NEW ROYAL HOLDCO I INC. Q1 FY2024 earnings call

• Completed sale of Nevada distributed business, used proceeds to repay over $0.5 billion of debt and establish a recurring dividend. - STRAT had improved occupancy but ADR down; Atomic Golf opened at end of March. - Laughlin revenue slightly grew. - Nevada Locals Casinos faced challenges from road construction and lower visitation. - Nevada taverns portfolio grew with purchase of additional locations. - Balance sheet had $397M term loan, $276M unsecured notes, and $400M cash; used cash to repay debt and buy taverns.

In the first quarter, Golden Entertainment generated revenue of $174 million and EBITDA of $41 million. Continuing operations: total revenue was down less than 1% but EBITDA was down over 15% due to increased labor costs in Nevada Casino Resorts and weaker revenues from higher-margin Nevada Locals casinos. At the STRAT, occupancy improved almost 8% to 78% but ADR was down about 8%. Laughlin saw slightly higher revenue supported by a new bingo room and concert, but margins were impacted by higher labor and entertainment expenses. Nevada Locals Casinos had revenue down 5% and EBITDA down 13%. Nevada tavern revenue was up 1% overall, but same-store revenue declined 4% with EBITDA down 11%.

• Continue to invest in assets, return capital to shareholders, and utilize $91M share repurchase authorization. - Anticipate Atomic Golf to contribute $4M-$5M of EBITDA. - Expect improvement in midweek occupancy at STRAT throughout the year.

• Impact of inflation and higher interest rates on consumer spending affecting business. - Road construction impacting access to Arizona Charlie's Decatur property. - Regulatory complexities in acquiring and operating taverns.

Q: Talked about past events and STRAT strategy.

A: Blake Sartini mentioned continuing ad campaigns, improving guest scores on OTA sites, and expecting convention-driven improvement.

Q: About Atomic Golf.

A: Charles Protell said it's an $80M project in ramping phase, expected to contribute $4M-$5M EBITDA, and used for driving foot traffic.

Q: Minimum wage hike in July.

A: Blake Sartini said preparing with expense mitigation, budgeting, and expecting mitigation to take effect.

Q: Taverns competition and M&A.

A: Blake Sartini said not seeing M&A opportunities in taverns, size and brand as competitive advantages.

Q: Macro backdrop and locals business.

A: Charles Protell said persistent inflation and higher rates affecting consumers, some stabilization in May.

Q: Strip supply and future benefit.

A: Blake Sartini said net positive, expecting benefit in Q3 and Q4.