Golden Entertainment Inc
Golden Entertainment Completes Sale of Nevada Distributed Gaming Operations
Golden Entertainment Inc. announced that it completed the previously disclosed sale of its distributed gaming operations in Nevada (Nevada Distributed Gaming Operations) to an affiliate of J&J Ventures Gaming LLC (J&J Gaming). Pursuant to the terms of the purchase agreement entered into among Golden Entertainment, J&J Gaming and the other parties thereto, J&J Gaming acquired Golden Entertainment’s Nevada Distributed Gaming Operations for cash consideration of approximately $213.5 million, subject to customary working capital and other adjustments, plus purchased cash (comprised cash and cash equivalents related to such operations at the time of closing) of approximately $37.5 million. The Company previously completed the sale of its distributed gaming operations in Montana to an affiliate of J&J Gaming on September 13, 2023.
Latham & Watkins LLP acted as a legal counsel to Golden Entertainment in connection with this transaction.
Golden Entertainment Inc. announced that effective March 20, 2024, Blake Sartini II, Golden’s Executive Vice President of Operations, became the Company’s Chief Operating Officer.
“Blake has worked in every capacity throughout our organization since he started at Golden almost 17 years ago. His unique knowledge of our Company’s culture, commitment to operational excellence, and strong leadership skills make him the ideal individual to be given responsibility for all our Nevada casino resorts, locals properties, tavern operations and related corporate functions,” Blake Sartini, Chairman and CEO of Golden, said.
Blake Sartini II initially joined Golden in June 2007, working with Golden’s tavern operations and building what is now the largest branded tavern portfolio in Nevada with 69 locations. Currently, as Executive Vice President of Operations, in addition to oversight of Golden’s taverns, he has direct responsibility for the Company’s five local casinos in Las Vegas and Pahrump.
Steve Arcana, Golden’s current Chief Operating Officer, became the Company’s Chief Development Officer also effective March 20, 2024. In this newly created role, Mr. Arcana will be responsible for all new tavern development, finding new third-party food and beverage concepts for the Company’s casino resorts, and exploring opportunities to unlock value in the Company’s excess real estate in Las Vegas, Laughlin and Pahrump. Mr. Arcana initially joined Golden in 2003 and has overseen the Company’s operations as it has grown from a privately held, 900-slot machine route operation to a publicly traded gaming company with casinos in Las Vegas, Laughlin and Pahrump in addition to its significant tavern portfolio.
“Steve has been with Golden for over 20 years and has been an integral part of growing our business and guiding us through many challenges. Steve has established a strong operating team and has been a consistent leader throughout his decades at Golden. His long history and extensive experience in the industry will continue to benefit the Company in his new role focused on creating value from new tavern development and unused assets in our casino portfolio,” Mr. Sartini said.
“These management changes will allow Golden to focus on maximizing performance in our core operations while exploring opportunities to drive future improvement by bringing potential new concepts to our existing portfolio. I am confident the changes to Blake and Steve’s roles with the Company will position us well to create additional shareholder value,” Mr. Sartini added.
Golden Entertainment Inc. reported financial results for the first quarter ended March 31, 2023.
Blake Sartini, Chairman and Chief Executive Officer of Golden Entertainment, commented: “In the first quarter we were able to grow revenue but elevated costs relative to last year continued to impact our Adjusted EBITDA. During the quarter, we announced the sale of our distributed gaming businesses in both Nevada and Montana, which will allow us to focus on investing in our wholly-owned casino assets and growing our tavern portfolio in Nevada. We expect the sale of our distributed gaming businesses to close by the end of 2023 and continue to expect the previously announced sale of our Rocky Gap property in Maryland to close by the end of June. Most of the sales proceeds from these transactions will further reduce leverage, which will position us well to continue investing in our owned properties, accelerate capital returns to shareholders and pursue future strategic initiatives.”
Consolidated Results
Revenues of $278.1 million for the first quarter of 2023 increased 2% from $273.6 million for the first quarter of 2022. Net income for the first quarter of 2023 was $11.6 million, or $0.38 per fully diluted share, compared to net income of $36.1 million, or $1.12 per fully diluted share, for the first quarter of 2022. First quarter 2023 Adjusted EBITDA was $62.2 million, compared to Adjusted EBITDA of $67.3 million for the first quarter of 2022.
Debt and Liquidity
As of March 31, 2023, the Company’s total principal amount of debt outstanding was $913 million, consisting primarily of $575 million in outstanding term loan borrowings and $335 million of senior unsecured notes. As of March 31, 2023, the Company had cash and cash equivalents of $156 million, and short-term cash investments of $5 million that will convert into cash during the quarter ending June 30, 2023, and there continues to be no outstanding borrowings under the Company’s $240 million revolving credit facility.
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