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Another big stock move following earnings suggests our Regional Reversal call still relevant. Feb regional gaming revs should bounce back

CONF CALL

  • New combined loyalty program launch in April 2014
  • All properties will be connected to universal card by mid-2015
  • New hotel yield system:  Kansas City came online in Dec; all properties will come online by end of 3Q
  • Trip frequency continues to decline with spend patterns stable; hardest hit among the <$100 segment
  • Rational marketing spend 
  • Will not pursue nonprofitable revenues
  • L'Auberge Lake Charles:  55% market share.  Double-digit growth from higher-end segments.
  • L'Auberge Baton Rouge:  market share increased 420bps from prior year (strong local and regional play), reduced marketing spend; achieved 2nd highest REVPAR in the company
  • ASCA St. Charles saw +10% REVPAR improvement in December due to new hotel yield system
  • River City:  230bps improvement in market share; cash revenue up 15% and total food up 32%
  • South segments:  saw better demand trends than Midwest; record EBITDA for both L'Auberge properties
  • January remain challenged; February off to better start
  • ASCA synergies:  public company costs, labor, and scale efficiencies; have started to implement changes in marketing. Will exceed $40MM target by 1Q 2014.
  • Belterra Park:  on time and slightly underbudget
  • New Orleans hotel:  on budget and will open early summer 2014
  • Lumiere sale will close 1Q or early 2Q

Q & A

  • Weather adversely impacted in December by $2MM
    • January was tough; could have worse impact
  • <$100MM segment:  unprofitable programming and macro factors
  • Corporate expense run rate:  expect to trend down towards $20MM
  • D&A:  expansion of River City creeped up D&A in Q4.  Additional D&A in Q4 due to player list purchase accounting.  Real depreciation in Q4 was $55-60MM.
  • 2014 Cash Taxes:  $10MM
  • Most of revenue synergies will be in 1H 2014
  • $26MM synergies:  almost exclusively cost synergies
  • Careful about reinvestments
  • Marketing reduction in 4Q:  1) L'Auberge Baton Rouge out of launch mode 2) marketing reductions across portfolio due to softness in revenues 3) eliminated unprofitable programming
  • 10K - March 3
  • Tilman Fertitta property (Lake Charles): plan to open Fall 2014 
    • think market will grow
  • Will continue to de-lever the company
  • Will look at NY, FL opportunities