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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Operating income, cash flow recede at Affinity Gaming

14 November 2014

LAS VEGAS -- Affinity Gaming saw its operating income and cash flow slip in the third quarter due what the casino operator termed as “unusual” corporate expenses over the three-month period.

The Las Vegas-based company said its corporate expenses grew 128.3 percent as it successfully fought a Colorado casino referendum, hired a new CEO, reconstituted its board and worked to “remediate” a recent data breach.

Affinity, which operates 11 casinos in four states, including five in Nevada, grew revenue in the quarter that ended Sept. 30 less than 1 percent to $99.5 million. Cash flow, however, fell 20.4 percent to $12.5 million. Operating income slipped 7 percent.

Affinity is privately owned with public debt. Illinois-based Z Capital is the company’s largest shareholder and holds 33.7 percent. Silver Point Capital of Connecticut owns 25.1 percent of the company.

In Nevada, revenue fell 2 percent in the quarter where Affinity operates the three Primm resorts and the off-Strip Silver Sevens Hotel & Casino.

In Colorado, however, where the company has three casinos, revenue increased 1 percent. Affinity and other Colorado casino operators helped fund the opposition campaign to ballot measure that would have allowed the state’s racetracks to add slot machines. The measure was overwhelmingly defeated.

Affinity’s Midwest casinos in Iowa and Missouri grew revenue 4.7 percent.

New Affinity CEO Michael Silberman, who was hired in August, said his initial goals was building out the company’s leadership team and adding analytics to the company’s marketing efforts.

“We are on a path to improved operating margins and overall performance as we continue to work hard to deliver added value to our business and shareholders,” Silberman said.