Monarch Casino Reports 2010 First Quarter Results
2010-04-22
Monarch Casino & Resort, Inc. (NASDAQ: MCRI) (the "Company"), owner of the Atlantis Casino Resort Spa (the "Atlantis") in Reno, Nevada, today announced results for the quarter ended March 31, 2010.
The Company reported net revenue of $34.4 million which is $1.8 million, or 5.5%, higher than the $32.6 million reported for the comparative quarter in 2009. The Company announced quarterly income from operations of $4.2 million, EBITDA(1) of $7.5 million and diluted EPS of $0.15 which represent increases of 118.0%, 47.1% and 150.0%, respectively, when compared to the prior year's first quarter. Revenue generated in the casino, food and beverage, hotel and other operating departments increased by 5.9%, 4.1%, 7.5% and 16.8%, respectively.
Casino operating expense increased approximately $376 thousand, or 4.2%, over the prior year's first 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 decreased to 38.6% as compared to 39.3% in prior year's first quarter primarily due to the increase in casino revenue partially offset by higher Complimentaries.
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Food and beverage operating expense as a percentage of revenue decreased to 43.7% for the first quarter as compared to 48.3% in the first quarter of the prior year primarily due to lower payroll and benefits expense combined with lower food commodity costs. Hotel operating expense as a percentage of revenue decreased to 27.7% from the 32.6% in prior year's first quarter due primarily to the increase in hotel revenue combined with a reduction in hotel operating expense of $140 thousand, or 8.9%.The Company reported that selling, general and administrative expense decreased by approximately $557 thousand, or 4.8%, due primarily to reductions in bad debt, legal and utilities expense, partially offset by higher marketing expense.
During the quarter, the Company paid down the balance outstanding under its credit facility by $7.5 million which decreased the outstanding balance of the credit facility from $48.5 million at December 31, 2009 to $41.0 million at March 31, 2010. Decreased borrowing levels drove interest expense down from $550 thousand in prior year's first quarter to $458 thousand in the current quarter.
Monarch's CEO and Co-Chairman John Farahi commented on the Company's performance: "Especially given the head winds of the continuing difficult economic conditions, we are pleased that during the first quarter of 2010 we grew revenue in each of our operating departments, reduced operating expenses and grew EBITDA. I would like to commend our entire team for achieving these stellar results."
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
March 31,
--------------------------
2010 2009
------------ ------------
Revenues
Casino $ 24,154,140 $ 22,804,499
Food and beverage 9,983,603 9,593,068
Hotel 5,178,067 4,818,839
Other 1,979,694 1,694,353
------------ ------------
Gross revenues 41,295,504 38,910,759
Less promotional allowances (6,943,952) (6,331,575)
------------ ------------
Net revenues 34,351,552 32,579,184
------------ ------------
Operating expenses
Casino 9,328,341 8,952,220
Food and beverage 4,364,454 4,635,397
Hotel 1,433,139 1,573,243
Other 640,111 684,120
Selling, general and administrative 11,063,126 11,619,722
Depreciation and amortization 3,306,811 3,180,955
------------ ------------
Total operating expenses 30,135,982 30,645,657
------------ ------------
Income from operations 4,215,570 1,933,527
------------ ------------
Other expense
Interest income - 35,418
Interest expense (458,424) (550,210)
------------ ------------
Total other expense (458,424) (514,792)
------------ ------------
Income before income taxes 3,757,146 1,418,735
Provision for income taxes (1,315,000) (496,575)
------------ ------------
Net income $ 2,442,146 $ 922,160
============ ============
Earnings per share of common stock
Net income
Basic $ 0.15 $ 0.06
Diluted $ 0.15 $ 0.06
Weighted average number of common shares
and potential common shares outstanding
Basic 16,125,388 16,122,048
Diluted 16,151,408 16,148,037
MONARCH CASINO & RESORT, INC.
Condensed Consolidated Balance Sheets
March 31, December 31,
------------- -------------
2010 2009
------------- -------------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 10,539,116 $ 14,420,323
Receivables, net 3,040,612 2,294,703
Inventories 1,548,243 1,706,867
Prepaid expenses 3,166,543 2,623,650
Deferred income taxes 1,090,063 1,090,063
------------- -------------
Total current assets 19,384,577 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 109,462,469 107,655,784
Leasehold improvements 1,346,965 1,346,965
------------- -------------
278,426,316 276,619,631
Less accumulated depreciation and
amortization (116,849,481) (113,538,145)
------------- -------------
Net property and equipment 161,576,835 163,081,486
Other assets, net 505,228 569,622
------------- -------------
Total assets $ 181,466,640 $ 185,786,714
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Borrowings under credit facility $ - $ 1,000,000
Accounts payable 7,641,845 8,984,010
Accrued expenses 11,627,067 11,056,079
Federal income taxes payable 1,111,546 46,546
------------- -------------
Total current liabilities 20,380,458 21,086,635
------------- -------------
Long-term debt, less current maturities 41,000,000 47,500,000
Deferred income taxes 4,695,657 4,695,657
------------- -------------
Total liabilities 66,076,115 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;
16,125,388 outstanding at 3/31/10
16,125,388 outstanding at 12/31/09 190,963 190,963
Additional paid-in capital 30,485,040 30,041,083
Treasury stock, 2,970,912 shares at 3/31/10
2,970,912 shares at 12/31/09, at cost (48,864,979) (48,864,979)
Retained earnings 133,579,501 131,137,355
------------- -------------
Total stockholders' equity 115,390,525 112,504,422
------------- -------------
Total liabilities and stockholder's
equity $ 181,466,640 $ 185,786,714
============= =============
MONARCH CASINO & RESORT, INC.
Reconciliation of Net Income to EBITDA(1)
(Unaudited)
Three Months Ended
March 31,
------------------------
2010 2009
------------ -----------
Net Income $ 2,442,146 $ 922,160
Adjustments
Provision for income taxes 1,315,000 496,575
Interest expense 458,424 550,210
Depreciation & amortization 3,306,811 3,180,955
Interest income - (35,418)
------------ -----------
EBITDA(1) $ 7,522,381 $ 5,114,482
============ ===========
(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.
