Boyd to expand Fremont Las Vegas, reinstate quarterly dividend amid record cashflows and performances

Boyd Gaming Corp. has shared its financial results for the fourth quarter and full-year 2021. In FY21, the business reported revenues of $3.4 billion, up from $2.2 billion the prior year, and a net income of $463.8 million -$4.07 per share- versus a net loss of $134.7 million in 2020. Total Adjusted EBITDAR was $1.4 billion versus $609.9 million in 2020.

“Our company finished 2021 with record quarterly performances across every segment of our operations,” said Keith Smith, President and CEO of Boyd Gaming, in a written statement. “For the fourth straight quarter, we set new records for company-wide EBITDAR and operating margins. And on a full-year basis, we surpassed our previous EBITDAR record by more than 50%, as we achieved company-wide operating margins of more than 40%.”

In a call with investors on Thursday, Smith revealed new plans following the profitable results posted for Q4 and FY21. The executive said Boyd intends to invest $50 million in its Fremont property, located in downtown Las Vegas.

“This $50 million project will upgrade Fremont’s food and beverage offerings by expanding and enhancing its gaming floor,” the executive told analysts, according to Las Vegas Review-Journal. “Based on the demand we are already seeing at Fremont today, We expect to see excellent returns from this investment following its completion in early 2023.”

Boyd CEO Keith Smith.

For Q4, Boyd Gaming reported revenues of $879.8 million, up 38.4% from $635.9 million in the prior-year quarter. Net income was $109.8 million -$0.96 per share-, up from $83.3 million; and Total Adjusted EBITDAR was $347.3 million, increasing 65% from Q4 2020. Company-wide Adjusted EBITDAR margins after corporate expense was 39.5%, increasing 33.1%.

“Given the ongoing strength of our business, we are expanding our program to return capital to our shareholders by reinstating our quarterly dividend,” the company had said in its revenue report. “In conjunction with our current share repurchase program, this action reflects our commitment to a balanced approach to creating long-term shareholder value.”

In his talk to investors, Smith provided details of the program, stating the company’s board of directors has authorized a quarterly cash dividend of 15 cents per share on April 15 to shareholders of record as of March 15. This is more than double what the company paid pre-pandemic, and reflects the company’s strong cash flow and operating margins.

With the company now generating more free cash flow than ever, Boyd is enabled to return about $500 million to shareholdersboth through dividends and with $150 million in stock buybacks since a share repurchase plan was restarted last year.

Treasure Chest Casino, in New Orleans.

Every segment of our business contributed to this successful performance with 24 of our 27 open properties growing revenue at a double-digit rate during the quarter and 26 of our properties achieved double-digit (cash flow) increases with the sole exception being our property in Shreveport, (Louisiana), where we are contending with a new smoking ban,” Smith said, according to Review-Journal.

The CEO credits the “exceptional results” posted since reopening to streamlining the company’s cost structure, enhancing capabilities and focusing “on core customers.” In addition to the Fremont expansion, the company is also spending $95 million to convert the Treasure Chest Casino on Lake Pontchartrain in New Orleans into a fully land-based casino by late 2023.

While Smith admitted visitation levels experienced a slight decrease in late December amid the omicron variant, he said crowds have since returned starting January. However, he explained visitation levels from Hawaii, one of the company’s strongest markets, have yet to return to pre-pandemic levels.

Finally, Smith reflected on labor constraints, which have reduced visitation to a certain extent. But the executive said he expects workers to gradually return, as midweek visitation and convention traffic picks up. He also showed enthusiasm in regards to the company’s downtown Vegas operations as newcomer Circa is “bringing people to downtown.”

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