The future owner of the Stratosphere saw earnings narrow but revenue increase by 7.7 percent in a record second quarter.
Golden Entertainment Inc., which operates the PT’s Pubs chain in Southern Nevada and slot-route operations in Nevada and Montana on Friday reported earnings of $1.7 million, 7 cents a share, on revenue of $110.5 million for the quarter that ended June 30.
Golden also is a casino operator in Pahrump and in Maryland.
Quarterly revenue was a record for the company as was adjusted net earnings before interest, taxes, depreciation and amortization of $15 million, up 12.8 percent over the previous year.
Golden surprised the industry in mid-June when it announced the $850 million acquisition of American Casino & Entertainment Properties, operators of two Arizona Charlie’s properties in Southern Nevada and Laughlin’s Aquarius in addition to the Stratosphere, the tallest structure in Las Vegas.
In response to an analyst’s question during a late-morning conference call, executives said the company may look at developing 15 acres on the Stratosphere site for a convention facility.
The American Casino acquisition along with the Illinois Gaming Board’s granting of a slot route license to a Golden subsidiary in that state later in June spells growth potential for the company, its top executive said.
“The four properties – Stratosphere Casino, Hotel & Tower, Arizona Charlie’s Decatur, Arizona Charlie’s Boulder and Aquarius Casino Resort in Laughlin – are highly complementary to our distributed gaming assets in Las Vegas and will seamlessly fit into our marketing and promotional strategy,” Golden Chairman and CEO Blake Sartini said in a conference call with investors.
“In particular, our mid-market customer base lines up nicely with the American Casino & Entertainment Properties customer and we believe we can effectively promote across Nevada, Montana and Maryland and create a dynamic, market-leading business,” Sartini said.
In the conference call, Sartini also said the company opened its 55th and 56th taverns in Southern Nevada, the second and third of seven anticipated openings this year. Golden plans to add six to eight more per year in the future.
The company’s best revenue generator is its Nevada slot route, which brought in $68.7 million. The Rocky Gap hotel-casino in Flintstone, Maryland, generated $17.4 million for the quarter, thanks in part to the company’s acquisition of state-owned slot machines for the casino floor. The investment has reduced the Maryland slot tax rate by 10 percent resulting in $3 million in annual savings.
Golden shares closed up 4.1 percent, 82 cents, to $20.95 a share on below-average volume.
Contact Richard N. Velotta at firstname.lastname@example.org or 702-477-3893. Follow @RickVelotta on Twitter.
Golden Entertainment Inc.
Second-quarter revenue and earnings for Las Vegas-based Golden Entertainment Inc. (Nasdaq: GDEN).
2Q 2017 2Q 2016 Change
Revenue $110.5 million $102.6 million +7.7%
Earnings $1.7 million $2.8 million -38.8%
Earnings per share 7 cents 12 cents -41.7%