GDEN - Earnings call transcript Q2 2021 | Golden Entertainment, Inc.

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Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Golden Entertainment Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. The question-and-answer session will follow the formal remarks. call recorded this XXXX. August that note is today being X, Please

I'd conference go Relations. the to ahead. to Now turn Investor over like Joe Jaffoni, Please

Joe Jaffoni

Thank everyone. good you Joelle, afternoon very much and

the materially the On today Safe statements differ Executive and results call, those Financial Protell, the Charles under we federal Harbor in Actual these Chief Chairman company's may and On is, Sartini, the Officer; President call the securities Officer. contemplated and laws. company's from Blake will Chief of Founder, provisions today's forward-looking make statements.

to differ cause filings Additional result a in statements these factors undertake Except today's information update that new information by of obligation contained the with concerning actual otherwise. these could results is statements required our to materially we as from as press or SEC. and release law, forward-looking no

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

in available the You financial a GAAP can release, measures results recent Charles We'll business start press the website. and update. is reconciliation find call details of our our which reviewing with of on

Thank that, questions. will to to Protell. the over and for your that, Charles my take turn call your And pleasure go please Blake ahead. Charles, Charles it's patience. Following with you

Charles Protell

Joe. Thanks

performance $XXX in record strong EBITDA quarter of million. revenue second million with Our continued the of $XX record and

improvement. results local quarter, for see EBITDA from asset to by over driven portfolio first higher we Vegas EBITDA taverns, over Strip and XX% the XXXX. were and still the was across quarter in XX% These Second QX higher Las record than previous our significant room achieved our our entire than growth of

performance XXXX quarter relevant. not the shutdowns are May, comparisons the to second during of Given April last really and

the generated STRAT provide historical XXXX. periods QX quarter XX%. QX of occupancy momentum we [Technical achieved of the of highest of property The of at as in is will in QX over [Technical what did points to comparable Difficulty] business XXXX. and by occupancy its to equal of STRAT and was midweek ever XXXX and In business. levels XXXX I about for in up occupancy in the XX% compared results QX, EBITDA quarterly just double basis Difficulty] second X,XXX improving. the are comparisons over So in This our rates indicators our Weekend XX% quarter

$XXX million Our guest in our XXXX are capture wallet earning of of investment a and we completed ROI higher helping is January significantly we more expected. than us

the the midweek of anticipate We property's increases with visitors. citywide as business also improve performance return and international will conventions

historical Vegas continued with XXXX. Las QX outperform locals XXX% to compared EBITDA also casinos results to increasing Our of two QX

Our continuing locals to reopening. are the missing to of X,XXX our quarter Even EBITDA the our for who rated of this our expect we margin some properties, players over margin XX% return to with still strength points basis two locals expansion since year. we improved

XX%. are of We club, to our Laughlin, with growth market. margins for of XX% enrollments also compared driver locals as improved out-of-state by over the EBITDA ongoing QX players population In seeing Las long-term which an in Vegas continued XXXX increases reinforces

in Center even the Event of events. is Laughlin a outdoor driver but it wasn't XX,XXX-feet QX Our open major visitation, March on restrictions given

scheduled to to However, drive properties. additional expected fall Laughlin our are have the concerts in six we that currently traffic

XXXX, XX% operate while casino by Maryland, Gap Rocky in margin margin EBITDA of casinos, expanded improved QX For points. of over margin basis X,XXX over our basis while EBITDA XXX% EBITDA in by X,XXX with Pahrump more XX% And points an expanding Pahrump. by QX to we to than XXXX, from compared improved Overall, XX%. our

by and almost to points compared EBITDA improved our was Looking EBITDA total, QX margin to in at XXXX casinos basis XX% X,XXX up of XX%.

players rated are see have to still Laughlin, future. the we and the we our STRAT and in return we sustainable to or improved performance of full occupancy that yet missing see operations casino to our Given potential some

Turning distributed XXXX Nevada, and QX EBITDA In basis margins XX% of improved were from over gaming points. operations. to our up XXX

All performance line taverns operations, XX benefit on casino cost our Nevada from really our strong the supermarkets outperformed, XXX% potential reflecting in distributed to stations but so we structure with taverns. our of meaningful demonstrated with our to for X, locations seen went our yet the only combined June revenue of full increases. streamlined wholly-owned gas capacity haven't

some over we levels. addition, out-of-town our historical enrollment taverns are In in XXx for players currently seeing card up

operations Our of rest our Montana XXXX. XX% businesses QX EBITDA same the showed as distributed from strength growing the by

and no in really with was operations this continued weakness a in our any strength of So that absolutely quarter July.

our purchase In Moving to and of leverage In loan loans receiving to forma is Nevada look partner total cash after $XXX our our million X.X million $XX puts at of further of which our William outstandings of term Currently wagering million net of on approximately the repaid Hill. on hand LTM their quarter term with Hill times. Including the casinos. with relationship no $XXX their a of We of $XX appreciate unsecured to the million our cash $XXX million our debt sports million borrowings. cash related consists ended We our cash debt outstanding $XXX sports our we received our Caesars, improved $XX operation outstanding million, forward plenty revolver. liquidity of notes. QX, payment over sheet. of pro from and with Entertainment continuing from balance book July William $XXX primarily Caesars long-standing million and in balance including our liquidity

for Blake to to are concludes in is available now So shareholders. our to remarks. that Operator, options questions. and our evaluating prepared start balance I place capital return our sheet good very

Operator

David [Operator Bain with comes you. B. first from question Instructions] Our Riley. Thank

Your line is open.

David Bain

Great. Thank obviously. Phenomenal you. quarter

or point core just have as of And Las in. first the there a a terms you you? you that gaming as to or about point, this my what distributed guess either have migrant of I driver to to them data of better demographic is get frequency? So trying you do, that spend of in migration question top opportunity base coming with whatever the be other visitation encapsulate the more trends. new identified want of mentioned that's At the on very Vegas sort strong long-term I'm would Laughlin cross-promotion an understanding visitor perhaps versus STRAT to the or

Charles Protell

-- So, hi, David thanks.

million the to you I obviously make if most a we're coming don't So seeing about that of that a adult you them mean lot mean move I Vegas. difference. the need are population of to sign-ups to is of sits driver California. in here And a California think XX-plus out

a Laughlin in particular, that seeing, scheduled concert have cross-promotion with see as lot of we of we that's terms the line In and for are what we fall. do our up

even So about top see in our we're do seen use past. the And that the that excited the pretty we local STRAT. of world restaurant players that. at We've the

are think So seeing migration And of we're that further players moving pretty I here. new that accentuated. it's about excited

our into you growth look And fastest built Southwest been taverns in we If the built part city. site recently, ones the home purposely are of here that here at Vegas. XX growth, over home in we the town new that that's of the

David Bain

or a potentially north in STRAT I spoken Strip And Strip think great. was of end we I million call. we below trying to of for spillover after $XXX EBITDA. new had mentioned, power think about whole million terms in the the were just normalizing catalysts, Okay, And we asset? understand $XX bunch And you the I'm in on general. where conference for and the Could the on the that earnings terms improvements of years? here in sort we -- of have weekdays of last pre-pandemic, the for million, STRAT. idea the where could traffic big you from Where I of and from power Convention base an of the $XX kind $XX like the next kind give exceed of us few that earnings -- million, are we something know

Blake Sartini

to very Yes, continue bullish on -- there. outlook at say, David. the we're the future as we that outlook accelerate EBITDA needless property to We

QX the Charles to had STRAT our performance mentioned, of in been in specific in perspective that the being of significant XX% QX we some have QX this record a STRAT as without about during in was mentioned, as give context continuing not through performance. year, XX% the QX see XXXX. of we at Charles we approximately the And you as this -- occupancy STRAT versus So, year, July. But in out past,

customers that So in XX,XXX period of call deficit than at it, On past. XXXX. we from room are about represents that, the to XX% a property we in the the spend nights more same of seeing approximately top did compared

the pretty So at significantly see a and the spend, property actually. deficit additional nights continued -- from upside between that we room

versus rooms was property or booking our it's when addition important property In the approximately direct XX% bought that, we're now about as the of hotel to think program we X% X%. I it we

casino that so talked on, our our programs, full us and anticipated marketing past. a new by entertainment the those had as experience this trend, additional driving targeted marketing, what direct booking XX% property providing that upgrades to are offerings, spend, So enabled which and has generate is which we resort about had beverage through food we resort at in

now of You coming Resorts The where World Convention in we as is the will north be the Strip Center catalyst open. online. mentioned understand on online additional is coming capacity part the XXXX. Fontainebleau

close our are those property. proximity, of All in proximity to

believe that, for And about well you bode over numbers numbers revenue. are we in things those we can of achieve all So driving property that future time. that talked the

and along just has entertainment convention we activity Vegas So at the are full moment. sports there's activity in what stadiums. great described, I had with no no Las seeing results general no And

to are this the think of leads, the think numbers all STRAT again, So some discussed you benefit the we I of of achievable. and

David Bain

both. you, Thank Awesome.

Operator

Thank you.

next comes with from Bank. Santarelli Carlo Our Deutsche question

open. is line Your

Carlo Santarelli

you Charles, went in the each very your kind obviously Hey, clearly, growth. regions the in Thank across terms properties, guys. of and of performance the remarks margin impressive of you. through

eliminations from about how think whole, that a As how of seeing to Thanks. before customers those will the come And were just out are are perhaps ultimately relates than you business? kind of of that you much you through do upside eliminations, at on they cost margin if come that out higher guys think have of the any? levels just back, flow spending versus cost much

Charles Protell

Yeah. of Thanks, the frankly margin months look the get-go. And across ago. over this XX has our front on been businesses, deceleration or seen which asking the all Carlo. no quite since been local have in expansion from mean, reopening out even I side, in spend question the we we've

are look versus assets XXXX, basis at of year-to-date. expansion us X,XXX year-to-date our you if So casino at about a kind margin point

hopefully Much how is margin types add those overall and than of more of previously should point, So I keeping portfolio. to restaurant to dilute the think a going and add it add obviously, revenues as things at we shows bit, the much this EBITDA aggregate couple more we stay? we that thought, but venues a it will

Blake Sartini

I pure side would as as run we refine dollar expectations that additional pure Carlo, direct on to of add costs, standpoint. be in are food are meaningful our mentioned well we business. the do spend marketing our in and revenue spend. seeing are labor overall demographic, as in would costs will and labor those how we forward from increase into reductions beverage we a expect built business, to we say, But properties that seeing FTEs, suppressed well. I other as those as the through as that we the decreased and but lower a the STRAT And increases – are we costs I –

higher do more believe, through we costs and property. it's the as with anticipated So traffic even occupancy sustainable people labor grows

we those through built forward the into talked that mitigated and expectations, those about. have our I I As said, areas

Carlo Santarelli

cash $X sheet continue talked of certainly move the perhaps for of the per half could cash and back we Blake obviously guys have year. how about you I shape year in Great. will delever end if shapes reasonable. the flow number Thanks, to you one take achievable given And of the just year, as balance already is – The first share up free the the half free Give and Charles. generated follow-up. the and obviously great year the through as guys flow and or this a looks in

think of are and of some return the about you whatever help sizing objective dividend, As kind that perhaps, of a be? that parameters capital around capital special leverage shape what maybe might return that

Charles Protell

Yeah.

that. a flow free be higher higher $X for I in think than this share much we'll cash year than

think as And we we as go end our the towards fourth the forward, year first again of look we so quarter, leverage as we to – if point and into the think now the you about, the shareholders. get quarter those we're about in okay, spot capital expectation that's below to X.X To thinking the is right will times. to me really return ways be when start to

Carlo Santarelli

you guys. Thank Great. Okay.

Operator

Thank you.

comes with from Beynon Chad Macquarie. question next Our

open. is lien Your

Chad Beynon

bricks-and-mortar Good taking you question. talk would that And the piggyback be shareholders. other opportunities. broadly deploy I that kind opportunities some Obviously, to the there? seeing on you Can Impressive segment? what back that you're the returning would are distributed Hi. of, to the results side guys. if wanted growth then Thanks capital to about be there in more out Thanks. capital for opportunities Charles on said, afternoon. gaming of legislatively option

Charles Protell

I Yeah. more operations from squarely an casino in think see time. we the side, the mean, at point perspective on this M&A opportunity own within I our and

riverboat that frankly some EBITDA the So that STRAT would Blake the momentum there more portfolio buying that the the here. where our a at would little we with could Midwest could you do otherwise Blake, And point, and $XX we things add about we're to have does the mentioned, at talk quite that distributed? this not seeing in $XX we million do synergies, than may to want to do get we what million

Blake Sartini

Yes. Yes.

is legislation talked being Chad, in about So proposed. common jurisdictions, us our theme the involvement activity where is consistent there or from

We are very several jurisdictions. in active

we're been have in in As gaming some jurisdictions. time. for and you distributed Pennsylvania of well that My new belief deeply know, some involved will these is emerge

of Sometimes we states it believe that for But efficient it, time. here. will these happen an are tax it's takes it form some considering and revenue

involved we opening we may involvement new that of our these are continues So occur. heavily jurisdictions terms in think up and where

Charles Protell

the from investment say that's there spend that the now And greenfield just those we opportunity time right side, a Chad, time distributed little bit is on more perspective but opportunities. I'd very the very, return dollars take our than And may on on high. it of

So where what our cash Getting to shareholder mean again the we being leverage it's on to our now. with I table spend is and be the worth balance on right the on through value And deploying that able increase needs M&A, we time front. to sheet see that have it for of efficiently own the now. look to right us value it

Chad Beynon

Great. occupancies. Thank you. weekday is regarding My follow-up

began. at all You kind events of could much pandemic seeing levels areas the be half a levels XXXX based XXXX? maybe will the off looks of those year sense of still back Could occupancies be from commentary on XXXX noted one the the well you in get the you we've to other that seen, like operators? we're based rate But of of have I the do trends at of just conventions shows what that's that's same a by than better that some looking largest Las and STRAT. we're the back Vegas of it terms of on the some we data guess and what since hear

Blake Sartini

Yes Chad, absolutely.

think I absolutely.

in basis. the to our calendar levels expectation which were a low XXs on Our XX-month back would be STRAT, mid- historical at occupancy to

challenging those X,XXX outdoor Strip I right the the to add and we within you value Charles seeing between have and XXXX. ran we – And LEC, drive rooms this QX Laughlin during fall, where would ability where have our that in XX,XXX levels which additional occupancy factors XX,XXX our quarter portfolio towards of strong. mentioned we to midweek we six generate which so in XXXX of Laughlin, to will events each of for those booked XXXX due properties historical in have shows increasing the at the Weekends events are you did rooms. occupancy the the people our terms shareholder revenue mentioned. definitely than and are capacity we're to nights own room yes, fewer we about again has been

So both to occupancy levels back coming markets. those those we anticipate do of in

Chad Beynon

both. you, on Congrats quarter. a Thank great

Blake Sartini

Chad. you, Thank

Charles Protell

Thank you, Chad.

Operator

Thank you.

Our next from question Jefferies. comes David with Katz

open. is line Your

David Katz

you ask Hi, talk has benefits impacts for good about of so the at can that the far some we've STRAT on I that cranes everyone. any Congrats been or go since Are quarter. just off measurable opened? sort watching afternoon, to those resorts time. quite that wanted about there

Blake Sartini

question. David, now right The honest is a no. that's great answer

this have not has information corridor with along been is is pretty robust. World which STRAT which us maybe that the up between traffic One Resorts and at literally more factors allowing Vegas construction, Las the Strip is really impeding that of the to is foot point normally torn

north end put a along we So up the up impact I the also World it understand traffic clear the that now that towards has Tower of helped the highly cleared within help absolutely online and will walking am be Top it will up. the those has that to restaurant, been the will when the and traffic deck major there. that World in walkway in year. of by as and capacities That rides, operation, up. clear cleaned foot in It future gets particularly front of once comes of the the Resorts Fontainebleau, STRAT confident will of hotels the and those things those us, view the kinds STRAT greatly thrill resorts corridor

David Katz

that? it. And this finding in different of three of some Strip companies discussed. which talked Got but opportunities And four Is or or a how I – far between know perspectives you've I far? yourself Charles, and of Las should how boundary? possibility? the presents times, we acquiring Is Perfect. just is a properties know property about too Vegas to want you number a outside think from inside range about

Charles Protell

on evaluating would little say, in pole, special second. I'd through is shareholders priorities, buyback, to totem the a I deleveraging top returning totem capital the dividends is lowest. say, of the pole or is low Yes. M&A probably further bit

for have And was say so with we involved we sure long it a very that to how meaningful be there pass was distributed look perspective, up from in where be a greenfield third. re-rate strategic at that our we're of synergies unique fit if and to couldn't in size been is that scale strong, Looking that. at had I'd today. M&A we'd an has opportunities, order But operations have or at to we to something terms markets we've time, looked

David Katz

the just pole on barely like, at Sounds it's all.

Okay. appreciate it.

Charles Protell

now. For

For now.

David Katz

now. you. For Thank Appreciate it.

Operator

Thank you.

DeCree Our next question comes CBRE. with from John

open. Your line is

John DeCree

you that Hi Blake. about the of Thanks revisit the investment. your for the Wanted some taking and STRAT's on question. made ROI comments seeing to my Hi you're performance Charles. had

if you wallet more wondering, shares. you've and Blake, little XX% think did rooms. bit. spend Charles know a I to increase I talked was could a guest I elaborate in capturing you

with that the a historical customers? occupancy, seeing obviously in we're you the pricing ROI. power are are the but job curious, just seeing increase Where where Is weekends the casino room great not to know, back You been given did floor. spend I activated Just floor, you have from renovation? you're more? -- we still seeing the on XX% casino some

Blake Sartini

Yes.

we're of where a but established So, strong rate bit weekend programs we're in seeing would seeing I were casino portion which we when robust John a that of casino program. a in rate, anemic, were they and marketing say. marketing mean obviously the I the bought -- significant that particularly We've casino, our property,

operations. would than we mentioned, put direct booking now to that That are allows looking in in direct We're customer our there, I increase. an the As OTA rooms our an which rate. the spend for booking more enormous customers it cheaper F&B a money XX% just is seeing of occupancy us

We're great literally We're and seeing dining full significantly our of at night. outlets in and casino. Our a experiences than in Las the is there. every beverage upticks -- past. upticks food restaurant one profitability higher and experiences of We're seeing It's in the running great Top ever it Vegas. World revenue the has greatest the

where spend. areas we're the within in it's this that would primarily, you of think seeing increased So terms

Charles Protell

touch casino of see let areas that's their place was spend a I mean to Las what touched but you the And terms feel all We the if our dormitory play, a more people floor common we thesis John, go versus in rooms, of add. would a number just with stay recall in of property, did really and primarily up I F&B, spend. the the did do the the all to attractions to significant within the happened. using all comfortable other where spaces money could And as Vegas. floor, they common

thesis in our are we on from is expectations. perspective, working is our our and that now a well excess clearly we that So profile return of investment think at

John DeCree

little snowball us something Thanks, flow help I We cash cash interest bit guys. in year about remind opportunity here. above free then a could to and be? us, normalized one think looking cash And maintenance generation? you from call taxes meaningful And like maybe Can more, perhaps the at Charles. think earlier be expect look what looks it you we're as a and frame strongly and might $X trading the X.XXX some talked this well. might then, where your I an for CapEx is very bond Maybe savings like

look Just help what trajectory a give cash free of kind picture of here. us of from like could the flow

Charles Protell

April Yes. the that focused is And year. It's in radar bond first date deleveraging screen, which is is on and in on be to next reason callable near another call of the term.

the bit far components, million interest this of be the that's little else, got QX. million expect flow NOLs but as lighter we're as be be right now, business forward. As $XX annually we under and which $XX cash coming balance million the million on quickly, sheet like to to our to a delever $XXX about expense, we as maintenance, We'll down a in where between everyone in $XX the year little future. be going will We've cash intended we

that we as years. sustainable, be it's to in number. going not a the to taxpayer a payment not next get but for a tax a the half back we're think performance year, meaningful into few We So, levels bit see of are we good may position of given be little of a

John DeCree

Thanks, so Thanks Charles. Perfect. Blake. helps, much that,

Charles Protell

John. Thanks,

Operator

over showing questions I to any like time. back would to further at Thank the now call for remarks. management you. turn this I'm not closing

Charles Protell

next us, and forward quarterly joining updating you call. we you Okay. at for our Thank look all to

Operator

participating. for call. you This Thank concludes today's conference

You disconnect. now may

Golden Entertainment (GDEN) 8 Aug 212021 Q2 Earnings call transcript