GDEN Golden Entertainment Inc

Golden Entertainment, Inc. (NASDAQ: GDEN) (“Golden Entertainment” or the “Company”) today reported financial results for the second quarter ended June 30, 2024. The Company reported second quarter revenue of $167.3 million, net income of $0.6 million and Adjusted EBITDA of $41.2 million. In addition, on August 6, 2024, the Company’s Board of Directors authorized the Company’s third recurring quarterly cash dividend of $0.25 per share of the Company’s outstanding common stock payable on October 2, 2024 to shareholders of record as of September 17, 2024.

Blake Sartini, Chairman and Chief Executive Officer of Golden, commented, “In the second quarter, we continued to strengthen our balance sheet by fully repaying our outstanding bonds in April and reducing our interest rate on our term loan in May. We also aggressively returned capital to shareholders through our recurring dividend and repurchasing nearly one million shares. Our healthy operating cash flow and strong balance sheet will continue to provide us with strategic and financial flexibility while we return capital to shareholders throughout the year.”

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. On May 29, 2024, the Company repriced its $396 million term loan, which reduced the annual interest rate on the term loan by 60 basis points.

The Company also paid its first and second quarterly cash dividends in the amount of $7.2 million and $7.1 million on April 4, 2024 and July 2, 2024, respectively. In addition, the Company repurchased 989,117 shares of its common stock during the quarter at an average price of $29.85 per share for total amount of $29.5 million. As of June 30, 2024, the Company had $61.4 million of availability remaining under its share repurchase authorization.

Consolidated Results

The Company reported second quarter of 2024 revenues of $167.3 million and Adjusted EBITDA of $41.2 million as compared to revenues of $286.7 million and Adjusted EBITDA of $58.4 million for the second 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 second quarter of 2024 was $0.6 million, or $0.02 per fully diluted share, as compared to $12.3 million, or $0.40 per fully diluted share, for the second quarter of 2023.

Debt and Liquidity

As of June 30, 2024, the Company’s total principal amount of debt outstanding was $400.7 million, consisting primarily of $396.0 million in outstanding term loan borrowings.

As of June 30, 2024, the Company had cash and cash equivalents of $88.6 million. 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, August 8, 2024 at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time), to discuss the 2024 second quarter results. The conference call may be accessed live over the phone by dialing (800) 717-1738 or for international callers by dialing (646) 307-1865. A replay will be available beginning at 8:00 p.m. Eastern Time today and may be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers; the passcode is 1170998. The replay will be available until August 14, 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 depreciation and amortization, non-cash lease expense, share-based compensation expense, gain or loss on disposal of assets and business, loss on debt extinguishment and modification, preopening and related expenses, transaction costs, interest and other non-operating income (expense), income taxes, 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 over 5,500 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 June 30,

 

Six Months Ended June 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenues

 

 

 

 

 

 

 

 

Gaming

 

$

78,247

 

 

$

182,355

 

 

$

165,196

 

 

$

370,442

 

Food and beverage

 

 

43,113

 

 

 

46,534

 

 

 

86,774

 

 

 

92,805

 

Rooms

 

 

31,422

 

 

 

30,918

 

 

 

60,822

 

 

 

61,495

 

Other

 

 

14,552

 

 

 

26,874

 

 

 

28,589

 

 

 

39,990

 

Total revenues

 

 

167,334

 

 

 

286,681

 

 

 

341,381

 

 

 

564,732

 

Expenses

 

 

 

 

 

 

 

 

Gaming

 

 

20,764

 

 

 

105,380

 

 

 

47,655

 

 

 

212,306

 

Food and beverage

 

 

34,300

 

 

 

33,645

 

 

 

68,476

 

 

 

67,667

 

Rooms

 

 

16,452

 

 

 

15,359

 

 

 

32,686

 

 

 

30,140

 

Other

 

 

2,784

 

 

 

7,905

 

 

 

6,864

 

 

 

11,735

 

Selling, general and administrative

 

 

56,087

 

 

 

67,093

 

 

 

116,074

 

 

 

129,129

 

Depreciation and amortization

 

 

22,616

 

 

 

21,454

 

 

 

44,736

 

 

 

44,962

 

(Gain) loss on disposal of assets

 

 

—

 

 

 

(34

)

 

 

14

 

 

 

(120

)

Loss (gain) on sale of business

 

 

792

 

 

 

—

 

 

 

(68,944

)

 

 

—

 

Preopening expenses

 

 

4

 

 

 

141

 

 

 

143

 

 

 

525

 

Total expenses

 

 

153,799

 

 

 

250,943

 

 

 

247,704

 

 

 

496,344

 

Operating income

 

 

13,535

 

 

 

35,738

 

 

 

93,677

 

 

 

68,388

 

Non-operating expense

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(8,610

)

 

 

(18,803

)

 

 

(19,296

)

 

 

(37,039

)

Loss on debt extinguishment and modification

 

 

(4,446

)

 

 

(405

)

 

 

(4,446

)

 

 

(405

)

Total non-operating expense, net

 

 

(13,056

)

 

 

(19,208

)

 

 

(23,742

)

 

 

(37,444

)

Income before income tax benefit (provision)

 

 

479

 

 

 

16,530

 

 

 

69,935

 

 

 

30,944

 

Income tax benefit (provision)

 

 

144

 

 

 

(4,248

)

 

 

(27,349

)

 

 

(7,032

)

Net income

 

$

623

 

 

$

12,282

 

 

$

42,586

 

 

$

23,912

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

28,798

 

 

 

28,845

 

 

 

28,761

 

 

 

28,578

 

Diluted

 

 

30,234

 

 

 

30,717

 

 

 

30,482

 

 

 

30,831

 

Net income per share

 

 

 

 

 

 

 

 

Basic

 

$

0.02

 

 

$

0.43

 

 

$

1.48

 

 

$

0.84

 

Diluted

 

$

0.02

 

 

$

0.40

 

 

$

1.40

 

 

$

0.78

 

Golden Entertainment, Inc.

Reconciliation of Adjusted EBITDA

(Unaudited, in thousands)

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenues

 

 

 

 

 

 

 

 

Nevada Casino Resorts (1)

 

$

101,093

 

 

$

102,562

 

 

$

202,105

 

 

$

202,738

 

Nevada Locals Casinos (2)

 

 

37,866

 

 

 

39,829

 

 

 

76,857

 

 

 

81,067

 

Nevada Taverns (3)

 

 

28,152

 

 

 

27,319

 

 

 

55,959

 

 

 

54,912

 

Corporate and other

 

 

223

 

 

 

8,282

 

 

 

441

 

 

 

8,797

 

Total Revenues - Continuing Operations

 

 

167,334

 

 

 

177,992

 

 

 

335,362

 

 

 

347,514

 

Distributed Gaming (4)

 

 

—

 

 

 

89,084

 

 

 

6,019

 

 

 

179,485

 

Maryland Casino Resort (5)

 

 

—

 

 

 

19,605

 

 

 

—

 

 

 

37,733

 

Total Revenues - Divested Operations

 

 

—

 

 

 

108,689

 

 

 

6,019

 

 

 

217,218

 

Total Revenues

 

$

167,334

 

 

$

286,681

 

 

$

341,381

 

 

$

564,732

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

Nevada Casino Resorts (1)

 

$

27,392

 

 

$

28,044

 

 

$

54,283

 

 

$

59,755

 

Nevada Locals Casinos (2)

 

 

16,928

 

 

 

19,471

 

 

 

34,464

 

 

 

39,631

 

Nevada Taverns (3)

 

 

7,791

 

 

 

8,450

 

 

 

15,352

 

 

 

16,988

 

Corporate and other

 

 

(10,919

)

 

 

(13,403

)

 

 

(22,399

)

 

 

(26,557

)

Total Adjusted EBITDA - Continuing Operations

 

 

41,192

 

 

 

42,562

 

 

 

81,700

 

 

 

89,817

 

Distributed Gaming (4)

 

 

—

 

 

 

9,950

 

 

 

484

 

 

 

19,734

 

Maryland Casino Resort (5)

 

 

—

 

 

 

5,898

 

 

 

—

 

 

 

11,026

 

Total Adjusted EBITDA - Divested Operations

 

 

—

 

 

 

15,848

 

 

 

484

 

 

 

30,760

 

Total Adjusted EBITDA

 

 

41,192

 

 

 

58,410

 

 

 

82,184

 

 

 

120,577

 

Adjustments

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

(22,616

)

 

 

(21,454

)

 

 

(44,736

)

 

 

(44,962

)

Non-cash lease benefit (expense)

 

 

148

 

 

 

9

 

 

 

233

 

 

 

(24

)

Share-based compensation

 

 

(2,450

)

 

 

(3,288

)

 

 

(5,719

)

 

 

(7,181

)

Gain (loss) on disposal of assets

 

 

—

 

 

 

34

 

 

 

(14

)

 

 

120

 

(Loss) gain on sale of business

 

 

(792

)

 

 

—

 

 

 

68,944

 

 

 

—

 

Loss on debt extinguishment and modification

 

 

(4,446

)

 

 

(405

)

 

 

(4,446

)

 

 

(405

)

Preopening and related expenses (6)

 

 

(4

)

 

 

(141

)

 

 

(143

)

 

 

(525

)

Transaction costs

 

 

(337

)

 

 

(170

)

 

 

(2,275

)

 

 

(277

)

Other, net

 

 

(1,606

)

 

 

2,338

 

 

 

(4,797

)

 

 

660

 

Interest expense, net

 

 

(8,610

)

 

 

(18,803

)

 

 

(19,296

)

 

 

(37,039

)

Income tax benefit (provision)

 

 

144

 

 

 

(4,248

)

 

 

(27,349

)

 

 

(7,032

)

Net income

 

$

623

 

 

$

12,282

 

 

$

42,586

 

 

$

23,912

 

(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 distributed gaming operations in Montana (for the three and six months ended June 30, 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.

(5)

Comprised of the operations of the Rocky Gap Casino Resort, which was sold on July 25, 2023.

(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/20240808506393/en/

Investor Relations Charles H. Protell President and Chief Financial Officer (702) 893-7777

James Adams Vice President of Corporate Finance (702) 495-4470 james.adams@goldenent.com