Golden Entertainment Posts Q2 Results, Considers M&A Activity

Golden Entertainment has reported its results for the second quarter of the year, highlighting changes to its performance. The company recently finalized its latest divestments and is now planning M&A activity to support its growth.

Golden Entertainment reported revenues of $286.7 million for Q2, representing a slight 1% year-on-year drop. Net income, meanwhile, sat at $12.3 million, which translates to $0.40 per fully diluted share. Unfortunately, this represents a noticeable decline from the $21.2 million recorded in Q2 2022.

Adjusted EBITDA for the period was $58.4 million, highlighting a year-on-year drop from Q2 2022’s adjusted EBITDA of $75 million.

Blake Sartini, Golden Entertainment’s chief executive, attributed the revenue decline to ongoing renovation works in Nevada. He said that the company’s local casinos continue to drive strong performance.

In Q2, the board of directors also declared a one-time cash dividend of $2 per share of its outstanding common stock. At the same time, the board approved a share buyback authorization, allowing the company to reacquire up to $100 million of its shares.

At the end of June 30, 2023, Golden Entertainment had an outstanding debt of $916 million, as well as cash and cash equivalents of $166 million. The next month, the company used the money from its $260 million sale of the Rocky Gap Casino Resort property to repay $175 million of its debts.

Golden Entertainment Considers M&A Activity

Golden Entertainment’s chief financial officer, Charles Protell, is optimistic about the company’s position, despite the slight setbacks. He noted that the company has the capacity to “go out and look for deals” that would improve its profitability.

Protell teased that the company is considering M&A activity in the western parts of the USA as it is more interested in acquiring “casinos or portfolios of a more meaningful size.” However, what matters most to Golden Entertainment is where it can create value through synergies with its existing portfolio.

So, I think that that is a fairly narrow lens to look at acquisitions, but we will do that. I think the other thing that we’re trying to highlight as we think about our future going forward is that it will be weighed against simply buying our own stock given the capacity that we have on the balance sheet and the buyback authorization from the board.

Charles Protell, CFO, Golden Entertainment

Meanwhile, Blake Sartini, Golden Entertainment’s chief executive officer, added that the company will continue working on accelerating the return of capital to shareholders in the forms of dividends and stock repurchasing.