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IGT continues on blockbuster path with 28% income jump

Apr 29, 2003 5:02 AM

International Game Technology (IGT) continued on its blockbuster business path during the second quarter of the current fiscal year recording income from continuing operations of $93.1 million, an increase of 28% over the corresponding period.

Earnings per diluted shares for the quarter amounted to $1.07 compared to $0.80 per diluted share earnings during the quarter that ended on March 30, 2002.

For the six months ended on March 29, 2003, income from continuing operations increased 46% to $181.5 million while earnings per diluted share increased to $2.07, a 38% increase over the previous year.

During the fiscal reporting period, the company noted that it had previously announced it planned to sell the casino and slot route operations it had acquired in connection with the acquisition of Anchor Gaming. The company said it closed on the sale of its slot route in February, grossing about $60.5 million in proceeds. Earlier this month, the company agreed to sell its Colorado casino operations and expects to close the deal by the end of April.

Still on the auction block, and the subject of discussions with prospective buyers is United Tote, another company acquired with the purchase of Anchor Gaming.

And, on Monday, the company reported an agreement to license certain bonusing patents from Acres Gaming Incorporated (AGAM). The agreement also settles outstanding litigation over the company’s Wheel of Gold patent currently pending in both Nevada and Oregon.

With respect to IGT’s licensing of certain Acres Bonus patents, IGT will pay a royalty advance of $10 million to Acres, and will cooperate on the development of new features to be integrated into certain IGT slot machine models.

Boyd Gaming

Fiscal results for the quarter that ended on March 31 were flat, according to a report made by Boyd Gaming Corporation (BYD) last week.

Adjusted earnings, before preopening expenses, were $0.29 per share compared to the $0.31 a share reported for the comparable period of a year earlier. The company said the $0.02 per share variance from last year’s first quarter "was principally caused by higher depreciation and interest expense."

A majority of gaming analysts had expected Boyd Gaming to earn $0.28 a share.

"Matching last year’s first quarter operating performance," said William Boyd, company chairman and CEO, "is quite an achievement. While we had dockside operations at Blue Chip and a full quarter of slot operations at Delta Downs helping us in the first quarter this year, we were also faced with a tough economy, war, higher gaming taxes in two major markets, and tough winter weather comparisons. Given all of that, I am very proud that we delivered results that compared so well with last year’s record first quarter."

During the conference, Ellis Landau, chief financial officer, said he believed earnings per share would be lower in the second quarter but he didn’t provide any details. A consensus of analysts expect earnings in the second quarter to be about $0.29 a share.

Harrah’s Entertainment Inc.

A 2.5% system-wide same store sales increase helped Harrah’s Entertainment Inc. (HET) reach its 17th straight quarter of year-over-year same-store increases for the period that ended on March 31.

"High demand for casino-entertainment options and limited supply bode well for our company, which has proven its ability to produce sustainable growth in both good and bad economic climates," said Gary Loveman, company CEO.

Revenues for the first quarter totaled $1.07 billion, a 9.8% increase over the previous year’s $974.7 million. EBITDA (property earnings before interest, taxes, depreciation and amortization) rose 1.9% to a record $285.3 million.

First-quarter 2003 diluted earnings per share amounted to $0.74 a share on 3.8% fewer shares outstanding, compared with diluted earnings per share before the cumulative effect of a change in accounting principled of $0.75 in the year-earlier quarter.

"The first quarter’s results clearly demonstrate that we not only have a robust growth strategy that allows this company to tolerate a variety of adverse circumstances, but that we also have the ability to manage our assets well," Loveman said.

He added that the company’s financial strength "affords us the ability to pursue opportunities in both existing and new jurisdictions in this country and abroad."

Argosy Gaming

Higher taxes and competition from rivals resulted in a substantial profit decline at Argosy Gaming Co. (AGY).

For the quarter that ended on March 31, the Alton, Ill., based company reported a profit of $14.7 million or $0.50 a share compared with $24.7 million or $0.84 per share in the year-ago quarter.

Revenue from to $236.3 million from last year’s $241.7 million, the company said.

However, a consensus of analysts had expected earnings of $0.47 a share, in line with the company’s February guidance that placed its expected profit to be between $0.45 and $0.50.

Negatively impacting the company were the results at its Empress Casino Joliet that was down 10% primarily due to the "customer preference for barge-based facilities, such as those operated by the company’s two nearest competitors." The company said it would open its own barge based facility next month. Also, the company said it felt the impact of increased gaming and admission tax rates imposed last year in Illinois.

Aztar Corp.

Results for the first quarter of the current fiscal year were relatively flat for Aztar Corp. (AZR) that operates casinos in Nevada and Atlantic City, as well as riverboats in Indiana.

Revenues for the period amounted to $203 million, slightly lower than the comparative $206 million. Earnings per share of $0.37 a share was a penny better than last year.

Of particular interest during the company’s teleconference was the future of its Las Vegas property, the Tropicana Hotel/Casino that sits at the intersection of Las Vegas Boulevard and Tropicana Ave.

The company said it would begin evaluating the property’s future at the end of the current year after it completes an expansion of its Tropicana property in Atlantic City.

Riviera Holdings

Improved operating results helped Riviera Holdings Corporation (RIV) reduce its net loss as compared to the company’s experience of a year ago.

While consolidated income from operations increased by 27.9 % to $4.7 million, the net loss for the period was $2.16 million or $0.62 a share compared with a net loss of $2.83 million or $0.82 a share in the first quarter of 2002.

The company said consolidated EBITDA increased by 9.3% to $8.9 million, helped by a jump of $935,000 or 28.2% to $4.3 million in income from operations from the Riviera Las Vegas.

Riviera Black Hawk contributed $1.6 million of income from operations while the property contributed an increase of $79,000 or 2.7% to the company’s EBITDA.

Dover Downs

The numbers were lower for Dover Downs Gaming & Entertainment Inc. (DDE) with company management placing the blame squarely on the Delaware Clean Indoor Air Act that prohibits smoking in its casino.

The company reported gross revenues decreased 6.5% to $48,355,000 compared to last year’s $51.7 million. The large part of the decline was caused by smaller revenues from the video lottery machines operated by the company at a harness racing facility.

Net earnings were a bit over $4 million or $0.15 per diluted share. During the 2002 comparable period, the company had earnings of $5.1 million or $0.19 per diluted share.

During the period, the company bought back 120,245 of its outstanding shares.