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Monday, January 10, 2011

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Monarch Casino Reports 2009 Second Quarter Results

RENO, NV — (Marketwire) — 07/22/09 —

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 June 30, 2009.

The Company reported net revenue of $34.5 million and EBITDA(1) of $6.4

million which were 2.5% lower and 1.3% higher, respectively, when compared

with the second quarter of 2008. The Company announced quarterly income

from operations of $3.3 million and diluted EPS of $0.11 which represent

decreases of 25.3% and 31.3%, respectively, compared to the prior year’s

second quarter. Revenue generated in the casino department decreased by

6.0% while revenue from the food and beverage and hotel departments

increased by 2.9% and 6.1%, respectively.

As a percentage of casino revenue, casino operating expense of 36.7%

remained relatively flat with the prior year’s second quarter of 36.1%.

Increased food and beverage revenue, combined with a $68 thousand, or

1.5%, decrease in expense, drove the operating expense from that

department as a percentage of revenue down from 48.2% in the second

quarter of the prior year to 46.2% in the current quarter. Hotel

operating expense as a percentage of hotel revenue decreased to 34.8%

from the 35.5% reported in prior year’s second quarter due primarily to

the increase in hotel revenue partially offset by an increase in hotel

operating expense of $80 thousand, or 4.0%.

The Company reported that selling, general and administrative expense

decreased by approximately $568 thousand, or 4.4%, due to reductions in

payroll, benefits, marketing, and other general expense, all of which were

the result of various cost reduction programs, partially offset by higher

bad debt and utilities expense. Depreciation expense increased by

approximately $1.2 million, or 63.5%, over prior year’s second quarter due

to the completion of the Company’s previously announced expansion, remodel

and Atlantis Convention Center Skybridge capital projects.

During the quarter, the Company paid down $3.8 million of the balance

outstanding under its credit facility which reduced the balance

outstanding at June 30, 2009 to $52.1 million. Increased borrowing levels

resulted in an increase in interest expense from the $131 thousand

reported in prior year’s second quarter to $571 thousand in the current

quarter.

Monarch’s CEO and Co-Chairman John Farahi commented on the Company’s

performance: “The challenging economic environment we experienced

throughout 2008 has continued though the first half of 2009. Even though

we successfully increased revenue in our food and beverage and hotel

departments, and increased our gaming market share, we could not overcome

the erosion of the gaming market as a whole, the result of which was lower

net revenue compared to the second quarter of 2008.”

Mr. Farahi continued: “Despite the disappointing decline in net revenue,

we are pleased with the reduction in expenses we achieved. With the

implementation of numerous cost reduction programs, and the completion of

our expansion and skybridge capital projects, we were able to drive

selling, general and administrative expenses down throughout the Company,

which allowed us to achieve an EBITDA level consistent with that of the

prior year’s second quarter and for that we are pleased.”

In July of 2008, the Company completed and opened several new phases of an

expansion project which include over 10,000 square feet, or approximately

20%, of new casino space on the first floor comprised of a significantly

upgraded and expanded race and sports book, an enlarged and upgraded poker

room and additional general gaming space. The casino expansion also

includes the new “Manhattan deli,” a New York deli-style restaurant, and a

casino lounge. The expanded facilities on the second floor include

approximately 27,000 square feet of new ballroom and convention space, in

a seamless addition to the pre-expansion ballroom and meeting facilities,

incorporating high end design and state-of-the-art audio-visual

technology.

In November 2008, the Company completed and opened the Atlantis Convention

Center Skybridge providing guests with a convenient, traffic-free stroll

between the Atlantis and the 500,000 square-foot Reno-Sparks Convention

Center. Next, in January 2009, the Company opened the final phase of the

expansion project, Spa Atlantis, featuring an upscale atmosphere,

amenities and treatments that are unique from any other offering in the

Company’s market. During construction of the expansion project, many of

the pre-expansion areas of the Atlantis were remodeled to be consistent

with the upgraded look and feel of the new facilities.

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.

For additional information visit Monarch’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,

———————————— ————————————

2009 2008 2009 2008

—————- —————- —————- —————-

Revenues

Casino $24,146,246 $25,672,907 $46,950,745 $49,428,857

Food and beverage 9,826,213 9,547,395 19,419,281 19,308,615

Hotel 5,884,634 5,545,006 11,264,376 11,375,701

Other 1,140,138 1,185,503 2,273,588 2,417,572

—————- —————- —————- —————-

Gross revenues 40,997,231 41,950,811 79,907,990 82,530,745

Less promotional

allowances (6,541,873) (6,607,046) (12,873,448) (12,913,587)

—————- —————- —————- —————-

Net revenues 34,455,358 35,343,765 67,034,542 69,617,158

—————- —————- —————- —————-

Operating expenses

Casino 8,855,900 9,266,916 17,762,792 18,013,416

Food and beverage 4,538,149 4,606,282 9,173,546 9,295,647

Hotel 2,047,251 1,967,720 4,053,171 4,073,093

Other 308,469 312,997 605,240 659,651

Selling, general and

administrative 12,309,904 12,877,513 23,929,626 25,981,613

Depreciation and

amortization 3,094,951 1,893,237 6,275,906 3,899,794

—————- —————- —————- —————-

Total operating

expenses 31,154,624 30,924,665 61,800,281 61,923,214

—————- —————- —————- —————-

Income from

operations 3,300,734 4,419,100 5,234,261 7,693,944

—————- —————- —————- —————-

Other (expense) income

Interest income 36,341 46,238 71,759 297,582

Interest expense (571,007) (131,335) (1,121,217) (135,492)

—————- —————- —————- —————-

Total other (expense)

income (534,666) (85,097) (1,049,458) 162,090

—————- —————- —————- —————-

Income before income

taxes 2,766,068 4,334,003 4,184,803 7,856,034

Provision for income

taxes (968,150) (1,531,100) (1,464,725) (2,751,100)

—————- —————- —————- —————-

Net income $ 1,797,918 $ 2,802,903 $ 2,720,078 $ 5,104,934

=========== =========== ===========

Earnings per share of

common stock

Net income

Basic $ 0.11 $ 0.16 $ 0.17 $ 0.29

Diluted $ 0.11 $ 0.16 $ 0.17 $ 0.29

Weighted average number

of common shares and

potential common shares

outstanding

Basic 16,122,048 17,189,200 16,122,048 17,802,518

Diluted 16,151,412 17,253,109 16,150,060 17,899,384

MONARCH CASINO & RESORT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, December 31,

——————- ——————-

2009 2008

——————- ——————-

ASSETS (UNAUDITED)

Current assets

Cash and cash equivalents $ 11,026,479 $ 11,756,900

Receivables, net 3,007,001 3,344,441

Inventories 1,429,987 1,564,347

Prepaid expenses 2,841,640 2,851,872

Deferred income taxes 429,300 429,300

——————- ——————-

Total current assets 18,734,407 19,946,860

——————- ——————-

Property and equipment

Land 12,162,522 12,162,522

Land improvements 3,511,484 3,511,484

Buildings 133,674,917 133,332,232

Building improvements 10,435,062 10,435,062

Furniture and equipment 104,763,183 96,767,076

Leasehold improvements 1,346,965 1,346,965

——————- ——————-

265,894,133 257,555,341

Less accumulated depreciation and

amortization (107,313,004) (101,825,190)

——————- ——————-

158,581,129 155,730,151

Construction in progress — 4,026,536

——————- ——————-

Net property and equipment 158,581,129 159,756,687

Other assets, net 3,433,845 2,797,949

——————- ——————-

Total assets $ 180,749,381 $ 182,501,496

=============

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Borrowings under credit facility $ — $ 2,500,000

Accounts payable 7,615,778 10,213,418

Construction payable — 5,404,372

Accrued expenses 8,591,667 8,940,110

Federal income taxes payable 958,461 233,736

——————- ——————-

Total current liabilities 17,165,906 27,291,636

——————- ——————-

Long-term debt, less current maturities 52,100,000 47,500,000

Deferred income taxes 2,115,371 2,115,371

——————- ——————-

Total Liabilities 71,381,277 76,907,007

——————- ——————-

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;

16,122,048 outstanding at 6/30/09

16,122,048 outstanding at 12/31/08 190,963 190,963

Additional paid-in capital 29,104,546 28,051,009

Treasury stock, 2,974,252 shares at 6/30/09

2,974,252 shares at 12/31/08, at cost (48,943,359) (48,943,359)

Retained earnings 129,015,954 126,295,876

——————- ——————-

Total stockholders’ equity 109,368,104 105,594,489

——————- ——————-

Total liability and stockholder’s equity $ 180,749,381 $ 182,501,496

=============

MONARCH CASINO & RESORT, INC.

RECONCILIATION OF NET INCOME TO EBITDA (1)

(UNAUDITED)

Three Months Ended June 30, Six Months Ended June 30,

————————————— —————————————

2009 2008 2009 2008

—————— —————— —————— ——————

Net income $ 1,797,918 $ 2,802,903 $ 2,720,078 $ 5,104,934

Adjustments

Provision for

income taxes 968,150 1,531,100 1,464,725 2,751,100

Interest expense 571,007 131,335 1,121,217 135,492

Depreciation &

amortization 3,094,951 1,893,237 6,275,906 3,899,794

Interest income (36,341) (46,238) (71,759) (297,582)

—————— —————— —————— ——————

EBITDA(1)(unaudited)$ 6,395,685 $ 6,312,337 $ 11,510,167 $ 11,593,738

============ ============ ============

(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.

Contacts:

Ron Rowan

CFO

(775) 825-4700

RRowanmonarchcasino.com

John Farahi

CEO

(775) 825-4700

JohnFarahimonarchcasino.com