Golden Entertainment (GDEN) 9 May 212021 Q1 Earnings call transcript

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Golden Entertainment First Quarter 2021 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] Please note that this call is being recorded today, May 6, 2021.

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

Adrian, you, afternoon, Thank good and everyone.

Charles these President On Actual securities the today’s the and from and Safe Chairman materially Golden call, results Entertainment’s the statements. call today forward-looking contemplated of those is may Chief Blake we will Harbor Executive differ statements Officer. provisions Chief laws. Financial and Sartini, make Founder, Protell, in On company’s under Officer, federal the

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

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

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

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

Joe. Thanks,

starting as million revenue across underperforming showed even and in $XX.X $XXX QX, our XXXX, for properties, quarter demonstrating it property XXXX per of million with said, local is quarterly relevant to EBITDA strong, our all EBITDA generated February. of only nearly momentum a $X than comparison XX% of QX EBITDA reported of XXXX EBITDA and regional the for month the for QX we QX shutdown higher the continued QX our this That our EBITDA STRAT with continued record million. businesses. and January our than to is XX% strength given company’s adjusted are EBITDA highest worth is March. QX history. year and This started quarterly we the We noting in that is last not higher the just

As its March flow-through people XX% asset we saw April. for every March, over return with is getting throughout seeing more our weekends, EBITDA. over January in the the weekend in from Vegas, XX% to improved and Strip reach share, occupancy now fair we and XX% sellout Occupancy to in to Las are quarter

Our are two Las Vegas and XX% almost historical QX. by locals up almost XX% of with to EBITDA of to QX increasing EBITDA X% QX. XXXX Laughlin, outperforming results, to QX In casinos over QX compared to and improved XX% XXXX

to more casinos, Pahrump XX% compared than QX. XXXX to our EBITDA and For improved XX% QX of

EBITDA to the all at their and was operations, compared operating historical Nevada QX XXXX up QX from our X% Casino without Looking of XX% levels. over STRAT even

casino in EBITDA almost EBITDA from over of operations QX approximately generated QX. compared casino and even to from combined STRAT for When XXXX Combined grew XXXX up casino of points XX% basis QX points was to QX compared margin up nearly XX% underperforming, XXX of quarter, looking up operations, XX%, X,XXX QX. XXXX QX. at Gap Maryland Rocky our EBITDA basis and the and the with XX% level property $X from XX% Our million

within quarter margin EBITDA business. by and XXXX points, gaming mostly improved Turning costs almost first QX basis from In wholly-owned driven distributed to our and EBITDA tavern XX% of $XX.X revenues our over to up QX. operating lower Nevada, XXX million, improved increased portfolio.

started QX in QX. May with distributed EBITDA sustained from Nevada for businesses over growing to capacity improvement, and XX% XX% We benefiting million, performance similar X. Montana showed operations distributed from both and see QX, expanded being the current up Nevada from $X.X taverns the our our up Montana most Our that

is in almost currently on the illegal legislators new many of unregulated dangers on focused as important, remain distributed that also states. of state expansion gaming educating gaming and jurisdictions happening We in

million $XX hand approximately generated based We sheet. over increasing to balance cash the performance, in $XXX of of the cash our operating on on our quarter first our million. strength to Moving

have to continue meaningful remainder limited no allocation liquidity $XXX revolving CapEx repayment returning the of capital year over the debt requirements, of our current leverage to then on primary borrowings year. we We reduce the And million and capital position, outstanding anticipate to the given credit our will With be evaluate balance facility. shareholders. our for

exceed and our confidence first trends the which our that the performance our businesses XXXX forward, current track Looking We we EBITDA see reinforces momentum continues. from on our sustainability only operating as are progress and through saw to continuing, XXXX, in XXXX quarter levels. is upside across we

are of starting is and across all our missing our We XX over to return. which database older still XX% properties,

open We’re fall of being Event prepared the weekend our and visitation with Strip biggest Center, booked lineup the convention excited events driver the remarks. is Blake market, that Lawson rapidly the Operator, concert fall. and questions. in please recovering for That available I line. the our for at are concludes for and

Bain first David B. [Operator from from our And comes Instructions] question Riley.

open. Your line is

the spoke Thank guess you. my CapEx looking there acquisitions of shareholders over potential or or several on would next prepared of to outside to quarters? high question return in focus projects? laser-focused opportunities, new on Phenomenal a Or kind we cash flow is be, paying route lower route down the of capital new like harvesting, kind remarks, are Charles, debt, to expansion, first return, I results. that you

David. Definitely latter, in the

at this generating shareholders. for return that are focused on to deleveraging looking and on capital cash sheet, balance we year, ways So hand to solely the

XXXX flexibility and look I for and as more some opportunities think at can deleveraging gives we get of those that the us beyond. future, we into

of new lot a Vegas demographic in read migrating. they the California Las identified frequency we you the demographic versus do terms Is coming of have higher visitation like then core? spend, And about crossover get start Have on from it visitation? California bifurcating for either for to the historical color? Fantastic. kind we out Okay. even an can to early STRAT of or Nevada? gates to the the a opportunity of Laughlin with the Or demographic greater new So the any promotion there is little

mean faces tell are have we in Blake. is faces we moving a our is lot and new around our been for seeing, lot people which residents I data. business, our seen. kind The particularly of bit this new a not frankly, are in to that that businesses, the third-parties of we in a it us that brand early There have deal. town those you distributor the little I hyper XX locations new a of lot David, are local of granular into Nevada. -- Yes, believe can

of that benefit standpoint from a data, a in those it’s on in customers to I seeing marketing we your of We that are intrinsic or in terms little also how regards of can the basis. crossover casinos. think too a early terms in lot But long-term local attracting bit

Okay. Great. again. Congratulations

Thanks, David.

Carlo from Bank. Deutsche And Santarelli our from next comes question

Your line is open.

bulk perhaps Charles, you. exit as Blake, guys, that March, to there from kind as March. just are sharing? and revenues a is business right about to Obviously, extracted the the we’ve When of you wants just business based have thank drove Charles on Hey, Nevada think that in of kind of extraction whoever you curious, I your relative of your think GGR guys clearly up aggregate in be take heard seen that this obviously, the kind casino you’d is to benchmarking of XXXX or of from now one. kind leverage the of just across was casino cost kind the comments, March, heated guys comfortable it sustainable the EBITDA the others. in results think quarter, cost run business? Or through that, rate ability something and I you the about

continue significantly underperforming of changed on have And we’re this given fact large we diluted the forward the because business over is as is sustainable? the of couldn’t give tank I too Yes, run But you they grow our which live maybe given our as a we expectations, that or events Blake. those was historical Are basis our how revenue, higher margin our higher to than well. dilutive margin And the be that the a a question, expectations. regards I going expectations answer business are quarter driver of fact to to Carlo, assume. sustainability the will extent? as here secondly, to operating the it think the -- that the with even We necessary yes. different to been, was that’s I’ll ran our for fundamentally as some margin internally going margin that as topic be the But for can we Laughlin averages. X/X we question I cost stick first Charles One regarding business concerts, is STRAT could day. in some add market. costs parts. have color that X/X bit to it X,XXX our in some portfolio, give is that with In posted, obviously are this short of revenues or think, The is robust reasonable you things we and as portfolio. current And back far that numbers higher rest historical trajectory, was is running sustainable? we -- as mean is or were answering we expectation to is not significantly two going of to going the believe [ph] forward, points may your the to us versus I levels. margin

So confident concerts year going trajectory of areas. even also, later embedded continue events revenue, growth portfolio are our this And will within there terms a in are in forward, and pretty sporting have our strong we those that, revenue along coming with for we two businesses. that current conventions,

two our labor just we that you portfolio that. even the And increase see And the The and seeing down. business, side as we still in I across entire marketing at add an and this not on in would going the are And environment, promotional point. the we costs, that to spend Yes. rightsized are know, side. biggest

a hopefully you’re sell rooms, we’d as On that you’re on little on board property. which the and expect would to probably the an have because occupancy GRAs, with uptick thing basis more that good labor the STRAT, a presuming doing the side, in labor be we at we more accretive increased

our For assets, staffing regional much that is and set. pretty local

same levels been we last we’ve the two assets. quarters for operating those So the have within at

the in from STRAT. would would et I again, at it So if cetera. revenue-generating But restaurants, that see a sales room be and perspective, uptick just categories the be again, from labor any think you

to both. Charles, could rate if you in spoke this about think one those looking in good cash very annualized of maybe almost and $XX leaves you I’m again, to you ask Great. of guys run ways follow-up. start thinking position interest on that’s a rest what the you’re million million just the focus And if maintenance whatever $XX But $XXX think want. quarter an remarks. to basis, from to about at EBITDA like perspective acknowledging your $X as prepared million, Thank a first And I powerful you on if do flow down, puts we a debt probably of we lines, million [ph] something certainly, Difficulty] next deploy $XX And you saying $XXX credit and you or the annual along pay not year. rate. will show which another did size cash you close say, capital, an million pretty of free about that share to [Technical

three small With those dividend? buckets? the conceptually? about how Special flow perspective. do picture, and relatively you do is, it prioritize it dividend? you where think of How about trading them? a think How do Buybacks? flow of Kind you just Or kind bigger in from

capital Yes, there’s the We shareholders sit room. the equally, special all this here, construct which to shareholders towards, we concept like right significant obviously, I mean, I I the would in look, conceptually, returning mean, as of to dividends. have of leads now, and the we’re depending probably pick more prices a take had path But trading, where at to optimal we’d that of if where look you the that’s company. time, say one. on now, the at a liquidity

we the look we at future. here As today sit and

very thanks much, guys. Great,

you. Thank

question Beynon from Macquarie. from next comes And our Chad

Your line open. is

afternoon. good my taking question. Hi, for Thanks

Chad. Hi,

being room some a side? you Will of STRAT kind levels? back? in and little period, about is locals pushing Thanks. of some on partner XX%? events come still mentioned kind And competitors of that weekends, those back really EDR where guess world? get One How to then that to second of and are focus of broadly, that you’re Are Can visitors? starting part on your you top of of a the the what’s ask two you the at covers conservative, you rough had non-gaming or some just rates get and wanted just take conventions between on price? split again, like terms doing? to Just during you I Charles, And wanted your compression time the it to to you’ve that. see just

Chad. Hey

part to specific world. first the the top your on of On question, the property of

restaurant, We a highest at night business significant doing we’re it’s Vegas, restaurant. the to we are seeing believe now Las XXX that grossing XXX that in in right covers restaurant

from Our feel the average – of it checks become there look the I results. significant we’re entirely It the producing to And up room the up XX%. it’s and is, evening. every are entire basically we’ve has retooled venue. menu full mean,

Strip that is elsewhere to local of and XX%. that of the majority business and at making XX% We venue. South a go traffic, or the amount that staying this between trip significant as point, up there’s far As to business is believe from so a either or

of very are continue offerings up improve we venue. to about we that growth continuing And So there. the the excited

the the compression room on rates think yes. is short and I as the far answer the weekends, As

more forward, but the rates ability the, Strip, the But will, think drive Las rest you important, a I couple As as of we as go community. it’s we’re of more and to rest seeing Vegas rest rises watermark of in the those high things. the if as the

the close. we recall, we into completed February of right XXXX, capital was $XXX As the lights you around were our before million approximate to which forced and out, went investment property

in been last as for been the property other every for it that So has has year choppy pretty operator town.

to unforeseen at the COVID. EBITDA that that watermark of high And now we’re And $XXX in that at talked about had this the only of beginning million to property. past we targeted XX% March, on prior event XX% while return the So is hitting terms the occupancy property. running

We’re longer. marks. people staying They’re spend achieving these spending water high And more. EBITDA are the customer

direct We’re seeing bookings. more

reservations. bookings are casino Both longer through marketing staying those Guests they’re are We’re of OTA spending more more. casino and seeing program. our displacing

improvements return seeing now and the again, March April with on believe And million EBITDA we with achieving right is underway a material in So $XXX occupancies anemic all And just believe these city And underway. built. seamless that strong will that its walkways, in running World were make that and The metrics is to to a North the some South was property. guests point to very pedestrian investors, coming for investment we’re well that Resorts numbers. while our reminder, which benefit sold Strip, experience June opens roadways XX. we that inertia good we at these lastly, here Drew of North will be just all

bit question. of going the And week-to-week, So long month-to-month, into winded I we’re think grow that get a as we rates. other to just and pretty are month-to-month it May answer bullish And we’re described, we that forward. can do sequentially seeing that was what property we a But elements your compression actually June. and property of that on seeing

remind that And occurred us that Thanks, now? the you just if Mike. impediment put quarter And a results where right in you’ve the side the been, to the that on on during secondly, can Thank it. Nevada, sits up? you. just that Appreciate has tavern slight then restrictions

has than type it of gaming certainly probably portfolio. other operations, more within Yes, our any

So there County, have May now which XX%. occupancy XX%, restrictions are had at moved as within, been up been of to Clark and X,

talking about lot smaller restaurant a, you’re material when floor. than So with a casino you venue, a that’s more could actually imagine large

hopeful for Governor be June look, pretty get that. about would which another, So be we’re us. said XXX% that we’re that, lift excited to And another to prepared we’d X, has here

quarter. Nice Blake. Thanks, Charles. Thanks,

next our from Jefferies. question comes Katz David And from

open. Your line is

Good afternoon, everyone.

Hi, David.

which the certainly neighborhood the within formal detail either last million of of wasn’t kinds to today, one we wonder, where that call do EBITDA. getting pre-COVID. pre Could discussed about we just thinking prominent or I fairly numbers offer? be where can But, go the qualitatively of And, you guidance property about as think where those it. the were to that? as Hi, we it notionally, the we $XX or there neighborhood At sit wanted ultimately, sort time look, time, on about is how much ceiling portfolio. to it was stratosphere, back I And the

David, I run right now. would say, at we’re that rate Well,

a So we’re property. with ceiling not focused that there that is

dynamics the relative, the North side to of the the with and the Blake we’re property. inertia that Given down the Strip, things coming doing that’s mentioned, that

So we’re look, very for on We that bullish think continues the into it. this this balance certainly, of trajectory year. and next year

ceiling. we a So push excited can see to high without how we’re it

think that’s, mentioned that, Yes, David, I comments. I in I my as think earlier

more I property, versus rate booking choosing on direct think property they’re website. a means continue people ceiling that the our as we a that gets to realize to which raised particular of

casino at ownership prior to very a robust that more casino our any program. exist, property, didn’t there given instituted seeing we’ve wasn’t bookings, casino We’re program really which

right a both The city, in us. properties great the think achieving mentioned, we’re associated we’ve going it. talked occupancy, given to area we those adding had North zone the ceiling cost, given capitalize believe a towards not coming District forward at positioned, the now targeted city’s talked in Charles and development of earlier is running Art we already a property coming about about as results and and fixed XX% downtown put and necessary the the So, that coming growth that’s XX% We some made, now, our right improvement with to but fundamental the south the cost that revenue property, property. want coming North will don’t stick we only development on the to believe, more we’ve changes the that great We well the circa, on South. to investment,

there’s plans a have on, since more Putting I into done? it is what for it? you much would so some of think did than Right, capital follow-up broader got take allocation, earlier scope consider? because natural ultimately what the, the so about to Understood, discussion

Yes, center to that very billion putting property piece convention really close broader space. I should for fortunate think the is be was spent shortly. convention the they opening, we’re that about a was the and But, that and

renovations do I we’ve it right now. think to we room in got we’ll So, continue course. mean, ordinary

think to where on other land. where type add the property the estate with on capital-light us of to partner to people fashion the I see use property could excess ways a capital, you contributing could to in not looking we amenities we’re at than real

who some us CapEx, folks more about us of this is of approach radar for $XXX million which large for but terms things at That’s with, talk we’ll doing on So large. those in scale us point. not the

Yes, forward between some the XXX was we we’ve And been renovated, would is reasonable as so focus we ours product rooms, your that and to the time. Charles the probably but did of another for getting roughly be our mentioned, I within invest room money, me more it. investment, are any balance want we catalyst what would the going XXX sheet I would a be there the think XXX, prior XXX think and to year. to have answer or question property, on our catalyst within half the where Certainly renovated last for amount has rooms the ownership, us

me. Thank to good Sounds you.

Protell And remarks. the session. I’ll the for call back this now question-and-answer over to turn concludes Mr. final

our and joining we’ll call. to Thanks, you quarterly everyone next for talk on

Thank and now you, gentlemen. you This Thank you call. today’s ladies disconnect. and may for conference concludes participating