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Golden CEO says financial report shows strong trends

Golden Entertainment, Inc. earlier this month reported financial results for the third quarter, which ended Sept. 30.

“Our financial performance quickly recovered from the impact of the mandated shutdowns in March reflecting the benefit of our diversified portfolio of local and regional gaming operations as well as adjustments we made to managing the business,” said Golden Chairman and CEO Blake Sartini. “Our third quarter results demonstrate the continued strong operating trends at most of our properties since reopening as we generated the highest third quarter Adjusted EBITDA in the company’s history.”

Golden reported 2020 third quarter revenues of $205.4 million compared to $243.3 million in the third quarter of 2019. Net loss for the third quarter of 2020 was $7.0 million, or a loss of $0.25 per share, compared to a net loss of $9.4 million, or $0.34 per share, in the third quarter of 2019. Adjusted EBITDA was $45.4 million for the third quarter of 2020 compared to adjusted EBITDA of $43.1 million for the third quarter of 2019.

“Third quarter financial performance was led by our Las Vegas locals’ casinos, which achieved double-digit revenue growth and collectively doubled their adjusted EBITDA contribution compared to the same period last year,” Sartini said. “Strong performance also continued at our Laughlin and Pahrump casinos, which increased adjusted EBITDA by 8% and 40%, respectively, for the third quarter compared to the prior year. Our Maryland property also demonstrated meaningful improvement with third quarter adjusted EBITDA increasing 27% compared to the prior year.

“For our total casino operations including The STRAT, our focus on continued expense management drove an adjusted EBITDA margin improvement of approximately 1,000 basis points year over year to over 37% in the third quarter.”

Golden Entertainment owns several properties across Southern Nevada and in Pahrump, including the Pahrump Nugget and others. The company also has a gaming property in Maryland and has holdings in Montana, along with being licensed in Illinois and Pennsylvania to operate video gaming terminals.

According to Golden Entertainment’s website, it’s the largest distributed gaming operator in the U.S.., where the company operates over 10,500 gaming devices in Nevada and Montana with future plans to expand into Pennsylvania and Illinois.

Casino revenues were $135.3 million in the third quarter of 2020 compared to $155.1 million in the third quarter of 2019. Casino adjusted EBITDA was $50.5 million compared to $42.2 million in the third quarter of 2019.

“Our Montana distributed gaming business also continued to grow revenue and adjusted EBITDA for the quarter, while our distributed gaming business in Nevada was challenged from the mandated reclosure of bar areas from July 10 to Sept. 20,” Sartini said. “We have since reopened bar areas at all of our tavern locations and have seen more normalized operating trends across our portfolio.”

Distributed gaming revenues for the third quarter of 2020 were $69.9 million compared to $88.0 million in the third quarter of 2019. Distributed gaming adjusted EBITDA was $4.7 million compared to $11.4 million in the third quarter of 2019.

“Even as The STRAT continues to improve and our Nevada bar areas were closed for most of the quarter, consolidated adjusted EBITDA increased 5.5% over the prior year to $45.4 million,” Sartini added. “In addition, third quarter total company adjusted EBITDA margin expanded 440 basis points on lower revenues reflecting reduced labor and marketing expenses at our properties.

“Also, during the third quarter we repaid the remaining $10 million drawn on the company’s $200 million revolving credit facility which remains available to us for future liquidity needs. Looking forward, we are focused on sustaining financial performance, cash generation and reducing leverage to position us for future opportunities.”

As of Sept. 30, Golden had cash and cash equivalents of $100.4 million. Total debt was approximately $1.2 billion, consisting primarily of $772 million outstanding under the company’s existing credit facilities and $375 million of senior unsecured notes. There are no outstanding borrowings under the company’s $200 million revolving credit facility.

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