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