In preparation for BYD's 2Q earnings release tomorrow, we’ve put together the recent pertinent forward looking company commentary.
Peninsula Acquisition (May 16)
- Please refer to our note, "BYD: PENINSULA GAMING ACQUISITION CONF CALL NOTES"
1Q CONFERENCE CALL YOUTUBE (April 24)
- "Economic fundamentals supporting our business are strengthening and we anticipate this trend will continue."
- "Our business clearly continues to move in the right direction, and we expect this momentum to continue for the remainder of the year."
- "The higher end of the database is certainly the area where we continue to see strength, I mean, that the customers we know the best they're obviously most entrenched with our brands and that segment continues to grow, I think at a very healthy pace."
- GUIDANCE:
- Wholly owned EBITDA (post corporate expense): $90-$95 million
- Borgata EBITDA: $33-$35 million
- Adjusted EPS: $0.06 to $0.10
- Borgata's interest expense: $20 million/Q a quarter
- Boyd interest expense: $162-$165 million
- "The guidance we provided incorporates some expected impact of Revel along with some offsetting and marketing expenses, the new marketing programs that we would anticipate to make sure that our customers continue to visit the Borgata along with additional efficiencies that we have built in over the quarter so that we can continue to manage the business and not only create the best experience, but maximize the profitability of the property."
- "A new competitor has opened in Atlantic City, and while it is early, I can tell you that we have yet to see a meaningful impact on Borgata. So far in April, we have seen year-over-year increases in guest counts, visitation, and rated slot win. Occupancy is higher as well running ahead of our expectations, and our cash room sales were up about 8% during the month. While April's performance is encouraging, we expect it will be several quarters before it is clear what impact this new competitor will have on the Borgata."
- "We also continued to widen our leadership position in poker where revenue grew by about $1 million as we captured nearly half of the entire Atlantic City poker market. These top line gains were magnified on the bottom line as the property increased EBITDA margins by more than 330 basis points during the first quarter, a reflection of the Borgata team's commitment to driving further efficiencies in the business without compromising the property's first-class customer experience."
- "We are seeing some positive factors as strip frequency from our customer base continues to grow and is now at the highest level in three years. Looking ahead, we expect steady EBITDA growth in our Local [LV] business."
- "Looking ahead, there is a lot of excitement about the progress that has been made in Downtown Las Vegas in recent months. The overall gaming market is expanding and its long-term outlook is encouraging. The Smith Center for Performing Arts and the Mob Museum opened during the first quarter, giving people new reasons to come to the area. These are exciting times in Downtown Las Vegas and we expect to see steady growth in visitor traffic as the renaissance of Downtown continues.""Outside of Las Vegas, we certainly are starting to see some positive signs at the lower end as well that shouldn't be a surprise as recovery takes hold."
- "In the months ahead, we will see further efficiencies from operational synergies contributing positively to EBITDA growth. And the rollout of B Connected next week will have a positive impact as well. At this point, the IP is exceeding our expectations and we see considerable additional upside for the property."
- IP EBITDA Margin: "I think there is certainly some upside from the 25.9% that we posted. B connected...goes into play live there next week. We think that is a big, big plus from a customer experience perspective and customer reward perspective. The summer is the peak season in the Gulf Coast market....there is a small new player coming online here in the next month or so, which we don't think will have an impact on our business, but, nonetheless, will mix things up a little bit."
- "We and certainly our competitors have gotten much better at putting loyalty cards in the hands of our customers, the group of unrated almost becomes a difficult group to find anymore."
- "With respect to the Native American investment we have made, it's still kind of a work-in-progress, it was a small investment we made for a tribe in California that we're still working with to see if we can pull a deal together and make an announcement. We'll probably have something hopefully to report later in the year, but it's still I think it's a construction in progress, if you will, not literally, but just figuratively."
- [Maryland Live impact] "We are not overly concerned with the impact from that operation. We have looked at our customers, where they are coming from, we're more focused on those properties kind of in the Philadelphia and the New York area. We're not expecting any impact really from that operation."
- "Our next maturity of $216 million is April 2014 approximately two years from today. We would expect to refinance that debt sometime prior to April of next year."
