Red Rock Resorts(US:RRR)2023-11-09 01:23Financial Performance - Net revenues for Q3 2023 were $411.6 million, a decrease of 0.7% compared to $414.4 million in Q3 2022[97]. - Operating income for Q3 2023 was $122.5 million, down 12.9% from $140.7 million in Q3 2022[99]. - Casino revenues decreased by 3.4% in Q3 2023 to $272.7 million, while for the nine months ended September 30, 2023, casino revenues were $830.5 million, down 1.5%[98]. - Food and beverage revenues increased by 4.3% in Q3 2023 to $72.8 million, and by 9.2% for the nine months to $228.5 million[98]. - Room revenues rose by 7.6% in Q3 2023 to $42.0 million, and by 8.9% for the nine months to $130.9 million[103]. - Adjusted EBITDA for the three months ended September 30, 2023, was $175.2 million, a decrease from $181.9 million in the prior year, while for the nine months it was $544.7 million, down from $549.5 million[114][116]. Expenses and Costs - Interest expense increased by 32.7% in Q3 2023 to $45.5 million, and by 47.5% for the nine months to $132.3 million[96]. - SG&A expenses increased by 0.3% or $0.3 million for the three months and 3.6% or $9.8 million for the nine months ended September 30, 2023, compared to the prior year periods[105]. - Depreciation and amortization expense increased by 5.7% for the three months ended September 30, 2023, but decreased by 1.0% for the nine months due to ceased depreciation for closed properties[106][107]. - Write-downs and other, net totaled $15.1 million and $44.8 million for the three and nine months ended September 30, 2023, respectively, compared to $3.9 million and $16.1 million in the prior year[108]. - Interest expense, net increased to $45.5 million and $132.3 million for the three and nine months ended September 30, 2023, respectively, due to higher variable interest rates and increased borrowings[110]. Cash Flow and Capital Expenditures - Cash and cash equivalents at September 30, 2023, totaled $122.8 million, with borrowing availability under the revolving credit facility at $512.5 million[122]. - Anticipated capital expenditures for the remainder of 2023 are expected to be between $110 million and $180 million, primarily for the development of Durango[123]. - Cash paid for capital expenditures totaled $512.5 million for the nine months ended September 30, 2023, compared to $198.6 million in the same period of 2022, indicating a significant increase of 158.5%[129]. - Net cash provided by operating activities for the nine months ended September 30, 2023, was $335.4 million, down from $417.5 million in the prior year[126]. - For the nine months ended September 30, 2023, net cash provided by operating activities was $335.4 million, a decrease of 19.7% compared to $417.5 million for the prior year period[128]. Market and Economic Conditions - The unemployment rate in the Las Vegas metropolitan area was 5.7% in September 2023, up from 5.3% in September 2022[91]. - The median price of an existing single-family home in Las Vegas was $450,000 in September 2023, unchanged from September 2022[91]. - The company is experiencing inflationary pressures, particularly in food costs, supplies, energy costs, and construction costs, which are expected to continue through the remainder of 2023[137]. - The company anticipates that rising inflation and higher interest rates could adversely affect consumer demand and overall business performance[143]. Corporate Actions and Governance - The company expects to spend approximately $780 million on the Durango project, set to open in December 2023[87]. - The board of directors authorized $600 million for Class A common stock repurchases through June 30, 2024, with $312.9 million remaining available[124]. - During the nine months ended September 30, 2023, the company paid $44.0 million in dividends to Class A common stockholders, slightly down from $44.7 million in the prior year[130][131]. - The company borrowed $370.5 million under the Revolving Credit Facility during the nine months ended September 30, 2023[130]. - The company has development agreements with the North Fork Rancheria of Mono Indians to assist in developing a gaming and entertainment facility in California[138]. - As of September 30, 2023, the company had outstanding letters of credit totaling $33.5 million[136]. - The company is subject to extensive regulation by gaming authorities, which may impact future operations and expansion efforts[139]. - There were no material changes to the company's critical accounting policies and estimates during the nine months ended September 30, 2023[142].