Boyd Gaming slipped to a loss for the first quarter in 2019, as the closure of all its venues due to the novel coronavirus (Covid-19) resulted in revenue falling 17.7% year-on-year to $680.5m.
The operator’s casinos in the Midwest and South brought in $445.6m in revenue for the three months to March 31, down 17.7% from Q1 2019.
Boyd’s Las Vegas local casinos brought in $180.8m, down 18.9%, while its Downtown Las Vegas properties brought in $54.1m, down 14.1%.
Gaming brought in the vast majority of revenue, at $509.8m, a 17.8% year-on-year decline. Food and beverage revenue, meanwhile, fell 19.1% to $89.8m. Revenue from rooms fell 18.4% to $46.7m and other revenue declined 11.8% to $34.1m.
Keith Smith, president and chief executive of Boyd Gaming, said the pandemic had halted momentum for the business in the period, revealing it had been on course to grow revenue year-over-year before Covid-19 hit.
“Prior to the closure of all of our properties in mid-March, our company began the first quarter with a strong performance, posting two consecutive months of solid year-over-year growth across our nationwide operations,” Smith said.
“And while our first-quarter results were significantly impacted by property closures, we have taken broad-based actions to reduce expenses and preserve liquidity.
“As a result of these actions, and the progress we have made in recent years to strengthen our balance sheet, we believe our company is well-positioned to sustain itself through the closure period. We intend to emerge from these challenging times as a more efficient and operationally focused company.”
The temporary closure of its venues did lead to costs of sales declining 10.0% to $21.4m for the period. Boyd’s operating expenses also fell, but less quickly than revenue, declining 8.8% to $647.2m.
Gaming-related costs were the highest expense, at $238.7m, down 13.7%. Food and beverage costs fell 12.1% to $89.8m while room expenses declined 14.5% to $23.0m.
Selling, general and administrative costs declined 1.8% from 2019 to $113.4m, while lease and rent expenses grew by 2.9% to $24.7m.
Maintenance and utility costs were 13.1% lower than in 2019, at $33.1m, while corporate expenses, excluding share-based compensation, fell 20.2% to $16.8m.
This left the business with earnings before interest, tax, depreciation and amortisation (EBITDA) of $119.8m.
Depreciation and amortization charges amounted to $67.0m, down 0.4% year-on-year.
Project development, preopening and writedown costs came to $3.5m, down 12.5%, while other operating costs grew more than 35-fold to $7.5m. Share-based compensation fell 15.6% to $8.2m.
This left an operating profit of $33.3m, down 71.7%.
Boyd reported net financial income of $51.2m, down 13.4%. The business received $439,000 in interest income and $344,000 in other financial income, but this was easily outweighed by interest expenses of $51.8m, in addition to a $175,000 loss on early extinguishment or modifications of debt.
As a result, the operator made a pre-tax loss of $17.9m, down from a profit of $56.3m last year. After paying $427,000 in income taxes, Boyd’s net loss was $18.3m, compared to a $45.5m profit last year.
Earlier this month , Boyd set out a number of additional measures to mitigate the financial impact of the pandemic, including placing most of its staff on unpaid furlough. In March, when it announced the closure of all of its venues, the operator also suspended its 2020 cash dividend.
Smith said Boyd looks forward to reopening its properties, but only when it is safe to do so.
“We are fully supportive of the actions taken by state and local officials to help slow the spread of Covid-19, including the closure of our properties nationwide,” Smith said.
“We look forward to re-opening our properties ‒ following strict safety protocols that will meet or exceed the requirements set forth by health officials ‒ when state authorities determine it is appropriate to do so.”