-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O1DdB/K8QV66JICV0xjd1rZ6R8nG1XX/o4K8w24+cvK5+HF7+M7yK9nROtqw4D1O 1eNhdkChCIRjpdC9KVEgeA== 0000892569-98-002090.txt : 19980803 0000892569-98-002090.hdr.sgml : 19980803 ACCESSION NUMBER: 0000892569-98-002090 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980731 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOYD GAMING CORP CENTRAL INDEX KEY: 0000906553 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 880242733 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 001-12168 FILM NUMBER: 98674723 BUSINESS ADDRESS: STREET 1: 2950 S INDUSTRIAL RD CITY: LAS VEGAS STATE: NV ZIP: 89109 BUSINESS PHONE: 7027927200 MAIL ADDRESS: STREET 1: 2950 SOUTH INDUSTRIAL ROAD CITY: LAS VEGAS STATE: NV ZIP: 89109 FORMER COMPANY: FORMER CONFORMED NAME: BOYD GROUP DATE OF NAME CHANGE: 19941130 10-Q/A 1 FORM 10-Q AMENDMENT 1 PERIOD END MARCH 31,1998 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q/A (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended March 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to ________ Commission file number 1-12168 BOYD GAMING CORPORATION (Exact name of registrant as specified in its charter) NEVADA 88-0242733 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2950 SOUTH INDUSTRIAL ROAD LAS VEGAS, NEVADA 89109 (Address of principal executive offices) (Zip Code) (702) 792-7200 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days. Yes X No -------- -------- Shares outstanding of each of the Registrant's classes of common stock as of April 30, 1998: Class Outstanding ----- ----------- Common stock, $.01 par value 61,669,628 2 BOYD GAMING CORPORATION QUARTERLY REPORT ON FORM 10-Q/A FOR THE PERIOD ENDED MARCH 31, 1998 TABLE OF CONTENTS PART I. FINANCIAL INFORMATION
Page No. -------- Item 1. Unaudited Condensed Consolidated Financial Statements Condensed Consolidated Balance Sheets at March 31, 1998 and December 31, 1997 3 Condensed Consolidated Statements of Operations for the three months ended March 31, 1998 and 1997 4 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 1998 and 1997 5 Notes to Condensed Consolidated Financial Statements 6 Signature Page 11
-2- 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS BOYD GAMING CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) MARCH 31, DECEMBER 31, (IN THOUSANDS, EXCEPT SHARE DATA) 1998 1997 - ------------------------------------------------------------------------------ ASSETS Current assets Cash and cash equivalents $ 77,881 $ 78,277 Accounts receivable, net 19,066 19,372 Inventories 8,681 9,906 Prepaid expenses 14,559 14,357 Income taxes receivable --- 2,787 ---------- ---------- Total current assets 120,187 124,699 Property and equipment, net 761,530 771,235 Other assets and deferred charges 44,517 41,912 Deferred income taxes 4,474 6,558 Goodwill and other intangible assets, net 206,660 208,011 ---------- ---------- Total assets $1,137,368 $1,152,415 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current maturities of long-term debt $ 1,757 $ 1,828 Accounts payable 32,084 28,535 Accrued liabilities Payroll and related 28,851 26,100 Interest and other 55,540 55,879 Income taxes payable 1,183 --- ---------- ---------- Total current liabilities 119,415 112,342 Long-term debt, net of current maturities 811,488 842,932 Commitments and contingencies Stockholders' equity Preferred stock, $.01 par value; 5,000,000 shares authorized --- --- Common stock, $.01 par value; 200,000,000 shares authorized; 61,669,628 shares outstanding 617 617 Additional paid-in capital 139,054 139,054 Retained earnings 66,794 57,470 ---------- ---------- Total stockholders' equity 206,465 197,141 ---------- ---------- Total liabilities and stockholders' equity $1,137,368 $1,152,415 ========== ==========
The accompanying notes are an integral part of these condensed consolidated financial statements. -3- 4 BOYD GAMING CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED (UNAUDITED) MARCH 31, ------------------ (IN THOUSANDS, EXCEPT SHARE DATA) 1998 1997 - -------------------------------------------------------------------------------- Revenues Casino $185,864 $153,965 Food and beverage 42,262 39,992 Room 18,514 19,360 Other 18,267 15,057 Management fees and joint venture 10,796 11,253 -------- -------- Gross revenues 275,703 239,627 Less promotional allowances 25,661 20,473 -------- -------- Net revenues 250,042 219,154 -------- -------- Costs and expenses Casino 95,408 78,065 Food and beverage 26,137 27,916 Room 5,774 6,473 Other 15,899 14,334 Selling, general and administrative 38,583 33,336 Maintenance and utilities 9,495 9,150 Depreciation and amortization 18,611 17,920 Corporate expense 4,900 5,002 Impairment loss -- 125,698 -------- -------- Total 214,807 317,894 -------- -------- Operating income (loss) 35,235 (98,740) -------- -------- Other income (expense) Interest income 113 151 Interest expense, net of amounts capitalized (19,272) (17,352) -------- -------- Total (19,159) (17,201) -------- -------- Income (loss) before provision (benefit) for income taxes 16,076 (115,941) Provision (benefit) for income taxes 6,752 (38,229) -------- -------- Net income (loss) $ 9,324 ($77,712) ======== ======== BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE - ---------------------------------------------------- Net income (loss) $ 0.15 ($1.27) ======== ======== Average basic shares outstanding 61,670 61,363 Average diluted shares outstanding 61,922 61,363 ======== ========
The accompanying notes are an integral part of these condensed consolidated financial statements. -4- 5 BOYD GAMING CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED (UNAUDITED) MARCH 31, ----------------------- (IN THOUSANDS) 1998 1997 - ------------------------------------------------------------------------------ CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 9,324 $(77,712) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 18,611 17,920 Deferred income taxes 2,084 (40,535) Impairment loss -- 125,698 Changes in assets and liabilities: Accounts receivable, net 306 5,049 Inventories 1,225 862 Prepaid expenses (202) 1,492 Income taxes receivable 2,787 1,873 Other assets (2,955) 1,630 Other current liabilities 7,077 (10,981) Income taxes payable 1,183 -- -------- -------- Net cash provided by operating activities 39,440 25,296 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES- Acquisition of property, equipment and other assets (8,321) (11,971) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Net borrowings under bank credit facility (31,000) (21,850) Payments on long-term debt (515) (625) -------- -------- Net cash used in financing activities (31,515) (22,475) -------- -------- Net decrease in cash and cash equivalents (396) (9,150) Cash and cash equivalents, beginning of period 78,277 70,426 -------- -------- Cash and cash equivalents, end of period $ 77,881 $ 61,276 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid for interest, net of amounts capitalized $ 19,825 $ 14,978 ======== ======== Cash paid for income taxes $ 698 $ 2,402 ======== ========
The accompanying notes are an integral part of these condensed consolidated financial statements. -5- 6 BOYD GAMING CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- NOTE 1. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Boyd Gaming Corporation and its wholly-owned subsidiaries, collectively referred to herein as the "Company". The Company owns and operates eleven casino entertainment facilities located in Las Vegas, Nevada, Tunica, Mississippi, Kansas City, Missouri, East Peoria, Illinois, and Kenner, Louisiana as well as a travel agency located in Honolulu, Hawaii. In addition, the Company manages a casino entertainment facility in Philadelphia, Mississippi, for which it has a seven year management contract that expires in 2001. All material intercompany accounts and transactions have been eliminated. Basis of Presentation In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the results of its operations and cash flows for the three month periods ended March 31, 1998 and 1997. It is suggested that this report be read in conjunction with the Company's audited consolidated financial statements included in the Annual Report on Form 10-K for the transition period ended December 31, 1997. The operating results and cash flows for the three month period ended March 31, 1998 are not necessarily indicative of the results that will be achieved for the full year or for future periods. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates used by the Company included the estimated useful lives for depreciable and amortizable assets, the estimated allowance for doubtful accounts receivable, the estimated valuation allowance for deferred tax assets, and estimated cash flows used in assessing the recoverability of long-lived assets. Actual results could differ from those estimates. Reclassifications Certain amounts in the 1997 condensed consolidated financial statements have been reclassified to conform to the 1998 presentation. These reclassifications had no net effect on the Company's net income. Recently Adopted Accounting Standards The Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income," which is effective for fiscal years beginning after December 15, 1997. This statement requires businesses to disclose comprehensive income and its components in their financial statements. The adoption of SFAS No. 130 did not affect the Company's condensed consolidated financial statements for the periods ended March 31, 1998 and 1997. -6- 7 The American Institute of Certified Public Accountants' Accounting Standards Executive Committee issued Statement of Position ("SOP") 98-5, "Reporting on the Costs of Start-up Activities." This standard provides guidance on the financial reporting for start-up costs and organization costs. This standard requires costs of start-up activities and organization costs to be expensed as incurred. This standard is effective for fiscal years beginning after December 15, 1998, though earlier application is encouraged. Management believes that this SOP could have a material impact on the consolidated financial statements depending on the status of the Company's current and future expansion projects at the time of adoption of this standard. NOTE 2. - IMPAIRMENT LOSS During the quarter ended March 31, 1997, the Company wrote-down the carrying value of its fixed and intangible assets in the Missouri gaming market to fair value, which resulted in a $126 million impairment loss. The impairment loss was recorded due to a significant change in the competitive environment with the January 1997 addition of a significantly larger competitor in the Kansas City gaming market and a history of operating losses at the Company's Sam's Town Kansas City gaming establishment. The fair value of the impaired assets was primarily determined through a discounted cash flow analysis of the operations of Sam's Town Kansas City. NOTE 3. - ACQUISITION On October 27, 1997, the Company acquired the remaining 85% equity interest in Treasure Chest Casino, L.L.C. ("Treasure Chest") that was not owned by the Company for approximately $103 million, plus the assumption of debt. Intangible license rights, representing the excess of the purchase price over the fair value of the net assets acquired, was approximately $85 million. Treasure Chest owns the Treasure Chest Casino, a riverboat casino operation on Lake Pontchartrain in Kenner, Louisiana. The Company has managed the Treasure Chest since its opening in September 1994. The Company funded the acquisition and the repayment of Treasure Chest's debt with borrowings under its bank credit facility. The Company's pro forma consolidated results of operations, as if the acquisition had occurred on January 1, 1997, are as follows:
Three Months Ended March 31, 1997 ------------------ Pro forma (in thousands, except per share data): Net revenues $ 246,142 Net loss (76,152) --------- Basic and diluted net loss per common share: Net loss $ (1.24) ---------
NOTE 4. - GUARANTOR INFORMATION The Company's $200 million of 9.25% Senior Notes (the "9.25% Notes") are guaranteed by a majority of the Company's wholly-owned existing significant subsidiaries. These guaranties are full, unconditional, and joint and several. In connection with the October 1997 acquisition of Treasure Chest discussed in Note 3, the Company created significant subsidiaries that do not guarantee the 9.25% Notes. Prior to October 1997, the assets, equity, income and cash flows of the non-guarantor subsidiaries represented less than 3% of the respective consolidated amounts and were inconsequential, individually and in the aggregate, to the Company. As such, the following consolidating schedules present separate condensed financial statement information on a combined basis for the parent only, as well as the Company's guarantor subsidiaries and non-guarantor subsidiaries, as of and for the three months ended March 31, 1998. Comparative financial information is not presented since such information is not material to investors. -7- 8 CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION AS OF MARCH 31, 1998
COMBINED COMBINED NON - ELIMINATION (IN THOUSANDS) PARENT GUARANTORS GUARANTORS ENTRIES CONSOLIDATED - -------------------------------------------------------------------------------------------------------------------------------- ASSETS Current assets $ 6,446 $ 93,836 $ 21,870 $ (1,965){1} $ 120,187 Property and equipment, net 19,504 699,177 42,849 - 761,530 Other assets and deferred charges 780,136 (349,532) 136,208 (517,821){1}{2} 48,991 Goodwill and other intangible assets, net - 121,808 84,852 - 206,660 ------------------------------------------------------- ---------------- Total assets $ 806,086 $ 565,289 $ 285,779 $ (519,786) $ 1,137,368 ======================================================= ================ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $ 23,858 $ 81,822 $ 17,011 $ (3,276){1} $ 119,415 Long-term debt, net of current maturities 574,639 236,782 67 - 811,488 Stockholders' equity 207,589 246,685 268,701 (516,510){2} 206,465 ------------------------------------------------------- ---------------- Total liabilities and stockholders' equity $ 806,086 $ 565,289 $ 285,779 $ (519,786) $ 1,137,368 ======================================================= ================
Elimination Entries {1} - To eliminate intercompany payables and receivables. {2} - To eliminate investment in subsidiaries and subsidiaries' equity. -8- 9 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1998
COMBINED COMBINED NON - ELIMINATION (IN THOUSANDS) PARENT GUARANTORS GUARANTORS ENTRIES CONSOLIDATED - ------------------------------------------------------------------------------------------- ------------ Revenues Casino $ - $ 155,102 $ 30,762 $ - $ 185,864 Food and beverage - 39,936 2,326 - 42,262 Room - 18,514 - - 18,514 Other 10,245 8,517 (495){1} 18,267 Management fees and joint venture 29,669 12,709 5,377 (36,959){1} 10,796 ------------------------------------------------- ----------- Gross revenues 29,669 236,506 46,982 (37,454) 275,703 Less promotional allowances - 24,016 1,645 - 25,661 ------------------------------------------------- ----------- Net revenues 29,669 212,490 45,337 (37,454) 250,042 ------------------------------------------------- ----------- Costs and expenses Casino - 84,140 11,268 - 95,408 Food and beverage - 23,648 2,489 - 26,137 Room - 5,774 - - 5,774 Other - 20,263 9,460 (13,824){1} 15,899 Selling, general and administrative - 32,171 6,412 - 38,583 Maintenance and utilities - 8,134 1,361 - 9,495 Depreciation and amortization 78 16,325 2,208 - 18,611 Corporate expense 4,016 373 511 - 4,900 ------------------------------------------------- ----------- Total 4,094 190,828 33,709 (13,824) 214,807 ------------------------------------------------- ----------- Operating income 25,575 21,662 11,628 (23,630) 35,235 Other expense, net (17,506) (1,653) - - (19,159) ------------------------------------------------- ----------- Income before provision for income taxes 8,069 20,009 11,628 (23,630) 16,076 Provision for income taxes 1,013 5,739 - - 6,752 ------------------------------------------------- ----------- Net income $ 7,056 $ 14,270 $ 11,628 $ (23,630) $ 9,324 ================================================= ===========
{1} - To eliminate intercompany revenue and expense. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOW INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1998
COMBINED COMBINED NON - (IN THOUSANDS) PARENT GUARANTORS GUARANTORS CONSOLIDATED - -------------------------------------------------------------------------------------------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES $ 33,173 $ 2,268 $ 3,999 $ 39,440 --------------------------------------- ------------ CASH FLOWS FROM INVESTING ACTIVITIES (428) (7,219) (674) (8,321) --------------------------------------- ------------ CASH FLOWS FROM FINANCING ACTIVITIES Net borrowings under bank credit facility (31,000) - - (31,000) Other 1,966 (2,386) (95) (515) -------------------------------------- ------------ Net cash used in financing activities (29,034) (2,386) (95) (31,515) --------------------------------------- ------------ Net increase (decrease) in cash and cash equivalents 3,711 (7,337) 3,230 (396) Cash and cash equivalents, beginning of period 2,832 58,317 17,128 78,277 --------------------------------------- ------------ Cash and cash equivalents, end of period $ 6,543 $ 50,980 $ 20,358 $ 77,881 ======================================= ============
-9- 10 NOTE 5. - NET INCOME (LOSS) PER COMMON SHARE During the six month period ended December 31, 1997, the Company adopted SFAS No. 128, "Earnings per Share". SFAS No. 128 requires the presentation of basic and diluted net income (loss) per share. Basic per share amounts are computed by dividing net income (loss) by the average shares outstanding during the period. Diluted per share amounts are computed by dividing net income (loss) by average shares outstanding plus the dilutive effect of common share equivalents. Since the Company incurred a net loss during the quarter ended March 31, 1997, both basic and diluted per share calculations are based upon average shares outstanding of 61,363,000 during the period. The effect of options outstanding to purchase 5,083,000 shares was not included in the diluted calculation during the period. Diluted net income per share during the quarter ended March 31, 1998 is determined considering the dilutive effect of outstanding stock options. The effect of stock options outstanding to purchase 2,711,000 shares was not included in the diluted calculation during the quarter ended March 31, 1998 since the exercise price of such options was greater than the average price of the Company's common shares. -10- 11 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BOYD GAMING CORPORATION (Registrant) Date: July 30, 1998 By /s/ ELLIS LANDAU -------------------------------- Ellis Landau Executive Vice President, Chief Financial Officer, Treasurer (Principal Financial Officer) -11- -----END PRIVACY-ENHANCED MESSAGE-----