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Boyd Gaming Reports Third-Quarter 2023 Results

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

Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: “Our third-quarter results reflect the value of our diversified business model. Continued strength in play from our core customers, strong results from Sky River and online gaming, and growth in our non-gaming business all contributed to a solid performance in the quarter. However, quarterly results were impacted by declines in play from our retail customers and ongoing cost pressures, both related to the challenging economic environment.”

Smith continued: “During the quarter we continued to leverage our strong free cash flow to pursue a balanced capital allocation strategy that is creating significant value for our shareholders. We demonstrated the growth potential of our property reinvestment initiative, delivering record quarterly results at the Fremont following its recent expansion project. And we remain committed to our capital return program, having returned over $1 billion to shareholders in the last two years through our ongoing share repurchases and dividends.”

Boyd Gaming reported third-quarter 2023 revenues of $903.2 million, up from $877.3 million in the third quarter of 2022. The Company reported net income of $135.2 million, or $1.34 per share, for the third quarter of 2023, versus $157.0 million, or $1.46 per share, for the year-ago period.

Total Adjusted EBITDAR(1) was $320.8 million in the third quarter of 2023, compared to $337.7 million in the third quarter of 2022. Adjusted Earnings(1) for the third quarter of 2023 were $137.3 million, or $1.36 per share, versus $159.2 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 Company’s property operating segments, core customer play increased on both a sequential and year-over-year basis, and hotel and food & beverage revenues rose year-over-year. These gains were offset by year-over-year softness in retail play, though business volumes from retail customers have remained consistent since late last year across all segments. Adjusted EBITDAR and margin performances reflected higher labor, utilities and property insurance costs, with Companywide property-level operating margins of 40%.

The Company’s Online segment benefitted from strong results from FanDuel’s operations, as well as the addition of Boyd Interactive, acquired by the Company in November 2022. Strong revenue and Adjusted EBITDAR growth in our Managed & Other business was driven by management fees from Sky River Casino, which opened in August 2022.

Dividend and Share Repurchase Program Update

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

As part of its ongoing share repurchase program, the Company repurchased $106 million in stock during the third quarter of 2023. As of September 30, 2023, the Company had approximately $426 million remaining under current repurchase authorizations.

Balance Sheet Statistics

As of September 30, 2023, Boyd Gaming had cash on hand of $269.2 million and total debt of $2.9 billion.

Conference Call Information

Boyd Gaming will host a conference call to discuss its third-quarter 2023 results today, October 24, at 5:00 p.m. Eastern. The conference call number is (888) 259-6580, passcode 60390005. 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/946960080.

Following the call’s completion, a replay will be available by dialing (877) 674-7070 on Tuesday, October 24, continuing through Tuesday, October 31. The conference number for the replay will be 390005. The replay will also be available at https://investors.boydgaming.com.

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

2023

2022

2023

2022

Revenues
Gaming

$

641,168

 

$

667,975

 

$

1,966,205

 

$

2,020,854

 

Food & beverage

 

70,986

 

 

67,792

 

 

212,936

 

 

201,834

 

Room

 

48,720

 

 

46,672

 

 

148,546

 

 

138,985

 

Online

 

90,288

 

 

52,353

 

 

298,153

 

 

164,203

 

Management fee

 

17,153

 

 

10,159

 

 

54,629

 

 

10,159

 

Other

 

34,849

 

 

32,312

 

 

103,611

 

 

96,421

 

Total revenues

 

903,164

 

 

877,263

 

 

2,784,080

 

 

2,632,456

 

Operating costs and expenses
Gaming

 

251,536

 

 

251,814

 

 

751,330

 

 

756,356

 

Food & beverage

 

59,672

 

 

58,502

 

 

177,623

 

 

169,892

 

Room

 

19,180

 

 

17,783

 

 

54,880

 

 

51,058

 

Online

 

79,080

 

 

45,827

 

 

252,478

 

 

140,715

 

Other

 

11,549

 

 

11,370

 

 

34,119

 

 

33,984

 

Selling, general and administrative

 

99,944

 

 

92,950

 

 

299,333

 

 

280,659

 

Master lease rent expense (a)

 

27,236

 

 

26,828

 

 

81,163

 

 

79,788

 

Maintenance and utilities

 

41,720

 

 

40,789

 

 

115,337

 

 

108,196

 

Depreciation and amortization

 

64,797

 

 

64,956

 

 

188,577

 

 

194,191

 

Corporate expense

 

27,872

 

 

26,375

 

 

88,232

 

 

90,251

 

Project development, preopening and writedowns

 

2,405

 

 

9,645

 

 

(11,268

)

 

528

 

Impairment of assets

 

 

 

5,575

 

 

4,537

 

 

5,575

 

Other operating items, net

 

301

 

 

(12,610

)

 

959

 

 

(12,324

)

Total operating costs and expenses

 

685,292

 

 

639,804

 

 

2,037,300

 

 

1,898,869

 

Operating income

 

217,872

 

 

237,459

 

 

746,780

 

 

733,587

 

Other expense (income)
Interest income

 

(1,585

)

 

(2,073

)

 

(22,445

)

 

(2,976

)

Interest expense, net of amounts capitalized

 

42,352

 

 

36,001

 

 

128,933

 

 

110,125

 

Loss on early extinguishments and modifications of debt

 

 

 

 

 

 

 

19,809

 

Other, net

 

(30

)

 

170

 

 

596

 

 

3,667

 

Total other expense, net

 

40,737

 

 

34,098

 

 

107,084

 

 

130,625

 

Income before income taxes

 

177,135

 

 

203,361

 

 

639,696

 

 

602,962

 

Income tax provision

 

(41,902

)

 

(46,359

)

 

(112,278

)

 

(136,269

)

Net income

$

135,233

 

$

157,002

 

$

527,418

 

$

466,693

 

 
Basic net income per common share

$

1.34

 

$

1.46

 

$

5.16

 

$

4.24

 

Weighted average basic shares outstanding

 

100,804

 

 

107,743

 

 

102,139

 

 

110,002

 

 
Diluted net income per common share

$

1.34

 

$

1.46

 

$

5.16

 

$

4.24

 

Weighted average diluted shares outstanding

 

100,850

 

 

107,840

 

 

102,187

 

 

110,135

 

 
(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 Nine Months Ended
September 30, September 30,
(In thousands)

2023

2022

2023

2022

Total Revenues by Segment
Las Vegas Locals

$

221,833

 

$

225,791

 

$

693,043

 

$

689,814

 

Downtown Las Vegas

 

49,545

 

 

49,507

 

 

159,093

 

 

152,890

 

Midwest & South

 

513,028

 

 

527,536

 

 

1,544,047

 

 

1,579,534

 

Online

 

90,288

 

 

52,353

 

 

298,153

 

 

164,203

 

Managed & Other

 

28,470

 

 

22,076

 

 

89,744

 

 

46,015

 

Total revenues

$

903,164

 

$

877,263

 

$

2,784,080

 

$

2,632,456

 

 
Adjusted EBITDAR by Segment
Las Vegas Locals

$

105,985

 

$

111,733

 

$

350,540

 

$

355,762

 

Downtown Las Vegas

 

15,857

 

 

17,704

 

 

57,876

 

 

58,216

 

Midwest & South

 

190,588

 

 

211,292

 

 

591,105

 

 

642,351

 

Online

 

11,005

 

 

6,350

 

 

45,028

 

 

22,916

 

Managed & Other

 

18,997

 

 

12,553

 

 

60,094

 

 

17,458

 

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

 

(21,611

)

 

(21,934

)

 

(65,314

)

 

(66,296

)

Adjusted EBITDAR

 

320,821

 

 

337,698

 

 

1,039,329

 

 

1,030,407

 

Master lease rent expense (b)

 

(27,236

)

 

(26,828

)

 

(81,163

)

 

(79,788

)

Adjusted EBITDA

 

293,585

 

 

310,870

 

 

958,166

 

 

950,619

 

 
Other operating costs and expenses
Deferred rent

 

177

 

 

192

 

 

531

 

 

576

 

Depreciation and amortization

 

64,797

 

 

64,956

 

 

188,577

 

 

194,191

 

Share-based compensation expense

 

8,033

 

 

5,653

 

 

28,050

 

 

28,486

 

Project development, preopening and writedowns

 

2,405

 

 

9,645

 

 

(11,268

)

 

528

 

Impairment of assets

 

 

 

5,575

 

 

4,537

 

 

5,575

 

Other operating items, net

 

301

 

 

(12,610

)

 

959

 

 

(12,324

)

Total other operating costs and expenses

 

75,713

 

 

73,411

 

 

211,386

 

 

217,032

 

Operating income

 

217,872

 

 

237,459

 

 

746,780

 

 

733,587

 

Other expense (income)
Interest income

 

(1,585

)

 

(2,073

)

 

(22,445

)

 

(2,976

)

Interest expense, net of amounts capitalized

 

42,352

 

 

36,001

 

 

128,933

 

 

110,125

 

Loss on early extinguishments and modifications of debt

 

 

 

 

 

 

 

19,809

 

Other, net

 

(30

)

 

170

 

 

596

 

 

3,667

 

Total other expense, net

 

40,737

 

 

34,098

 

 

107,084

 

 

130,625

 

Income before income taxes

 

177,135

 

 

203,361

 

 

639,696

 

 

602,962

 

Income tax provision

 

(41,902

)

 

(46,359

)

 

(112,278

)

 

(136,269

)

Net income

$

135,233

 

$

157,002

 

$

527,418

 

$

466,693

 

 
(a) Reconciliation of corporate expense:
 
Three Months Ended Nine Months Ended
September 30, September 30,
(In thousands)

2023

2022

2023

2022

Corporate expense as reported on Condensed Consolidated Statements of Operations

$

27,872

 

$

26,375

 

$

88,232

 

$

90,251

 

Corporate share-based compensation expense

 

(6,261

)

 

(4,441

)

 

(22,918

)

 

(23,955

)

Corporate expense, net, as reported on the above table

$

21,611

 

$

21,934

 

$

65,314

 

$

66,296

 

 
(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 Nine Months Ended
September 30, September 30,
(In thousands, except per share data)

2023

2022

2023

2022

Net income

$

135,233

 

$

157,002

 

$

527,418

 

$

466,693

 

Pretax adjustments:
Project development, preopening and writedowns

 

2,405

 

 

9,645

 

 

(11,268

)

 

528

 

Impairment of assets

 

 

 

5,575

 

 

4,537

 

 

5,575

 

Other operating items, net

 

301

 

 

(12,610

)

 

959

 

 

(12,324

)

Loss on early extinguishments and modifications of debt

 

 

 

 

 

 

 

19,809

 

Interest income (a)

 

 

 

 

 

(14,315

)

 

 

Other, net

 

(30

)

 

170

 

 

596

 

 

3,667

 

Total adjustments

 

2,676

 

 

2,780

 

 

(19,491

)

 

17,255

 

 
Income tax effect for above adjustments

 

(629

)

 

(616

)

 

3,983

 

 

(3,712

)

Impact of tax valuation allowance

 

 

 

 

 

(35,856

)

 

 

Adjusted earnings

$

137,280

 

$

159,166

 

$

476,054

 

$

480,236

 

 
Net income per share, diluted

$

1.34

 

$

1.46

 

$

5.16

 

$

4.24

 

Pretax adjustments:
Project development, preopening and writedowns

 

0.03

 

 

0.09

 

 

(0.11

)

 

 

Impairment of assets

 

 

 

0.05

 

 

0.04

 

 

0.05

 

Other operating items, net

 

 

 

(0.11

)

 

0.01

 

 

(0.11

)

Loss on early extinguishments and modifications of debt

 

 

 

 

 

 

 

0.18

 

Interest income (a)

 

 

 

 

 

(0.14

)

 

 

Other, net

 

 

 

 

 

0.01

 

 

0.03

 

Total adjustments

 

0.03

 

 

0.03

 

 

(0.19

)

 

0.15

 

 
Income tax effect for above adjustments

 

(0.01

)

 

(0.01

)

 

0.04

 

 

(0.03

)

Impact of tax valuation allowance

 

 

 

 

 

(0.35

)

 

 

Adjusted earnings per share, diluted

$

1.36

 

$

1.48

 

$

4.66

 

$

4.36

 

 
Weighted average diluted shares outstanding

 

100,850

 

 

107,840

 

 

102,187

 

 

110,135

 

 
(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.

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