Golden Entertainment(US:GDEN)2021-08-05 16:00Financial Performance - Total revenues for the three months ended June 30, 2021, were $292.5 million, a 285% increase from $76.0 million in the same period of 2020[101] - Operating income for the three months ended June 30, 2021, was $60.0 million, compared to a loss of $62.0 million in the same period of 2020[101] - Net income for the three months ended June 30, 2021, was $103.0 million, a significant turnaround from a net loss of $78.6 million in the prior year[101] - For the six months ended June 30, 2021, total revenues increased by $249.0 million, or 88%, compared to the prior year, attributed to a full six months of operations and easing COVID-19 measures[105] - Net cash provided by operating activities was $119.4 million for the six months ended June 30, 2021, a significant improvement from net cash used of $10.5 million in the prior year[124] Revenue Breakdown - The Casinos segment generated revenues of $170.8 million for the three months ended June 30, 2021, compared to $39.4 million in the prior year, reflecting a significant recovery[101] - Distributed Gaming revenues increased to $121.4 million for the three months ended June 30, 2021, up from $36.3 million in the same period of 2020[101] - The Casinos segment experienced a revenue increase of $131.3 million, or 333%, for the three months ended June 30, 2021, driven by increases in gaming, food and beverage, room, and other revenues[103] - The Distributed Gaming segment saw a revenue increase of $85.1 million, or 234%, for the three months ended June 30, 2021, primarily due to a full quarter of operations and easing COVID-19 restrictions[104] Operational Metrics - Adjusted EBITDA margin for the Casinos segment was 46% for the three months ended June 30, 2021, compared to 5% in the prior year, reflecting improved operational performance[108] - Operating expenses increased by $100.9 million, or 198%, for the three months ended June 30, 2021, primarily due to increased revenues and a full quarter of operations[109] - Selling, general and administrative expenses rose by $20.7 million, or 64%, for the three months ended June 30, 2021, mainly due to a full quarter of operations[110] Assets and Liquidity - As of June 30, 2021, the company had $152.5 million in cash and cash equivalents and $200 million in borrowing availability under its Revolving Credit Facility[121] - The company had $152.5 million in cash and cash equivalents as of June 30, 2021, with no short-term investments held[145] Shareholder Actions - The Board of Directors authorized a share repurchase program, increasing the total authorization to $50 million as of August 3, 2021, with no repurchase transactions reported for the three and six months ended June 30, 2021[133] Tax and Non-Operating Income - The effective income tax rate was 0.8% for the three months ended June 30, 2021, differing from the federal tax rate of 21% due to changes in valuation allowance against deferred tax assets[116] - The company recognized non-operating income of $60.0 million for the three and six months ended June 30, 2021, related to an amendment with William Hill[115] - The company received a one-time payment of $60 million from William Hill following a change of control transaction, recognized as non-operating income in June 2021[131] Future Considerations - The company is evaluating the potential impact of the transition from LIBOR, which is expected to start phasing out at the end of 2021, but does not anticipate a material impact on its financial condition or results of operations[146] - The company may pursue expansion opportunities influenced by factors such as licensing availability and suitable investment opportunities, potentially requiring substantial investments[134] Regulatory Environment - The gaming industry is subject to extensive regulation, and changes in laws or regulations could materially impact the company's financial position and operations[140] Seasonal Factors - Seasonal factors affect the company's Casinos and Distributed Gaming segments, with lower revenues typically observed during summer months due to fewer tourists[138] Cost Management - The company has implemented various cost-saving measures in response to the COVID-19 pandemic, including delaying capital expenditures and reducing operating expenses[88] Property Operations - As of June 30, 2021, the company operated 10 resort casino properties and nearly 11,700 slots in over 1,000 locations in its Distributed Gaming segment[98] - The company owns and operates 66 branded taverns, which offered over 1,000 onsite slots as of June 30, 2021[99] - The STRAT, the company's premier casino property, includes 676 slot machines and 45 table games, with a total of 2,429 hotel rooms[90] - The operations of the Colorado Belle property remain suspended due to the ongoing impact of the COVID-19 pandemic[91] Interest Rate Sensitivity - As of June 30, 2021, the company had a weighted-average effective interest rate of approximately 3.75% on its outstanding borrowings under the Credit Facility[144] - A 50 basis point increase in the applicable interest rate on the Credit Facility would increase interest incurred by $3.6 million over a twelve-month period[144] Off-Balance Sheet Arrangements - The company has no off-balance sheet arrangements that materially affect its financial condition or results[142]