Golden Entertainment(US:GDEN)2024-03-01 01:04Financial Data and Key Metrics Changes - In Q4, the company generated revenue of $231 million and EBITDA of $48.8 million, leading to total annual revenue of $1.1 billion and annual EBITDA of $222.5 million [6][5] - Adjusting for divested operations, revenue decreased by 1.6% and EBITDA declined by 11% in Q4, impacted by increased labor and other costs [7][6] - The company reduced debt by over $60 million in Q4, totaling nearly $240 million for the year, with a year-end debt profile of $398 million in floating rate term loans and $276 million in fixed rate bonds [19][18] Business Line Data and Key Metrics Changes - Revenue at Nevada Casino Resorts increased slightly year-over-year, while EBITDA declined by 8.8% [8] - Nevada Taverns saw a 3% increase in revenue and a 4% increase in EBITDA, attributed to the acquisition of four new taverns [16] - Revenue for Nevada Locals Casinos decreased by 4% and EBITDA by 10%, primarily due to reduced room nights at Arizona Charlie's Boulder [17] Market Data and Key Metrics Changes - STRAT occupancy in Q4 was 79%, up 2% from last year, but still below 2019 levels [14] - The company experienced a significant decline in midweek occupancy compared to 2019, with 125,000 missing room nights translating to approximately $40 million in potential revenue [65] Company Strategy and Development Direction - The company is focusing on organic growth opportunities through improved performance at STRAT and expanding the Tavern footprint, capitalizing on favorable macro trends in Southern Nevada [21] - A quarterly cash dividend of $0.25 per share has been established, with plans for opportunistic stock repurchases [20][19] - The company aims to grow its tavern locations from 69 to 90-100 without significant increases in corporate overhead [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from labor costs but expressed optimism for flat margin trends in 2024, aided by room refurbishments and new amenities [35][34] - The company is actively engaging with F1 organizers to enhance the event's appeal and maximize contributions to STRAT in future years [71][72] Other Important Information - The company completed the sale of its Nevada Distributed Gaming business for approximately $240 million, significantly improving its leverage profile and liquidity [18][19] - The STRAT has undergone significant renovations, with 1,300 of its 2,400 rooms recently upgraded, and additional amenities like Atomic Golf expected to enhance revenue [15][74] Q&A Session Summary Question: Labor costs and margin outlook for Nevada Casino - Management expects margins to be flat in 2024, considering the renewal of the union contract and potential revenue uplifts [35][34] Question: Dividend policy and capital flexibility - Management believes the dividend can coexist with stock buybacks and maintains flexibility for potential M&A opportunities [28][39] Question: Midweek opportunities at STRAT - Management sees improvement in midweek occupancy and anticipates better performance due to new amenities and a robust convention calendar [64][65] Question: Tavern expansion and competition - The company is focused on acquiring new tavern locations and believes its operational expertise positions it well against competition [47][46] Question: F1 event contributions and future strategies - Management is working with F1 to broaden the event's appeal and enhance participation from non-mid-strip operators [71][72]