Golden Entertainment (GDEN) 17 Feb 222021 Q4 Earnings call transcript

0:02 Good day and thank you for standing by. Welcome to the Golden Entertainment Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised today’s conference is being recorded. Instructions]. [Operator to Relations. over like Joe speaker the Investor Jaffoni, hand I'd to conference today, X:XX ahead. go Please

X:XX Thank much you very afternoon, everyone. Victor and good

in the from forward-looking and Federal results Blake statements. and On Officer. of On these President is the company's we Financial those the today Chairman will may Safe call, Founder, provisions make and Sartini, Chief Actual Chief under Protell, differ Securities Charles the Officer; contemplated Laws. today's materially the statements company's Executive call Harbor

Additional During forward-looking in actual obligation we also a our these will of from in release information as today's discuss to could to results cause non-GAAP in Except concerning as factors statements financial that X:XX required materially about statements differ call, update by undertake filings and our performance. measures we today's these new with no result talking otherwise. SEC. information contained law, is or press

it's the of with our can and Charles, You call call fourth measures of on which reviewing the pleasure is quarter in release, ahead. details and a press Blake results that, that, Charles the reconciliation to website. start take Charles, business your host With X:XX turn following will the Charles your over full-year questions. available XXXX go find to the We'll and and Protell. GAAP financial update my please

Joe. Thanks, X:XX

and adjusted XX% XXXX. QX $XX of performance record than higher the of with revenue in EBITDA continued QX Our million which $XXX than fourth almost XX% was of million, and XXXX higher over quarter

and record also even the margins reopening. to XXXX, our our comprised Casinos, our particularly X it from more properties now continue impacted quarter XXX reduced release $XXX million, new a navigated the spend, as we reflecting Casinos and of results more increase our basis of And time Before we in over press annual our and $X segment for measures getting and despite better in restrictions, detailed X:XX EBITDA that visitation during taken points last out our of have cost properties. maintain investors properties Vegas the Nevada Laughlin supply Locals generated were to the STRAT. we customers in first specifics are The the successfully of completed shortages, All experienced in team record history. they Pahrump. that XXXX. by We and we break labor of with streamlined COVID visibility this revenues to different operations better than Nevada X:XX been and structure Las reporting we believe the since our in visitation X types the approximately EBITDA fourth provides customer into portfolio. afternoon, a STRAT Resorts, increased achieved in Local which our represents up expand year which QX a Casino billion have as performance, for which our quarters could at

only Despite X:XX Revenue we about year-over-year we sold from margin Gap XX% averaged In what have to QX X players we many of set XXXX last continue our We the Omicron having million. STRAT. success gaming visitation performance and the occupancy performance more revenue rose XXX,XXX QX property our numbers STRAT a also from property. for XXXX, XX% been revenue to X:XX more program This EBITDA increase than and from just our into room Maryland, Resorts in drive of million Nevada and year. I quarter, XX% missing impacted nights Nevada XXXX, Marketing the room $XX mentioned, operations, from particularly so quarter the Montana. and of still the helped missing a XXX% nights, for in attracting occupancy improved translates improved lower improvement STRAT of the gaming higher. XXXX. of with of XX% revenue combines script which late times and November, in property occupancy. at the EBITDA, room nights, top for Rocky December, XX% achieve visitation X:XX Casino EBITDA The we up at our distributed record world Our than improved our venues, dramatic year. up is XX% a average all STRAT’s In XX% which occupancy over could and X,XXX STRAT in saw restaurant, and XXXX. Casino $XXX basis at XX% huge Resort EBITDA record even the new in points the nearly to consolidated Casino to is QX these which

some We believe attract of nights to product continue property drive to lobby the of events players. a X:XX room new and the We further XXXX EBITDA STRAT theater to sweep it The as return much conventions in is property as make the renovating plus room and at to recovery of support move older residencies higher entertainment we the sporting modest a and today. translate and areas entertainment higher citywide incremental XXXX such than the refurbishing refreshing pool investments worth revamped and will through

occupancy through schedule anticipate increased concert QX quarter and almost QX returning up the our from a with in to at and For concerts already compared XX% to EBITDA spend venues guests shows X properties. full We and in the We drove spring, six concerts over booked in that March concert June. to our with market Laughlin resumed X:XX XX,XXX in properties, XXXX. XX% revenue improved was the

and players in Local to competitive opportunity margin XX% properties and and revenue our the concerned to in in still missing revenue million the margins as demographic older million EBITDA Laughlin, view current XX% Vegas, XXX margins X:XX while meaningful meaningful seen increased rose Casinos with over basis of portion environment we as in sustaining this While excess X:XX have We're to move rational standards we're a improved a we promotional XX%. and growing for to experience. impacting able market some market, we quarter. tight, XX% the in our points Nevada EBITDA of of $XX while start going return we $XX Las XXXX. remains guest way to of EBITDA by through which Vegas have are high The the forward. labor to any been Arizona, not Our Las maintain locals is we're environment Charlie's an

and Vegas X:XX revenue for weather quarter. increased third revenues revenue traffic gaming from our food For to EBITDA to Nevada, guests. $XX EBITDA was Gap Rocky up to in to over up also food party Las QX meaningfully EBITDA of the of benefited owned party Maryland and rose X:XX growth revenue was with rapid million XX% XX%. our sustained improved Turning for mild Pahrump its XXXX excess For margins in to third quarter casinos has new in XX%. operations and fueled and stable sports revenue Casino distributed XXX the XX% portfolio the all $X for as we're recovery margins quarter. EBITDA and million rooms well beverage $XXX XX% $XX fourth locations was at wholly and to up where while lounge The at adding million seeing has Tavern relatively a revamped renovated the from million with flow We've for as good and Montana added offerings property recently XX% operations

we of We the X:XX degree newer seeing even and anticipated located demand where wholly in migration our In new performing Local increased greater in now continuing several areas are from Nevada Californians development. others what we fact to of taverns Casinos. see the to residential Taverns are portfolio. a best purposely And generally Nevada locations our those owned were than our in

our recent establish lot to forward, addition tavern What QX, million openings? In and balance development with about our $XXX outstanding likely down no are year, continue cash target plenty million of outstanding a with we buying XXX million over new We of thinking XXXX loan including Moving $XXX year the loan. haven't ended taverns back to million in stock. like term our of our most our of we by million liquidity debt, term sheet, recently. to last have of to paid X:XX debt, of repay We borrowings loan, $XX are and term on provided X reducing borrowings we QX in total XX $XXX X in of our plus Currently, million we upsize of million revolver, X:XX our going million. $XXX notes. spent debt time we locations X that new to can million outstanding $XXX a from a $XXX unsecured consists primarily

over investment thesis opportunistically shareholders. will course the upside And Nevada, straightforward position world authorization remaining the also capital leverage which significant X:XX today to We of intend coming the flow wholly-owned as refinance $XX use do cash below times to X returning to accelerate of of year. market net primarily from the well be with expect our times, view very We leverage which growing continue weeks. most buyback is able as in gaming have assets we gaming attractive X.X in million our this the we a current in to in to future. bonds, Our we to the we approximately

for remarks greenfield cash X:XX our our be questions. on focused to I pursuing the shareholders. or flow of portfolio free are maximizing could development are We and in that Blake, lines concludes from available not solely generating we unproven are prepared performance current returned business, That

Instructions] first from Bain question Our B. Riley. from [Operator X:XX David of line the

You may begin?

golden several and, Great, and with the the increased forward opportunities already you the Nevada, I the that, segments mentioned some if overall just Nevada sheet positives other results. see look the I lot and we and pockets? in and future assets. growth kind long-term But opportunities Nevada, and know increase for growth areas to on and with strip with hyper if in captures nice given super the transparency you other of X:XX positives opportunities there. of on portfolio could near-term with leverage a thank Perhaps local, could guess, taverns strength the in thanks that balance I a

This Blake. XX:XX is Yes, David.

staying anything, transaction whitespace be, would that have the focused we're to that – Nevada. our And, do outside Northern portfolio – growth occur our a think think Charles also opportunity as on pretty could current Nevada, that of focused in have could to up yes, current business, and we for mentioned, route to I possibly particular I in that us. answer is some be real meaningful

we given is designed, will, portfolio this if put Nevada or centric. So, together, you which that we

would think was in I infer you I – this within can it can we see growth a if Again, in think would format. meaningful jurisdiction. we – future, that you the

great. XX:XX Okay,

there valuations valuations your around weigh market the worth in land Sorry, cap. and just more, for action, the is mean, just given real corporate I estate, recent do increasingly higher at one have I background and you for looking arguably your how Nevada elsewhere? noise.

XX:XX recently, provided of Yeah, look, everyone top valuation right that's the mind for some been transactions pretty have in that's, recent metrics. business as solid

say is significant it's prior real grow. and With our our I'll at in than as calls not – but considering underlying other tangible you time us current underlying as said it continues as value real value, is as And as portfolio is, anything for I've I to holdings this estate current think not valuable optionality time, think and your that As value that for we're well underlying know, anymore estate goes significant maintaining of on. as that, we're shareholders. I

just would mean… XX:XX I that, Yes, I add to

ahead. XX:XX Okay. Go

one XX trade, becoming the new the traditional rates. rather it before the last XX:XX earlier. in than investors regional times accepted [Indiscernible] you're more for and was that was And written gaming now seeing entrants minutes it XX class

means So estate. with up more capital line could is in and cost with our gaming they that their pay trade find lower, their their, gonna I of REITs the that you time, over which real more you're peers, for think

right only to I'd going our paid us the to say backstop value that be patient market. so But say our in now, So around never. thesis estate relative the for the is far is current valuation provides real never we're off, in

Awesome. you, XX:XX guys. Thank

David. Thanks, XX:XX

from comes may Deutsche Bank, of Santarelli next from you line begin. question Carlo Our XX:XX

talked your in the guys, impact flag thanks. business heard variant it Vegas guys that have the of peers Las I talked some December, Charles of the some in on little your quarter, Hey, would of talked in anything have good you XX:XX remarks, peers to more impact obviously, about and STRAT specifically things a first a and the prepared the that little November stripped variance bit and about the evening. And first like quarter? as or you so pertains about bit

the softness and XX:XX to relative strip, a a we others past, two that Yeah, Super been similar first of pretty on weekend same. and saw where Bowl January weekend weeks Presidents did to Day packed definitely so and we've the to beyond in in the bit where we be the little that's we see saw every looks

about encouraged doubt January. impact there beginning there no the balance of we're but So is of the an year, the is in

XX:XX believe And over Charles. it the Okay, year, the great. do Laughlin as as to calendar there, then and event of look pertains you the Thanks, out rest just half, of kind or get you normal back of of this we'll at kind at that maybe events point the its asset that base? some cadence asset I say? should second year, at to

first XX:XX there, Yes, putting that fall this down And see think we're that March. think your significant answer we're week we're, turn in, increase The Carl, comes our question the the into I to concert, yes, we're already establishing pretty your answer a I year. rotation see we're, beginning you'll of think, so entertainment first now. that, in is to we're I major

So that's bring occurring, than earlier we anticipate the that'll and next earlier results of fall positive already year. than

said, I year. this I it'll in March think As begin of

XX:XX obviously, coming Yes, the full for for up But on we're the fall. and working the a the to in too into we're excited that this, well. acts six and it's as we about expect bookings that then early spring are we first the heading slate fall have have

XX:XX Great, thank guys. you,

XX:XX Thanks, Carlo.

line question next from comes of the Sander from Our JPMorgan. XX:XX Omer

begin. You may

question. XX:XX Hey, Charles, Blake for and taking thanks the

online? that or your that First, looking commentary today, in here, STRAT, amenities you encouraging customer any if on you're when the across you're missing look and portfolio, you're segments additional

parts – wanted the which XX:XX city. and we we essentially versus stated guests was Yes, that people as that to the staying longer in as in early transitory and enabled prior our investment that to capital provide other we on an coming property, and environment spend property, terms in visiting stay more, so, of of our

seeing very phase built seeing one we outlets good we're on think, results, this move property. that on that now, is that I were I property, time higher around. we us let's million $XXX of, higher out, stickiness need may keeps see in showing as that so we more which will people target, stickiness, seeing So are we're you'll efficient a that call investments which it more $XXX, something right think far, as capital, we of And thing allow spend, mean, forward, food is

a of that you'll entertainment You're better public we're our seeing the new We outside the modest investments. and kind we've including now of that a a can initial property. We world to and upgrade continue seen more end of area improve believe of with entertainment a showroom, early over at providing continue a us attract positives our to enable top will just the invest did bit that time, in to out we experience. customer see higher our XX:XX to of which fleet, we results room little with product, the

that or north this of range, second we the property. that anticipate our program golf coming We would I beginning entertainment, to of food quarter in atomic the intend you're So year. of aware say facilities, time put

add see see that So yes, is will we we're the that additions types continue of for on and beginning that these to the demand good we to demand as property. to news

to One that going convention thing chase is we're adjacent not XX:XX to we're going big to property. building chase a the center not

that's we Center, properties looking feel for us we're and had niche success. perfectly that that, for we've of that's Convention can more a So from around lot we've provide that that the what that we next existing where the spillovers and we're located the to feel there's seen for

with that. So stick we're gonna

you and evidenced interest it doesn't And refi? then cash stock, for your up any flow forward? and but share, going maybe year, generated And you by per capital about as XX:XX sense. $XXX priorities this look convention cash like you. the buying $XXX about there's makes free more from do commentary CapEx major How savings potential return free follow on you've the million back flow, there. from think It one started broadly totally Thank

cap we'll we take look, of being on about $XX have in share, buyback Yeah, relative a want put allocation for you'd mean, XX:XX and it going substantial deliver. in it us, that's, it authorization, like how rate be flow could think investing whatever and you I the in terms that, to cash target we getting at balance that also so XXX saving, could our ends as up own free at think of CAP million We're interest we view it, we for going that we million roughly to forward, on a cash we said, is properties. $XX the focused through

now that, make opportunistically we we're based on we have where think position, to the I returns. choices think where in those best we So, fortunate get the

Thanks XX:XX much. so

next comes from Our line question may XX:XX begin. Jefferies, David from you Katz the of

bogey, would candidly, of going questions, of think how I a some XX:XX putting some you to like some of as little afternoon, one thinking whereas, – Hi, in more us before pursue, be like was something, a may I would cap you which it farther, may mentioned projects, about, have been number. sounds have right, the is, there pretty prior right? much maintenance baseline acts about we

where CapEx, frankly, COVID, little at finished probably the coming We bit much out be. million light about and quite pretty a Yes. XX:XX $XX we of which year maintenance, were not was quite up gonna sure of

pursuing. the out it's million of concept development new that this I CapEx $XX of a what but that's So Those between million to we're major any some and that slot about, include talked it'll include year, forward to capital, projects. look will we X not course going as we not over on perspective X are, going that somewhere taverns to think will $XX include be

important clear little It's and give a our are committed to it's XX:XX to disciplined be on and understand, a to I important, more clarity Yeah, efficient approach we to think capital. that. David,

those I entertainment capital are atomic us $X So reigns, outlined. for So disciplined our and and estate just of those projects some modest outside bit to doing full we regards of to the there. but kind things million, a are talked life example, a Charles aren't capital. STRAP, number. that that would that we're facilities to aren't about any not example, some is terms in design there $X take number are to million areas, The using as million putting remodel, taverns, real etc, Charles I remodel a new million etc. on capital, talking modest that's this approach mentioned and $XX room simply as aware, to just maintenance year, rooms of maybe the we you're outside of $X.X this that not right, about. for until are an framework was XX:XX type that which when collateral our including coming we upgrades of capital are a are all-in XX:XX previously capital continuing more $XX to project are some food in million, So But reiterate, not is, that That's in

to our million maintenance, million is in depending our Yeah, maintenance $XX XX:XX the going year. $XX on what's on

XX:XX Got it.

fall the So, look, in certainly of quickly up, have to I day. pretty reasonably might just like end based into I an I year. model the year on at really seems this million cash whatever and next that. $XX throughout eyedropper the mean, starts mean, what if I, a pile

Yes. XX:XX

XX:XX Okay.

what, at what looking what, do do then thing and both or options the to and same with the when we're think to it become it? I so

dividends. And buybacks primarily, Yes, ways capital to there's return of right. that's to right or shareholders through XX:XX lots

authorization. the that to science till there's your no mind, go a do yes, and but It's to not – we something the to authorization you the back need so of for board we wait end do there's look year we have or could now. And buyback didn't, a to

the of pursue execution a our think shareholders, we're in best balanced refi refi. position. to to that low of a forward that's approach the path And We and we and in pursue, capital intend leverage investing to have properties, a we maintaining returning And we existing then going to value. want maximize again, to create that

we one, if of absolute relatively is last may, impression redirect some Would low. talked But, mean, my I never about, are just that always talked we'd be – one my in that Agreed that these I you those things probabilities what XX:XX the prospect terms. been still meaningful about has acquisition, true?

feel other us bar for create – the adjusted we mean, risk look, outlined a could for And to to brainer mean, those of I paths. of pursue so the really to very types highest be the no quite, is return path almost I Yes. high, risk the execution we XX:XX has those lot shareholders. level things. we There's in

XX:XX very you Perfect. Thank much.

XX:XX Thank you.

is question, Chad Macquarie. Our offline XX:XX Beynon next from

begin. may You

us afternoon. Thanks question. you Good for XX:XX at on Charles, STRAT. my gave taking the occupancy some statistics

room bit Just heard of weekend you just terms wanted business but good more that in Thanks. that the can when that up, positive from when, convention a then, to and just some strip is could still, dig start bifurcation? and on we've international some operators compression commentary clarification midweek to some midweek. into little versus get some other some And really a think, of wanted nights, property pick you

rates. XX:XX deficiency. roughly the is same that business or lack that We're that Yes, the it visitation, at is of it's on creating seeing the same the still weekend midweek predominantly

the March we're and rates, the more convention coming get major first into town, us that looking week that's stay into that we weekend. think forward the people sell over also terms what being as not as to NAV of but and into rooms, only in to city does I during to for being wide compress April, able

with combined think we're particularly city. events are demand, I the into retail pretty attendees happening very and there when as are strong on is visible what get impact get is are the conventions continued the So the what in QX, we it'll what for those seeing here, this that city,

ask service the X full under your is within on pretty clear XX:XX labor that terms it's, where X that Gotcha. situation, control, you're portfolio, about been just understanding the kind inflation, in mainly the dynamic months. that, of of like wanted sounds from past to to time over of industry the given side, And then has margins, Thanks. employees, crystal stability but

will XX:XX business. at Yes, is cost revenue business, the forward. the we that be to Chad, I up things to the and as will volume up there There add as picks think that will – occupancies is pick static add same going time like but

are very So, margins, and pretty a that – of forward, are be a confident prior, – I'll diet but as we confident, what XXXX we from we someone we're you historical if said We matter a fact steal will, made it, on outsized lifestyle maintain here. line would and going can versus I forgot a change. who not

this through continue and So to talked these maintain margins we confident visitation full will lifestyle Charles change historical. compared outsized as about, can we're

increases big you experienced pandemic, we have We through and it, and QX mind July. that got to keep that we we saw fully June, reflected employees, XXXX. Yes, in numbers, now X,XXX QX in that's XX:XX been had really and think labor I costs in pre

and the revenue in giving XX% more force, more over EBITDA. down labor we're So

costs increases while So labor in are our aggregate down. those have there, overall been

Thanks, Thanks, Charles. XX:XX Blake. Appreciate it.

Our the question Edward from you XX:XX Capital, Roth begin. may line of Engle comes from next

is for at question. quantify older it look my fourth room left much at it versus look is for thank to that from recover We in Hi, there segment way XXXX? the When to quarter, any ages your demographics going? spending XX:XX how XX plus, you how's you from taking call spending

see we in XX:XX Yes, I'd most Laughlin is the the assets. our noticeably varies property that say, where it – she by and

revenue the call I to to asset and gaming rated most being down attributed probably of for older XX% XX% of that it, we're demographic. that So

starting look us I but customers you look And other is back, of businesses begin think worth locals, real it So, you just generally a back. as a real times I see piece that's our are business, out going there's to the year. trickle at get why missing there's as at accelerated we we in. could we a Laughlin, that of to properties, come those through huge and mean, forward comfortable most opportunity they to, see just back and pockets the and the passivity for here point at taverns, more that

for on any rates? currently that if I That's you. you sensitivity I you and the on have, rising maybe focus shift Would in what's kind to and an Great, with know refinancing? the loan of kind I guess, XX:XX thank refinancing, that use then helpful. your to lock upcoming rates opportunity of term to cost fixed that And gets the some cost, interest as longer

ours, LIBOR most, most flow, it. And term debt a Like floor floor floating loans, in XX have though instrument, have they're a XX:XX points. including a they even is they basis rate our

to So why comfortable we're when margin. a indicative perspective, talking XX about targeting to right actually from both LIBOR getting get XX:XX leveraged rate. in we're now least savings. from we're more the can. market. on that's bank And report when indicative net-net, actually on trading that by is that market we're as loan now that, there'll out the I'm be what interest market versus at And cash at it's rising do that And an done. point a excess was a right rate new Think working we lower we're strong basis of bond million is and $XX refi, you perspective soon the a you fairly to move rate and for so as guide But look, that environment working

XX:XX on and Terrific. congrats good quarter. Thanks

it. Appreciate XX:XX

back XX:XX call like any showing any the to in not Protell to comments. questions Mr. And turn closing I'm the queue. over further for I’d

Thanks, you XX:XX for and quarter. forward look Okay. to updating next we joining everyone, us,

Thank you participating. conference XX:XX call. And today's concludes for this

great Everyone, day. have a now disconnect. may You