SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 7, 2004
STATION CASINOS, INC
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(Exact name of registrant as specified in its charter)
Nevada 000-21640 88-0136443
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
2411 West Sahara Avenue, Las Vegas, Nevada 89102
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 367-2411
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N/A
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(Former name or former address, if changed since last report)
Item 7.01. Regulation FD Disclosure
Certain executives of Station Casinos, Inc. (the "Company") intend to
participate in various investor meetings and gaming industry conferences
beginning on September 8, 2004. At these meetings and conferences, the Company
will present the following updated information with respect to guidance and
operations:
2004 Guidance
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o Based on the strength of the Las Vegas local economy and strong same
store revenues, the Company now believes that, prior to non-recurring
items, EBITDA (1) and earnings per share ("EPS") for the third quarter
of 2004 will exceed previously issued guidance of $81 million to $86
million and $0.37 to $0.42, respectively. The Company now believes
that EBITDA will be in a range of approximately $86 million to $90
million and EPS will be in a range of $0.42 to $0.46 with the increase
driven largely by higher than anticipated same store revenues. For the
two months ended August 31, 2004, same store revenue growth at the
Major Las Vegas Operations (2) and Green Valley Ranch exceeded the
previously issued guidance of 8% to 10% for the third quarter.
o Based on the increase in third quarter guidance, the Company is now
adjusting EBITDA and EPS prior to non-recurring items, above
previously issued guidance for calendar year 2004 of $360 million to
$370 million and $1.84 to $1.93, respectively. The adjusted guidance
now provides EBITDA for calendar year 2004 will be in a range of
approximately $364 million to $374 million and EPS will be in a range
of $1.87 to $1.97. The Company will update guidance for the fourth
quarter of 2004 on its regularly scheduled earnings release conference
call for the third quarter, which is anticipated to be held in the
latter part of October 2004.
o As a result of the approval of amendments to its compact, which took
effect on September 2, 2004, the United Auburn Indian Community began
operating additional slot machines at its Thunder Valley Casino. The
Company believes that additional slot machines will become operational
at various times throughout the fourth quarter of 2004. Previously
issued guidance considered that additional machines would be added
within this timeframe and the revised guidance has not changed the
amount of projected incremental management fee earnings from these
machines.
o No changes have been made to previously communicated levels for
depreciation, amortization, interest or the tax rate for 2004.
2005 Guidance
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o The Company is increasing guidance, prior to non-recurring items, for
EBITDA and EPS for calendar year 2005 to approximately $395 million to
$410 million and $2.13 to $2.26, respectively, from previously issued
guidance of $385 million to $400 million and $2.04 to $2.18,
respectively. The Company continues to project same store revenue
growth of 3% to 5% with a flow through of approximately 50% of the
increment to EBITDA, which is consistent with previous guidance.
However, the revenue base has increased significantly in 2004 due to
the strength of the Las Vegas economy and the favorable supply demand
characteristics of this market.
o Due to delays in receiving certain regulatory approvals, the Company's
guidance for 2005 does not include management fees from either the
Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians ("Gun Lake") or
the Mechoopda Indian Tribe of Chico Rancheria's gaming facilities. The
Company believes that amounts previously included in the 2005 guidance
for management fees from these contracts will be more than offset by
the continued strength of the Las Vegas locals' market as well as the
contribution from the additional slot machines at Thunder Valley
Casino.
o No changes have been made to previously communicated levels for
depreciation, amortization, interest or the tax rate for 2005.
2006 Guidance
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o The Company's EPS guidance, prior to non-recurring items, for calendar
year 2006 remains unchanged at approximately $2.43 to $2.62. There are
no material changes to EBITDA, depreciation and interest. The guidance
for 2006 assumes $10 million of management fees for all tribal
operations, excluding management fees from Thunder Valley Casino.
Red Rock Station
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The Company now believes that Red Rock Station will cost approximately
$550 million, increased from the previously communicated cost of $475 million.
This increase is due in part to higher material costs and the Company's decision
to build out and operate the full service restaurants itself as opposed to
leasing the restaurants to third parties. In addition, and as a result of the
continued strength of the Las Vegas locals' market, the project has been
designed to accommodate additional gaming capacity without expanding the
physical facility. The first full year EBITDA guidance for the project is
approximately $60 million to $64 million, and the project is scheduled to open
in late 2005 or the first quarter of 2006. The Company continues to believe that
the project will see increasing returns on investment over time similar to the
other Las Vegas projects that the Company has developed, most recently
demonstrated at Green Valley Ranch.
Even with the increase in cost at Red Rock Station, the Company
believes that its debt to cash flow ratio will peak in late 2005 or early 2006
at just over 4.25 times and that, adjusted for a return on Red Rock Station, the
proforma debt to cash flow ratio should be between 3.5 and 3.75 times at the
opening of the project.
Company Information and Forward-Looking Statements
Station Casinos, Inc. is the leading provider of gaming and
entertainment to the residents of Las Vegas, Nevada. Station's properties are
regional entertainment destinations and include various amenities, including
numerous restaurants, entertainment venues, movie theaters, bowling and
convention/banquet space, as well as traditional casino gaming offerings such as
video poker, slot machines, table games, bingo and race and sports wagering.
Station owns and operates Palace Station Hotel & Casino, Boulder Station Hotel &
Casino, Santa Fe Station Hotel & Casino, Wildfire Casino and Wild Wild West
Gambling Hall & Hotel in Las Vegas, Nevada, Texas Station Gambling Hall & Hotel
and Fiesta Rancho Casino Hotel in North Las Vegas, Nevada, and Sunset Station
Hotel & Casino, Fiesta Henderson Casino Hotel, Magic Star and Gold Rush in
Henderson, Nevada. Station also owns a 50% interest in both Barley's Casino &
Brewing Company and Green Valley Ranch Station Casino in Henderson, Nevada and a
6.7% interest in the Palms Casino Resort in Las Vegas, Nevada. In addition,
Station manages the Thunder Valley Casino near Sacramento, California on behalf
of the United Auburn Indian Community.
This 8-K contains certain forward-looking statements with respect to
the business, financial condition, results of operations and expansion projects
of the Company and its subsidiaries which involve risks and uncertainties that
cannot be predicted or quantified, and consequently, actual results may differ
materially from those expressed or implied herein. Such risks and uncertainties
include, but are not limited to, financial market risks, the ability to maintain
existing management, integration of acquisitions, competition within the gaming
industry, the cyclical nature of the hotel business and gaming business,
economic conditions, regulatory matters and litigation and other risks described
in the filings of the Company with the Securities and Exchange Commission,
including, but not limited to, the Company's Annual Report on Form 10-K for the
year ended December 31, 2003, and its Registration Statement on Form S-4 File
No. 333-113986. All forward-looking statements are based on the Company's
current expectations and projections about future events. All forward-looking
statements speak only as of the date hereof and the Company undertakes no
obligation to publicly update any forward-looking statements, whether as a
result of new information, future events or otherwise. Additional financial
information, including presentations from recent investor conferences, is
available in the "Investor Relations" section of the Company's website at
www.stationcasinos.com (3).
Construction projects such as Red Rock Station, the expansions of
Green Valley Ranch Station, Santa Fe Station and Sunset Station entail
significant risks, including shortages of materials or skilled labor, unforeseen
regulatory problems, work stoppages, weather interference, floods and
unanticipated cost increases. The anticipated costs and construction periods are
based on budgets, conceptual design documents and construction schedule
estimates. There can be no assurance that the budgeted costs or construction
period will be met.
(1) EBITDA consists of net income plus income tax provision, interest
and other expense, depreciation, amortization, development expense, preopening
expenses and nonrecurring items. EBITDA is presented solely as a supplemental
disclosure because the Company believes that it is a widely used measure of
operating performance in the gaming industry and as a principal basis for
valuation of gaming companies. The Company believes that in addition to cash
flows and net income, EBITDA is a useful financial performance measurement for
assessing the operating performance of the Company. Together with net income and
cash flows, EBITDA provides investors with an additional basis to evaluate the
ability of the Company to incur and service debt and incur capital expenditures.
To evaluate EBITDA and the trends it depicts, the components should be
considered. The impact of income tax provision, interest and other expense,
depreciation, amortization, development expense, preopening expenses and
nonrecurring items, each of which can significantly affect the Company's results
of operations and liquidity and should be considered in evaluating the Company's
operating performance, cannot be determined from EBITDA. Further, EBITDA does
not represent net income or cash flows from operating, financing and investing
activities as defined by generally accepted accounting principles ("GAAP") and
does not necessarily indicate cash flows will be sufficient to fund cash needs.
It should not be considered as an alternative to net income, as an indicator of
the Company's operating performance or to cash flows as a measure of liquidity.
In addition, it should be noted that not all gaming companies that report EBITDA
or adjustments to such measures may calculate EBITDA or such adjustments in the
same manner as the Company, and therefore, the Company's measure of EBITDA may
not be comparable to similarly titled measures used by other gaming companies.
(2) The Major Las Vegas Operations include the wholly owned properties
of Palace Station, Boulder Station, Texas Station, Sunset Station, Santa Fe
Station, Fiesta Rancho and Fiesta Henderson.
(3) The hyperlink to the Company's URL is included herein solely for
the convenience of investors in accessing the presentations. All other
references herein to the Company's URL are inactive textual references. None of
the information contained on the Company's website shall be deemed incorporated
by reference or otherwise included herein.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Station Casinos, Inc.
Date: September 7, 2004 By: /S/ Glenn C. Christenson
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Glenn C. Christenson
Executive Vice President, Chief
Financial Officer, Chief
Administrative Officer and Treasurer