CONF CALL
- Non-gaming initiatives working out
- Consumers growing more confident and spending more
- Locals market solid- non-gaming grew in 7th consecutive quarter. Orleans and Suncoast did well.
- EBITDA fell due to $1m disruption at Suncoast (will continue until road work ends in June).
- Sports book win down 80% related to Super Bowl bets
- Downtown LV: solid Hawaiian play and increased Fremont Street. Non-gaming up 3%. Lower fuel costs from Hawaiian service.
- Regionals: Kansas Star (improved marketing plans). IP (strong flowthrough). Blue Chip (revenue and EBITDA grew). Treasure Chest (revs up 8% thanks to visitation and slot play). Par-a-Dice: adapting to new competitive landscape well. Delta Downs (well ahead of expectations, strong visitation from core customers)
- Borgata: $5.5m property tax benefits; solid gaming volumes; more cost efficiencies. Contributed to 14,000 more room nights in 1Q.
- AC Same-store gaming revenues grew 5% in 1Q 2015
- Customer is changing: younger demographic of customers; need to reposition non-gaming amenities
- Cash room rates at LV: +14%
- Orleans/Blue Chip renovation scheduled to be completed by end of 2015
- 20 new F&B concepts will open in next 12 months
- Debt reduced by $80m in 1Q
- 1Q capex: $19m ($7m Peninsula, $5m Borgata); will meet previously issued FY capex ($100m maintenance (Boyd), $15m maintenance (Peninsula) $45m project capex, Borgata around $25m)
- Guidance raised:
- Expect LV road construction to impact 2Q (about ~$1mm)
- Expect LV Locals and Downtown EBITDA to grow 2-3% : also for Q2
- Expect Midwest/South EBITDA to grow 3-4%: also for Q2
- Expect Borgata EBITDA ($160-165m)
- Borgata leverage ratio: 4.2x (down from 7.0x leverage in March 2014)
Q & A
- Margins are sustainable, particularly in payroll/marketing
- Delta Downs: through April, continue to be very strong
- LV Q2: trends from Q1 are continuing into Q2. April is similar to Q1. May is looking good. June is looking soft. Nothing that gives them concern.
- REIT option - continue to evaluate
- LV Downtown: cost cuts (half of it was due to lower fuel costs)
- Raised FY guidance all due to stronger Q1 results
- Pacquiao fight and Rock in Rio: will take advantage by levering up rates
- Slot replacement cycle is fairly normal