Casino operator Affinity Gaming grew its net income and revenues in the first quarter, the Las Vegas-based company reported late Monday.
Affinity, which was created after the bankruptcy reorganization of Herbst Gaming, said its net income for the quarter ending March 31 was $4.1 million, compared with $3.4 million in the same quarter a year ago.
The company said overall net revenues grew 4.8 percent, to $112.8 million.
Affinity Gaming is privately held but has publicly traded debt of roughly $400 million.
During the first quarter, Affinity Gaming closed several transactions, including the sale of its Terrible Herbst convenience store slot machine route operations and a casino in Searchlight to Jett Gaming. The company sold the rest of its slot machine routes and its Pahrump casinos to Golden Gaming.
Affinity acquired Golden Gaming's three Colorado casinos, which were leased back to the company pending licensing by Colorado gaming authorities. Affinity said those lease payments accounted for $1.1 million in cash flow.
Affinity said its total cash flow in the quarter was $20.5 million, a 24.1 percent increase.
Following the earnings release, Deutsche Bank gaming analyst Andrew Zarnett initiated coverage of Affinity Gaming's long-term debt with a buy rating. He said the company strengthened its balance sheet when it raised about $435 million through a $235 million credit agreement and a $200 million loan.
"Affinity completed a large refinancing which positions them well for the future," Zarnett said.
Affinity currently operates 12 casinos; nine in Nevada, two in Missouri and one in Iowa. In Southern Nevada, the company operates the off-Strip Terrible's and three Primm resorts.
In Southern Nevada, net revenues grew $3.6 million, of which $2.3 million was due to increased fuel sales at service stations in Primm. Southern Nevada net revenues, excluding fuel sales, grew $1.3 million, or 3.2 percent.
"The first quarter results serve as a testament to the soundness of our operating strategy," Affinity Chief Executive Officer David Ross said in a statement. "We remain focused on keeping our properties on target for the remainder of the year, and we look forward to completing licensing in Colorado so we can begin executing our growth strategy in Black Hawk."
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