Good afternoon, and welcome to the Golden Entertainment, Inc. 2022 third quarter results call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Joe Jaffoni. Please go ahead. Thank you very much, operator, and good afternoon, everyone. On today's call is Blake Sartini, the company's Founder, Chairman, and Chief Executive Officer, and Charles Protell, the company's President and Chief Financial Officer. On today's call, we will make forward-looking statements under the safe harbor provisions of the federal securities laws. Actual results may differ materially from those contemplated in these statements. Additional information concerning factors that could cause actual results to materially differ from these forward-looking statements is contained in today's press release and on our filings with the SEC. Except as required by law, we undertake no obligation to update these statements as a result of new information or otherwise. During the call, we will also discuss non-GAAP financial measures in talking about our performance. You can find the reconciliation of GAAP financial measures in our press release, which is available on our website. We'll start the call with Charles reviewing details of the 2022 third quarter results and a business update. Following that, Blake and Charles will take your questions. With that, it's my pleasure to turn the call over to Charles Protell. Charles, please go ahead. Thanks, Joe. We had another strong quarter, the second highest Q3 revenue and EBITDA in our history, surpassed only by Q3 of 2021. For the quarter, we delivered revenue of $279 million and EBITDA of $61 million, below last year, but still higher than the 2019 third quarter by 15% and 42% respectively. Our third quarter performance reflects the return of summer seasonality at our properties, as well as declines from last July, which was unusually strong given the continued stimulus and excess demand in the market. Our operating margins contracted compared to last year due to higher labor costs and other expenses, but we are pleased that our Nevada casinos continue to operate at margins that are 800 basis points higher than 2019. To start the fourth quarter in October, we saw strong business trends across our portfolio, with EBITDA up over last year at every property other than in Laughlin, where we had one more concert last October than this October. Also in October, The STRAT posted its highest hotel revenue month in history, with occupancy above 80% on average, including being completely sold out on the weekends. We expect October to be the second highest EBITDA-generating month in the property's history other than last July. Getting into our segment results for Q3, revenues for Nevada Casino Resorts was $98.9 million, while EBITDA was $30.1 million, with both of those metrics down year-over-year, reflecting the elevated STRAT performance last July, as well as the impact from higher labor and utility costs in the quarter. Also in Laughlin, we did not have any concerts in our outdoor arena compared to having two concerts in the same period last year. Last year was an unusual event calendar as we typically do not have large outdoor events in Q3 due to the summer heat in Laughlin. Reduced occupancy at The STRAT compared to last year was the primary driver of lower margins within our resort segment, but we expect margins to improve in the fourth quarter as occupancy continues to grow. In August, our development partner broke ground on a $75 million golf entertainment facility with over 100 bays located on excess land adjacent to The STRAT. We are excited for the project to be completed by the end of 2023 and believe it will be a significant traffic driver to our property for locals and visitors alike. Our Nevada local casinos reported revenue of $37.7 million and EBITDA of $16.8 million, reflecting the impact of higher August seasonality compared to last year, in addition to the cost increases we've seen in other areas of our business. Our Nevada locals margin was 44.6%, down a few percentage points from last year, but still up 1,650 basis points from 2019. To start Q4 in October, revenue and EBITDA tracked ahead of last year for all our local casinos. For our distributed gaming operations, revenue of $117.6 million was flat compared to last year, while EBITDA declined to $18.8 million. In Nevada, our wholly owned branded taverns, as well as our managed third-party locations, both saw decreased visitation in August and early September, similar to what we typically see at our properties when people tend to travel or get ready for back to school. This was offset by increased revenue in Montana, where we added new locations and benefited from increased summer tourism over last year. Margins were modestly impacted year over year by increased labor costs, but were also affected by annual rent increases in our Nevada tavern and chain store locations. Our Nevada wholly owned taverns got off to a strong start for Q4, benefiting from the sports calendar as well as the continued strong performance from our newest tavern opened in March. Turning to Maryland, revenue was $21.6 million and EBITDA was $7.4 million. In August, we announced definitive agreements to sell Rocky Gap for $260 million, reflecting a 10x multiple. Rocky Gap is a great casino resort property with a strong management team, but without any other East Coast properties, this sale will allow us to further focus on our core operations in Nevada. We expect the transaction to close in the second quarter next year. Moving to our balance sheet. In Q3, we repaid $25 million of our term loan, taking our total debt repayments to nearly $220 million over the last 18 months. Currently, our total debt outstanding is approximately $940 million. We ended the third quarter with $178 million of cash and no outstanding borrowings on our $240 million revolver. Our current net leverage is 2.8 x, and we intend to maintain our net leverage at 3 x or less going forward. Given the strong free cash flow we generate and the expected proceeds from the sale of Rocky Gap, our flexible capital structure positions us to maintain a healthy leverage profile, evaluate accretive opportunities, and return capital to shareholders. We were unable to repurchase shares in Q3 given blackout restrictions related to the pending sale of Rocky Gap. Although we repurchased nearly $50 million of our common stock since Q4 2021. This week, our board increased our share repurchase authorization to $75 million, and we anticipate being opportunistic while there is continued dislocation in our public valuation. We believe our portfolio is well-positioned for any economic environment. There are more visitation drivers and economic activity in Southern Nevada, where our operations are focused, than any other gaming market in the country. Our properties are stable, cash-generating assets with underlying real estate value, and we have not pursued uncertain development projects or unprofitable technology platforms. We have one of the lowest leverage ratios in the industry and plenty of liquidity. These factors make us excited about our future and confident in our ability to continue creating long-term value for our shareholders. That concludes our prepared remarks. Blake and I are now available for questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star two. At this time, we will pause momentarily to assemble our roster. The first question comes from Chad Beynon with Macquarie. Please go ahead, sir. Good afternoon. Thanks for taking my question. Charles, Blake, appreciate the October commentary. I think that's really helpful for everyone, you know, just given the questions that everyone's had through the past couple of months with the consumer. Wanted to talk about occupancy. I think you said you're kind of back to peak levels and the performance of The STRAT is one of the best since you've acquired it. Wondering if you can talk a little bit more in terms of what you're seeing on the weekends, some of these compression time periods. I think a lot of the other operators have reported really strong occupancies. I'm just wondering if you're starting to be able to drive ADRs as you originally intended when you acquired the property. Thanks. Yeah, Chad, thanks. Yeah, I think that's accurate. We are seeing early in the fourth quarter a lot of compression on the weekends. We're sold out, and it looks like we're sold out going forward, certainly on the weekends. It does look like midweeks have picked up significantly as well. For the month of October, we ran over an 80% occupancy at the hotel, which was historically the highest occupancy rate for a month that we've had at the highest hotel revenue rate that we've ever had. We are seeing compression in the broader market. We are benefiting from that not only on the weekends, but during the weekdays. That has been kind of a slow build that we've been seeing from, call it kind of mid-September through October and now into our booking windows in the future. We're very bullish on that property. We still expect to achieve EBITDA results that we're targeting. We're seeing, as you mentioned, a lot of strength regarding the demand for the hotel going forward. Thanks. Given your balance sheet and the cash proceeds after the Rocky Gap asset sale is completed, how are you thinking about what to do with the capital? I know in the past you've talked about your ability to look at a lot of things, and you just haven't found something that you're willing to bite down on. Can you just kind of remind us your priorities with that capital and kind of what you're seeing out there in the market? Yeah. Hey, Chad. I think for us, we're focused on maintaining a flexible balance sheet. Leverage being low, we think is critical at this juncture. We like the fact that we can look at other opportunities. The hurdle rate is high for us to pursue those, as we've talked about in the past. We think given where the balance sheet sits right now, we're fortunate where we can look at opportunities, invest in our own assets, and have the flexibility to return capital to shareholders. Thanks, guys. Appreciate it. Thanks, Chad. Thanks, Chad. Thank you. The next question comes from Cassandra Lee with Jefferies. Hi, good afternoon. Thank you for taking my question. Some of your competitors mentioned unusually high utility expense. I think they used the word extraordinary. I was wondering how much did it impact your operation? We saw that as well. Our utilities costs were up about 25% compared to last year. I mean, if you look at our quarter-over-quarter declines, you know, half of that had to do with labor costs plus utilities and other maintenance types of, you know, fixed costs that you'd see going up in the business. Yes, we did see that. You'd expect to see some of the utilities and energy price costs trend down as you get into the winter times, you know, versus where they are in peak summer seasons when you're trying to cool off big buildings in Las Vegas. Great. Thank you. If I may follow up. Longer term, how should we think about margins in the casino resorts, versus local casinos? Look, I think that the local casinos will always operate at a higher margin than the resorts, given just the footprint, the amount of fixed costs that are there. You know, that being said, as occupancy improves at The STRAT, you see wide swings in terms of the performance and the resulting margin associated with that. So we expect that this quarter will be a low point from a margin perspective. As we move through Q4, you'll see improvement in the margins that we're reporting right now. Great. Thank you so much for taking my question. Thanks, Cassandra. Thank you. Your next question comes from Omer Sander with JPMorgan. Hey, Blake and Charles, thanks for taking the question. Just one from me. So pro forma for the asset sale or for the Rocky Gap sale, you'll have $400 million or so of cash on the balance sheet looking at the 3Q ending cash balance. Obviously, the balance sheet's strong like you said. How do you think about additional non-core asset sales if there's anything else in your portfolio that, you know, somebody comes to you with the right price for? Yeah, look, I mean, if we're selling assets at 10 x EBITDA, we're trading at 7 right now. There's clearly a misallocation of valuation between private and public markets at this stage. We're a public company, you know, in our mind, everything, you know, everything has a price. We're not active in terms of, you know, marketing any of our assets at this point in time. If someone were to make us an attractive offer that reflects what we feel is the valuation of an asset, then we would transact. Awesome. Thanks. I guess maybe a follow-up. I know I said one, but do you think the ability for somebody to do so, given the change in the financing environment, is maybe tougher today than maybe it was, you know, 6-12 months ago for an asset that maybe has millions in front of it instead of billions? I think it depends. To your last point, it depends on the size of the asset. I think when you talk about financings in the billions that require large commitments, you know, those are much more difficult to do in this environment. But when you're talking in the hundreds of millions, there's several companies like our own that have ample liquidity to do those off their own balance sheet. I think those transactions still happen, still get announced, and will still be at, you know, multiples that are in excess of where public companies are trading at right now. Thanks, Charles. Thank you. The next question comes from David Bain with B. Riley. Great. Thanks so much. I guess first, given all the upcoming new events in Las Vegas and the return of growth from 2019 with conventions, are there gonna be additional investments or repositioning of The STRAT to capture that additional flow or try and take share, you know, using the adjacent land? Anything strategically with The STRAT? If we can get an update on Atomic Golf. I see a lot in the news, but I'd love to hear your take. Yeah, David, the answer is yes. We are continuing to program The STRAT to take advantage of what we see as a pretty robust calendar going forward for the broader city. We just opened a brand new food outlet a couple of weeks ago, an Asian outlet that is getting out of the gate very strong. We do anticipate next year, the first half of next year, to invest in approximately 550 more hotel rooms to bring them up to a competitive position in the market, which will then put the hotel well over half of the room inventory will be in a new configuration, and probably 80% of it will be in a configuration that is competitive with other properties along the Strip, given prior investment before our ownership, right before we took ownership. We are revamping our entertainment program as we go along, which is seeing significant improvement in terms of driving people to those events. You mentioned Atomic Golf. They're projecting a Q3 opening next year, is what they're trying to do in regards to getting in front of F1. That would be the target to open up prior to that. We are making investments in our pool product next year, which we think will be well received. All of this, I think, to your point, is we're seeing more stickiness on the property, which was our thesis in the beginning. We plan to target smart capital going forward at that property to continue to bring that into a highly competitive mode with those on the South Strip. Awesome. I guess as a follow-up, just because of the moves in the capital markets the last couple of days back to kind of macro, I mean, clearly, you're not seeing any impact to date. Maybe Blake, you know, given your history in the casino business, are there any economic indicators you would generally look for something to tip you off? Then maybe Charles, or even within the casino or business segments. Charles, if there are any changes that you would make today in case of that type of environment, or is that something that you guys have already sort of planned for and staged as a hedge? Yeah. I mean, in terms of making changes, you know, like we said, we're busy as we've ever been right now. From that perspective, you know, we saw some of that summer seasonality come back, and then the visitation and business and level of spends just pick right back up. From our perspective, you know, the portfolio is appropriately staffed. I mean, keep in mind, our headcount is still down 20% from 2019 levels. You know, labor, it's competitive. We can find bodies now, but it's still in a competitive labor market. You know, I think we are operating at the level where we've added back the amenities that we'd like to. Things like buffets for us are not coming back. Valet at certain properties, that's not coming back. Right now, we feel like we're on the right track in order to, you know, harvest visitation that is really gonna be predicated on those drivers to the city, whether it's the increased sporting events, the city wides. As you get into next year, we have a very stacked calendar for Q1. When you think about CES, CONEXPO-CON/AGG, what's happening in terms of March Madness and hosting the regional tournament here, so on and so forth. You know, we're pretty excited about the outlook with the businesses and the structure that we have in place. In regards to your question about, you know, the course of my career in the industry, is there any tells, if you will, or do we get tipped off as to what may be coming in the broader macro environment? You know, my answer, the short answer to that is no. My experience has been these things kind of take on the personality, if you will, of what's going on in the macro environment. Over time, that either wear and tear on the consumer in terms of drum beats about recession or high commodity prices or high gas prices or whatever they may be. That just, you know, the wealth effect, I think, is more of an effect on our consumer than anything. Are they, you know, do they still have equity in their homes? Do they still have spendable income in their pocket after inflation? I will end with, you know, in my career, I've never ceased to be amazed at the resiliency of the gaming consumer, particularly in the local market. Las Vegas is a dynamic community. It's growing very rapidly with significant population growth, massive amounts of commercial and residential construction. It's one of the most vibrant cities and continues to be over the last 2 or 3 decades in the world. That is only accelerating from what we see driving around town here. You know, I think our answer to all of that uncertainty and not being able to really pick a particular tell out of the macro economy is, as Charles mentioned in his comments, to have a strong balance sheet right now is really what our focus is to be prepared for either way that this thing goes. Right now, to your point, we're not seeing it tail off to any extent that they're talking about on a macro level. However, if it does, we're in a good position. Fantastic. Thank you both. Thank you. Your next question comes from Jordan Bender with JMP Securities. Great. Thanks for taking my question. You've been talking about some of the supply chain issues over the last couple of quarters, and you also talked about some of the occupancy caps last quarter as well. I was wondering if you could just talk about how that translated over into the third quarter and kind of what you're seeing now into the fourth quarter as well. Yeah. Hi, Jordan. Obviously, we talked about cost increases from a supply chain perspective for us in terms of getting, you know, certain food items, getting certain supplies. That has abated to a large extent. Now, the pricing is still high, so we've seen that price inflation that's happened there. From an occupancy standpoint, you know, the disruption of The STRAT is really about when you compare it to last July, which was for us, the highest really on record, and the second highest is actually gonna be this October. That just, you know, again, goes to show we just had a really tough comp at that property when you look July year-over-year. Again, I don't think we're having any meaningful supply chain issues right now. We don't see that going forward. Great. I guess, housekeeping item, your corporate and other on the revenue line was up pretty significantly in the quarter. Just anything to call out on that? We actually did a deal where we actually sold some, you know, royalty rights related to an old, you know, Lakes, some IP that Lakes Entertainment had dating back several years ago to, you know, Galaxy Gaming, which is a smaller, you know, equipment manufacturer. There's a little bit of gain on that that's embedded into that number. Great. Thank you. Thank you. The next question comes from Edward Engel with Roth Capital. Hi, thanks for taking my question. We've heard from a couple of your Las Vegas competitors that some of the tightness in the labor market is at least maybe starting to ease. Have you seen any loosening, either related to hiring or even wage inflation? Yes, it has loosened. I think we are finding it easier on a relative basis to find people to staff, for example, our new restaurant at The STRAT, fill out some of the areas in which we needed some additional labor. However, I think you're pretty much seeing us run at a level right now that we anticipate running going forward from a kind of a standard consistent basis. We are though, however, in particular classifications, seeing wage inflation, in particular security is one. Security's you know, a high profile and a high level kind of a position now that everyone is seeking out. We do have pockets of higher inflation with certain positions. That's the bad news. The good news is, we are seeing it's easier to find people that are willing to work and perform within our properties. Perfect. I recall last year you talked about 35,000 room nights missing at The STRAT relative to pre-COVID. Is it safe to assume, just given the strength in October, that sounds like you're kind of right back at where pre-COVID level was in terms of STRAT bookings? I think we're still missing a little midweek. You know, if you look at where the property in 2019, it operated on average, roughly 89% occupancy. When we're talking October, we're in low 80%. We still have a little bit of ways to go from that perspective, so we see that as upside. Again, as the city continues to book events, as Raiders continue to fill up, as the Knights continue to draw people, as we still continue to have citywide concerts, we think that gap will close in Q1 of next year. Perfect. Thank you. Thank you. The next question comes from John DeCree with CBRE Securities. Hi, Blake. Hi, Hi, Charles. Thanks for taking my questions. Hello, John. Just to maybe follow up on your last point, Charles, in terms of regaining that last little bit of occupancy at The STRAT. You know, we've heard from some of your peers that a little bit of international business is coming back into Las Vegas. Are you seeing that? Can you remind us if that's a meaningful piece of that additional occupancy gap that you'll look to recover next year? Yeah, meaningful is probably the wrong word, but it's something. If you look at 2019, international is about 7% of the occupancy at The STRAT. That adds. That will definitely be additive. I think a strong dollar obviously hurts that traveler coming over here. We'll just have to see how that goes. Of that 7%, about half was from Asia, and the other half was from Europe, where we got a very strong bid for that during the summer season. You know, we hope that comes back. It's not big, it's not meaningful to us, but it is something that's additive to close that gap. That's helpful. Maybe one on the balance sheet. I know we've talked a little bit about this already, but to ask it a little differently, you know, as we look out to when you close Rocky Gap and your net leverage and given your cash balance, it'd be a lot closer to 2x or less. I think you said, you know, you wanna stay under 3x. Just to get your views looking ahead, I mean, would you potentially kind of stay closer to 2x for a while, given the potential economic impacts that we all keep talking about? Then on the reverse side of that, would you go above 3x for the right accretive opportunity? Kind of, you know, what are the parameters you'd flex the balance sheet up or down, say over the next 12 or 18 months? Look, I think as you pointed out, pro forma for the sale of Rocky Gap will be 2x or less from a leverage perspective. You know, I think for a company that owns its own real estate, being 3x or less is very, very healthy. Would we stretch above that if we found the right acquisition? I mean, it would be very close to that level. Again, keep in mind, if you have a target, you'd be using the leverage capacity of that target. We have excess cash on the balance sheet as well. You know, I think that you're not gonna see this company be at 4x or 5x levered again. Yeah. Not in our lexicon right now. Yeah, I think that, John, it's, I mean, that's a good question to try to lead us into, you know, we stay in sub 2x or go above 3x. One of the prerequisites, if you will, when we look at the potential opportunity, is we like owning the real estate. In that case, to Charles' point, you know, it's a high hurdle for us to find an M&A opportunity, although we do think there is or may be those available. I think that real estate portion of it would drive, you know, number one, our interest, and number two, where do we end up in terms of the price for that asset on the balance sheet in terms of the balance sheet leverage? I think if all that comes together and we think it's the right opportunity, we do it. To Charles Protell's point, you're not gonna see us leverage it 4x or 5x again. That's helpful. You guys have done a great job getting the balance sheet in such a great place. It's good to see all the flexibility you have. I I appreciate the additional color on how you're thinking about that. Thanks, guys. Thank you. Yeah. Thank you. There are no further questions at this time. I would like to turn the conference back over to Charles Protell for any closing remarks. Okay, thank you all for participating. We'll talk to you on our next quarterly call. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.