GDEN - Earnings call transcript Q1 2024 | 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 2024 Earnings Conference Call. [Operator Instructions] Please note that this call is being recorded today.

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

Joseph Jaffoni

much, good very everyone. operator, you afternoon, and Thank

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

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

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

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

measures available with the which Blake in our find will business can details reviewing and You press the take on your the following call website. update, financial is We'll Charles start Protell quarter results of the that, the reconciliation first GAAP Charles our release, and questions. of

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

Charles Protell

Joe. Thanks,

our We of repurchase completing has us quarter. bonds were debt authorization. outstanding share to liquidity the to X flexibility we repay us $X.X The over our past quarter distributed financial business, The current the yield by a X the in by businesses and including the of recreated an were $XX leverage recurring billion divested of the fully attractive positions that sale maintain last allowed April end dividend used establish that these redemption reducing and at from million utilize primarily at started transactions proceeds months. noncore the to the of of over Nevada our

prior $XX in million revenue distributed operations financial businesses results. and gaming year which million the from Nevada our excludes EBITDA of and to generated of divested our casino the first quarter, Maryland in Turning $XXX We and Montana.

than X%, total first Resorts Nevada from over down Casino but increased results XX%, less as was operations EBITDA to in casinos. our primarily revenues revenue the as down continuing Comparing in the Locals due was Nevada well of quarter, the costs labor higher-margin our weaker

total Unfortunately, largest concerts in X% Las several visitation occupancy of March, over conventions, for Vegas hosting XX% improvement occupancy. one large year, city's at midweek Allegiant basketball Stadium. as X% games as is with improved compared sold-out STRAT, the the of in drivers including At missed a to last the of to CONEXPO few which NCAA tournament almost the well of quarter

at to a XX% gap the year. was Despite at with the to Las February, of growth quarter. key quarter, over EBITDA for our improve continue the STRAT to XXXX, view is occupancy that XX% during the will narrowing weekend were although but improving still a that occupancy successful down growing ADR increasingly as STRAT, quarter. Super Bowl our we in missing about our occupancy Weekend component Vegas compared capital X% was business recent in for believe and each week the midweek passing we throughout We the investments and visitation

end to the is drive and expected for visitors additional at the of opened Golf March, locals entertainment Atomic new addition, In this which experience. STRAT to

drive visitation. additional about also media by had STRAT [indiscernible] campaigns to to the On $XXX,XXX quarter We driven advertising This build the and enhance increased labor primarily higher in QX. union XX% order after awareness future front, contract our the new our expenses anniversary STRAT consumer that experienced expense costs will by about the for of in year-over-year.

filled as customers Event concert X,XXX Center. the revenue driving having In Laughlin, Laughlin we slightly grew seats for is supported our local as Edgewater new by quarter bingo in at that in a room well our more

players of visitation improved activity revenue and all gaming in the in and market. Laughlin remains with rated healthy spend database tiers Our across

in were primarily residing by limited the Arizona. costs compete employees pool of as we Laughlin in of out labor higher Margins impacted labor for

entertainment also concert comp expenses the We higher expense. related that well to experienced increased as activity advertising as

and declined mid-tier and rated decreased our visitation primarily to declined Nevada XX% EBITDA our spend in X% Casinos, due For players. Locals revenue low-

were Our Arizona the which largest revenue Charlie's value-oriented and as in EBITDA in portfolio. property, most view declines we our Boulder casino the

April, In the addition, Decatur see well activity but to the by in market. May. improvement been continued we Arizona impacted These promotional affecting seeing have road trends Charlie's increased in our as as entry some have construction property in we

total in quarter X% On basis, Nevada declines year, X%, end to up supported the food offset revenue in X same-store bringing March. slight total XX gaming and tavern our beverage locations at over last the by revenue, same-store in declined First driven revenue. increase November, taverns revenue by of partially of new a by was purchase a

from lower We revenue to as demand well visitation lower our attribute players. less same-store declining tier-rated retail as frequent

As a XX%. result, EBITDA for taverns the Nevada declined

locations, XX next the in In of the still over XX We opening purchased tavern them few XXnd to our we additional Valley. growing within portfolio Vegas Las of with April, our tavern we by locations X growing the target end portfolio anticipate and XX years. to QX, taverns, the

term proceeds provide on our of unsecured balance cash sale quarter loan with and on the approximately $XXX an from update sheet. the distributed received of of me of Outstanding primarily to a consisted due the of gaming end let notes, our $XXX million $XXX debt Now at hand million million business.

and $XXX liquidity and another purchase of used of revolver. as of with to $XX to of from notes initial the we taverns. $XXX and the accrued X our dividend additional million well unfunded $XXX This us outstanding April, In million as interest cash cash access million for leaves million about repay

less and leverage invest with continue us in capital and flexibility than own net to profile of the provides strong to to return current evaluate Xx opportunities. liquidity strategic Our assets, potential our shareholders

an market own to opportunity find to do of to to for continue less acquiring repurchase current intend has us. we actionable our macro time, remainder stock, the year owned be which it's with over Nevada-based casinos estate, would acquire with we to the accretive and which conducive opportunities, real review it more authorization. than current strategic While this made backdrop the environment difficult M&A At our

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

Operator

Instructions] comes Katz, Your first question David from Jefferies. [Operator

Moving on.

Your next Bain, from B. Riley. David question comes

David Bain

Great. events commentary last upfront. yet, occupancy. help be should it best level attendance in XQ like But Very will the Obviously, convention the that XXXX. seems so and at the seems obviously like CON/AGG STRAT not of of year past other year, helpful but through that rest XQ the since

remodel, looking Post campaign. advertising about strategically, doing promotionally different or hear a saying at you new groups something something you directed did FID? I at are

be significant lever. such STRAT a midweek would great given Just any more depth on catalysts for occupancy

Blake Sartini

Yes.

Charles remarks, grow seeing grow. prepared as his in midweek occupancy as think I overall said occupancy we're as well

out an new we ad first there towards regional end with year and referenced amenities ad and the provided our that the reintroduce campaign a did of You rolled of that capital quarter property this investment. the year last campaign. We the to

advertise property. will continue the a and We at new new improvements basis, retail if to on the you capital the will, amenities,

FID terms that moving attacking the of and search. are particular, OTA we in In by on up

you rates in for sites, If room it's endless scroll kind of an these Vegas. and value OTA scroll on

terms scores, guest of -- of rates which that moved occupancy, better improving allows By in those we to in sites the top OTA on I our over the moved time. up think, us pages, to produce, the significantly scroll. We more have

internally So continue doing we that. will

forward see more rise you comments, in the Vegas full. We mentioned, the the movement as And that when tide high rate, in year. seeing The there of remainder coming of is conventions improvement to we in has are to always believe as Charles we but opening continue the town. the and challenge we mentioned Las been will STRAT, throughout then his

David Bain

Okay. launched, any if traffic drive here helpful. maybe now flow to awareness? it around color just moves traffic And their us and insight to give augment going time? Golf to it you've to that That's of STRAT little And can bit real if from that you the you Great. you're more Atomic how add in intends audience then if further also making a have sort or in seen be

Charles Protell

project kind up not But about of expect $X through share to it's be of Yes. of additional in the Look, balance so ramping a I $XX of that at driven the of on It mean off phase. with to And EBITDA our sheet. million them, agreement end we the some contribute quarter that that's think it. pretty it's million us revenue opened we its we're plus a an $X property. combination seeing of have million we're traffic will excited to that now. we

come the the our down on a it well guests we'll promotions get amenity some new terms and play way STRAT. in see website, in local this just as So we view here Vegas packages. And of and entertainment could for offering Las to our of again, another as certain type population have and we as experience that you'll stay

Blake Sartini

valet, I back, that Atomic package Specifically, say, room the our in, traffic out. our parking in STRAT rolling with STRAT just both as providing we through drive add, externally well would which are front way at through parking let's or promoting to a and at is and internally there, we're as facility combined the the the valet beginning

the Atomic So of foot shoots as drive traffic now to Charles forward. inventory we're room kind specifically well are as we through year. going to mentioned, your casino green to going question, drive these through to right are using that answer And mature the as

Operator

comes question Jonas, Truist. next Barry Your from

Barry Jonas

next the wage hike Maybe in talk prepared how for increase minimum about you're July.

You getting smaller this and are it. a think have guess, still impact to than be you offset year. out And -- you I will able think last you'll

Blake Sartini

Yes.

portfolio. So our that primarily impact tavern to is going

We are preparing for for that. budgeted that. we Obviously,

quarter the actually, think, now, programs -- opening process in in of the reap mitigation towards the early the cost going in middle full we within labor. comment, that benefit this go-forward year-over-year the are then QX. And of mentioned right of We We company-wide, his lap -- Charles benefit full the much forward. includes expense comps, should of as middle I organization, the it

efforts we we headwind. I question, believe will now. comps right are last -- then those, answer that of -- begin to will Both your QX. cost we're to those And mitigation think, in employing So mitigate

Barry Jonas

business, of maybe a in taverns environment Great. And other market you're an Wondering the follow-up, in then potential the viewing competition how there. M&A some if seeing just hear express as players you're here. to anything and continue interest increased speaking

Blake Sartini

we at to We're have or not the We anything who get anybody had look look. environment. wants sell first in seeing first pretty M&A much

good available So position a what's market. we're and in terms of the there out in in knowing

X-star the if we're first the also our not this focused on which greenfield point. get We opportunities, of one look, locations, primarily at first

impossible nearly if And large the of standpoint. a compete individually, at enough a this significant would large I that -- number, look, would from to our be look you number to the of point, quickly, in footprint think, these that regulatory think, a a licensed be having I taverns each regulatory at complexities is get portfolio

So very way significant our there I competitive size advantage weighted has us. a through is our always out successfully. for And that been brand, there. think, our and Competition we've

brand, believe with the position only continue we in grow our footprint tavern and forward. business our we're to to going a not So stay in strong but good

Operator

from next Santarelli, Carlo Deutsche comes Instructions] [Operator question Bank. Your

Carlo Santarelli

two. have I

one most comments, and in we little bit probably of First bigger one. be the second is to locals we peers, from the than more Charles, and seems in picture first businesses down one see is bit around trend it in and data a your But picture obviously, the Nevada. bigger heard a the it but little and in

perhaps of the the don't some for be competitors go the kind changed has cetera? grow Given of things incentive more that to a you backdrop kind promotional, line macro and think driving that's sky, little the acknowledging to bit top et and out headwinds, of some what do of

Charles Protell

we've look, got active in players mean, XXX,XXX I our Yes. database.

in of is it's consumer and our have decent least we point. rates, at on at certainly it I some pretty interest going -- with a when have think And higher persistent of feeling this I think our you view what's So population consumer. inflation that

some that's some continue so what level in I we as seen April, trend look off? but that saw of through we've my And into of we that think May, terms Like see. in stabilization. And that said remarks, does we I

to contributor within market. to Arizona the local our do entry some casinos construction. property, blocked Decatur that of the way had Now largest to Charlie's which And is our has road local

freed including for and environment prolonged say tougher [ helpful. obviously on I inflationary think that's an that has it's the of that's macro that, side, that So no rates think when But on consumer, I impact the the higher to up, period ] ours.

Carlo Santarelli

it, level it. The to second or of property arbitrarily tougher -- one, a the at, it's be There's, $XX corporate when you Got million give rate. run answer. little to expense. bit running And probably take XQ call business $XXX is look But let's going so. at just or million take,

about being the a tough. little on side the buy talked M&A environment bit You

portfolio You you potential suitors that think I of certainly of same assuming the I'm headwinds that a see have are that assets attractive. in many market. see

you -- could you size as think some you and some when guys, things? But of are could be that to how are about view about the comments scope you those you perhaps -- to what strategic options and of think kind share options available

Charles Protell

Yes.

with look, in And look think everything, my size of buy others I or looked the that are, we've things being asset. we on that structure at quite think public side I in very like of guys terms frankly, then they we in the and things market over months you an and I a had opco said either the from front are several the we've several -- at privately. M&A terms the these discussions not appealing past in comments, setting as see or in the many

that, say obviously that rate also a environment cost from I'd of impacts again, perspective, financing.

to the also we're to so that given where between is do and accretive, ask some where math bid it a and harder at, makes buyer deals of trading it tougher And seller. little make are that

we today, at us, prices, buyback value own We or even estate, look depressed that our that's is is range even But REITs to pick trading a in rent, in are where of own which is utilize at that your for a if say is excess we're in its right value. of market assets, lot us any that what most our I'd capital. for enterprise what multiple a where could at you So company given research real that leads our you now, to trading that's at authorization. we're accretive which current reports the said owns going invest of use as also the do, think

valued So the to we value. shares. we at until for are, me, own is I'm looking both frankly, all value we're sure our be operations to had any in the But business. and buying quite estate that But the that real there's ways think not action of unlock to for now, appropriately again,

Operator

from Beynon, question Chad Your comes next Macquarie.

Chad Beynon

is core of hit being Blake, on end in in it. talked you the weakest of Charles, guys just seeing what Charles, the you about you're prepared your probably kind remarks, across the it database. seeing lower lower that broad is of Are in the that board? mid- database? any kind of you in the mainly Or to segments higher-end Like your players? it of part

Blake Sartini

the consistent. the may be think if cases, the database. being use be I it's tier of modest tier mid-tier consistent, mainly, Chad, word mid-tier upper bit but The -- spend mid-tier is some -- is consistent. in visitation visitation lower you the may visitation mainly in the word a The the

cases, So it in database. we some of the think of with, mid-tier spend. answer less your is -- the the consistent main lower tier to question, tier part remains consistent, is Upper visitation in

Chad Beynon

about Okay. supply off potentially Potentially under XX out strip next on closed. with coming months you And some have Rock then of Trop and taking rooms the maybe just some as the we strip, inventory. renovation the Hard think

convention have weeks ownership. kind Fontainebleau which about How put some and you When the new see positive Rio we're You net all be as do things guys opened, of a that in of for you have a big just you blender, that? these thinking should FX. you

Blake Sartini

net it's think a We Yes. positive.

some as the forward. actually, that you off Given the a the do see inventory the the market positive net going calendar as throughout level we're pretty of year, the sizably convention and of we it of remainder the coming remainder activity seeing entertainment throughout year, mentioned,

Chad Beynon

benefit that the in to do that And should start maybe start quarter like -- you'll see think you meaningful see way? a fourth in we to

Charles Protell

see we QX when Yes, think -- we I QX we're mean and to going is into start to that.

Operator

are this at will back no questions to for time. turn management remarks. There it closing further now I

Charles Protell

the quarter. you next Thank you in to joining. all We'll talk for

Operator

We for concludes your and your you ask that this Ladies today. and call thank lines. disconnect gentlemen, for please conference participating you

Golden Entertainment (GDEN) 8 May 242024 Q1 Earnings call transcript