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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(AMENDMENT NUMBER 1)
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended June 30, 1995
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)
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Nevada 88-0242733
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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2950 South Industrial Road, Las Vegas NV 89109
(Address of principal executive offices) (Zip Code)
(702) 792-7200
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
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NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- ---------------------
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Common Stock, par value $.01 per share New York Stock Exchange
10.75% Series B Senior Subordinated Notes New York Stock Exchange
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SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None
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 than the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
-- --
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. / /
As of September 22, 1995, the aggregate market value of the voting
stock held by non-affiliates of the Registrant, based on the closing price on
the New York Stock Exchange for such date, was approximately $302,492,258.
Shares of Common Stock held by officers, directors and holders of more than 5%
of the outstanding Common Stock have been excluded from this calculation
because such persons may be deemed to be affiliates. This determination of
affiliate status is not necessarily a conclusive determination for other
purposes.
As of September 22, 1995, the Registrant had outstanding 56,999,018
shares of Common Stock.
Documents Incorporated by Reference into Parts I-III: Portions of the
Registrant's 1995 Annual Report to Stockholders are incorporated by reference
into Part II hereof and portions of the definitive Proxy Statement for the
Registrant's 1995 Annual Meeting of Stockholders are incorporated by reference
into Part III hereof.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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FINANCIAL CONDITION AND CAPITAL RESOURCES
Cash Flow and Working Capital
The Company's policy is to use operating cash flow and debt and equity
financing to fund renovation of its properties and expansion of its business
both in Nevada and in emerging markets. The Company believes that the current
expansion of the gaming industry affords opportunities for companies with strong
management capabilities and financial resources to achieve significant returns
on invested capital and thereby create shareholder value. The Company has
completed a significant expansion program and is continuing to explore new
opportunities for growth.
The Company's cash flow from operating activities was $83.1 million in
the fiscal year ended June 30, 1995. This compares to $75.8 million in the prior
fiscal year and $54.4 million in the fiscal year ended June 30, 1993. The
Company's balance of cash, cash equivalents and short term investments,
exclusive of cash used in the Company's operations, was $53.7 million on June
30, 1995, compared to $46.7 million on June 30, 1994.
The Company's cash flow from investing activities resulted in net cash
used of $145.5 million in the fiscal year ended June 30, 1995. This compares to
$310.4 million in the prior fiscal year and $23.0 million in the fiscal year
ended June 30, 1993.
The Company's cash flow from financing activities resulted in net cash
provided by financing activities of $78.7 million in the fiscal year ended June
30, 1995. This compares to $241.5 million in the prior fiscal year and $7.4
million in the fiscal year ended June 30, 1993.
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Capital Expenditures
The Company is committed to continually maintaining and enhancing its
existing facilities, most notably by upgrading and remodeling its casinos and
restaurants and by providing the latest state-of-the art slot machines for its
customers. The Company's capital expenditures for these purposes were $23.5
million, $16.2 million and $26.1 million in its three fiscal years ended June
30, 1995, 1994 and 1993, respectively.
The Company completed its current expansion program with the opening of
Sam's Town Kansas City on September 13, 1995 at a cost of approximately $145
million including land, capitalized interest and preopening costs of
approximately $10 million. The program consisted of expansions and acquisitions
with respect to five properties in Nevada and the development of and investment
in four properties in three states outside of Nevada. The Nevada projects
included the acquisition of the Eldorado Casino and Jokers Wild Casino, the
acquisition of Main Street Station, the expansion of Sam's Town Las Vegas and
the addition of a 146-room hotel tower at the California Hotel and Casino. The
projects outside of Nevada included Sam's Town Tunica, Silver Star Hotel and
Casino which is managed by the Company and owned by the Mississippi Band of
Choctaw Indians, Treasure Chest Casino which is managed by the Company and in
which the Company has a 15% equity interest and Sam's Town Kansas City. The
total cost of this expansion program was approximately $505 million of which
approximately $145 million and $325 million was spent in fiscal 1995 and fiscal
1994, respectively. Approximately $35 million will be spent in fiscal 1996 to
complete Sam's Town Kansas City. The funds for these projects came from funds
provided by operations, proceeds from the Company's initial public offering in
October 1993, shares issued and debt assumed in connection with the acquisition
of the Eldorado and Jokers Wild Casinos, bank borrowings and the issuance of
public debt. In addition to these projects, the Company completed an $18 million
rooms expansion project at Sam's Town Tunica (completed December 1994) and
loaned an additional $10 million to the Mississippi Band of Choctaw Indians for
purposes of a casino expansion at Silver Star
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Hotel and Casino (completed December 1994).
Long Term Debt
During fiscal 1995, the Company completed the following debt transactions:
--- In November 1994, pursuant to its loan agreement, the Company
increased the availability under its Boyd Tunica loan to $60
million from $30 million. This loan matures in August 1998
and is secured by the Company's Sam's Town Tunica property
located in Tunica County, Mississippi. As of June 30, 1995
the loan was fully drawn.
--- Equipment and other financing totaling $26.4 million.
--- As of June 30, 1995, the Company had a commitment from a
group of banks whereby the banks have agreed to make
available up to $30 million through a two-year reducing
revolving credit facility. This facility will be secured by
the Company's Sam's Town Kansas City property located in
Kansas City, Missouri. This transaction is expected to be
finalized in October 1995.
Stockholders' Equity
The Company's stockholders' equity increased from $164.4 million on
June 30, 1994 to $202.6 million on June 30, 1995. Most of the increase resulted
from the Company's earnings during fiscal 1995. In addition, 182,123 additional
shares of common stock were issued pursuant to the Employee Stock Purchase Plan.
New Expansion Projects
In connection with the opening of the Fremont Street Experience the
Company is committed to opening the Main Street Station Hotel and Casino by the
middle of 1996. This project is expected to include a refurbishment of rooms, a
redesign of the property's public space and the construction of a parking
garage. The Company is in the initial design and planning stages of this project
and has not yet developed a definitive budget.
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The Company continues to pursue and investigate additional expansion
opportunities both in Nevada and in emerging markets where casino gaming is
currently permitted. The Company is also pursuing expansion opportunities in
jurisdictions where casino gaming is not currently permitted in order for the
Company to be prepared to develop projects upon approval of casino gaming. Such
expansions will be affected and determined by several key factors, including the
resolution of certain zoning matters (which will determine whether the Company
can proceed with a hotel/casino project on a site it has identified in Reno,
Nevada); the selection process of the Indiana Gaming Commission (the Company has
an application pending in Hammond, Indiana); the license selection process of
the Missouri Gaming Commission (the Company has been selected by the City of
Cape Girardeau, Missouri to be the developer and operator of a riverboat casino
facility in downtown Cape Girardeau ); approval of gaming in jurisdictions where
the Company has been active but where casino gaming is not currently permitted;
identification of additional suitable investment opportunities in current gaming
jurisdictions; and availability of acceptable financing. Additional projects
will require the Company to make substantial investments. When these investments
are required, the Company intends to use one or a combination of cash flow from
operations, availability under existing credit agreements, new borrowings to the
extent permitted under existing debt agreements, the issuance of additional
equity and vendor and other financing to meet its need for capital.
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RESULTS OF OPERATIONS
The following table sets forth for the periods indicated certain Income
Statement Data for the Company's properties. As used herein, "Boulder Strip
Properties" consists of Sam's Town Las Vegas, the Eldorado Casino and Jokers
Wild Casino (both acquired in October 1993); "Downtown Properties" consists of
the California Hotel and Casino and the Fremont Hotel and Casino; and the
"Central Region" consists of Sam's Town Tunica (opened May 1994), management fee
income from Silver Star Hotel and Casino (opened July 1994), and management fee
and joint venture income from Treasure Chest Casino (opened September 1994).
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Year Ended June 30,
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(In thousands) 1995 1994 1993
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INCOME STATEMENT DATA
NET REVENUES
Stardust $193,563 $195,899 $191,735
Boulder Strip Properties 168,036 125,087 108,982
Downtown Properties 135,232 137,726 129,961
Central Region 163,509 9,507 -
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Total Properties 660,340 468,219 430,678
OPERATING INCOME
Stardust 30,688 26,713 28,039
Boulder Strip Properties 15,551 20,686 24,696
Downtown Properties 22,561 23,583 21,810
Central Region 68,486 2,439 -
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Total Properties 137,286 73,421 74,545
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FISCAL 1995 COMPARED TO FISCAL 1994
Consolidated net revenues increased 41% for fiscal 1995 compared to
fiscal 1994. This increase in net revenues in fiscal 1995 resulted from the
Company's current expansion program which included the opening of Sam's Town
Tunica in May 1994 and a subsequent rooms expansion project in December 1994,
the opening of the Silver Star Hotel and Casino in July 1994 and a subsequent
casino expansion in December 1994, the opening of the Treasure Chest Casino in
September 1994, the opening of Sam's Town Las Vegas expansion in July 1994 and
the opening of the California Hotel rooms expansion in December 1994. The
Company's Central Region, which consists of Sam's Town Tunica, Silver Star Hotel
and Casino and
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Treasure Chest Casino, accounted for more than 80% of the increase in net
revenues. Only one of these properties was open prior to the start of the fiscal
year as Sam's Town Tunica was open for approximately one month in fiscal 1994.
In the Company's Nevada Region, which consists of the Stardust Resort and
Casino, Sam's Town Las Vegas, the Eldorado Casino, Jokers Wild Casino, the
California Hotel and Casino and the Fremont Hotel and Casino, net revenues
increased 8.3% with net revenues at the Boulder Strip Properties increasing 34%
and net revenues at the Stardust and Downtown Properties declining 1.2% and
1.8%, respectively. Net revenues at the Boulder Strip Properties were enhanced
by the opening in July 1994 of the Sam's Town Las Vegas expansion and by the
acquisition of the Eldorado Casino and Jokers Wild Casino in October 1993. The
Company's revenue growth was achieved in all major revenue categories with
casino revenue increasing 36%, room revenue increasing 45%, food and beverage
revenue increasing 18.6% and other revenue increasing 28%. Management fee and
joint venture revenue relating to the operation of the Silver Star Hotel and
Casino, which opened in July 1994 and the Treasure Chest Casino, which opened in
September 1994, totaled $35.8 million for fiscal 1995. Slot revenue, which
continues to account for more than two-thirds of total casino revenue, increased
38% in fiscal 1995 compared to fiscal 1994. The increase in slot revenue is
primarily attributable to the opening of Sam's Town Tunica in May 1994 and the
opening of the Sam's Town Las Vegas expansion in July 1994. Table games revenue,
the only other significant component of casino revenue, increased 39% also as a
result of the opening of Sam's Town Tunica and the Sam's Town Las Vegas
expansion. Company-wide room revenue increased 45% for fiscal 1995 compared to
fiscal 1994 primarily as a result of a 25% increase in occupied rooms and a
12.7% increase in average daily room rate. The increase in occupied rooms is
attributable to the openings of the Sam's Town Las Vegas expansion in July 1994
(650 rooms), the opening and subsequent expansion of Sam's Town Tunica (200
rooms opened May 1994 and an additional 308 rooms opened December 1994) and the
opening of the California Hotel and Casino rooms expansion (146 rooms opened
December
<PAGE> 8
1994). The Company's hotel rooms posted an overall occupancy percentage of 95%
in fiscal 1995 compared to 98% in fiscal 1994. Occupancy statistics do not
include Main Street Station rooms which the Company uses to augment the rooms
base at the California and Fremont. Occupancy rates at the Stardust declined to
97% while Sam's Town Tunica posted an occupancy rate of 87% for fiscal 1995.
Consolidated operating income increased 104% for fiscal 1995 compared
to fiscal 1994 while consolidated operating income margins increased 5.1
percentage points to 16.7% for fiscal 1995 compared to 11.6% in fiscal 1994. The
increase in operating income and operating income margins for fiscal 1995 was
generated primarily by the Company's Central Region properties which produced
$68.5 million in operating income and posted a 42% operating income margin. In
the Nevada Region, the Stardust operating income margin increased to 15.9% in
fiscal 1995 from 13.6% in fiscal 1994 and operating income margins at the
Boulder Strip and Downtown Properties declined to 9.3% and 16.7%, respectively,
in fiscal 1995. Higher corporate expense related to the Company's development
activities also impacted consolidated operating income margins. Operating income
in the Central Region includes management fees and joint venture income related
to the Company's Silver Star and Treasure Chest operations. Neither of these
properties were open in fiscal 1994.
Net revenues at the Stardust declined 1.2% for fiscal 1995 as compared
to the prior fiscal year. Casino and food and beverage revenues declined 3.8%
and 5.1% respectively, while rooms revenue increased 14.4% and showroom revenue
increased 19.9%. Slot revenue declined 1.8% with a 3.5% increase in wagering
offset by lower net winnings. Table games revenue declined 3.8% as a result of a
decline of 2.2% in wagering combined with slightly lower net winnings. Other
casino revenues declined 15.9% for fiscal 1995 with both the sports book and
keno posting declines in wagering, 17.3% and 17.8% respectively, offset by
slightly higher net winnings. The decline in wagering in the sports book was
primarily attributable to the decline in
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baseball wagering due to the Major League Baseball strike. Rooms revenue at the
Stardust increased 14.4% for fiscal 1995 compared to fiscal 1994 with a 2.6%
decline in occupied rooms offset by a 15.7% increase in average daily room rate.
The Stardust posted an occupancy rate of 97% in fiscal 1995 versus 99% in the
prior fiscal year. Operating income margins increased 2.3 percentage points to
15.9% for fiscal 1995 versus 13.6% in fiscal 1994. The increase in the operating
income margin was the result of increased operating income in the rooms
department and showroom department combined with slight decreases in payroll and
overhead expenses.
Net revenues for the Boulder Strip Properties increased 34% for fiscal
1995 versus fiscal 1994 primarily as a result of the opening of the Sam's Town
Las Vegas expansion in July 1994 and also as a result of the acquisition of the
Eldorado Casino and Jokers Wild Casino in October 1993. Sam's Town revenue
increased 31% as a result of the expansion with casino revenue increasing 22%,
food and beverage revenue increasing 54% and increased rooms revenue as a result
of having a full year of rooms revenue in fiscal 1995. For most of fiscal 1994
all 200 hotel rooms at Sam's Town Las Vegas were removed as part of the
expansion project. Net revenues at the Eldorado and Jokers Wild increased 40%
and 56%, respectively, primarily as a result of their acquisition in October
1993. The operating income margin for the Boulder Strip Properties was 9.3% in
fiscal 1995 versus 16.5% in fiscal 1994. The decline in the operating income
margin was attributable to a decline in Sam's Town operating income margin to
7.3% from 15.6% and a decline in operating income margins at the Eldorado and
Jokers Wild to 14.8% and 19.8%, respectively, from 18.3% and 23.7%,
respectively. The decline in operating income margins at Sam's Town was
primarily attributable to the growth in revenues which did not match the growth
in expenses associated with the expanded property and increased competition,
primarily the opening of a new property on the Boulder Strip. The decline in
operating income margins at the Eldorado and Jokers Wild resulted from increased
competition on the Boulder Strip.
<PAGE> 10
Net revenues at the Downtown Properties decreased 1.8% for fiscal 1995
as compared to fiscal 1994. Net revenues at the California increased 2.5% in
fiscal 1995 with casino revenue increasing 1.5%, rooms revenue increasing 15.9%
and food and beverage revenue declining 4.2%. Net revenues at the California
were enhanced by the opening in December 1994 of a 146-room expansion project.
At the Fremont, net revenues declined 6.1% with casino revenue declining 4.5%
and rooms and food and beverage revenue declining 3.8% and 14.3%, respectively.
During the third and fourth fiscal quarters, the Fremont and to a lesser extent
the California were negatively impacted by the construction of the Fremont
Street Experience. The construction of the Fremont Street Experience, as well as
work on several adjacent streets, impeded the free flow of both vehicular and
pedestrian traffic through downtown Las Vegas. The Company expects to be
negatively impacted by this construction until the Fremont Street Experience is
completed which is expected to be December 1995. The Fremont Street Experience,
a cooperative effort between the downtown casino operators and the City of Las
Vegas, is designed to be a nightly high-tech light and sound extravaganza set
against the backdrop of a space frame high above Fremont Street. Operating
income margins at the Downtown Properties were 16.7% in fiscal 1995 versus 17.1%
in fiscal 1994 with operating income margins at the California of 17.5% in
fiscal 1995 versus 18.7% in fiscal 1994 and operating income margins at the
Fremont of 15.7% in fiscal 1995 versus 15.5% in fiscal 1994. The decline in
operating income margin at the California is attributable to increased revenues
in lower margin departments and certain inefficiencies associated with the
opening of the new hotel rooms.
The Central Region produced net revenues of $163.5 million for fiscal
1995 versus $9.5 million in fiscal 1994. Sam's Town Tunica, in its first full
year of operation, produced net revenues of $127.7 million while management fee
and joint venture income from Silver Star and Treasure Chest totaled $35.8
million. Operating income and the operating income margin for
<PAGE> 11
fiscal 1995 was $68.5 million or 42%. Operating income was $32.7 million at
Sam's Town Tunica while operating income from Silver Star and Treasure Chest
totaled $35.8 million. The Central Region results include the full revenues and
income from Sam's Town Tunica which opened in May 1994, management fee income
from Silver Star Hotel and Casino which opened in July 1994 and management fee
and joint venture income from Treasure Chest Casino which opened in September
1994. Net revenues, operating income and operating income margin were enhanced
by the opening of a 308-room expansion at Sam's Town Tunica in December 1994 and
a casino expansion at Silver Star which opened in December 1994.
Interest income for fiscal 1995 was $2.1 million compared to $3.4
million in fiscal 1994. Interest expense, net of amounts capitalized, increased
$9.0 million or 22.7% for fiscal 1995 versus the prior year as a result of
increased borrowings and higher interest rates. Depreciation expense for fiscal
1995 increased 29% primarily as a result of the openings of Sam's Town Tunica
and the Sam's Town Las Vegas expansion.
The Company's tax rate for fiscal 1995 was 44% as compared to 41% for
fiscal 1994. The increase in the Company's tax rate was primarily a result of
the increase in certain non-deductible expenses related to the Company's
development efforts.
As a result of these factors, net income before the cumulative effect
of a change in accounting principle increased $25.6 million or 240% for fiscal
1995 as compared to fiscal 1994. Net income increased $24.0 million or 197%
during fiscal 1995 compared to the prior fiscal year.
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FISCAL 1994 COMPARED TO FISCAL 1993
Consolidated net revenues increased 8.6% for fiscal 1994 compared to
fiscal 1993. The Company continued to experience revenue growth in each of its
areas with net revenues at the Stardust increasing 2.2%, and net revenues at the
Boulder Strip Properties and Downtown Properties increasing 14.8% and 6.0%,
respectively. Revenues at the Boulder Strip Properties
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were enhanced by the acquisition of the Eldorado Casino and Jokers Wild Casino
in October 1993 in connection with the Company's initial public offering.
Revenues at these properties offset declines at Sam's Town Las Vegas which
occurred as a result of construction disruption related to the expansion project
at that property. The expanded Sam's Town facility opened in July 1994. Revenues
for fiscal 1994 were also enhanced by the opening in May 1994 of Sam's Town
Tunica, located in Tunica County, Mississippi, which posted revenues of $9.5
million for its first month of operation. Revenue growth was achieved in both
casino and food and beverage operations for fiscal 1994 compared to fiscal 1993,
with casino revenue increasing 10.7% and food and beverage revenue increasing
6.5%. Slot revenue, which accounted for more than two-thirds of total casino
revenue in fiscal 1994, increased 11.7%. The increased slot revenue is primarily
attributable to the acquisition of the Eldorado and Jokers Wild Casinos, the
opening of Sam's Town Tunica, and increases at the Stardust and Downtown
properties. Table games revenue, the only other significant component of casino
revenue, increased 5.8% also as a result of the acquisition of the Eldorado and
Jokers Wild Casinos and the opening of Sam's Town Tunica. The Company's hotel
rooms posted an overall occupancy percentage of 98% for fiscal 1994, up 1.5
percentage points from fiscal 1993, led by the Stardust which posted a 2.2%
increase in occupied rooms over the prior year. Occupancy percentages do not
include Main Street Station rooms which the Company uses to augment the rooms
base at the California and Fremont. Company-wide rooms revenue decreased 4.1%
during fiscal 1994 due primarily to the absence of rooms for the majority of the
year at Sam's Town Las Vegas, as a result of the expansion project at that
property, and decreased rooms revenue at the Stardust as a result of a slightly
lower average room rate and increased promotional allowances.
Consolidated operating income margins were 11.6% for fiscal 1994
compared to 14.6% for fiscal 1993. The decline in operating income margins
resulted from the write-off of $4.6 million in preopening expenses related to
Sam's Town Tunica and the effects of construction
<PAGE> 13
disruption at Sam's Town Las Vegas related to the expansion project at that
facility.
Net revenue at the Stardust rose 2.2% for fiscal 1994 as compared to
the prior fiscal year as a result of increases in casino revenue (3.0%), food
and beverage revenue (10.8%) and occupied rooms (2.2%). Slot revenue increased
2.1% with a 9.8% increase in slot wagering offset by lower net winnings. Slot
revenue increased in the first half of the fiscal year and decreased in the
second half due to the Company's plan, implemented in the second quarter of the
fiscal year, to offer customers a more competitive slot product. The initial
impact of this plan resulted in increased wagering not offsetting lower net
winnings. Table games revenue decreased 1.3% with a decline in wagering of 3.0%
offset by slightly higher net winnings. Other casino revenues increased 26.8%,
with keno and sports book posting 75.0% and 45.8% increases, respectively, based
on higher net winnings. The Stardust achieved an occupancy rate of 99%, up 2.1
percentage points from the prior fiscal year. Operating income margins were
13.6% for fiscal 1994 compared to 14.6% in fiscal 1993. The decline in operating
income margin was the result of higher marketing costs associated with the
opening of three new properties on the Las Vegas Strip in fiscal 1994.
Net revenues for the Boulder Strip Properties increased 14.8% for
fiscal 1994 versus fiscal 1993 as a result of the acquisition of the Eldorado
and Jokers Wild Casinos. Sam's Town revenue decreased 5.6% during fiscal 1994 as
a result of construction disruption related to the expansion project which took
place at the property during fiscal 1994. The expanded Sam's Town facility
opened July 1, 1994. Decreases in rooms revenue, resulting from the removal of
all 200 hotel rooms as part of the expansion project, decreases in slot revenue
(5.1%), table games revenue (5.0%), and food and beverage revenue (6.6%) all
contributed to the revenue decline at Sam's Town. The operating income margin at
the Boulder Strip Properties was 16.5% in fiscal 1994 versus 22.7% in fiscal
1993, with Sam's Town operating income margin declining to 15.6% in fiscal 1994
from 22.7% in the prior fiscal year. Higher operating income margins at
<PAGE> 14
the Eldorado and Jokers Wild Casinos during 1994 partially offset the decline at
Sam's Town. The Eldorado and Jokers Wild Casinos had operating income margins of
18.3% and 23.6%, respectively.
Net revenues at the California and the Fremont (Downtown Properties)
increased 6.0% for fiscal 1994 versus fiscal 1993. Slot revenues rose 6.3%
during fiscal 1994 on an increase of 4.6% in slot wagering and slightly higher
net winnings. Table games revenue also rose, increasing 3.9% in fiscal 1994 on
slightly higher wagering and net winnings. The Downtown Properties posted
significant increases in rooms revenue in fiscal 1994 (15.9%) as a result of the
use of additional rooms at the Main Street Station, located across the street
from the California Hotel and Casino, for the entire year. Operating income at
the Downtown Properties increased 8.1% over the prior year as a result of the
increased revenues and higher operating margins overall. The Downtown Properties
achieved an operating margin of 17.1% overall for fiscal 1994 versus 16.8% for
the prior year.
Interest income rose over the prior year primarily due to excess
proceeds from the Company's senior subordinated note offering in September 1993
and the proceeds from the Company's initial public offering in October 1993.
Interest expense, net of amounts capitalized, increased 16.5% versus the prior
fiscal year due to increased borrowings. Interest incurred and capitalized
during fiscal 1994 that was related to construction of new properties and major
additions totaled $6.6 million.
During the prior fiscal year the Company recorded a gain on the sale of
an investment of $1.1 million. Also during the prior fiscal year, the Company
recorded an extraordinary loss (net of tax) of $7.4 million resulting from the
redemption at 106% of the Company's $135 million 12 3/4% senior subordinated
note issue due 1996 and the write-off of certain associated expenses.
The Company adopted Statement of Financial Accounting Standard (SFAS)
No. 109, Accounting for Income Taxes, effective July 1, 1993. As a result, the
Company recorded a
<PAGE> 15
cumulative effect of a change in an accounting principle of $2.0 million in
fiscal 1994.
As a result of these factors, net income decreased 0.4% during fiscal
1994 as compared to the prior fiscal year. Net income per common share rose to
$.23 in fiscal 1994 from $.22 in fiscal 1993 as a reduction in preferred
dividends resulting from the conversion of the outstanding $100 preferred stock
offset slightly lower net income and additional shares outstanding.
<PAGE> 16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized, on
June 7, 1996.
BOYD GAMING CORPORATION
By: /s/ Keith E. Smith
-----------------------------
Keith E. Smith
Vice President and Controller
(Chief Accounting Officer)
