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Station forges ahead despite quarterly loss

Station Casinos posted sharp declines in key revenue categories during the first three months of the year, although a gaming analyst said the locals casino giant is showing no signs of cutting back on development.

The company posted a net loss of $29.7 million for the quarter ended March 31 compared to a net profit of $23 million last year, according to a Monday filing with the Securities and Exchange Commission.

The loss was driven by a decrease in revenue and increased operating expenses as well as interest expenses tied to debt from the company's private-equity buyout last year.

However, Station Casinos is going ahead with new projects despite the economic downturn.


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  • "The bigger thing is Station continues to invest," Wachovia Capital Markets bond analyst Dennis Farrell Jr. said. "It's not like they're cutting back."

    The tightening credit markets have not affected construction of the $675 million Aliante Station in North Las Vegas, scheduled to open by the end of the year.

    The project is a joint venture with land developer American Nevada Co., which partnered with the company to build Green Valley Ranch Resort.

    The company also recently discussed plans for its Viva project, a multibillion-dollar mixed-use development planned for 110 acres on Tropicana Avenue and Dean Martin Drive just west of Interstate 15.

    In mid-April, Chairman and Chief Executive Officer Frank Fertitta III and President Lorenzo Fertitta said Viva, which would replace the Wild Wild West casino, would rival MGM Mirage's $8 billion CityCenter in size.

    The company is also positioned to start construction on the 67-acre gaming site on Durango Drive and the Las Vegas Beltway in the fourth quarter, but has yet to make an announcement on its plans.

    The company has other land holdings in Clark County, including the 26-acre Castaways site, 61 acres on Cactus Lane and Las Vegas Boulevard, and 45 acres acquired in November in the Inspirada development in Henderson.

    "They continue to reinvest, they continue to acquire land," Farrell said. "They're well-positioned for a turnaround when it does occur."

    The current economic slowdown is posing some challenges for the locals gaming operator, though.

    Company revenue dropped for the second straight quarter, declining 5.4 percent to $352.3 million from $372.4 million in 2007 while operational expenses increased 4.5 percent.

    The revenue decline was driven by a 5.4 percent drop in casino revenues while room, food and beverage revenues remained flat.

    Room occupancy dropped 6 percent to 88 percent but average daily room rates climbed $1 to $98 per day.

    Revenue has been on a steady decline since the second quarter of last year when it rose 6.4 percent before the slowdown.

    Cash flow, described as earnings before interest, taxes, depreciation and amortization, declined for the third consecutive quarter, dropping 10.6 percent to $136.2 million from $152.3 million.

    Station Casinos, which is now privately owned, did not hold a conference call for investors and gaming analysts on Monday.

    "Everyone is feeling pressure," Farrell said. "It's driven just by the weakened consumer and the environment."

    Station Casinos, along with many other gaming companies, has been combatting the slowdown at many of its properties through layoffs and job attrition.

    Although it has declined to discuss how widespread layoffs have been, the company confirmed laying off nearly 70 corporate-level employee s.

    Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or 702-477-3893.



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    ILENE CROMER wrote on July 17, 2008 06:42 PM: A RESPONSE TO THE waaaa IT ISN'T THE
    FACT THAT STATIONS DIDN'T HAVE ANY BUSINESS THIS COMPANY STARTED ELIMINATING JOBS WAY BEFORE THEIR SLOW
    DOWN AND DID HIRE SEVERAL MINIORITYS
    IN PLACE OF THE WORKERS SO YOU SHOULD
    KEEP YOUR COMMENT TO YOURSELF. I GUESS
    YOU EITHER HAVE A JOB WITH STATIONS AT
    THIS TIME OR YOU DON'T EVEN KNOW WHAT THIS COMPANY HAS DONE TO MANY OF IT'S
    EMPLOYEES THEIRS NO LOALITY TO IT'S
    EMPLOYEES. WHEN THEY OPENED RED ROCK
    AND HAD ALL THOSE TRANSFERS DO YOU KNOW
    THAT THE TRANSFERS WERE THE FIRST TO BE
    LET GO HOW WOULD YOU LIKE TO WORK FOR A COMPANY FOR 14YRS AND ALL OF A SUDDEN
    YOU HAVE NO JOB. BUT BECAUSE IT IS A
    CASINO AND THEY MAKE LAS VEGAS RUN THEY
    GET AWAY WITH DOING WHAT THEY WANT.IT'S
    TRUE WHAT THIS OTHER PERSON IS SAYING
    HOW DO YOU KNOW THAT THE PEOPLE MAKING
    COMMENTS ABOUT STATION CASINO HAVE BEEN
    FIRED FROM THEIR. AND WHAT ABOUT ALL
    THE PEOPLE THAT GAVE THEIR ALL TO SEE
    RED ROCK MAKE A SUCESSFUL OPENING PEOPLE WERE WORKING 13HRS A DAY SINCE
    JAN OF 2006 WHERE WAS THE LOYALITY TO
    THOSE EMPLOYEES. WHAT ABOUT THE ONES THAT INVESTED 15 OR MORE YRS IN THIS
    COMPANY. THEY ELIMINATED ALL PART TIME
    AND SEVERAL FULLTIME SO THEY COULD SAVE
    MONEY YES WE ARE IN A SERIOUS DEPRESSION AT THIS TIME BUT LIKE I SAID
    WHEN THEY STARTED ELIMINATING POSITIONS
    BACK IN 2007 THEY WERE STILL DOING VERY
    WELL THEY SAY THAT THE RICH WILL COLAPSE AND THE MEAK WILL SERVIVE ALTHOUGH IT SURE DOESN'T SEEM THAT WAY
    I NEVER WISH HARM TO ANYBODY BUT WE ARE
    HUMAN AND NO COMPANY SHOULD TREAT THEIR
    EMPLOYEES LIKE STATION CASINO DOES.THEY
    ALSO NEED TO FIND A NEW GM AT THEIR
    RED ROCK PROPERTY THE WAY HE TREATED
    SITUATIONS WITH EMPLOYEES HE MIGHT BE GOOD AT BUSINESS END OF IT BUT WITH
    GENERAL SITUATIONS HE WASN'T.


    jerry Bowman wrote on July 16, 2008 02:40 PM: STATION CASINO is one of the worst companys anybody could work for know
    I have personally talked to several
    employees working at station property
    I WAS TOLD ABOUT A FIRING THAT
    ACCURED IN JULY OF 2007 AT ONE OF THEIR
    PROPERTYS.THE EMPLOYEE TELLING ME ABOUT WHAT HAPPENED WAS IN TEARS. SHE SAID THAT ALL THOSE PEOPLE THAT WERE LET GO
    SHOULD OF NEVER HAPPENED THEY WERE TOLD
    THEY COULD OBTAIN THE MERCHANDISE THEY
    AQUIRED BY THEIR SUPERVISORS AND THIS HAD BEEN GOING ON SINCE 2006. SHE SAID
    WHEN SHE READ ON THE BULLITIN BOARD THAT THEY WERE GOING PRIVATE. SHE NEW IT WASN'T GOING TO BE THE SAME SHE SAID YOU HAD TO SEE THESE EMPLOYEES FACES SHE SAID THEY ACTUALLY BECAME A
    FAMILY. SHE SAID THE MANAGEMENT DIDN'T
    EVEN BOTHER TO LISTEN TO ANYTHING THESE EMPLOYEES HAD TO SAY. THEY SAY THEY HAVE A SECOND CHANCE POLICY THEY
    LIE. PEOPLE WHO HAD WORKED 56789YRS WERE TERMINATED AND THEN ON TOP OF IT
    THERE PRIVACY WAS TOTALLY VIOLATED EVERYONE INCLUDING GUEST KNEW WHY THEY
    WERE BEING FIRED. WHAT HAPPENED TO THE
    PRIVACY LAW? EXPECIALLY WHEN IT WASN'T
    THESE EMPLOYEES FAULT. A MAN WHO WAS
    FIRED WHO HAD WORKED FOR YEARS THEIR
    DIED BECAUSE OF THE STRESS AND FALSE
    ACUATIONS THEY MADE AGAINST HIM.EVEN
    THE ASSISTANT GM ASKED EMPLOYEES WHERE
    THEY GOT A CERTAIN THINGS BECAUSE SHE
    WANTED ONE FOR HERSELF IF THIS WAS A
    ISSUE WHY DIDN'T ANYONE SAY ANYTHING
    WHY DIDNT SECURITY EVER QUESTION IT
    EVERYONE WALKED PASSED THEM EVERYDAY.
    THE EMPLOYEE SAID WAS SHE TRULY BELIEVED THAT THIS WAS A SETUP TO ELIMINATED EMPLOYEES BECAUSE OF THE
    NOTICE ON THE BULLITIN BOARD THAT STATED IN JULY STATIONS PROPERTY WAS GOING TO SLOW DOWN AND THAT PEOPLE WERE GOING TO HAVE TO TAKE EXTRA TIME OFF. THEY MADE SURE THAT PEOPLE HAD
    PERMINATE TIME OFF. SHE SAID SHE HATES
    IT THEIR KNOW SHE SAID THEY HAVE THE
    MANAGERS AND SUPERVISORS FROM HELL


    so what wrote on May 13, 2008 10:05 PM: Freedom's Watch Backer to Take Stand in Israeli Lawsuit
    Casino mogul and Freedom's Watch backer Sheldon Adelson, who's being sued in Israel, takes the stand tomorrow, Ha'aretz's Yossi Melman reports. Among the allegations in this case and related law suits, Melman reports: Adelson helped the Chinese government derail Congressional human rights legislation that would have called for Beijing not to get the 2008 Olympic games. In exchange, the law suits allege, Adelson received Beijing's nod to open a casino in Chinese-controlled Macau. Various businessmen along the way claim that Adelson cut them out of the deals. Melman:

    ... Besides Moshe Hananel's suit, there are another four against Adelson for hundreds of millions of dollars that were submitted to American courts about the concession granted to companies he owns for the operation of a hotel and casino in Macau. The suits were filed a few years ago by Chinese and American businessmen and by a New York investment house and a Taiwan bank. All parties claim Adelson promised to compensate them for assistance they had given him to gain the Macau franchise. ...
    "Adelson, his assistants and companies deny the claims," the paper reports.




    Dave wrote on May 13, 2008 05:02 PM: Stations seems to have enough money to press forward on expansion and development plans but when it comes to taking care of its employees, the spicket comes to a grinding halt.


    paul wrote on May 13, 2008 03:40 PM: Good point waaaaa. But lets look at it another way. If customers don't see any loyalty FROM a business, they may not have any loyalty TO a business. Businesses seen as hostile and unfriendly may lose money. It's not as simple as you seem to think.


    homeless in Las Vegas wrote on May 13, 2008 02:39 PM: Waaaa, you sound just like any other greedy business person taking advantage fot the labor force. You probably hire illegals at minimum wage to run your toilet of a business.


    Waaaa! wrote on May 13, 2008 12:14 PM: Is any business supposed to have a duty to keep employees around when it doesn't have business to support them? Only disgruntled losers (or union bosses) think anyone owes them a great paying job anymore. World is tough, deal with it. You don't owe Stations any business and they don't owe anyone a job. If you don't like that arrangement, start your own business so you only can be fired by yourself.


    homeless in Las Vegas wrote on May 13, 2008 10:48 AM: Station Casinos, along with many other gaming companies, has been combatting the slowdown at many of its properties through layoffs and job attrition.

    At what price the almight dollar? How many employees have suffered at the Fertitas challenge to make their next billion? How much is enough? The Fertitas are already worth more than a billion dollars each and yet they continue to eliminate jobs, cheat their employees out of hard earned and much deserved benefits. At what point do the Fertitas stop making more then they will ever need and start taking care of their employees?


    Steve Win wrote on May 13, 2008 08:54 AM: A huge loss in the quarter -I love it. I would love to see Ferttita's go down with the ship. That would be awesome.