Monarch Casino Reports 2010 Fourth Quarter and Full-Year ResultsRENO, NV -- (Marketwire - February 24, 2011) - Monarch Casino & Resort, Inc. (NASDAQ: MCRI) (the "Company"), owner of the Atlantis Casino Resort Spa (the "Atlantis") in Reno, Nevada, today announced fourth-quarter and full-year results for the quarter and year ended December 31, 2010.
RESULTS FOR THE QUARTER ENDED DECEMBER 31, 2010
The Company reported net revenue of $33.8 million which is $1.9 million, or 6.0%, higher than the $31.9 million reported for the comparative quarter in 2009. The Company announced quarterly income from operations of $948 thousand which represents an increase of 193.6% when compared to the prior year's fourth quarter. EBITDA(1) of $4.7 million was $200 thousand or 4% lower than the $4.9 million reported in the fourth quarter of the prior year. Revenue generated in the casino, food and beverage, hotel and other operating departments increased by 6.1%, 9.0%, 1.5% and 19.0%, respectively.
Casino operating expense increased approximately $1.0 million, or 11.0%, over the prior year's fourth quarter primarily due to the cost of a greater amount of complimentary food, beverages and other services provided to casino patrons ("Complimentaries"). As a percentage of casino revenue, casino operating expense increased to 41.1% as compared to 39.3% in the prior year's fourth quarter, primarily due to the higher Complimentaries.
Food and beverage operating expense as a percentage of food and beverage revenue increased to 48.8% for the fourth quarter as compared to 44.7% in the fourth quarter of the prior year primarily due to higher repairs and maintenance expense related to various improvement projects undertaken during the quarter. Hotel operating expense as a percentage of hotel revenue decreased to 30.8% from 35.5% in prior year's fourth quarter due to the increase in hotel revenue combined with lower overall hotel operating expense. Selling, general and administrative expense increased by $391 thousand, or 3.3%, due primarily to higher marketing expense.
The Company reported that during the fourth quarter it demolished its 149 room motor lodge which resulted in a one-time charge in the fourth quarter of $414 thousand. The motor lodge was a free standing, low-rise building located next to the Atlantis. The former footprint of the motor lodge was converted into paved surface parking.
During the quarter, the Company paid down the balance outstanding under its credit facility by $3.4 million, which decreased the outstanding balance of the credit facility from $32.0 million at September 30, 2010 to $28.6 million at December 31, 2010. Decreased borrowing levels, combined with lower interest rates, drove interest expense down from $496 thousand in the prior year's fourth quarter to $316 thousand in the quarter ended December 31, 2010.
RESULTS FOR THE YEAR ENDED DECEMBER 31, 2010
For the year, the Company reported net revenue of $142.0 million, income from operations of $14.0 million and EBITDA(1) of $27.7 million, which represent increases of a 6.2%, 53.5% and 20.5%, respectively, when compared to the prior year. Revenue generated in the casino, food and beverage, hotel and other operating departments increased by 5.6%, 7.4%, 9.2% and 15.8%, respectively.
Casino operating expense increased approximately $2.9 million, or 8.1%, over the prior year primarily due to the cost of increased Complimentaries. As a percentage of casino revenue, casino operating expense increased slightly to 38.9% as compared to 38.0% in the prior year, primarily due to the higher Complimentaries.
Food and beverage operating expense for the year as a percentage of food and beverage revenue decreased slightly to 46.1% as compared to 46.9% in the prior year. Hotel operating expense as a percentage of hotel revenue decreased to 27.3% from 33.2% in the prior year due primarily to the increase in hotel revenue combined with lower payroll, benefits and overall maintenance expense. Selling, general and administrative expense of $47.9 million was flat with the prior year.
During the year, the Company paid down the balance outstanding under its credit facility by $19.9 million, which decreased the outstanding balance of the credit facility from $48.5 million at December 31, 2009 to $28.6 million at December 31, 2010. Decreased borrowing levels, combined with lower interest rates, drove interest expense down from $2.1 million in the prior year to $1.5 million in 2010.
Monarch's CEO and Co-Chairman John Farahi commented on the Company's performance: "We are pleased to report revenue increases for the fourth consecutive quarter despite the ongoing macroeconomic weakness of our national and local economies. We are also pleased with our full-year results. We grew annual net revenue by 6.2% and annual EBITDA by 20.5%. We continued to upgrade our facility while strengthening our balance sheet by paying down our outstanding debt by almost $20 million."
Mr. Farahi added: "The fourth quarter demolition of the motor lodge buildings was another important step forward. The motor lodge facility was past its prime and did not provide our guests with the level of quality that we offer in our newly expanded and upgraded facilities. Moreover, the demolition allowed us to add premium surface parking right next to the Atlantis, which has been very well received by our guests."
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 825 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 race and 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 Year Ended
December 31, December 31,
-------------------------- --------------------------
2010 2009 2010 2009
------------ ------------ ------------ ------------
Revenues
Casino $ 24,598,175 $ 23,174,218 $ 99,813,126 $ 94,510,933
Food and beverage 10,030,398 9,206,419 40,979,514 38,172,149
Hotel 4,295,822 4,232,749 21,767,117 19,937,568
Other 1,997,574 1,678,532 7,908,525 6,830,800
------------ ------------ ------------ ------------
Gross revenues 40,921,969 38,291,918 170,468,282 159,451,450
Less promotional
allowances (7,079,488) (6,440,404) (28,438,255) (25,719,594)
------------ ------------ ------------ ------------
Net revenues 33,842,481 31,851,514 142,030,027 133,731,856
------------ ------------ ------------ ------------
Operating expenses
Casino 10,101,265 9,100,855 38,777,935 35,887,871
Food and beverage 4,898,165 4,116,412 18,874,351 17,890,429
Hotel 1,321,291 1,501,432 5,942,399 6,628,190
Other 674,507 520,774 2,825,692 2,449,977
Selling, general
and
administrative 12,123,464 11,731,999 47,881,105 47,865,432
Depreciation and
amortization 3,361,412 3,190,468 13,281,396 12,501,048
Player club
implementation
expense - 1,366,614 - 1,366,614
Motor lodge
demolition 414,099 - 414,099 -
------------ ------------ ------------ ------------
Total operating
expenses 32,894,203 31,528,554 127,996,977 124,589,561
------------ ------------ ------------ ------------
Income from
operations 948,278 322,960 14,033,050 9,142,295
------------ ------------ ------------ ------------
Other expenses
Interest income - 16,697 - 124,661
Interest expense (315,562) (495,660) (1,457,865) (2,103,798)
------------ ------------ ------------ ------------
Total other
expense (315,562) (478,963) (1,457,865) (1,979,137)
------------ ------------ ------------ ------------
Income before
income taxes 632,716 (156,003) 12,575,185 7,163,158
Provision for
income taxes (164,869) 239,546 (4,338,924) (2,321,679)
------------ ------------ ------------ ------------
Net income $ 467,847 $ 83,543 $ 8,236,261 $ 4,841,479
============ ============ ============ ============
Earnings per share
of common stock
Net income
Basic $ 0.03 $ 0.01 $ 0.51 $ 0.30
Diluted $ 0.03 $ 0.01 $ 0.51 $ 0.30
Weighted average
number of common
shares and
potential common
shares outstanding
Basic 16,138,158 16,125,388 16,131,321 16,123,027
Diluted 16,270,912 16,157,105 16,205,606 16,159,415
MONARCH CASINO & RESORT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31,
----------------------------
2010 2009
------------- -------------
ASSETS
Current assets
Cash and cash equivalents $ 13,800,604 $ 14,420,323
Receivables, net 3,269,250 2,294,703
Federal income tax receivable 99,202 -
Inventories 1,883,816 1,706,867
Prepaid expenses 2,553,341 2,623,650
Deferred income taxes 1,384,443 1,090,063
------------- -------------
Total current assets 22,990,656 22,135,606
------------- -------------
Property and equipment
Land 13,172,522 13,172,522
Land improvements 3,891,990 3,511,484
Buildings 139,843,299 140,522,106
Building improvements 10,766,414 10,410,770
Furniture and equipment 112,847,107 107,655,784
Leasehold improvements 1,346,965 1,346,965
------------- -------------
281,868,297 276,619,631
Less accumulated depreciation and
amortization (125,437,458) (113,538,145)
------------- -------------
Net property and equipment 156,430,839 163,081,486
Other assets, net 312,043 569,622
------------- -------------
Total assets $ 179,733,538 $ 185,786,714
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Borrowings under credit facility $ - $ 1,000,000
Accounts payable 10,216,495 8,984,010
Accrued expenses 14,077,344 11,056,079
Federal income taxes payable - 46,546
------------- -------------
Total current liabilities 24,293,839 21,086,635
------------- -------------
Long-term debt, less current maturities 28,600,000 47,500,000
Deferred income taxes 3,384,218 4,695,657
Other long-term liabilities 873,872 -
------------- -------------
Total Liabilities 57,151,929 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;
16,138,158 outstanding at 12/31/10
16,125,388 outstanding at 12/31/09 190,963 190,963
Additional paid-in capital 31,558,693 30,041,083
Treasury stock, 2,958,142 shares at
12/31/10 2,970,912 shares at 12/31/09,
at cost (48,541,663) (48,864,979)
Retained earnings 139,373,616 131,137,355
------------- -------------
Total stockholders' equity 122,581,609 112,504,422
------------- -------------
Total liability and stockholder's
equity $ 179,733,538 $ 185,786,714
============= =============
MONARCH CASINO & RESORT, INC.
Reconciliation of Net Income to EBITDA(1)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
--------------------------- ---------------------------
2010 2009 2010 2009
------------- ------------ ------------- ------------
Net Income $ 467,847 $ 83,543 $ 8,236,261 $ 4,841,479
Adjustments
(Benefit)/provision
for income taxes 164,869 (239,546) 4,338,924 2,321,679
Interest expense 315,562 495,660 1,457,865 2,103,798
Depreciation and
amortization 3,361,412 3,190,468 13,281,396 12,501,048
Interest income - (16,697) - (124,661)
Motor lodge
demolition 414,099 - 414,099 -
Player club
implementation
expense - 1,366,614 - 1,366,614
------------- ------------ ------------- ------------
EBITDA (1) $ 4,723,789 $ 4,880,042 $ 27,728,545 $ 23,009,957
============= ============ ============= ============
(1) "EBITDA" consists of net income plus provision for income taxes and other one-time non-cash charges, interest expense, depreciation and amortization less interest income and any benefit for income taxes. 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
RRowan@MonarchCasino.com
John Farahi
CEO
(775) 825-4700
JohnFarahi@MonarchCasino.com
For additional information visit Monarch's web site at MonarchCasino.com.
