Boyd Gaming Corporation, the Las Vegas-based casino resort company, reported third quarter net income of $6.3 million, or $0.07 per share, compared to net income of $8.7 million, or $0.10 per share, in the same period last year. Adjusted earnings for the third quarter 2009 were $8 million, or $0.09 per share, compared to $14 million, or $0.16 per share, for the same period in 2008. Net revenues were $398.2 million for the third quarter 2009, compared to $426.5 million for the same quarter in 2008, a decrease of 6.6 percent. Total Adjusted EBITDA was $96.6 million for the quarter, a decrease of 4.5 percent from $101.2 million in the prior year.

“We are encouraged that we were able to produce both increased EBITDA and operating margins in three of our four regions during the quarter,” said Keith Smith, president and CEO of Boyd Gaming. “Improved results in our downtown Las Vegas, Borgata and Midwest and South regions helped offset softness in the Las Vegas Locals market. While visitation levels remained fairly constant, spend per visitor continues to be down significantly year-over-year, as consumers are still being cautious with their spending.”

Boyd reported net income for the nine months ended Sept. 30, 2009 of $5.3 million, or $0.06 per share. By comparison, it reported a net loss of $2.2 million, or $0.03 loss per share, for the nine months ended Sept. 30, 2008. The company’s nine-month results in the period ended Sept. 30, 2009 were primarily impacted by noncash, pre-tax impairment charges of $28.4 million related to Dania Jai-Alai, and $13.5 million related to Boyd’s joint venture with Morgans Hotel Group at Echelon, offset by a $14.4 million gain related to the fire at The Water Club.

Adjusted Earnings for the nine months ended Sept. 30, 2009 were $31.4 million, or $0.36 per share, compared to $70 million, or $0.80 per share, for the nine-month period in 2008. Net revenues were $1.26 billion and $1.36 billion for the nine months ended September 30, 2009 and 2008, respectively. Total adjusted EBITDA was $311.8 million for the current nine-month period. By comparison, total adjusted EBITDA for the 2008 period was $348.5 million.

In Las Vegas, development of Echelon -- including the resort, casino and retail project that is owned by Echelon Resorts, a subsidiary of the company - remains suspended. Based the company’s current outlook, Boyd said it does not anticipate that Echelon will resume construction for three to five years. “We continue to believe in the long-term viability of the Las Vegas market,” said Smith. “But given the ongoing weak economic conditions, the significant new supply coming online and a difficult capital market environment for projects of this nature, resuming construction in the near term is not an option. We remain committed to having a significant presence on the Las Vegas Strip as part of our long-term growth strategy and we continue to view this site as a major strategic asset.”

As a consequence of the uncertainty surrounding Echelon, Boyd recorded an impairment charge of $13.5 million in the third quarter related to the joint venture at Echelon with Morgans Hotel Group. In addition, Echelon and Shangri-La Hotels and Resorts mutually agreed to terminate Shangri-La's management and technical services agreements.

Commenting on Boyd Gaming's previously disclosed proposal to acquire some or all of the assets of Station Casinos, Smith said, “We remain very serious about acquiring Station's assets when permitted by the bankruptcy court. We believe an acquisition would deliver immediate value to our shareholders, and represents a very attractive and timely solution for Station, its creditors, employees and customers.”

In Boyd’s Las Vegas Locals segment, third quarter 2009 net revenues were $150.7 million versus $181.8 million for the third quarter 2008. Third quarter 2009 adjusted EBITDA was $31.4 million, a 31.3 percent decrease from the $45.7 million in the same quarter 2008. Boyd said results in the region continue to be impacted by lower consumer spending and room rate pressures throughout the entire market, as Las Vegas remains one of the hardest-hit metropolitan areas.

Boyd’s Downtown Las Vegas properties generated net revenues of $54.9 million versus $55.6 million in the third quarter 2008. Adjusted EBITDA for the third quarter was $8.7 million, a 26.1 percent increase from the $6.9 million reported in the third quarter 2008. Continued strength in Boyd’s Hawaiian customer segment driven by refinements in the company’s targeted marketing efforts, as well as cost-control measures, contributed to gains in this region.

In Boyd’s Midwest and South region, the company recorded $192.6 million in net revenues for the third quarter 2009, compared to $189.1 million for the same period in 2008. Adjusted EBITDA for the current period was $41.5 million, an increase of 6.2 percent from the $39.1 million reported in the third quarter of 2008. Regional results were boosted by a strong performance at Boyd’s recently expanded Blue Chip property, as well as continued growth at Delta Downs.

In Atlantic City, net revenues for Borgata were $222.6 million for the third quarter 2009, compared to $239.9 million recorded in the same quarter in 2008. Operating income for the third quarter 2009 increased to $77 million, versus $39.5 million for the third quarter 2008, in part due to a $28.7 million gain on an insurance settlement related to the fire at The Water Club. Adjusted EBITDA increased to $67.6 million, up from $59.8 million for the third quarter 2008. For more information, visit www.boydgaming.com.
 

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