Boulder Station Casino, Las Vegas

A strong locals gaming market is reaping rewards for Station Casinos, but is it time to go public? (Image: archive.fortune.com.)

Could Station Casinos be planning a stock market float? This was the question that was put to Station Casinos Chief Financial Officer Marc Falcone during the company’s Q4 conference call last week.

Falcone quickly dismissed the speculation, but not convincingly enough, apparently, to dissuade the assembled journalists and analysts.

Station Casinos first went public in 1993 when it was floated on the New York Stock Exchange, where it remained for 14 years. But, like Caesars Entertainment, the company went private in the late noughties, just as the economic downturn hit the casino industry hard.

It was acquired by the Fertitta brothers and Colony Capital in a $5 billion leveraged buy-out. Two years later, struggling to serve its $5.9 billion debt, it was declared bankrupt.

Highest Net Revenue Since 2008

However, unlike Caesars, which has an industry-high debt level and is currently trying to file for bankruptcy amid legal challenges from its low-level creditors, Station Casinos has climbed out of the hole. And while Caesars has failed to report a profit since 2008, Station has enjoyed 15 consecutive quarters of cash flow growth. Last year it reported net revenue of $1.29 billion in 2014, the highest figure since 2008.

Station emerged from bankruptcy in 2011, with Deutsche bank owning 25 percent, a reorganization process that wiped $4 billion off the company’s debt load. However, it also gave Deutsche Bank powers to place the company into an IPO in June 2016 should it choose to do so. However, analysts believe a float could come sooner.

“We believe that with (Station Casinos’) recent debt recapitalization and better performance, the likelihood is that (an IPO) comes sooner,” Union Gaming Group analyst Chris Jones told the Las Vegas Review. “This would set a comparison for Boyd in the locals market, which we believe is a positive.”

Locals Gaming Market Strong

Station is upbeat about the about the future of the Vegas locals market, citing factors such as higher consumer confidence, lower gasoline prices and generally healthier economy in Las Vegas.

“It may finally appear we have reached that inflection point we have been discussing for several years,” said Falcone. “The majority of key economic indicators have shown signs of improvement for several years and we expect these improvements to continue in 2015.”

Falcone said that Station Casinos Las Vegas properties experienced 5.1 percent growth in gaming revenue during the fourth quarter of 2014, representing the largest increase since the first quarter of 2012. Additionally hotel revenue was up 13 percent, the largest increase in seven years. Station Casino’s revenue for Q4 was $333.7 million, an increase of 2.2 percent.

“We believe the strength in overall fourth quarter spending may be a sign that our guests now have more money to spend on gaming,” he added.