Golden Entertainment Declares Special Dividend, Boosts Buyback Program

Posted on: July 31, 2023, 05:09h. 

Last updated on: July 31, 2023, 05:09h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Golden Entertainment (NASDAQ: GDEN) is joining the growing list of casino operators paying dividends, albeit in what appears to be temporary fashion.

Golden Entertainment
Golden Entertainment’s Strat Las Vegas. The company declared a special dividend and is increasing its buyback program. (Image: Twitter)

In conjunction with the release of its second-quarter earnings, the Strat operator said its board of directors approved a special dividend of $2 per share. Golden currently doesn’t pay a quarterly dividend and didn’t mention related plans in a press release.

The one-time cash dividend is payable on August 25, 2023 to stockholders of record as of August 11, 2023,” according to a statement issued by the Las Vegas-based company.

The special dividend will be the first paid by the Arizona Charlie’s operator since June 2016 and just the second in the firm’s more than 24 years as a publicly traded company, according to Yahoo Finance data. Furthering its commitment to shareholder rewards, Golden also announced it is adding $100 million to an existing share buyback program.

Golden Has Resources for Shareholder Rewards

At the end of the second quarter, Golden had $166 million in cash on hand and outstanding liabilities of $916 million.

With its $260 million sale of the Rocky Gap Casino Resort in Flintstone, Md., announced last August wrapping up earlier this month, the operator directed $175 million in proceeds to reducing that debt burden.  Golden added that as of today, it’s debt total stands out $735 million with “$400 million in outstanding borrowings under the new term loan and $335 million of senior unsecured notes.”

The company has access to all of a $240 million revolving credit facility, should it need that capital. Further supporting the firm’s efforts to pare debt and boost shareholder rewards, Golden announced the $361.5 million sale of its distributed gaming operations earlier this year.

Privately held J&J Ventures Gaming is acquiring the businesses from Golden and will enter into a five-year agreement with the casino operator to “support the gaming operations of Golden’s branded tavern locations in Nevada.” Those include PT’s Pubs, which are ubiquitous throughout the Las Vegas Valley. That transaction is expected to close by the end of this year.

Golden Entertainment Q2 Earnings Review

In the June quarter, Golden earned 40 cents a share on revenue of $286.7 million. Analysts expected earnings per share of 50 cents on sales of $282.34 million. The earnings miss was likely attributable to renovations at the Strat, which took some of the venue’s room supply off the market. However, analysts view that as a “near-term pain, long-term gain” proposition for the venue.

Additionally, there were signs of vibrancy in the Las Vegas locals market. For Golden, that includes a pair of Arizona Charlie’s casinos and a slew of PT’s Pubs strewn across the Las Vegas Valley.

With the sale of Rocky Gap, Golden is now a Nevada-only operator and that may serve to enhance its investment thesis. The company runs eight gaming venues in Laughlin, Las Vegas and Pahrump.