Golden Entertainment(GDEN) - 2021 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported record revenue of $282 million for Q4 2021, which is over 70% higher than Q4 2020 and almost 60% higher than Q4 2019 [7][8] - Adjusted EBITDA for Q4 2021 was $68 million, reflecting a significant increase of 145% year-over-year [7][8] - The company achieved over $1 billion in revenue for the first time in its history and recorded annual EBITDA of $292 million [8] Business Line Data and Key Metrics Changes - Revenue for Nevada Casino Resorts rose 62% year-over-year to $105 million, with EBITDA improving 145% to $37 million [10] - The STRAT's revenue increased by 90% and EBITDA grew more than fivefold compared to Q4 2020, with occupancy improving to 77% [10][11] - Revenue for Nevada Local Casinos increased 20% to $40 million, and EBITDA rose 32% to $19 million, with an EBITDA margin improvement of over 400 basis points [15] - Rocky Gap Casino in Maryland saw revenue up 28% to $19 million and EBITDA up 34% to $6 million [17] - Distributed gaming operations reported a revenue increase of 27% to $118 million and EBITDA rose 45% to $20 million [18] Market Data and Key Metrics Changes - The STRAT averaged 67% occupancy in 2021, down from 90% in 2019, resulting in over 180,000 missing room nights [11] - The company noted a significant opportunity for recovery in the older demographic, particularly in Laughlin, where rated gaming revenue is down 10% to 15% [69] Company Strategy and Development Direction - The company is focused on maximizing performance from its current portfolio and generating free cash flow for shareholder returns, without pursuing greenfield development [23] - Plans include modest incremental investments in properties to enhance customer experience and attract higher-value players [12][43] - The company aims to maintain a disciplined approach to capital allocation, balancing investments in properties with shareholder returns [46][56] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that operations were impacted by COVID restrictions, supply and labor shortages, but expressed optimism for recovery as conventions and events return [8][35] - The company expects continued strong demand in Las Vegas, particularly with upcoming conventions, which should improve midweek occupancy rates [62] - Management is confident in maintaining EBITDA margins despite rising labor costs, citing a reduction in overall labor force while achieving higher revenue [66] Other Important Information - The company reduced term loan borrowings by $25 million in Q4 and repaid a total of $132 million in debt over the past year [21] - The company ended 2021 with $221 million in cash and no outstanding borrowings on its revolver [21] Q&A Session Summary Question: Future growth opportunities in Nevada - Management indicated potential growth opportunities in Northern Nevada and emphasized a focus on the current portfolio [25][26] Question: Impact of COVID variants on Las Vegas business - Management noted a slight softness in early January due to COVID variants but expressed optimism for the remainder of the year [34][35] Question: Customer segments and amenities at The STRAT - Management highlighted ongoing investments to enhance customer experience and attract higher-end customers [42][43] Question: Free cash flow and capital return priorities - Management discussed targeting $15 million in cash interest savings from refinancing and a balanced approach to capital allocation [46][56] Question: Occupancy trends and midweek business - Management confirmed that midweek occupancy remains a challenge but expects improvement with upcoming conventions [62] Question: Spending from older demographics - Management identified a significant opportunity for recovery in the older demographic, particularly in Laughlin [69][70]