Las Vegas-based Golden Entertainment Inc. reported record second-quarter revenue and adjusted cash flow exceeding analysts’ expectations for the second straight quarter.
The company that operates three casino properties in Pahrump – the Pahrump Nugget, Gold Town and Lakeside, in addition to casinos in other communities — reported a loss of $14.4 million, 52 cents a share, on revenue of $248.1 million for the quarter that ended June 30.
In the same quarter a year earlier, the company showed net income of $3.6 million, 12 cents a share, on revenue of $216.5 million. A survey of five Wall Street analysts had projected adjusted earnings per share of 5 cents and revenue of $242 million.
“The improvements we have made at The STRAT continue to be well-received by our guests despite the ongoing construction disruption at the property,” Golden CEO Blake Sartini said in an Aug. 6 earnings call with investors.
“We have started renovations to The STRAT casino floor and remodels of additional hotel rooms, which we expect to complete by the end of the year. We have also integrated the operations of the Edgewater and Colorado Belle casinos in Laughlin, and we expect these properties to deliver improved results in the second half of the year as we begin to realize our targeted synergies. In addition, we have improved our ability to incentivize guests across our casino platform with the completed rollout of our new TrueRewards loyalty program at all 10 of our casino properties.”
STRAT renovations for 2019 remain on schedule, with renovations to the casino floor beginning in June and additional room renovations beginning in July. The STRAT’s new tap room, lounge and sportsbook were open for the entire second quarter. In addition, the company completed renovations to the SkyPod on the 108th floor of the tower, which includes a remodeled gift shop and food and beverage outlets as well as improvements to the Sky Jump experience.
Before the second quarter, Golden completed the renovation of 317 hotel rooms, other food and beverage outlets, including Top of the World, Strat Café and Starbucks, exterior lighting and landscaping of the property.
The remaining projects for 2019 include completing the casino remodel, renovating an additional 252 hotel rooms and completing the design of potential group meeting space. Golden expects the renovations of the casino floor to be ongoing throughout 2019.
As of June 30, the company invested $54 million on The STRAT renovations, including approximately $24 million in 2018. Company executives expect about $30 million of additional renovation costs for 2019, which it plans to pay for with cash flow from operations. Golden Entertainment’s total budget for The STRAT renovations remains unchanged at $140 million.
The company’s distributed gaming segment — the slot routes Golden operates across Nevada and Montana — improved with the addition of six new taverns since the second quarter of 2018, and the company now pays less rent at about half its chain store locations.
Besides the Pahrump properties, Golden Entertainment Inc.’s operations include The STRAT on Las Vegas Boulevard, two Arizona Charlies’ properties in Southern Nevada, Nevada’s PT’s Pub chain and casinos in Laughlin.
Golden Entertainment Inc.
Second-quarter revenue and earnings for Las Vegas-based Golden Entertainment Inc., which operates the Strat and two Arizona Charlies properties in Las Vegas and properties in Laughlin, Pahrump and Flintstone, Maryland. (Nasdaq: GDEN)
2Q 2019: $248.1 million
2Q 2018: $216.5 million
2Q 2019: ($14.4 million)
2Q 2018: $3.6 million
Earnings/(loss) per share
2Q 2019: (52 cents)
2Q 2018: 12 cents