Golden Entertainment(US:GDEN)2021-11-04 16:00Revenue Growth - Total revenues for the three months ended September 30, 2021, increased by $77.0 million, or 38%, compared to the same period in 2020, driven by increases in gaming, food and beverage, room, and other revenues[109]. - The Casinos segment reported a revenue increase of $28.9 million, or 21%, for the three months ended September 30, 2021, primarily due to higher hotel occupancy and the easing of COVID-19 restrictions[110]. - Revenues increased by $48.0 million, or 69%, in the Distributed Gaming segment for the three months ended September 30, 2021, primarily due to an increase in gaming, food and beverage, and other revenues[111]. - For the nine months ended September 30, 2021, revenues increased by $326.0 million, or 67%, driven by a full nine months of operations and increased occupancy in hotel rooms[112]. - The Casinos segment saw a revenue increase of $161.6 million, or 53%, for the nine months ended September 30, 2021, attributed to higher occupancy and easing COVID-19 restrictions[113]. Operating Performance - Operating income for the three months ended September 30, 2021, was $45.2 million, compared to an operating loss of $9.4 million in the same period of 2020[108]. - Adjusted EBITDA for the three months ended September 30, 2021 was $73.4 million, compared to $45.9 million in the prior year, and for the nine months it was $223.9 million, up from $70.8 million[132]. - Adjusted EBITDA margin for the Casinos segment was 40% for the three months and 42% for the nine months ended September 30, 2021, compared to 38% and 28% in the prior year[115]. Expenses and Costs - Operating expenses increased by $43.7 million, or 39%, for the three months ended September 30, 2021, mainly due to higher occupancy and a full quarter of operations[116]. - The increase in operating expenses for the nine months ended September 30, 2021 was $144.7 million, or 49%, driven by increased occupancy and operations[119]. - Selling, general and administrative expenses rose by $25.7 million, or 19%, for the nine months ended September 30, 2021, primarily due to a full nine months of operations[122]. Net Income and Cash Flow - Net income for the three months ended September 30, 2021, was $29.1 million, a significant recovery from a net loss of $6.9 million in the prior year[108]. - Net cash provided by operating activities increased to $249.3 million for the nine months ended September 30, 2021, compared to $24.6 million for the same period in 2020, primarily due to a full nine months of operations and easing COVID-19 restrictions[137]. - Net cash used in investing activities decreased to $20.5 million for the nine months ended September 30, 2021, down from $30.8 million in 2020, reflecting a focus on liquidity preservation[138]. Financial Position and Liquidity - The company maintained a $200 million undrawn revolving credit facility as of September 30, 2021, to enhance liquidity amid ongoing pandemic challenges[95]. - As of September 30, 2021, the company had $219.3 million in cash and cash equivalents and $200 million in borrowing availability under its revolving credit facility, which was increased to $240 million on October 12, 2021[134][137]. - The company repaid $97 million of principal under its term loan borrowings for the nine months ended September 30, 2021, eliminating the requirement for further quarterly installment payments[140]. Future Strategies and Considerations - Future growth strategies may include additional financing for acquisitions or business investments, potentially through debt or equity financing[95]. - The company may seek additional financing through debt, convertible debt, or equity financing to enhance liquidity or finance future acquisitions[136]. - The company may pursue expansion opportunities influenced by licensing availability and suitable investment opportunities, potentially requiring substantial investments[147]. Tax and Non-Operating Income - Non-operating income for the nine months ended September 30, 2021 was $11.5 million, a change of $63.1 million from the prior year, largely due to a $60.0 million recognition related to an agreement with William Hill[128]. - The effective income tax rate was (0.4%) for the three months and 0.3% for the nine months ended September 30, 2021, differing from the federal tax rate of 21% due to changes in valuation allowance[129]. Challenges and Industry Impact - The Colorado Belle property operations remain suspended due to the impact of COVID-19, reflecting ongoing challenges in the gaming industry[98]. - The company has implemented various cost reduction measures to preserve liquidity, including delaying capital expenditures and reducing operating expenses[95]. - The company is evaluating the potential impact of the transition from LIBOR to a new benchmark interest rate, with no expected material impact on its business[159].