Boyd Gaming Reports Second-Quarter 2023 Results

July 27, 2023

Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the second quarter ended June 30, 2023.

Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: “During the second quarter we once again proved our ability to deliver solid results in a challenging environment, thanks to our effective operating model, strong management teams and successful growth initiatives. We maintained our focus on building loyalty among our core customers while our operating teams continued to effectively manage expenses throughout the business, achieving strong companywide margins consistent with recent quarters. Property operating results were impacted by difficult year-over-year comparisons early in the quarter, while overall results were strengthened by our key growth initiatives, including online gaming and Sky River Casino. We remain confident in the overall direction of our business and our ability to create long-term value for our shareholders.”

Boyd Gaming reported second-quarter 2023 revenues of $917.0 million, up from $894.5 million in the second quarter of 2022. The Company reported net income of $192.5 million, or $1.89 per share, for the second quarter of 2023, increasing from $146.8 million, or $1.33 per share, for the year-ago period.

Total Adjusted EBITDAR(1) was $351.4 million in the second quarter of 2023, compared to $353.9 million in the second quarter of 2022. Adjusted Earnings(1) for the second quarter of 2023 were $161.3 million, or $1.58 per share, compared to $163.5 million, or $1.48 per share, for the same period in 2022.

(1) See footnotes at the end of the release for additional information relative to non-GAAP financial measures.

Operations Review

In the Las Vegas Locals segment, core customer trends remained solid while operating margins once again exceeded 50%; however, revenues and Adjusted EBITDAR declined year-over-year due to difficult comparisons to prior year. The Downtown Las Vegas segment continued to benefit from growth in visitation throughout the downtown area, while second-quarter results were impacted by construction disruption at both the Fremont and Main Street Station. In the Midwest & South segment, while revenue and Adjusted EBITDAR were down year-over-year, both grew sequentially over the first quarter of 2023, as business trends continued to improve.

The Company’s Online segment benefitted from strong results at FanDuel’s operations in Ohio and Pennsylvania, as well as the addition of Boyd Interactive. Results in our Managed & Other business were driven by continued strength at Sky River Casino, which has performed ahead of expectations since opening in August 2022.

Dividend and Share Repurchase Program Update

Boyd Gaming paid a quarterly cash dividend of $0.16 per share on July 15, 2023, as previously announced.

As part of its ongoing share repurchase program, the Company repurchased $100 million in stock during the second quarter of 2023. As of June 30, 2023, the Company had approximately $533 million remaining under current repurchase authorizations.

Balance Sheet Statistics

As of June 30, 2023, Boyd Gaming had cash on hand of $260.8 million, and total debt of $3.0 billion.

Conference Call Information

Boyd Gaming will host a conference call to discuss its second-quarter 2023 results today, July 27, at 5:00 p.m. Eastern. The conference call number is (888) 886-7786, passcode 91078497. Please call up to 15 minutes in advance to ensure you are connected prior to the start of the call.

The conference call will also be available live on the Internet at https://events.q4inc.com/attendee/634511924.

Following the call’s completion, a replay will be available by dialing (877) 674-7070 on Thursday, July 27, continuing through Thursday, August 3. The conference number for the replay will be078497. The replay will also be available at https://investors.boydgaming.com.

BOYD GAMING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
Three Months Ended Six Months Ended
June 30, June 30,
(In thousands, except per share data)

2023

2022

2023

2022

Revenues
Gaming

$

660,729

 

$

684,925

 

$

1,325,037

 

$

1,352,879

 

Food & beverage

 

70,366

 

 

70,299

 

 

141,950

 

 

134,042

 

Room

 

49,761

 

 

49,904

 

 

99,826

 

 

92,313

 

Online

 

85,002

 

 

56,774

 

 

207,865

 

 

111,850

 

Management fee

 

17,446

 

 

 

 

37,476

 

 

 

Other

 

33,646

 

 

32,548

 

 

68,762

 

 

64,109

 

Total revenues

 

916,950

 

 

894,450

 

 

1,880,916

 

 

1,755,193

 

Operating costs and expenses
Gaming

 

249,999

 

 

254,500

 

 

499,794

 

 

504,542

 

Food & beverage

 

58,622

 

 

57,456

 

 

117,951

 

 

111,390

 

Room

 

18,580

 

 

17,285

 

 

35,700

 

 

33,275

 

Online

 

71,393

 

 

48,899

 

 

173,398

 

 

94,888

 

Other

 

11,003

 

 

11,678

 

 

22,570

 

 

22,614

 

Selling, general and administrative

 

99,070

 

 

95,662

 

 

199,389

 

 

187,709

 

Master lease rent expense (a)

 

27,099

 

 

26,654

 

 

53,927

 

 

52,960

 

Maintenance and utilities

 

37,591

 

 

34,517

 

 

73,617

 

 

67,407

 

Depreciation and amortization

 

62,220

 

 

66,757

 

 

123,780

 

 

129,235

 

Corporate expense

 

31,705

 

 

34,872

 

 

60,360

 

 

63,876

 

Project development, preopening and writedowns

 

5,201

 

 

912

 

 

(13,673

)

 

(9,117

)

Impairment of assets

 

 

 

 

 

4,537

 

 

 

Other operating items, net

 

438

 

 

188

 

 

658

 

 

286

 

Total operating costs and expenses

 

672,921

 

 

649,380

 

 

1,352,008

 

 

1,259,065

 

Operating income

 

244,029

 

 

245,070

 

 

528,908

 

 

496,128

 

Other expense (income)
Interest income

 

(2,715

)

 

(483

)

 

(20,860

)

 

(903

)

Interest expense, net of amounts capitalized

 

42,715

 

 

36,466

 

 

86,581

 

 

74,124

 

Loss on early extinguishments and modifications of debt

 

 

 

16,509

 

 

 

 

19,809

 

Other, net

 

522

 

 

3,750

 

 

626

 

 

3,497

 

Total other expense, net

 

40,522

 

 

56,242

 

 

66,347

 

 

96,527

 

Income before income taxes

 

203,507

 

 

188,828

 

 

462,561

 

 

399,601

 

Income tax provision

 

(11,053

)

 

(42,065

)

 

(70,376

)

 

(89,910

)

Net income

$

192,454

 

$

146,763

 

$

392,185

 

$

309,691

 

 
Basic net income per common share

$

1.89

 

$

1.33

 

$

3.81

 

$

2.79

 

Weighted average basic shares outstanding

 

102,025

 

 

110,118

 

 

102,818

 

 

111,151

 

 
Diluted net income per common share

$

1.89

 

$

1.33

 

$

3.81

 

$

2.78

 

Weighted average diluted shares outstanding

 

102,071

 

 

110,259

 

 

102,867

 

 

111,303

 

 
(a) Rent expense incurred by those properties subject to a master lease with a real estate investment trust.
BOYD GAMING CORPORATION
SUPPLEMENTAL INFORMATION
Reconciliation of Adjusted EBITDA to Net Income
(Unaudited)
 
Three Months Ended Six Months Ended
June 30, June 30,
(In thousands)

2023

2022

2023

2022

Total Revenues by Segment
Las Vegas Locals

$

230,940

 

$

236,461

 

$

471,210

 

$

464,023

 

Downtown Las Vegas

 

52,991

 

 

53,899

 

 

109,548

 

 

103,383

 

Midwest & South

 

518,846

 

 

534,937

 

 

1,031,019

 

 

1,051,998

 

Online

 

85,002

 

 

56,774

 

 

207,865

 

 

111,850

 

Managed & Other

 

29,171

 

 

12,379

 

 

61,274

 

 

23,939

 

Total revenues

$

916,950

 

$

894,450

 

$

1,880,916

 

$

1,755,193

 

 
Adjusted EBITDAR by Segment
Las Vegas Locals

$

118,395

 

$

125,334

 

$

244,555

 

$

244,029

 

Downtown Las Vegas

 

19,652

 

 

22,123

 

 

42,019

 

 

40,512

 

Midwest & South

 

201,833

 

 

218,859

 

 

400,517

 

 

431,059

 

Online

 

13,400

 

 

7,678

 

 

34,023

 

 

16,566

 

Managed & Other

 

19,546

 

 

2,512

 

 

41,097

 

 

4,905

 

Corporate expense, net of share-based compensation expense (a)

 

(21,464

)

 

(22,633

)

 

(43,703

)

 

(44,362

)

Adjusted EBITDAR

 

351,362

 

 

353,873

 

 

718,508

 

 

692,709

 

Master lease rent expense (b)

 

(27,099

)

 

(26,654

)

 

(53,927

)

 

(52,960

)

Adjusted EBITDA

 

324,263

 

 

327,219

 

 

664,581

 

 

639,749

 

 
Other operating costs and expenses
Deferred rent

 

177

 

 

192

 

 

354

 

 

384

 

Depreciation and amortization

 

62,220

 

 

66,757

 

 

123,780

 

 

129,235

 

Share-based compensation expense

 

12,198

 

 

14,100

 

 

20,017

 

 

22,833

 

Project development, preopening and writedowns

 

5,201

 

 

912

 

 

(13,673

)

 

(9,117

)

Impairment of assets

 

 

 

 

 

4,537

 

 

 

Other operating items, net

 

438

 

 

188

 

 

658

 

 

286

 

Total other operating costs and expenses

 

80,234

 

 

82,149

 

 

135,673

 

 

143,621

 

Operating income

 

244,029

 

 

245,070

 

 

528,908

 

 

496,128

 

Other expense (income)
Interest income

 

(2,715

)

 

(483

)

 

(20,860

)

 

(903

)

Interest expense, net of amounts capitalized

 

42,715

 

 

36,466

 

 

86,581

 

 

74,124

 

Loss on early extinguishments and modifications of debt

 

 

 

16,509

 

 

 

 

19,809

 

Other, net

 

522

 

 

3,750

 

 

626

 

 

3,497

 

Total other expense, net

 

40,522

 

 

56,242

 

 

66,347

 

 

96,527

 

Income before income taxes

 

203,507

 

 

188,828

 

 

462,561

 

 

399,601

 

Income tax provision

 

(11,053

)

 

(42,065

)

 

(70,376

)

 

(89,910

)

Net income

$

192,454

 

$

146,763

 

$

392,185

 

$

309,691

 

 
(a) Reconciliation of corporate expense:
 
Three Months Ended Six Months Ended
June 30, June 30,
(In thousands)

2023

2022

2023

2022

Corporate expense as reported on Condensed Consolidated Statements of Operations

$

31,705

 

$

34,872

 

$

60,360

 

$

63,876

 

Corporate share-based compensation expense

 

(10,241

)

 

(12,239

)

 

(16,657

)

 

(19,514

)

Corporate expense, net, as reported on the above table

$

21,464

 

$

22,633

 

$

43,703

 

$

44,362

 

 
(b) Rent expense incurred by those properties subject to a master lease with a real estate investment trust.
BOYD GAMING CORPORATION
SUPPLEMENTAL INFORMATION
Reconciliation of Net Income to Adjusted Earnings
and Net Income Per Share to Adjusted Earnings Per Share
(Unaudited)
 
Three Months Ended Six Months Ended
June 30, June 30,
(In thousands, except per share data)

2023

2022

2023

2022

Net income

$

192,454

 

$

146,763

 

$

392,185

 

$

309,691

 

Pretax adjustments:
Project development, preopening and writedowns

 

5,201

 

 

912

 

 

(13,673

)

 

(9,117

)

Impairment of assets

 

 

 

 

 

4,537

 

 

 

Other operating items, net

 

438

 

 

188

 

 

658

 

 

286

 

Loss on early extinguishments and modifications of debt

 

 

 

16,509

 

 

 

 

19,809

 

Interest income (a)

 

 

 

 

 

(14,315

)

 

 

Other, net

 

522

 

 

3,750

 

 

626

 

 

3,497

 

Total adjustments

 

6,161

 

 

21,359

 

 

(22,167

)

 

14,475

 

 
Income tax effect for above adjustments

 

(1,418

)

 

(4,591

)

 

4,612

 

 

(3,096

)

Impact of tax valuation allowance

 

(35,856

)

 

 

 

(35,856

)

 

 

Adjusted earnings

$

161,341

 

$

163,531

 

$

338,774

 

$

321,070

 

 
Net income per share, diluted

$

1.89

 

$

1.33

 

$

3.81

 

$

2.78

 

Pretax adjustments:
Project development, preopening and writedowns

 

0.05

 

 

0.01

 

 

(0.13

)

 

(0.08

)

Impairment of assets

 

 

 

 

 

0.04

 

 

 

Other operating items, net

 

 

 

 

 

0.01

 

 

 

Loss on early extinguishments and modifications of debt

 

 

 

0.15

 

 

 

 

0.18

 

Interest income (a)

 

 

 

 

 

(0.14

)

 

 

Other, net

 

0.01

 

 

0.03

 

 

0.01

 

 

0.03

 

Total adjustments

 

0.06

 

 

0.19

 

 

(0.21

)

 

0.13

 

 
Income tax effect for above adjustments

 

(0.02

)

 

(0.04

)

 

0.04

 

 

(0.03

)

Impact of tax valuation allowance

 

(0.35

)

 

 

 

(0.35

)

 

 

Adjusted earnings per share, diluted

$

1.58

 

$

1.48

 

$

3.29

 

$

2.88

 

 
Weighted average diluted shares outstanding

 

102,071

 

 

110,259

 

 

102,867

 

 

111,303

 

 
(a) Adjustment to the expected losses for interest on note receivable

Non-GAAP Financial Measures

Our financial presentations include the following non-GAAP financial measures:

  • EBITDA : earnings before interest, taxes, depreciation and amortization,
  • Adjusted EBITDA : EBITDA adjusted for deferred rent, share-based compensation expense, project development, preopening and writedown expenses, impairments of assets, other operating items, net, gain or loss on early extinguishments and modifications of debt and other items, net,
  • EBITDAR : EBITDA further adjusted for rent expense associated with master leases with a real estate investment trust,
  • Adjusted EBITDAR : Adjusted EBITDA further adjusted for rent expense associated with master leases with a real estate investment trust,
  • Adjusted Earnings : net income before project development, preopening and writedown expenses, impairments of assets, other operating items, net, gain or loss on early extinguishments and modifications of debt, adjustments to the expected losses for interest on note receivable, the release of valuation allowances on deferred tax assets and other non-recurring adjustments, net, and,
  • Adjusted Earnings Per Share (Adjusted EPS) : Adjusted Earnings divided by weighted average diluted shares outstanding.

Collectively, we refer to these and other non-GAAP financial measures as the “Non-GAAP Measures”.

The Non-GAAP Measures are commonly used measures of performance in our industry that we believe, when considered with measures calculated in accordance with accounting principles generally accepted in the United States (GAAP), provide our investors with a more complete understanding of our operating results and facilitates comparisons between us and our competitors. We provide this information to investors to enable them to perform comparisons of our past, present and future operating results and as a means to evaluate the results of core on-going operations. We have historically reported these measures to our investors and believe that the continued inclusion of the Non-GAAP Measures provides consistency in our financial reporting. We also believe this information is useful to investors in allowing greater transparency related to significant measures used by our management in their financial and operational decision-making, their evaluation of total company and individual property performance, in the evaluation of incentive compensation and in the annual budget process. Management also uses Non-GAAP Measures in the evaluation of potential acquisitions and dispositions. We believe these measures continue to be used by investors in their assessment of our operating performance and the valuation of our company.

The use of Non-GAAP Measures has certain limitations. Our presentation of the Non-GAAP Measures may be different from the presentation used by other companies and therefore comparability may be limited. While excluded from certain of the Non-GAAP Measures, depreciation and amortization expense, interest expense, income taxes and other items have been and will be incurred. Each of these items should also be considered in the overall evaluation of our results. Additionally, the Non-GAAP Measures do not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. We compensate for these limitations by providing the relevant disclosure of our depreciation and amortization, interest and income taxes, capital expenditures and other items both in our reconciliations to the historical GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance. We do not provide a reconciliation of forward-looking Non-GAAP Measures to the corresponding forward-looking GAAP measure due to our inability to project special charges and certain expenses.

The Non-GAAP Measures are to be used in addition to and in conjunction with results presented in accordance with GAAP. The Non-GAAP Measures should not be considered as an alternative to net income, operating income, or any other operating performance measure prescribed by GAAP, nor should these measures be relied upon to the exclusion of GAAP financial measures. The Non-GAAP Measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding historical GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. Management strongly encourages investors to review our financial information in its entirety and not to rely on a single financial measure.

Forward-looking Statements and Company Information

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements contain words such as “may,” “will,” “might,” “expect,” “believe,” “anticipate,” “could,” “would,” “estimate,” “continue,” “pursue,” or the negative thereof or comparable terminology, and may include (without limitation) information regarding the Company's expectations, goals or intentions regarding future performance. In addition, forward-looking statements in this press release, as well as in our earnings conference call remarks, include statements regarding continued growth in visitation and spending among the Company’s core customers, the Company’s views that it will be able to drive continued revenue and EBITDAR growth throughout its business, the impacts of COVID-19 on the Company, the Company’s operating strategy, the Company’s confidence in its long-term growth trajectory, and the Company’s plans with respect to share repurchases and returning capital to shareholders. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. Risks also include fluctuations in the Company's operating results; the political climate and its effects on consumer spending and its impact on the travel industry; the state of the economy and its effect on consumer spending; the impact and effects of the local economies in the markets where the Company operates; the receipt of legislative, and other state, federal and local approvals for the Company's development projects; developments in legalization of online gaming, the Company's ability to operate online gaming profitably, or otherwise; consumer reaction to fluctuations in the stock market and economic factors; the effects of events adversely impacting the economy or the regions from which the Company draws a significant percentage of its customers; competition; litigation; financial community and rating agency perceptions of the Company; changes in laws and regulations, weather, regulation, economic, credit and capital market conditions; and the effects of war, terrorist or similar activity. Additional factors that could cause actual results to differ are discussed under the heading “Risk Factors” and in other sections of the Company's Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, and in the Company's other current and periodic reports filed from time to time with the SEC. All forward-looking statements in this press release are made as of the date hereof, based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement.

About Boyd Gaming

Founded in 1975, Boyd Gaming Corporation (NYSE: BYD) is a leading geographically diversified operator of 28 gaming entertainment properties in 10 states, manager of a tribal casino in northern California, and owner and operator of Boyd Interactive, a B2B and B2C online casino gaming business. The Company is also a strategic partner and 5% equity owner of FanDuel Group, the nation's leading sports-betting operator. With one of the most experienced leadership teams in the casino industry, Boyd Gaming prides itself on offering guests an outstanding entertainment experience and memorable customer service. Through a long-standing company philosophy called Caring the Boyd Way, Boyd Gaming is committed to advancing Environmental, Social and Corporate Governance (ESG) initiatives that positively impact the Company's stakeholders and communities. For additional Company information and press releases, visit https://investors.boydgaming.com.

Financial Contact:
Josh Hirsberg
(702) 792-7234
joshhirsberg@boydgaming.com

Media Contact:
David Strow
(702) 792-7386
davidstrow@boydgaming.com

Source: Boyd Gaming Corporation