Golden Entertainment(US:GDEN)2022-05-05 16:00Financial Performance - Total revenues for the three months ended March 31, 2022, were $273.6 million, a 14% increase from $239.7 million in the same period of 2021 [111]. - Net income for the three months ended March 31, 2022, was $36.1 million, compared to $10.6 million in the prior year period [111]. - Adjusted EBITDA for the same period increased to $67.3 million, a rise of $7.8 million, or 13%, compared to $59.5 million in the prior year [124]. - Nevada Casino Resorts saw revenues increase by $21.6 million, or 29%, and Adjusted EBITDA rise by $6.9 million, or 26%, due to higher hotel occupancy [125]. - Distributed Gaming revenues increased by $9.3 million, or 8%, with Adjusted EBITDA up by $1.2 million, or 6%, driven by increased gaming demand [129]. Revenue Sources - Gaming revenue increased by $13.8 million to $190.8 million, while food and beverage revenue rose by $8.7 million to $42.5 million [112]. - The company operates ten casino properties in Nevada and Maryland, with a total of 357,886 square feet of casino space and 16,961 slot machines [98]. - The Distributed Gaming segment includes over 11,800 slot machines across approximately 1,100 non-casino locations in Nevada and Montana [107]. - As of March 31, 2022, the company owned and operated 65 branded taverns, offering over 1,000 onsite slot machines [108]. - The STRAT Hotel and Casino, the company's premier property, features an 80,000 square foot casino with 711 slot machines and 2,429 hotel rooms [98]. Cash Flow and Financing - Cash and cash equivalents as of March 31, 2022, totaled $202.3 million, with $240 million available under the revolving credit facility [131]. - Net cash provided by operating activities decreased by $8.7 million, or 17%, to $43.5 million for the three months ended March 31, 2022, primarily due to timing of working capital spending [134]. - Net cash used in investing activities increased by $6.0 million, or 128%, to $10.7 million, reflecting higher capital expenditures [135]. - Net cash used in financing activities surged by $45.4 million, or 796%, to $51.1 million, mainly due to term loan prepayments and stock repurchases [136]. - As of March 31, 2022, the company had $625 million in principal amount of outstanding term loan borrowings under the Credit Facility, with a weighted-average effective interest rate of approximately 3.75% [153]. Operational Insights - The company continues to seek opportunistic and accretive opportunities for additional tavern openings and acquisitions [108]. - The operations of the Colorado Belle property remain suspended due to the impact of the COVID-19 pandemic [95]. - Operating expenses increased by $21.3 million, or 16%, for the three months ended March 31, 2022, primarily due to increased occupancy and guest visitation as COVID-19 restrictions eased [113]. Regulatory and Market Factors - The gaming industry is subject to extensive regulation, and changes in laws or regulations could materially affect the company's financial position and operations [149]. - Seasonal factors affect the company's revenue, with lower revenues typically seen in summer months due to fewer tourists and increased local vacation activity [147]. - The company's Nevada distributed gaming operations generally experience higher revenues during the fall, coinciding with professional sports seasons [147]. - The company is exposed to interest rate risk associated with its variable rate long-term debt, primarily under the Credit Facility [152]. Tax and Accounting - The effective income tax rate for the three months ended March 31, 2022, was (105.1)%, significantly differing from the federal tax rate of 21% due to changes in valuation allowance [120]. - The company continues to evaluate the potential impact of the transition from LIBOR, which is expected to have no material impact on its business or financial condition [155]. - The company has no off-balance sheet arrangements that could materially affect its financial condition or results [151]. - As of March 31, 2022, there were no material changes in the company's commitments under contractual obligations compared to previous disclosures [146].