Exhibit 99.1
GOLDEN ENTERTAINMENT REPORTS SECOND QUARTER RESULTS
Second Quarter highlights:
- Increased revenues, net income, Adjusted EBITDA and EBITDA Margin
- Stratosphere renovations on schedule and on budget
- Reiterating full year Adjusted EBITDA guidance
LAS VEGAS – August 8, 2018 – Golden Entertainment, Inc. (NASDAQ:GDEN) (“Golden Entertainment” or the “Company”) today reported financial results for the second quarter ended June 30, 2018.
Blake L. Sartini, Chairman and Chief Executive Officer of Golden Entertainment, commented, “We are pleased with our second quarter results which saw revenue growth across both our casino and distributed gaming segments. Our strong financial performance was driven by our diversified portfolio, with particular strength from our Las Vegas Locals properties, our existing casino resort in Laughlin and our Rocky Gap property in Maryland. During the quarter, we were excited to begin our Phase I renovations to the Stratosphere, which we expect to be completed by year end. We also look forward to expanding our casino portfolio with our pending acquisition of two Laughlin casino resorts from Marnell Gaming, which is expected to close in the first quarter of 2019. This acquisition will allow us to benefit from operating synergies immediately after closing while increasing our presence in Southern Nevada, which we believe is one of the most attractive gaming markets in the country.”
The Company reported second-quarter revenues of $216.5 million, up from $109.9 million in the second quarter of 2017. Net income for the second quarter of 2018 was $3.6 million or $0.13 per share, compared to net income of $1.7 million or $0.08 per share in the second quarter of 2017. Adjusted EBITDA was $46.3 million for the second quarter compared to $15.0 million for the second quarter of 2017.
Adjusted EBITDA was up 13.6% and Adjusted EBITDA margin improved 230 basis points when compared to Combined Adjusted EBITDA and Combined Adjusted EBITDA margin for second quarter of 2017 including the results of American Casino & Entertainment Properties, LLC (“American”), which was acquired in October 2017.
Casinos
Casino segment revenues rose to $130.9 million in the second quarter of 2018 compared to $26.2 million in the second quarter of 2017. Including the results of American for the second quarter of 2017, Combined Revenues would have been $129.5 million. Casino segment Adjusted EBITDA rose to $42.2 million compared to $6.9 million in the same quarter in 2017. Adjusted EBITDA rose 10.3% when compared to the Combined Adjusted EBITDA of $38.2 million which includes the results of American for the second quarter of 2017.
For our Nevada Casinos, second quarter revenues were $112.9 million, slightly up from Combined Revenues for the segment in the prior year period on a same property basis, while Adjusted EBITDA of $36.5 million was up 8.4% from Combined Adjusted EBITDA for the segment in the prior year period. This growth was primarily due to the effectiveness of our operational changes as well as particular strength from our Las Vegas Locals properties and our existing Laughlin resort.
Our Rocky Gap Resort in Maryland saw increases in revenue of 3.8% to $18.0 million for the quarter, while Adjusted EBITDA increased 24.2% to $5.7 million which was in part due to the property’s tax rate on slot revenue being reduced in July 2017.
Distributed Gaming
Distributed Gaming segment revenues increased to $85.4 million, up 2.1% from $83.6 million in the second quarter of 2017. Adjusted EBITDA declined 4.7% to $12.8 million, from $13.5 million in the same period 2017.
In our Nevada distributed gaming business, total revenues during the second quarter were $69.5 million, a year-over-year increase of 1.7%. Adjusted EBITDA of $10.6 million was down 5.7% compared to last year as our EBITDA growth in our wholly-owned tavern portfolio continued to be offset by weaker contribution from our chain store locations.
Our Montana distributed business generated revenues of $15.9 million in the second quarter, an increase of 4.2% compared to last year. Adjusted EBITDA for the Montana distributed business was $2.2 million for the second quarter.
Stratosphere Renovations Update
Phase I of the Stratosphere renovations began in May, with the project proceeding on time to be completed by year end and on budget of approximately $32 million. Phase I includes the renovation of 317 rooms, the installation of state-of-the-art exterior signage and lighting, as well as the addition of a unique gastro brewery connected to a newly renovated sports book. We expect approximately 250 of these renovated rooms to be in service in September, with the balance completed in the fourth quarter.
When our Stratosphere renovations are complete, we will have remodeled 1,133 rooms, refreshed the interior and exterior of the property, provided guests with new premium food and beverage outlets and added attractive group meeting space. Our total budget for the Stratosphere renovations remains at $140 million, and is expected to be completed by mid-2021.
Balance Sheet & Liquidity
As of June 30, 2018, the Company had cash and cash equivalents of approximately $140 million and total outstanding debt of approximately $1 billion. There were no outstanding borrowings under the Company’s $140 million revolving credit facility. At the end of the second quarter, the Company’s net leverage ratio (total debt less cash to Adjusted EBITDA for the 12 months ended June 30, 2018) was 5.2x.
Full-Year 2018 Guidance
For the full year 2018, Golden Entertainment is maintaining its guidance for total Adjusted EBITDA to be $184 million to $190 million. The Company continues to expect to end the year with a net leverage ratio below 4.75x.
Investor Conference Call and Webcast
The Company will host a webcast and conference call today, August 8, 2018 at 5:00 p.m. Eastern Time, to discuss the second quarter 2018 results. The conference call may be accessed live by dialing (844) 465-3054 or (480) 685-5227 for international callers and entering the passcode 2089229. A replay will be available beginning at 8:00 p.m. ET on August 8, 2018 and may be accessed by dialing (855) 859-2056 or (404) 537-3406 for international callers; the passcode is 2089229. The replay will be available until August 11, 2018. The call will also be webcast live through the “Investors” section of the Company’s website, www.goldenent.com. A replay of the audio webcast will also be archived on the Company’s website, www.goldenent.com.
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Forward-Looking Statements
This press release contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. Forward-looking statements can generally be identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “potential,” “seek,” “should,” “think,” “will,” “would” and similar expressions, or they may use future dates. Forward-looking statements in this press release include, without limitation, statements regarding: the pending Laughlin acquisition and the expected timing of the closing thereof; the benefits of and realization of cost synergies from the American and Laughlin transactions; estimated future financial and operating results and future net leverage ratio; proposed future capital expenditures, investments and property improvements, including the Stratosphere redevelopment plan, and their associated timing, source of funding and cost; and the Company’s plans, strategic priorities, objectives, expectations, intentions, including with respect to its growth prospects and growth opportunities and potential acquisitions. Forward-looking statements are based on our current expectations and assumptions regarding the Company’s business, the economy and other future conditions. These forward-looking statements are subject to assumptions, risks and uncertainties that may change at any time, and readers are therefore cautioned that actual results could differ materially from those expressed in any forward-looking statements. Factors that could cause actual results to differ materially include: the failure of our pending Laughlin acquisition to close as anticipated; the Company’s ability to realize the anticipated cost savings, synergies and other benefits of the American and Laughlin transactions and its other acquisitions, and integration risks relating to such transactions; changes in national, regional and local economic, political and market conditions; legislative and regulatory matters (including the cost of compliance or failure to comply with applicable laws and regulations); increases in gaming taxes and fees in the jurisdictions in which the Company operates; litigation; increased competition; the Company’s ability to renew its distributed gaming contracts; reliance on key personnel (including the Company’s Chief Executive Officer, Chief Operating Officer and Chief Strategy and Financial Officer); the level of the Company’s indebtedness and the Company’s ability to comply with covenants in its debt instruments; terrorist incidents; natural disasters; severe weather conditions; the effects of environmental and structural building conditions; the effects of disruptions to the Company’s information technology and other systems and infrastructure; factors affecting the gaming, entertainment and hospitality industries generally; and other risks and uncertainties discussed in the Company’s filings with the SEC, including the “Risk Factors” sections of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 and most recent Quarterly Reports on Form 10-Q. The Company undertakes no obligation to update any forward-looking statements as a result of new information, future developments or otherwise. All forward-looking statements in this press release are qualified in their entirety by this cautionary statement.
Non-GAAP Financial Measures
To supplement the Company’s consolidated financial statements presented in accordance with United States generally accepted accounting principles (“GAAP”), the Company uses Adjusted EBITDA, Combined Revenues and Combined Adjusted EBITDA which measures the Company believes are appropriate to provide meaningful comparison with, and to enhance an overall understanding of, the Company’s past financial performance and prospects for the future. The Company believes Adjusted EBITDA and Combined Adjusted EBITDA provide useful information to both management and investors by excluding specific expenses and gains that the Company believes are not indicative of core operating results. Further, Adjusted EBITDA is a measure of operating performance used by management, as well as industry analysts, to evaluate operations and operating performance and is widely used in the gaming industry. Other companies in the gaming industry may calculate Adjusted EBITDA differently than the Company does.
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Combined Revenues and Combined Adjusted EBITDA represent historical revenues, net income and Adjusted EBITDA of American (for periods prior to the American acquisition) and Golden on a combined basis, as if the American acquisition had occurred on the first day of the period presented. Such presentation does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentations; however, the Company has included these combined results because it believes they provide a meaningful comparison for the periods presented. All combined financial information is unaudited and does not include any pro forma adjustments to reflect the American acquisition and related transactions. The combined financial information has been prepared by the Company’s management for illustrative purposes only and does not purport to be indicative of what its results of operations, financial condition or other financial information would have been if the American acquisition and related transactions had occurred at the beginning of the period presented. In addition, the combined financial information does not reflect non-recurring charges incurred in connection with the American acquisition, nor any cost savings and synergies expected to result from the American acquisition (and associated costs to achieve such savings or synergies), nor any costs associated with severance, restructuring or integration activities resulting from the American acquisition.
The presentation of this additional information is not meant to be considered in isolation or as a substitute for measures of financial performance prepared in accordance with GAAP. Reconciliations of Adjusted EBITDA to net income (loss) are provided in the financial information tables below. Additionally, a reconciliation of Combined Revenues to revenues is provided in the financial information tables below.
The Company has not provided a reconciliation of its guidance for Adjusted EBITDA to net income since interest, depreciation, amortization, taxes and other adjustment items are not available without unreasonable efforts. The Company defines “Adjusted EBITDA” as earnings before interest and other non-operating income (expense), income taxes, depreciation and amortization, acquisition expenses, loss on disposal of property and equipment, share-based compensation expenses, preopening expenses, class action litigation expenses, executive severance, gain on change in fair value of derivative, and other gains and losses. Adjusted EBITDA for a particular segment or operation is Adjusted EBITDA before corporate overhead, which is not allocated to each segment or operation.
About Golden Entertainment, Inc.
Golden Entertainment, Inc. owns and operates gaming properties across two divisions – resort casino operations and distributed gaming. The Company operates approximately 16,000 gaming devices, 121 table games, 5,164 hotel rooms, and provides jobs for over 7,000 team members. Golden Entertainment owns eight resort casinos – seven in Southern Nevada and one in Maryland. Through its distributed gaming business in Nevada and Montana, Golden Entertainment operates slot machines at over 1,000 locations and owns nearly 60 traditional taverns in Nevada. The Company is licensed in Illinois to operate video gaming terminals. Golden Entertainment is focused on maximizing the value of its portfolio by leveraging its scale, leadership position and proven management capabilities across its two divisions. For more information, visit www.goldenent.com.
Contacts
Golden Entertainment, Inc. | Investor Relations |
Charles H. Protell | Joseph Jaffoni, Richard Land, James Leahy |
Chief Financial Officer | JCIR |
702/893-7777 | 212/835-8500 or gden@jcir.com |
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Golden Entertainment, Inc.
Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | 2018 | | | 2017(1) | | | 2018 | | | 2017(1) | |
Revenues | | | | | | | | | | | | | | | | |
Gaming | | $ | 132,546 | | | $ | 89,257 | | | $ | 266,409 | | | $ | 175,436 | |
Food and beverage | | | 43,422 | | | | 15,021 | | | | 86,025 | | | | 29,893 | |
Rooms | | | 27,568 | | | | 1,920 | | | | 53,633 | | | | 3,408 | |
Other | | | 13,007 | | | | 3,687 | | | | 25,265 | | | | 7,031 | |
Total revenues | | | 216,543 | | | | 109,885 | | | | 431,332 | | | | 215,768 | |
Expenses | | | | | | | | | | | | | | | | |
Gaming | | | 78,510 | | | | 61,166 | | | | 156,198 | | | | 120,163 | |
Food and beverage | | | 35,351 | | | | 13,163 | | | | 68,943 | | | | 26,176 | |
Rooms | | | 12,291 | | | | 499 | | | | 23,856 | | | | 972 | |
Other operating | | | 3,655 | | | | 3,518 | | | | 7,651 | | | | 6,794 | |
Selling, general and administrative | | | 43,986 | | | | 18,913 | | | | 88,379 | | | | 36,895 | |
Depreciation and amortization | | | 22,854 | | | | 7,408 | | | | 48,091 | | | | 13,960 | |
Acquisition expenses | | | 194 | | | | 2,066 | | | | 1,306 | | | | 2,066 | |
Preopening expenses | | | 389 | | | | 574 | | | | 837 | | | | 846 | |
Loss on disposal of property and equipment | | | 218 | | | | — | | | | 295 | | | | — | |
Total expenses | | | 197,448 | | | | 107,307 | | | | 395,556 | | | | 207,872 | |
Operating income | | | 19,095 | | | | 2,578 | | | | 35,776 | | | | 7,896 | |
Non-operating income (expense) | | | | | | | | | | | | | | | | |
Interest expense, net | | | (16,066 | ) | | | (2,000 | ) | | | (30,809 | ) | | | (3,683 | ) |
Change in fair value of derivative | | | 1,462 | | | | — | | | | 4,673 | | | | — | |
Total non-operating expense, net | | | (14,604 | ) | | | (2,000 | ) | | | (26,136 | ) | | | (3,683 | ) |
Income before income tax benefit (provision) | | | 4,491 | | | | 578 | | | | 9,640 | | | | 4,213 | |
Income tax benefit (provision) | | | (897 | ) | | | 1,135 | | | | (2,116 | ) | | | 2,842 | |
Net income | | $ | 3,594 | | | $ | 1,713 | | | $ | 7,524 | | | $ | 7,055 | |
| | | | | | | | | | | | | | | | |
Weighted-average common shares outstanding | | | | | | | | | | | | | | | | |
Basic | | | 27,406 | | | | 22,265 | | | | 27,278 | | | | 22,258 | |
Dilutive impact of stock options and restricted stock units | | | 2,258 | | | | 1,023 | | | | 2,250 | | | | 799 | |
Diluted | | | 29,664 | | | | 23,288 | | | | 29,528 | | | | 23,057 | |
Net income per share | | | | | | | | | | | | | | | | |
Basic | | $ | 0.13 | | | $ | 0.08 | | | $ | 0.28 | | | $ | 0.32 | |
Diluted | | $ | 0.12 | | | $ | 0.07 | | | $ | 0.25 | | | $ | 0.31 | |
___________________
(1) | Prior-period information has been recast for the adoption of Accounting Standards Codification Topic 606 (ASC 606), Revenue from Contracts with Customers, which the Company adopted effective January 1, 2018, utilizing the full retrospective transition method. |
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Golden Entertainment, Inc.
Supplemental Combined Financial Information
(Unaudited, in thousands)
| | | | | | Three Months Ended | | | | | |
| | Three Months Ended | | | June 30, 2017 | | | | | |
| | June 30, 2018 | | | Golden | | | American | | | Combined | | | % Change | |
Revenues | | | | | | | | �� | | | | | | | | | | | | |
Nevada Casinos | | $ | 112,917 | | | $ | 8,833 | | | $ | 103,348 | | | $ | 112,181 | | | | 0.7 | % |
Maryland Casino | | | 18,009 | | | | 17,346 | | | | - | | | | 17,346 | | | | 3.8 | % |
Total Casinos | | | 130,926 | | | | 26,179 | | | | 103,348 | | | | 129,527 | | | | 1.1 | % |
Nevada Distributed Gaming | | | 69,507 | | | | 68,357 | | | | - | | | | 68,357 | | | | 1.7 | % |
Montana Distributed Gaming | | | 15,890 | | | | 15,253 | | | | - | | | | 15,253 | | | | 4.2 | % |
Total Distributed Gaming | | | 85,397 | | | | 83,610 | | | | - | | | | 83,610 | | | | 2.1 | % |
Corporate and other | | | 220 | | | | 96 | | | | 29 | | | | 125 | | | | 76.0 | % |
Total revenues | | $ | 216,543 | | | $ | 109,885 | | | $ | 103,377 | | | $ | 213,262 | | | | 1.5 | % |
| | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 3,594 | | | $ | 1,713 | | | $ | 14,348 | | | $ | 16,061 | | | | (77.6 | %) |
Adjustments to net income: | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization | | | 22,854 | | | | 7,408 | | | | 7,358 | | | | 14,766 | | | | 54.8 | % |
Acquisition expenses | | | 194 | | | | 2,066 | | | | - | | | | 2,066 | | | | (90.6 | %) |
Loss on disposal of property and equipment | | | 218 | | | | - | | | | - | | | | - | | | | 100.0 | % |
Share-based compensation | | | 2,758 | | | | 2,322 | | | | - | | | | 2,322 | | | | 18.8 | % |
Preopening expenses | | | 389 | | | | 574 | | | | - | | | | 574 | | | | (32.2 | %) |
Class action litigation expenses | | | 218 | | | | 55 | | | | - | | | | 55 | | | | 296.4 | % |
Executive severance and sign-on bonuses | | | 371 | | | | - | | | | 43 | | | | 43 | | | | 762.8 | % |
Loss on extinguishment of debt | | | - | | | | - | | | | 881 | | | | 881 | | | | (100.0 | %) |
Settlement expense | | | - | | | | - | | | | 800 | | | | 800 | | | | (100.0 | %) |
Other, net | | | 199 | | | | - | | | | 7 | | | | 7 | | | | 2742.9 | % |
Interest expense, net | | | 16,066 | | | | 2,000 | | | | 2,331 | | | | 4,331 | | | | 271.0 | % |
Change in fair value of derivative | | | (1,462 | ) | | | - | | | | - | | | | - | | | | 100.0 | % |
Income tax (benefit) provision | | | 897 | | | | (1,135 | ) | | | - | | | | (1,135 | ) | | | (179.0 | %) |
Adjusted EBITDA | | $ | 46,296 | | | $ | 15,003 | | | $ | 25,768 | | | $ | 40,771 | | | | 13.6 | % |
| | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | | | | | | | | | | | | | | | | | | | |
Nevada Casinos | | $ | 36,524 | | | $ | 2,379 | | | $ | 31,302 | | | $ | 33,681 | | | | 8.4 | % |
Maryland Casino | | | 5,658 | | | | 4,555 | | | | - | | | | 4,555 | | | | 24.2 | % |
Total Casinos | | | 42,182 | | | | 6,934 | | | | 31,302 | | | | 38,236 | | | | 10.3 | % |
Nevada Distributed Gaming | | | 10,638 | | | | 11,277 | | | | - | | | | 11,277 | | | | (5.7 | %) |
Montana Distributed Gaming | | | 2,204 | | | | 2,201 | | | | - | | | | 2,201 | | | | 0.1 | % |
Total Distributed Gaming | | | 12,842 | | | | 13,478 | | | | - | | | | 13,478 | | | | (4.7 | %) |
Corporate and other | | | (8,728 | ) | | | (5,409 | ) | | | (5,534 | ) | | | (10,943 | ) | | | (20.2 | %) |
Adjusted EBITDA | | $ | 46,296 | | | $ | 15,003 | | | $ | 25,768 | | | $ | 40,771 | | | | 13.6 | % |
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Golden Entertainment, Inc.
Supplemental Combined Financial Information (continued)
(Unaudited, in thousands)
| | | | | | Six Months Ended | | | | | |
| | Six Months Ended | | | June 30, 2017 | | | | | |
| | June 30, 2018 | | | Golden | | | American | | | Combined | | | % Change | |
Revenues | | | | | | | | | | | | | | | | | | | | |
Nevada Casinos | | $ | 228,584 | | | $ | 17,926 | | | $ | 208,200 | | | $ | 226,126 | | | | 1.1 | % |
Maryland Casino | | | 32,829 | | | | 32,543 | | | | - | | | | 32,543 | | | | 0.9 | % |
Total Casinos | | | 261,413 | | | | 50,469 | | | | 208,200 | | | | 258,669 | | | | 1.1 | % |
Nevada Distributed Gaming | | | 138,241 | | | | 135,044 | | | | - | | | | 135,044 | | | | 2.4 | % |
Montana Distributed Gaming | | | 31,317 | | | | 30,080 | | | | - | | | | 30,080 | | | | 4.1 | % |
Total Distributed Gaming | | | 169,558 | | | | 165,124 | | | | - | | | | 165,124 | | | | 2.7 | % |
Corporate and other | | | 361 | | | | 175 | | | | 65 | | | | 240 | | | | 50.4 | % |
Total revenues | | $ | 431,332 | | | $ | 215,768 | | | $ | 208,265 | | | $ | 424,033 | | | | 1.7 | % |
| | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 7,524 | | | $ | 7,055 | | | $ | 33,093 | | | $ | 40,148 | | | | (81.3 | %) |
Adjustments to net income: | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization | | | 48,091 | | | | 13,960 | | | | 14,432 | | | | 28,392 | | | | 69.4 | % |
Acquisition expenses | | | 1,306 | | | | 2,066 | | | | - | | | | 2,066 | | | | (36.8 | %) |
Loss on disposal of property and equipment | | | 295 | | | | - | | | | - | | | | - | | | | 100.0 | % |
Share-based compensation | | | 4,602 | | | | 3,749 | | | | - | | | | 3,749 | | | | 22.8 | % |
Preopening expenses | | | 837 | | | | 846 | | | | - | | | | 846 | | | | (1.1 | %) |
Class action litigation expenses | | | 335 | | | | 55 | | | | - | | | | 55 | | | | 509.1 | % |
Executive severance and sign-on bonuses | | | 558 | | | | - | | | | 43 | | | | 43 | | | | 1197.7 | % |
Loss on extinguishment of debt | | | - | | | | - | | | | 881 | | | | 881 | | | | (100.0 | %) |
Settlement expense | | | - | | | | - | | | | 800 | | | | 800 | | | | (100.0 | %) |
Other, net | | | 390 | | | | - | | | | 7 | | | | 7 | | | | 5471.4 | % |
Interest expense, net | | | 30,809 | | | | 3,683 | | | | 4,983 | | | | 8,666 | | | | 255.5 | % |
Change in fair value of derivative | | | (4,673 | ) | | | - | | | | - | | | | - | | | | 100.0 | % |
Income tax (benefit) provision | | | 2,116 | | | | (2,842 | ) | | | - | | | | (2,842 | ) | | | (174.5 | %) |
Adjusted EBITDA | | $ | 92,190 | | | $ | 28,572 | | | $ | 54,239 | | | $ | 82,811 | | | | 11.3 | % |
| | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | | | | | | | | | | | | | | | | | | | |
Nevada Casinos | | $ | 76,445 | | | $ | 5,270 | | | $ | 66,158 | | | $ | 71,428 | | | | 7.0 | % |
Maryland Casino | | | 9,387 | | | | 7,966 | | | | - | | | | 7,966 | | | | 17.8 | % |
Total Casinos | | | 85,832 | | | | 13,236 | | | | 66,158 | | | | 79,394 | | | | 8.1 | % |
Nevada Distributed Gaming | | | 21,640 | | | | 22,277 | | | | - | | | | 22,277 | | | | (2.9 | %) |
Montana Distributed Gaming | | | 4,209 | | | | 4,307 | | | | - | | | | 4,307 | | | | (2.3 | %) |
Total Distributed Gaming | | | 25,849 | | | | 26,584 | | | | - | | | | 26,584 | | | | (2.8 | %) |
Corporate and other | | | (19,491 | ) | | | (11,248 | ) | | | (11,919 | ) | | | (23,167 | ) | | | (15.9 | %) |
Adjusted EBITDA | | $ | 92,190 | | | $ | 28,572 | | | $ | 54,239 | | | $ | 82,811 | | | | 11.3 | % |
| | | | | | | | | | | | | | | | | | | | |
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Golden Entertainment, Inc.
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(Unaudited, in thousands)
| | Three Months Ended June 30, 2018 | |
| | Casino Segment | | | Distributed Gaming Segment | | | | | | | | | |
| | Nevada Casinos | | | Maryland Casino | | | Nevada Distributed Gaming | | | Montana Distributed Gaming | | | Corporate and Other | | | Consolidated | |
Net income (loss) | | $ | 19,632 | | | $ | 4,604 | | | $ | 6,583 | | | $ | 969 | | | $ | (28,194 | ) | | $ | 3,594 | |
Depreciation and amortization | | | 16,364 | | | | 1,048 | | | | 3,745 | | | | 1,234 | | | | 463 | | | | 22,854 | |
Acquisition expenses | | | - | | | | - | | | | - | | | | - | | | | 194 | | | | 194 | |
Loss on disposal of property and equipment | | | 214 | | | | 4 | | | | - | | | | - | | | | - | | | | 218 | |
Share-based compensation | | | - | | | | - | | | | - | | | | - | | | | 2,758 | | | | 2,758 | |
Preopening expenses | | | - | | | | - | | | | 88 | | | | - | | | | 301 | | | | 389 | |
Class action litigation expenses | | | 3 | | | | - | | | | 195 | | | | - | | | | 20 | | | | 218 | |
Executive severance | | | 168 | | | | - | | | | 2 | | | | - | | | | 201 | | | | 371 | |
Other, net | | | 120 | | | | - | | | | - | | | | - | | | | 79 | | | | 199 | |
Interest expense, net | | | 23 | | | | 2 | | | | 25 | | | | 1 | | | | 16,015 | | | | 16,066 | |
Change in fair value of derivative | | | - | | | | - | | | | - | | | | - | | | | (1,462 | ) | | | (1,462 | ) |
Income tax provision | | | - | | | | - | | | | - | | | | - | | | | 897 | | | | 897 | |
Adjusted EBITDA | | $ | 36,524 | | | $ | 5,658 | | | $ | 10,638 | | | $ | 2,204 | | | $ | (8,728 | ) | | $ | 46,296 | |
| | Three Months Ended June 30, 2017 | |
| | Casino Segment | | | Distributed Gaming Segment | | | | | | | | | |
| | Nevada Casinos | | | Maryland Casino | | | Nevada Distributed Gaming | | | Montana Distributed Gaming | | | Corporate and Other | | | Consolidated | |
Net income (loss) | | $ | 1,143 | | | $ | 3,809 | | | $ | 6,978 | | | $ | 880 | | | $ | (11,097 | ) | | $ | 1,713 | |
Depreciation and amortization | | | 1,281 | | | | 744 | | | | 3,700 | | | | 1,242 | | | | 441 | | | | 7,408 | |
Acquisition expenses | | | - | | | | - | | | | - | | | | - | | | | 2,066 | | | | 2,066 | |
Share-based compensation | | | - | | | | - | | | | - | | | | - | | | | 2,322 | | | | 2,322 | |
Preopening expenses | | | - | | | | - | | | | 311 | | | | 89 | | | | 174 | | | | 574 | |
Class action litigation expenses | | | - | | | | - | | | | - | | | | - | | | | 55 | | | | 55 | |
Interest expense, net | | | (45 | ) | | | 2 | | | | 288 | | | | (10 | ) | | | 1,765 | | | | 2,000 | |
Income tax benefit | | | - | | | | - | | | | - | | | | - | | | | (1,135 | ) | | | (1,135 | ) |
Adjusted EBITDA | | $ | 2,379 | | | $ | 4,555 | | | $ | 11,277 | | | $ | 2,201 | | | $ | (5,409 | ) | | $ | 15,003 | |
8
Golden Entertainment, Inc.
Reconciliation of Net Income (Loss) to Adjusted EBITDA (continued)
(Unaudited, in thousands)
| | Six Months Ended June 30, 2018 | |
| | Casino Segment | | | Distributed Gaming Segment | | | | | | | | | |
| | Nevada Casinos | | | Maryland Casino | | | Nevada Distributed Gaming | | | Montana Distributed Gaming | | | Corporate and Other | | | Consolidated | |
Net income (loss) | | $ | 40,772 | | | $ | 7,305 | | | $ | 13,406 | | | $ | 1,594 | | | $ | (55,553 | ) | | $ | 7,524 | |
Depreciation and amortization | | | 34,973 | | | | 2,074 | | | | 7,525 | | | | 2,602 | | | | 917 | | | | 48,091 | |
Acquisition expenses | | | - | | | | - | | | | - | | | | - | | | | 1,306 | | | | 1,306 | |
Loss on disposal of property and equipment | | | 276 | | | | 4 | | | | 5 | | | | 10 | | | | - | | | | 295 | |
Share-based compensation | | | - | | | | - | | | | - | | | | - | | | | 4,602 | | | | 4,602 | |
Preopening expenses | | | - | | | | - | | | | 236 | | | | - | | | | 601 | | | | 837 | |
Class action litigation expenses | | | 16 | | | | - | | | | 195 | | | | - | | | | 124 | | | | 335 | |
Executive severance | | | 219 | | | | - | | | | 37 | | | | - | | | | 302 | | | | 558 | |
Other, net | | | 144 | | | | - | | | | 167 | | | | - | | | | 79 | | | | 390 | |
Interest expense, net | | | 45 | | | | 4 | | | | 69 | | | | 3 | | | | 30,688 | | | | 30,809 | |
Change in fair value of derivative | | | - | | | | - | | | | - | | | | - | | | | (4,673 | ) | | | (4,673 | ) |
Income tax provision | | | - | | | | - | | | | - | | | | - | | | | 2,116 | | | | 2,116 | |
Adjusted EBITDA | | $ | 76,445 | | | $ | 9,387 | | | $ | 21,640 | | | $ | 4,209 | | | $ | (19,491 | ) | | $ | 92,190 | |
| | Six Months Ended June 30, 2017 | |
| | Casino Segment | | | Distributed Gaming Segment | | | | | | | | | |
| | Nevada Casinos | | | Maryland Casino | | | Nevada Distributed Gaming | | | Montana Distributed Gaming | | | Corporate and Other | | | Consolidated | |
Net income (loss) | | $ | 3,189 | | | $ | 6,490 | | | $ | 14,507 | | | $ | 1,572 | | | $ | (18,703 | ) | | $ | 7,055 | |
Depreciation and amortization | | | 2,125 | | | | 1,471 | | | | 7,045 | | | | 2,531 | | | | 788 | | | | 13,960 | |
Acquisition expenses | | | - | | | | - | | | | - | | | | - | | | | 2,066 | | | | 2,066 | |
Share-based compensation | | | - | | | | - | | | | - | | | | - | | | | 3,749 | | | | 3,749 | |
Preopening expenses | | | - | | | | - | | | | 396 | | | | 213 | | | | 237 | | | | 846 | |
Class action litigation expenses | | | - | | | | - | | | | - | | | | - | | | | 55 | | | | 55 | |
Interest expense, net | | | (44 | ) | | | 5 | | | | 329 | | | | (9 | ) | | | 3,402 | | | | 3,683 | |
Income tax benefit | | | - | | | | - | | | | - | | | | - | | | | (2,842 | ) | | | (2,842 | ) |
Adjusted EBITDA | | $ | 5,270 | | | $ | 7,966 | | | $ | 22,277 | | | $ | 4,307 | | | $ | (11,248 | ) | | $ | 28,572 | |
9
Golden Entertainment, Inc.
Consolidated Balance Sheets
(Unaudited, in thousands)
| | June 30, 2018 | | | December 31, 2017(1) | |
ASSETS | | | | | | | | |
Current assets | | | | | | | | |
Cash and cash equivalents | | $ | 140,330 | | | $ | 90,579 | |
Accounts receivable, net | | | 13,297 | | | | 14,692 | |
Prepaid expenses | | | 16,836 | | | | 19,397 | |
Inventories | | | 6,867 | | | | 5,594 | |
Other | | | 2,284 | | | | 2,817 | |
Total current assets | | | 179,614 | | | | 133,079 | |
Property and equipment, net | | | 884,493 | | | | 895,241 | |
Goodwill | | | 158,134 | | | | 158,134 | |
Intangible assets, net | | | 148,912 | | | | 157,692 | |
Deferred income taxes | | | 7,680 | | | | 7,787 | |
Other assets | | | 18,071 | | | | 13,242 | |
Total assets | | $ | 1,396,904 | | | $ | 1,365,175 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | |
Current liabilities | | | | | | | | |
Current portion of long-term debt | | $ | 9,038 | | | $ | 9,759 | |
Accounts payable | | | 21,364 | | | | 19,470 | |
Accrued taxes, other than income taxes | | | 6,704 | | | | 6,664 | |
Accrued payroll and related | | | 17,970 | | | | 22,570 | |
Accrued liabilities | | | 20,447 | | | | 20,373 | |
Total current liabilities | | | 75,523 | | | | 78,836 | |
Long-term debt, net | | | 961,343 | | | | 963,200 | |
Other long-term obligations | | | 3,251 | | | | 3,226 | |
Total liabilities | | | 1,040,117 | | | | 1,045,262 | |
Shareholders' equity | | | | | | | | |
Common stock, $.01 par value; authorized 100,000 shares; 27,430 and 26,413 common shares issued and outstanding, respectively | | | 274 | | | | 264 | |
Additional paid-in capital | | | 428,850 | | | | 399,510 | |
Accumulated deficit | | | (72,337 | ) | | | (79,861 | ) |
Total shareholders' equity | | | 356,787 | | | | 319,913 | |
Total liabilities and shareholders' equity | | $ | 1,396,904 | | | $ | 1,365,175 | |
___________________
(1) | Prior-period information has been recast for the adoption of Accounting Standards Codification Topic 606 (ASC 606), Revenue from Contracts with Customers, which the Company adopted effective January 1, 2018, utilizing the full retrospective transition method. |
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