Golden Entertainment: Positive Future Ahead for The STRAT
Golden Entertainment Reports Third Quarter 2023 Results
Golden Entertainment's third-quarter 2023 revenues fell slightly to $257.7 million, down from $279 million in the same period in 2022. Despite this, the operator of nine casino resorts in Nevada is focused on increasing foot traffic around its iconic Las Vegas landmark, The Strat, especially with the upcoming December opening of Fontainebleau.
Positive Growth at The STRAT
Revenues grew by 8% at The STRAT, with adjusted earnings increasing by 16% due to improved occupancy, leading to higher spending on gaming and food and beverage. Occupancy reached 75% during the quarter, up from 68% a year ago at The STRAT.
Charles Protell, President and CFO, also noted that The Strat would benefit from major events like Las Vegas' Formula 1 race and the Super Bowl, alongside the soon-to-open Atomic Golf.
Renovations and Atomic Golf Impact
"We've completed renovations on our 1,300 rooms, casino, pool, entertainment, and restaurants, and we are well-positioned to capitalize on the high-traffic events coming to Vegas over the next few quarters," said Protell. "In addition, Atomic Golf, a $75 million golf entertainment complex behind The STRAT, is on track to open in January, which will further drive visitation and spending at the property."
Declines in Revenue Due to Divestitures
Declines in revenues and Adjusted EBITDA were largely due to the exclusion of full-quarter results from the company's Rocky Gap Casino Resort and the Montana distributed gaming business, both of which were sold during the third quarter. The results only include 24 days of operations for the Rocky Gap Casino Resort and exclude 18 days of operations for the Montana distributed gaming business when compared to the prior year. Additionally, earnings for the quarter reflect the impact of a $305.8 million gain on the sale of the Rocky Gap Casino Resort and Montana distributed gaming business, along with transaction costs of $8.6 million recognized during the quarter.
Strong Performance in Nevada Properties
Blake Sartini, Chairman and CEO of Golden, commented: "In the third quarter, we saw improved performance in our Nevada Casino Resorts segment, driven primarily by increased occupancy and the recent completion of room and pool renovations at The STRAT. Our Nevada Locals Casinos segment maintained strong performance throughout the year, while our taverns experienced typical seasonality with lower summer volumes. Following our divestiture of Rocky Gap Casino Resort in July, we completed the sale of our Montana distributed gaming business in September and are on track to finalize the sale of our Nevada distributed gaming business by the end of the year. These transactions significantly strengthen our balance sheet, enabling capital returns to shareholders and providing greater financial flexibility."
Las Vegas Growth Offsets Declines in Pahrump
"Growth in our Las Vegas properties offset the lower revenue and EBITDA at our Pahrump properties, which were impacted by summer monsoons that closed a major highway connecting California through Death Valley," added Protell. "The strength of the Las Vegas economy continues to support a growing database of core customers."
Conclusion: Positioning for Future Growth
While Golden Entertainment’s third-quarter results show a slight decline in overall revenues, the company remains optimistic about its prospects, particularly with the ongoing renovations at The Strat and the addition of Atomic Golf. The successful execution of these projects, along with major events on the horizon, is expected to drive increased visitation and spending in the coming quarters. Golden Entertainment is poised for continued success as it capitalizes on Las Vegas' robust economy and thriving tourism sector, with a strong emphasis on enhancing the guest experience and strengthening its financial position.
