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Station Casinos upbeat about jobs from new Strip project

12 May 2015

By Howard Stutz
Last week’s groundbreaking for the $4 billion Resorts World Las Vegas was celebrated in the offices of Station Casinos.

The locals casino operator viewed the potential 30,000 construction jobs being created by the development as an expanded customer base.

“The construction sector is already the fastest growing segment of Las Vegas employment,” Station Casinos Chief Financial Officer Marc Falcone said Monday on a conference call with analysts to discuss the company’s quarterly earnings.

“The overall employment picture (in Las Vegas) continued to improve during the first quarter,” Falcone added.

Station Casinos grew revenues 5 percent to $342.8 million in the quarter that ended March 31. Casino revenue at the company’s properties in the Las Vegas Valley increased 4 percent. Restaurant revenue was up 7 percent and hotel revenue grew 11 percent.

Cash flow for the quarter grew 12.5 percent to $124.6 million, the 16th consecutive quarterly increase.

The company’s two American Indian Casinos — Gun Lake Casino in Michigan and Graton Resort & Casino in Northern California — generated a 21 percent increase in management fees in the quarter to $14.4 million on improved results.

Station Casinos spent $55 million to improve its restaurant offerings and nongaming amenities at Red Rock Casino, Resort & Spa and Green Valley Ranch Resort, Spa and Casino last year.

“Red Rock’s new restaurants are creating a great vibe at the property and achieving excellent cover counts,” Falcone said.

Deutsche Bank gaming analyst Andrew Zarnett told investors Station Casinos had a broad-based increase in revenues.

“Management mentioned that consumer confidence and spending levels showed strength during the quarter,” Zarnett said.

Station Casinos net income for the quarter was $37.8 million, compared to $13.6 million in the same quarter last year, which was impacted by a loss of more than $10 million from the company’s since-closed online gaming activities.

Station Casinos is not publicly traded but has publicly traded debt of $2 billion.

Falcone said the company was “off to a strong start in 2015.”

He said the company’s cash flow, combined with capital programs, have allowed Station Casinos to “reduce debt and improve leverage over the past several years.”

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