GDEN - Earnings call transcript Q1 2022 | Golden Entertainment, Inc.

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Operator

Good afternoon, ladies and gentlemen, thank you for standing by. Welcome to the Golden Entertainment First Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note that this call is being recorded today, May 5, 2022.

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

Joe Jaffoni

afternoon, Good and Kevi, everyone. Thanks, is On Chairman President Golden Officer. Founder, Sartini, Chief today’s and Executive Financial company’s call and the Officer; Entertainment’s Protell, Blake and Chief Charles Safe make Laws. statements will Federal we call, of the today’s under On the Harbor provisions Securities forward-looking differ those contemplated may statements. in from materially results these Actual

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

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

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

questions. to Charles Following please take will it’s your that, to over that, call pleasure and Blake Protell. ahead. the With my go Charles Charles, turn

Charles Protell

Thanks, Joe.

Casino XX% our record EBITDA for into and COVID entertainment rose at properties, well a higher at spend volume of increased XX% revenue and XXXX venue increased These million, well strong in from from the Nevada higher the reflect million. continued quarter our periods. XX% despite gaming January customer STRAT of year. million to margins XX% STRAT, of EBITDA our of on, $XX meaningfully adjusted cost demand year, We year-over-year over our $XX concerts cost. improved very local as up from year. and to to and first STRAT’s weekend distributed Resorts labor impact continued overall to has to QX pre-COVID Margins and XX% saw for return as levels due Revenues The at maintain up casinos to revenue were lack ability EBITDA last driving the in which in locations midweek $XXX occupancy primarily in to of million QX The of were excess and XX%, slightly, down up results with Laughlin, continued structure, respectively, XXXX, strong visitation destination Our last the performance large-scale and occupancy. to quarter the compared mid-February in last The $XX

is occupancy entertainment In Although concert to XX,XXX which our for year. various tickets quarter. at of are we older the midweek events almost to over also points business increased of return return recovering, our missing helped The sold nearly we’ve the with XX demographic STRAT, we of expect in live rest core return the visitation drive still the properties. Laughlin, seen And

the XX,XXX a of We up great having with already upcoming QX tickets. entertainment have in for concerts sold year, lined over remainder the

rose Casinos, to and in revenue the Locals employment Nevada properties. demand local sustained of EBITDA For our state and home created $XX of continued to increased Las Vegas, $XX million at the X% new million for from X% has out Increased residents equity appreciating influx quarter.

has which a see environment increasing success promotional to in market, to locals maintaining contributed costs. despite margins continue We rational our the in

added slightly revamped In Maryland. our quarter, our all and rooms $XX the to renovated up We $X.X million food to was recently Resort, XX% Rocky up revenue sports offerings margins a and for million Turning to EBITDA Rocky lounge. with Gap XX% up at volume. increased Gap, was the gaming on

and QX. summer property quarters of when is ready is the So XX% EBITDA the for than QX season higher typically winter the

from margins Similar year. of costs modestly last to operations, our were revenues X% Distributed QX to the impacted our increased rose EBITDA and $XXX Gaming $XX were million for up million X% relative to casinos, labor For year-over-year to quarter.

has In recovery Nevada, macro continued of for and a January Our casinos midweek early metrics particularly for by business, in tavern drivers March. Strip business, our as quarter. affected are distributed our of led as well opened in top win driving per XX-owned were a for February, February, one most and taverns Vegas. growth has rebounded drive operations the our revenue Vegas. Montana in helped record our night this The quickly late EBITDA same weather taverns, Gaming nicely which Distributed And Las at to performers. Las part located of locals northwest but the we This are based increased unit the in become this new which on of results,

million and billion. in approximately Moving $XX we’ve $XXX $X our our to our our beginning total is repurchased balance $XX we to debt liquidity Since outstanding capital have common million loan of cash, $XXX stock. stock. to $XX our Currently, sheet. debt In ended million outstanding term down we repurchasing the plenty our of the of continued more of We addition to million approximately stakeholders, quarter since return paid our December, of first million XXXX, than repaying QX, of $XXX borrowings on with than our revolver. of more with million no

at we Directors a focused $XX the capital million returning to on week, leverage to all program. continued shareholders opportunistically expect To support share that, repurchase reauthorized net this X.X our of Board across times year. the remain low and our this over strength Given of our course properties,

at and continued Our strong signs QX operational QX properties. into of slowdown we in of our no any see has performance

flow maintaining Gaming the gaming Southern most That Blake As primarily we view today. have generated the and our prepared destination remarks. our questions. We we wholly-owned said optimizing remain of and as concludes locations. before, our available I core in for are Nevada, now business, resorts, upside the stable on Distributed gaming our in and which from world our capturing local focused properties attractive market performance the assets while is cash from

Operator

is ahead. from go Sander Omer you. Thank Instructions] JPMorgan. First with [Operator question Please

Omer Sander

question. Hey Charles, EBITDA on thanks A taking and for Blake, question margins. my

the of think labor inflation about margins the basis aggregate quarter; you versus on XQ dollar in When clean and for any How have about on impacts? the of “call those Your consumer impacts margins were COVID it some any there strong is pockets your any basis. absolute up a think of, XQ two, nicely very about? quarter” pressure, one, an your you talked early weakness peers do on and sequential without EBITDA a

Charles Protell

if largely international look look, Yes. think January in at I you and Omicron the all. CES to to I travel. town just impactful was the mean, early lack not and And February, that was of due

margins. be So $X basis, in to yes. EBITDA if The $X you obviously our could on And answer a we thought benefit higher? million that would million is normalized

Omer Sander

just Awesome. Thanks. different topic. maybe a pivoting And

Does owned real estate expertise you think your real more some Board that have about how You estate under change portfolio? now. your

Blake Sartini

Blake. anything a This to to but value no, to is underlying provide for regard Omer. the which term we in that great our think shareholders. viewing Yes, or significant signals background, with continues our his Andy portends are our estate, short in don’t is how addition Board, real obviously, I

is, remains So but the answer right our same. Andy, short the we our real now welcome estate approach to

Omer Sander

so quarter. Thanks Nice Awesome. much.

Operator

Carlo Next Deutsche with ahead. question from Bank. go Please Santarelli is

Carlo Santarelli

The of not. the it kind up the Charles. bit first guys you to period? think revenue comparable occupancy With Hey year-over-year. hey The kind are STRAT’s where contribution you From Blake, of in slippage open, perspective, under of mix Charles does EBITDA [ph] of little standing quarter obviously, to ultimately rest that with With punching, margins STRAT, when margin mix STRAT of end it are and lead think a comes will that talked the about that the in will a I get you what portfolio? of and back some

Charles Protell

the labor because comparable not closer, gets higher. costs it think I are much there

properties. other have employees in We there categories more we our of do than

more from have We have outlets. entertainment food employees more products actually we’re servicing that and and we to beverage there

but be overall to a as bit dilutive it think it’s ultimately will to margins I gets – busier, get it The we So, the STRAT the when through little year. accretive EBITDA,

Blake Sartini

is are with – And capacity as the and getting numbers, we’re relative the right? are bigger white said, with even capital We’ve punching those the experiencing very recent Charles space happy we’re we’re a term, midweek. property on Those investment that at our returns Carlo. current mentioned, in under

property. significant We’re at seeing growth year-over-year the

But that are in into of regarding to the punching back our wanted invested. accurate margin just over on going think is I return that, we I discussion So, terms the forward. capital we weight Charles

Carlo Santarelli

Thanks Thank to that and Charles. answer. you, Blake Great.

months follow-up. your was of we they that to one have all margin. like, – that anecdotally very generally It generally do, they’re margins. that for look, me probably stuff to ago, one all like all mentioned that, allowed, stuff and going of that peers Just be going was and With things XX gatherings helpful are to shutdown, events cetera, the et were not degrade like group

stuff dollar a margin it’s From dollar an standpoint right other you that still bringing little in an But back they’ve standpoint, standpoint, makes understand sense obviously out they from that I a dollar, little competitive Laughlin been. EBITDA are that more be dilutive. standpoint, gaming of mentioned of concerts with bit entertainment bit could there? a So, from where kind in environment the and a forms driver there, the does the now guys always

Charles Protell

our which clearly those XX,XXX right an us, for that are speak event-driven a across those to on we weekends. the drives is amphitheater, directly into the outdoor properties street. only Look, seat we bodies can Laughlin, market which events, after And have

line months, well. acts the up a out perspective, and into our already from have fall upcoming are as mean, we the is have that I yes. sold So good the answer going in we’ll

seen to market. back excuse we’ve core get into pulled drive demographic giving actually been the to that’s and the that. our reach back them out and It’s It’s of So, back them some us missing. out

perspective, So absolutely, margin from it’s an if for accretive the perspective. is a absolutely diluted entertainment EBITDA

Blake Sartini

between a is gaming that revenue There in Yes. market. attendance entertainment, direct correlation and

Carlo Santarelli

guys. you, Thank Great.

Blake Sartini

Carlo. Thanks,

Operator

Cassandra open. [Operator Lee is Instructions] Next question line And from Jefferies. with your is

Cassandra Lee

And you around month. just a The talk I you XX, my for for afternoon. running million per moment? was $X the guys STRAT team, taking were good occupancy we few for Hi, of think about a quarters can ago, question. pushing when EBITDA remember the I Thank low-to-mid one

been what wondering of looks side. for operators; convention I for entertainment Strip the on Just bullish rest think like other from the And they’ve pretty year and the the that also, commentary the today?

whether push wondering $XXX The could EBITDA like So, week. above million potentially in STRAT

I people before. have think we or it few

Blake Sartini

Yes.

clearly in going The poised significant growth forward. is STRAT and in So our EBITDA our for portfolio minds

might bit. quarters. I running little lower a memory challenge your were midweek in occupancies think, prior significantly We I

of rate in an resulting We run around think, $X a million XX%, occupancy currently. overall are approaching, $X run that rate that’s and now million month XX%, to I

believe We center pretty tide what the now the returns the hurdle capital of those along our property ships we some of additional million very fully realistic being think in that and million rising I achieve will and million with town to seeing marks we process budgeting what convention come $XXX confident, the the can conventions that the the utilized, We we’re to and in high with targeted all And $XXX at travel now. that results. then get and And are both forward. international experiencing kind that returns. going mimic where seeing would towards $XX attendance we’re see is additional that to

Cassandra Lee

Thank you it. very Got much.

Blake Sartini

Thanks, Cassandra.

Operator

is from Beynon with Chad go ahead. Please Macquarie. Next question

Unidentified Analyst

is Thanks Aaron on I on my wanted for sequential just this Chad. monthly second. Hi, for touch to taking for a question. trends

operators have Jan Omicron noted sequential in gone it like and April? other into I’m March March well was that there with effect as you improvement how You seems saw that’s trends a and the strongest. curious if trend the from based being on

Charles Protell

QX I where right, off. Like mean, said, picking our QX up, left is I

there. March saw month-over-month. our growing no no anticipated and So, trend, STRAT big Again, again, a and same we’ve show with And February into seen meaningful mind. to growing right improvement January that we April The slowdown in is February, continue slowdown into

us others. look to has has at portfolio, locals. trend it with bit for it like we you I’d say that if different exposure both So because is that a our have little the continued

taverns asset. the we have and have We Strip

steadily that growth while town are very Strip, to quarters in been since from Rocky to to local people and you with has the as the that very, upside here Gap most traveling, destination if properties most look, reopening So Laughlin, not spend property, ago. only but strong perspective, continued get the seven back our has our showing into

Unidentified Analyst

Great. for Last me. Perfect. one

thinking like Sports launch potential this you’re Betting, you Is could looks that next potentially can about color they later Just how Thanks. year, share year. there opportunity? on any Maryland online on

Charles Protell

wagering coming as us, company. do for for of at for property, wagering the what able to really already to the Look, they opportunity operators. a guests account our we untethered from But it’s come sports have to bet before can’t lounge much games or from have they they have of it, may unbranded think and to it, have watch use are Even a if us, is an our frankly, which already place quite our they about established. and for We online sports any placed the of to guests an out a perspective. our where amenity sit, use property. don’t be an Many really they state,

know I it as us has directly from Maryland our is and of to the visit I been view driver property, that they out But when smaller, in for asset. a hoped. a has that gate, don’t we state and to But look, do is the think little So bit a something bit customers, big us everyone slower they engage our come other states. it little in which

Unidentified Analyst

the Okay, you. quarter. Congrats on thank

Charles Protell

Appreciate it.

Blake Sartini

Thanks.

Operator

go ahead. from Next question is Edward Capital. Roth with Engel Please

Edward Engel

events some quarters basis summer kind it still the back Is the guess, of market-wide my you for or even in how quickly looks the It of you perspective? taking I ramp Vegas? versus where event kind a of up pretty thank lagging a to were could market? couple like Hi, could from of to slate on for significantly down schedule pre-COVID, get visitation jam-packed, to Las question. those is Laughlin take you

Charles Protell

keep Ed. Hey is part us. of because Yes. just that in mind, of Yes,

So, we properties open three had pre-COVID.

gross opened. of Now, that out we And seen our look from just at have purposely we’ve we market that that were are gaming database to the have called two a of if end you it’s lower the perspective, business. that revenue really what

generating even gross revenues. unprofitable us, to the is gaming though but segment So it an was of business, that

perspective, think healthy. the that very is from So we market

Our the entertainment COVID things. concerts or was are on our they the very customer the bringing And other reasons there frequency, now. did properties sidelines and are higher other that right core higher spend right, worth, healthy enjoy has back because higher for been that

Now they’re coming back.

we of seeing already that we in sold that, just we lot – the going are Like is momentum in throughout anticipating for I almost what upcoming had we we’re now. already QX. have QX, And mentioned, tickets So, it a events double continue to think year.

Blake Sartini

cadence, fact, part that in of a part driven. of entertainment seasonal is large And it

As you know, warm. very down summers there the are

tend also it be we visitation. high – to for tends the season So,

will keep enclosed down that’s acts for a So, venue, the seats rolling entertainment and back pick there But venue XX,XXX-seat have in good venue momentum fall during we through X,XXX XX,XXX-seat smaller there up we’re summer. our we coming. larger about the the good that to seeing for

it through I And the own the in just up. wanted cools climate. Once management right somewhat back to a we summer, it’s of our point so make pick provide down, what to entertainment will due that

Edward Engel

tier And Thanks the you that I about But kind I just how just consumer lower guess, commentary been of Great. customer? phasing end I talk, you or theme in of kind of give for just softening that know out segment. any kind part. guess phased kind the you’re of of about about of you lower kind color. recently then has some there talked

Blake Sartini

there’s think more don’t much I Yes. commentary.

point that our approach end that I called, the I database. that lower have into or is think, experiencing limited we’re to think I Any that reinvestment we on what Charles seeing. that would made level, change from say, of we’re due marketing the

though, addition, are sign-ups significant our seeing moving new Valley. sign-ups I would add into we community from rewards this In that new the into coming program, residents robust in new

while forward, lower we of a providing growth marketing end database. the lot retool that’s of for going so fuel And that

Valley database Charles as been grow with called continues design, we’re word residents. sign-ups pickup end significant lower the our of of new seeing So, and in to that that has by used as kind this

Edward Engel

Thank Great. you.

Operator

Protell comments. I’ll turn There back to are closing questions. it for Charles no further

Charles Protell

quarter. everyone, forward to call. look Thanks, you updating next And we joining our for Okay.

Operator

our and does for call thank participating that you now today. conclude can for We everyone, disconnect. And

Golden Entertainment (GDEN) 7 May 222022 Q1 Earnings call transcript