Golden Entertainment, Inc. (NASDAQ: GDEN) (“Golden
Entertainment” or the “Company”) today reported financial results
for the first quarter ended March 31, 2024. In the quarter, the
Company reported first quarter revenue of $174.0 million, net
income of $42.0 million and Adjusted EBITDA of $41.0 million. In
addition, on May 2, 2024, the Company’s Board of Directors declared
the Company’s recurring quarterly cash dividend of $0.25 per share
of the Company’s outstanding common stock, which is payable on July
2, 2024 to shareholders of record as of June 14, 2024.
Blake Sartini, Chairman and Chief Executive Officer of Golden,
commented, “We started 2024 by completing the sale of our non-core
assets and simplifying our capital structure. In January, we
completed the sale of our Nevada distributed gaming operations and
in April used those proceeds to fully repay our outstanding bonds.
As a result, we now have a Nevada portfolio of eight casinos with
owned real estate and 71 gaming taverns with our operations focused
in markets where we see long-term drivers of future growth. In
addition, with our debt reduced significantly, our low leverage
provides us with the flexibility to invest in our own assets,
return capital to shareholders and pursue potential strategic
opportunities.”
On January 10, 2024, the Company completed the previously
disclosed sale of its distributed gaming operations in Nevada to an
affiliate of J&J Ventures Gaming, LLC for cash consideration of
$213.5 million plus $37.5 million of purchased cash, subject to
customary working capital and other adjustments.
On April 15, 2024, the Company redeemed and repaid in full all
of its senior unsecured notes in the amount of $287.0 million,
consisting of $276.5 million in principal and $10.5 million in
accrued and unpaid interest. The Company also paid its first
quarterly dividend in the amount of $7.2 million on April 4,
2024.
Consolidated Results
The Company reported first quarter of 2024 revenues of $174.0
million and Adjusted EBITDA of $41.0 million as compared to
revenues of $278.1 million and Adjusted EBITDA of $62.2 million for
the first quarter of 2023. The declines in revenues and Adjusted
EBITDA over the prior year period were primarily related to the
exclusion of the results for the Company’s Rocky Gap Casino Resort
and distributed gaming operations in Montana and Nevada that were
sold on July 25, 2023, September 13, 2023 and January 10, 2024,
respectively. Net income for the first quarter of 2024 was $42.0
million, or $1.37 per fully diluted share, as compared to $11.6
million, or $0.38 per fully diluted share, for the first quarter of
2023. Net income and diluted earnings per share for the first
quarter of 2024 include the benefit of the $69.7 million gain on
the sale of distributed gaming operations in Nevada completed
during the quarter. The Company incurred $2.0 million in
transaction costs for the sale of the distributed gaming operations
in Nevada during the first quarter of 2024.
Debt and Liquidity
As of March 31, 2024, the Company’s total principal amount of
debt outstanding was $678.7 million, consisting primarily of $397.0
million in outstanding term loan borrowings and $276.5 million of
senior unsecured notes. On April 15, 2024, the Company redeemed and
repaid in full all of its senior unsecured notes, thereby reducing
its total principal amount of debt outstanding to $402.2
million.
As of March 31, 2024, the Company had cash and cash equivalents
of $404.3 million, which included the $287.0 million of cash used
to fully redeem the outstanding senior unsecured notes plus accrued
interest. There continues to be no outstanding borrowings under the
Company’s $240 million revolving credit facility.
Investor Conference Call and
Webcast
The Company will host a webcast and conference call today, May
8, 2024 at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time), to
discuss the 2024 first quarter results. The conference call may be
accessed live over the phone by dialing (888) 886-7786 or for
international callers by dialing (416) 764-8658. A replay will be
available beginning at 7:00 p.m. Eastern Time today and may be
accessed by dialing (844) 512-2921 or (412) 317-6671 for
international callers; the passcode is 38689609. The replay will be
available until May 15, 2024. The call will also be webcast live
through the “Investors” section of the Company’s website,
www.goldenent.com. A replay of the audio webcast will also be
archived on the Company’s website, www.goldenent.com.
Forward-Looking
Statements
This press release contains forward-looking statements regarding
future events and the Company’s future results that are subject to
the safe harbors created under the Securities Act of 1933 and the
Securities Exchange Act of 1934. Forward-looking statements can
generally be identified by the use of words such as “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “forecast,”
“intend,” “may,” “plan,” “project,” “potential,” “seek,” “should,”
“think,” “will,” “would” and similar expressions, or they may use
future dates. In addition, forward-looking statements in this press
release include, without limitation statements regarding: the
Company’s strategies, objectives, business opportunities and plans;
anticipated future growth and trends in the Company’s business or
key markets; the payment of recurring quarterly cash dividends;
projections of future financial condition, operating results or
other financial items; and other characterizations of future events
or circumstances as well as other statements that are not
statements of historical fact. Forward-looking statements are based
on the Company’s current expectations and assumptions regarding its
business, the economy and other future conditions. These
forward-looking statements are subject to assumptions, risks and
uncertainties that may change at any time, and readers are
therefore cautioned that actual results could differ materially
from those expressed in any forward-looking statements. Factors
that could cause the actual results to differ materially include:
changes in national, regional and local economic and market
conditions; legislative and regulatory matters (including the cost
of compliance or failure to comply with applicable laws and
regulations); increases in gaming taxes and fees in the
jurisdictions in which the Company operates; litigation; increased
competition; reliance on key personnel (including our Chief
Executive Officer, President and Chief Financial Officer, and Chief
Operating Officer); the Company’s ability to comply with covenants
in its debt instruments; terrorist incidents; natural disasters;
severe weather conditions (including weather or road conditions
that limit access to the Company’s properties); the effects of
environmental and structural building conditions; the effects of
disruptions to the Company’s information technology and other
systems and infrastructure; factors affecting the gaming,
entertainment and hospitality industries generally; and other risks
and uncertainties discussed in the Company’s filings with the SEC,
including the “Risk Factors” sections of the Company’s most recent
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The
Company undertakes no obligation to update any forward-looking
statements as a result of new information, future developments or
otherwise. All forward-looking statements in this press release are
qualified in their entirety by this cautionary statement.
Non-GAAP Financial
Measures
To supplement the Company’s consolidated financial statements
presented in accordance with United States generally accepted
accounting principles (“GAAP”), the Company uses Adjusted EBITDA
because it is the primary metric used by its chief operating
decision makers and investors in measuring both the Company’s past
and future expectations of performance. Adjusted EBITDA provides
useful information to the users of the Company’s financial
statements by excluding specific expenses and gains that the
Company believes are not indicative of its core operating results.
Further, the Company’s annual performance plan used to determine
compensation for its executive officers and employees is tied to
the Adjusted EBITDA metric. It is also a measure of operating
performance widely used in the gaming industry.
The presentation of this additional information is not meant to
be considered in isolation or as a substitute for measures of
financial performance prepared in accordance with GAAP. In
addition, other companies in gaming industry may calculate Adjusted
EBITDA differently than the Company does.
The Company defines “Adjusted EBITDA” as earnings before
interest and other non-operating income (expense), income taxes,
depreciation and amortization, impairment of assets, severance
expenses, preopening and related expenses, gain or loss on disposal
of assets and businesses, share-based compensation expenses,
non-cash lease expense, and other non-cash charges that are deemed
to be not indicative of the Company’s core operating results,
calculated before corporate overhead (which is not allocated to
each reportable segment).
About Golden
Entertainment
Golden Entertainment owns and operates a diversified
entertainment platform, consisting of a portfolio of gaming and
hospitality assets that focus on casino and branded tavern
operations. Golden Entertainment owns eight casinos and 71 gaming
taverns in Nevada, operating nearly 5,700 slots, nearly 100 table
games, and over 6,000 hotel rooms. For more information, visit
www.goldenent.com.
Golden Entertainment,
Inc.
Consolidated Statements of
Operations
(Unaudited, in thousands, except
per share data)
Three Months Ended March
31,
2024
2023
Revenues
Gaming
$
86,949
$
188,087
Food and beverage
43,661
46,271
Rooms
29,400
30,577
Other
14,037
13,116
Total revenues
174,047
278,051
Expenses
Gaming
26,891
106,926
Food and beverage
34,176
34,022
Rooms
16,234
14,781
Other operating
4,080
3,830
Selling, general and administrative
59,987
62,036
Depreciation and amortization
22,120
23,508
Loss (gain) on disposal of assets
14
(86
)
Gain on sale of business
(69,736
)
—
Preopening expenses
139
384
Total expenses
93,905
245,401
Operating income
80,142
32,650
Non-operating expense
Interest expense, net
(10,686
)
(18,236
)
Total non-operating expense,
net
(10,686
)
(18,236
)
Income before income tax
provision
69,456
14,414
Income tax provision
(27,493
)
(2,784
)
Net income
$
41,963
$
11,630
Weighted-average common shares
outstanding
Basic
28,724
28,308
Diluted
30,679
30,904
Net income per share
Basic
$
1.46
$
0.41
Diluted
$
1.37
$
0.38
Golden Entertainment,
Inc.
Reconciliation of Adjusted
EBITDA
(Unaudited, in thousands)
Three Months Ended March
31,
2024
2023
Revenues
Nevada Casino Resorts (1)
$
101,012
$
100,176
Nevada Locals Casinos (2)
38,991
41,238
Nevada Taverns (3)
27,807
27,593
Corporate and other
218
515
Total Revenues - Continuing
Operations
168,028
169,522
Maryland Casino Resort (4)
—
18,128
Distributed Gaming (5)
6,019
90,401
Total Revenues - Divested
Operations
6,019
108,529
Total Revenues
$
174,047
$
278,051
Adjusted EBITDA
Nevada Casino Resorts (1)
$
26,891
$
31,711
Nevada Locals Casinos (2)
17,536
20,160
Nevada Taverns (3)
7,561
8,538
Corporate and other
(11,480
)
(13,154
)
Total Adjusted EBITDA - Continuing
Operations
40,508
47,255
Maryland Casino Resort (4)
—
5,128
Distributed Gaming (5)
484
9,784
Total Adjusted EBITDA - Divested
Operations
484
14,912
Total Adjusted EBITDA
40,992
62,167
Adjustments
Depreciation and amortization
(22,120
)
(23,508
)
Non-cash lease expense
85
(33
)
Share-based compensation
(3,269
)
(3,893
)
(Loss) gain on disposal of assets
(14
)
86
Gain on sale of business
69,736
—
Preopening and related expenses (6)
(139
)
(384
)
Other, net
(5,129
)
(1,785
)
Interest expense, net
(10,686
)
(18,236
)
Income tax provision
(27,493
)
(2,784
)
Net income
$
41,963
$
11,630
(1)
Comprised of The STRAT Hotel, Casino &
Tower, Aquarius Casino Resort and Edgewater Casino Resort.
(2)
Comprised of Arizona Charlie’s Boulder,
Arizona Charlie’s Decatur, Gold Town Casino, Lakeside Casino &
RV Park and Pahrump Nugget Hotel Casino.
(3)
Comprised of the operations of the
Company’s branded tavern locations.
(4)
Comprised of the operations of the Rocky
Gap Casino Resort, which was sold on July 25, 2023.
(5)
Comprised of distributed gaming operations
in Montana (for the three months ended March 31, 2023 only) and
Nevada. On September 13, 2023, the Company completed the sale of
its distributed gaming operations in Montana. On January 10, 2024,
the Company completed the sale of its distributed gaming operations
in Nevada.
(6)
Preopening and related expenses consist of
labor, food, utilities, training, initial licensing, rent and
organizational costs incurred in connection with the opening of
branded tavern and food and beverage and other venues within the
casino locations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240508917520/en/
Golden Entertainment, Inc. Charles H. Protell President and
Chief Financial Officer (702) 893-7777
Investor Relations Richard Land JCIR (212) 835-8500 or
gden@jcir.com
Golden Entertainment (NASDAQ:GDEN)
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