Golden Entertainment said results since reopening “have exceeded expectations”, despite a 69.4% drop in revenue to $76.0m in the three months to 30 June and losses increasing to $78.6m.
Casinos made up $39.4m of Golden Entertainment’s revenue, down 75.2%, while distributed gaming venues, mostly consisting of other locations with slot machines, brought in $36.3m, down 59.3%
Gaming was the largest source of revenue, bringing in $56.7m, but this was down 61.4%.
Food and beverage revenue fell 80.9% to $10.2m while room revenue fell 83.1% to $6.0m while other revenue dropped 77.9% to $3.1m.
Total expenses, meanwhile, fell 41.0% to $137.9m. Gaming costs of sales were the largest expense, despite falling 58.1% to $35.2m. Food and beverage costs of sales fell 75.8% to $9.7m while room costs of sales declined by 71.4% to $4.6m. Costs of sales from other operations were down 72.8% to $1.4m.
The business reopened its operations in Montana in May, with Nevada following on 4 June when casinos in the state were permitted to reopen and Maryland on 19 June.
“I want to thank our team members for their dedication to our Company and their efforts to reopen our properties safely and efficiently,” Blake Sartini, chairman and chief executive of Golden Entertainment, said.
Selling, general and administrative expenses, meanwhile, fell 42.2% to $32.5m while depreciation and amortisation costs grew by 6.3% to $31.9m.
Golden Entertainment paid $367,000 in acquisition and severance expenses, down 67.3%, $703,000 for the disposal of assets, up 20.0% and $9,000 in preopening expenses, down 98.7%.
The business incurred a further $21.4m operating cost due to goodwill impairment, resulting in an operating loss of $62.0m.
After paying $16.4m in interest expenses, down 14.2%, Golden Entertainment made a pre-tax loss of $78.4m, up almost five times the loss it made in 2019.
After paying $206,000 in income taxes, the operator’s final loss was $78.6m, up 445.8%.
For the first half of 2020, Golden Entertainment brought in $283.1m in revenue, down 42.2%. Of this total, $183.9m was through gaming, down 36.6%. Food and beverages brought in $51.7m, down 49.3%, while room revenue fell 52.7% to $31.6m. Other revenue was down 45.7% to $15.9m.
Expenses declined too, but much more slowly, by 22.4% to $358.9m. Gaming costs of sales 32.0% $113.3m. Food and beverage costs of sales were down 43.1% to $44.6m and room costs of sales were down 30.1% to $18.5m, while other costs of sales fell 44.2% to $6.5m.
Selling, general and administrative costs were down 29.2% to $80.2m, while deprecation and amortisation costs grew by 10.1% to $63.1m.
Acquisition and severance costs were up 23.4% to $3.3m while losses from the disposal of assets grew by 51.1% to $1.3m. Preopening expenses, however, were down 92.5% to $115,000.
Impairment costs came to $27.9m, after no such costs the prior year. This resulted in an operating loss of $75.8m, after the operator made a profit of $25.7m.
Golden Entertainment paid an interest expense of $35.2m, down 5.3%. This resulted in a pre-tax loss of $110.9m, up 354.4% year-on-year.
After paying income taxes of $258,000, Golden Entertainment’s final loss was $111.2m, an almost five-fold increase from 2019.
Sartini said that as Golden Entertainment is a regional casino operator, it should be better poised to recover than destination casino operators.
“Our diversified gaming platform, with nearly 80% of our historical property Adjusted EBITDA derived from locals-oriented or regional gaming operations, is positioned to recover quickly from the impact of the mandated shutdowns.”
Sartini also noted that earnings before tax, interest, depreciation and amortisation (EBITDA) was up 14% in June compared to June 2019, which boded well for its recovery prospects.
“Performance in June was led by our Las Vegas Locals casinos and taverns which achieved double-digit revenue growth and collectively doubled their Adjusted EBITDA contribution compared to the same period last year,” he said.
“Our strong recent financial performance, significant and sustainable margin improvement, as well as our diverse local and regional operations, gives us confidence that we will recover from the current challenges and remain well-positioned for future opportunities.”