Golden Entertainment's Las Vegas locals casino revenue down, earnings grow 21% in Q4

Golden Entertainment reported 2020 fourth-quarter revenues of $205.6 million compared to $242.1 million in the fourth quarter of 2019. Net loss for the period was $18.5 million, or a loss of $0.66 per share, compared to a net loss of $7.7 million in the prior-year period. Adjusted EBITDA was $38.9 million, down from $43.1 million.

Casino revenues were $112.6 million in the fourth quarter, a decrease from $150.2 million in the fourth quarter of 2019. Casino Adjusted EBITDA was $33.4 million, down from $41.7 million.

Blake Sartini, Chairman and CEO of Golden Entertainment, commented: “Our fourth quarter started strong with record October Adjusted EBITDA. However, tightened operating restrictions across all our businesses due to the pandemic began in November and extended through December, impacting overall fourth quarter results. Despite these challenges, our fourth quarter continues to demonstrate that the adjustments we have made to our operations provide a foundation for sustainable margin improvements which are expected to provide a significant lift to our Adjusted EBITDA and free cash flow as business volume returns to normalized levels."

“Reflecting a margin improvement of more than 1,000 basis points, fourth-quarter Adjusted EBITDA for our Las Vegas locals casinos increased 21% compared to the same period last year despite a 6.5% decline in revenue as a result of reduced capacity and other restrictions. While The STRAT generated positive Adjusted EBITDA in the fourth quarter, the property was particularly impacted by the restrictions in place during the period which significantly impacted occupancy in November and December," he continued.

Adjusted EBITDA for all of the company's Nevada casinos excluding The STRAT, increased 5.6% year over year as it improved the Adjusted EBITDA margin by 840 basis points, the CEO explained. "Our Maryland property was also impacted by restrictions and adverse weather during the quarter. For our total casino operations excluding The STRAT, our focus on continued expense management drove an Adjusted EBITDA margin improvement of approximately 670 basis points year over year to approximately 37% in the fourth quarter. In addition, both our Nevada and Montana distributed gaming operations grew revenue and Adjusted EBITDA in the fourth quarter over the prior-year period."

“We are encouraged by the increased business volumes since state restrictions began to ease and believe that as the vaccination rollout progresses, Las Vegas will benefit from pent up demand as well as the resumption of retail and business travel. Looking forward, we expect the changes we have made to our cost structure will provide us with sustainable margin improvements which are expected to result in higher cash generation and allow us to reduce leverage, pursue future strategic initiatives and return capital to shareholders," Sartini concluded.