Golden Entertainment Announces Special Dividend and Expands Buyback Plan
Golden Entertainment (NASDAQ: GDEN) is the latest casino operator to hop on the dividend train, though it seems to be a one-off move.
Following the release of their second-quarter earnings results, Golden's board of directors approved a one-time cash dividend of $2 per share. Despite not having a quarterly dividend scheme, they didn't announce any plans for one in their press release.
As per a statement issued by the Las Vegas-based company, the special dividend will be distributed on 25th August 2023 to all shareholders of record on 11th August 2023.
This is Golden's first special dividend since June 2016, and only the second one in its over two-decade-long stint as a publicly traded firm. They've also extended their share buyback program by an additional $100 million, as part of their ongoing efforts to satisfy shareholders.
Golden Has the Resources for Shareholder Rewards
By the end of the second quarter, Golden had $166 million in cash reserves and total liabilities of $916 million.
The completion of their $260 million sale of the Rocky Gap Casino Resort in Flintstone, MD, that was announced in August 2021 helped reduce their debt load. The remaining balance from this sale, which amounted to $175 million, has been used to lower the company's debt burden. According to company officials, as of today, their total debt stands at $735 million, comprising $400 million in outstanding borrowings under their new term loan and $335 million of senior unsecured notes.
If Golden needs more capital, it can use the entirety of their $240 million revolving credit facility. And to further strengthen its financial position, they announced the $361.5 million sale of their distributed gaming operations to J&J Ventures Gaming earlier in the year. This deal, set to close by the end of this year, will see J&J support Golden's gaming operations at their Nevada-based tavern locations, including PT's Pubs, which are spread across the Las Vegas Valley.
Golden Entertainment's Q2 Earnings Review
In the June quarter, Golden reported earnings of 40 cents a share on revenues of $286.7 million. On the other hand, analysts forecasted earnings per share of 50 cents on sales of $282.34 million. The discrepancy in earnings can likely be attributed to the reduction in room supply due to renovations at the Strat. However, most analysts view this as a temporary setback, with potential long-term benefits.
Additionally, the local's market in Las Vegas showed signs of renewed vitality. This includes two of their Arizona Charlie's casinos and a whole host of PT's Pubs spread all over the Las Vegas Valley.
Becoming a Nevada-only operator following the sale of Rocky Gap may enhance the company's investment case. Currently, Golden manages eight gaming establishments in Laughlin, Las Vegas, and Pahrump.
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Source: www.casino.org