Station Casinos Shows $11.2 Million Profit, Buys Fertitta
It was not long ago that Station Casinos was filing for bankruptcy and was in dire straits financially. However, today the company reported a profit for the third quarter, as well is a huge increase in revenue. The company also said that they will be acquiring a controlling interest in Fertitta Interactive. The company is currently new the licensed in the Ultimate Gaming online gaming business. Terms of the deal were not initially disclosed in the report, but are expected to surface at some point in the future.
Station has a total of 17 properties throughout the Las Vegas area, all of which were a part of the old company, prior to the bankruptcy. The new company emerged from the previous bankruptcy in June of 2011. The company stated that their third-quarter net revenue increased a large amount to $295.7 million from $282.4 million over the previous year. The company also stated that it was able to earn a total of $11.2 million in profit this quarter, versus the $19.2 million that the company lost in the year ago quarter.
The company also had a solid EBITDAM, which is used to measure profitability, at $71.7 million. That was an increase of 3.2% over the previous year. The measurement looks at the earnings before interest, taxes, management fees, and appreciation. The company did see a huge slowdown since the second quarter of that rate, coming in at a 15.8%.
“Despite a challenging operating environment, we experienced continued improvements in our operating results during the third quarter, and for the third consecutive quarter we experienced gains in both revenue and operating income in all of our major departments,” Marc Falcone, executive vice president.
The higher revenue for the company is definitely a positive, but executives are looking to boost profit, not just revenue. With the local markets in Las Vegas looking up, it would be no surprise to see the new Station post much higher revenue overall. They also said that they were hopeful that promotional spending increases of $1 million over the course of the last year would help the company grow, and bring in new business. The unemployment rate is currently 11.5% locally in the Las Vegas area, but other key economic indicators that are used to forecast growth are showing a huge upswing in visitation the Las Vegas.
Along with Las Vegas, Station as a number of Indian gaming deals that of help them to grow. They manage the Graton Tribe casino which is currently under construction about 43 miles away from San Francisco. They are expected to start booking revenue from that deal when the property first opens in the later months of 2013. The drive was able to secure more than $850 million in financing over the course of the summer, that would help to get the casino off of the ground.
With this new deal with Fertitta Interactive, It is clear that Station would like to get into the online gaming business which is expected to grow rapidly as more companies receive licenses to work through state Station online gaming platforms, allowing the state to increase their overall tax revenue.