Golden Entertainment Q2 revenue drops 41.6%, company optimist about F1 race

Gaming and hospitality company Golden Entertainment reported a significant decline in its second-quarter financial results for 2024, with revenue falling by 41.6% year-over-year to $167.3 million. The downturn was largely attributed to the sale of key assets in 2023 and early 2024, including the Rocky Gap Casino Resort and its distributed gaming operations in Montana and Nevada.

The company's Adjusted EBITDA for Q2 2024 also saw a decline, registering $41.2 million compared to $58.4 million in the same period last year. Net income fell sharply to $0.6 million, or $0.02 per fully diluted share, from $12.3 million, or $0.40 per share, in Q2 2023.

Despite these declines, Golden Entertainment made substantial strides in strengthening its balance sheet. On April 15, 2024, the company fully redeemed $287 million in senior unsecured notes. This move was followed by a reduction in the interest rate on its $396 million term loan by 60 basis points on May 29, 2024.

As of June 30, 2024, Golden Entertainment reported cash and cash equivalents of $88.6 million with no outstanding borrowings under its $240 million revolving credit facility. The company also repurchased nearly one million shares during the quarter at a total cost of $29.5 million and declared a third recurring quarterly cash dividend of $0.25 per share, payable on October 2, 2024.

Golden Entertainment's business operations also showed resilience in specific areas. The STRAT, one of its flagship properties, reported record hotel revenues in Q2 2024, with hotel rates up by 8% and weekend occupancy reaching 97%. The company's network of neighborhood taverns, which includes brands such as PT’s and Sierra Gold, saw a 3% increase in revenue and is poised to expand to 72 locations in the third quarter of 2024.

The company expressed optimism about the upcoming F1 Las Vegas Grand Prix, with CEO Blake Sartini noting a more aggressive strategy for capitalizing on the event compared to the previous year. Sartini emphasized that the company is in "offensive mode" for the event, anticipating a more lucrative weekend.

“This year we are way ahead of promotional activity during that weekend for both downtown and the north part of the Strip which we’re included in,” Sartini said. "All of the downtown properties are involved. I think part of the Arts District, as well, is involved which is adjacent to us. And we intend to be involved heavily in that process or in the entertainment schedule."

Golden Entertainment also continues to explore strategic opportunities in Laughlin, where it owns multiple properties. Charles Protell, the company's President and CFO, mentioned ongoing assessments for the future of the Colorado Belle site, which offers significant potential given its prime location along the Colorado River.

Sartini also said he remains bullish on the prospects for Atomic Golf, a new venture adjacent to The STRAT, despite its slow start. The CEO highlighted the potential for cross-traffic between the two properties as weather conditions improve and convention business picks up later in the year.