RENO, NV--(Marketwire - 07/21/10) - Monarch Casino & Resort, Inc. (NASDAQ:MCRI - News) (the "Company"), owner of the Atlantis Casino Resort Spa (the "Atlantis") in Reno, Nevada, today announced results for the quarter ended June 30, 2010.
The Company reported net revenue of $36.2 million which is $1.7 million, or 4.9%, higher than the $34.5 million reported for the comparative quarter in 2009. The Company announced quarterly income from operations of $4.5 million, EBITDA(1) of $7.7 million and diluted EPS of $0.16 which represent increases of 35.2%, 20.3% and 45.5%, respectively, when compared to the prior year's second quarter. Revenue generated in the casino, food and beverage, hotel and other operating departments increased by 3.6%, 5.5%, 13.5% and 3.1%, respectively.
Casino operating expense increased approximately $645 thousand, or 7.3%, over the prior year's second quarter primarily due to the cost of increased complimentary food, beverages and other services provided to casino patrons ("Complimentaries"). As a percentage of casino revenue, casino operating expense increased to 38.1% as compared to 36.8% in prior year's second quarter primarily due to the higher Complimentaries.
Food and beverage operating expense as a percentage of food and beverage revenue decreased to 44.9% for the second quarter as compared to 46.2% in the second quarter of the prior year primarily due to the higher revenue combined with lower food commodity costs. Hotel operating expense as a percentage of hotel revenue decreased to 27.3% from 31.7% in prior year's second quarter due to the increase in hotel revenue combined with relatively flat hotel operating expense.
The Company reported that selling, general and administrative expense decreased by approximately $396 thousand, or 3.2%, due primarily to reductions in legal, utilities and bad debt expense, partially offset by higher marketing expense.
During the quarter, the Company paid down the balance outstanding under its credit facility by $3.2 million, which decreased the outstanding balance of the credit facility from $41.0 million at March 31, 2010 to $37.8 million at June 30, 2010. Decreased borrowing levels drove interest expense down from $571 thousand in prior year's second quarter to $366 thousand in the current quarter.
Monarch's CEO and Co-Chairman John Farahi commented on the Company's performance: "We are pleased with this quarter's results, particularly because each of our operating departments reported revenue increases despite the ongoing macroeconomic weakness of our national and local economies. Looking forward, our plan is to continue delivering to our guests the same high quality experience that provided the foundation for this quarter's increased revenues."
Monarch Casino & Resort, Inc., through its subsidiary, Golden Road Motor Inn, Inc., owns and operates the Atlantis Casino Resort Spa, a hotel/casino facility in Reno, Nevada which features approximately 61,000 square feet of casino space; approximately 1,000 guest rooms; eight food outlets; two espresso and pastry bars; an approximate 30,000 square foot health spa and salon with an enclosed year-round pool; two retail outlets offering clothing and traditional gift shop merchandise; an 8,000 square-foot family entertainment center; and approximately 52,000 square feet of banquet, convention and meeting room space. The casino features approximately 1,450 slot and video poker machines; approximately 38 table games, including blackjack, craps, roulette, and others; a sports book; a 24-hour live keno lounge and a poker room. The Company and its predecessors have operated a facility on the Atlantis site since 1972.
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 which are subject to change, including, but not limited to, comments relating to (i) future operating performance, (ii) economic and market conditions, and (iii) the liquidity requirements of the Company. Actual results and future events and conditions may differ materially from those described in any forward-looking statements. Additional information concerning potential factors that could affect the Company's financial results is included in the Company's Securities and Exchange Commission filings, which are available on the Company's web site at www.monarchcasino.com.
MONARCH CASINO & RESORT, INC.
Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2010 2009 2010 2009
------------ ------------ ------------ ------------
Revenues
Casino $ 25,020,899 $ 24,146,246 $ 49,175,039 $ 46,950,745
Food and beverage 10,369,922 9,826,213 20,353,525 19,419,281
Hotel 5,931,465 5,224,404 11,109,532 10,043,243
Other 1,855,462 1,800,368 3,835,156 3,430,773
------------ ------------ ------------ ------------
Gross revenues 43,177,748 40,997,231 84,473,252 79,844,042
Less promotional
allowances (7,021,852) (6,541,873) (13,965,804) (12,873,448)
------------ ------------ ------------ ------------
Net revenues 36,155,896 34,455,358 70,507,448 66,970,594
------------ ------------ ------------ ------------
Operating expenses
Casino 9,525,444 8,880,076 18,853,785 17,832,295
Food and beverage 4,656,332 4,538,148 9,020,786 9,173,546
Hotel 1,617,683 1,654,775 3,050,822 3,192,700
Other 765,813 676,770 1,405,924 1,396,207
Selling, general
and
administrative 11,913,997 12,309,904 22,972,598 23,929,626
Depreciation and
amortization 3,214,390 3,094,951 6,525,726 6,275,906
------------ ------------ ------------ ------------
Total operating
expenses 31,693,659 31,154,624 61,829,641 61,800,281
------------ ------------ ------------ ------------
Income from
operations 4,462,237 3,300,734 8,677,807 5,170,313
------------ ------------ ------------ ------------
Other income
(expense)
Other income 16,000 36,341 16,000 135,707
Interest expense (365,851) (571,007) (824,275) (1,121,217)
------------ ------------ ------------ ------------
Total other
expense (349,851) (534,666) (808,275) (985,510)
------------ ------------ ------------ ------------
Income before
income taxes 4,112,386 2,766,068 7,869,532 4,184,803
Provision for
income taxes (1,452,055) (968,150) (2,767,055) (1,464,725)
------------ ------------ ------------ ------------
Net income $ 2,660,331 $ 1,797,918 $ 5,102,477 $ 2,720,078
============ ============ ============ ============
Earnings per share
of common stock
Net income
Basic $ 0.16 $ 0.11 $ 0.32 $ 0.17
Diluted $ 0.16 $ 0.11 $ 0.32 $ 0.17
Weighted average
number of common
shares and
potential common
shares outstanding
Basic 16,129,053 16,122,048 16,127,231 16,122,048
Diluted 16,220,865 16,151,412 16,186,154 16,150,060
MONARCH CASINO & RESORT, INC.
Condensed Consolidated Balance Sheets
June 30, December 31,
------------- -------------
2010 2009
------------- -------------
ASSETS (unaudited)
Current assets
Cash and cash equivalents $ 10,009,792 $ 14,420,323
Receivables, net 2,805,313 2,294,703
Federal income tax receivable 436,399 -
Inventories 1,691,634 1,706,867
Prepaid expenses 3,105,286 2,623,650
Deferred income taxes 1,090,063 1,090,063
------------- -------------
Total current assets 19,138,487 22,135,606
------------- -------------
Property and equipment
Land 13,172,522 13,172,522
Land improvements 3,511,484 3,511,484
Buildings 140,522,106 140,522,106
Building improvements 10,410,770 10,410,770
Furniture and equipment 110,070,823 107,655,784
Leasehold improvements 1,346,965 1,346,965
------------- -------------
279,034,670 276,619,631
Less accumulated depreciation and
amortization (119,893,275) (113,538,145)
------------- -------------
Net property and equipment 159,141,395 163,081,486
Other assets, net 440,833 569,622
------------- -------------
Total assets $ 178,720,715 $ 185,786,714
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Borrowings under credit facility $ - $ 1,000,000
Accounts payable 6,958,118 8,984,010
Accrued expenses 10,713,355 11,056,079
Federal income taxes payable - 46,546
------------- -------------
Total current liabilities 17,671,473 21,086,635
------------- -------------
Long-term debt, less current maturities 37,800,000 47,500,000
Deferred income taxes 4,695,657 4,695,657
------------- -------------
Total liabilities 60,167,130 73,282,292
------------- -------------
Stockholders' equity
Preferred stock, $.01 par value, 10,000,000
shares authorized; none issued - -
Common stock, $.01 par value, 30,000,000
shares authorized; 19,096,300 shares issued;
16,132,058 outstanding at 6/30/10
16,125,388 outstanding at 12/31/09 190,963 190,963
Additional paid-in capital 30,821,256 30,041,083
Treasury stock, 2,964,242 shares at 6/30/10
2,970,912 shares at 12/31/09, at cost (48,698,466) (48,864,979)
Retained earnings 136,239,832 131,137,355
------------- -------------
Total stockholders' equity 118,553,585 112,504,422
------------- -------------
Total liabilities and stockholder's
equity $ 178,720,715 $ 185,786,714
============= =============
MONARCH CASINO & RESORT, INC.
Reconciliation of Net Income to EBITDA (1)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2010 2009 2010 2009
------------- ------------ ------------- ------------
Net income $ 2,660,331 $ 1,797,918 $ 5,102,477 $ 2,720,078
Adjustments
Provision for
income taxes 1,452,055 968,150 2,767,055 1,464,725
Interest expense 365,851 571,007 824,275 1,121,217
Depreciation and
amortization 3,214,390 3,094,951 6,525,726 6,275,906
Interest income - (36,341) - (71,759)
------------- ------------ ------------- ------------
EBITDA (1)
(unaudited) $ 7,692,627 $ 6,395,685 $ 15,219,533 $ 11,510,167
============= ============ ============= ============
(1) "EBITDA" consists of net income plus provision for income taxes, interest expense, depreciation and amortization less interest income. EBITDA should not be construed as an alternative to operating income (as determined in accordance with generally accepted accounting principles) as an indicator of the Company's operating performance, as an alternative to cash flows from operating activities (as determined in accordance with generally accepted accounting principles) or as a measure of liquidity. This item enables comparison of the Company's performance with the performance of other companies that report EBITDA, although some companies do not calculate this measure in the same manner and therefore, the measure as presented may not be comparable to similarly titled measures presented by other companies.
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Executive Offices
3800 South Virginia Street
Reno, Nevada 89502
Phone 775.335.4600
Fax 775.332.9171
monarchcasino.com