Station Casinos, a Las Vegas locals-oriented gaming company whose properties include Green Valley Ranch and Red Rock Resort, announced its second-quarter earnings today.
Company: Station Casinos LLC
Revenue: $324.2 million, up 2.4 percent from the second quarter of 2013.
Earnings: $55.4 million, compared to $7.3 million last year. Part of the reason for the dramatic difference is that Graton Resort & Casino in Northern California hadn’t opened at this time last year.
What it means: Station also reports its adjusted earnings before interest, income taxes, depreciation, amortization and management fees, which is not a generally accepted accounting principle. Using that measurement, the company’s earnings were $104.4 million, excluding its online affiliate Fertitta Interactive. That marks Station’s 13th consecutive quarter of growth in that category.
Including Fertitta Interactive, adjusted earnings were $101.9 million, a 6 percent increase from last year. Chief Financial Officer Mark Falcone told analysts in a conference call that online gaming overall has gotten off to a slower start than anticipated, but that Station has made some adjustments to its products.
Hotel revenue increased, while food and beverage revenue was down slightly, but the company attributed that dip mostly to renovations closing some Red Rock and Green Valley restaurants. Falcone said that Mercadito, the restaurant that opened at Red Rock earlier this summer, is exceeding expectations.
And while business on the Strip has been improving, Falcone said, Station hasn’t yet seen that translate into more gaming revenue from locals.
Station’s long-term debt is $2.2 billion.
Quote: “Despite a challenging operating environment in the second quarter, Station Casinos continued its positive trend of year-over-year improvements by posting its 13th consecutive quarter of Adjusted EBITDAM growth...Our same-store Las Vegas properties continued to perform well on many measures in the second quarter. Despite the softness in revenues and some unanticipated costs, we were still able to yield significant flow-through this quarter of 98 percent of the revenue increase to Adjusted EBITDAM in the quarter.” — Chief Financial Officer Mark Falcone