Golden Entertainment (GDEN) 12 Mar 212020 Q4 Earnings call transcript

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Golden Entertainment Fourth Quarter 2020 Earnings Conference Call. [Operator Instructions] Please note that this call is being recorded today, March 11, 2021.

Now I'd like to turn the conference over to Joe Jaffoni, Investor Relations. sir. ahead, go Please

and everyone. Towanda, good you, afternoon, Thank

call, On Founder, materially those and Chairman today safe is harbor On CharlesProtell, under statements. the contemplated forward-looking the Actual company's Blake Sartini, results today's Officer. in and Financial securities company's provisions and these the will the from President make statements call the Chief we federal Chief laws. of Executive Officer, differ may

statements materially concerning contained factors cause differ to Except Commission. that press law, from obligation and in is as to otherwise. undertake these new by we release the forward-looking information today's a Additional Securities with actual these as could filings result statements required update no results of Exchange or our and information

will talking also measures we financial non-GAAP about performance. call, in discuss the our During

can provide business review of the which Charles available financial on our afternoon's in of website. details reconciliation recent will is measures a call, press On update. and this release, our first find You GAAP results

and please pleasure Charles, to Following that, call my that, Protell. the Charles Charles With questions. Blake to over ahead. turn it's go your take will

Thanks, Joe.

period. to in EBITDA other EBITDA through accounted managing our record the greatly guests. success Before and exceptional start roughly want which the quarter, to all the to of our the our thank our commitment of strong has fourth members our our XX operators, to extraordinary our months about pandemic, for for after contributed quarter XXXX. continued October, total challenges service members Similar the continues dedication to to team providing their from began for team talking of we and company in the half with unprecedented very effort

Even sustained November capacity quarter. quarter that restrictions we probably margin performance more operational so, full are efficiencies results. for restrictions, provides generated and quarter you became significantly and million stringent $XXX driving regulatory of almost over Despite EBITDA are our properties. our the impacted which and revenue the million evidence strong $XX increased December, in improvement aware, As of at our other fourth

Las trend, much and February was our continue to were months two XXX for loosening Vegas point our than improved improvement increased margin XX% lower, properties to our basis margin restrictions local more points. driving EBITDA believe was EBITDA EBITDA than don't and EBITDA make local In California than basis X,XXX casinos is points. a support leading While will which as year-over-year but business. more Fourth Laughlin, dependent November January us the up for over that casinos on that this customers, the was December, and low better quarter highly in our

our than Pahrump and EBITDA XXX-basis point we improvement. casinos, XX%, more margin improved a achieved For

Casino our point an Resort Looking improvement. Nevada X.X% Strat, was margin operations, EBITDA up XXX-basis on excluding at all the

restrictions, casino improvement. hindered casino for Gap When Rocky EBITDA our margin on point X% Our increased XXX-basis Strat, and by nearly level looking the we operations weather quarter. the still $X a but combined generated over were operations, excluding grew of casino EBITDA property at million

of our all driving to fixed it our implementing and that stay the for be was December we point was And low and March, the XX% restrictions in XX% even surprise from the saw about the market, occupancy above the our breakeven, impact just property. cost orders quarter. that While is XX%, With forecast Strat October hit still generated about and positive impacted that Nevada. needs properties, fall further given biggest other base for largest we to structure, the EBITDA at for the with in December. to The to reaffirming occupancy XX% room be in at our property be and above view limitations Strat capacity California, should increased home restrictions no than felt occupancy

simplified to fourth distributed Tavern business, and labor from Nevada, as to our wholly our we due year-over-year, owned menus EBITDA portfolio restrictions. growth offset EBITDA Turning capacity X.X% improved our quarter mostly in streamlined to

with perform Montana revenue over up than our continue more X% well, year-over-year. was X%, addition, up In EBITDA while operations to

Montana distributed businesses grew and and less and operating January balance our continuing this in February, trend see Nevada environment Our also year-over-year becomes Onto our restrictive. as we sheet.

We position million no on on more than million facility. have liquidity cash a strong credit $XXX revolving and borrowings with of $XXX our hand

to new shareholder our real last or a year, debt during equity or did to raise were know need estate get you dilutive we you that XXXX. If not sell any through

was the it prior So our to is at same essentially now place COVID. as capital structure

focus prioritizing would while XXXX all in we QX. generate of Looking share per the And is near-term forward, cash our excluding $X.XX improving Strat, performance free collectively for EBITDA cash debt flow EBITDA levels, free over operations, on the XXXX our At in businesses all flow. already exceeded our other reduction.

XXXX, will We business distributed free are growth properties, of on and confident in sustained generated our margin our improvement further million from over revenues from which cash our flow. continued $XXX casino build

partnership through We future in in positioned Hill gaming jurisdictions. new on capitalize potential also Maryland wagering are of William and such our distributed with sports as the to opportunities, for expansion

are with accretive please concludes open prepared are to the available and financial return and we our with long-dated very comfortable no our questions. flexibility Blake This of debt provide While I is our covenants, pursue more prioritizing which reduction capital us remarks. leverage for the line. structure, will opportunities with shareholders. to Operator,

question with comes [Operator Deutsche of line Bank. the first Carlo from Santarelli Our Instructions]

you Charles Blake. And the Charles, comments. thank Hey, and for

roughly your February color February compared Any January, Just of kind you noted And than how around quarter. October of and around October January of perspective? to an also you better of obviously provide November, from sequencing, kind could the December. much in terms the you candor relative fourth EBITDA was that monthly noted half

in us. I for just was October Yes. from EBITDA monster a mean, perspective, our month

I So were we're quite trending at we this XXXX would than levels. frankly those at not where say higher But in point.

far. so we're seeing what by encouraged highly we're So

about talk feel maybe a talk you of as kind when provide Could then, and around at to what there bit [indiscernible], to could that when start color and as kind so? you're of you guidepost of just And use kind bit a you shareholders. Charles, capital little Great. point you a doing you'll returns little did of

Yes.

get the us on we're faster we've Carlo, in now, the And to returning shareholders. the about that be in people think. get capital as I should out. half as potential to a of we'll year, we than we cash, the going that, generating those intend business, do think deleveraging think and we be the to towards we're we where for past, And levels year, think position back exceed right said trend. we that I XXXX This to prove and

could follow-up. just I one If ask final

kind are as know of bit? least last of has windows As what incredibly are you could all the but everyone booking the to, seemingly demand a kind meaningfully you're terms -- you whatnot, terms talk been accustomed in long, in accounts over of obviously what several little improved has at look the just guys guys these seeing little seeing October, for relative a a bit I what by to backed month reservation strip you which about at pandemic weeks of kind is and of off

Yes.

So is the Strat? question Carlo, your to specific

that. Yes, more of

encouraging. the sure. quarter is March. the We're year, of for this trends And occupancy the better than highly we're January. better into last trends the February XX% are January fourth weekends range, improving month continue seeing than which seeing seeing in We're obviously last that

As you travel the we've the booking convention window. talked fairly and our lack business mentioned, business with is general, about windows a before, or of booking in short

nicely somewhat March these in So trends, although confident seeing and forward going we're that point, February, up early seeing pretty into ramp January, here. at this I'm April demand

comes Bain Riley. Our the with question next of line from David B.

Congrats before the on clearly level normalization? worked after even Strat, much than could to sustain with on it's hit execution. But in your guess, XX%, wondering many been more known And looking the a strip advantages. the challenges, now confidence with I the return on COVID of remodel environment some the overall certain following really you right I'm believe of margin business. up if how of you other CapEx at levels pure XX% even hits and structural properties to maybe completed the kind XXXX, maybe speak really resilient

not to property, or much investment our honest, remodel the had performance. Yes, hard the be million of David, or whether it's with so, do perfectly it's -- to to $XXX the say

say As maybe you your said, guest you COVID was were was basis time during will this managing unpredictable, really the up. during this that challenged because spend than can so question, so and to tell better the restrictions I through it's year. But time hard other an I strip operators ongoing period to say. period, those, on variable

can one for investment tell rates, restaurant our clearly. actually, property people even We this even in would And thing environment. longer, first the those place. mention, the your Top I stay the bodes -- are things outperforming at which X seeing I for in is of to thesis well pretty these lower you occupancy is our World on

As attraction and certain very you in of We're see, lot restaurant. or will, a to become we're Vegas, menus in seeing we've a attend, and traffic, numbers. large environment, must if here offerings this a that seeing it's revamped a go must Las even challenged and time,

given occupancy remodel, the point ability sticking normal. said pre-COVID, things a it they're property this seeing customers I'm to we we're of things Top on that year-round I generate the World calls, feel confident time, our as spend they're about I we think return to So that driver. your XX% -- basis. the the that we targeted capital. in we've more, people property the a And XXXX, on kept call being And the bullish more. to property return on spending on property, feel XX% is real prior on more, property around at very longer, remodel return that once normalize, that ran

be And change and It's triggers the occurs cash so, decipher, that that on that lower, that going us the of or million as upper it where payment or you. you follow-up, to to kind could that cash William the little then of infusement, hard to it's -- level Fantastic. an end outsider on a mid in help understand from Hill Can fall? looks of to $XX a like April whether the up of spectrum. Okay. control it's

Yes. I'd that expect on get to see, and we'd $XX of information say, that valuation public all based we look, million. the substantially the

really to deal clear. my close perspective, have engage to So the at parameters with point, this that for are valuation from wait But that. to we

comes question David Katz the next from of with line Our Jefferies.

you little comment bit have better you flow a cash remarks, and about your than historically? in doing a Charles, made

That's right.

anything that magnitude if of as So at proxy see using to and talk to around converted from for cash XXXX just sort XX%. can of a CFO it there Is order ops, as actually turns into the better? how was moment, about and you look I revenue that of revenue

line, David, trying subtract to yes, what comments, your if on cash little and are roughly of interest feedback a but I $XXX of took with There's in expense, my EBITDA and bit our of you $XXX get flow. you about you're at left was level XXXX free CapEx million million,

$XXX time. roughly taxpaying of expect million to be have so entity some We I a quite NOLs, for don't

you by about if what take roughly could the and free big count, a quarters. if at cash forward $X.XX a meaningful last way so we've divided talked flow. in look X And add over that of share share margin our improvement you very it's And that, to

$XX million share. improvements, So XXX-basis Or revenues, even of of side, that's conservative margin $XX if of point per and $X and want point-margin an extra a basis to X,XXX million than a on about more EBITDA casino you don't cash $XXX flow. talk for improvement million you underwrite

for continuing kind of that's part better in sustainability again, of our now the last to that a QX the us mind, to will some just of cash a de-lever this think that of, focus for throughout substantial and year of into seen us tremendous with is least X So this the that opportunity we've about and think we the if that quarters on other we the opportunities. year company amount at provide margins allow

to start just buybacks that you comfortable you've me, thinking about leverage alternatives, target capital segued you or of that? up, And which nicely I are Perfect. leverage for how can if or return before about other through look through thinking ranges would follow

on Yes. if this I be present on a which Xx those I the attend below year options would to end mean, we us that think leverage by really themselves under look, we're this basis, I of trajectory. when get

capital which for We'll move said as through is generation we X goal to positioned our cash our so think in prove how we will our number we'll priorities the deploy I before to be half I happen, X year. on sheet return is reduction, shareholders out which itself, capital debt balance will onto we And other expansion to first and be to look then think and have what again, and deleveraging cash opportunities. margin earlier, number of that think is this at flow of

comes question Chad next Beynon Our of from Macquarie. the with line

to from those or what our organically the routes then and But gain distributed, as you're was about think sidebar that Montana how new wanted closing market? into guys inorganically the week. multiple just also Tavern more kind a through like, multiples, markets standpoint. pretty Thanks. about chime on properties of know about the it's are talked could you on in just what's how about Nevada that through And sold that, grow you Looked obviously could M&A. those I you looks or share growing should assets Are full market it whether have wondering was happened to moving like portfolio maybe kind in this? markets ask last well? thinking we if of in a there I

a Specific Excel competitive I Chad. transaction business size our X/X you hey, the to mentioned, in restricted market. price of think the Century about said business price a Yes, for that's full you

it's So apples. apples and

scale prices point valuing prove to businesses and businesses. continuing for your are is multiples thesis along that our of about So terms all these meaningful and in these size

wanting we in assume size, guys let there. but for main up tent not we was well and of can, paid price weren't are I as So they that, as competitor We can they full you the said, a again, business it. under math to you conversations. the positioned as well about the involved the were those regarding do but X/X

We in have year a competitive a And position. organically We've Nevada, is not very centralized business. there. every grown been really we've Century relevant up

of you the we know, with X regards games stops. they So exist. kind that truck which years, we're or in is state to skill of are than throughout about the already the know X And in VGTs businesses dealing comfortable we the years operators being in Pennsylvania. in stand. providing which in with not Pennsylvania of revenue proliferated general, in other as efforts Pennsylvania where issue you they to In focused X and anyone legal

well to be business. and Pennsylvania. continues So we movement bills are around draft of that continuing And very be expansion frankly, in active very, to things on as There as the is think are targeting, Chad, the we we this type specific the it to that carry that process. states, other going are states momentum for targeting where through business of we legislative

I the see leading determine for in Some and process gaming It's But good some legislative states company can out there, that. growth in is hard think Pennsylvania of these that will break we this are you believe we're more may be template. targeting, we're some as loose a these some But you'll see germination that of period business. one probably I'm timeframe not to for term, confident, just the that distributed I'm takes these bullish short But -- the if the in things longer. time.

I comfortable with this for quarter accounts respect the and then did that group, in then still customer, more And everyone signs older casino there Okay. to confirm be heartened put any signs of able are casino as recovery? the the at see are couple just traditional database business, not we vaccinated? for over home? largely age And that Can the people were guys any kind piece the to by these Great, demographic, in getting past XX% weeks about properties. your fourth up should you the of encouraging talked still results you of that in has XX-year-old getting you know that to with really Blake. back a I coming which thanks, you believe little And

second beginning that It's question. we're if a back database, older, that to part you To and great to see part database your will, take the of question in. starting the first, trickle XX of

out. age become more at safer that in vaccinations going feel As I people think widespread,

right. quarter, and of missing. part that this Charles performed year-over-year better except for which assets You're the was mentioned, the as I database mean this all of Strat, was without our fourth substantial

of case, it in our in had about fourth still was returned portion think quarter. the of I the not XX% that database

a come positive mentioned, great as it. that's attitudes forward. that and catalyst as that we're vaccinations as here towards And to the sign trickle very see We so along in back, bit. margin with to loosening out improvement and people's as continues doing that see business as little beginning I we things that up within and see a getting the going improve We the other to a

and going trickling be, advantageous it build, So when to it's us say back. now, come going we're but seeing trickle, for be in I trend that's kind of highly they I as that is to think,

very luck. It's great to much. Best hear. Thank you of

question Union line Our comes DeCree Gaming. with John next from the of

ask follow-up, going bit. if could I know you very a but Blake, be to perhaps there's and I little data, little a

demand, of if the little or been than seems your the spend comments and trickling anecdotally in if the thinking kind would kind even the about if interesting. year. more that similar think is all any this We're they're about that the I you that door. demographic curious customer early, on talk but patterns, they for or typically to of particular could you're older DL seeing I'm better about getting spending. it's insight back footfall of on a customer of do of Curious customer notion and be back part pent-up be them spending kind a has how sidelines

That's a question. good

to come more are coming from with fact, if the that's that's back the portion As properties, that yet continuing into we are our a of you database see I matter this And will. we -- in. spend seeing database seeing of

highs say have yet would I that for accounts and are there casino And close to national it. savings savings have are at part group that that of these in in some general that people think the maybe lot than larger they've are of the had all-time past. that some people not a of accounts these or I entered stats savings

about So prior, in the to clairvoyant. than that, in we'll I stimulus shortly. spend some pre-COVID think is cases particularly continue seeing yes, we're you so visit confident released new that We're question here we per more or I and your think as gets XX% see if package had will

a to and Thanks, thought folks space that's Strat. If ask convention one helpful. as the a school the really That's doesn't business at the your it Strat here. bounce on specifically Vegas There's on convention good a of relates business hear. could to have in the I perspectives Las Strat your more lot much back and that recovery to waiting of for

Vegas? to back see need get how So but are Las play customer starts of your that mid-week people back road business over your on it What as into big what perspectives think to about do business and might back? or come at out airlift you really your specifically. next the how convention Do look months Vegas? the curious you demographic and Obviously, to come recovery everyone, to that you kind X X helps

rates groups Yes. large And think it's in Look, room fact everyone. they everyone the on certainly a allow their case, I and hard Strat to and as town down big generate conventions associated to benefit with the benefit yield of rooms. kind those that trickle in better groups our ignore

get good specifically. past We do of see in flow-through as But from upon Strat past, But where the that. which dependent for at into we've foot is the really lot to drive-in traffic, the that the talked tower not Top not in is is thing. as a our lot business business business ignored. restaurant our are our the about Strat, be upon World, to not we And that upswing. that's in property So a the we've going a is that of reliant of mentioned

to options. tend to Las events, of Vegas Hockey as National if the our League, particularly sports you Vegas in entertainment things Football general, think to So with National city Las recover continues positioned, all is going basket, League, well Strat I fill reopens entertainment. those And as this be will,

recover of our bread at be to property. businesses, that made and I Our think I butter seen was the come are that time. drive-in, the do restrictions to We'd Las the going well before very travel is quickly. faring -- in do leisure base that visitor part may is willing quarter town, late that's Vegas the people and and think where that fourth mean, that I to property more at that and drive the our

some maybe pick I we are properties So other the think year. that than as will of later earlier up maybe in weighted conventions the

all year. That's and unprecedented additional the on congratulations helpful. color the Thanks, I Blake. appreciate navigating

showing the for any Protell turn questions. will further closing not Charles call back A I'm to Mr. now I over remarks. -

joining for Thanks, our to you results. look with us. forward updating everyone, quarter We first

your conference participation. Ladies today's and you gentlemen, this concludes Thank call. for

now disconnect. You may