– Record third quarter revenue of $282.4 million, net income
of $29.1 million and Adjusted EBITDA of $73.4 million
– All casino and distributed gaming operations generated
revenue growth and margin expansion
– Repaid over $50 million of debt in the quarter; increased
revolver availability to $240 million and extended maturity
Golden Entertainment, Inc. (NASDAQ: GDEN) (“Golden
Entertainment” or the “Company”) today reported financial results
for the third quarter ended September 30, 2021.
Blake Sartini, Chairman and Chief Executive Officer of Golden
Entertainment, commented, “Our third quarter results demonstrated
sustained growth and margin expansion for our casinos and
distributed gaming segments compared to the third quarter of 2020
as well as comparable pre-pandemic quarterly periods. The strong
performance across all of our operations, despite occupancy at The
STRAT and our Laughlin properties still not having fully recovered
to 2019 levels, is an encouraging indicator for our future
performance.
“We continued to focus on reducing leverage during the third
quarter as we repaid over $50 million of our outstanding debt
obligations, and we remain committed to further debt reductions
over the coming quarters. Subsequent to the quarter end, we
increased our revolver availability to $240 million and extended
its maturity. Given our significant available liquidity and current
valuation, we view using our existing $50 million share buyback
authorization as an attractive means to begin returning capital to
shareholders. In addition to using our buyback availability, we
will also continue to evaluate potential dividends and other
opportunities to create shareholder value in the future.”
Consolidated Results
The Company reported 2021 third quarter revenues of $282.4
million compared to $205.4 million for the third quarter of 2020.
Net income for the third quarter of 2021 was $29.1 million, or
$0.91 per fully diluted share, compared to a net loss of $7.0
million, or a loss of ($0.25) per share, for the third quarter of
2020. Adjusted EBITDA was $73.4 million for the third quarter of
2021 compared to Adjusted EBITDA of $45.9 million for the third
quarter of 2020.
Casinos
Casino revenues were $164.1 million for the third quarter of
2021 compared to $135.3 million for the third quarter of 2020.
Casino Adjusted EBITDA was $65.0 million compared to $50.8 million
for the third quarter of 2020. Total Casino Adjusted EBITDA margin
was 40% for the third quarter of 2021.
Distributed Gaming
Distributed Gaming revenues for the third quarter of 2021 were
$117.9 million compared to $69.9 million in the third quarter of
2020. Distributed Gaming Adjusted EBITDA was $21.2 million compared
to $4.9 million for the third quarter of 2020. Total Distributed
Gaming Adjusted EBITDA margin was 18% for the third quarter of
2021.
Debt and Liquidity
Golden Entertainment paid down $50 million of its term loan in
the third quarter and as of September 30, 2021, total principal
amount of debt was approximately $1.0 billion, consisting primarily
of $675 million in term loan borrowings outstanding under the
Company’s existing credit facility and $375 million of senior
unsecured notes. There are no outstanding borrowings under the
Company’s recently increased $240 million revolving credit
facility. The Company also extended the maturity date on the
revolving credit facility from October 20, 2022 to April 20, 2024.
As of September 30, 2021, the Company had cash and cash equivalents
of $219.3 million.
Investor Conference Call and
Webcast
The Company will host a webcast and conference call today,
November 3, 2021, at 5:00 p.m. Eastern Time, to discuss the third
quarter 2021 results. The conference call may be accessed live over
the phone by dialing (844) 465-3054 or for international callers by
dialing (480) 685-5227. A replay will be available beginning at
8:00 p.m. Eastern Time today and may be accessed by dialing (855)
859-2056 or (404) 537-3406 for international callers; the passcode
is 1722269. The replay will be available until November 6, 2021.
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 and business opportunities;
anticipated future growth and trends in the Company’s business or
key markets; projections of future financial condition, operating
results, income, capital expenditures, costs or other financial
items, including anticipated future cash generation and resulting
ability to continue to reduce leverage and to return capital to
shareholders; 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:
the uncertainty of the extent, duration and effects of the COVID-19
pandemic and the response of governments; 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;
the Company’s ability to realize the anticipated cost savings,
synergies and other benefits of its casino and other acquisitions;
litigation; increased competition; the Company’s ability to renew
its distributed gaming contracts; reliance on key personnel
(including our Chief Executive Officer, President and Chief
Financial Officer, and Chief Operating Officer); the level of the
Company’s indebtedness and its 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,
which measure the Company believes is appropriate to provide
meaningful comparison with, and to enhance an overall understanding
of, the Company’s past financial performance and prospects for the
future. The Company believes Adjusted EBITDA provides useful
information to both management and investors by excluding specific
expenses and gains that the Company believes are not indicative of
core operating results. Further, Adjusted EBITDA is a measure of
operating performance used by management, as well as industry
analysts, to evaluate operations and operating performance and is
widely used in the gaming industry. Other companies in the gaming
industry may calculate Adjusted EBITDA differently than the
Company.
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.
Reconciliations of Adjusted EBITDA to net income (loss) are
provided in the financial information tables below.
The Company defines “Adjusted EBITDA” as earnings before
interest and other non-operating income (expense), income taxes,
depreciation and amortization, impairment of goodwill and
intangible assets, severance expenses, preopening and related
expenses, gain or loss on disposal of assets, share-based
compensation expenses, change in non-cash lease expense, change in
fair value of derivative, and other non-cash charges. Adjusted
EBITDA for a particular segment or operation is Adjusted EBITDA
before corporate overhead, which is not allocated to each segment
or operation. The Company defines “Preopening and related expenses”
as labor, food, utilities, training, initial licensing, rent and
organizational costs incurred in connection with the opening of
tavern and casino locations.
About Golden Entertainment,
Inc.
Golden Entertainment owns and operates gaming properties across
two divisions – casino operations and distributed gaming. Golden
Entertainment operates over 16,900 slots, 120 table games, and
6,200 hotel rooms. Golden Entertainment owns ten casino resorts –
nine in Southern Nevada and one in Maryland. Through its
distributed gaming business in Nevada and Montana, Golden
Entertainment operates video gaming devices at nearly 1,100
locations and owns over 60 traditional taverns in Nevada. Golden
Entertainment is also licensed in Illinois and Pennsylvania to
operate video gaming terminals. For more information, visit
www.goldenent.com.
Golden Entertainment,
Inc.
Consolidated Statements of
Operations
(Unaudited, in thousands, except
per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Revenues
Gaming
$
193,167
$
145,521
$
575,124
$
329,413
Food and beverage
44,271
28,685
123,013
80,400
Rooms
31,566
22,505
80,213
54,097
Other
13,418
8,685
36,235
24,617
Total revenues
282,422
205,396
814,585
488,527
Expenses
Gaming
106,301
76,128
309,478
189,471
Food and beverage
32,182
22,654
85,256
67,280
Rooms
13,220
11,111
35,213
29,652
Other operating
4,635
2,748
10,430
9,279
Selling, general and administrative
54,457
52,156
161,333
135,657
Depreciation and amortization
26,474
31,551
80,342
94,637
Loss on disposal of assets
(72
)
(474
)
747
817
Preopening expenses
3
73
232
187
Impairment of goodwill and intangible
assets
—
—
—
27,872
Total expenses
237,200
195,947
683,031
554,852
Operating income (loss)
45,222
9,449
131,554
(66,325
)
Non-operating income (expense)
Other non-operating income
—
—
60,000
—
Interest expense, net
(15,535
)
(16,422
)
(47,752
)
(51,575
)
Loss on debt extinguishment and
modification
(759
)
—
(759
)
—
Change in fair value of derivative
—
—
—
(1
)
Total non-operating income (expense),
net
(16,294
)
(16,422
)
11,489
(51,576
)
Income (loss) before income tax benefit
(provision)
28,928
(6,973
)
143,043
(117,901
)
Income tax benefit (provision)
123
17
(366
)
(241
)
Net income (loss)
$
29,051
$
(6,956
)
$
142,677
$
(118,142
)
Weighted-average common shares
outstanding
Basic
28,950
28,130
28,599
28,045
Dilutive impact of stock options and
restricted stock units
2,904
—
2,938
—
Diluted
31,854
28,130
31,537
28,045
Net income (loss) per share
Basic
$
1.00
$
(0.25
)
$
4.99
$
(4.21
)
Diluted
$
0.91
$
(0.25
)
$
4.52
$
(4.21
)
Golden Entertainment,
Inc.
Reconciliation of Adjusted
EBITDA
(Unaudited, in thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Revenues
Casinos
Nevada
$
142,485
$
114,842
$
405,369
$
266,046
Maryland
21,640
20,472
58,980
36,670
Casinos revenues
164,125
135,314
464,349
302,716
Distributed Gaming
Nevada
92,773
48,024
272,181
133,701
Montana
25,162
21,879
77,066
51,525
Distributed Gaming revenues
117,935
69,903
349,247
185,226
Corporate and Other
362
179
989
585
Total revenues
$
282,422
$
205,396
$
814,585
$
488,527
Net income (loss)
$
29,051
$
(6,956
)
$
142,677
$
(118,142
)
Adjustments
Other non-operating income
—
—
(60,000
)
—
Depreciation and amortization
26,474
31,551
80,342
94,637
Change in non-cash lease expense
(143
)
425
517
756
Share-based compensation
3,089
3,520
8,762
7,522
(Gain) loss on disposal of assets
(72
)
(474
)
747
817
Loss on debt extinguishment and
modification
759
—
759
—
Preopening and related expenses
3
73
232
412
Severance expenses
193
24
193
3,367
Impairment of goodwill and intangible
assets
—
—
—
27,872
Other, net
(1,338
)
1,286
1,591
1,760
Interest expense, net
15,535
16,422
47,752
51,575
Change in fair value of derivative
—
—
—
1
Income tax (benefit) provision
(123
)
(17
)
366
241
Total Adjusted EBITDA
$
73,428
$
45,854
$
223,938
$
70,818
Adjusted EBITDA
Casinos
Nevada
$
57,299
$
42,645
$
173,717
$
73,916
Maryland
7,669
8,114
20,831
10,699
Casinos Adjusted EBITDA
64,968
50,759
194,548
84,615
Distributed Gaming
Nevada
17,872
2,276
56,494
7,079
Montana
3,286
2,591
10,457
5,838
Distributed Gaming Adjusted EBITDA
21,158
4,867
66,951
12,917
Corporate and Other
(12,698
)
(9,772
)
(37,561
)
(26,714
)
Total Adjusted EBITDA
$
73,428
$
45,854
$
223,938
$
70,818
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211103006109/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
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