Golden Entertainment reported a 21 percent jump in net revenue and a 26.5 percent increase in Adjusted EBITDA for the third quarter of 2016, its first partial quarter as a fully merged company, it reported Thursday afternoon.
Net income for the quarter was $1.3 million – $0.06 per diluted share – against a $3 million figure for from the prior year, a slump that the company attributed to an abnormally high share-based compensation expense in July 2016 and a $12.9 income tax benefit payout.
The finalized merger and newly-acquired distributed gaming operations in Montana served as the key growth drivers for the quarter, with Montana’s 16,000 gaming devices contributing $15.1 million in net revenue and 15 percent of the state’s overall gaming revenue.
“The third quarter represents another period of strong economic results for Golden Entertainment,” said Blake L. Sartini, Chief Executive Officer of Golden Entertainment. “We continue to see significant same store strength in each jurisdiction in which we operate, and believe there are additional organic as well as external growth opportunities as we look forward.”
The company also opened its 50th branded tavern in the Las Vegas region during the quarter and is scheduled to launch another – PT’s Gold – before year’s end. It plans to open roughly 10 more wholly-owned taverns in Las Vegas in 2017.
“We see significant benefits and opportunities that are derived from having a uniquely diversified gaming company operating across differing segments and in multiple jurisdictions,” Sartini said.
Golden Entertainment was formed on July 31, 2015 with the merger of Lakes Entertainment and Sartini Gaming.
The lion’s share of revenue growth for the quarter came from Golden’s distributed gaming properties in Nevada and Montana, which grew from $61.1 million year-over-year to $78.3 million – a 27.9 percent jump. Growth was slower in the casino segment, increasing by 3.7 percent from $25 million to 25.9 million.
“In our distributed gaming segment we continue to see positive trends from both our wholly-owned branded taverns as well as our third party accounts,” said Sartini. “The outlook for this segment going forward, is strong, as many (temporary) closures will come back on line between now and Q1 of next year, and our organic growth pipeline is accelerating early in the fourth quarter.”
The company also touted that it is performing particularly well among millennials – with visitation in the segment up 18 percent and gaming revenue up 24 percent for the quarter.
“The profile of our customer is evolving and, we are the market leader in appealing to the growing millennial sector,” said Sartini, who attributed growth in this demographic to enhanced food and beverage offerings, new gaming platforms and a sports deposit and smartphone wagering option.
