Increased business from its three downtown Las Vegas casinos helped Boyd Gaming Corp. offset poor first-quarter results from the company’s regional jurisdictions hurt by weather issues and market softness.
The Las Vegas-based company said Wednesday it had its best first quarter in five years from Main Street Station, Fremont and California Club, all of which benefited from a cavalcade of market-changing events downtown.
“It’s really a combination of all the things happening downtown combined which has led to a little bit of a renaissance on Fremont Street,” Boyd Gaming CEO Keith Smith said following an afternoon conference call with analysts to discuss results for the quarter that ended March 31.
The opening of the Zappos headquarters in the former City Hall, improvements on East Fremont Street, such as the opening of Container Park, and the opening of the Downtown Grand inside the former Lady Luck, have all worked to boost downtown visitation.
Smith said the opening this week of the Slotzilla zipline attraction on Fremont Street would also bring more visitors downtown, which benefits Boyd Gaming’s properties.
“It ends right at the Fremont,” Smith said.
Boyd said its net loss for the first quarter was $6.2 million, an improvement from the loss of $7.3 million in the same quarter of 2013. Boyd told investors the company lost 6 cents per share in the first quarter, compared to a loss of 8 cents per share a year ago.
Total revenues companywide declined nearly 4 percent to $708.3 million.
In addition to weather issues in the Midwest and South, the company’s Borgata resort in Atlantic City recorded a $3.2 million operating loss related to its launch of online gaming operations in New Jersey.
From its locals segment, which includes the Coast casinos brands and Sam’s Town, Boyd Gaming said its revenues declined less than 1 percent to $151.4 million. However, cash flow from the properties increased 2 percent, the fifth consecutive quarter of cash flow gains.
On the conference call, Boyd chief operating officer Paul Chakmak said the company is looking at upgrading its restaurant offerings in its locals properties. The company renovated hotel rooms at the Gold Coast last year and is now upgrading convention space. Chakmak said Boyd would also finish hotel room renovations at The Orleans and Suncoast.
In downtown, Boyd Gaming’s net revenue grew 3.1 percent to $55.7 million, and cash flow increased 31.2 percent. The company also credited yield improvements in the Boyd’s Hawaiian charter service.
“The refinements we have made to our operations are paying clear dividends in all segments of our business, and we expect additional benefits as the economy recovers,” Smith said in a statement.
Smith said Boyd repaid $55 million of debt during the quarter. Boyd’s total debt was $4.37 billion, of which $1.14 billion was related to its purchase of Peninsula Gaming more than a year ago and $809.3 million was related to Borgata.
Smith didn’t have much to say about the investment in Boyd in March by a New York hedge fund. The stock purchase led to speculation the investor might seek for Boyd to spin off its casinos into a real estate investment trust.
“We spend time thinking of ways to create shareholder value in the company,” Smith said on the conference call. “We consider all such alternatives, but we don’t comment on them until we make a decision. It’s like making an acquisition.”
Boyd declined to bid on one of four casino licenses available in upstate New York, but Smith said that process was still early and there was still a possibility Boyd could be brought in as part of a management deal.
Contact reporter Howard Stutz at email@example.com or 702-477-3871. Follow @howardstutz on Twitter.