Golden Entertainment posts revenue up by 2% in Q1 as it advance Nevada-focused strategy

Gaming and hospitality firm Golden Entertainment has reported first-quarter results for 2023, with $278.1 million in revenue, an increase of 2% from $273.6 million when compared to last year’s Q1. Additionally, net income came in at $11.6 million, or $0.38 per fully diluted share, down from net income of $36.1 million in Q1 2022.

Adjusted EBITDA for the first quarter of 2023 was $62.2 million, down from $67.3 million for the first quarter of 2022. The results come as the operator anticipates to becoming a 100% Nevada-focused business by the end of the year, with the firm not ruling out M&A action as it seeks to strengthen its position in the region.

Blake Sartini, Chairman and Chief Executive Officer of Golden Entertainment, noted that while the company was able to grow revenue in the first quarter, elevated costs relative to last year continued to impact Adjusted EBITDA.

The firm continues working on divesting non-core businesses, leaving it with a Nevada portfolio of owned casino assets and the largest gaming tavern footprint in the state. The company is confident in long-term demographic trends across Las Vegas in support of the growth strategy of its taverns segment, which will also be bolstered by the addition of six locations.

Company moves forward with sales

The report follows the recent announcements of the sale of two company businesses. Golden Entertainment had previously unveiled that it would sell its Rocky Gap Casino Resort to Century Casinos by June this year.

Additionally, the company is looking at selling its distributed gaming businesses across Nevada and Montana to J&J Gaming by the end of 2023. With the divestments lined-up for this year, J&J is set to become the largest distributed operator in the US after closing while Golden Entertainment will exit the segment.

Sartini in a statement explained: “During the quarter, we announced the sale of our distributed gaming businesses in both Nevada and Montana, which will allow us to focus on investing in our wholly-owned casino assets and growing our tavern portfolio in Nevada. We expect the sale of our distributed gaming businesses to close by the end of 2023 and continue to expect the previously announced sale of our Rocky Gap property in Maryland to close by the end of June.”

The firm will focus on its Nevada portfolio, which includes Vegas' The Strat

He further added: “Most of the sales proceeds from these transactions will further reduce leverage, which will position us well to continue investing in our owned properties, accelerate capital returns to shareholders and pursue future strategic initiatives.”

Additional Q1 highlights

As of March 31, the company’s total principal amount of debt outstanding was $913 million, consisting primarily of $575 million in outstanding term loan borrowings and $335 million of senior unsecured notes.

As of that same date, the company also had cash and cash equivalents of $156 million, and short-term cash investments of $5 million that will convert into cash during the quarter ending June 3, and there continues to be no outstanding borrowings under the company’s $240 million revolving credit facility.