Station Casinos has best quarter in three years

Bolstered by improving economic conditions and consumer spending in Southern Nevada, Station Casinos LLC on Tuesday reported its best operating quarter in more than three years as the company earned $6.8 million on revenues of $318.2 million.

The Las Vegas-based locals casino company said net revenues were up 8.4 percent from $293.4 million in the first quarter last year. In the first quarter of 2011, Station Casinos posted a loss of $11.8 million.

"Our first quarter results were the best quarter Station Casinos has reported in three years," Mark Falcone, executive vice president and chief financial officer, said in a conference call Tuesday.

Falcone told gaming industry analysts the company was pleased with the results but was "not taking anything for granted." He said "signs of stabilization and small signs of growth" in the Las Vegas area helped Station Casinos.

Station Casinos attributed the profits in part to consumers spending more at its casinos.

The results in the first quarter of 2011 were reported by Station Casinos Inc., the company that operated the casinos prior to its restructuring through U.S. Bankruptcy Court.

Station Casinos emerged from bankruptcy on June 17, 2011, with 17 properties, including Red Rock Resort, Palace Station and Green Valley Ranch.

The company also develops and manages American Indian casinos, a division that generated $7.7 million in management fees in the first quarter. Most of those fees were generated by Gun Lake Casino in Michigan, the company said.

Casino revenues increased 6.6 percent in the first quarter, to $230.2 million compared with $215.9 million last year.

The $14.3 million increase reflects a 5.7 percent jump in slot revenue and a 5.6 percent increase in revenue from table games, the company said.

Food and beverage revenues increased 9.4 percent to $60.9 million in the first quarter, in part because the company took over restaurant operations that had been leased. The average guest check also increased 1.8 percent in the first quarter.

At the company's hotels, room revenue increased 14.2 percent to $27.8 million. Occupancy improved to 87.8 percent from 83.9 percent and the average daily room rate rose from $71 to $77. Revenue per available room jumped 13.3 percent to $68 in the first quarter from $60.

Falcone said the company is making significant progress on the Federated Indians of Graton Rancheria's project 43 miles north of San Francisco. He expected construction to begin this summer with the casino set to open by the end of 2013. The resort-casino with 3,000 slot machines is expected to cost $435 million to complete. Falcone expected Station Casinos to secure financing in a couple of months.

In the first quarter, the company repaid some $44 million of debt. From the time it emerged from bankruptcy, Station Casinos has repaid more than $110 million of debt.

"The best use of capital for this company is to pay down debt," he said. Falcone said it would put Station Casinos in a great position to "refinance the company in four to five years."

Contact reporter Chris Sieroty at csieroty@review
journal.com or 702-477-3893.