Boyd posts loss in quarter
Boyd Gaming Corp. reported a third-quarter net loss yesterday after taking a $65 million charge to write down its sale of the South Coast Hotel & Casino in Las Vegas. The company also saw a decline in revenue from its Hawaii air charter subsidiary.
The Las Vegas-based casino operator said it had a net loss of $12.9 million, or 15 cents a share, compared with a net profit of $32.9 million, or 36 cents a share, a year earlier. Revenue rose 1.4 percent to $530.7 million from $523.5 million.
Vacations Hawaii, Boyd's charter flight subsidiary in Honolulu, saw revenue fall 19.4 percent to $10.4 million from $12.9 million.
The unit operates flights six days a week between Las Vegas and Honolulu.
For the first nine months of the year, Vacations Hawaii's revenue was down 8.9 percent to $36.9 million from $40.5 million over the same period a year earlier.
Hawaii residents primarily frequent Boyd's downtown properties, which include the California Hotel and Casino, the Fremont Hotel and Casino and the Main Street Station Casino, Brewery and Hotel.
The $65 million impairment charge allowed Boyd to write down South Coast to its fair value minus estimated cost to sell to Michael Gaughan, the founder of the Coast Casinos chain that Boyd merged with two years ago. That sale, which closed yesterday, involved $401 million in cash and the cancellation of a $112 million note.
"The completion of our South Coast sale provides additional capital for future growth, and in connection with the sale, we were able to repurchase approximately 3.4 million shares," said Bill Boyd, chairman and chief executive of the company.
Boyd also announced a deal with Harrah's Entertainment to trade the Barbary Coast Hotel and Casino in a tax-deferred exchange for approximately 24 acres of Las Vegas Strip property near Boyd's 63-acre Echelon Place development on the Las Vegas Strip.
In addition, Boyd said it would undergo a $130 million expansion project at its Blue Chip facility in Michigan City, Ind., to meet rising demand and strengthen the property's competitive edge in the northern Indiana market.
Echelon Place, set to open in 2010, is a $4 billion hotel, retail and casino development on the Las Vegas Strip site of Boyd's Stardust Hotel and Casino. Boyd recently announced it would close the Stardust, setting the stage for its demolition later in the first quarter of 2007.
