Boyd Gaming Reports 1Q '09 Results

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. May 06, 2009

MAY 6, 2009 - Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the first quarter ended March 31, 2009.

For the quarter, we reported a net loss of $13.8 million, or $0.16 per share, compared to a loss of $32.6 million, or $0.37 per share, in the same period last year. The loss was due in part to a non-cash, pre-tax impairment charge of $28.4 million related to the write-off of goodwill incurred as a result of the finalization of our purchase price for Dania Jai-Alai in January 2009.

Adjusted Earnings(1) for the first quarter 2009 were $13.0 million, or $0.15 per share, compared to $29.6 million, or $0.34 per share, for the same period in 2008. During the first quarter 2009, certain pre-tax adjustments resulted in a net reduction of income by $41.5 million ($26.8 million, net of tax, or $0.31 per share). By comparison, the first quarter 2008 included certain pre-tax adjustments that had a net effect of reducing income by $95.0 million ($62.2 million, net of tax, or $0.71 per share). Pre-tax adjustments in the first quarter 2009 and 2008 are listed in a table at the end of this press release.

Net revenues were $434.8 million for the first quarter 2009, compared to $471.1 million for the same quarter in 2008, a decrease of 7.7%. Total Adjusted EBITDA was $109.6 million for the quarter, compared to $127.7 million in the prior year.

Keith Smith, President and Chief Executive Officer of Boyd Gaming, commented on the quarter, "The recession continues to impact our business, but we're encouraged by some positive trends that developed during the quarter. In our Las Vegas Locals region, we began to see signs of stabilization, while Borgata continued to outperform a severely challenged Atlantic City market. Results were especially encouraging in our Midwest and South and Downtown Las Vegas regions, both of which posted gains for the quarter. These regional performances helped to offset difficult economic climates in Las Vegas and Atlantic City, and demonstrate the value of geographic diversification to our Company."

(1) See footnotes at the end of the release for additional information relative to non-GAAP financial measures.

Key Operations Review

Las Vegas Locals

In our Las Vegas Locals segment, first quarter 2009 net revenues were $170.1 million versus $206.5 million for the first quarter 2008. First quarter 2009 Adjusted EBITDA was $45.3 million, a 32.0% decrease from the $66.7 million in the same quarter 2008. We continue to be impacted by overall weakness in consumer spending, as well as significant declines in room rates.

Downtown

Our Downtown Las Vegas properties generated net revenues of $58.7 million and Adjusted EBITDA of $13.4 million for the first quarter 2009, versus $60.9 million and $10.2 million, respectively, for the first quarter 2008. Favorable fuel pricing led to improved margins from our Hawaii charter operations, while increased efficiencies in our Downtown operations also strengthened results.

Midwest and South

In our Midwest and South region, we recorded $206.1 million in net revenues for the first quarter 2009, compared to $203.7 million for the same period in 2008. Adjusted EBITDA for the current period was $48.0 million, an increase of 5.3% from the $45.6 million reported in the first quarter of 2008. Continued strength at our Louisiana properties helped boost results from this region, highlighted by all-time record revenue and Adjusted EBITDA at Delta Downs.

Borgata

Borgata's operating income for the first quarter 2009 was $25.5 million versus $37.1 million for the first quarter 2008. Net revenues for Borgata were $187.9 million for the first quarter 2009, down compared to the $202.0 million recorded in the same quarter in 2008. Adjusted EBITDA was $45.9 million, compared to $55.5 million for the first quarter 2008. Borgata's results were adversely impacted by both the recession and an increasingly competitive regional environment.

Paul Chakmak, Executive Vice President and Chief Operating Officer, said, "We responded aggressively to this downturn by streamlining our operations and removing costs from across our business. These efforts helped lessen the recession's impact on our results, particularly in our Las Vegas regions. Elsewhere, results were brighter. Our Louisiana properties have proven resilient, and our Blue Chip expansion is being favorably received as we transition from our opening phase."