Golden Entertainment (GDEN) 7 Nov 242024 Q3 Earnings call transcript

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Golden Entertainment Third Quarter 2024 Earnings Conference Call. [Operator Instructions]. Please note that this call is being recorded today.

turn Corporate James Finance to Vice the like of President and I'd over Adams, to company's Now Treasurer. Please go ahead, sir.

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

On will company's President company's Chief Financial law, harbor Sartini, Executive from we the securities information provisions laws. this and statements and no is call, under result On and as safe we Actual Officer; those the materially contemplated federal Chairman differ Except forward-looking Chief the a Protell, Charles in Officer. call today the make Founder, update Blake of required or to may by undertake obligation as these statements. these results otherwise. statements new of the

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

GAAP which press of in You our website. the financial is on can release, reconciliation our available measures find

Charles start and results business third will call We the details of the quarter reviewing update. a with

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

We $XXX our the with Starting $XX EBITDA third quarter. revenue in million generated financial James. million of and Thanks, results. of

XX% X% quarter. Our consolidated numbers continuing the our include operations, results to operations. casino revenue the distributed Maryland gaming total declined divested year and By declined our third reported EBITDA comparing from in prior the results and

third most tavern for significant Our quarter both the challenging and segments, year-over-year July. with was our casino declines in

and taverns. this contributed to which local record lower summer, have our others heat As at casino Las Vegas properties experienced noted, visitation

remainder we the our our $XXX QX our spending portfolio repurchase those Despite have year. the weakness authorization environment. outlook performance continued Reflecting as financial have current for October saw we lower given see discretionary of view, of challenges, database addition, the in we for the these trends consumers level In million. tiers share by our reduced increased that their and at of as the economic lowest

capacity million last we quarters. of to repurchased over So to million X buyback now we the over have add $XXX the $XX

segments. on our some for operating Now color

Resorts, At revenue the year-over-year. Casino declined Nevada STRAT. with occupancy our most and coming STRAT, EBITDA was up the XX%, weekend declined For the X% decline our of of out slightly

our occupancy July, However, spend year citywide were properties. was trended per quarter. and weaker Vegas almost prior to X% for lower midweek ADR and for mid- Las to in guest occupancy particularly the lower-tier also down

In same recovering STRAT space, extent without business addition, direct the unable properties. was benefit meeting strip other to September to the as from in convention

performance our Laughlin, For our growth STRAT, year-over-year midweek looks stronger reduced in QX, despite quarter anticipate In the and their in from than occupancy market expenses. QX their operating core visitation with customer. and lower and for the from share spend our increased we XXXX increased returning revenue, opportunity stable and properties

Laughlin offset Riverfront to less continued Center. our drive to having help Our room Event lower concert increased bingo at business visitation due one major to local

For and our decreased X% Casinos, lower-tier and where XX%, years declined recent seasonality we customers. EBITDA Nevada spend revenue our Locals increased to saw declined compared from

come from year-over-year. to which Our largest to remained Arizona Decatur Arizona Boulder value-oriented were declines Nevada disruption our room property The guests, which was our smaller EBITDA completed casinos mid-September. in from Pahrump Locals casinos property, our percentage impacted by most revenue while caters further renovations, our stable and Charlie's continue Charlie's

be year-over-year all local moderating. QX Vegas performance our properties, the will stable expect in We Las environment for which by promotional helped

with hike minimum our July. XX% last the with associated wage revenue initial operating result as Nevada mandated quarter, tavern elevated third declined new and taverns a margins mostly negatively the of in impacted Nevada X% and For EBITDA declined X the expenses

increasing we credit of regards taverns shares were opening to X of QX, shareholders these Our nearly continue see shares. million we October, impacted the have With over August last combination returned approximately repurchased we capital same to XXX,XXX extreme million have $XXX the our the last XX heat have X the to which of and facility. repaid nearly $XXX and typically buyback EBITDA summer by by Xx over to of we availability representing spending. $XX shares be as million selling have acquisition, float. million the new the multiples last and debt over X follow can and structure, our authorization, Combined undrawn balance $XXX maintain revolving million of at stabilizing the $XXX months through pattern. for months, in year, revolving After tavern of and and or customers expect noncore our premium share we one almost since operations industry of as Since also X we best repurchases, funded repurchases our availability a dividends, under discretionary of repurchased cash leverage We including free million X% less and with repurchased well credit Between million X% shares within to in our our from X of approximately at facility. end gaming sheets our our net assets outstanding share with QX.

that from time. demographic of trends economic in and own owned favorable taverns casinos Southern Nevada, the continuing to acquire believe our wholly equity significant at local continue in we long-term We our to value and and portfolio this will see benefit

to current a as remarks. questions. prepared anticipate strategic compelling more our we Blake and are arise, bar valuation, While concludes now we back buy acquisitions opportunities for evaluate given it high our they stock be I continuing meaningfully alternatives. available and will absent That for do

[Operator Instructions].

first from The the from of Barry comes Truist line question Securities. Jonas

environment maybe be interested be curious out on seeing how I for you on you're rich comments of I'd there, your assets sale-leaseback you'd model. on get appreciate could is in? And talk thoughts the just appreciate comments there an [indiscernible]. then but I to the Charles, your what about M&A,

the as always. deck, You have slide a in

Just curious valuation updated any where given if today. sits thoughts

bit take of Blake the and want I'll first comment part, on Yes. a the may second. to

there lot that's seen compelling for I think a perspective, out we an us. M&A from haven't

what's bit between buyers M&A more think now, still you the at and the I rate a on a the maybe disconnect around sellers run much so that not the spread think And which look on EBITDA. when multiple, there's more as bid-ask help of rates, next landscape operations right but be of into a there's think year, I well stabilization of going to the as necessarily visibility declining M&A environment. as look interest around the lot should I benefit we

Yes.

In may addition all I includes And I we it's think that deck, alternatives. think are and that provide overstating buy free at some math now around -- to shows OpCo in that how strategic drive certainly in our is looking active our really mode you math that, that the shares. our our look, real right our potential don't in price, estate given our if value of our of value investor we share

active don't aren't regards out Charles' but we're of we tag think, our They all are the given be moving to are in we're at assets. -- a comments that So assets. many point. inventory, considering M&A segment, the holdco there, of needle In on. REIT, Golden and I'll our at valuation in -- this those terms there. again, considering out all active on there alternatives our so in But for particularly, for preference in balance I of we're I would sheet mode. limited to There's Holdco looking of strength

any the seasonality. on helpful. consumer the in that the from But summer segments? to That's as a any improvements or seen see related? you your and any saw you if have then and would Great. that's follow-up, heat certainly curious impact of just And And over, also commentary now election the expect appreciate you

Yes.

to some bit presidential a elections, after. federal major these pulling certainly every and spending in around election, cautiously the the consumers term, and back see do historically, that's term think prior years, little short if before elections right I a we -- having X but the

the So elections like come only short see pulling years, -- elections back pattern consumers elections X certainly seasonality, these much term a the before every of around occur. we broad do these in

question from the Riley David comes Securities. B. from next line of The Bain

we hoping in It opportunity or like the stability will unpack improve multiple seems segments I'm flat can to XQ from year-over-year XQ. margin results.

and is be of I would assume I helpful. EBITDA those tavern maybe the across some and And understood online portfolio So but of coming the X commentary rest margins? term, meant in the rebound with higher normalizing there. that on function the revenue a the you longer

Yes.

quite asset challenged the that, And signed perspective culinary that has really a do remains earlier be a latest as we union from the think will bit margin that to into the this QX. I with frankly, look only STRAT that year. contract we

structures As we see other the and the that both we cost in the business. on at look revenues stabilization, assets,

specific to changes Some of we're it making.

we continue really the business. you a to the in focusing manage Nevada, down in in look bit of costs and just scale strategy And locals stabilization in If entertainment. locals here we more while going Laughlin, of spend. see the that are smaller on that to our

respect And the of STRAT ebb along to the the STRAT, with occupancy town going what's mentioned I the Strip on You corridor. and already. taverns flow the will the with think and

so own And of you do for in all thing reflected with is have we out that cost space. without group structure. any a an our our now. right basically have we direct of QX It's there of derivative we're The generally one meeting views that elevated are

in portfolio. the confident low So statements being we our QX for point about feel the

Las just XQ Vegas speak for translates comp if the and to helpful Super And in and could FX also, maybe Okay. XQ generally. portfolio STRAT, that the to but but the you was not the commentary this, Bowl how

Yes. the comp side. we've adjustments, year, The obviously, spend FX on is made to last our -- certainly approach

going we positive. in regards a to that's to to So drive try to properties make improvements significant spent result we're the what to in going to traffic

hearing of and do inertia to pop-ups tough gone going are given try drive and low. hearing festival last I room with with prices the partnered that some it's downtown downtown think weekend out a we're to to are to and those of things. customer a We've folks year, of kinds weekend lower. entertainment rates generally, kind ticket that FX bands, citywide, We're be comp

from FX for it QX -- a big last year. for standpoint. in year certainly we're for Bowl. this ourselves well speaking Bowl So was better we last tough year, And positioned us cost Super Super than comp much is with a were

was for I big the think last city year. it

we're a going So to QX tough that's knowing going be that, into comp.

And worth in to EBITDA us. a to million of about was magnitude it Super $X just Bowl, give sense of

that quarter, overcome feel things that that many And we of comp. are drivers perspective, talk in my on that tavern between think increased so stabilizing, the terms course we the there's we and other at fine occupancy from the going of between STRAT, over fading as the

next Jordan Citizens of The JMP. comes the question from line Bender from

Atomic there if I traffic, foot thoughts Golf guess, been between land fit something around else that and excess Golf drive both STRAT up to the any incremental more the running, Atomic could With into help and has could properties?

up. talking no been Look, Yes. has been about slow ramp secret. it's Golf We've Atomic to

on ramping, ramp, terms development to adjacent next And slow to a irregardless property. Atomic near world-class asset potential going relevant it modern asset a what physically additional continue it significant the to facility. remains about million be and is It's a property us facility. talk still offers. is I which of believe Before competitive in the a to still us, It's our I or of $XX

bullish use that tried land to to push lot regards We're to into and between the best possibly we're X.X getting the But We're In make have a property. for trying could cross-walk across is street, to of STRAT flat So I there. to too highest do on there developable acres more to what desirable. Atomic concept traffic that we which property, closer think the fit drive building put the We inquiries long-term is and the it that. convenient would a traffic. be adjacent in narrow. of asphalt

attractions benefit there have adjacent some property on with ability the would the we that absolutely, that to So STRAT. put

amenities say building. development of I'd also working we're on extra inside the

square So feet level STRAT. we the space approximately a developable on have XXX,XXX of mezzanine of

type to experiential so we're help to we that property think the attractions third drive with traffic parties working And some well. bring as some

go we parameters there up? then, cetera? Great. Is or payout, we a about et on follow-up, yield, just it be a does dividend of any of based is the And in a off should paid, terms kind of of as approach Charles, that thinking cadence being year X

based Yes. talked I fluctuation thought the about the company. we've equity the as out of on mean, could door amount dollars, constant a we it look, back and bit into almost buy the with

much those our we think flow So stock what's see anniversaries, do we'll in how a other and to when look going get bought words, how back and projected how forward, we cash take we get about look into into overall to going our that cash we increase has to that we -- been clearly, outflow. as next the But translates constant a piece us we and cash forward, dividend year. flows X-year of

the from next comes of Katz The line question from David Jefferies.

that talking excess be one sale properly. range just some make purposes way the of necessarily want of talking would other. a activating potentially or the the all And And leaseback. the just commentary returns? potentially about proceeds I'm capital there this to the of about We're for a we're processing used Or I for sure land uses also is potential and exercise?

Yes.

think the you real Blake estate today. illustrate the that discussed of the of excess to look is company the earlier, is I what total sits value if enterprise at reasonable it in So had rent any multiple a of of here stream, as valuation purpose highlighting of the which is

terms as estate. perspective, of as the undervalued real clearly our combination well from in So OpCo the the of

meaningfully. very So that's increasing quite in buyback share frankly, we're why, confident the

bit that credit the opportunity as to of do of availability within market $XXX so. could over little the and have see We facility, half use we a buyback. that It revolving represents our we million on

consistent will see not going we're through the to going that leaseback see strategic But a think buyback to us a be as you're that have sale going We to fund and you're alternative. to development QX, other into future. do I doing not

a but are I some it REIT at discount we've think which might a the extent has, that that in for levels where helped out I environment, I point been -- trading has that think think period, to challenging we people rate and don't interest multiples. remains the prolonged

today our to rate that rate year. in next rates play as going cuts multiples And better happen and belief as cuts it's real we get we get so a and that from see cap perspective, better future, we're anticipate estate the and get we the through that out let

other, play, can sensible. and totally of potential these I Blake that just, of like and follow includes it things active, mergers I the says type corporate know up play field does about when assume that? agree does include right, but or Totally before, we've I field activities we're If the talked

Yes. mean those to are Yes. the frustrating frustrating see and sure it's that the we to follow credit no -- we real get it's for investors estate I and whatsoever. frustrating, it's our company, to I'm

we with alternatives. the well-run at And are real within position frustrated that we're context, wholly in with balance strong and So company a owned estate valuation. all sitting a a sheet, look good to

drive our at to corporate that yes, may merger, all we're looking active So things value in potentially significant current portfolio.

line the Chad from Macquarie is Management. Beynon question next from The of Asset

nice high on Chad. on there? wanted Aaron the guys. touch story business I STRAT, about think for you can for which the How Or direct how optimal is you the This to think at has success do do go? that been you mix a just

Yes.

property. of over now could about pretty we've mean, over And when XX%. property, like about I to was lower. XX%, hard. the be mix and the it XX% we the So between first down ideally, moving to XX% That's that took worked And to XX%, we think we'd XX% OTA we XX%. keep

they once once better rather the return even -- job being able capturing off data doing property, of the boosting and bit direct lot with citywide of a OTA. the conventions an may doing rooms of we're have and they the a citywides get OTA, our customer selling working business, more directly little booking they terms on to booked blocks through than closely send offers So a of things into them in though

a we So upside It's one, the that from are about there's in but pretty doing a good journey, journey. it's slow excited that. property and

that continue bright well. would to the we property. think add to it see I Yes. spots Charles said I just that, at very

our was We a improvement marketing improvement We're much are part property, play. nonexistent. aggressively relevant if We today levels. may are prior -- the seeing may people in XX% metric that just still ownership which for revisitation, ADRs not in our and pretty revisiting look to today's in be environment. the seeing But casino 'XX, or and over you at approximately 'XX up

midweek the is weekend about bit, occupancy to down up, a continues upside. Charles Our our but where is but talk is

points it going in but it time, in We're lot inch taking that a property going an data a is the right of of positive there's direction. in a direction. are at So the kind

Understood.

turning taverns. to Just

taverns, In year, next of rate year? color the Just at your terms the have there locations you see same look great. anticipate this as growing we set adding as on the how of would number opportunity any you to you do be

be I No, to some we that very the and portfolio. marketplace acquire think some had think unique term in to opportunities will some the long brands locations we beneficial

on focused up. we're forward, more ground Going developing

we so then look that, in probably range. after add the next year. And going to to it's X to X X forward X And

a I thing talks bullish that we're Charles X add would greenfield for only about more that to is to X. little on The color

looking to further an success inventory Charles are those of locations we what for locations grow to in said, still locations solid to longer new build return X locations or those them. have a going still we ramp the versus We these those X for cash-on-cash And the premier XX% solely having only provide call year. up, acquired us admittedly as We're us providing portfolio. locations, X-star forward. taken locations, build which new And a when

So continue confident will that we in very, we're direction. very

of question the is from John next The Dickree CBRE. line from

life into or about little when months the X to think, about mine the mean give stabilize. or you of and tavern typically the up answered, into you came so maybe online is, property discussion, the even And color inflection of follow-up XX are then to that kind ones, profitability? across maybe acquired then kind of new money a margin most to about kind one think break a I moving and at and enhancement particularly given that spoke of different business profitability properties have today you opening and system, that on builds on cycle that earlier think bit I in new the we you bring as follow-up that tavern Can more overall? and us you cycle? guess lose life you been take, but I new I times, a where

Yes.

the $X we spending ramp-up, XX-month between X- don't scale typically have it's competition a that tavern, have and locations, location and So in usually around. not to end shorter other of where when it, a We the call million, a the potentially million open of we're ground-up of we $X there's range. on and lot usually

and we out faster, ramp they that So them taverns. our came existing people of staff with

our they our our we they know they And and process, XX% know know see as they quickly methodology, the XX% ramp ROI, brands very to So cash-on-cash Blake mentioned. know marketing. to those

With staff that or shorter the longer. be either the could for longer. acquisitions, depending case, X acquired, In this these we it's on that brands,

basically the in staff have acquired. we we've entire turned So locations X over the

put of we're that staff, we've ramp-up into the right of in in seeing Now terms getting we're fruits new that as QX now. and

those get had a that we've there. brands They're the bit what some confident So -- different we're from will in little there's past.

those We So new opened one we like that. build brands. of actually our with

to our taking to get So a but longer standard. a them diversification up portfolio, the just to little bit adds us little it it's

and gentlemen, Ladies we Bank. of question Deutsche line Carlo take the the from last from Santarelli

and flat stable local kind bit. mentioned just mean maybe segment, that I'm I XQ you don't also I'm When what expected they about would year-over-year, to you just assuming Casino would misunderstanding. but Nevada segment, to you you talked meant little to respect of I the of to year-over-year. the want with wanted with the a you you comment. be Charles, understand stable a kind be believe I understand anticipate

Yes.

which commentary, in was reference really than locals. For QX the the in STRAT right? year-over-year, the was Other And my commentary. to my flat,

Laughlin way. our should our that's properties the casinos out local and Pahrump. So same be in

a but are little bit year-over-year I down where perspective, we think a should be the given that's labor STRAT time. expense from

All QX. will better than be

Yes.

earnings is and Okay. sellers, not the to that that in you point difference And erode? cash or the sellers business nuanced multiple for -- more Is EBITDA just difference of and It looking it looking that's made exactly necessarily buyer's might then -- growing correctly. pricing were or flat about slightly of to from buyers disconnect it you off buyers kind then referencing? of was what perception perspective what I But and talked kind bid-ask. just in understood Or in of the things are a that of dynamic a have for flows. a been have exactly not was might between it you continue or a are a kind when

looking I going be say would growth would to whether specific not we probably look more more saying to just what they're buyer get as Depending a least rates, EBITDA are perspective a underwrite seller at offering, double-digit that the conservatism, the there Yes. a at we're we sellers should in what on offering be offering dynamic, in at at conservative. is future. not bit like the conservative buyers may a flat, more and we're we're and they're think than situations we as I more or from seeing we've from there's our little looked think perspective. that

Securities. we members, B. from Riley David follow-up Bain question a have from Dear

you question well. model, track I'm business This around of Nevada? and clearly little mistaken, and relationship, got that the of Vegas. opportunity have have around new discussion Las if be as were But not Tavern you brand J&J think there the given proven may thoughts the I still Tavern any been a I the outside believe expansion centered off kind would

a very Yes, that's question. actually good

potential imminent, exited route we remaining We have think brick-and-mortars brands. is that. that yes. we nothing a although I I us there's think through for our when So or path And we that's I brands the us, opportunity both to for an have calls, -- I business either do in or new think fact the on for business, Montana not Nevada, exited and prior distributed in the the operating referenced

and Thank Entertainment, conference Inc. participation. of Thank concludes for your Golden gentlemen, this the Ladies you. you

your lines. may You disconnect now