– Significant margin improvement led to Q4 Adjusted EBITDA
growth compared to Q4 2019 at all local and regional Nevada casino
properties
– Positive Q4 Adjusted EBITDA at The STRAT despite increased
restrictions and decreased travel volume in November and
December
– Nevada and Montana Distributed Gaming Q4 revenue and
Adjusted EBITDA exceeded Q4 2019 levels
– Ended 2020 with approximately $104 million cash on hand and
no revolver borrowings
– Q1 2021 business trends improving over Q4 2020
performance
Golden Entertainment, Inc. (NASDAQ: GDEN) (“Golden” or the
“Company”) today reported financial results for the fourth quarter
and full year ended December 31, 2020.
Blake Sartini, Chairman and Chief Executive Officer of Golden
Entertainment, commented, “Our fourth quarter started strong with
record October Adjusted EBITDA. However, tightened operating
restrictions across all our businesses due to the pandemic began in
November and extended through December, impacting overall fourth
quarter results. Despite these challenges, our fourth quarter
continues to demonstrate that the adjustments we have made to our
operations provide a foundation for sustainable margin improvements
which are expected to provide a significant lift to our Adjusted
EBITDA and free cash flow as business volume returns to normalized
levels.
“Reflecting a margin improvement of more than 1,000 basis
points, fourth quarter Adjusted EBITDA for our Las Vegas locals
casinos increased 21% compared to the same period last year despite
a 6.5% decline in revenue as a result of reduced capacity and other
restrictions. While The STRAT generated positive Adjusted EBITDA in
the fourth quarter, the property was particularly impacted by the
restrictions in place during the period which significantly
impacted occupancy in November and December. Adjusted EBITDA for
all of our Nevada casinos excluding The STRAT, increased 5.6% year
over year as we improved the Adjusted EBITDA margin by 840 basis
points. Our Maryland property was also impacted by restrictions and
adverse weather during the quarter. For our total casino operations
excluding The STRAT, our focus on continued expense management
drove an Adjusted EBITDA margin improvement of approximately 670
basis points year over year to approximately 37% in the fourth
quarter. In addition, both our Nevada and Montana distributed
gaming operations grew revenue and Adjusted EBITDA in the fourth
quarter over the prior-year period.
“We are encouraged by the increased business volumes since state
restrictions began to ease and believe that as the vaccination
rollout progresses, Las Vegas will benefit from pent up demand as
well as the resumption of retail and business travel. Looking
forward, we expect the changes we have made to our cost structure
will provide us with sustainable margin improvements which are
expected to result in higher cash generation and allow us to reduce
leverage, pursue future strategic initiatives and return capital to
shareholders.”
Consolidated Results
The Company reported 2020 fourth quarter revenues of $205.6
million compared to $242.1 million in the fourth quarter of 2019.
Net loss for the fourth quarter of 2020 was $18.5 million, or a
loss of $0.66 per share, compared to a net loss of $7.7 million, or
$0.28 per share, in the fourth quarter of 2019. Adjusted EBITDA was
$38.9 million for the fourth quarter of 2020 compared to Adjusted
EBITDA of $43.1 million for the fourth quarter of 2019.
Casinos
Casino revenues were $112.6 million in the fourth quarter of
2020 compared to $150.2 million in the fourth quarter of 2019.
Casino Adjusted EBITDA was $33.4 million compared to $41.7 million
in the fourth quarter of 2019.
Distributed Gaming
Distributed Gaming revenues for the fourth quarter of 2020 were
$93.0 million compared to $91.7 million in the fourth quarter of
2019. Distributed Gaming Adjusted EBITDA was $13.6 million compared
to $13.2 million in the fourth quarter of 2019.
Debt and Liquidity
As of December 31, 2020, the Company had cash and cash
equivalents of $103.6 million. Total debt was approximately $1.2
billion, consisting primarily of $772 million in term loan
borrowings outstanding under the Company’s existing credit facility
and $375 million of senior unsecured notes. There were no
outstanding borrowings under the Company's $200 million revolving
credit facility as of December 31, 2020.
Investor Conference Call and Webcast
The Company will host a webcast and conference call today March
11, 2021 at 4:30 p.m. Eastern Time, to discuss the fourth quarter
2020 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; the passcode is 2964498. A replay will be
available beginning at 3:00 p.m. PT today and may be accessed by
dialing (855) 859-2056 or (404) 537-3406 for international callers;
the passcode is 2964498. The replay will be available until March
14, 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 include
statements regarding the impact of the 2019 novel coronavirus
(“COVID-19”) pandemic on the Company’s business; the return of
business volumes to normalized levels as the pandemic subsides;
anticipated future performance and demand as vaccination rollouts
progress and state restrictions ease; 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 future cash
generation and ability to reduce leverage and return capital to
shareholders; the sustainability of margin improvements; 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,
including government-mandated closures or travel restrictions;
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, acquisition and severance expenses, preopening
and related expenses, loss (gain) on asset disposal, share-based
compensation expenses, change in fair value of derivative, and
other gains and losses. 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 inclusive of rent,
organizational costs, non-capital costs associated with the opening
of tavern and casino locations, and expenses related to The STRAT
rebranding and the launch of the True Rewards loyalty program.
About Golden Entertainment, Inc.
Golden Entertainment owns and operates gaming properties across
two divisions – casino operations and distributed gaming. Golden
Entertainment operates over 16,000 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 over 1,000 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 December
31,
Year Ended December
31,
2020
2019
2020
2019
Revenues
Gaming
$
147,340
$
146,197
$
476,753
$
578,803
Food and beverage
31,681
49,962
112,081
202,933
Rooms
17,314
30,045
71,411
132,193
Other
9,293
15,930
33,910
59,481
Total revenues
205,628
242,134
694,155
973,410
Expenses
Gaming
85,570
84,787
275,041
334,941
Food and beverage
24,922
40,278
92,202
159,728
Rooms
10,283
15,457
39,935
62,510
Other operating
2,510
4,924
11,789
21,333
Selling, general and administrative
47,122
55,560
179,412
225,848
Depreciation and amortization
29,793
29,740
124,430
116,592
Impairment of goodwill and intangible
assets
6,092
—
33,964
—
Acquisition and severance expenses
343
393
3,710
3,488
(Gain) loss on disposal of assets
(14
)
320
803
919
Preopening expenses
121
175
308
1,934
Total expenses
206,742
231,634
761,594
927,293
Operating (loss) income
(1,114
)
10,500
(67,439
)
46,117
Non-operating expense
Interest expense, net
(17,535
)
(18,174
)
(69,110
)
(74,220
)
Loss on extinguishment and modification of
debt
—
—
—
(9,150
)
Change in fair value of derivative
—
(79
)
(1
)
(4,168
)
Total non-operating expense,
net
(17,535
)
(18,253
)
(69,111
)
(87,538
)
Loss before income tax benefit
(provision)
(18,649
)
(7,753
)
(136,550
)
(41,421
)
Income tax benefit (provision)
180
81
(61
)
1,876
Net loss
$
(18,469
)
$
(7,672
)
$
(136,611
)
$
(39,545
)
Weighted-average common shares
outstanding
Basic
28,186
27,841
28,080
27,746
Dilutive impact of stock options and
restricted stock units
—
—
—
—
Diluted
28,186
27,841
28,080
27,746
Net loss per share
Basic
$
(0.66
)
$
(0.28
)
$
(4.87
)
$
(1.43
)
Diluted
$
(0.66
)
$
(0.28
)
$
(4.87
)
$
(1.43
)
Golden Entertainment, Inc.
Reconciliation of Net (Loss) Income to Adjusted EBITDA
(Unaudited, in thousands)
Three Months December 31,
2020
Casinos Segment
Distributed Gaming
Segment
Nevada Casinos
Maryland Casino
Nevada Distributed
Gaming
Montana Distributed
Gaming
Corporate and Other
Consolidated
Total Revenues
$
97,628
$
14,966
$
73,059
$
19,971
$
4
$
205,628
Net (loss) income
$
(1,323
)
$
3,232
$
7,172
$
600
$
(28,150
)
$
(18,469
)
Depreciation and amortization
22,707
1,016
3,636
1,809
625
29,793
Impairment of goodwill and intangible
assets
6,092
—
—
—
—
6,092
Acquisition and severance expenses
324
1
—
(1
)
19
343
Preopening and related expenses (1)
—
—
—
—
121
121
Loss (gain) on disposal of assets
3
35
(57
)
4
1
(14
)
Share-based compensation
—
—
—
—
2,115
2,115
Other, net
1,052
(1
)
—
—
464
1,515
Interest expense, net
269
6
448
—
16,812
17,535
Income tax benefit
—
—
—
—
(180
)
(180
)
Adjusted EBITDA
$
29,124
$
4,289
$
11,199
$
2,412
$
(8,173
)
$
38,851
Three Months December 31,
2019
Casinos Segment
Distributed Gaming
Segment
Nevada Casinos
Maryland Casino
Nevada Distributed
Gaming
Montana Distributed
Gaming
Corporate and Other
Consolidated
Total Revenues
$
133,852
$
16,346
$
72,776
$
18,955
$
205
$
242,134
Net income (loss)
$
13,288
$
3,873
$
7,005
$
621
$
(32,459
)
$
(7,672
)
Depreciation and amortization
22,774
949
3,764
1,757
496
29,740
Acquisition and severance expenses
51
—
—
—
342
393
Preopening and related expenses (1)
61
—
67
—
135
263
Loss (gain) on disposal of assets
363
(1
)
19
(61
)
—
320
Share-based compensation
—
—
—
—
1,223
1,223
Other, net
95
—
52
—
475
622
Interest expense, net
264
1
15
1
17,893
18,174
Change in fair value of derivative
—
—
—
—
79
79
Income tax benefit
—
—
—
—
(81
)
(81
)
Adjusted EBITDA
$
36,896
$
4,822
$
10,922
$
2,318
$
(11,897
)
$
43,061
(1)
Preopening and related expenses include
rent, organizational costs, non-capital costs associated with the
opening of tavern and casino locations, and expenses related to The
STRAT rebranding and the launch of the True Rewards® loyalty
program.
Year Ended December 31,
2020
Casinos Segment
Distributed Gaming
Segment
Nevada Casinos
Maryland Casino
Nevada Distributed
Gaming
Montana Distributed
Gaming
Corporate and Other
Consolidated
Total Revenues
$
363,674
$
51,636
$
206,760
$
71,496
$
589
$
694,155
Net (loss) income
$
(32,085
)
$
10,145
$
1,156
$
865
$
(116,692
)
$
(136,611
)
Depreciation and amortization
94,801
4,144
15,651
7,284
2,550
124,430
Impairment of goodwill and intangible
assets
33,964
—
—
—
—
33,964
Acquisition and severance expenses
2,776
155
571
40
168
3,710
Preopening and related expenses (1)
225
—
(1
)
—
309
533
Loss (gain) on disposal of assets
1,263
65
(462
)
49
(112
)
803
Share-based compensation
—
—
—
—
9,637
9,637
Other, net
1,190
48
705
—
1,332
3,275
Interest expense, net
825
12
485
3
67,785
69,110
Change in fair value of derivative
—
—
—
—
1
1
Income tax provision
—
—
—
—
61
61
Adjusted EBITDA
$
102,959
$
14,569
$
18,105
$
8,241
$
(34,961
)
$
108,913
Year Ended December 31,
2019
Casinos Segment
Distributed Gaming
Segment
Nevada Casinos
Maryland Casino
Nevada Distributed
Gaming
Montana Distributed
Gaming
Corporate and Other
Consolidated
Total Revenues
$
545,231
$
70,170
$
285,012
$
72,227
$
770
$
973,410
Net income (loss)
$
64,034
$
16,145
$
25,536
$
2,829
$
(148,089
)
$
(39,545
)
Depreciation and amortization
89,056
3,862
15,322
6,713
1,639
116,592
Acquisition and severance expenses
529
46
22
13
2,878
3,488
Preopening and related expenses (1)
2,708
15
1,482
—
343
4,548
Loss (gain) on disposal of assets
1,026
98
96
(296
)
385
1,309
Share-based compensation
11
—
5
10,108
10,124
Other, net
405
—
52
—
1,759
2,216
Interest expense, net
576
5
68
5
73,566
74,220
Loss on extinguishment and modification of
debt
—
—
—
—
9,150
9,150
Change in fair value of derivative
—
—
—
—
4,168
4,168
Income tax benefit
—
—
—
—
(1,876
)
(1,876
)
Adjusted EBITDA
$
158,345
$
20,171
$
42,583
$
9,264
$
(45,969
)
$
184,394
(1)
Preopening and related expenses include
rent, organizational costs, non-capital costs associated with the
opening of tavern and casino locations, and expenses related to The
STRAT rebranding and the launch of the True Rewards loyalty
program.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210311005898/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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