“Despite the soft revenue environment, Station Casinos reported revenue increases across all major departments and generated double-digit growth in Adjusted EBITDAM. This is our tenth consecutive quarter of gains in Adjusted EBITDAM. Our continued focus on efficiently managing our business has clearly improved our operating results."
-Marc Falcone, Executive Vice President, Chief Financial Officer and Treasurer.
CONF CALL NOTES
- Disappointed in LV Locals revenue
- Higher healthcare costs, federal govt issues impacted revenue environment
- Graton Resort & Casino: 30% Asian target population in San Francisco; 13 restaurants, 9 casual dining choices
- Pleased with inital opening of property and consumer response; smoothest of new Stations Casino openings
- Fees: will now receive 24% of pre-tax income (year 1-4) and 27% of pre-tax income (year 5-7)
- 10th consectuive growth of EBITDA growth
- Overall, core LV market remain strong; housing market has shown improvements; construction on Strip is promising
- Nevada: Ultimate Poker continues to be the leader. Will release new features in next few months
- Full-launch NJ i-gaming: Nov 26
- North Fork Rancheria: referendum will be on Nov 2014 ballot; Oct 22 compact was published in federal register; timing has become less certain
- Adjusted EBITDAM leverage of 5.9x will improve as Graton opens
- 3Q Capex: $15.6MM; $66.8MM YTD; $20-25MM addtional capex for balance of 2013
Q & A
- Graton: property opened for 1 week; will provide more financial details next quarter
- Customers: getting decent response from Asian community
- Simliar trends within portfolio but more softness at lower-end properties
- Continue to delever the company
- LV Locals: will not comment on Oct trends; July/August was strong, September was weak; similar comments made by other operators
- Promotional environment: STN remains disciplined. Periodic episodes of promotional activity by different operators.
- $62MM Loan (rate 11 5/8%)
- 2014 LV Locals: group bookings are solid, visibility is limited
- i-gaming NV: CZR launched 45 days ago; impact has been within range or slightly better than what they expected; CZR grew the market a little bit; industry still remain challenged with use of credit cards; still market leader
- i-gaming NJ: $300MM to $1.2 BN - estimate of market size; will be dependent on ACH and wire payment options - will create limitations on market size; there will be an option to provide free play for players
- North Fork: waiting for validation of 500k signatures; no clarity until they get those
- Will launch with full scale of games offerings in NJ
- i-gaming NJ: Exclusive contract agreement with Trump
