– Casino resorts and distributed gaming operations reopened
in Q2
– June financial results significantly exceeded
expectations
– Ongoing operating and marketing expenses meaningfully
reduced
– Repaid $190 million of $200 million borrowed in Q1 under
revolving credit facility
Golden Entertainment, Inc. (NASDAQ:GDEN) (“Golden Entertainment”
or the “Company”) today reported financial results for the second
quarter ended June 30, 2020.
Blake Sartini, Chairman and Chief Executive Officer of Golden
Entertainment, commented, “Our reopenings began in May with our
Montana distributed operations, followed by our Nevada operations
on June 4th and our Maryland casino on June 19th. I want to thank
our team members for their dedication to our Company and their
efforts to reopen our properties safely and efficiently. Our
diversified gaming platform, with nearly 80% of our historical
property Adjusted EBITDA derived from locals-oriented or regional
gaming operations, is positioned to recover quickly from the impact
of the mandated shutdowns.
“Our results since reopening have exceeded our expectations,
with June Adjusted EBITDA up 14% over last June even with fewer
days of operations. Performance in June was led by our Las Vegas
Locals casinos and taverns which achieved double-digit revenue
growth and collectively doubled their Adjusted EBITDA contribution
compared to the same period last year. We generated a similar
strong performance in June from our reopened Laughlin and Pahrump
casinos, which increased revenue and grew Adjusted EBITDA by over
50%. In addition to strong gaming revenues across most of our
businesses, we focused on significantly lowering operating and
marketing expenses. For our Nevada casino operations, excluding The
STRAT, our expense management initiatives drove an Adjusted EBITDA
margin improvement of 2,000 basis points to almost 50% in June. Our
distributed gaming businesses also performed well in June across
Nevada and Montana with revenue growth of 6% and an Adjusted EBITDA
increase of more than 18%.
“Given our quick actions in March to reduce expenses and
increase our liquidity by drawing down $200 million on our existing
revolving credit facility, we had no need to raise additional
capital during the shutdown. In June, we repaid $190 million of the
$200 million drawn on the Company’s revolving credit facility,
which remains available to us for potential future liquidity
needs.
“Our strong recent financial performance, significant and
sustainable margin improvement, as well as our diverse local and
regional operations, gives us confidence that we will recover from
the current challenges and remain well-positioned for future
opportunities.”
Consolidated Results
The Company reported 2020 second quarter revenues of $76.0
million compared to $248.1 million in the second quarter of 2019.
Net loss for the second quarter of 2020 was $78.6 million, or a
loss of $2.80 per share, compared to a net loss of $14.4 million,
or $0.52 per share, in the second quarter of 2019. Adjusted EBITDA
was $(5.7) million for the second quarter of 2020 compared to
Adjusted EBITDA of $49.8 million for the second quarter of
2019.
Casinos
Casino revenues were $39.4 million in the second quarter of 2020
compared to $158.7 million in the second quarter of 2019. Casino
Adjusted EBITDA was $1.8 million compared to $48.0 million in the
second quarter of 2019.
Distributed Gaming
Distributed Gaming revenues for the second quarter of 2020 were
$36.3 million compared to $89.2 million in the second quarter of
2019. Distributed Gaming Adjusted EBITDA was $0.9 million compared
to $13.7 million in the second quarter of 2019.
Debt and Liquidity
As of June 30, 2020, the Company had cash and cash equivalents
of approximately $86.2 million. Total debt was approximately $1.2
billion, consisting primarily of $782 million drawn under the
Company’s existing credit facilities (including $10 million under
its revolving credit facility) and $375 million of senior unsecured
notes. $190 million is currently available under the Company’s
existing $200 million revolving credit facility.
Investor Conference Call and Webcast
The Company will host a webcast and conference call today August
6, 2020 at 4:30 p.m. Eastern Time, to discuss the second 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 7685643. A replay will be
available beginning at 8:00 p.m. ET today and may be accessed by
dialing (855) 859-2056 or (404) 537-3406 for international callers;
the passcode is 7685643. The replay will be available until August
9, 2020. 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 our 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. Forward-looking statements in this press release include,
without limitation, statements regarding: the impact of the
COVID-19 pandemic on our business and expectations regarding
recovery of our business following mandated shutdowns; future
financial and operating results; and the Company’s plans, strategic
priorities, objectives, expectations, intentions. Forward-looking
statements are based on our current expectations and assumptions
regarding the Company’s 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 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; the
Company’s ability to realize the anticipated cost savings,
synergies and other benefits of the American and Laughlin
transactions and its other acquisitions, and integration risks
relating to such transactions; changes in national, regional and
local economic, political 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; the Company’s ability to renew
its distributed gaming contracts; reliance on key personnel
(including the Company’s Chief Executive Officer, President and
Chief Financial Officer, and Chief Operating Officer); the level of
the Company’s indebtedness and the Company’s ability to comply with
covenants in its debt instruments; terrorist incidents; natural
disasters; severe weather conditions; 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 Annual Report on Form 10-K
for the year ended December 31, 2019 and most recent 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, acquisition
and severance expenses, preopening and related expenses, asset
disposal and other writedowns, 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 approximately 16,400 slots, 130 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 approximately 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 June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Revenues
Gaming
$
56,677
$
146,246
$
183,892
$
290,038
Food and beverage
10,168
52,104
51,715
101,862
Rooms
5,987
35,514
31,592
66,801
Other
3,142
14,206
15,932
29,261
Total revenues
75,974
248,070
283,131
487,962
Expenses
Gaming
35,231
84,007
113,343
166,355
Food and beverage
9,739
40,216
44,626
78,430
Rooms
4,586
16,008
18,541
30,409
Other operating
1,404
5,160
6,531
11,594
Selling, general and administrative
32,548
56,235
80,158
113,182
Depreciation and amortization
31,930
29,976
63,086
57,241
Impairment of goodwill and intangible
assets
21,411
—
27,872
—
Acquisition and severance expenses
367
1,123
3,343
2,667
Loss on disposal of assets
702
585
1,291
832
Preopening expenses
9
738
114
1,516
Total expenses
137,927
234,048
358,905
462,226
Operating (loss) income
(61,953
)
14,022
(75,774
)
25,736
Non-operating expense
Interest expense, net
(16,407
)
(19,135
)
(35,153
)
(37,270
)
Loss on extinguishment and modification of
debt
—
(9,150
)
—
(9,150
)
Change in fair value of derivative
—
(1,489
)
(1
)
(3,737
)
Total non-operating expense,
net
(16,407
)
(29,774
)
(35,154
)
(50,157
)
Loss before income tax (provision)
benefit
(78,360
)
(15,752
)
(110,928
)
(24,421
)
Income tax (provision) benefit
(206
)
1,344
(258
)
1,995
Net loss
$
(78,566
)
$
(14,408
)
$
(111,186
)
$
(22,426
)
Weighted-average common shares
outstanding
Basic
28,072
27,762
28,001
27,667
Dilutive impact of stock options and
restricted stock units
—
—
—
—
Diluted
28,072
27,762
28,001
27,667
Net loss per share
Basic
$
(2.80
)
$
(0.52
)
$
(3.97
)
$
(0.81
)
Diluted
$
(2.80
)
$
(0.52
)
$
(3.97
)
$
(0.81
)
Golden Entertainment,
Inc.
Reconciliation of Net (Loss)
Income to Adjusted EBITDA
(Unaudited, in thousands)
Three Months Ended June 30,
2020
Casino Segment
Distributed Gaming
Segment
Nevada
Casinos
Maryland
Casino
Nevada
Distributed
Gaming
Montana
Distributed
Gaming
Corporate
and Other
Consolidated
Total Revenues
$
36,305
$
3,127
$
23,554
$
12,785
$
203
$
75,974
Net loss
$
(44,487
)
$
(1,492
)
$
(4,960
)
$
(234
)
$
(27,393
)
$
(78,566
)
Depreciation and amortization
24,273
1,071
4,097
1,805
684
31,930
Impairment of goodwill and intangible
assets
21,411
-
-
-
-
21,411
Acquisition and severance expenses
189
-
109
25
44
367
Preopening and related expenses (1)
-
-
(1
)
-
10
9
Asset disposal and other writedowns
641
41
(11
)
36
(5
)
702
Share-based compensation
-
-
-
-
1,756
1,756
Other, net
-
48
41
-
28
117
Interest expense, net
90
1
9
1
16,306
16,407
Change in fair value of derivative
-
-
-
-
-
-
Income tax provision
-
-
-
-
206
206
Adjusted EBITDA
$
2,117
$
(331
)
$
(716
)
$
1,633
$
(8,364
)
$
(5,661
)
Three Months Ended June 30,
2019
Casino Segment
Distributed Gaming
Segment
Nevada
Casinos
Maryland
Casino
Nevada
Distributed
Gaming
Montana
Distributed
Gaming
Corporate
and Other
Consolidated
Total Revenues
$
140,260
$
18,456
$
71,445
$
17,708
$
201
$
248,070
Net income (loss)
$
18,194
$
4,277
$
6,687
$
660
$
(44,226
)
$
(14,408
)
Depreciation and amortization
23,092
960
3,894
1,675
355
29,976
Acquisition and severance expenses
101
-
9
-
1,013
1,123
Preopening and related expenses (1)
685
15
660
-
137
1,497
Asset disposal and other writedowns
412
99
78
(4
)
-
585
Share-based compensation
-
-
-
-
2,134
2,134
Other, net
81
-
-
-
406
487
Interest expense, net
63
1
21
2
19,048
19,135
Loss on extinguishment and modification of
debt
-
-
-
-
9,150
9,150
Change in fair value of derivative
-
-
-
-
1,489
1,489
Income tax benefit
-
-
-
-
(1,344
)
(1,344
)
Adjusted EBITDA
$
42,628
$
5,352
$
11,349
$
2,333
$
(11,838
)
$
49,824
Six Months Ended June 30,
2020
Casino Segment
Distributed Gaming
Segment
Nevada
Casinos
Maryland
Casino
Nevada
Distributed
Gaming
Montana
Distributed
Gaming
Corporate
and Other
Consolidated
Total Revenues
$
151,204
$
16,198
$
85,677
$
29,646
$
406
$
283,131
Net (loss) income
$
(48,918
)
$
1
$
(4,086
)
$
(504
)
$
(57,679
)
$
(111,186
)
Depreciation and amortization
47,947
2,110
8,082
3,685
1,262
63,086
Impairment of goodwill and intangible
assets
27,872
-
-
-
-
27,872
Acquisition and severance expenses
2,451
155
571
41
125
3,343
Preopening and related expenses (1)
225
-
(1
)
-
115
339
Asset disposal and other writedowns
1,262
47
(30
)
17
(5
)
1,291
Share-based compensation
-
-
-
-
4,002
4,002
Other, net
47
48
238
-
141
474
Interest expense, net
334
2
23
2
34,792
35,153
Change in fair value of derivative
-
-
-
-
1
1
Income tax provision
-
-
-
-
258
258
Adjusted EBITDA
$
31,220
$
2,363
$
4,797
$
3,241
$
(16,988
)
$
24,633
Six Months Ended June 30,
2019
Casino Segment
Distributed Gaming
Segment
Nevada
Casinos
Maryland
Casino
Nevada
Distributed
Gaming
Montana
Distributed
Gaming
Corporate
and Other
Consolidated
Total Revenues
$
275,889
$
34,201
$
142,850
$
34,660
$
362
$
487,962
Net income (loss)
$
38,056
$
7,104
$
13,719
$
1,234
$
(82,539
)
$
(22,426
)
Depreciation and amortization
43,781
1,914
7,617
3,281
648
57,241
Acquisition and severance expenses
387
-
22
13
2,245
2,667
Preopening and related expenses (1)
2,339
15
1,226
-
149
3,729
Asset disposal and other writedowns
668
99
78
(13
)
390
1,222
Share-based compensation
11
-
5
-
6,302
6,318
Other, net
92
-
-
-
1,259
1,351
Interest expense, net
113
3
36
3
37,115
37,270
Loss on extinguishment and modification of
debt
-
-
-
-
9,150
9,150
Change in fair value of derivative
-
-
-
-
3,737
3,737
Income tax benefit
-
-
-
-
(1,995
)
(1,995
)
Adjusted EBITDA
$
85,447
$
9,135
$
22,703
$
4,518
$
(23,539
)
$
98,264
- 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 TrueRewards loyalty program.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200806005858/en/
Golden Entertainment, Inc. Charles H. Protell President and
Chief Financial Officer (702) 893-7777
Investor Relations Joseph Jaffoni, Richard Land, James Leahy
JCIR (212) 835-8500 or gden@jcir.com
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