<PAGE> 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
<PAGE> 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
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
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
</TABLE>
-2-
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BOYD GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(UNAUDITED) MARCH 31, DECEMBER 31,
(IN THOUSANDS, EXCEPT SHARE DATA) 1998 1997
- ------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
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
========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
-3-
<PAGE> 4
BOYD GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
(UNAUDITED) MARCH 31,
------------------
(IN THOUSANDS, EXCEPT SHARE DATA) 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
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
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
-4-
<PAGE> 5
BOYD GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
(UNAUDITED) MARCH 31,
-----------------------
(IN THOUSANDS) 1998 1997
- ------------------------------------------------------------------------------
<S> <C> <C>
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
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
-5-
<PAGE> 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-
<PAGE> 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:
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1997
------------------
<S> <C>
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)
---------
</TABLE>
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-
<PAGE> 8
CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION AS OF MARCH 31, 1998
<TABLE>
<CAPTION>
COMBINED
COMBINED NON - ELIMINATION
(IN THOUSANDS) PARENT GUARANTORS GUARANTORS ENTRIES CONSOLIDATED
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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
======================================================= ================
</TABLE>
Elimination Entries
{1} - To eliminate intercompany payables and receivables.
{2} - To eliminate investment in subsidiaries and subsidiaries' equity.
-8-
<PAGE> 9
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION FOR THE
THREE MONTHS ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
COMBINED
COMBINED NON - ELIMINATION
(IN THOUSANDS) PARENT GUARANTORS GUARANTORS ENTRIES CONSOLIDATED
- ------------------------------------------------------------------------------------------- ------------
<S> <C> <C> <C> <C> <C>
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
================================================= ===========
</TABLE>
{1} - To eliminate intercompany revenue and expense.
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOW INFORMATION FOR THE
THREE MONTHS ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
COMBINED
COMBINED NON -
(IN THOUSANDS) PARENT GUARANTORS GUARANTORS CONSOLIDATED
- -------------------------------------------------------------------------------------------- ------------
<S> <C> <C> <C> <C>
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
======================================= ============
</TABLE>
-9-
<PAGE> 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-
<PAGE> 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-
