Q1 2024 Golden Entertainment Inc Earnings Call Transcript
Key Points
- Golden Entertainment Inc (GDEN) successfully completed the sale of its Nevada distributed business, using the proceeds to repay over $0.5 billion of debt and establish a recurring dividend.
- Despite a slight revenue decline, total occupancy at The Strat improved by almost 8% to 78% for the quarter, with significant improvements in midweek occupancy.
- The opening of Atomic Golf at the end of March is expected to drive additional visitors and locals to The Strat, enhancing the entertainment experience.
- Golden Entertainment Inc (GDEN) has expanded its Tavern portfolio to 71 locations, with plans to grow to over 90 locations in the coming years, indicating strong growth in this segment.
- The company maintains a strong liquidity profile with about $100 million in cash and access to $240 million of additional liquidity, providing flexibility for future investments and shareholder returns.
- Total revenue was down less than 1% and EBITDA decreased by over 15% in the first quarter, primarily due to increased labor costs and weaker revenues from Nevada locals casinos.
- The company experienced higher labor costs due to a new union contract, which increased wages by about 11% year-over-year.
- Revenue and EBITDA from Nevada locals casinos declined by 5% and 13% respectively, driven by decreased visitation spend among low and mid-tier rated players.
- Same-store revenue in the Nevada taverns declined by 4%, attributed to declining retail demand and less frequent visitation from lower-tier rated players, resulting in an 11% decline in EBITDA for this segment.
- The current market environment and macroeconomic backdrop have made it less conducive for mergers and acquisitions, limiting strategic growth opportunities through acquisitions.
Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the Golden Entertainment first-quarter 2024 earnings conference call. (Operator Instructions)
Please note that this call is being recorded today. Now I'd like to turn the conference over to Joe Jaffoni, Investor Relations. Please go ahead, sir.
Thank you very much, operator, and good afternoon to everyone. On the call today is Blake Sartini, the company's Founder, Chairman and Chief Executive Officer; and Charles Protell, the company's President and Chief Financial Officer.
On this call, we will make forward-looking statements under the Safe Harbor provisions of the federal securities laws. Actual results may differ materially from those contemplated in these statements. Additional information concerning factors that could cause actual results to materially differ from these forward-looking statements is contained in today's press release and our filings with the SEC. Except as required by law, we
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