Segment Information

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Segment Information

Note 11 – Segment Information

The Company conducts its business through two reportable operating segments: Casinos and Distributed Gaming. The Company’s Casinos segment involves the ownership and operation of resort casino properties in Nevada and Maryland. The Company’s Distributed Gaming segment involves the installation, maintenance and operation of slots and amusement devices in non-casino locations such as restaurants, bars, taverns, convenience stores, liquor stores and grocery stores in Nevada and Montana, and the operation of branded taverns targeting local patrons located primarily in the greater Las Vegas, Nevada metropolitan area. The Corporate and Other segment includes the Company’s cash and cash equivalents, miscellaneous receivables and corporate overhead. Costs recorded in the Corporate and Other segment have not been allocated to the Company’s reportable operating segments because these costs are not easily allocable and to do so would not be practical.

The Company evaluates each segment’s profitability based upon such segment’s Adjusted EBITDA, which represents each segment’s earnings before interest and other non-operating income (expense), income taxes, depreciation and amortization, impairment of goodwill and intangible assets, acquisition and severance expenses, preopening and related expenses, asset disposal and other writedowns, share-based compensation expenses, and change in fair value of derivative, calculated before corporate overhead (which is not allocated to each segment).

The following tables set forth, for the periods indicated, certain operating data for the Company’s segments, and reconciles net income (loss) to Adjusted EBITDA:

	Three Months Ended September 30, 2020
(In thousands)	Casinos		Distributed Gaming		Corporate and Other		Consolidated
Revenues
Gaming	$	83,549	$	61,972	$	—	$	145,521
Food and beverage	22,067		6,618		—		28,685
Rooms	22,505		—		—		22,505
Other	7,193		1,313		179		8,685
Total revenues	$	135,314	$	69,903	$	179	$	205,396
Net income (loss)	$	25,068	$	(1,161)	$	(30,863)	$	(6,956)
Depreciation and amortization	25,165		5,723		663		31,551
Acquisition and severance expenses	—		—		24		24
Preopening and related expenses (1)	—		—		73		73
Gain on disposal of assets	(20)		(346)		(108)		(474)
Share-based compensation	—		—		3,520		3,520
Other, net	92		467		727		1,286
Interest expense, net	226		15		16,181		16,422
Income tax benefit	—		—		(17)		(17)
Adjusted EBITDA	$	50,531	$	4,698	$	(9,800)	$	45,429

	Three Months Ended September 30, 2019
(In thousands)	Casinos		Distributed Gaming		Corporate and Other		Consolidated
Revenues
Gaming	$	69,953	$	72,615	$	—	$	142,568
Food and beverage	37,836		13,273		—		51,109
Rooms	35,347		—		—		35,347
Other	11,977		2,110		203		14,290
Total revenues	$	155,113	$	87,998	$	203	$	243,314
Net income (loss)	$	17,858	$	5,786	$	(33,091)	$	(9,447)
Depreciation and amortization	23,500		5,616		495		29,611
Acquisition and severance expenses	137		—		291		428
Preopening and related expenses (1)	308		189		59		556
Gain on disposal of assets	(4)		(223)		(6)		(233)
Share-based compensation	—		—		2,583		2,583
Other, net	218		—		25		243
Interest expense, net	200		18		18,558		18,776
Change in fair value of derivative	—		—		352		352
Income tax provision	—		—		200		200
Adjusted EBITDA	$	42,217	$	11,386	$	(10,534)	$	43,069

(1)Preopening and related expenses include rent, organizational costs, non-capital costs associated with the opening of tavern and casino locations, and expenses related to The Strat rebranding and the launch of the TrueRewards loyalty program.

	Nine Months Ended September 30, 2020
(In thousands)	Casinos		Distributed Gaming		Corporate and Other		Consolidated
Revenues
Gaming	$	170,664	$	158,749	$	—	$	329,413
Food and beverage	57,888		22,512		—		80,400
Rooms	54,097		—		—		54,097
Other	20,067		3,965		585		24,617
Total revenues	$	302,716	$	185,226	$	585	$	488,527
Net loss	$	(23,849)	$	(5,751)	$	(88,542)	$	(118,142)
Depreciation and amortization	75,222		17,490		1,925		94,637
Impairment of goodwill and intangible assets	27,872		—		—		27,872
Acquisition and severance expenses	2,606		612		149		3,367
Preopening and related expenses (1)	225		(1)		188		412
Loss (gain) on disposal of assets	1,290		(360)		(113)		817
Share-based compensation	—		—		7,522		7,522
Other, net	187		705		868		1,760
Interest expense, net	562		40		50,973		51,575
Change in fair value of derivative	—		—		1		1
Income tax provision	—		—		241		241
Adjusted EBITDA	$	84,115	$	12,735	$	(26,788)	$	70,062

	Nine Months Ended September 30, 2019
(In thousands)	Casinos		Distributed Gaming		Corporate and Other		Consolidated
Revenues
Gaming	$	213,075	$	219,531	$	—	$	432,606
Food and beverage	113,327		39,644		—		152,971
Rooms	102,148		—		—		102,148
Other	36,653		6,333		565		43,551
Total revenues	$	465,203	$	265,508	$	565	$	731,276
Net income (loss)	$	63,018	$	20,739	$	(115,630)	$	(31,873)
Depreciation and amortization	69,195		16,514		1,143		86,852
Acquisition and severance expenses	524		35		2,536		3,095
Preopening and related expenses (1)	2,662		1,415		208		4,285
Loss (gain) on disposal of assets	763		(158)		384		989
Share-based compensation	11		5		8,885		8,901
Other, net	310		—		1,284		1,594
Interest expense, net	316		57		55,673		56,046
Loss on extinguishment and modification of debt	—		—		9,150		9,150
Change in fair value of derivative	—		—		4,089		4,089
Income tax benefit	—		—		(1,795)		(1,795)
Adjusted EBITDA	$	136,799	$	38,607	$	(34,073)	$	141,333

(1)Preopening and related expenses include rent, organizational costs, non-capital costs associated with the opening of tavern and casino locations, and expenses related to The Strat rebranding and the launch of the TrueRewards loyalty program.

Assets

The Company’s assets by segment consisted of the following amounts:

(In thousands)	Casinos		Distributed Gaming		Corporate and Other		Consolidated
Balance at September 30, 2020	$	1,112,412	$	433,198	$	63,317	$	1,608,927
Balance at December 31, 2019	$	1,204,574	$	482,294	$	54,049	$	1,740,917