Golden Entertainment(GDEN)2024-11-09 18:06Financial Data and Key Metrics Changes - The company generated revenue of 34 million in Q3 2024, with total revenue declining 5% and consolidated EBITDA declining 21% compared to the previous year [6][7] - The third quarter was noted as a challenging period, particularly in July, due to record heat in Las Vegas affecting visitation [8] Business Line Data and Key Metrics Changes - For Nevada Casino Resorts, revenue declined 6% and EBITDA declined 20%, primarily due to performance at the STRAT, which saw a decrease in midweek occupancy by almost 6% [9] - Nevada Locals Casinos experienced a revenue decline of 7% and EBITDA decline of 15%, with increased seasonality and reduced spending from lower-tier customers [11] - Nevada tavern revenue declined 2% and EBITDA declined 29%, impacted by elevated operating expenses from new taverns and the minimum wage hike [12] Market Data and Key Metrics Changes - The company noted a decrease in visitation and revenue in Laughlin, but managed to increase market share and reduce operating expenses [10] - The STRAT's performance is expected to stabilize in Q4, with opportunities for growth in 2025 as midweek occupancy returns [10] Company Strategy and Development Direction - The company plans to continue share repurchases, increasing the buyback authorization by 130 million available for buybacks [8][13] - The management believes in the long-term demographic and economic trends in Southern Nevada, indicating a focus on acquiring equity and evaluating strategic opportunities [14] Management's Comments on Operating Environment and Future Outlook - Management views Q3 as the lowest financial performance for the portfolio, with positive trends expected in October and beyond [8] - The management anticipates stabilization in revenues and cost structures across various assets, with a focus on improving margins [22][24] Other Important Information - The company has repaid over 150 million to shareholders through share repurchases and dividends [13] - The STRAT is expected to face challenges due to a new culinary union contract, impacting its margin stability [22] Q&A Session Summary Question: Insights on M&A environment and sale-leaseback model - Management noted a disconnect between buyers and sellers in the M&A landscape, with a conservative approach to EBITDA projections [16][51] Question: Impact of elections on consumer behavior - Management observed that consumers tend to pull back on spending before and shortly after major elections, which may have affected performance [19] Question: Margin stability and opportunities in Q4 - Management indicated that most assets are expected to stabilize, with the STRAT being the exception due to labor costs [22][24] Question: Future of Atomic Golf and adjacent property development - Management is optimistic about Atomic Golf and is exploring potential developments on adjacent land to drive traffic [30][31] Question: Tavern expansion plans - The company plans to add 1 to 2 new taverns next year, focusing on ground-up development rather than acquisitions [41][42] Question: Dividend strategy moving forward - Management intends to evaluate cash flow and stock buybacks to determine future dividend increases [33] Question: Potential for expansion outside Nevada - Management acknowledged the opportunity for expanding the tavern business outside Nevada, although no immediate plans are in place [55]