Boyd Gaming Corp. (BYD) reported Monday a wider net loss in its fourth quarter, mainly reflecting an impairment charge related to its decision not to proceed with development of the Echelon site on the Las Vegas Strip. Adjusted loss was wider-than-expected by Wall Street analysts on higher expenses, and revenues missed their view, despite growth.
The company also entered into a definitive agreement to sell the Echelon site to the Genting Group for $350 million in cash.
Boyd Gaming said its sale agreement includes both the 87-acre land parcel as well as all improvements to the site. The transaction would close today, subject to deal terms and satisfaction of various conditions. Boyd Gaming expects to receive about $157 million in net proceeds from the transaction.
President and Chief Executive Officer Keith Smith said, "The sale of the Echelon site is another important step in the ongoing effort to improve our long-term financial position. While we remain committed to the Las Vegas market, we determined that developing a large-scale project on the Las Vegas Strip was not consistent with our current strategy."
In its recently concluded fourth quarter, net loss attributable to the company widened to $899.90 million or $10.24 per share compared to a loss of $491 thousand or $0.01 per share prior year.
The latest quarterly results were hurt by a one-time, non-cash pretax impairment charge of approximately $994 million related to Boyd Gaming's decision not to proceed with development of the Echelon site. The results also reflected $39.4 million of impairment charges associated with the company's excess land holdings in North Las Vegas and Pennsylvania, and a $17.5 million impairment charge associated with its gaming license in Shreveport, Louisiana.
Adjusted loss, which excluded items, was $27.7 million or $0.31 per share, compared to a loss of $2.9 million or $0.03 per share, in the prior year. On average, 14 analysts polled by Thomson Reuters expected the company to report a loss of $0.13 per share for the quarter. Analysts' estimates typically exclude special items.
Net revenues, however, increased 3.2 percent to $625.84 million from $606.67 million last year, while analysts' were looking for revenue of $635.37 million.
For fiscal 2012, attributable net loss was $908.87 million or $10.37 per share, compared to last year's net loss of $3.85 million or $0.04 per share. Adjusted loss was $24.7 million or $0.28 per share, compared to earnings of $1.1 million or $0.01 per share a year ago. Annual net revenues improved 6.5 percent to $2.49 billion.
Commenting on the results, Keith Smith said, "We continued to make significant progress executing our Company's strategic plan. The completion of the Peninsula acquisition further diversifies our operations, and will strengthen our balance sheet by greatly expanding our free cash flow... We remain focused on improving our core business, successfully integrating the Peninsula assets, and finding new ways to drive revenue and EBITDA growth throughout the business."
Boyd Gaming shares closed Friday's trading at $6.46, down $0.11 or 1.67 percent.
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