GDEN - Earnings call transcript Q4 2017 | Golden Entertainment, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Golden Entertainment Fourth Quarter 2017 Earnings Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded today, March 15. I would now like to turn the conference over to Joe Jaffoni, Investor Relations. begin. may you Sir,

Joe Jaffoni

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

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

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

Protell, provide it's pleasure over prepared Founder, Blake have Chief which, Blake? we remarks, Charles company's will we'll the open Strategy company's Officer; Chief and to Executive to today, Chairman, some your and Sartini. to and call and my Financial that, turn the Sartini, Officer. With Entertainment President the the Blake call Blake Charles Golden Chief the On Officer after questions. call

Blake Sartini

for Thank start I by vision everyone. capital We a our long-term for afternoon, call our spending announced giving conference to brief good on concluded want XXXX and Joe, solid Welcome plan results. already operations, fiscal our of we strong stratosphere fourth quarter today's perspective today Goldman call. update additional the Entertainment. on you XXXX details you, another our and quarter operating some on to with the

Arizona company organically for Casino, both are continued strong year expanded There demonstrates was wholly-owned Charles Stratosphere and XX% addition Properties. casino American through shortly. our throughout being a results driven our operations completing excellent mix in of financially, multiple scale, and another with composed Charlie's operations. saw initiatives we've we've we earnings legacy will significantly by expanded highlights as Southern our and was portfolio The Aquarius backdrop from transformed that annual positioned full across business company our of assets. which the cash Tower, our solid taverns our route primarily and gaming Boulder to has the our our operations with mix our adjusted distributed Decatur, the acquisition M&A, provide reflected Golden a shifted quarterly of our operationally progress the as Arizona growth, reflects approximately of today's strategic and adjusted while the of year & has release, Casino for & Casino we are year acquisition, regional for of an current results. off acquisition, organic this casinos, of Our Resort that American operations. flow XXXX paying our With that Hotel to the growth and is and Charlie's of Casino economic EBITDA one Nevada and our both market-leading all dramatically of year Entertainment that more for business EBITDA paths

Vegas, traffic Strip, economic the investment the for of the environment Center outlook to including the diversification remains of and the strong. complete Large-scale investment significant by Our And a expansion supported are will the Las a north to particular, in Vegas the end doorstep and Fontainebleau at our Las Vegas the further Genting, its economy. bringing Convention of capital on World, and Las infrastructure former be Stratosphere. Resorts projects

portfolio. grow existing X already see Nation Las the and Strip. will regularly with in more an growth population the to Nevada would X.X% of support together four asset. worst iconic and Stratosphere, in unique are Knights than Stratosphere of Arena strong customers the our wage out some playoffs, Raider announce are trends to particular, while visitors stay cross its for first remains make locations are selling is healthy. October, T-Mobile Southern what builds more is Raiders time, Vegas push touch plan in play numbers. at Aquarius provide and in tavern their million compelling million enhancement master American play Charlie's result market areas resort adjacent encouraging properties annual Since we highs is for to Arizona in as anticipation $XXX the while In are Las Nevada the to to with an Southern Vegas time. continues quite new the of coming level over these upgrade be we also the to program what guests increasing return the our the Valley focused new acquiring to To our addition, visiting starting and to excited and all reasons community us, capital that NHL throughout The In the taking to the sports professional The Golden is local Vegas while unemployment as and towards the arrival Las the they a in home

hotel Our year in complete Stratosphere upgrades include: a the which new XXX come will view the new phases. upgrades a quarter include a facility bar, facility. to also adrenaline upgraded Las calling new and other a area. of new look all will the be minimizing modest casino casino remodel throughout of remodel and and player spaces; in a XXX our Phase rides. which current phase a Vegas; concept, remodel throughout feet tower also of targeting gastro-brew signage new the hotel be convention book; feel remodel VIP the disruption we're casino approximately latter will the all suites, and retail landscape in a high-rise, area, aesthetic will space, bar all upgrades house, of package, new one to is of center rooms, the part hall hardscape outlet. I enhancements proximity continuing and which final XX,XXX new and Starbucks to all remodel of complete is new top while bar will steak showroom; and food will creating be sports close be new top exit II will gaming include exterior Phase begin in new three to floor The fresh made; rooms slated current lounge, the casino and linked noodle the will complete to to and QX. new rooms experience a of visitor space new the casino a and most Phase which an experiences demographic, XXXX new room race suites; of hotel plus the of state-of-the-art thrill outlets include of levels, with That current included registration added will mezzanine entrance the program, a the begin a in fresh including food second hotel and and and the III a concept, all improvements reward square tower exterior of a adjacent and this new to younger state-of-the-art XXX to and finishes will remodel level be refresh a the ride and include include in a world on at in which and lounge which and be of the the the a begin new and and our of observation the in restaurant deck tower space; remodeled of will undifferentiated concert; a QX tower XXXX along the floor, unique thrill

inside property faced As of continue we base including the we complete, remodel and of Stratosphere construction new through have the X,XXX XXXX, added operations to our every minimize touch one-half are and activity highest that level. room of we approximately and to to our moves will the guests at ensure convention to current rooms part the When or disruption the at the out space. serve amenities, our over project forward summer

We expect when to our to approximately for capital finished. XX% development XX% the of generate a return plan on master Stratosphere invested

facilities, to excess legacy this potential the implementation this later gaming currently estate within from properties believe our we In long-term rated players. customers the be of property. this XXX,XXX also part includes card various distributed our though this of announcing owned XX year. not real the is loyalty are Stratosphere's have single across our crossover have the exciting initial master will enormous addition newest develop we approximately programs, development all existing across part approximately a of patrons acres play our cultivating which footprint, plan of ability to the players rewards for Complementing active portfolio, We we surrounding our today. at becoming our With has properties program opportunity expansion,

key marketing are developing infrastructure casino for offering are teams needed players. compelling, and card. currently install operations this value-added distributed highly And for gaming partners all technology our of our the with to a working teams Our

total high-return, Finally, which the new this as Nevada. add already opened, our taverns capital platform our year, traditional of XX wholly-owned two six includes also taverns here development tavern for portfolio XXXX have to in bringing continued well plan

and new generate our our consistently investment and Nevada. locations offerings complements distributed in casino taverns returns, gaming Southern branded in Our high

growth Pub, rate our under Gold PT's the believe For program. Place, Sean gaming offer for a adoption and and locations our along active customers With to Gen shareholders. boast newer X devices that experience. value our of a customer will XX I in turn to our brands turn have for Charles. food mix and in strong beverage the very call and that investors, Las PT's enhance provide These another Golden to proud these gaming projected one Patrick's operate the local the long-term Sierra millennials opportunity establishments attract Entertainment confident market. and we're typically of Gold, Vegas of high-quality we remain We PT's In closing, we our with unique venues XXXX card and and growth database, that further committed new will are substantial oriented over with high generally accomplishments which will driving from XXXX robust the benefit further

Charles Protell

fourth up net scale basis, $XX net grew when assets, inclusive XXXX, Thanks, properties adjusted year-over-year days for the of American of $XXX year year-over-year and our important on and Blake. On reduction of EBITDA of the rose XX% synergies, exclude million numbers million and of and combined in July. Like It's to between at results X, million implemented what that which Entertainment combined X.X% base. entire on when basis a Maryland note million, reflected same to financials well November to the quarter. American impact up financial based our acquired of by give impact the we EBITDA tax current October rate XX% sense be revenues other property the $XXX million, generated room our tragedy in impact net $X were the of on full of $XXX.X as while properties Golden $X rose including half for on December. a our for in QX of the of XXX% year the are Casino XXXX on XXth. to our basis experienced in the of of operations the performance To occupancy this X.X% million. including a a million operators, October primarily Stratosphere as property our same Adjusted on American at quarter achieved XX revenue million to X.X% QX already targeted assets which client a combined EBITDA $XX mostly Stratosphere. on grew you quarter impacted estimate $XX a these and we revenue We was swap

the is quarter for our acquisition. revenue due our for Notably X.X%, and net to also As were EBITDA fourth up total, respectively, from casinos prior significantly year-over-year facility X.X% to acquisition up up casinos of EBITDA quarter. $XX.X same segment over million revenue by $XXX.X was in of basis, period XXX% on American. million, the Adjusted the for and due the

For EBITDA at helped the Aquarius, quarter, still quarter X.X% our weather poor EBITDA Nevada on Coast, at Stratosphere. of also by and revenue softness our Nevada revenue-adjusted Rocky growth, fourth by $XX.X quarter was in fourth the so, Pahrump casinos net the during partially Boulder million. Decatur, and the the the casinos offset and same-store which respectively. grew X.X% grew the X.X%, Gap revenues East With to Even

a EBITDA of While both revenue as million, million was Montana, investment reduction in year quarter, Net generating the saw growth and a weakness $XX.X extreme just adjusted down X.X%. office. our business, previously State EBITDA, that opening improved satellite distributed distributed the year-over-year in the devices ago we X.X% in from cold cost, increased as $X.X Maryland. fourth revenues revenues grew gaming net by offset slot to year-over-year revenues million, the XX.X% in well Nevada which as Adjusted operating a which as reflected $X.X the to purchase from quarter of EBITDA million. to the while net of operation Nevada December On million grew $XX.X $XX.X of distributed to gaming slightly growth of higher grew reflected some million. quarter related labor increase adjusted impact mentioned. well $X.X our to flow-through during primarily items In owned as X.X% the the from business $XX.X year-over-year million, new following of was on fourth the tax EBITDA This by X% were I our Montana, total

recover to further the QX active operations Montana still in a market distributed to fragmented as consolidate which in in evaluating are our expect see and state. We gaming we opportunities

the adjusted impact $XX million year expect our trend to the was realize with to level $X.X run Looking between we in to the the our per rise attributable Near the million other in the term, at and prior from half expenses, EBITDA million with of and million corporate of fourth corporate corporate in the back $XX.X quarter, in lower compared the quarter the acquisition. American then as synergies full to American expenses quarter we and $XX transaction. year,

and per on compared to related diluted loss inclusive For in of $XX.X the the net to or of fourth a interest a prior reported of or loss million debt extinguishment $XX income quarter, higher net we share expense $X.XX year $X.XX of our share period. acquisition million per diluted

of equivalents as leverage sheet, we our have bringing balance X.X times outstanding and ratio million to into cash debt of billion, approximately $X Moving $XX December, of cash total net and times. further a $XX basis, net we offering, combined January, $XX In raised approximately to marketed equity inclusive a as of on of million part of million lowering synergies. our five leverage

Our million undrawn. remains $XXX revolver

the as scale a result I Q&A, and transformation American outlook move XXXX the want full our on to of acquisition. to perspective of we some year Before on given our provide business

$XXX adjusted run XXXX targeted be rate to range in EBITDA expect full of the of including the $XXX million, full million to year synergies. We consolidated

other Stratosphere million, the in As expenditures year phase a the we of X.XX of projects million. capital leverage that by our capital capital first expect tavern reduce including our to Blake times planned execute on expenditures, new maintenance Stratosphere outlined, $XX course redevelopment renovations times $XX we targeting XXXX, leverage, CapEx X.X million, $XX of million end. Total to net still plan XXXX of of $XX over including and

our year. portfolio, please us American flow the preserve being our of new a shareholder liquidity allows acquisition the we Operator, strategic growth that leverage to questions. concludes opportunities pursue did further following closing, taxpayer to fund existing line addition, anticipate operating reduce can and investment That this our prepared In the cash open In on cash anticipated value. not enhance for marks.

Operator

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

line now Your open. is

Chad Beynon

guys. Great afternoon. Good thank you

Blake Sartini

Chad. Hi

Charles Protell

Chad. Hi

Chad Beynon

Stratosphere the on color the for Thanks renovation.

of couple a to on there. go to wanted Just details

think you're So math $XXX X,XXX for do Can your buck can with bang these that given you're kind you given there like feels return expect where that increase like your the and to XX% you you million, touching might what if to good pretty obviously of XX% going some I a a get of just that able is outlined even you there. room we are those certainly good $XX? to most the the rest It there be on are run then conservative, getting ADRs projects think and sounds that rates rooms. you're return

So I kind you're you. the a could versus on to returns? think to but how bit hotel us more property. maybe help thinking Thank raise detail does bar, already the this – just little guess raise for not overall the And about side what your you the I'm of looking about you room

Charles Protell

I with in Chad, regard Charles. and of out people other holistic other when we could as at Yes. room there tend return or you put that Thanks, expected No, their on that we in think terms it’s it agree But mendates, but either project. to you investment what in view look

we've the rooms, folks as not here our have only goal is many on move property of phone think presentations amenities to whole we the ADR the the can but seen and on the as our on the investment, stated based earn in I up you've it. around website,

as get can – don't I want to we you the the said. goals that raising that we comment on we've anymore to think we So think And this to outlined. target

Chad Beynon

us business, Strip markets for up regional XX% Nevada the million that same-store I about think despite fourth even in $X the to Completely the million in on quarter, was guess, a help on Vegas. understand. year-over-year Southern the impact $X Okay. the in Laughlin. Can noted then it And and in casino you you Las flow-through, basis,

the year, of flow-through the half strong, started if XX% year? the regional quite back any first particularly was why as it strong, in the the revenues or fourth markets, of and be quarter continue XXXX guess, the seen and in in January. think half shouldn't Is to there back of pretty strong the I I in the reason half what we've track has

Blake Sartini

The answer is no.

through We same. expect the be to the flow

Chad Beynon

acquisitions Okay you times will to to that noted me, X.X with X.XX one you be leverage at net – then given occupied year-end gunpowder some from , if tuck-in acquisitions leverage Montana last something these your they you make what by in great. the have on you Illinois? to what distributed Nevada, the just along of or accretive planned side, opportunities as still for do be there for are your gaming this, in times the as come attractive And either

Charles Protell

actually being our and around fund we’re acquisitions about the the powder portfolio excess at. generated reduced in of to that's capital keep the the cash – of portfolio we've strategy we revolver tuck-in form leverage and cash capacity of looking do, We our in reinvest flow in terms thought structure using in those type by dry to

Chad Beynon

Best Okay, luck thank you very much. of

Charles Protell

Thanks Chad.

Blake Sartini

Sure.

Operator

Thank Jefferies. of Instructions] comes of you. Katz line Our the [Operator David next from question

David Katz

Hi gentlemen. good afternoon

Charles Protell

Hi David.

David Katz

take at tolerance are of boundaries would I terms I acquisition issue your you integrated terms in where a in further strategic acquisitions? alternatives? consider this terms mean, point. the have just being further What bit you wanted in be on of last do that's to that a transformative of would what

Charles Protell

So the now. very mean, space I active look is right

a casino sizes seeing from then But on. going and that space. within maybe parameters business opportunities would into see and the us to we other bit a business, gaming others even the future in we're fit say, bite paybacks deals and have that appetite for You've of we've comments seen I announced expand outlined. lot certainly distributed both in the our from more echo our those in get us, is for the We'll announcements, I there activity would narrow from if

to As the we've to said our past, accretive looking leverage. doing that are the going our in not we are and from increase you to perspective, certainly not deals to shareholders, aren't we be

David Katz

about of it. and to the left timing the you're can you're just in that you've the return over of we we've talk ADR some see that RevPar of in and and left, some outlined the technology specifically you which investments making? And some benefit terms start making which Got from can release which technology and with discussed, investments

Charles Protell

Yes.

that that the as outlined of we system the one have to As by card Blake just end far portfolio. without installed year the the expect

the plan integrated seeing the be from we'll XXXX of that we've So pickup in perspective. that as

David Katz

one. it. last And one Got

other or end, property, through or – investment strategies that's Stratosphere much the can is As placed in middle would to whatever been have to attention community of it the be me. helpful? the And what I how not not in time, the think, about to tactics Strip, may share may you thinking details some have of that which the from attract you other

Blake Sartini

and Yes north is David, development encroaching that terms our those foot significantly projects both I benefit simple how feel, think the car terms to just are. traffic Strip, property we and Las visibility remarks, as we prepared close going further in mentioned Vegas that of in in on the further is of and

upgrade of west those big kind staying in resort next of X,XXX a within guess. property to to we're of those planning designed iconic end create I an be the – along remarks, at the development the building the for already in within amenities process, an to half upgraded see do, with you'll that I valley. What signage. rooms, are will look a in we over other including we're from which my reposition the designed think of said in this the from to more from adding. With in amenities as experience for tallest facility the – the really regards itself is feel will several the place fact. And of in exterior, are it's and certainly, the difference create And remain exterior relevant everywhere of in Mississippi, I decades, property the that speaks building the the to prepared to visible tower

property what traveling, be people are of to staying mean, end than from Las or I in either Vegas. much So anything is more the at to appealing there going visiting we're not that other terms in that exterior looking programming to transformational be

David Katz

Thanks.

Operator

you. Thank

of the from comes DeCree Union of question next Gaming. Our line John

Your open. line is now

John DeCree

Hey guys, are how you?

Charles Protell

John. Hi

John DeCree

back – circle that plan if kind us and then I a this, remarks. could of was the to kind in when for prepared if missed I give the frame your Blake, redevelopment wondering renovation some Wanted time But you apologize I of to of of Stratosphere. online done somewhat you come in ROI would had into that's expect next you flow of high wanted the be XXXX know there? rooms will over to do or time a a given And that renovated line project? if guys just XXXX,

Blake Sartini

So have the probably September, we give rooms in of quarters the three to rooms regards the specifically, take, will or October a rooms, around frame. portion of done time

year. So XX% be of will the will of the and talking XXXX, the the will we're remainder XXX, probably be XXX quarters done the done remodeling of at in year. done those total be end for early of about three Approximately QX

over that So rooms, will can been summer. the call impact have have count rooms XXX it, the done in days you full of XX on again XXXX. we’ll of the it But

the same at of of forward, The Going we to be summer room of shoulder models in would target the the plan and disruption. XXXX. periods the the the same year times XXXX, minimize end to year

So as going reposition sensitive rent is property to lag the there very of we high but rate. to rooms occupancy these sensitive And we're is that bit a disruption. The forward. effect, a currently a we're

John DeCree

Good, also, kind the relates of Stratosphere. that’s that. to, it leisure Wanted ask demand helpful. about to as Appreciate

last so sense convention it I how as sense, through whole about of but XQ is on how guys Strip coming back year, lot a XXXX? if the October business as know far if was have bit relates for you well is little you that wondering a kind post Was to impacted a have guys town the leisure Stratosphere a tough of in X. demand talked comp as You've a

Charles Protell

looking think did start on is We that bit that I January. the And February. Yes saw others mitigate to John to be we in in track. saw more And a it’s even Charles. impact same March

the others still that we're trends about optimistic Stratosphere on have QX, So within Strip. the but show the same we

John DeCree

it That’s guys. from thanks Helpful, me.

Operator

further Thank back Mr. this you. closing queue to turn for showing remarks. like I'm at would no time. questions in conference I the to over Sartini

Blake Sartini

to our us We forward continued on Thank progress And today. we thanks look you as updating quarter May. results for operator. joining report first everyone our everyone in to

Operator

thank gentlemen, program. today's for today's your conference. concludes and in participation This you Ladies

You may now Everyone disconnect. great have a day.

Golden Entertainment (GDEN) 15 Mar 182017 Q4 Earnings call transcript