LAS VEGAS – Golden Entertainment, Inc. (NASDAQ:GDEN) (“Golden” or the “Company”) announced that its Board of Directors declared a special cash dividend of an aggregate of approximately $23.5 million, payable on July 14, 2016 to eligible shareholders of record as of the close of business on June 30, 2016 (“Record Date”). The Company estimates that the special cash dividend payable to eligible shareholders will be $1.71 per common share, based on 13,750,489 eligible shares currently outstanding. The Company will calculate and announce the final per share amount of the special dividend promptly following the Record Date by dividing the aggregate amount of the special dividend, by the number of outstanding shares of common stock held by eligible shareholders on the close of business on the Record Date, and rounding the amount down to the nearest whole cent per share.
Background to Special Dividend
The decision to declare a special dividend was a result of the previously disclosed sale by the Company of its $60.0 million subordinated promissory note from the Jamul Indian Village (the “Jamul Note”) for $24.0 million in cash.
Under the terms of the Company’s January 2015 merger agreement with Sartini Gaming, Inc. (“Sartini Gaming”), the Company agreed that the proceeds received from the sale of the Jamul Note, net of related costs, would be distributed in a cash dividend to its shareholders holding shares as of the record date for such dividend, other than shareholders that have waived their right to receive such dividend. Sartini Gaming’s former sole shareholder, for itself and any related party transferees of its shares, waived their right to receive such dividend with respect to their shares (which total 7,996,393 shares in the aggregate), subject to receipt of a private letter ruling from the IRS (which was recently issued by the IRS), unless their shares are sold to an unaffiliated third party prior to the Record Date. Also in connection with the Sartini Gaming merger, holders of an additional 457,172 shares waived their right to receive such dividend, unless their shares are sold to an unaffiliated third party prior to the Record Date.
All of the shareholders who waived their rights to the special dividend have informed the Company that they do not intend to sell their shares prior to the Record Date. The Company’s estimated special dividend amount of $1.71 per share assumes that none of the shares subject to the waiver are sold and settled prior to the Record Date and that none of the 452,743 vested, in-the-money options to purchase Company common stock are exercised prior to the Record Date.
As is customary, anti-dilutive adjustments to the exercise prices of outstanding options were approved by the Board of Directors and the Compensation Committee, effective as of the special dividend payment date, in accordance with the Company’s equity incentive plans approved by the Company’s shareholders.
This press release may be deemed to contain forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. Forward-looking statements can generally be identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “plan,” “project,” “seek,” “should,” “think,” “will,” “would” and similar expressions. In addition, forward-looking statements include statements regarding the estimated per share amount of the special dividend to the Company’s eligible shareholders of the net proceeds from the sale of the Jamul Note and the timing of payment of such special dividend, as well as other statements that are not statements of historical fact. Forward-looking statements are based on the Company’s current expectations and assumptions regarding the Company’s business, the economy and other future conditions. These forward-looking statements are subject to assumptions, risks and uncertainties that may change at any time, and readers are therefore cautioned that actual results could differ materially from those expressed in any forward-looking statements. Factors that could cause actual results to differ include: sales to third parties of shares of common stock prior to the Record Date by shareholders who waived their rights to the special dividend or exercises of vested, in-the-money stock options prior to the Record Date, either of which will increase the number of eligible shares entitled to receive the special dividend and reduce the final per share amount of the special dividend compared to the estimated per share amount, the Company’s ability to realize the anticipated cost savings, synergies and other benefits of the merger with Sartini Gaming and the acquisitions of distributed gaming assets in Montana, and integration risks relating to such transactions, changes in national, regional and local economic and market conditions, legislative and regulatory matters (including the cost of compliance or failure to comply with applicable laws and regulations), increases in gaming taxes and fees in the jurisdictions in which the Company operates, litigation, increased competition, the Company’s ability to renew its distributed gaming contracts, reliance on key personnel (including its Chief Executive Officer, Chief Operating Officer and Chief Financial Officer), the level of the Company’s indebtedness and the Company’s ability to comply with covenants in its debt facilities, terrorist incidents, natural disasters, severe weather conditions, the effects of environmental and structural building conditions, the effects of disruptions to the Company’s information technology and other systems and infrastructure, the occurrence of an “ownership change” as defined in Section 382 of the Internal Revenue Code, and factors affecting the gaming, entertainment and hospitality industries generally. In addition, please refer to the risk factors contained in the Company’s SEC filings available at www.sec.gov, including the Company’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to revise or update any forward-looking statements for any reason.
About Golden Entertainment, Inc.
Golden Entertainment, Inc. owns and operates gaming properties across two divisions – distributed gaming and resort and casino operations. Golden Entertainment operates approximately 12,000 gaming devices and over 30 table games in Nevada, Maryland and Montana. The Company owns four casino properties, 50 taverns and operates approximately 980 distributed gaming locations in Nevada, Maryland and Montana. Golden Entertainment is focused on maximizing the value of its portfolio by leveraging its scale, leadership position, and proven management capabilities across its two divisions. For more information, visit www.goldenent.com.