Red Rock Resorts(US:RRR)2024-02-08 03:17Financial Data and Key Metrics Changes - For Q4 2023, the company's net revenue was $462.7 million, an increase of 9.3% from the prior year's fourth quarter [31] - Adjusted EBITDA for Q4 2023 was $201.3 million, up 6.1% from the prior year, with an adjusted EBITDA margin of 43.5%, a decrease of 133 basis points from the previous year [31] - The company generated $147.1 million in operating free cash flow, converting 73% of adjusted EBITDA to cash flow for the quarter [32] - Full year 2023 net revenue was $1.7 billion, up 3.8% from the prior year, with adjusted EBITDA of $746 million, a 0.4% increase [47] Business Line Data and Key Metrics Changes - The food and beverage segment achieved its highest quarterly revenue and profit in the company's history, driven by higher average checks and cover counts [33] - The hotel division also experienced record revenue and profitability, attributed to increased occupancy and average daily rates (ADR) [48] - Catering revenue continued to show strength, marking the 10th consecutive quarter of double-digit year-over-year growth [48] Market Data and Key Metrics Changes - The Durango Casino & Resort opened on December 5, 2023, and has been profitable since day one, positively impacting the surrounding market and attracting new customers [36] - The company noted that while there is some cannibalization expected from the opening of Durango, it has been largely in line with expectations [51] Company Strategy and Development Direction - The company plans to focus on fine-tuning the Durango property in 2024 and will evaluate new projects in 2025 [9] - A special cash dividend of $1 per Class A share was declared, reflecting confidence in the business model and the Las Vegas locals market [53] - The company is committed to investing in existing properties and enhancing customer experiences through new amenities [72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business, particularly with the addition of the Durango property, despite facing challenging year-over-year comparisons in 2024 [50] - The company anticipates a gradual ramp-up in performance as the Durango property stabilizes and begins to attract a consistent customer base [141] Other Important Information - The company completed the sale of approximately 73 acres at former properties for about $58 million, using proceeds to pay down debt [55] - The cash and cash equivalents at the end of Q4 were $137.6 million, with total debt outstanding at $3.3 billion [52] Q&A Session Summary Question: Can you quantify same-store EBITDA performance? - Management indicated that Durango is performing above expectations and cannibalization levels are in line with forecasts [65] Question: What impact do you expect from the Super Bowl festivities? - Management expects a significant lift in visitation and revenue due to the Super Bowl, indicating it may be one of the biggest weekends for Las Vegas [66] Question: What disruptions are occurring at Palace Station? - Ongoing roadwork around Palace Station is causing disruptions, expected to continue until May [92] Question: How is the loyalty program performing? - New signups for the loyalty program are up high single digits for the quarter, indicating positive customer engagement [15] Question: What is the strategy for taverns and organic growth? - The company is exploring tavern investments in high-growth areas, focusing on organic growth and potential acquisitions [23]