and higher carryover capital from previous projects, with full-year guidance holding at approximately $160 million [24][52] Business Line Data and Key Metrics Changes - The Midwest and South segment showed continued growth in same-store revenues, EBITDAR, and operating margins despite severe winter weather [13][15] - The Las Vegas Locals segment achieved its highest first quarter EBITDAR since 2007, with segment operating margins improving by 134 basis points to exceed 33% [8][10] - Downtown Las Vegas operations delivered record first quarter EBITDAR performance, with all three properties posting revenue and EBITDAR gains [12] Market Data and Key Metrics Changes - Southern Nevada's economy remains strong, with a 2.4% job growth rate over the last 12 months, outpacing the national average [10][11] - The visitation in Las Vegas reached an all-time high for the convention and meeting business, with new infrastructure supporting further growth [11][12] - The company reported strong performance in its newly acquired properties, achieving revenue and EBITDAR growth on a combined basis [15][22] Company Strategy and Development Direction - The company is focused on integrating new properties into its nationwide player loyalty network and enhancing marketing capabilities [17][20] - The expansion of sports betting is seen as a key growth driver, with positive results reported from properties in Mississippi and Pennsylvania [18][19] - The company continues to pursue opportunities for expansion while balancing growth with returning capital to shareholders and deleveraging its balance sheet [21][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth trends for the Locals business, supported by a robust Southern Nevada economy and population growth [10][12] - The company remains optimistic about the future potential of its new assets and the synergies expected from recent acquisitions [8][22] - Despite weather-related challenges, management noted a recovery in business trends and a positive outlook for the remainder of the year [23][35] Other Important Information - The company returned over $28 million to shareholders during the quarter through dividends and share repurchases [24] - EBITDAR guidance for the year remains reaffirmed at $885 million to $910 million [25] Q&A Session Summary Question: Impact of the Palms property on performance - Management indicated that the Palms property does not significantly impact the Gold Coast customer base, and they are pleased with Gold Coast's performance [28] Question: Incremental EBITDA from sports betting - Management noted positive growth in visitation and spending due to sports betting but did not provide specific incremental EBITDA figures [29] Question: Weather impact on Midwest and South margins - Management stated that quantifying the weather impact is complex, but overall trends in March were positive, indicating recovery [32][35] Question: Performance at Eastside Cannery - Management acknowledged operational modifications at Eastside Cannery that initially did not succeed but reported improved results in April following adjustments [36] Question: Downtown Las Vegas performance drivers - Management attributed strong performance to a growing interest in Downtown Las Vegas and effective revenue management [38] Question: Resort fees and customer pushback - Management confirmed that resort fees have not been raised recently and noted minimal customer pushback due to modest fee increases [69] Question: Market share shifts between Downtown and the Strip - Management has not conducted specific surveys on market share shifts but noted increased interest in Downtown due to enhanced amenities [72] Question: Legislative updates on Illinois gaming tax - Management is monitoring legislative developments in Illinois but did not provide specific updates on the proposed tax changes [76]