GDEN - Earnings call transcript Q3 2017 | Golden Entertainment, Inc.

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Operator

Good day, ladies and gentlemen and welcome to Golden Entertainment, Incorporated Third Quarter 2017 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, November 8, 2017.

Now I'd like to introduce your host for today's conference Mr. Joe Jaffoni, Investor Relations. Sir?

Joe Jaffoni

James, afternoon, much very you and everyone. good Thank Investors access third be quarter now, under on everyone earnings our have should the www.goldenent.com, at can By XXXX to release, company's website section. the found which

phrases, updated Before we need everyone of statements the identified that are which use the numerous should should similar refer and on of forward-looking our the could words most exercise caution more materially of results corporate all Form condition subsequent remarks, recent federal today our or as include These These from risk the our by future operating to in other performance. to them. are forward-looking expect, SEC relying quarterly you and XX-K, of will as our working risks statements results could our factors on We differ that that remind to guarantees statements. recent to discussion forward-looking discussion anticipate, risks therefore, detailed believe, not statements and the within our statements begin formal we you reports by such impact meaning Form will, including a securities financial uncertainties cause laws. in for XX-Q the usually subject future actual of filings, interpreting other are and and

available XXXX directly These company's of or comparable results in accordance performance. is financial reconciliation GAAP. the in management with isolation and uses most prepared measures operating a our useful measures quarter these earnings should third our considered non-GAAP evaluating which financial substitute for release. A will GAAP measures today's discuss to the we During call, believes are not as in in measures be

we Chief we Company's Martin, Strategy Company's Company's today, Blake Steve call Officer; the and Executive Chief President Chairman, and Officer; the Arcana, Officer Chief the Chief Charles Operating Officer; Ned which remarks, Protell, the Financial call and Sartini, to On have call your will over and my will questions. provide Blake to some it's the With the after Administrative Charles Blake? Blake Officer. turn Chief that, open Sartini. Company's prepared the to pleasure

Blake Sartini

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and the Even the confident shooting remain Las focused Currently year operators and the own city we are as balance our for beyond. businesses of we on Vegas this outlook resort our X Strip, positive evaluating our many reinvesting within properties. on in the in endured on are tragedy also our October, properties which

cities record has here feel NHL of they in gotten and convention addition to the when Vegas start a Boulevard. world projects center and the readers ultimately dollars for of Vegas expansion Further, be the be investment just to what only many off end a we to with Vegas the represent getting preview attendance team will of reception Las Knights a understand move new resorts resounding biggest Las Las underway Golden winning In is we our the of product alone north which overflow billions construction on XXXX. be in

bring These growth very efforts greater active of our and quarter business operations. both results and EBITDA to continued strong continued We third Our of demonstrate quarter diversify consolidated adjusted outstanding our growth across casino results businesses. XX.X%. and Golden's gaming reflect portfolio distributed efficiencies delivering to had

gaming distributed our momentum profitable the Nevada our success mix owned driven revenue of by managing wholly our locals towards quarter business third valuable in strength market and actively the both continued and locations. more the its During third-party

Our expect representing on our The opportunity tavern year fourth our attractive XXXX continue new the Vegas we expand we portfolio. new and Las opened September. as steadily our in our location grow additional perform XXth branded wholly an locations presence by end to new XXXX. early in of to to remain very We owned XX well two open taverns pace taverns open and opened to in tavern

share with To we building completed approximately our market Las Vegas organic In growth, opportunities and on operator we XX of the to for our route the in to anticipated XXX smaller gaming accretive devices. on point continued state. acquisition the locations that see acquisitions continue Nevada addition in leading gaming X, distributed November smaller

expect ability will our and incremental distributed well locations These as to We do Nevada. total home EBITDA of scale gaming, $X of in even a bankruptcy our so on less through add as approximately required than to to million the of here importance multiple process in highlighting investment the gaining two times. continue acquisition market a

drive new that and and our become that then new machine eventually continue approximately from we to of believe XX% recently gain existing local game XXXX this We to adjusted build initially further increased We by additional XXXX our benefited the locations efficiencies. performance for long-term has unit presence. shown establishing expand locations. entering higher Since year win operating location EBITDA our scale have we platform and two as revenues the to delivered Montana, we XX% current margins state-wide could third-party to a and portfolio that market a the have our to averages. stage growth expand the in our from state offered proprietary set significant our meaningfully Turning last per acquisitions in

in expenditures efforts we market significant operations marketing we the Turning right-size to casino improvement our increasing quarter first in as Pahrump completed adjusted to while EBITDA share. saw

again continuing of significant into are the fourth delivered performance to resort this financial this growth. contributions We Rocky encouraged our quarter Pahrump's EBITDA Maryland, see portfolio quarter quarter. another for by adjusted In Gap casino our and

we resulted reduction which desk. As in on on a casino previously our second XX% slot call, quarter our devices we on July state-owned a noted X the purchased floor gaming in

We continue successfully superior market customer operate competitive amenities to Gaps resort and believe Maryland base. to continue a property reinforce in Rocky that create this and

Stratosphere all Tower believe million in in casino and assets American significantly, market-leading the Finally $XXX Aquarius country. Entertainment Casino the Southern our market Nevada acquisition and Properties already we & scale on our transaction Charlie's gaming our expand and before highlight Arizona increased acquired of and in This company Boulder vastly the oriented the most was portfolio XX. unique best of completed Decatur our October locals and properties Resort the of Charlie's the resort, dramatically footprint Laughlin I is which and diversified Casino

larger gaming our these enters turn our members to which efficiently positions and and are we and has to excited In newly immediate in am Entertainment believe closing, which forward for unique going the call increase existing is off for Charles. on much Our efforts the successfully and our value. Golden operational all to to of properties resulted we look with well continue as of that to to across a asset their organization With smooth great our I'll much focus thank future operations more diverse we distributing us to diversity to our execute over so want team transition and start. casinos, integrate strategies shareholder continue traditional combined a I and far ownership forward. XXXX I a With company.

Charles Protell

year. X.X% and over representing a grew XX.X% benefited Blake. $XX.X $XX.X from Net last adjusted $XX.X gaming million our year were distributed ago third EBITDA increase year-over-year million business margin was X% grew the Golden in from adjusted during to Entertainment while generated quarter third quarter $XXX.X as of continued distributed revenues an increase $X.X primarily from our of our $XX.X of the Nevada Thanks the X% in X.X% total net while revenue operations Nevada Adjusted up up revenues X.X% of year-over-year the EBITDA of expansion a quarter net year-over-year million. was million in to operations. we EBITDA quarter million million

portfolio towards branded in and continued more adjustment our our demonstrate of third-party results profitable the Our taverns locations. mix wholly-owned

route these business. million gaming As that in operations total Blake X $X EBITDA to distributed we generated begin contribute EBITDA two quarter the to separate small and gaming year. approximately acquired million and Montana, net of margins we In million adjusted revenues throughout a Montana X annual last immediately improve recently of operator after distributed as $XX.X acquiring operators our operations will expect these mentioned, incremental for of operations million we investment

Moving on to our casinos.

adjusted EBITDA in of the million, million prior revenue $XX.X XX.X% is net the $X.X quarter a $X.X to while the up EBITDA over X.X% to revenues For XX.X% year net XX.X% year-over-year grew $X.X were at and quarter million period. Property was increase million. of adjusted

while grew X.X% to quarter. million. in made the Gap plan discussed we Pahrump XX.X% EBITDA Net $X.X year-over-year the previously increasing in market adjustments As grew marketing million, Rocky revenues share $XX.X to at our while to adjusted quarter in

reflect addition in the the our XX% gaming for we in impact state In exchange results the the continued the from to state-owned EBITDA tax Maryland purchasing overall adjusted of market, slight growth devices. reduction previously received

from third the to the up with adjusted year-over-year business our in to growth. and continue was and to Looking EBITDA $X expectations million expenses scale at other corporate impact as quarter expense our we corporates and in line up

million or diluted prior quarter, per the $X.XX of share Golden diluted in year $X.XX or million to third For the income Entertainment compared $X.X net reported $X.X per share period.

pro $XXX completed for quarter credit of acquisition of Maryland to for total $XX pro approximately approximately That Based had year-end year. prepared combined approximately refinancing cash questions. we of five of American. forma our open we expected please equivalents of $XX.X the line of net million. concludes the of debt tax our the year Operator, of the our sheet closing million the $XXX be balance impact forma remarks. on As in our with slot which Note October includes leverage and pro full of existing synergies our the a and facilities estimated end at times million the outstanding EBITDA million reduction cash and forma anticipate

Operator

question Beynon first comes Our Chad Macquarie. Instructions] [Operator from with

is line open. Your

Chad Beynon

for and guys the prepared remarks. my you Thank taking questions

in kind cancellations with to to you want American on start is to Casino the quarter really talked early the shooting. respect what just about going of fourth start wanted be? we about but with point Can could anything on it's the from and clients you've what in Thanks. property focus you note obviously market some to the talk questions don't I incredibly seen on impact and had out, that the a just obviously lot just Just integrating the

Blake Sartini

in haven't - the us, will I October. near-term early we think say the set recovering affects The properties same we're of on took Obviously event anything Other but quarter was Chad. some horrific event unfortunate year. as I particular very, it we we with properties the that reconstruction we on will all that as is the a seen positive on wane in goes these the incredibly very ownership if you Yes quarter and the issues. on seeing fully within Stratosphere. first seen of really have dealing us are of lot first next

Charles Protell

Chad and numbers currently with just will for kind so have American, that the will we who results add the an show folks to And that. be our that the delay quarterly will suspense tomorrow everyone, would filing it third I quarter are of X-K

you is portfolio. that even fourth at continued million all as forma know results remains will having $XXX American through goes, track we’re we that for be to pro on million quarter seeing confident we're advertise As the the we've of from far in that presentations very investor business through the that $XXX our higher that consistency followed The EBITDA October. the as approximately than

Chad Beynon

margins have able for you if inflation and given you're note in some talk had any sustainable would within more that flow positive this you a segment color if quarter around Pahrump offset regions pretty through to if and in Gap. margin casino about is Could and the On both and Rocky targeted these on just where expansion unemployment helpful? significant goals the be you

Blake Sartini

a reduction we’ll come Yes not our it tax the in but but margin that we in Nevada impact certainly there the second. is mind the improvement is operations is in to slot but that margin. margin I impacting is is from mean keep in think sustainable an which Maryland only revenues impact too is of

are we that we we that margins in margin in continue feel second Casino of in for that the on the impacted and based Pahrump was future. share Pahrump. the have locations that has that and see we been some rectified Nevada our marketing pursued side our I would the margin expect by that quarter continued here we strategies at and On foreseeable So to have market growth

way to looking with are they end the progressing we're year. forward these So the of comfortable in that margins

Chad Beynon

Pennsylvania was you is to your bullet you view think the ratified, to My into that could different for you points of were Pennsylvania? bill parts the respect bill with how on in and provide last expand if question the it's business opportunity you your see that some an that

Blake Sartini

We when a think I it we’re expansion is opportunity. discussion major now way. that mean the it’s gaming excited of in part a look comes to distributed

is So truck the focused on but in and a other states. side of and role play the our on pieces that stop on to potentially state and the we’re expansion meaningful that obviously business from most we intend distributed this

Operator

Instructions] comes [Operator Our question Union Gaming. next John DeCree with from

open. is line Your

John DeCree

the an and about kind like of the entering can business of Nevada you if operator small in be add be how Pennsylvania just there wanted up keep but more much type ask at to my now time briefly frequently this and that in over relatively talked and these forma opportunity out guys discussion pro about or I small It’s to but coming couple relative to Illinois the these team along stuff adding comes had the curious to you tend acquisition might a years? quarters about the of things home able of Nevada. of in lot you'll size of route this was bolt-on how I just

Charles Protell

what of that’s side We is it's think price. mean function right and we I a will. opportunity that opportunistic on bit

unique, vertically a open to very and What mean by have the we state have necessary grow market to fairly So avenues integrated obviously jurisdiction. we’re large numerous us within is for share then Nevada here. we our that I is another

taverns spectrum third-party acquiring what tavern our third-party. location our have as we the We acquiring well only building third-party own from case opportunities as as taverns, across was operator. see as not So a as as but new business, so in well owned our well wholly this route

the fairly is those position on that market-leading of based all unique call based our just first to usually say we're us So across our I'd on position. opportunities

we're medium in in organic and benefit portfolio the add still But should opportunities American. highlight market we it’s the see although at very cost it So state now of home is important Nevada for that we that think we focused plus size the our than that of and EBITDA opportunities smaller the to share accretive that even on maybe XX acquisition growth here % inorganic. with

Blake Sartini

and along John natural terms route So been the I quickly Charles which with operations add these more has would across of given of our way think in that distributed critical where from just Nevada of size. our right state scale outlined the are Montana. coming of the smaller opportunity for the I in opportunities Most mass allows in fragmented that business fragmentation growth has future of these

John DeCree

was had you wondering any update from to And I market approach plans recently sense, how relatively BGT kind license you might that's of if on Illinois helpful. to or make over here? - That's Illinois, large your jump guys

Blake Sartini

participate to in ways that evaluating We’re market.

the is still excited consolidate that it to that market about there growing distributed and are still We’re gaming opportunities market.

it about time but excited and right with right we’re we opportunities evaluate taking in point to are So the the that entry others. jurisdiction our

Operator

I'm in questions showing further queue. no

Mr. So remarks. I’d over to call like the turn for to Sartini closing back

Blake Sartini

We today. we look and you. joining next report Operator, everyone forward for thanks on Thank to us results continued you, March. progress our as updating Thank quarter everyone to fourth

Operator

today's much Thank That your for you. Thank you conclude does conference. participation. very

day. may a wonderful all You Have disconnect.

Golden Entertainment (GDEN) 8 Nov 172017 Q3 Earnings call transcript