- Revenue: $167 million in the second quarter.
- EBITDA: $41 million in the second quarter.
- Total Property Revenue Decline: 1.4% decline in the second quarter.
- Consolidated EBITDA Decline: 4.9% decline in the second quarter.
- Nevada Casino Resorts Revenue Decline: 1.4% decline.
- Nevada Casino Resorts EBITDA Decline: 2.3% decline.
- STRAT Hotel Revenue: Record Q2 with ADR up 8% and total occupancy up 4% to 73%.
- Weekend Occupancy at STRAT: 97%.
- Midweek Occupancy at STRAT: Improved 2% to 64%.
- Nevada Locals Casinos Revenue Decline: 4.9% decline.
- Nevada Locals Casinos EBITDA Decline: 13% decline.
- Nevada Tavern Revenue Increase: Up 3% over last year.
- Total Tavern Locations: 71 at the end of June, with a 72nd opening in Q3.
- Same-Store Revenue Decline: 2.4% decline.
- Same-Store Gaming Revenue Increase: 6% increase.
- Outstanding Debt: $396 million term loan.
- Cash on Hand: $89 million at the end of the quarter.
- Additional Liquidity: $240 million from unfunded revolver.
- Interest Rate Reduction: Reduced by 60 basis points to SOFR plus 2.25%.
- Annual Interest Savings: $2.4 million.
- Net Leverage: Below 2 times.
- Quarterly Cash Dividend: $0.25 per share.
- Share Repurchase: Nearly 1 million shares repurchased in Q2.
- Share Repurchase Authorization Availability: $61 million at the end of the quarter.
- Capital Returned to Shareholders: Over $110 million in the last 18 months.
Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Golden Entertainment Inc (GDEN, Financial) achieved record Q2 hotel revenue at the STRAT with an 8% increase in ADR and a 4% rise in total occupancy.
- The company successfully reduced its interest rate by 60 basis points, resulting in $2.4 million of annual interest savings.
- Golden Entertainment Inc (GDEN) has a strong balance sheet with a net leverage below 2 times and $89 million in cash.
- The company repurchased nearly 1 million shares in Q2 and plans to continue share buybacks, demonstrating a commitment to returning capital to shareholders.
- Atomic Golf, a new attraction, is gaining momentum and is expected to drive additional visitors to the STRAT.
Negative Points
- Total property revenue declined by 1.4% and consolidated EBITDA decreased by 4.9% in the second quarter.
- Nevada casino resorts experienced a 1.4% decline in revenue and a 2.3% drop in EBITDA.
- The Laughlin segment saw declines in revenue and EBITDA due to reduced large-scale entertainment acts and increased labor costs.
- Nevada locals casinos reported a 4.9% decline in revenue and a 13% drop in EBITDA, primarily due to decreased visitation and spend from lower-tier customers.
- The Tavern business faced EBITDA declines due to additional costs from acquired locations and increased labor expenses.
Q & A Highlights
Q: Can you provide an update on Atomic Golf's performance and its impact on cross-selling to the STRAT?
A: Blake Sartini, Chairman, President, Chief Executive Officer: Atomic Golf has met or exceeded physical expectations, though it had a slow start. They have adjusted their staffing and marketing efforts, leading to increased momentum. We anticipate significant cross-traffic between Atomic Golf and the STRAT due to its location.
Q: With recent closures of Strip properties, do you see Golden Entertainment as a potential beneficiary?
A: Charles Protell, President, Chief Financial Officer, Treasurer: The reduction in room supply, particularly in the center and South Strip, is beneficial for us as we approach the fall season.
Q: How are you addressing the midweek occupancy gap compared to 2019 levels?
A: Charles Protell, President, Chief Financial Officer, Treasurer: We have improved midweek occupancy by 2% to 3% each quarter through increased direct bookings. We continue to focus on this strategy, expecting further progress in the coming quarters.
Q: Can you elaborate on the shift to smaller scale events in Laughlin and its impact on profitability?
A: Charles Protell, President, Chief Financial Officer, Treasurer: We shifted to smaller, more frequent events due to high costs and low profitability of larger acts. This strategy has improved profitability by reducing risk and focusing on player-driven events.
Q: What is your approach to share repurchases given the current stock valuation?
A: Charles Protell, President, Chief Financial Officer, Treasurer: We plan to maintain the pace of share repurchases, spending approximately $30 million each quarter. We have the flexibility to use our $240 million unfunded revolver if necessary, as we believe our stock is undervalued.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
