Golden Entertainment, the operator of Las Vegas’ The Strat Hotel, reported its financial results for the third quarter ended September 30, 2023. Although revenue for the three-month period was down, the company reported improved performance in its Nevada Casino Resorts segment, driven by increased occupancy and its recent completion of room and pool renovations at The Strat.
The Las Vegas-based gaming and hospitality firm reported a total revenue of $257.7 million and a net income of $241.2 million for the third quarter. The overall revenue experienced a decline of approximately 7.6% compared to the previous year.
It also reported an Adjusted EBITDA of $53.2 million in Q3 of 2023, compared to $61.1 million in the third quarter of 2022. Declines in revenues and Adjusted EBITDA were primarily due to the exclusion of full-quarter results for the Rocky Gap Casino Resort and the Montana distributed gaming business that were sold during the third quarter.
Specifically at The Strat, revenue was up by 8% with completed room renovations and a new neighbor down the street, the Fontainebleau, which the company expects to bring more foot traffic to its flagship resort. The completion of most of the room renovations is fueling high expectations, along with the January debut of the $70 million Atomic Golf attraction.
“We feel that the property is now well-positioned to capitalize on the high-traffic events like F1 and Super Bowl coming to Vegas over the coming quarters and beyond,” said Charles Protell, President and Chief Financial Officer of Golden Entertainment.
During an earnings call with investors, Blake Sartini, Chairman and Chief Executive Officer of Golden Entertainment, said the company’s Nevada Locals Casinos segment maintained a strong performance. Meanwhile, tavern revenue was “flat” during the summer months, when business is typically slower. However, Golden reports that the last eight taverns it has opened are generating a return on investment of 25%.
The company expects to complete the purchase of four more taverns by the end of the year, and two more early next year. It’s also exploring sites for future tavern development.
Blake Sartini
In September, the firm completed the sale of its Montana-distributed gaming business to J&J Ventures Gaming for an aggregate cash consideration of approximately $109 million and is “on track” to complete the sale of its Nevada-distributed gaming business at the end of the year.
“The completion of these transactions significantly strengthens our balance sheet, enables the return of capital to shareholders, and provides financial flexibility to enhance shareholder value,” Sartini explained.
As of September 30, the company’s total principal amount of debt outstanding was $738.7 million, consisting primarily of $399 million in outstanding term loan borrowings and $335.5 million of senior unsecured notes.
As of that same date, the company also had cash and cash equivalents of $295.9 million. There continue to be no outstanding borrowings under the company’s $240 million revolving credit facility.
In addition to The Start, Golden Entertainment owns two more Las Vegas casinos, Arizona Charlie’s Decatur and Arizona Charlie’s Boulder. Golden also owns Laughlin properties Aquarius Casino and Resort and Edgewater Casino and Resort, along with three casinos in Pahrump: Pahrump Nugget, Gold Town Casino, and Lakeside Casino and RV Park.
