Golden Entertainment, the Las Vegas-based distributed gaming operator, reported strong second quarter growth Friday on the heels of impressive performances in its Nevada and Montana slot routes.
The company grew distributed gaming revenues year-over-year by 8.3 percent to $84.2 million, with Nevada operations increasing by 6 percent to $68.7 million and Montana jumping by nearly 20 percent to $15.4 million in the quarter.
Net income from distributed gaming grew nearly 25 percent from the prior year quarter to $7.9 million.
“Our distributed gaming businesses in Nevada and Montana generated solid growth, as trends we saw to start the year continued into the second quarter,” said Blake Sartini, chief executive of Golden Entertainment.
“In Nevada, our business mix continues to transition towards our higher-growth and higher-margin branded tavern locations and away from contracted locations in the route that are less profitable,” he continued.
Enterprise-wide, total revenues grew 7.7 percent to $102.6 million and adjusted EBITDA increased 12.8 percent from the prior year quarter to $15 million. Net income for the quarter was $1.7 million – $0.07 per diluted share.
Sartini added that Golden opened two additional wholly-owned taverns during the quarter and remains on pace to open a grand total of seven in 2017.
The company’s property in western Maryland also continues to perform well in an increasingly competitive market.
“Rocky Gap again competed very effectively in the greater DC market, generating healthy net revenue and double-digit EBITDA growth during the quarter,” said Sartini. The property grew revenues by 8 percent to $17.4 million and adjusted EBITDa by 19 percent to $4.6 million.
The biggest news of the quarter was the announcement of an $850 million acquisition of American Casino & Entertainment Properties – a portfolio that includes the iconic Stratosphere Casino, Hotel and Tower.
Sartini said that the acquisition figures to nicely complement Golden’s existing southern Nevada assets.
“Our mid-market customer base lines up nicely with the American Casino & Entertainment Properties customer and we believe we can effectively promote across Nevada, Montana and Maryland and create a dynamic, market-leading business,” he said Sartini.
The company also obtain licensure to operate video gaming terminals in Illinois, a significant stepping-stone toward further distributed gaming expansion across the country.
“We have said for some time that we want to be a larger player in the distributed gaming marketplace and believe that Illinois represents an attractive long-term growth opportunity for the company,” said Sartini.
“Golden is very well-suited to become a leading provider in Illinois, thanks to our deep experience operating the largest distributed gaming platform in the country, and we expect to become the partner of choice for existing and new distributed gaming locations throughout Illinois,” he continued.
As of the June 30, the company had $49.8 million in cash and cash equivalents on its balance sheet against $178.7 million in total debt.
After opening trading at $19.44 Friday morning, Golden shares spiked as high as $21.45 by mid-morning.
