Golden Entertainment(US:GDEN)2020-11-08 20:57Financial Data and Key Metrics Changes - The company achieved record third-quarter results with adjusted EBITDA of $45.4 million, reflecting a year-over-year improvement of 5.5% despite lower revenue [15][17] - Total EBITDA margin improved by 440 basis points to 37%, and if excluding the STRAT, total casino EBITDA would be up 38% with margins improving by over 1,300 basis points to 44% [13][15] - The company maintained a balance sheet similar to pre-shutdown levels with $100 million in cash on hand and did not raise additional debt or equity capital [17] Business Line Data and Key Metrics Changes - Las Vegas locals casinos achieved double-digit revenue growth and doubled their EBITDA contribution compared to last year, with combined EBITDA margins exceeding 50% [8] - In Laughlin, EBITDA grew by 8% on lower revenue, with combined EBITDA margins exceeding 40% [9] - The STRAT's room revenues were approximately 50% lower than last year, but guest spending increased by 30%, primarily on higher-margin gaming revenue [10][12] Market Data and Key Metrics Changes - The Nevada distributed gaming business faced challenges due to mandated bar closures, resulting in a 31% revenue decrease and approximately $7 million in lost EBITDA for the quarter [14] - Montana operations reported a 17% revenue increase and a 7% EBITDA increase since opening in May [15] Company Strategy and Development Direction - The company aims to sustain and improve performance across operations while using excess cash flow to reduce leverage and position for future opportunities, including sports wagering in Maryland and expansion of distributed gaming [17] - The focus is on distributed gaming expansion rather than traditional M&A, with a disciplined approach to capital deployment [32] Management's Comments on Operating Environment and Future Outlook - Management noted strong operating trends in local and regional properties continuing through October, generating positive cash flow [16] - The company is optimistic about future performance, particularly with potential improvements in the STRAT as entertainment and group business return [57] Other Important Information - The company expressed gratitude to team members for their dedication and exceptional service during challenging times [18] Q&A Session Summary Question: Expansion opportunities post-pandemic - Management indicated that several states are considering gaming expansion, with active efforts in Pennsylvania and other jurisdictions [20][21] Question: Sports book operations and potential settlements - Management expects to receive payments related to sports book operations upon transaction closure, but details are pending [22] Question: Maryland sports betting plans - Management anticipates limited licenses for operators in Maryland, which should drive value for the company [26] Question: Pennsylvania gaming opportunities - Management is optimistic about potential gaming expansion in Pennsylvania, citing budget constraints as a driving factor [30][31] Question: Cost reductions and margin sustainability - Management confirmed a 25% reduction in labor and marketing costs, indicating that these are controllable components [35] Question: STRAT performance and competition - Management noted that STRAT's performance is independent of other Strip properties, primarily driven by local visitors [39] Question: Laughlin performance and future improvements - Management highlighted that Laughlin's performance could improve with the return of events and concerts [44] Question: Fourth-quarter trends and COVID impact - Management observed continued strong trends into October but noted a typical election cycle slowdown [51]