Golden Entertainment (GDEN) 2 Nov 232023 Q3 Earnings call transcript

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Golden Entertainment Third Quarter 2023 Earnings Conference Call. [Operator Instructions] A question-and-answer session will follow the formal remarks. Please note, this call is being recorded today.Now, I'd like to turn the conference over to Joe Jaffoni, Investor Relations. sir. ahead, go Please

much, good very everyone. operator, you afternoon, and Thank

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

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

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

measures quarter the press a start the You reconciliation our is on details financial reviewing results third Charles GAAP of of our in available find the and call website.We'll which release, update. can business with

and your Charles Protell. Blake will to go ahead. that, take please over that, questions. I turn call Charles, Charles Following will the With

Joe. Thanks,

flexibility. our in largest our STRAT improved Revenue of to we missing remained liquidity footprint a business. these the the tavern in regulatory distributed and $XXX X%. Casino our at Resort XX X%, revenue previously Maryland July our that proceeds quarter, The us million, and For $XXX from for $XXX our and sale of track XX. to and sale term valuations, million buybacks $XXX,XXX September.Our on our this $XXX our results will gaming of reflecting while August our increased refinancing, improved million-plus provide almost to third of transactions approvals share million by operations missing quarter property. fund generated increasing of subject The dividend at businesses from for sold Nevada.Moving for Maryland from last $XX.X to of financial sale compared gaming owned to in Maryland from attractive goals occupancy, quarter XX%, cash distributed we outstanding sale we which quarter, repay and divesting increased of $XXX pay after up of $X million strategic enhance proceeds on of is gaming last and the compared $X million Revenue is XX% accomplishes stock that us per million approximately received EBITDA of Montana and and of $XXX September gaming leaving around year, allowed EBITDA strategic special the cash businesses In net Casino close was up Gap EBITDA flexibility higher distributed in at Nevada the $X also our property our capital the May spend and loan year-end, of Casino nearly million. Occupancy to from and assets additional continuing which F&B When a in increased our the that Nevada our portfolio announced remains the Rocky in our to we operations. Montana structure on Resorts our sold EBITDA and casino the revenue business million to led EBITDA distributed with to with noncore year. XX% X%

quarters that an million These of renovations coming completed the XXX that and in high-traffic renovation now be Bowl also on the created XXX to some started and events room October. $X capitalize like estimate and rooms finished entertainment we during the we renovations, restaurant coming the to pool, disruption, FX is which feel X,XXX-room,casino additional of Super quarter beyond. to property the EBITDA well and We Vegas our QX.With rooms over we for on positioned about

entertainment STRAT million supported Golf, spend at Atomic will $XX behind at higher revenue complex addition, by up In declined which robust the X%, new calendar, drive Laughlin, is was the on open a reflecting property. a further X%, In event while visitation golf more in track January, operating labor visitation we EBITDA at increase to drove midweek year more Arizona other and costs, business. forward.During that bingo from room our have versus has expect events to we the last going continues moderate quarter, to entertainment and that revenue new which had targeting success local this helped Edgewater more

that outlets our at branded operations. guests offset Vegas redeploy core our which with Vegas in QX Laughlin continuing revenue stable Las year-to-date. of third dining for EBITDA by using preserving through customers. promotional environment highway while provide California database locals food and Death stable of to Additionally, performance parties bring are properties, capital continues our properties to monsoons enhanced to our locals economy in our properties, lower properties were which closed will casinos impacted major line Growth core a remain revenue our we a the Nevada strength growing Las for to at year, for the and last the and summer support Pahrump to were connecting largely for and Valley.The new options EBITDA us healthy

were attractive Despite minimum revenue down was tavern casinos. as Nevada continues year, EBITDA while model flat our by generate to unit X% increase impacted to for increased builds wage new was tavern costs, the operations, quarter our in tavern Nevada's For more ROIs acquisitions. margins our and third last July

the over expansion the by the portfolio and to our support average tavern X of purchase the locations the X the is locations in of and XX%.We or we on Vegas the year last anticipate closing For taverns, of built we Las have QX. end X expect growth of bought, ROI

We reserves strong contracts million we Nevada our our pipeline cash to based future has in The balance using at taxes debt authorization. store closing chain quarter have first the renew XX%. compared confidence accelerated shares from September. for brief and share loan, development related buybacks After sheet and capital had We $XX a $XXX for revenue during of in repay new market of under in form reducing in of the we repurchase future fees includes the our $XXX Nevada to XXX,XXX our future not our while signed EBITDA the unsecured down potential sheet, our cash In was loan in of the the window and on shareholders with million to locations.Moving consisted end begin sites new and volume old economics or of to a to in the million repurchased quarter. the repurchased unsecured our of term distributed million approximately approximately our notes of on robust X balance quarter, at locations. distributed we future sale distributed primarily cash to also a the million term remaining lien did operations $XXX return our million At our these our distributed year, third-party will and the loss we pipeline availability August, addition, a replace of notes. after million per $XXX full $XX which million opportunistic open the be $XX outstanding decreased on which and certain After revolver intend end X% of a we of open $X balance sheet. we senior locations, and of outstanding special end $XXX of have divestitures. $XX our the at initiatives million par of to quarter, Montana of strength the $XXX million October.Given third-party million balance dividend last less, $X generation, the the recent to

opportunities we forma less us pro a was quarter property, after positioned close shareholders Xx portfolio. capture from grow anticipate population of distributed advantage Las forma invest Montana for obviously own the the distributed the local Gap business.Our gives lot volume Nevada company the Vegas. of at return With adjusting gaming to uniquely business, to flexibility net strip the our taverns from that visitor existing and leverage to to our operations Our our being Rocky a to growth reduced of leverage sale of capital the our after and take pro of X.Xx range increasing than in the and of remains to of sale potential end which assets,

support I at spend of construction disruption Our improved we and results the Golf forward Blake amenities year. core will forward.That and stable remarks. higher prepared for look property as questions. investment new our portfolio remains rated are are occupancy we our like and customers now available through next into and STRAT in our believe Atomic going healthy absence concludes the and QX Further, with

[Operator Bender session. question-and-answer JMP. from the with question begin The now will comes We Instructions] Jordan first

the the might just but you the some might weak that highs. at that that California Just data driving the has be off guys more the pertain last looking customer STRAT? data, coming all-time this market might any coming Laughlin, seeing been driving of from are quarters, weakness couple And the of in be into

seen I of property that just disruption there right an is untold I'm is would at on dissuading way we that. I terms No. a significant through I-XX driving, all state But story is the some would say the our impact south we which not have probably the now, in say strip people. sure of haven't. line, maybe of bit material

for at from picking And business then guys any in did up my STRAT? follow-up, the the the cyber just quarter benefit you just hack

not in Yes. it weekend the maybe that. got from little mean, bit mean a material, obviously, not it's a to for you that so. industry, I see spillover little or we to But want a but anybody I was think I something

Next from Deutsche Santarelli Bank. question with Carlo comes

talked was the in of, what Vegas patron some in know this is a gaming general, locals business. you're whatnot. and just the seeing stage. at of the the it just bit driven know Las terms tavern location of wondering, what from Just Charles, in kind you I I of consumer. about But seeing I in temperature locals you're little general,

performing bit last us, QX. they of local like market a strong, Pahrump Yes. that -- we combine properties actually We assets. our is our I with better our than little mean about talked for are did

there's of So, of property. in strength our by a was weakness Pahrump Vegas little the offset that bit

California, that very there high, relatively still is unemployment I And to the low. is think down. employment not Vegas The migration database healthy. from look, of are continued rates story slowing there's is it's local population our So,

seeing in and local translating is So, we're that properties. economy, and healthy into folks have a money more pockets it in our their

then Great. pro And obviously, for Charles, talked about leverage execution. in be forma the and position you'll you also sale

educate maybe pertains get to the deals I imagine, a clearly M&A done bit It's the thoughts not side. M&A obviously would the But this can As sell kind you you side around stage? market, to happening. at environment, of on -- us or things there's the it buy little your on easiest

I little Yes. to attractive we acquiring a public I forward given challenging And our executed think more I our mean think think prices value look us, that To a got some standpoint. environment at from is on below if at buyers companies, path if the basis Xx and I transactions, makes a for interest valuation are, clearest rates own where trading between our deals stock. you sellers. we're good

And so are to a do up, be take same it. there At we'll may time, that come the things look look we at strategic will if that that.

see It will existing we estate strategic that properties our could the are where will opportunity in real be an own narrow. footprint. we with value the and focus West Our where be

next from Katz The Jefferies. with question comes David

you is, Nevada? States, Are seeing we Nice Western we're you off, half to are quarter. that? are thinking of wanted exclusive opportunities? Where where Where up left just to the United we right would pick consider you the I Vegas? thinking Las which

we've Southern last particularly I in up think Yes, David, Nevada. here perspective, years our on. spent setting with wholly-owned From a you're of couple portfolio spot ourselves the Nevada,

be where where, So obviously, west for on the Charles needle move a on target, to primary we're our us, but a where is Nevada as less, say, we're portfolio we target synergies assets of described, and would certainly as that mostly would meaning and primary potentially at. let's probably taking focused Colorado, Nevada that proximity close in drive that things for can some within from looking we're

So, Nevada. we've proven ourselves in Southern

gaming primary that's I best We country. the an have portfolio our said, I the here. And I is now in established as target. think think market

back starts of have to north there's come some thesis end go were I enough, the alternatives you particularly do at strategies far It's view some fact back the the expand if go there, opening And and those enhance in STRAT. of that potentially whether not again. property what there to another the far away and that [ of one recall look to I that and strip ] of too major life

Yes. I'll way. it answer this

at this and are Our the finished at disruptions point major renovations STRAT.

position Casino, put going time. property on given blocking the hotel believe over our property since talked compete mentioned, we've strip, going the to within on Charles rooms, in to certainly bars, owned north about that pool, the STRAT, good As us all north to a distance benefit which that, inertia the restaurants, the growth strip close is that we've we

-- kind of do So going on bit the projects, major major although we the point. point, of property sit have we're this to a at shelf-ready data a

the made we've September mine investment and would and example, with be major ranges. you'll some what for highest And investments we've owned drive investment. we highest not was continue point the major in capital disruption of to the are traffic that in which month more the, restaurant, through healthy. October, October kind year, that type side, the see going since the generated call we capital. the will terms be a Casino the revenue no that to we've a had on and forward the in maybe at Golf. would we're continued those in to course ever and property take disruption some They're with performed investments property.So, that is minor Just over going $X Atomic EBITDA bar month to million million of prudent slot do had not hotel of and of on we've disruption, Those of that renovation $X that advantage but radar. have next property of any now be this And short-term major the by to North very

from Macquarie. Beynon comes question Chad Next with

in of Any to change been here. unrated ask on the database the customer wanted Nevada focusing I seeing for in tier that the any lowest or see that guess, versus you've quarters? past casino the you degradation, we've kind about business? operations your been or of end Did of couple I tavern what

for not no, No, us.

for So, slot and if distinct those revenue compared you distinct out days our increased last players, increased players. QX database year, at actual look to and of increased actually table we've gaming

there's we've for that's is the play. that same database revenue very, very that -- -- we So, expected, retail atrophy we the database And there's as healthy. and view I some But think probably of normally the and that's the time the uncarded for others is have been year. long continuing throughout seeing now very been us itself But and expecting a just trend that healthy. the

Okay.

say -- environment So, would by it there driven was just of the getting the didn't macro. that was normal -- housing, kind of ]. to the kind back move economy, [ of kind is no we This

locals our assets about are You That's our those We look at our between Vegas year-over-year most market. local flat on mean talked just properties. a basis. the Las being I up. play of is where rated

for trend So this down. don't database, again, see us, healthy the we and slowing very

same-store kind the that's we slightly we're expense model. basis flat revenue plateaued kind talked about kind of to does can creep? hold going expenses. let's tavern, a environment, from a Laughlin, market, Charles, we some assume a if you margins, do I the because that way, one-off from revenue to see about, margins STRAT, higher the what that different given of terms Has think in margins growth need just locals or of a of thinking to asked of do standpoint And that lower a forward? Outside what situation

Yes.

by break you ours segment. think -- I look, to we So, look think have I if out

point. regard. we to from we've that think think that pretty We flat perspective, gotten a we're So local in

X% increase through I quarter, because we minimum in next wage. a increase this be on at labor base. will to That with in higher wage faced one a due minimum a rate the tavern is There tavern in largely more at it's side, the think year. lower Nevada

end beginning developments. of be at acquiring X year, that but there'll bit the the little this next X So, we're adding there, portfolio a the into plus pressure we're taverns of

look stable growth fairly So, been basis EBITDA from STRAT, an then say, general, that it's there. segment.And I'd we in expect at if within overall the you

the of so total around you XXX If about have only are that, there, think or union we X,XXX Out employees. labor potential union. pressures

not big portfolio, our portfolio. piece We of piece a is labor, relationships. we our like having some but of So, union union is have it feel good

that smoothly to is we fairly go bigger the expect So, strip. that us for the contract once out with guys ironed in

And potential June. the in been expense union since terms Chad, there, we've for of to accruing Charles point, impact added

confident as that we've that had mitigated with them. this to then conversations a once the pretty point So, said, have we're good we obviously. Charles we've relationship And

anticipate that we going forward. So,

comes from question Securities. CBRE DeCree next John The with

kind X just Maybe to conversations. prior follow-ups of

recovery occupancy When weekends the comments kind the opportunity -- still the STRAT were mix The price occupancy you and to weekend then at Blake, Is seeing? October, very is weekend, is needed helpful. are that there strip your what and is look the of to much you've if the that forward. on much midweek? recovery continue in is is customer march continues how the on entertainment opportunity first it demand given an just to still and there the drive seen full and case, at And

Yes.

space way property's So, significant And of that bump look pretty We versus I midweek fills still prior significant to when that occupancy that's the to deficit is have a good property. a at that performance. think the in pretty is periods. a live

of It other terms referenced having we going we renovations be with that but been. on we're that that without with about, it. and an ebb to October, to line over we trajectory think in of booking being is September approximately I flow through in referenced think occupancy other upon metric first significant amenities property property number amount the $XX positive. took is talked and OTA with Atomic But drive So, you were still important facility the of John, trend more see I've XX% at will what the is XX%. is is million starting a property to citywides, very kind our upward small amounts down citywides no going it's we that, seeing, significant confident the when we're and a to with pretty to bought we space about disruption.One when the of I Golf properties. in than be of disruption, October, dependent property, significant That ebb trajectory has again, going not traffic i.e. flow banquet But other added, OTAs,

So, we're dependence, drive if And improved the own destiny customer of that of control on more the our and we continue, dependent you to about will, -- terms amount. we've see by want you a the to us pretty in which gives type OTAs to rate our opportunity significant property.

what all of we're produce property right the think with we future. moving So, on very in that things those bullish can in direction, the

on you my mix. think there follow-up took I OTA

event Or little given on can even bit color position extra get closer, thinking locals, to couple So, with that about look being a discussion from the good look still And as at positive weeks net major impact? much us of hasn't for is that that? give maybe strip of as as a I'll you your quarter But you into you're this your that city you? or that how a been feel of FX. kind we as November about a and peers. away There still event we for the

the of that, robust effect which, Bowl, beyond FX for be the of than that going south we're have more event much of it as is event a will us be that the beyond the all to city going raise high-end -- frame. demand way, will But seeing that time much have during a a ships to is for terms tail New magnitude very and Yes. there's where rate be. you and that, Year's Clearly, currently. and certainly now right waterfall migrate effect in waterfall I to additive don't strip and effect, additive you it's well. to And in Super by of us terms a sell

months. So that's provide lift. to for the better a is FX of But news certainly, next even going couple

Congratulations on the quarter.

would our I concludes to over remarks. turn question-and-answer to This session. any the closing like Protell conference Charles for

the to talk Thanks joining. all for call. at you quarterly next We'll

The Thank today's conference for has attending now presentation. concluded. you

You may disconnect. now