Boyd Gaming grew total revenues by 5.1 percent to $612.2 million in the third quarter, capping a three-month performance that saw generally strong returns from all the company’s far-flung operations.
The Las Vegas business held steady throughout the period, with revenue essentially flat year on year in the suburban locals segment at $208.8 million, although cash flow was up 6.6 percent to $60 million.
The company said its Downtown casinos performed at “record levels” in the quarter through increased visitation and business volumes. However, the results were offset on losses from its Hawaiian charter service and disruption from the development of a resort complex on Fremont Street controlled by rival operator Derek Stevens and construction on Interstate 15.
Downtown revenues grew less than 1 percent to $59.2 million, with cash flow dipping 2 percent to $11.4 million.
The Midwest and South regions benefitted from a full quarter of the company’s new slot route operations in Illinois and 13 days from the recently acquired Valley Forge Casino outside Philadelphia to grow revenues 6.5 percent to $344.5 million. Cash flow increased 8.5 percent to $97.8 million.
Despite a 5.8 percent increase in cash flow company-wide to $148.8 million, the bottom line was down by half compared to the same period last year. Net income came in at $11.8 million, or 10 cents per share, compared to $23.2 million, or 20 cents per share, in Q3 2017. Boyd said development costs and pre-opening expenses surrounding the company’s re-launched player loyalty program increased expenses by $15.6 million. Also, interest expense increased by $11.4 million as a result of debt incurred to fund several high-profile acquisitions earlier this year.
Las Vegas-based Boyd added five casinos in four states to its portfolio. In addition to Valley Forge, purchased for $280.5 million, the company reached deals with Pinnacle Entertainment to acquire the operations of two Ameristar casinos in St. Louis and Kansas City, Mo., and two Belterra-branded casinos in Indiana and Ohio in lease-back deals with Penn National’s Gaming and Leisure Properties REIT for a total of $575 million.
The acquisitions give Boyd access to customers in four of the top 30 metropolitan statistical areas in the U.S.𑁋Philadelphia, Cincinnati, St. Louis, and Kansas City. The company now operates 29 casinos in 10 states.
“We significantly bolstered our company’s long-term growth prospects, further expanding our geographic reach and significantly strengthening our robust free cash flow,” CEO Keith Smith said.
