– Record quarterly revenue of $292 million, net income of
$103 million and Adjusted EBITDA of $91 million
– All casino properties and distributed gaming operations
achieved the highest quarterly Adjusted EBITDA in our
history
– Received $60 million cash payment from Caesars
Entertainment in July; may receive up to an additional $15 million
based on the potential sale value of William Hill’s UK
business
– Repaid over $50 million of debt in the quarter; cash
balance of $213 million including the payment from Caesars
Entertainment
Golden Entertainment, Inc. (NASDAQ: GDEN) (“Golden
Entertainment” or the “Company”) today reported financial results
for the second quarter ended June 30, 2021.
Blake Sartini, Chairman and Chief Executive Officer of Golden
Entertainment, commented, “Our second quarter operating results
demonstrated improvement over our first quarter, as we generated
record quarterly levels of revenue, net income and Adjusted EBITDA.
These results highlight strong levels of visitation and spend at
all of our properties, including The STRAT, combined with the
margin improvement we have sustained over the last twelve
months.
“During the quarter, we deployed cash generated from operations
to repay over $50 million of outstanding debt obligations including
$47 million of our term loan. After the quarter ended, we received
a $60 million cash payment from Caesars Entertainment, Inc.
(“Caesars”) related to their acquisition of William Hill and have
the potential to receive up to an additional $15 million payment
from Caesars depending on the sale value for William Hill’s UK
business. We appreciate our longstanding relationship with William
Hill and look forward to their continued operation of the
sportsbooks in our Nevada casinos. After receiving the payment from
Caesars, our pro forma LTM net leverage ratio is 3.8x and we expect
to continue to reduce our leverage through the end of the year
which will provide additional strategic flexibility and position us
to return capital to our shareholders.”
Consolidated Results
The Company reported 2021 second quarter revenues of $292.5
million compared to $76.0 million for the second quarter of 2020.
Net income for the second quarter of 2021 was $103.0 million, or
$3.26 per fully diluted share, compared to a net loss of $78.6
million, or a loss of $2.80 per share, for the second quarter of
2020. Net income for the second quarter of 2021 includes $60.0
million, or $0.53 per fully diluted share, in other non-operating
income recognized from the Caesars payment received after quarter
end. Adjusted EBITDA was $91.0 million for the second quarter of
2021 compared to Adjusted EBITDA of ($5.5) million for the second
quarter of 2020.
Casinos
Casino revenues were $170.8 million for the second quarter of
2021 compared to $39.4 million for the second quarter of 2020.
Casino Adjusted EBITDA was $78.5 million compared to $1.9 million
for the second quarter of 2020. Total Casino Adjusted EBITDA margin
was 46% for the second quarter of 2021.
Distributed Gaming
Distributed Gaming revenues for the second quarter of 2021 were
$121.4 million compared to $36.3 million in the second quarter of
2020. Distributed Gaming Adjusted EBITDA was $24.9 million compared
to $0.9 million for the second quarter of 2020. Total Distributed
Gaming Adjusted EBITDA margin was 21% for the second quarter of
2021.
Debt and Liquidity
Golden Entertainment paid down $53.4 million of debt obligations
in the second quarter and as of June 30, 2021, total debt was
approximately $1.1 billion, consisting primarily of $725 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 $200 million
revolving credit facility. As of June 30, 2021, the Company had
cash and cash equivalents of $152.5 million and on July 14, 2021,
the Company received a $60 million payment from Caesars in
connection with their acquisition of William Hill plc, which is not
included in the quarter end cash balance.
Investor Conference Call and
Webcast
The Company will host a webcast and conference call today,
August 5, 2021, at 4:30 p.m. Eastern Time, to discuss the second
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
7:30 p.m. Eastern Time today and may be accessed by dialing (855)
859-2056 or (404) 537-3406 for international callers; the passcode
is 8559794. The replay will be available until August 8, 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 potential additional payments from Caesars
relating to William Hill, 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 reduce leverage and 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 16,700 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 June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Revenues
Gaming
$
204,957
$
56,677
$
381,957
$
183,892
Food and beverage
44,938
10,168
78,742
51,715
Rooms
30,249
5,987
48,647
31,592
Other
12,323
3,142
22,817
15,932
Total revenues
292,467
75,974
532,163
283,131
Expenses
Gaming
106,805
35,231
203,177
113,343
Food and beverage
29,533
9,739
53,074
44,626
Rooms
12,383
4,586
21,993
18,541
Other operating
3,099
1,404
5,795
6,531
Selling, general and administrative
53,285
32,548
106,876
80,158
Depreciation and amortization
26,682
31,930
53,868
63,086
Loss on disposal of assets
610
702
819
1,291
Preopening expenses
109
9
229
114
Impairment of goodwill and intangible
assets
—
21,411
—
27,872
Severance expenses
—
367
—
3,343
Total expenses
232,506
137,927
445,831
358,905
Operating income (loss)
59,961
(61,953
)
86,332
(75,774
)
Non-operating income (expense)
Other non-operating income
60,000
—
60,000
—
Interest expense, net
(16,169
)
(16,407
)
(32,217
)
(35,153
)
Change in fair value of derivative
—
—
—
(1
)
Total non-operating income
(expense)
43,831
(16,407
)
27,783
(35,154
)
Income (loss) before income tax
provision
103,792
(78,360
)
114,115
(110,928
)
Income tax provision
(786
)
(206
)
(489
)
(258
)
Net income (loss)
$
103,006
$
(78,566
)
$
113,626
$
(111,186
)
Weighted-average common shares
outstanding
Basic
28,621
28,072
28,421
28,001
Dilutive impact of stock options and
restricted stock units
2,990
—
2,864
—
Diluted
31,611
28,072
31,285
28,001
Net income (loss) per share
Basic
$
3.60
$
(2.80
)
$
4.00
$
(3.97
)
Diluted
$
3.26
$
(2.80
)
$
3.63
$
(3.97
)
Golden Entertainment,
Inc.
Reconciliation of Net Income
(Loss) to Adjusted EBITDA
(Unaudited, in thousands)
Three Months Ended June 30,
2021
Casinos Segment
Distributed Gaming
Segment
Corporate and Other
Consolidated
Nevada Casinos
Maryland Casino
Nevada Distributed
Gaming
Montana Distributed
Gaming
Total Revenues
$
149,534
$
21,240
$
94,536
$
26,867
$
290
$
292,467
Net income
$
49,661
$
7,186
$
17,202
$
2,226
$
26,731
$
103,006
Other non-operating income
—
—
—
—
(60,000
)
(60,000
)
Depreciation and amortization
20,159
992
3,361
1,536
634
26,682
Change in non-cash lease expense
17
106
75
2
21
221
Share-based compensation
—
—
—
—
2,668
2,668
Loss (gain) on disposal of assets
179
—
433
(2
)
—
610
Preopening and related expenses (1)
4
—
16
—
89
109
Other, net
65
—
—
—
696
761
Interest expense, net
126
5
64
—
15,974
16,169
Income tax provision
—
—
—
—
786
786
Adjusted EBITDA
$
70,211
$
8,289
$
21,151
$
3,762
$
(12,401
)
$
91,012
Three Months Ended June 30,
2020
Casinos Segment
Distributed Gaming
Segment
Corporate and Other
Consolidated
Nevada Casinos
Maryland Casino
Nevada Distributed
Gaming
Montana Distributed
Gaming
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
Change in non-cash lease expense
18
112
16
4
20
170
Impairment of goodwill and intangible
assets
21,411
—
—
—
—
21,411
Share-based compensation
—
—
—
—
1,756
1,756
Loss (gain) on disposal of assets
641
42
(11
)
35
(5
)
702
Preopening and related expenses (1)
—
—
(1
)
—
10
9
Severance expenses
189
—
109
25
44
367
Other, net
—
48
41
—
28
117
Interest expense, net
90
1
9
1
16,306
16,407
Income tax provision
—
—
—
—
206
206
Adjusted EBITDA
$
2,135
$
(218
)
$
(700
)
$
1,636
$
(8,344
)
$
(5,491
)
(1)
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.
Six Months Ended June 30,
2021
Casinos Segment
Distributed Gaming
Segment
Corporate and Other
Consolidated
Nevada Casinos
Maryland Casino
Nevada Distributed
Gaming
Montana Distributed
Gaming
Total Revenues
$
262,884
$
37,340
$
179,408
$
51,904
$
627
$
532,163
Net income (loss)
$
74,902
$
10,949
$
30,341
$
4,097
$
(6,663
)
$
113,626
Other non-operating income
—
—
—
—
(60,000
)
(60,000
)
Depreciation and amortization
40,506
1,991
6,858
3,253
1,260
53,868
Change in non-cash lease expense
48
212
351
5
44
660
Share-based compensation
—
—
—
—
5,673
5,673
Loss (gain) on disposal of assets
159
—
844
(184
)
—
819
Preopening and related expenses (1)
4
—
16
—
209
229
Other, net
521
—
74
—
2,334
2,929
Interest expense, net
278
10
138
—
31,791
32,217
Income tax provision
—
—
—
—
489
489
Adjusted EBITDA
$
116,418
$
13,162
$
38,622
$
7,171
$
(24,863
)
$
150,510
Six Months Ended June 30,
2020
Casinos Segment
Distributed Gaming
Segment
Corporate and Other
Consolidated
Nevada Casinos
Maryland Casino
Nevada Distributed
Gaming
Montana Distributed
Gaming
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
Change in non-cash lease expense
50
223
8
5
45
331
Impairment of goodwill and intangible
assets
27,872
—
—
—
—
27,872
Share-based compensation
—
—
—
—
4,002
4,002
Loss (gain) on disposal of assets
1,263
47
(31
)
17
(5
)
1,291
Preopening and related expenses (1)
225
—
(1
)
—
115
339
Severance expenses
2,451
155
571
41
125
3,343
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
$
31,271
$
2,586
$
4,804
$
3,246
$
(16,943
)
$
24,964
(1)
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/20210805005954/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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