Golden Entertainment's 2024 Q4: M&A Strategies, STRAT Performance, and Tavern Growth Expectations in Conflict

These are the key contradictions discussed in Golden Entertainment's latest 2024 Q4 earnings call, specifically including: M&A strategy, STRAT occupancy and performance, and taverns segment growth expectations:



Financial Performance and Strategic Initiatives:
- Golden Entertainment reported revenue of $164 million and EBITDA of $39 million for Q4 2024, with full-year revenue and EBITDA reaching $667 million and $155 million, respectively.
- The company's financial results were driven by strategic initiatives such as the sale of noncore assets, reducing leverage, lowering the cost of capital, and instituting a regular quarterly dividend.

Property Segment Performance:
- At The STRAT, weekend occupancy was flat at 95%, while midweek occupancy was down 6%, leading to an overall occupancy of 75% for the quarter.
- The decline in occupancy was attributed to lower demand during midweeks, which was partially offset by increased weekend spending.

Operational Improvements and Market Share:
- The Nevada locals casinos segment saw increased revenue and EBITDA, with an EBITDA margin improving to 46%.
- Operational improvements and increased market share in Laughlin due to riverfront bingo room and smaller entertainment venue programming contributed to the segment's performance.

Capital Structure and Shareholder Returns:
- Total funded debt was approximately $400 million, with net leverage of 2.3x EBITDA, and $220 million of remaining availability under the revolving credit facility.
- The company returned nearly $190 million to shareholders through share repurchases and dividends since 2022, with $113 million returned in 2024 alone.

M&A and Strategic Alternatives:
- Golden Entertainment continues to explore strategic alternatives to maximize shareholder value, including M&A and real estate monetization.
- The company remains open to acquiring properties of at least $40 million to $50 million in EBITDA and aims for a pro forma leverage ratio of 3x or less.