Golden Entertainment, Inc. (NASDAQ: GDEN) (“Golden
Entertainment” or the “Company”) today reported financial results
for the second quarter ended June 30, 2022. The Company generated
second quarter revenue of $289.4 million, net income of $21.2
million and Adjusted EBITDA of $75.0 million.
Blake Sartini, Chairman and Chief Executive Officer of Golden
Entertainment, commented, “Our operating discipline supported
strong second quarter results and offset challenges in the current
economic environment. We have maintained our Adjusted EBITDA margin
over the last four quarters as we continue to exceed 2019
performance levels. In addition, our strong cash flow generation
has allowed us to allocate capital to debt reduction while also
returning capital to shareholders through share repurchases. Since
the beginning of 2021 we have reduced indebtedness by nearly $200
million and since December 2021 we have repurchased almost $50
million of our common stock. For the rest of the year, we expect to
remain focused on maintaining the strength of our balance sheet and
opportunistically returning capital to shareholders.”
During the second quarter, the Company repurchased $37.5 million
of senior unsecured notes at par and $22.5 million of its common
stock. As of June 30, 2022, the Company had approximately $27.5
million remaining under its current share repurchase
authorization.
Consolidated Results
Revenues of $289.4 million for the second quarter of 2022 were
down 1% from $292.5 million for the second quarter of 2021. Net
income for the second quarter of 2022 was $21.2 million, or $0.67
per fully diluted share, compared to net income of $103.0 million,
or $3.26 per fully diluted share, for the second quarter of 2021.
Net income and earnings per share for the second quarter of 2021
included $60.0 million, or $0.53 per fully diluted share, in other
non-operating income recognized from the payment related to Caesars
Entertainment’s acquisition of William Hill. Second quarter 2022
Adjusted EBITDA was $75.0 million, an 18% decline from Adjusted
EBITDA of $91.0 million for the second quarter of 2021. Adjusted
EBITDA margin was 26% for second quarter of 2022 compared to 31%
for the second quarter of 2021.
Nevada Casino Resorts
Revenues for Nevada Casino Resorts were $107.5 million for the
second quarter of 2022 compared to $106.0 million for the second
quarter of 2021. Adjusted EBITDA was $38.9 million compared to
$46.6 million for the second quarter of 2021. Adjusted EBITDA
margin was 36% for the second quarter of 2022 compared to 44% for
the second quarter of 2021.
Nevada Locals Casinos
Revenues for Nevada Locals Casinos were $39.8 million for the
second quarter of 2022 compared to $43.5 million for the second
quarter of 2021. Adjusted EBITDA was $19.8 million compared to
$23.6 million for the second quarter of 2021. Adjusted EBITDA
margin was 50% for the second quarter of 2022 compared to 54% for
the second quarter of 2021.
Maryland Casino Resort
Revenues for Maryland Casino Resort were $20.5 million for the
second quarter of 2022 compared to $21.2 million for the second
quarter of 2021. Adjusted EBITDA was $7.2 million compared to $8.3
million for the second quarter of 2021. Adjusted EBITDA margin was
35% for the second quarter of 2022 compared to 39% for the second
quarter of 2021.
Distributed Gaming
Revenues for Distributed Gaming were $121.4 million for the
second quarter of both 2022 and 2021. Adjusted EBITDA was $22.2
million for the second quarter of 2022 compared to $24.9 million
for the second quarter of 2021. Adjusted EBITDA margin was 18% for
the second quarter of 2022 compared to 21% for the second quarter
of 2021.
Debt and Liquidity
As of June 30, 2022, the Company’s total principal amount of
debt outstanding was approximately $965 million, consisting
primarily of $625 million in outstanding term loan borrowings and
$337.5 million of senior unsecured notes. As of June 30, 2022, the
Company had cash and cash equivalents of $179.2 million and there
continues to be no outstanding borrowings under the Company’s $240
million revolving credit facility.
During the second quarter of 2022, the Company allocated $60
million of capital to repurchase $37.5 million of its outstanding
senior unsecured notes in the open market at par and repurchase
515,000 shares of its common stock for $22.5 million.
Investor Conference Call and
Webcast
The Company will host a webcast and conference call today,
August 4, 2022, at 5:00 p.m. Eastern Time, to discuss the results
for the second quarter of 2022. The conference call may be accessed
live over the phone by dialing (877) 407-3982 or (201) 493-6780 for
international callers. 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 13730505. The replay will be available until August 11, 2022.
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 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
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 goodwill and
intangible assets, acquisition and severance expenses, preopening
and related expenses, gain or loss on disposal of assets,
share-based compensation expenses, change in 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,
Inc.
Golden Entertainment owns and operates a diversified
entertainment platform, consisting of a portfolio of gaming and
hospitality assets that focus on casino and distributed gaming
operations (including gaming in the Company’s branded taverns).
Golden Entertainment operates over 17,000 slots, 100 table games,
and 6,200 hotel rooms. Golden Entertainment owns ten casinos – nine
in Southern Nevada and one in Maryland. Through its distributed
gaming business in Nevada and Montana, Golden Entertainment
operates video gaming devices at approximately 1,100 locations and
owns more than 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 June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Revenues
Gaming
$
196,679
$
204,957
$
387,466
$
381,957
Food and beverage
44,451
44,938
86,907
78,742
Rooms
33,174
30,249
58,920
48,647
Other
15,068
12,323
29,723
22,817
Total revenues
289,372
292,467
563,016
532,163
Expenses
Gaming
109,740
106,805
215,391
203,177
Food and beverage
32,546
29,533
64,003
53,074
Rooms
13,816
12,383
26,290
21,993
Other operating
5,346
3,099
9,322
5,795
Selling, general and administrative
57,287
53,285
118,197
106,876
Depreciation and amortization
25,332
26,682
51,608
53,868
Loss on disposal of assets
710
610
669
819
Preopening expenses
4
109
59
229
Total expenses
244,781
232,506
485,539
445,831
Operating income
44,591
59,961
77,477
86,332
Non-operating (expense) income
Other non-operating income
—
60,000
—
60,000
Interest expense, net
(14,738
)
(16,169
)
(29,856
)
(32,217
)
Loss on debt extinguishment
(1,073
)
—
(1,254
)
—
Total non-operating (expense) income,
net
(15,811
)
43,831
(31,110
)
27,783
Income before income tax (provision)
benefit
28,780
103,792
46,367
114,115
Income tax (provision) benefit
(7,560
)
(786
)
10,919
(489
)
Net income
$
21,220
$
103,006
$
57,286
$
113,626
Weighted-average common shares
outstanding
Basic
28,877
28,621
28,885
28,421
Diluted
31,633
31,611
31,889
31,285
Net income per share
Basic
$
0.73
$
3.60
$
1.98
$
4.00
Diluted
$
0.67
$
3.26
$
1.80
$
3.63
Golden Entertainment,
Inc.
Reconciliation of Adjusted
EBITDA
(Unaudited, in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Revenues
Nevada Casino Resorts (1)
Gaming
$
46,114
$
50,018
$
90,344
$
88,844
Food and beverage
23,123
22,716
44,507
37,681
Rooms
28,573
26,164
50,602
41,792
Other
9,688
7,109
18,480
12,495
Nevada Casino Resorts revenue
$
107,498
$
106,007
$
203,933
$
180,812
Nevada Locals Casinos (2)
Gaming
$
29,048
$
33,253
$
58,429
$
62,789
Food and beverage
6,301
6,323
12,480
11,836
Rooms
2,529
2,084
4,773
3,562
Other
1,907
1,867
3,992
3,885
Nevada Locals Casinos revenues
$
39,785
$
43,527
$
79,674
$
82,072
Maryland Casino Resort (3)
Gaming
$
15,456
$
16,451
$
29,913
$
29,483
Food and beverage
2,222
2,111
3,870
3,553
Rooms
2,072
2,001
3,545
3,293
Other
796
677
1,110
1,011
Maryland Casino Resort revenues
$
20,546
$
21,240
$
38,438
$
37,340
Distributed Gaming (4)
Gaming
$
106,061
$
105,235
$
208,780
$
200,841
Food and beverage
12,805
13,788
26,050
25,672
Other
2,503
2,380
5,761
4,799
Distributed Gaming revenues
$
121,369
$
121,403
$
240,591
$
231,312
Corporate and other
174
290
380
627
Total Revenues
$
289,372
$
292,467
$
563,016
$
532,163
(1)
Comprised of The STRAT Hotel, Casino &
SkyPod, Aquarius Casino Resort, Edgewater Hotel & Casino Resort
and Colorado Belle Hotel & 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 Rocky
Gap Casino Resort.
(4)
Comprised of distributed gaming operations
in Nevada and Montana, as well as branded taverns in Nevada.
Three Months Ended June
30,
Six Months Ended June
30,
(In thousands)
2022
2021
2022
2021
Adjusted EBITDA
Nevada Casino Resorts (1)
$
38,892
$
46,635
$
72,467
$
73,291
Nevada Locals Casinos (2)
19,795
23,576
39,833
43,127
Maryland Casino Resort (3)
7,242
8,289
12,814
13,162
Distributed Gaming (4)
22,194
24,913
44,247
45,793
Corporate and other
(13,107
)
(12,401
)
(27,020
)
(24,863
)
Total Adjusted EBITDA
$
75,016
$
91,012
$
142,341
$
150,510
Adjustments
Other non-operating income
—
60,000
—
60,000
Depreciation and amortization
(25,332
)
(26,682
)
(51,608
)
(53,868
)
Change in non-cash lease expense
(230
)
(221
)
(411
)
(660
)
Share-based compensation
(3,311
)
(2,668
)
(6,983
)
(5,673
)
Loss on disposal of assets
(710
)
(610
)
(669
)
(819
)
Loss on debt extinguishment
(1,073
)
—
(1,254
)
—
Preopening and related expenses (5)
(4
)
(109
)
(59
)
(229
)
Other, net
(838
)
(761
)
(5,134
)
(2,929
)
Interest expense, net
(14,738
)
(16,169
)
(29,856
)
(32,217
)
Income tax (provision) benefit
(7,560
)
(786
)
10,919
(489
)
Net income
$
21,220
$
103,006
$
57,286
$
113,626
(1)
Comprised of The STRAT Hotel, Casino &
SkyPod, Aquarius Casino Resort, Edgewater Hotel & Casino Resort
and Colorado Belle Hotel & 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 Rocky
Gap Casino Resort.
(4)
Comprised of distributed gaming operations
in Nevada and Montana, as well as branded taverns in Nevada.
(5)
Preopening and related expenses consist of
labor, food, utilities, training, initial licensing, rent and
organizational costs incurred in connection with the opening of
tavern and casino locations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220804005872/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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