RENO, Nev., July 23 NV-Monarch-Casino-2Q
RENO, Nev., July 23 /PRNewswire-FirstCall/ -- 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, 2008 and announced the opening of its $50 million expansion
project.
The Company reported net revenue of $35.3 million, a 15.1% decline from
the $41.6 million reported for the comparable quarter in 2007. The Company
announced second quarter 2008 income from operations of $4.4 million,
EBITDA(1) of $6.3 million and diluted EPS of 16 cents which represent
decreases of 56.2%, 48.0% and 55.6%, respectively, when compared to the prior
year's second quarter. These decreases were driven primarily by the decrease
in net revenue. Selling, general and administrative expense of $12.9 million
for the quarter was nearly flat compared with the $12.8 million reported in
the second quarter of 2007.
Through June 30, 2008, the Company drew $34 million from its $50 million
credit facility to pay for the previously announced share repurchases and to
fund ongoing capital projects. As a result of this borrowing activity, the
Company incurred interest expense of $131 thousand during the quarter, an
increase of $128 thousand when compared to the same quarter of the prior year.
The Company used its invested cash reserves during the quarter for completion
of its expansion project and share repurchases resulting in a decrease in
interest income from the $474 thousand reported in the second quarter of 2007
to $46 thousand in the current quarter.
As of the end of the current quarter, the Company has completed the
repurchase of 3 million shares of the Company's common stock which fulfilled
the previously announced share repurchase authorizations by the Company's
board of directors.
The Company announced that its $50 million, 116,000 square feet, expansion
project is now open with the exception of the expanded and upgraded spa
facilities which are expected to open in the early part of the fourth quarter
of 2008. The casino floor has been expanded by over 10,000 square feet, or
approximately 20%, to include a redesigned, significantly upgraded and
expanded race and sports book of approximately 4,000 square feet, an enlarged
and upgraded poker room and other general gaming space. The first floor
expansion also includes the "Manhattan deli", a New York deli-style
restaurant. The second floor ballroom and convention space has been expanded
with the addition of approximately 27,000 square feet of new space that is
equipped with state-of-the art audio-visual technology. The Company plans to
upgrade the pre-expansion areas of the Atlantis over the next several quarters
to be consistent with the upgraded standards of the new facilities.
The Company's previously announced $12.5 million Atlantis Convention
Center Skybridge project, which will provide guests with a convenient,
traffic-free stroll between the Atlantis and the 500,000 square-foot Reno-
Sparks Convention Center in an enclosed, climate controlled environment, is on
track to be completed late in the fourth quarter of 2008.
Monarch's CEO and Co-Chairman John Farahi commented on the Company's
performance: "This quarter's results reflect the effects of the challenging
operating environment that we previously described in press releases over the
last several quarters. As in many other areas around the country, the
national economic slowdown remains a significant challenge for our region.
Consistent with the last several quarters, other factors negatively impacting
our results include aggressive marketing and discount programs by our
competitors, disruption from construction related to our completed expansion
project and legal expenses associated with the ongoing and previously
disclosed Kerzner litigation. We anticipate that downward pressure on profits
will persist as long as we continue to experience these adverse conditions."
Mr. Farahi added, "While the recent economic climate is challenging, we
are committed to, and excited about, the improvements we have made, and that
are ongoing, to our Atlantis facility. The recently opened expansion sets a
new standard for us in terms of design and functionality. It allows us to
deliver a superior experience to guests who come to the Atlantis to enjoy
gaming, conventions, meetings and other social events. We plan to remodel the
pre-expansion portion of our facility over the next several quarters to update
its look and feel while we complete the skybridge project which will establish
the Atlantis as the only property to be physically connected to the Reno-
Sparks Convention Center."
Monarch Casino & Resort, Inc., through its wholly-owned subsidiary, owns
and operates the tropically-themed Atlantis Casino Resort Spa in Reno, Nevada.
The Atlantis is the closest hotel-casino to, and is directly across the street
from, the Reno-Sparks Convention Center. The Atlantis features a Sky Terrace,
a unique structure rising approximately 55 feet above street level and
spanning 160 feet across Virginia Street with no intermediate support pillars.
The Sky Terrace connects the Atlantis to a 16-acre parcel of land owned by the
Company, that is compliant with all casino zoning requirements and is suitable
and available for future expansion and growth. Currently, the Company uses
this parcel for additional paved parking for the Atlantis. The existing
Atlantis site offers almost 1,000 guest rooms in three contiguous high-rise
hotel towers and a motor lodge. The Atlantis features approximately 61,000
square feet of high-energy casino space with 38 table games and approximately
1,500 slot and video poker machines, a race and sports book, Keno and a poker
room, and offers a variety of dining choices in the form of ten high-quality
food outlets.
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, (iii) ongoing
expansion and upgrade plans, and (iv) 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.
For additional information visit Monarch's web site at monarchcasino.com.
(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.
Monarch Casino & Resort, Inc.
Condensed Consolidated Statements of Income
Three Months Ended Six Months Ended
June 30,June 30,
200820072008 2007
UNAUDITED UNAUDITED UNAUDITEDUNAUDITED
Revenues
Casino$25,672,907 $29,277,718 $49,428,857 $54,575,990
Food and beverage 9,547,395 10,568,173 19,308,615 21,072,388
Hotel 5,545,006 7,027,156 11,375,701 13,855,123
Other 1,185,503 1,285,8282,417,5722,474,451
Gross revenues41,950,811 48,158,875 82,530,745 91,977,952
Less promotional
allowances (6,607,046) (6,597,555) (12,913,587) (12,635,041)
Net revenues 35,343,765 41,561,320 69,617,158 79,342,911
Operating expenses
Casino 9,266,916 9,268,084 18,013,416 17,737,421
Food and beverage 4,606,282 4,866,9699,295,6479,835,686
Hotel 1,967,720 2,111,7654,073,0934,255,105
Other 312,997 377,437 659,651 741,057
Selling, general and
administrative12,877,513 12,792,008 25,981,613 24,322,811
Depreciation and
amortization 1,893,237 2,064,9703,899,7944,140,416
Total operating
expenses 30,924,665 31,481,233 61,923,214 61,032,496
Income from operations 4,419,100 10,080,0877,693,944 18,310,415
Other (expense) income
Interest income46,238 473,537 297,582 817,421
Interest expense (131,335) (3,174)(135,492)(152,274)
Total other (expense)
income (85,097)470,363 162,090 665,147
Income before income
taxes 4,334,003 10,550,4507,856,034 18,975,562
Provision for income
taxes (1,531,100) (3,650,000) (2,751,100) (6,580,000)
Net income$2,802,903 $6,900,450 $5,104,934 $12,395,562
Earnings per share of
common stock
Net income
Basic $0.16 $0.36$0.29$0.65
Diluted$0.16 $0.36$0.29$0.64
Weighted average number
of common shares and
potential common
shares outstanding
Basic 17,189,200 19,091,756 17,802,518 19,081,173
Diluted 17,253,109 19,366,442 17,899,384 19,345,213
Monarch Casino & Resort, Inc.
Condensed Consolidated Balance Sheets
June 30,December 31,
2008 2007
ASSETS(UNAUDITED)
Current assets
Cash and cash equivalents $11,672,748 $38,835,820
Receivables, net 3,679,8244,134,099
Federal income tax refund receivable - 998,123
Inventories 1,471,3471,496,046
Prepaid expenses 3,040,1233,144,374
Deferred income taxes 582,4071,084,284
Total current assets 20,446,449 49,692,746
Property and equipment
Land12,162,522 10,339,530
Land improvements3,511,4843,166,107
Buildings 80,655,538 78,955,538
Building improvements 10,435,062 10,435,062
Furniture and equipment 73,328,364 72,511,165
Leasehold improvements 1,346,9651,346,965
181,439,935 176,754,367
Less accumulated depreciation and
amortization (96,011,025) (92,215,149)
85,428,910 84,539,218
Construction in progress 53,494,393 17,236,062
Net property and equipment138,923,303 101,775,280
Other assets, net 2,817,8422,817,842
Total assets $162,187,594 $154,285,868
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $34,000,000 $-
Accounts payable12,788,488 10,840,318
Construction payable 3,330,2261,971,022
Accrued expenses 9,193,0309,230,157
Federal income taxes payable51,100-
Total current liabilities 59,362,844 22,041,497
Deferred income taxes 2,825,4332,825,433
Total Liabilities 62,188,277 24,866,930
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 6/30/08
18,566,540 outstanding at 12/31/07190,963 190,963
Additional paid-in capital 26,891,871 25,741,972
Treasury stock,
2,974,252 shares at 6/30/08
529,760 shares at 12/31/07, at cost (48,943,359) (13,268,905)
Retained earnings 121,859,842 116,754,908
Total stockholders' equity 99,999,317 129,418,938
Total liabilities and stockholder's
equity $162,187,594 $154,285,868
Monarch Casino & Resort, Inc.
Reconciliation of Net Income to EBITDA (1)
Three Months Ended Six Months Ended
June 30,June 30,
2008 2007 2008 2007
UNAUDITED UNAUDITED UNAUDITED UNAUDITED
Net income $2,802,903$6,900,450$5,104,934 $12,395,562
Adjustments
Provision for
income taxes 1,531,100 3,650,000 2,751,100 6,580,000
Interest expense 131,335 3,174 135,492 152,274
Depreciation &
amortization 1,893,237 2,064,970 3,899,794 4,140,416
Interest income (46,238) (473,537) (297,582) (817,421)
EBITDA (1)
(unaudited)$6,312,337 $12,145,057 $11,593,738 $22,450,831
(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.
SOURCE Monarch Casino & Resort, Inc.
