Golden Entertainment Q3 Revenue: The Strat Growth Insights
Golden Entertainment Reports Q3 2023 Results with Strong Performance at The Strat
Golden Entertainment, the operator of Las Vegas' iconic The Strat Hotel, announced its financial results for the third quarter ended September 30, 2023. Although the company experienced a slight decline in overall revenue, it reported notable improvements within its Nevada Casino Resorts segment, particularly at The Strat, which saw increased occupancy and a successful completion of recent room and pool renovations.
Financial Overview
For the third quarter, Golden Entertainment generated total revenue of $257.7 million and a net income of $241.2 million. This marks a decline of approximately 7.6% compared to the previous year. The company also reported Adjusted EBITDA of $53.2 million for Q3 2023, down from $61.1 million in Q3 2022. The primary reasons for these declines were the exclusion of full-quarter results from the Rocky Gap Casino Resort and the Montana distributed gaming business, both of which were sold during the quarter.
Performance at The Strat
Despite the revenue dip, The Strat saw an 8% increase in revenue, benefiting from completed room renovations and a strategic location near the soon-to-open Fontainebleau resort. Golden Entertainment is optimistic that the completion of its room renovations, coupled with the $70 million Atomic Golf attraction set to debut in January 2024, will continue to drive increased foot traffic to the resort.
Charles Protell, President and Chief Financial Officer of Golden Entertainment, stated, "We feel that the property is now well-positioned to capitalize on high-traffic events like F1 and the Super Bowl coming to Las Vegas in the coming quarters."
Strong Performance from Nevada Locals Casinos
Blake Sartini, Chairman and CEO of Golden Entertainment, noted that the company’s Nevada Locals Casinos segment had maintained strong performance throughout the quarter. However, tavern revenues were flat during the slower summer months, which is typical for that time of year. On a positive note, Golden’s last eight tavern openings have generated a solid 25% return on investment.
Golden Entertainment is on track to acquire four additional taverns by the end of 2023 and another two early next year, with future sites being explored for additional tavern development.
Successful Divestitures and Strengthened Balance Sheet
Golden completed the sale of its Montana-distributed gaming business to J&J Ventures Gaming for approximately $109 million in September. Additionally, the company is on track to finalize the sale of its Nevada-distributed gaming business by the end of the year. These transactions are expected to strengthen Golden’s balance sheet and provide more flexibility to return capital to shareholders.
As of September 30, 2023, Golden Entertainment had a total debt of $738.7 million, consisting mainly of $399 million in term loan borrowings and $335.5 million in senior unsecured notes. The company also reported cash and cash equivalents of $295.9 million and had no outstanding borrowings under its $240 million revolving credit facility.
Expansion and Continued Growth
Golden Entertainment owns a diverse portfolio of properties, including The Strat, Arizona Charlie's Decatur, Arizona Charlie's Boulder, and several Laughlin properties such as Aquarius Casino and Resort and Edgewater Casino and Resort. In addition, the company operates casinos in Pahrump, including Pahrump Nugget, Gold Town Casino, and Lakeside Casino and RV Park.
Conclusion: Positioned for Future Growth
While Golden Entertainment faced a revenue decline in Q3, the company remains strategically positioned for growth, particularly with the anticipated debut of Atomic Golf, ongoing renovations at The Strat, and the expected boost from major Las Vegas events like F1 and the Super Bowl. The divestitures and continued focus on expanding its tavern segment further bolster the company’s ability to strengthen its balance sheet and enhance shareholder value in the future.
