The STRAT Positioned for Fontainebleau, F1, and Super Bowl

Golden Entertainment Highlights The STRAT’s Strength Amid Major Transactions and Upcoming Attractions

Golden Entertainment showcased the resilience and growth of The STRAT during the third quarter, emphasizing its prime positioning to benefit from high-profile events like the Formula 1 race, the Super Bowl, and the opening of Fontainebleau in December. Additionally, the upcoming January debut of Atomic Golf, a $75 million golf entertainment complex adjacent to The STRAT, is expected to further boost visitation and revenue.

Q3 Financial Performance

Despite revenue and adjusted earnings declines, Golden Entertainment reported a significant increase in net income in the third quarter, primarily due to the completion of two major asset sales:

  • Rocky Gap Casino Resort – Sold for $260 million in July

  • Montana Distributed Gaming Business – Sold for $109 million in September

As a result, third-quarter net income surged to $241.2 million ($7.83 per fully diluted share), compared to $14 million ($0.45 per share) in Q3 2022.

Key Financial Highlights

  • Total Q3 Revenue: $257.7 million, down from $279 million in Q3 2022

  • Adjusted EBITDA: $53.2 million, compared to $61.1 million last year

  • Impact of Asset Sales: Includes a $305.8 million gain from the transactions, partially offset by $8.6 million in transaction costs

The STRAT's Strong Performance and Growth Potential

Golden Entertainment executives pointed to The STRAT’s improved performance as a key driver of growth in its Nevada Casino Resorts segment:

  • Revenue in this segment rose 7%; adjusted earnings increased 2%

  • The STRAT's revenue grew 8%, with a 16% rise in adjusted earnings, driven by:

    • Higher occupancy (75% vs. 68% in Q3 2022)

    • Increased gaming, food, and beverage spending

“With renovations to our 1,300 rooms, casino, pool, entertainment, and restaurants, we believe The STRAT is well-positioned to capitalize on major events and growing visitation,” said Charles Protell, President and CFO of Golden Entertainment.

Protell also highlighted the anticipated impact of Atomic Golf, which is expected to drive additional traffic and spending when it opens in January 2024.

Other Property and Market Insights

  • Nevada locals' casinos continued their strong performance

  • Laughlin properties saw a 6% revenue increase, though adjusted earnings fell 4% due to labor and operational costs

  • Taverns segment was impacted by seasonality and Nevada’s minimum wage increase

Strategic Moves and Future Expansion

Golden Entertainment remains on track to complete the sale of its Nevada distributed gaming business for $214 million by year-end. While revenue in this segment was down 9%, the sale is expected to further strengthen the company’s balance sheet.

Financial Health & Shareholder Returns

  • $175 million of Rocky Gap proceeds were used to repay debt

  • $2 per share one-time cash dividend paid to shareholders

  • 252,395 shares repurchased for $9.1 million in Q3

  • Debt Reduction:

    • Total outstanding debt: $738.7 million

    • Cash & equivalents: $295.9 million

    • No outstanding borrowings under the $240 million revolving credit facility

    • $49.3 million in senior unsecured notes repurchased in October

Looking Ahead

Golden Entertainment remains focused on strategic expansion, including:

  • Tavern portfolio growth: Four new locations expected by year-end, with two more in Q1 2024

  • New development sites and a growing pipeline of future locations

  • Increased opportunities tied to Las Vegas’ expanding economy and major events

The STRAT & Atomic Golf Set to Drive Future Growth

With the ongoing revitalization of The STRAT and the debut of Atomic Golf, Golden Entertainment is poised to capitalize on Las Vegas’ dynamic entertainment landscape. As Protell noted, “The strength of the Las Vegas economy continues to support a healthy and growing customer base, and we’re excited about the future.”
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