Earnings call transcript Q4 2022

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Operator

Good day, and welcome to the Golden Entertainment Incorporated 2022 Fourth Quarter Results Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Mr. Joe Jaffoni of Investor Relations. Please go ahead, sir.

Joe Jaffoni

and everyone. much, very you good afternoon, Thank

On Founder, and Chairman today is Officer. Charles the company's Blake Sartini, Financial and Chief the President the company's call Protell, and Chief Executive Officer;

will this the from of laws. those make On in securities we forward-looking under statements. harbor federal differ the may results these statements Actual contemplated provisions safe materially call,

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

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

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

take and your Charles that, Following will Blake question.

my to to that, With call ahead. Charles, please over Protell. Charles pleasure go it's turn the

Charles Protell

Thanks, of revenue QX and Joe. our second highest by in only solid QX another history, surpassed We EBITDA the XXXX. quarter, had

For up million, than of XX% year the million still of revenue period. fourth but the higher compared XX% revenue lower and significantly that than EBITDA XXXX, last to of EBITDA with quarter, quarter delivered and we $XX $XXX up

pandemic. record properties the to annual EBITDA up the highest year, For since XXXX. of $XXX other revenue generated highlighting at full million, than year EBITDA XXXX, the of prior X% our second customer record $X.X billion, full we on over our generated strong year spend We

and were payroll margins largely higher XXXX, expense Relative other inflationary costs. by to pressured

XXX-basis-point our our XXXX, and is year operating However, up full improvement, XX%. relative maintained EBITDA margins a to

the we breakout of vast will distributed This Montana specifics owned derived the of Gaming of in Before portfolio third-party results within and our results Vegas the now is revenue on detailed our gaming be out casinos breaks our branded tavern continue total release, both and operations reported operations, Las getting segment Distributed Nevada provides tavern in taverns. Nevada-branded majority largest The reporting on into our operations. further our and that that to segment. new press our our more for from EBITDA detail highlights and

STRAT we Within results year additional to make segment, our X Further The our lower less contributing Resorts revenue up where had in EBITDA mostly X visitors properties to adjustments QX less were resulting flat assets. fourth our to compared segment being level the to for for incurred largest with quarter Nevada our the with QX, at XXXX. the to labor X Laughlin Laughlin the These mostly across saw portfolio. labor concert, million had last the comparisons to XX,XXX costs property of in and $X.X in market increases we keep Nevada Resorts approximately Casino the

first more we XXXX, in the should have XX our already of booked which half than properties visitation For to XXXX. Laughlin events, drive

while revenue QX the at XX%. The to At occupancy XXXX of quarter, remained X% STRAT, increased for comparable

decreased gaming by which from our addition away to In decision revenue, move [Baccarat]. impacted margins local were driven costs, increased was labor negatively to by volatile

have attracting and from out database levels diverse retail focused building spend guests. more We since a higher player on

new card We XX% recent efforts success have in seen these January. some with in sign-ups up

at STRAT. see The still improvement of lot potential for We a

through. the EBITDA XXX,XXX million on the million room and of of occupancy midweek over margin XXXX For relative maintained implies potentially XXXX, close $XX to year of spend missing additional property almost current midweek and based XX%. rates, when our nights full to room $XX revenue This guest we're still flow

from Formula of levels as as closer and anticipated continued XXXX the international in back the well get occupancy the to travel expect conventions with We benefit recovery half to XXXX One. of

revenue still last which increasing X,XXX Our year EBITDA the and year's Margins Nevada last up at QX is local numbers. record quarter, from over and casino up remained for slightly strong points performance, basis saw year-over-year XX% XXXX. continued over

the to improved performance a economy and Las Our continued of a in Vegas. stable resilience local promotional environment is testament the

Nevada revenue reflecting and in last we tavern last EBITDA XX quarter compared year, our portfolio. fourth was For from the year operations, locations underperforming QX operating down as some pruned to XX from

as and We that the In costs. tavern extended to saw we players portfolio we continue intend the out fall to can holidays adding believe hadn't XX locations without some resume COVID to travel XXX tavern seen infrastructure addition, additional trends get for in seasonal XXXX. our the in coming grow and we top of

to will X least have of acquire additional X year. we at be added the all construction, tavern to have year. will end, that to We which And to this X X under portfolio taverns, per target X taverns new agreed

EBITDA Total third-party revenue compared last flat slightly. increased distributed to year, was while

market operations third-party over inflationary Our results and of the states operate the model in we our all even Nevada spanned distributed and leadership our the an in across distributed X,XXX reflect of Montana, where and environment. stability locations

year, Turning weather to both were primarily to prior Revenue impacting and visitation to Maryland. in due down EBITDA December.

sale January the and $XXX with and of We implementation expect have Rocky we Last end the close property. more our moderate second for seen Gap to August, the system the for the announced of visitation quarter. revenue by management weather with of rebound new million the transaction in hotel

ended quarter outstanding revolver. no million years. our million and our notes, and QX, $XXX we retired balance total debt $XXX fourth approximately and over In our cash is to in in million on $XXX $XXX million and X unsecured outstanding repaid XXXX our million repayments $X to $XX Moving borrowings last the our million total Currently, with taking of we debt loan our nearly million, $XXX of the sheet. term

XXX,XXX repurchased We shares stock of and shares during quarter in the fourth million year. common the full X.X

repurchase $XX remaining share million had we December, our under of As current authorization.

the current majority leverage Xx sale believe to of Rocky flexibility real debt. using strategic estate maintaining low our alternatives capital to to anticipate own shareholders. of owning our maintain maximum going and return assets, provides in our the and intend forward. leverage target, Gap proceeds to is leverage explore X.Xx, that support reduce invest and from We the net Our we net To we below

XXXX, our $XX the cautious CapEx we of pandemic. spending were In as approximately million out coming totaled on

XXXX, about we and at for prepurchases year CapEx XXXX. $XX at million CapEx, $XX the in renovated which some restaurant about finished STRAT million a spent of Asian included for The For suites, new anticipated

So our normalized CapEx million $XX per for the is about portfolio year.

a renovate intend Bowl. the more business we more The and to Super to In product FX citywide XXXX, demand competitive STRAT from and provide capture like at order in events rooms to group

X,XXX XXX completed in the which be the at bring corridors out XXXX. X,XXX of the total currently suites are $XX that rooms hallway with most have renovating of rooms half expected of prior renovated The rooms, property, first the areas, We others at STRAT acquisition we XXXX. and additional our having been our of in year approximately the in in will cost to This pool of should to updated million

XXX-bay In addition, Atomic under we excess a our STRAT new facility on golf million opening that The land entertainment Golf, are $XX behind construction in QX. to is targeting

are project. we not Golf, Atomic cash capital contributing to For

the for land lease only project. contributing participation in revenue exchange a are in We

property add We to of $XX when approximately EBITDA million expect projects XXXX our complete. the to STRAT annualized

target uniquely to Vegas. Additionally, development Taverns upcoming we adding from Las to with are in are a the pursuing residential benefit with opportunities Las new locations positioned actively we investment. modest of Vegas growth tavern areas can since

XX% spending million acquisitions to in allocated anticipate anticipate identified previously sites XX% XXXX, to we We a which tavern our tavern For $XX $XX the building acquired with locations we approximately and new million XXXX. return investment. development on and X already mentioned, are on

$XXX in at $XX expect We total CapEx and The million additional growth to taverns. to including new spend a the our XXXX, for million of targeted STRAT projects

see COVID material environment. did slowdown CapEx in the as We we to will a be should able reduce we post business

significant visitation the operations, strong the achieved margin Nevada, we improvement healthy economic Given future positioned Southern have of and in our sustained for in company conditions well for Las and outlook is the success. our Vegas

concludes and questions. Blake for That now prepared our available I are remarks.

Operator

the Riley. from [Operator come question with David will Instructions] B. Bain first And

David Bain

higher that you, You've the doesn't on union kind this already of increases The later be issues Great. that negotiating I seen be XQ guess, just clear, firstly, chains in impact? that noted, of will year, directly the impact you Strip correct? labor some profile to that

Charles Protell

be our That's assets. The others. We that will of have that of a do within Union from one derivative not the Culinary one STRAT. There but property

but an part our is and those it other smaller important workforce of mentioned. of you So some labor companies

Blake Sartini

further Yes. clarification, for And just maybe David.

labor a strip think I at a our STRAT downtown a contract Charles with has between The hybrid and contract. the contract is mentioned union force

So not the South on mimicked in past, have what our they Strip. do the terms

David Bain

on. Maybe stalled some Maybe Great. a seems wrong one of kind I bit. there. here. Okay. to little expansion for is the And it Carolina still North distributed guess have like new potential markets I'm choose

sale, But you're focused. could the you jurisdictional Nevada growth, that. tavern after Gap almost If in all and Casino beyond help with the Rocky Nevada

taverns. and initiatives growth reviewed You

How do valuations strategically you sure there. companies, appetite reflected it's here the there's are out in segment, Resiliency reflected I'm appreciated. distributed M&A or at this maybe but point? that not I view segment other mean

So there this kind do we if look alternatives? question a picture big Just Are division on grow to could. business? I of that

Blake Sartini

growth share in we had not originally a which the jurisdictions at obviously met your the Yes, pace question. that these great it's anticipated. new observation And we has

support is of you of the we distinct will. distributor actually you operate so which distributed rails owned we in portfolio assets, our with non-owned or look locations route separately kind And at our One X in third-party if if operations.

Gaming, or other in That operations be in are which, Distributed that other Pennsylvania be certainly Nevada, states, can frankly, others whether the transported. currently owned we're our model could here is The be aware of it Illinois, which of. side to side tavern wholly involved transported

the your are actually tavern we focused continues as in some and to here terms we jurisdictions at the see portfolio, the is that on, pursue growth And of open we the Nevada work with per begin units question, looking to open extremely we on, Distributed pursuing, side particularly to pace an of believe, we new or well, area of terms growth in that machine the obviously the up us in pace in up to the answer do franchise. the -- of side so in should business. potentially where Distributed opening, are quicken would that outperformed leading -- business Specifically,

question. good So

the at owned are distributed of We it, on and our we in portfolio. we're We're wholly side it. like focused to where committed

Charles Protell

Yes. third-party stable just that. up. add And the to they're quarter, quickly results Like you look fourth if in I the would to very at

with that that agree model, in really resiliency markets. highlights underappreciated of and mean I So we you. It's been the public the

David Bain

I agree. Yes,

Operator

Bank. question Carlo come Next with Santarelli will Deutsche from

Carlo Santarelli

is strategically, So obviously, the out the split you Nevada same anything it lines disclosure helpful. question, but more to splitting just going there Gaming. but prior of help out from kind guys taverns I'm can't is along right now? Obviously, more of David's to But as kind of go to notice, rationale the decided Distributed

And the maybe when you a is give feeder think for a throughout than sensitive bit about as strategically a little that you we tavern for? more credit Nevada, guys business

Charles Protell

Yes, mean, I look complementary treat to portfolio. mean, in our at the such. the market obviously, I local portfolio Las rest to a that's local as think it's scale Vegas. I as the taverns, And predominantly if -- business, size our effectively casinos them you We that mean, such. and so. we is I of players Look, the good-sized of

We programs. casino have our them with integrated rewards

very, ultimately, from the service if we EBITDA XX% both the difference perspective, a between look it's for and a our there's than I others. perspective, of So think we overall to property But again, Distributed control certainly very business, think the less at you We operations. third-party that that do the try businesses well. businesses I

business the company But this is, when look it of public the frankly, at maintained the our business for than operating start within in. we opportunities, today. states sits that we important here portfolio, us -- in we're the growth It's versus the where distributed the within -- have rest you more the see that units opportunities of in than other it's quite third-party

Carlo Santarelli

million incremental $XX just regular provided, STRAT million was the that was project. million? taverns of million million then on Great. it And way $XXX The spend. million to $XX kind Is maintenance It the to to $XX rehash $XX you'll you to get color back to $XX to accurate that circles and the that that then on

Charles Protell

Yes, right. that’s Yes.

Operator

next come Your will with Cassandra question Jefferies. Lee from

Cassandra Lee

how kind estate But the between maximum public marketing owning Charles, thinking the said PropCo about of and leaseback? are your given sale that pursuing you market, kind valuation real gives just misallocation flexibility. of you private of OpCo, you potentially

Charles Protell

you owning capital I our with Well, own the estate right peers, think on leverage as it as we your assets, look well I some of as now, at to to you shareholders. reducing about well optionality. as actually as think returning real mean in cash own provides execute us if your investing flow

if rent were where on that a would you'd I annualized be outstripped M&A, scale larger far increases at more we think potentially we pursuing synergies be we see that it'd basis, strategic that portfolio or looking were an something the incremental earnestly. that

That ultimate the value I not the the being we an our backstop of from said, will extent the to there's appreciation of that estate. consider that's expansion company we in And underlying strongly. perspective, something that in time are see over real that to I think shares the embedded it's able the a multiple value more to think

Blake Sartini

flexibility. by this I maintaining said what to have balance owning plenty my like estate to those as said drive just comments his believe previous our targeting ultimate in a prepared of and to that opportunity Xx Charles that's flexibility remarks, on levered, the while reiterate in I'd us few I other And real real us value add previous within Yes. Charles, last estate. sheet to And gives in owning our than of offers comments ways calls less company own

So well. very I think Charles that outlined

as there's with kind as look sheet estate point Obviously, significant this But optionality us the where or of sits, balance it for real said, point. will. company at time, Charles ways you this a believe backstop there monetizing value our -- to in we at without drive at we if this

Cassandra Lee

very us just we since -- M&A, mentioned M&A has kind at since all spoke? dynamic? how in quick there been you may I what you strategic do tell if up come And of last you -- a can change any valuation observe the Great. have industry's follow-up or down went Has

Charles Protell

I private valuations the think the disconnected still valuations. that are from public

now private value the longer-term where you in the multiples view transactions, public given think in marketplace around i.e., right private the sector. we’re taking I seeing see that are a markets .

And that is continuing. still

transactions premiums the see still you’ll are trades. that current at accretive or think I sector to where

partners I think still be rates despite strength this as consolidation a view business. will higher longer-term take private and there the in sector on the of strategics

Operator

will Deutsche from The Chinchilla Bank. with next Ricardo come question

Ricardo Chinchilla

of take decided the be Or out repayment? debt proceeds out planning are capital any you you mentioned bonds guys guys to on sales how from Have guys You some towards the fixed guys that end the the year? of used debt. taking potential and structure the will how mix? -- the thinking the about are variable moves you Do changing versus debt

Charles Protell

early mean, quite We've Yes. thinking it I look, I think it's that. little for bit. a certainly a about been

around I more closing think we when the Rocky specific of timing the have have on on we'll color that more Gap. visibility

question want say refinancing for time. I a a in company having right discussion is about at way, make doesn't any to, it's can less-than-Xx-levered the or a a company refinancing would we optimal do form we it about shape the what that the

Operator

The John question CBRE next come will Securities. DeCree from with

John DeCree

gave a XQ, where I to maybe prepared where if But circle was we think you rehashing you XXs think remarks. wanted wouldn't your little to 'XX occupancy I color Charles, in your you there. I XQ. bit in calendar obviously busy mind convention and back STRAT. a to The view This high pretty and was on of getting in kind have said year, of back

in for bookings bridge pretty on So some you're just XQ. maybe convention looking occupancy recovery busy and at what your and of forward-looking a like the commentary how kind looks season

Charles Protell

sure. give will I'll that, Yes. and you of that, Blake to add overview an I'm

the at really midweek. the occupancy ended So -- to quarter, up where very comparable difference I I But about year. that XX% we think for mentioned weekend were is see comments versus when you what last the we

weekends the the less we were basically during running and occupancy week. XX% than on So full

about feel the were this we renovated. saw renovating from into are premium we to that And a rate perspective, why and getting leads like batch. we're We we comfortable think a I we through rooms that pretty where should those where rooms. $XX We're more that heading. feel $XX on first be we

think to to coming benefit to conventions FX more well again, order Super from we drivers traffic product that. we Madness to prepare to March aware have these so in town that competitive that a everyone into for of need Bowl to And is big from

are around midweek missing XXX,XXX XXXX. nights specifics relative what The room are to

in you back. is those visitor, see take million is and where including $XX million the And type which if per gaming rate, around whether opportunity average F&B, revenue EBITDA assuming resort double midweek the just and $XXX, to through so spend run that folks $XX or that roughly flow-through fee, get various components, occupancy revenue we just of it's

We calendar of in just But all of that even initiatives convention does addition of and the the get back, in growth hope year those this half we drivers? those that noted. meaningful that with to certainly so. we if it's So matriculate property

Blake Sartini

components build first no investment Charles think, what's you recall, Yes, bookings of to on we OTA It our the is focused a STRAT forward was component. kind -- room little of look all at saying we're property. STRAT, property, on doing what component have year happening Las going doing. the to the to you and to what been what's obviously, there took is as to also direct And produce of I in we've when we of this But each in or through and citywide we're happening what as The bookings here. at online on think The ownership that key but I was capital bookings going city addition Vegas what more

And help I us build, have a time, very generating to in marketing continue guests we're think direct will program, particular, our over that midweek. program that with through component, investments. casino robust -- instituted are a very communication We robust now these we

I and coming large of we to stays predict. are we a what Vegas. we and our Las where coming and marketed mean, a begin and But to on easy internally the know ourselves for success midweek events to property. people time focused is part build believe are frame, that longer special we're longer how the amenities are attract in terms out that the property lies In that's we of activities within as that say. pretty Those hard obviously the time

John DeCree

That's helpful.

monthly comparable But data? guys to of ability we LVCVA rates most on you're to questions thoughts help you you full there. one. the seeing are need push all in the When what the think come -- days? the both I of occupancy my of rate property covered raise maybe kind weekends, do across see to back Or mid-week kind you whole on to

Charles Protell

entire No, in we side see convention is that isn’t the south hurt are more will to when Strip pushing that mean, rates filling of center, on the weekend. property and midweek isn’t up business group comparable others the the I LVCVA. on This town. The we what the so filling convention potentially than up

the could So hurt we we with will as they just on the weekends actually probably much midweek base. more room but flex more in will, than or

Operator

This over like for Protell would question-and-answer session. closing any ahead, turn Mr. concludes Please to conference our Charles go I remarks. to the Instructions] [Operator back sir.

Charles Protell

Thank you for the with all results. QX speak for We’ll joining you call. our

Operator

for has you conference Thank attending now concluded. The presentation. today's

disconnect. may You now

Golden Entertainment (GDEN) 1 Mar 232022 Q4 Earnings call transcript