Closed deals, Strat upgrades touted, but Golden Entertainment posts quarterly loss

March 14, 2019 11:57 PM
  • Matthew Crowley, CDC Gaming Reports
March 14, 2019 11:57 PM
  • Matthew Crowley, CDC Gaming Reports

Progressing renovations at the newly branded Strat hotel-casino in Las Vegas and closed deals for two Laughlin properties had officials upbeat as Golden Entertainment released fourth-quarter earnings Thursday. But the casino operator posted a wider loss and missed analysts’ forecasts.

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In a statement issued after stock markets closed Thursday, Las Vegas-based Golden Entertainment, which owns hotel-casinos in Nevada and Maryland and slot routes in Nevada and Montana, said its net loss was $25.9 million or 92 cents per diluted share, for the three months ended Dec. 31, compared with a net loss of $13.5 million or 53 cents per diluted share, a year earlier.

Analysts polled by Yahoo Finance had expected Golden Entertainment to earn 2 cents per share in the quarter.

Golden Entertainment shares dropped before the earnings news, falling 64 cents, or 3.74 percent, to close regular trading at $16.45 on the Nasdaq.

Adjusted earnings before interest, taxes, depreciation and amortization, a cash flow measure that excluded nonrecurring costs, rose 19 percent to $34.4 million from $28.9 million.

Fourth-quarter revenue rose 14.4 percent to $210.1 million from $183.7 million. But the latest number missed the $211.1 million in revenue forecast by Yahoo-polled analysts.

In a statement accompanying the results, Golden Entertainment CEO Blake Sartini touted progress at the Strat, which had been known as the Stratosphere. He said 311 rooms have been renovated and the hotel-casino will soon add a new tap house, sports book casino and lounge.

“Throughout 2019, we will continue to focus on upgrades to the Strat’s (food-and-beverage) outlets while remodeling the casino floor and developing new entertainment amenities,” he said. “In addition, we anticipate renovating additional rooms and accelerating the renovation of suites.”

Golden acquired the property in 2017. As part of the rebranding of the Strat, with its 1,150-foot-tall observation tower and 2,400-plus hotel rooms, the tower’s top three floors will become the SkyPod. The space will house the Jump and Top of the World restaurants, among other features.

Golden Entertainment said it has spent $24 million through Dec. 31 for Strat renovations and has budgeted $54 million for 2019. In all, the company said it has budgeted $140 million for renovations and expects to finish them by 2021.

Sartini also said the January closing of the $190 million deal to acquire the Colorado Belle and Edgewater hotel-casinos in Laughlin from Marnell Gaming for $155 million would boost the company. Combining the newly acquired casinos with the already owned Aquarius gives Golden 10,000 rooms in Laughlin.

Golden Entertainment’s fourth-quarter casino segment revenues rose 22.2 percent to $123.7 million from $101.2 million. Fourth-quarter revenue for Golden’s Nevada casinos — nine-tenths of the company’s casino portfolio — were $107.9 million.

Montana distributed gaming business rose 12.5 percent to $16.7 million. Rocky Gap Resort in Maryland had revenue of $15.8 million in the quarter.

In January, bookmaker William Hill said it would operate sports books at the two Laughlin casinos. Financial terms weren’t disclosed. William Hill in October agreed to manage Golden’s race and sports operations in Nevada, Maryland and Montana for an undisclosed price.

Golden said it bought back 1.2 million shares of its stock in the fourth quarter for $19.6 million. The company’s board this month approved a new $25 million share repurchase authorization

For the 12 months ended Dec. 31, Golden posted a net loss of $20.9 million, or 76 per diluted share, reversing year-earlier profit of $2.1 million, or 8 per diluted share.

Twelve-month revenue rose 68 percent to $851.8 million from $507.1 million.

Follow Matthew Crowley on Twitter @copyjockey