Red Rock Resorts Announces First Quarter 2024 Results

Rhea-AI Summary

Red Rock Resorts announced its first quarter 2024 financial results, with net revenues of $488.9 million, a 12.7% increase from the same period in 2023. Despite a 8.4% decrease in net income to $78.4 million, adjusted EBITDA rose by 7.7% to $209.1 million. Las Vegas operations saw a 12.9% revenue increase to $485.6 million and a 7.3% rise in adjusted EBITDA to $229.8 million. The company reported $129.7 million in cash and cash equivalents and a total debt outstanding of $3.5 billion as of March 31, 2024. Additionally, a dividend of $0.25 per Class A common share was declared for the second quarter of 2024.

Positive

• Net revenues increased by 12.7% to $488.9 million in the first quarter of 2024.

• Adjusted EBITDA rose by 7.7% to $209.1 million in the first quarter of 2024.

• Las Vegas operations saw a revenue increase of 12.9% to $485.6 million in the first quarter of 2024.

• Adjusted EBITDA from Las Vegas operations increased by 7.3% to $229.8 million in the first quarter of 2024.

• The company reported $129.7 million in cash and cash equivalents as of March 31, 2024.

Negative

• Net income decreased by 8.4% to $78.4 million in the first quarter of 2024.

• Total debt outstanding was reported at $3.5 billion as of March 31, 2024.

Insights

Financial Analyst

Red Rock Resorts, Inc. has presented a mixed financial report for the first quarter of 2024, demonstrating both growth and contraction in key financial metrics. Net revenues have experienced a healthy increase of 12.7% year-over-year. This uptick in revenue is a positive indicator, possibly reflecting a successful adoption of strategic initiatives or favorable market conditions in the gaming and hospitality sector. However, net income has declined by 8.4%, suggesting increased costs or possibly one-time expenses that have not been detailed in the summary provided. Adjusted EBITDA, up 7.7%, is a significant metric for gauging the company’s operational efficiency. This growth indicates a potentially stronger underlying operational performance, despite the net income dip. The balance sheet reveals a substantial debt load at $3.5 billion, which warrants a cautious examination of the company's long-term financial sustainability and interest coverage capability. The announcement of a consistent dividend could signal confidence from the board in the company's cash flow stability. However, investors should consider the potential impact of the company's debt level on future dividend sustainability. The declared dividend could be appealing to income-focused investors, but the modest yield should be weighed against the overall financial health and prospects of the company. Overall, while revenue growth is a positive sign, the decrease in net income and high debt levels are areas that merit careful consideration. The financial results give a neutral outlook, suggesting investors should closely monitor subsequent quarters for trends in profitability and debt management.

Market Research Analyst

The gaming and hospitality industry, in which Red Rock Resorts operates, is highly competitive and sensitive to macroeconomic factors. The reported revenue increase suggests that Red Rock Resorts is capturing market share or benefiting from increased consumer spending in this sector. Notably, the significant increase in Las Vegas operations revenue could indicate successful regional marketing or an uptick in tourism. Additionally, the strength in Las Vegas may reflect wider economic trends such as increased disposable income or a shift in consumer entertainment preferences. However, the decrease in net income amidst revenue growth necessitates a deeper dive into the company's cost structures and operational efficiencies. Investors should consider how the company's performance compares with industry peers and whether the reported figures are aligned with broader industry trends. The stated reliance on Adjusted EBITDA as a valuation metric, while common in the industry, requires careful scrutiny due to its non-GAAP nature and the potential for exclusion of significant expenses. Market response to these results will likely hinge on perspectives regarding the company's long-term growth strategies and its ability to manage expenses while continuing to expand revenue streams. This analysis provides a neutral perspective on the company's current positioning in the market.

LAS VEGAS, May 7, 2024 /PRNewswire/ -- Red Rock Resorts, Inc. ("Red Rock Resorts," "we" or the "Company") (NASDAQ: RRR) today reported financial results for the first quarter ended March 31, 2024.

First Quarter Results

Consolidated Operations

• Net revenues were $488.9 million for the first quarter of 2024, an increase of 12.7%, or $55.3 million, from $433.6 million in the same period of 2023.
• Net income was $78.4 million for the first quarter of 2024, a decrease of 8.4%, or $7.2 million, from $85.5 million in the same period of 2023.
• Adjusted EBITDA⁽¹⁾ was $209.1 million for the first quarter of 2024, an increase of 7.7%, or $15.0 million, from $194.2 million in the same period of 2023.

Las Vegas Operations

• Net revenues from Las Vegas operations were $485.6 million for the first quarter of 2024, an increase of 12.9%, or $55.5 million, from $430.0 million in the same period of 2023.
• Adjusted EBITDA from Las Vegas operations was $229.8 million for the first quarter of 2024, an increase of 7.3%, or $15.7 million, from $214.1 million in the same period of 2023.

Balance Sheet Highlights

The Company's cash and cash equivalents at March 31, 2024 were $129.7 million and total principal amount of debt outstanding at the end of the first quarter was $3.5 billion.

Quarterly Dividend

The Company's Board of Directors has declared a cash dividend of $0.25 per Class A common share for the second quarter of 2024. The dividend will be payable on June 28, 2024 to all stockholders of record as of the close of business on June 14, 2024. 

Prior to the payment of such dividend, Station Holdco LLC ("Station Holdco") will make a cash distribution to all unit holders of record, including the Company, of $0.25 per unit for a total distribution of approximately $27.5 million, approximately $16.0 million of which is expected to be distributed to the Company and approximately $11.5 million of which is expected to be distributed to the other unit holders of record of Station Holdco. 

Conference Call Information 

The Company will host a conference call today at 4:30 p.m. Eastern Time to discuss its financial results. The conference call will consist of prepared remarks from the Company and include a question and answer session.  Those interested in participating in the call should dial (888) 317-6003, or (412) 317-6061 for international callers, approximately 15 minutes before the call start time. Please use the passcode: 9838276. A replay of the call will be available from today through May 14, 2024 at www.redrockresorts.com. A live audio webcast of the call will also be available at www.redrockresorts.com.

Presentation of Financial Information

(1) Adjusted EBITDA is a non-GAAP measure that is presented solely as a supplemental disclosure. We believe that Adjusted EBITDA is a widely used measure of operating performance in our industry and is a principal basis for valuation of gaming companies. We believe that in addition to net income, Adjusted EBITDA is a useful financial performance measurement for assessing our operating performance because it provides information about the performance of our ongoing core operations. Adjusted EBITDA for the three months ended March 31, 2024 and 2023 includes net income plus depreciation and amortization, share-based compensation, write-downs and other, net (including gains and losses on asset disposals, preopening and development, business innovation and technology enhancements, demolition costs and non-routine items), interest expense, net, loss on extinguishment/modification of debt and provision for income tax.

Company Information and Forward Looking Statements

Red Rock Resorts is a holding company that owns an indirect equity interest in and manages Station Casinos LLC ("Station Casinos"). Station Casinos is the leading provider of gaming, hospitality and entertainment to the residents of Las Vegas, Nevada. Station Casinos' properties, which are located throughout the Las Vegas valley, are regional entertainment destinations and include hotels as well as various amenities, including numerous restaurants, entertainment venues, movie theaters, bowling and convention/banquet space, as well as traditional casino gaming offerings such as video poker, slot machines, table games, bingo and race and sports wagering. Station Casinos owns and operates Red Rock Casino Resort Spa, Green Valley Ranch Resort Spa Casino, Durango Resort & Casino, Palace Station Hotel & Casino, Boulder Station Hotel & Casino, Sunset Station Hotel & Casino, Santa Fe Station Hotel & Casino, Wildfire Rancho, Wildfire Boulder, Wildfire Sunset, Wildfire Valley View, Wildfire Anthem, Wildfire Fremont and Wildfire Lake Mead. Station Casinos also owns a 50% interest in Barley's Casino & Brewing Company, Wildfire Casino & Lanes and The Greens.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include, without limitation, statements regarding our expectations, hopes or intentions regarding the future. These forward-looking statements can often be identified by their use of words such as "will", "might", "predict", "continue", "forecast", "expect", "believe", "anticipate", "outlook", "could", "would", "target", "project", "intend", "plan", "seek", "estimate", "pursue", "should", "may" and "assume", or the negative thereof, as well as variations of such words and similar expressions referring to the future. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. Certain important factors, including but not limited to, financial market risks, could cause our actual results to differ materially from those expressed in our forward-looking statements. Further information on potential factors which could affect our financial condition, results of operations and business includes, without limitation, the impact of rising inflation, higher interest rates and increased energy costs on consumer demand and the Company's business, financial results and liquidity; the impact of unemployment and changes in general economic conditions on discretionary spending and consumer demand; the impact of our substantial indebtedness; the effects of local and national economic, credit and capital market conditions on consumer spending and the economy in general, and on the gaming and hotel industries in particular; the effects of competition, including locations of competitors and operating and market competition; changes in laws, including increased tax rates, regulations or accounting standards, third-party relations and approvals, and decisions of courts, regulators and governmental bodies; risks associated with construction projects, including disruption of our operations, shortages of materials or labor, unexpected costs, unforeseen permitting or regulatory issues and weather; litigation outcomes and judicial actions, including gaming legislative action, referenda and taxation; acts of war or terrorist incidents, pandemics, natural disasters or civil unrest; risks associated with the collection and retention of data about our customers, employees, suppliers and business partners; and other risks discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and in the Company's other current and periodic reports filed from time to time with the Securities and Exchange Commission. All forward-looking statements in this document are made based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement.

View source version on http://redrockresorts.investorroom.com/:

INVESTORS:
Stephen L. Cootey
Stephen.Cootey@redrockresorts.com
(702) 495-4214

MEDIA:
Michael J. Britt
Michael.Britt@redrockresorts.com
(702) 495-3693

 

Red Rock Resorts, Inc.
Condensed Consolidated Statements of Income
(amounts in thousands, except per share data)
(unaudited)
	Three Months Ended March 31,
	2024		2023
Operating revenues:
Casino	$          316,854		$          288,240
Food and beverage	93,278		78,147
Room	52,888		43,939
Other	25,877		23,310
Net revenues	488,897		433,636
Operating costs and expenses:
Casino	84,969		71,711
Food and beverage	73,447		60,112
Room	15,871		13,607
Other	7,267		7,712
Selling, general and administrative	104,805		92,505
Depreciation and amortization	44,873		31,095
Write-downs and other, net	2,141		19,619
	333,373		296,361
Operating income	155,524		137,275
Earnings from joint ventures	723		899
Operating income and earnings from joint ventures	156,247		138,174
Other expense:
Interest expense, net	(57,201)		(42,456)
Loss on extinguishment/modification of debt	(14,402)		—
Income before income tax	84,644		95,718
Provision for income tax	(6,273)		(10,191)
Net income	78,371		85,527
Less: net income attributable to noncontrolling interests	35,536		40,851
Net income attributable to Red Rock Resorts, Inc.	$            42,835		$            44,676
Earnings per common share:
Earnings per share of Class A common stock, basic	$               0.73		$               0.77
Earnings per share of Class A common stock, diluted	$               0.68		$               0.75
Weighted-average common shares outstanding:
Basic	58,783		57,653
Diluted	103,728		103,190
Dividends declared per common share	$1.25		$0.25

 

Red Rock Resorts, Inc.
Segment Information and Reconciliation of Net Income to Adjusted EBITDA
(amounts in thousands)
(unaudited)
	Three Months Ended March 31,
	2024		2023
Net revenues
Las Vegas operations	$          485,567		$          430,049
Corporate and other	3,330		3,587
Net revenues	$          488,897		$          433,636
Net income	$            78,371		$            85,527
Adjustments
Depreciation and amortization	44,873		31,095
Share-based compensation	5,875		5,296
Write-downs and other, net	2,141		19,619
Interest expense, net	57,201		42,456
Loss on extinguishment/modification of debt	14,402		—
Provision for income tax	6,273		10,191
Adjusted EBITDA	$          209,136		$          194,184
Adjusted EBITDA
Las Vegas operations	$          229,759		$          214,089
Corporate and other	(20,623)		(19,905)
Adjusted EBITDA	$          209,136		$          194,184

 

View original content:https://www.prnewswire.com/news-releases/red-rock-resorts-announces-first-quarter-2024-results-302138667.html

SOURCE Red Rock Resorts, Inc.

FAQ

What were Red Rock Resorts' net revenues in the first quarter of 2024?

Red Rock Resorts reported net revenues of $488.9 million in the first quarter of 2024, a 12.7% increase from the same period in 2023.

What was the adjusted EBITDA for Red Rock Resorts in the first quarter of 2024?

Red Rock Resorts' adjusted EBITDA was $209.1 million in the first quarter of 2024, showing a 7.7% increase.

How did Las Vegas operations perform for Red Rock Resorts in the first quarter of 2024?

Las Vegas operations generated $485.6 million in revenues, a 12.9% increase, and an adjusted EBITDA of $229.8 million, up by 7.3% in the first quarter of 2024.

What was the total debt outstanding for Red Rock Resorts as of March 31, 2024?

Red Rock Resorts had a total debt outstanding of $3.5 billion as of March 31, 2024.

What dividend was declared by Red Rock Resorts for the second quarter of 2024?

Red Rock Resorts declared a cash dividend of $0.25 per Class A common share for the second quarter of 2024.

When will Red Rock Resorts' dividend for the second quarter of 2024 be payable?

The dividend will be payable on June 28, 2024, to all stockholders of record as of June 14, 2024.