Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Golden Entertainment Fourth Quarter 2015 Earnings Call. [Operator Instructions] Please note that this call is being recorded today, March 9, 2016. I will now turn things over to the company's Investor Relations contact, Jacques Cornet, with ICR. Please go ahead, sir.

Thank you, operator, and good afternoon. By now, everyone should have access to our fourth quarter 2015 earnings release, which can be found on the company website at www.goldenent.com under the Investors section. Before we begin our formal remarks, we need to remind everyone that the discussion today will include forward-looking statements within the meaning of the federal securities law. These forward-looking statements, which are usually defined by the use of words such as will, expect, believe, anticipate, should or other similar phrases, are not guarantees of future performance. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect, and therefore, you should exercise caution in interpreting and relying on them. We refer all of you to the risk factors in our recent SEC filings, including our most recent Form 10-K as updated by our subsequent quarterly reports on Form 10-Q, for a more detailed discussion of the risks that could impact our future operating results and financial condition and other forward-looking statements. During today's call, we will discuss non-GAAP measures, which management uses and believes are useful in evaluating the company's operating performance. Financial results before August 2015 did not include the results of Sartini Gaming. Sartini Gaming was merged with a subsidiary of the company on July 31, 2015, and its financial results were included beginning in August. Because of the merger, management believes it is helpful to provide comparisons on an unaudited combined basis where the results of the company are combined with the premerger result of Sartini Gaming for the relevant periods. We provided that information in the press release issued earlier today. The combined presentation does not conform to GAAP or the SEC's rules for pro forma presentations. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available in our fourth quarter 2015 earnings release. Hosting the call today, we have Blake Sartini, who serves as Chairman of the Board, President and Chief Executive Officer of the company; and Matt Flandermeyer, who serves as Executive Vice President and Chief Financial Officer of the company. Management will provide prepared remarks, after which we will open the call to questions. With that, I'll turn the call over to Blake.

Thank you, Jacques, and good afternoon. We appreciate everyone joining us and welcome you to our fourth quarter earnings call. To begin, it is important to understand that the fourth quarter was the first full quarter of results as a combined company post our merger, which closed on July 31, 2015. As a result, we ended calendar year 2015 with a strong trajectory, which reveals the benefits of the combination of Lakes Entertainment and Sartini Gaming. Today, we are very pleased with the integration, as we anticipate additional operational and growth opportunities as we move forward. Starting with our Distributed Gaming segment. Revenues increased 4.2% over prior year period and adjusted EBITDA increased 10.5%, reflecting the benefits of our scale and resulting operating leverage. Going forward, we remain focused on revenue growth through increased market share as well as new development. As of this date, we anticipate third-party Distributed Gaming accounts growing by 34 locations, which will deploy approximately 312 gaming devices throughout 2016. Within our Distributed Gaming segment, our wholly owned branded tavern locations turned in a strong quarter. Same-store revenues increased approximately 8.2% versus the prior year period, and full year same-store revenues grew 6.9% versus last year, highlighting our unique business model and brand strength in the Nevada market. Moving forward, we are currently on track to add 6 new tavern locations in Las Vegas during 2016, including one new Sierra Gold, our flagship tavern brand. Recently, on February 10, we successfully opened our first of the 6 planned new taverns, PT's Brewing Company, and early results are encouraging. Even more encouraging is our continued strong pipeline of tavern opportunities both for new tavern development as well as targets to acquire and rebrand. Now turning to our Casinos segment. During the quarter, the combined properties continued to…

Thanks, Blake. To start, let me remind you that our financial results for the fourth quarter last year did not include results of Sartini Gaming. Sartini Gaming was merged with the subsidiary of the company on July 31, 2015, and its financial results were included beginning in August. Because of the merger, we believe it is helpful to provide comparison on an unaudited combined basis, where we included results of the company with the premerger results of Sartini Gaming for the relevant periods. We have provided that information in the press release issued earlier today. Turning to the quarter. Net revenues for the 3 months ended December 31, 2015, were $86.4 million, an increase of more than 5x compared to the prior year period and an increase of 3.2% compared to the unaudited combined results for the prior year period. Adjusted EBITDA for the current quarter was $9.4 million, compared to $0.2 million in the prior year period. Again, we believe the more meaningful comparison is to our unaudited combined results for the prior year quarter, which represents 7.4% growth for adjusted EBITDA. Excluding some transition expenses, we continue to realize merger synergies during the fourth quarter of 2015. We expect to achieve full run rate merger synergies beginning in the second quarter of 2016. Looking into our segments. As Blake mentioned, Distributed Gaming net revenues for the fourth quarter increased 4.2% compared to the combined amount for the same period last year. Distributed Gaming adjusted EBITDA was $9 million versus a combined $8.1 million last year, an increase of 10.5%. Adjusted EBITDA margin improved to 14.2%, representing an increase of over 80 basis points compared to the combined margin for 2014 due to higher gaming and food and beverage revenue on subdued operating expenses. Distributed Gaming revenue was positively…

Thank you all for joining us this afternoon.

[Operator Instructions] We'll hear first from Howard Rosencrans of Performing Capital.

Everything sounds very good. Just remind me if you would that you -- give us some stats on what your device count was or what the -- excuse me, what the add was; you were adding, I guess, 34 -- I guess, to Vegas, you were adding 34 locations and 112 devices and that is on a base of...

So it was 34 locations. As of this date now -- understand that these numbers fluctuate as we go through the year, but as of this date, we're anticipating 34 locations being added, which will deploy approximately 312 devices.

Okay. And I'm just asking what base that's on top of and what does that bring the total to.

So we currently have approximately 650 locations with approximately 7,500 devices. So that does not include the Montana location, which is approximately 101,000 devices in Montana.

Okay. And then Montana is all new. Am I correct in that?

Yes.

Well, it's new to us. It was added effectively January 29.

Okay. And if we were to do the math on the -- is it fair to say that the 300 devices or the 34 additional locations, were those pretty much -- are you expecting them to be additive at the same rate on a per -- if I was looking at, what, the 60 -- the 650 or 7,500 do on a per location or per device basis, will these be similarly productive in your vision?

Yes. We believe that they'll have a similar productivity, basically their contribution to us. So revenue less expenses to the location.

Okay. And if you would remind me what the revenue per either locale or device and what sort of margin you garner on that, if you would.

So we haven't gone through those economics at this point in time. I think it would be fair to take a look at our income statement and extrapolate that information.

Okay. And do you -- are you hopeful that the Montana properties will be more or less productive than the -- than these?

Well, I think it's a bit different of an analogy. The Montana operations are a -- new to us. We have said that we believe that they are accretive and so -- I believe Blake had provided some market estimates on Montana, and hopefully, that's helpful.

So Howard, there's a significant difference in the model between Nevada and Montana, which is going to result in different economics. And the biggest difference is there's a $2 wager limit on the devices of Montana with an $800 payout limit. Obviously, the state website, I think, in Montana can provide significant information regarding current performance of those devices in the state, but you're going to see a disparity in the economics, given the model in Montana is governed by a max wager and a max jackpot versus Nevada, which does not have that. Also, I will illuminate just a bit further because I think it's important: Although there is that max wager and max jackpot situation in Montana, there is also a different operational model up there in that it is more operationally light, if you will, in terms of fixed cost. And the use of cash up there is provided by locations versus -- what we do down here is provide our cash for our locations. So there is some very large pros in that market up there to make up for a limited wager and limited jackpot situation.

[Operator Instructions] We'll hear next from Jeff Bronchick of Cove Street Capital.

In Montana, the -- is that the beginning of a series of acquisitions? Or is this "get you in state" and you go organic? Or is this "what you see is what you get?"

Jeff, this is Blake. I think as I mentioned in my opening remarks, we enter the market with a sizable footprint. And given the breadth and size of the market up there, we're hopeful that there is growth both organically and potentially through additional acquisition. It's a fairly fragmented market in terms of the number of operators. And so as we get up there and get our feet on the ground, we're learning more each day. We're hopeful, I would say, that we continue to expand our footprint potentially both through organic and acquisition approaches.

And as you look elsewhere at whether the market appetite or changing regulation and -- governed by your balance sheet, conceptually, what else are you seeing? Sniffing, looking around, what areas look of interest over the next year or 2?

Well, I'll answer that consistently. I think you and I have had the conversation prior. And that is I view very tangible opportunities, as again mentioned in our opening comments, around taverns here in the Nevada market, which we are rolling out 6 this year. We anticipate that pipeline to remain pretty full going forward to your time frame of the next couple of years. In addition, these route opportunities, whether Montana or potentially elsewhere, are tangible in regards to potentially acting upon them as jurisdictions such as Montana, Illinois and others are growing in terms of their distributed segment. So I think those are very tangible, and we're also obviously in the Casino business. So I would answer it that way. Tangible opportunities, you're going to see us continue to roll out on distributed side, and we will be selective on the casino side if those opportunities present themselves.

Our next question will come from Michael Melby of Gate City Capital Management.

Just curious, you gave some overview on gaming devices for the State of Montana. With your acquisition, are the win per units similar to the state average there?

They are not quite at the state average but they're -- as a result of this acquisition, we believe there may be some opportunity although it will -- there will be some maybe deferred capital expense incurred in getting some of the devices current, if you will, but they're performing at a reasonable level compared to the state average. And we believe over time, we can improve.

Got it. And you mentioned some gives and takes compared to maybe your current business. Just kind of curious how you could directionally provide their EBITDA margins, whether it's significantly higher or pretty similar to what you're doing now in Distributed Gaming.

Mike, I'm sorry. You broke up a little bit there. Can you repeat the question?

Sure. With the acquisition, you mentioned some gives and takes in terms of their margin contribution, just curious directionally, if it's substantially higher or lower or kind of equal to what you're currently doing now at around 14% EBITDA margins.

So their model is different, as you mentioned. Their tax rate is higher than what we have here in Nevada, but then they're, as Blake mentioned, operationally light. So those things somewhat wash a little bit out, but I think their margin is slightly higher than what we currently are running on our route.

And next, we'll take a question from Roy Barry [ph], a private investor.

Mr. Sartini, I actually read your December 23 blog that's on your website and I've got a question concerning it. You mentioned something about a partnership with Uber. I can't envision how you would partner with Uber, but secondly, it could be huge with users.

Yes. So I hope you're not disappointed here. It is a partnership but essentially with our wholly owned taverns here in the Las Vegas area, which number approximately 50 at the moment. We partner with them to provide their service to our locations by incenting our customers through a promotion which enables free rides. Their first ride is free or several rides are free with the Uber service. We're trying to be responsible, obviously continue to be responsible, as we provide food and beverage services in our taverns. The Uber service is a great benefit to our consumers who don't want to drive, if that's their choice. Uber is very prompt and has been very well received by our customers. So the partnership is essentially around us promoting that service with our current guests through initially some free rides.

[Operator Instructions] And we'll take a follow-up from Howard Rosencrans.

The -- what was the incremental sort of synergy number that has not been achieved? What was -- I don't know how much was achieved in '15, but what is sort of the incremental full year that we'll achieve in '16 from -- you laid it out in a previous call. I think it might have been a total of maybe $5 million or something, and I don't know how much was achieved in '15.

Thanks, Howard. We had laid out prior that there was roughly anticipated to be $3 million of synergies. Essentially, it was cost that were to be eliminated on Day 1. We achieved, pro rata, that. We were only 5 months out of 12. We achieved that in 2015, and we expect to achieve the remainder in 2016. We did, in 2015 though, have some incremental transition costs of approximately $400,000. Those costs will go away effective on April 1, 2016.

So in theory, there is just to pick round numbers, the $3 million. So maybe you've got $1.5 million last year. And this year, you'll get $3 million plus an additional $400,000 -- no, maybe you've got $1.5 million less $400,000. So you've got $1.1 million. And this year, you'll get like $3 million. Is that sort of a delta of about $2 million in incrementals? Is that the way we should think about it?

Yes. I think that for the most part, it's pretty rough. Maybe I'll just reiterate so that we're on the same page. We achieved roughly $1.250 million in 2015 of synergies less the $400,000. We expect then a delta between $3 million and $1.250 million to be achieved in 2016 during the first 7 months, and then we'll pick up that $400,000 on a run rate beginning April 1, 2016.

We have no further questions at this time. I would like to turn the call back to Mr. Blake Sartini, CEO, for any additional or closing remarks.

Thank you. And again, thank you all for joining us this afternoon. We look forward to updating everyone on our progress when reporting our first quarter results. Thank you again for joining.

Ladies and gentlemen, that does conclude today's conference. Again, we thank you all for joining us.