Golden Entertainment sees revenue rise but earnings fall
Golden Entertainment’s 2,900-slot expansion in Montana and the opening of five branded taverns in the Las Vegas Valley in 2016 resulted in a leap in revenue for the company that reported its fourth-quarter earnings Monday.
Golden, owner of the PT’s Pub, Sean Patrick’s and Sierra Gold franchises, reported a 21.9 percent increase in revenue for the quarter over 2015’s fourth quarter and a 29.1 percent increase in cash flow for the period.
A tough comparison with the company’s 2016 fourth quarter resulted in a decline in earnings for the quarter that ended Dec. 31. The 2016 fourth quarter included a $5.1 million income tax benefit related to the release of a portion of the valuation allowance against deferred tax assets.
In the company’s earnings call Monday afternoon, Golden Chairman and CEO Blake Sartini said the company’s focus on cost controls and disciplined management as well as strong business volumes would serve Golden well. The company plans to open seven Las Vegas taverns in 2017 and will keep a development pipeline active beyond that as part of the company’s aggressive expansion strategy in Nevada’s tavern industry.
Sartini said Southern Nevada’s recent immersion into major-league sports is a good fit for one of the company’s primary revenue generators.
“Major league sports continue to recognize Las Vegas as an attractive potential market for expansion, and we are hopeful that the NFL’s (Oakland) Raiders follow the lead of the NHL’s (Vegas) Golden Knights who will have their first game at T-Mobile Arena in Las Vegas later this year,” Sartini told investors.
The Raiders are about two weeks away from a vote of league owners on a request to relocate the team to Las Vegas. The Golden Knights, a new National Hockey League franchise, will begin play in October.
Golden also operates four casino properties in Pahrump and in Rocky Gap, Maryland.
“At Rocky Gap, we added gaming devices, updated the interior and expanded parking while refining our branding and marketing programs,” Sartini said.
Despite the opening of a big regional competitor — MGM Resorts International’s National Harbor property — in December, Sartini said Rocky Gap has continued to grow revenue year over year.
Golden Entertainment’s stock value jumped 10.9 percent, $1.28 a share, to $13.08 on heavy trading in regular trade. Charles Protell, the company chief financial officer, told investors on the call he did not know why the stock climbed so rapidly. It was unchanged in after-hours trade.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.
