It’s doubtful that Bill Boyd, whose family success for
two generations has been in the casino business could have imagined that the
immediate future of the company would lie in the success of a racetrack.
However, that’s exactly what Boyd Gaming Corporation (BYD)
anticipates with the recent purchase of Delta Downs Racetrack in Louisiana and
the expectation that approval will come in August for the installation of 1,700
slot machines at that facility.
Should the approval come about as expected, and
“we’ve had some encouraging conversations” with the Louisiana gaming
regulator, said Boyd CFO Ellis Landau, prospects are bright for the success of
the “racino,” a horse track that features slot machines.
“Delta Downs has an extremely good location,” Landau
said in a teleconference, “and its especially well located to the Houston
The Delta Downs expectations and a construction progress
report on The Borgata Resort in Atlantic City were highlighted during Boyd’s
announcement of its second quarter earnings.
The period ended on June 30 resulted in earnings of $0.14
a share compared to $0.13 cents a share for the same period a year ago. Also,
the company recorded the second highest quarterly EBITDA in its history. For the
quarter, earnings before interest, taxes, depreciation, amortization and
pre-opening expenses after corporate expense was $57.6 million. This exceeded
last year’s second quarter EBITDA by seven percent.
“It was most gratifying,” remarked Boyd, “to have
seven of our eight units report year-over-year quarterly gains, especially the
two Sam’s Town properties (Las Vegas and ÂÃ‚ÂTunica) that are continuing to
recover from last year’s disappointing results.”
After reviewing the report, Bill Schmitt, lead gaming
analyst for CIBC World Markets, said he found the company’s valuation
“compelling” but indicated he would maintain his “hold rating” on the
stock until the Louisiana regulators approval the slot operations at Delta
Reporting once again that Aztar’s quarterly performance
had generated record cash flows for the period, Paul Rubeli, chairman, president
and CEO noted that the company had shown cash flow increases in 21 of its last
22 operating quarters.
“We continue to focus on programs that produce revenues
with higher profit components and to keep tight control on our expenses,” he
Net income for the period ended on June 28 amounted to
$16 million compared with $14.9 million during the comparable period. This was
equal to $0.40 a share compared to $0.34 a share the previous year.