Blake Sartini
Golden Entertainment Reports 2024 Third Quarter Results
Golden Entertainment Inc. reported financial results for the third quarter ended September 30, 2024. The Company reported third quarter revenue of $161.2 million, net income of $5.2 million and Adjusted EBITDA of $34.0 million. In addition, on November 5, 2024, the Company’s Board of Directors authorized the Company’s recurring quarterly cash dividend of $0.25 per share of the Company’s outstanding common stock payable on January 7, 2025 to shareholders of record as of December 20, 2024. The Company’s Board of Directors also increased the Company’s share repurchase authorization by $100 million, creating $131.4 million of current availability under the Company’s share repurchase program.
Blake Sartini, Chairman and Chief Executive Officer of Golden, said: “In the third quarter, we have maintained our commitment to returning capital to shareholders through our regular dividend and share buyback program despite a challenging operating environment for our properties. We anticipate that business conditions will improve in the fourth quarter and, with our increased share buyback authorization currently at over $130 million, we expect to continue to use our liquidity to acquire our own shares throughout the year.”
The Company repurchased 815,116 shares of common stock in the third quarter, at an average price of $31.65 per share for a total of $25.8 million. In October, after the end of the quarter, an additional 134,613 shares were repurchased for a total of $4.2 million. Year to date, the Company has repurchased 1.94 million shares of the Company’s common stock at an average price of $30.70 per share for a total of $59.5 million.
Consolidated Results
The Company reported third quarter of 2024 revenues of $161.2 million and Adjusted EBITDA of $34.0 million, compared to revenues of $257.7 million and Adjusted EBITDA of $53.2 million for the third quarter of 2023. The declines in revenues and Adjusted EBITDA over the prior year period were primarily related to the exclusion of the results for the Company’s Rocky Gap Casino Resort and distributed gaming operations in Montana and Nevada that were sold on July 25, 2023, September 13, 2023 and January 10, 2024, respectively. The Company reported net income of $5.2 million, or $0.18 per fully diluted share, for the third quarter of 2024, compared to net income of $241.2 million, or $7.83 per fully diluted share, for the third quarter of 2023. The third quarter of 2023 results included the impact of the $305.8 million gain on the sales of the Rocky Gap Casino Resort and the Montana distributed gaming business recognized during the quarter.
Debt and Liquidity
As of September 30, 2024, the Company’s total principal amount of debt outstanding was $399.0 million, consisting primarily of $395.0 million in outstanding term loan borrowings.
As of September 30, 2024, the Company had cash and cash equivalents of $68.6 million. There continues to be no outstanding borrowings under the Company’s $240 million revolving credit facility.
Golden Entertainment Inc. announced that effective March 20, 2024, Blake Sartini II, Golden’s Executive Vice President of Operations, became the Company’s Chief Operating Officer.
“Blake has worked in every capacity throughout our organization since he started at Golden almost 17 years ago. His unique knowledge of our Company’s culture, commitment to operational excellence, and strong leadership skills make him the ideal individual to be given responsibility for all our Nevada casino resorts, locals properties, tavern operations and related corporate functions,” Blake Sartini, Chairman and CEO of Golden, said.
Blake Sartini II initially joined Golden in June 2007, working with Golden’s tavern operations and building what is now the largest branded tavern portfolio in Nevada with 69 locations. Currently, as Executive Vice President of Operations, in addition to oversight of Golden’s taverns, he has direct responsibility for the Company’s five local casinos in Las Vegas and Pahrump.
Steve Arcana, Golden’s current Chief Operating Officer, became the Company’s Chief Development Officer also effective March 20, 2024. In this newly created role, Mr. Arcana will be responsible for all new tavern development, finding new third-party food and beverage concepts for the Company’s casino resorts, and exploring opportunities to unlock value in the Company’s excess real estate in Las Vegas, Laughlin and Pahrump. Mr. Arcana initially joined Golden in 2003 and has overseen the Company’s operations as it has grown from a privately held, 900-slot machine route operation to a publicly traded gaming company with casinos in Las Vegas, Laughlin and Pahrump in addition to its significant tavern portfolio.
“Steve has been with Golden for over 20 years and has been an integral part of growing our business and guiding us through many challenges. Steve has established a strong operating team and has been a consistent leader throughout his decades at Golden. His long history and extensive experience in the industry will continue to benefit the Company in his new role focused on creating value from new tavern development and unused assets in our casino portfolio,” Mr. Sartini said.
“These management changes will allow Golden to focus on maximizing performance in our core operations while exploring opportunities to drive future improvement by bringing potential new concepts to our existing portfolio. I am confident the changes to Blake and Steve’s roles with the Company will position us well to create additional shareholder value,” Mr. Sartini added.
Golden Entertainment Inc. reported financial results for the first quarter ended March 31, 2023.
Blake Sartini, Chairman and Chief Executive Officer of Golden Entertainment, commented: “In the first quarter we were able to grow revenue but elevated costs relative to last year continued to impact our Adjusted EBITDA. During the quarter, we announced the sale of our distributed gaming businesses in both Nevada and Montana, which will allow us to focus on investing in our wholly-owned casino assets and growing our tavern portfolio in Nevada. We expect the sale of our distributed gaming businesses to close by the end of 2023 and continue to expect the previously announced sale of our Rocky Gap property in Maryland to close by the end of June. Most of the sales proceeds from these transactions will further reduce leverage, which will position us well to continue investing in our owned properties, accelerate capital returns to shareholders and pursue future strategic initiatives.”
Consolidated Results
Revenues of $278.1 million for the first quarter of 2023 increased 2% from $273.6 million for the first quarter of 2022. Net income for the first quarter of 2023 was $11.6 million, or $0.38 per fully diluted share, compared to net income of $36.1 million, or $1.12 per fully diluted share, for the first quarter of 2022. First quarter 2023 Adjusted EBITDA was $62.2 million, compared to Adjusted EBITDA of $67.3 million for the first quarter of 2022.
Debt and Liquidity
As of March 31, 2023, the Company’s total principal amount of debt outstanding was $913 million, consisting primarily of $575 million in outstanding term loan borrowings and $335 million of senior unsecured notes. As of March 31, 2023, the Company had cash and cash equivalents of $156 million, and short-term cash investments of $5 million that will convert into cash during the quarter ending June 30, 2023, and there continues to be no outstanding borrowings under the Company’s $240 million revolving credit facility.
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Blake Sartini
Golden Entertainment Inks Nevada and Montana Distributed Gaming Operations Divestiture Deals
American gaming firm Golden Entertainment has signed definitive agreements that are to see it divest its video-based distributed gaming operations in the states of Montana and Nevada for an aggregate consideration of some $361.5 million.
The deals will involve J&J Ventures Gaming paying roughly $247.5 million for the Las Vegas-headquartered company’s operations in Nevada alongside around $114 million for its compatriot business in Montana. The arrangements set to close before the end of the year remain subject to customary working capital adjustments and are to additionally embrace expected purchased cash of about $39 million and $5 million respectively.
Golden Entertainment currently owns and operates casinos, taverns and distributed gaming facilities in the American states of Nevada, Montana and Maryland featuring nearly 16,800 slots alongside more than 100 gaming tables. This portfolio runs to nine casinos and 60 taverns in southern Nevada as well as western Maryland’s 216-room Rocky Gap Casino Resort facility.
In addition to these divestitures and Golden Entertainment has signed a five-year agreement that is to see privately-held J&J Gaming support its branded tavern-based gaming operations in Nevada. The company did not disclose the financial details of this latter arrangement with the established Illinois-based distributed gaming operator but did state that these terms are consistent with its ‘past practice’.
The aggregated consideration of these deals represents a multiple of approximately nine times the $44 million Golden Entertainment’s distributed gaming operation chalked up in adjusted EBITDA for the twelve months to the end of December excluding $3.8 million in allocated corporate costs. The company now expects to focus more of its time and resources on its portfolio of wholly-owned casinos and taverns in Nevada so as to create additional shareholder value.
“Our leading distributed gaming operations in Nevada and Montana were built over the last 20 years through the hard work and dedication of team members who provide exceptional service and support to our valued route partners,” Blake Sartini, Chairman and Chief Executive Officer for Golden Entertainment, said. “We believe these transactions will provide further success for our route partners through sharing of best practices and new technology. We anticipate our distributed gaming team members will continue to serve our route partners with the same dedication under J&J Gaming’s ownership. Our confidence in J&J Gaming’s future success is highlighted by our new long-term agreement with J&J Gaming to service [our] wholly-owned tavern portfolio.”
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