Golden Entertainment touted progress during its second-quarter earnings reveal, saying renovations to its off-Strip Strat hotel-casino remained on schedule and recent Laughlin property acquisitions are delivering benefits. But the company posted a quarterly loss, reversing year-earlier income, although revenue rose and beat Wall Street forecasts.
In a statement issued after stock markets closed Tuesday, Las Vegas-based Golden Entertainment, which owns hotel-casinos in Southern Nevada and Maryland and slot routes in Nevada and Montana, said its net loss was $14.4 million or 52 cents per share, in the three months ended June 30, reversing net income of $3.6 million, or 12 cents per diluted share, a year earlier.
Analysts surveyed by Yahoo Finance had, on average, expected net income of 5 cents per share. Zacks Investment Research noted that Golden Entertainment hasn’t surpassed Wall Street earnings forecasts in the past four quarters.
Adjusted earnings before interest, taxes, depreciation and amortization, a cash flow measure that filters out one-time costs, rose 7.6 percent to a record $49.8 million from $46.3 million. The latest results include contributions from the Edgewater and Colorado Belle hotel-casinos in Laughlin, acquired in January.
In a conference call with journalists and analysts to announce the earnings news, Chief Financial Officer Charles Protell said Golden Entertainment is on track to realize roughly half of its targeted $4 million cost synergies from the two new Laughlin properties by year’s end and capture the balance in 2020’s first half.
Quarterly revenue rose 14.6 percent to $248.1 million from $216.5 million. The latest result topped the $242.5 million consensus revenue forecast by Yahoo Finance-polled analysts.
The $140 million makeover of the Strat, which began in 2018’s second quarter, continues toward a 2021 completion, the company said.
Protell said casino floor renovations have started along with renovation of about 250 hotel rooms; half the rooms will be renovated by the end of the third quarter and half will be finished of the fourth quarter. By Dec. 31, Protell said, Golden Entertainment will have spent $84 million on the Strat since renovations started.
During the call, CEO Blake Sartini said, “Based on our current investment, The Strat will be well-positioned to take advantage of citywide traffic drivers in 2020 such as (the) Conexpo (convention), the NFL Draft and the Raiders pickup season in Las Vegas,” he said.
He later added, “We have a dominant position in Nevada and growing market share in Montana. As the largest distributed location operator across multiple jurisdictions, Golden is well-positioned to expand our business into existing or new markets.”
Nevada operations delivered gains. Golden Entertainment’s Nevada casino revenue rose 24.3 percent to $140.3 million from $112.9 million and its slot route revenue rose 3.3 percent to $71.4 million from $69.1 million. Montana slot route revenue had an even bigger increase, rising 11.3 percent to $17.7 million for, $15.9 million.
During the quarter, Golden Entertainment named Anthony Marnell III and Ann Dozier to its board of directors and re-elected all five nominees standing for re-election — Sartini, Lyle Berman, Mark Lipparelli, Robert Miodunski and Terrence Wright. Former board members Timothy Cope and Neil Sell did not stand for re-election.
Golden Entertainment shares fell 20 cents, or 1.5 percent, Wednesday to close at $13.09 on the Nasdaq. The share price has fallen 21.5 percent in 2019.
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