Golden Entertainment(US:GDEN)2024-11-08 17:44Revenue Performance - Total revenues for the three months ended September 30, 2024, decreased by $96.5 million, or 37%, compared to the prior year period, primarily due to the exclusion of Rocky Gap and distributed gaming operations in Montana and Nevada [106]. - Gaming revenues decreased by $89.5 million, food and beverage revenues decreased by $2.7 million, room revenues decreased by $2.5 million, and other revenues decreased by $1.8 million for the same period [106]. - Revenues decreased by $319.8 million, or 39%, for the nine months ended September 30, 2024, compared to the prior year, driven by declines in gaming ($294.7 million), food and beverage ($8.7 million), rooms ($3.1 million), and other revenues ($13.3 million) [107]. - Revenues for Nevada Casino Resorts decreased by $6.0 million, or 6%, for the three months ended September 30, 2024, attributed to lower visitation and reduced entertainment offerings [123]. - Revenues for Nevada Locals Casinos decreased by $2.5 million, or 7%, for the three months ended September 30, 2024, primarily due to lower gaming revenue from reduced visitation [126]. - Revenues for Nevada Taverns decreased by $0.5 million, or 2%, for the three months ended September 30, 2024, mainly due to declines in gaming and food and beverage revenues, offset by an increase in other revenues [129]. - For the nine months ended September 30, 2024, revenues increased by $0.5 million, or 1%, primarily due to a $2.8 million increase in other revenues, despite decreases in gaming and food and beverage revenues [130]. Operating Income and Expenses - Operating income for the three months ended September 30, 2024, was $6.7 million, a significant decrease from $323.7 million in the prior year period [104]. - The company reported a $241.2 million, or 51%, decrease in operating expenses for the nine months ended September 30, 2024, mainly from declines in gaming ($239.3 million) and other expenses ($6.1 million) [109]. - Operating expenses decreased by $75.0 million, or 50%, for the three months ended September 30, 2024, primarily due to a $74.7 million decrease in gaming expenses and a $1.2 million decrease in other operating expenses [108]. - Selling, general and administrative (SG&A) expenses decreased by $10.7 million, or 16%, for the three months ended September 30, 2024, primarily due to the exclusion of results from Rocky Gap and distributed gaming operations [110]. Net Income and Adjusted EBITDA - Net income for the three months ended September 30, 2024, was $5.2 million, compared to $241.2 million in the same period last year [104]. - Adjusted EBITDA decreased by $34,014 for the three months ended September 30, 2024, compared to $53,185 in the prior year, reflecting a decrease of $19,171 [121]. - Adjusted EBITDA decreased by $2.6 million, or 15%, for the three months ended September 30, 2024, and by $7.8 million, or 14%, for the nine months ended September 30, 2024, primarily due to higher labor costs and reduced revenues compared to prior year periods [128]. - Adjusted EBITDA margins for Nevada Casino Resorts, Nevada Locals Casinos, and Nevada Taverns were 25%, 40%, and 20% respectively for the three months ended September 30, 2024, down from 29%, 45%, and 28% in the prior year [132]. Strategic Decisions and Acquisitions - The company completed the sale of Rocky Gap Casino Resort for $260.0 million on July 25, 2023, and distributed gaming operations in Montana for $109.0 million on September 13, 2023 [91]. - The company acquired Lucky's Lounge & Restaurant for $10.0 million on November 21, 2023, and Great American Pub for $7.3 million on April 22, 2024, expanding its branded tavern portfolio [92]. Cash Flow and Financing - Net cash provided by operating activities decreased by $58.5 million, or 46%, for the nine months ended September 30, 2024, compared to the prior year, primarily due to a decrease in operating income from divestitures [139]. - Net cash provided by investing activities was $155.1 million for the nine months ended September 30, 2024, mainly from the sale of distributed gaming operations in Nevada [140]. - Net cash used in financing activities increased by $85.9 million, or 32%, for the nine months ended September 30, 2024, primarily due to a $276.5 million payment to redeem 2026 Unsecured Notes [141]. - The company repurchased 1,804,233 shares of common stock at an average price of $30.67 per share for a total of $55.4 million during the nine months ended September 30, 2024 [144]. Tax and Interest Rates - The effective income tax rate was 519.7% for the three months ended September 30, 2024, significantly higher than the federal income tax rate of 21%, primarily due to benefits from the reduction of uncertain tax positions [117]. - The weighted-average effective interest rate on outstanding borrowings under the Credit Facility was 7.56% for the three months ended September 30, 2024 [156]. Operational Insights - The Nevada Casino Resorts segment caters primarily to a regional drive-in customer base, with a larger number of hotel rooms compared to other properties [95]. - The company’s Nevada Locals Casinos segment typically experiences a higher frequency of customer visits compared to casino resort properties [99]. - The company’s strategic decision to reduce entertainment offerings at the Laughlin Event Center contributed to decreased visitation and lower revenues [106]. - Depreciation and amortization expenses increased by $0.4 million, or 2%, for the three months ended September 30, 2024, mainly due to the addition of new locations and asset depreciation [113]. - As of September 30, 2024, the company operated 72 branded taverns with over 1,100 onsite slot machines [102]. - As of September 30, 2024, the company had $68.6 million in cash and cash equivalents and $240 million in borrowing availability under its Revolving Credit Facility [135].