Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 02, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | MONARCH CASINO & RESORT INC | |
Entity Central Index Key | 907,242 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 17,792,384 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues: | ||
Gross revenues | $ 56,268 | $ 65,218 |
Less promotional allowances | (11,804) | |
Net revenues | 56,268 | 53,414 |
Operating expenses: | ||
Selling, general and administrative | 15,185 | 14,639 |
Depreciation and amortization | 3,692 | 3,906 |
Loss on disposition of assets | 18 | |
Total operating expenses | 47,711 | 45,688 |
Income from operations | 8,557 | 7,726 |
Other expenses | ||
Interest expense, net of amounts capitalized | (80) | (272) |
Total other expense | (80) | (272) |
Income before income taxes | 8,477 | 7,454 |
Provision for income taxes | (1,736) | (2,582) |
Net income | $ 6,741 | $ 4,872 |
Earnings per share of common stock | ||
Basic (in dollars per share) | $ 0.38 | $ 0.28 |
Diluted (in dollars per share) | $ 0.36 | $ 0.27 |
Weighted average number of common shares and potential common shares outstanding | ||
Basic (in shares) | 17,770 | 17,477 |
Diluted (in shares) | 18,710 | 18,021 |
Casino | ||
Revenues: | ||
Gross revenues | $ 29,945 | $ 41,310 |
Operating expenses: | ||
Operating expenses | 10,696 | 17,680 |
Food and beverage | ||
Revenues: | ||
Gross revenues | 16,938 | 15,490 |
Operating expenses: | ||
Operating expenses | 13,094 | 6,252 |
Hotel | ||
Revenues: | ||
Gross revenues | 6,363 | 5,640 |
Operating expenses: | ||
Operating expenses | 3,499 | 2,208 |
Other | ||
Revenues: | ||
Gross revenues | 3,022 | 2,778 |
Operating expenses: | ||
Operating expenses | $ 1,545 | $ 985 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 29,368 | $ 29,151 |
Receivables, net | 5,574 | 6,925 |
Income taxes receivable | 272 | 2,008 |
Inventories | 3,244 | 3,335 |
Prepaid expenses | 4,513 | 4,612 |
Total current assets | 42,971 | 46,031 |
Property and equipment | ||
Land | 30,034 | 30,034 |
Land improvements | 7,281 | 7,249 |
Buildings | 193,286 | 193,286 |
Buildings improvements | 24,781 | 24,745 |
Furniture and equipment | 141,483 | 140,404 |
Construction in Progress | 65,909 | 48,834 |
Leasehold improvements | 3,782 | 3,800 |
Gross property and equipment | 466,556 | 448,352 |
Less accumulated depreciation and amortization | (201,038) | (197,638) |
Net property and equipment | 265,518 | 250,714 |
Other assets | ||
Goodwill | 25,111 | 25,111 |
Intangible assets, net | 3,578 | 3,869 |
Deferred income taxes | 3,544 | 3,544 |
Other assets, net | 2,683 | 2,818 |
Total other assets | 34,916 | 35,342 |
Total assets | 343,405 | 332,087 |
Current liabilities | ||
Accounts payable | 8,718 | 8,184 |
Construction accounts payable | 11,217 | 5,823 |
Accrued expenses | 27,797 | 25,406 |
Total current liabilities | 47,732 | 39,413 |
Long-term debt | 26,200 | 26,200 |
Total liabilities | 73,932 | 65,613 |
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; 17,792,384 outstanding at March 31, 2018; 17,759,446 outstanding at December 31, 2017 | 191 | 191 |
Additional paid - in capital | 27,541 | 26,890 |
Treasury stock, 1,303,916 shares at March 31, 2018; 1,336,854 shares at December 31, 2017 | (17,658) | (18,123) |
Retained earnings | 259,399 | 257,516 |
Total stockholders' equity | 269,473 | 266,474 |
Total liabilities and stockholders' equity | $ 343,405 | $ 332,087 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | |
Preferred stock, shares authorized | 10,000,000 | |
Preferred stock, shares issued | 0 | |
Common stock, par value (in dollars per share) | $ 0.01 | |
Common stock, shares authorized | 30,000,000 | |
Common stock, shares issued | 19,096,300 | 19,096,300 |
Common stock, shares outstanding | 17,792,384 | 17,759,446 |
Treasury stock, shares | 1,303,916 | 1,336,854 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 6,741 | $ 4,872 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 3,692 | 3,906 |
Amortization of deferred loan costs | 135 | 134 |
Stock-based compensation | 1,115 | 962 |
(Recoveries) Provision for bad debts | (32) | 48 |
Loss on disposition of assets | 18 | |
Changes in operating assets and liabilities: | ||
Receivables | 1,383 | 581 |
Income taxes receivable | 1,736 | 2,720 |
Inventories | 91 | 193 |
Prepaid expenses | 99 | 374 |
Accounts payable | 534 | (1,224) |
Accrued expenses | (2,467) | (2,274) |
Net cash provided by operating activities | 13,027 | 10,310 |
Cash flows from investing activities: | ||
Proceeds from sale of assets | 1 | |
Change in construction payable | 5,394 | 90 |
Acquisition of property and equipment | (18,204) | (12,246) |
Net cash used in investing activities | (12,810) | (12,155) |
Net increase (decrease) in cash | 217 | (1,845) |
Cash and cash equivalents at beginning of period | 29,151 | 26,383 |
Cash and cash equivalents at end of period | 29,368 | 24,538 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest, net of amounts capitalized | $ 138 | |
Adjustment to beginning retained earnings for accounting changes in accordance with the new revenue recognition standard | ||
Accrued Expenses | $ 4,858 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | MONARCH CASINO & RESORT, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) QUARTERLY PERIOD ENDED MARCH 31, 2018 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation : Monarch Casino & Resort, Inc. was incorporated in 1993. Unless otherwise indicated, “Monarch” and the “Company” refer to Monarch Casino & Resort, Inc. and its subsidiaries. Monarch owns and operates the Atlantis Casino Resort Spa, a hotel and casino in Reno, Nevada (the “Atlantis”) and Monarch Casino Black Hawk, a casino in Black Hawk, Colorado. In addition, Monarch owns separate parcels of land located next to the Atlantis, a parcel of land located next to Monarch Casino Black Hawk and a parcel of land with an industrial warehouse located between Denver, Colorado and Monarch Casino Black Hawk. Monarch also owns Chicago Dogs Eatery, Inc. and Monarch Promotional Association, both of which were formed in relation to extended licensure requirements for extended hours of liquor operation in Black Hawk, Colorado. The accompanying unaudited condensed consolidated financial statements include the accounts of Monarch and its subsidiaries (the “Consolidated Financial Statements”). Intercompany balances and transactions are eliminated. Interim Financial Statements : The Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the management of the Company, all adjustments considered necessary for a fair presentation are included. Operating results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The balance sheet at December 31, 2017 has been derived from the audited consolidated financial statements of the Company at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2017. Fair Value of Financial Instruments : The estimated fair value of the Company’s financial instruments has been determined by the Company, using available market information and valuation methodologies. However, considerable judgment is required to develop the estimates of fair value; thus, the estimates provided herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The carrying amounts of cash, receivables, accounts payable and accrued expenses approximate fair value because of the short-term nature of these instruments. Additionally, the carrying value of our debt approximates fair value due to the variable nature of applicable interest rates and relatively short-term maturity. Debt Issuance Costs: Costs incurred in connection with the issuance of long-term debt are capitalized and amortized to interest expense over the term of the related debt agreement. Loan issuance costs are included in “Other assets, net” on the Company’s condensed consolidated balance sheets. As of March 31, 2018, loan issuance costs, net of amortization was $1.8 million. Segment Reporting: The accounting guidance for disclosures about segments of an enterprise and related information requires separate financial information to be disclosed for all operating segments of a business. The Company determined that the Company’s two operating segments, Atlantis and Monarch Casino Black Hawk, meet all of the aggregation criteria stipulated by ASC 280-10-50-11. The Company views each property as an operating segment and the two operating segments have been aggregated into one reporting segment. Inventories Inventories, consisting primarily of food, beverages, and retail merchandise, are stated at the lower of cost and net realizable value. Cost is determined based on the weighted average, which approximates a first-in, first out method. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2018 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | NOTE 2. REVENUE RECOGNITION On January 1, 2018, the Company adopted accounting standard update No. 2014-09 (“ASC 606”) and all the related amendments to all contracts (“new revenue standard”). The Company applied the modified retrospective method and recognized a $4.86 million cumulative effect adjustment to the opening balance of retained earnings with the adoption of the new revenue standard. This adjustment exclusively related to the change in the accounting for the slot club liability from the immediate revenue/cost method to the deferred revenue method. Financial results for the quarter ended March 31, 2017 have not been restated and are reported under the accounting standards in effect during that period. Players’ Club Program: The Company operates a players’ club program under which as players perform gaming activities they earn and accumulate points, which may be redeemed for a variety of goods and services. Points may be applied toward hotel room stays, food and beverage consumption at the food outlets, gift shop items, as well as goods and services at the spa and beauty salon and for cash in our Monarch Casino Black Hawk property. Points earned may also be applied toward off-property events such as concerts, shows and sporting events. The point balance under the players’ club program is forfeited if the member does not earn or use any points over a twelve-month period. A large portion of our revenues are generated by customers who are members of our players’ club. Given the significance of the players’ club program and the ability for members to bank such points based on their past play, we have determined that players’ club program points granted in conjunction with gaming activity constitute a material right and, as such, represent a performance obligation associated with the gaming contracts. We have determined the points estimated standalone selling prices (“SSP”) by computing the cash redemption value of the points expected to be redeemed by type of good or service. This cash redemption value is determined through an analysis of all redemption activity over the preceding twelve-month period, leveraging the fair market value of the goods and services provided through redemption of points as the means for determining the fair market value of such points as points are not otherwise independently sold. Because of the similarity of gaming and other transactions, we have applied the practical expedient under the portfolio approach as prescribed in ASC paragraph 606-10-10-4 to apply to our loyalty credit transactions. Prior to the adoption of the ASC 606, at the time points are earned, which occurs commensurate with casino patron play, we recognized a liability for points outstanding based on the average cost of the goods and services expected to be redeemed, with a corresponding increase in casino expenses. After the adoption of the ASC 606, at the time points are earned, we recognize deferred revenue at the standalone selling prices of the goods and services that the points are expected to be redeemed for, with corresponding decrease in gaming revenue. As of March 31, 2018 we had estimated the obligations related to the players’ club program at $8.9 million, which is included in Accrued Expenses in the Liabilities and Stockholders’ Equity section in the Condensed Consolidated Balance Sheet. Estimates and assumptions made regarding breakage rates and the combination of goods and services members will choose impacts the estimated SSP of the points. We use historical data to assist in the determination of estimated accruals. Changes in estimates or member redemption patterns could produce different results. The majority of the Company’s revenue continues to be recognized when products are delivered or services are performed. For certain revenue transactions (when a patron uses a club loyalty card) a portion of the revenue is deferred until the points earned by the patron are redeemed or expire. The new revenue standard also resulted in reclassifications to or from revenues, promotional allowances and operating expenses. Pursuant to the new Financial Accounting Standards Board (“FASB”) guidelines, food and beverage, hotel and other complimentaries are now valued at their retail price and included as revenues within their respective categories, with a corresponding decrease in gaming revenues, as the offsetting amount historically included in promotional allowances has been eliminated. In addition, the cost of providing these complimentary goods and services are now included as expenses within their respective categories, resulting in a corresponding decrease in casino expenses. While those changes have resulted in a $145 thousand increase in net revenue for the first quarter in 2018.The adoption of the new revenue standard had no impact on the net income. In accordance with the new revenue standard requirements, below is a disclosure of the impact of the adoption of ASC 606 on our consolidated income statement for the period ended March 31, 2018 (in thousands): Three Months Ended March 31, 2018 Post ASC 606 Adoption Other ASC 606 Changes Pre ASC 606 Adoption Revenues Casino $ 29,945 $ 13,761 (a) (b) (c) (d) $ 43,706 Food and beverage 16,938 (1,453) (a) (d) (e) 15,485 Hotel 6,363 (658) (a) (f) 5,705 Other 3,022 24 (a) (d) 3,046 Gross revenues 56,268 11,674 67,942 Less promotional allowances — (11,819) (a) (d) (11,819) Net revenues 56,268 (145) (b) (c) (e) (f) 56,123 Operating Expenses — Casino 10,696 8,282 (b) (c) (g) 18,978 Food and beverage 13,094 (6,923) (e) (g) 6,171 Hotel 3,499 (973) (f) (g) 2,526 Other 1,545 (531) (g) 1,014 Selling, general and administrative 15,185 — 15,185 Depreciation and amortization 3,692 — 3,692 Total operating expenses 47,711 (145) 47,566 — Net income $ 6,741 $ — $ 6,741 Earnings per share of common stock Net income Basic $ 0.38 $ — $ 0.38 Diluted $ 0.36 $ — $ 0.36 (a) Change as a result of reclassification of current period complimentaries at estimated retail price from promotional allowances to casino, food and beverage, hotel, spa and retail revenues. (b) Change as a result of reclassification of the earned and unused points during the period from casino expense to casino revenue. (c) Change as a result of reclassification of the wide area progressive system expense from casino revenue to casino expense. (d) Change as a result of the change of the casino floor bars menu prices and some retail outlets prices from discounted to retail price. (e) Change as a result of reclassification of the banquets service fees from food and beverage expense to food and beverage revenue. (f) Change as a result of reclassification of the groups rebate and commissions from hotel expense to hotel revenue. (g) Change as a result of the elimination of the reclassification journal entry that reclassified the costs of complimentaries from hotel, food and beverage and other expense categories to casino expense. Under ASC 606, the costs of complimentaries stay in the complimentaries revenue producing department. Casino revenue: Casino revenues represent the net win from gaming activity, which is the difference between the amounts won and lost, which represents the transaction price. Jackpots, other than the incremental amount of progressive jackpots, are recognized at the time they are won by customers. Funds deposited by customers in advance and outstanding chips and slot tickets in the customers’ possession are recognized as a liability until such amounts are redeemed or used in gaming play by the customer. Additionally, net win is reduced by the performance obligations for the players’ club program as discussed above, progressive jackpots and any pre-arranged marker discounts. Progressive jackpot provisions are recognized in two components: 1) as wagers are made for the share of players’ wagers that are contributed to the progressive jackpot award, and 2) as jackpots are won for the portion of the progressive jackpot award contributed by us. Cash discounts and other cash incentives to guests related to gaming play are recorded as a reduction to gaming revenue. Food and Beverage, Hotel and Other (retail) Revenues: Food and Beverage, Hotel and Other Revenues in general are recognized when products are delivered or services are performed. We recognize revenue related to the products and services associated to the players points’ redemptions at the time products are delivered or services are performed, with corresponding reduction in the deferred revenue, at SSP. Other complimentaries in conjunction with the gaming and other business are also valued at SSP. Hotel revenue is presented net of non-third party rebate and commission. Other Revenues : Other revenues (excluding retail) primarily consist of commissions received on ATM transactions and cash advances, which are recorded on a net basis as the Company represents the agent in its relationship with the third-party service providers, and commissions and fees received in connection with pari-mutuel wagering, which are also recorded on a net basis. Sales and other taxes : Sales taxes and other taxes collected from customers on behalf of governmental authorities are accounted for on a net basis and are not included in revenues or operating expenses. In addition, tips and other gratuities, excluding service charges, collected from customers on behalf of our employees are also accounted for on a net basis and are not included in revenues or operating expenses. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2018 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 3. STOCK-BASED COMPENSATION On January 1, 2017, the Company adopted a new accounting standard update (“ASU”) No. 2016-09, which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. Subsequent to the adoption, the Company records any excess tax benefits or deficiencies from its equity awards in its Consolidated Statements of Income in the reporting periods in which vesting occurs. As a result, the Company’s income tax expense and associated effective tax rate are impacted by fluctuations in stock price between the grant dates and vesting dates of equity awards. This guidance of requiring recognition of excess tax benefits and deficits in the income statement was applied prospectively with the adoption of ASU No. 2016-09. For the three months ended March 31, 2018 and 2017, the effect of the adoption of ASU No. 2016-09 was a decrease of tax expense by $145 thousand and $64 thousand, respectively, resulting in an increase of basic and diluted earnings per share by less than $0.01. The Company has elected to keep the accounting policy of estimated forfeitures, rather than account for forfeitures as they occur. The amendments in the guidance that require application using a modified retrospective transition method did not impact the Company. Therefore, there was no cumulative-effect adjustment to retained earnings recognized as of January 1, 2017. ASU No. 2016-09 also changes the classification and presentation of the excess tax benefit from stock-based compensation in the statement of cash flows. The Company applied the amendments in this guidance relating to classification on its consolidated statement of cash flows prospectively. Reported stock-based compensation expense was classified as follows (in thousands): Three months ended March 31, 2018 2017 Casino $ 38 $ 32 Food and beverage 38 34 Hotel 10 8 Selling, general and administrative 480 391 Total stock-based compensation, before taxes 566 465 Tax benefit (119) (163) Total stock-based compensation, net of tax $ 447 $ 302 Effective January 1, 2018, the Company adopted ASU 2017-09, which provides guidance about when changes to the terms or conditions of a share-based payment award must be accounted for as modifications and the disclosure required. During the first three months of 2018, there were no changes to the terms and conditions of the share-based awards that required modification accounting or disclosure. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2018 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 4. EARNINGS PER SHARE Basic earnings per share is computed by dividing reported net earnings by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflect the additional dilution for all potentially dilutive securities such as stock options. The following is a reconciliation of the number of shares (denominator) used in the basic and diluted earnings per share computations (shares in thousands): Three months ended March 31, 2018 2017 Per Share Per Share Shares Amount Shares Amount Basic 17,770 $ 0.38 17,477 $ 0.28 Effect of dilutive stock options 940 (0.02) 544 (0.01) Diluted 18,710 $ 0.36 18,021 $ 0.27 Excluded from the computation of diluted earnings per share are options where the exercise prices are greater than the market price as their effects would be anti-dilutive in the computation of diluted earnings per share. For the three months ended March 31, 2018 and 2017, options for approximately 236 thousand and 468 thousand shares, respectively, were excluded from the computation. |
NEW ACCOUNTING PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2018 | |
NEW ACCOUNTING PRONOUNCEMENTS | |
NEW ACCOUNTING PRONOUNCEMENTS | NOTE 5. NEW ACCOUNTING PRONOUNCEMENTS In November 2016, the FASB issued amended accounting guidance on the presentation of restricted cash in the statement of cash flows. Entities are required to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The amended guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We adopted this ASU on January 1, 2018, with no impact to our presentation on the Consolidated Statements of Cash Flows. In August 2016, the FASB issued an ASU that provides clarifying guidance on the presentation of certain cash receipts and cash payments in the statement of cash flows. The guidance clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows and how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The ASU is effective for annual reporting periods beginning after December 15, 2017. We adopted this ASU on January 1, 2018, with no impact to our presentation of cash receipts and payments on our Consolidated Statements of Cash Flows. In February 2016, the FASB issued an ASU, amended January 2017, which addresses the recognition and measurement of leases. Under the new guidance, for all leases (with the exception of short-term leases), at the commencement date, lessees will be required to recognize a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Further, the new lease guidance simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and liabilities, which no longer provides a source for off- balance sheet financing. The effective date for this update is for the annual and interim periods beginning after December 15, 2018 with early adoption permitted. Lessees and lessors must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently assessing the impact the adoption of this standard will have on its Consolidated Financial Statements. A variety of proposed or otherwise potential accounting standards are currently under review and study by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, we have not yet determined the effect, if any, the implementation of any such proposed or revised standards would have on the Company’s Consolidated Financial Statements. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2018 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 6. RELATED PARTY TRANSACTIONS The shopping center adjacent to the Atlantis (the “Shopping Center”) is owned by Biggest Little Investments, L.P. (“BLI”). John Farahi and Bob Farahi, Co-Chairmen of the Board and executive officers of the Company, and Ben Farahi are the three largest stockholders (the “Farahi Family Stockholders”) of Monarch and each also beneficially owns limited partnership interests in BLI. Maxum LLC is the sole general partner of BLI, and Ben Farahi is the sole managing member of Maxum LLC. Neither John Farahi nor Bob Farahi has any management or operational control over BLI or the Shopping Center. Until May 2006, Ben Farahi held the positions of Co-Chairman of the Board, Secretary, Treasurer and Chief Financial Officer of the Company. On August 28, 2015, Monarch, through its subsidiary Golden Road, entered into a 20-year lease agreement with BLI for a portion of the Shopping Center, consisting of an approximate 46,000 square-foot commercial building on approximately 4.2 acres of land adjacent to the Atlantis (the “Parking Lot Lease”). This lease gives the Atlantis the right to use a parcel, approximately 4.2 acres, comprised of a commercial building and surrounding land adjacent to the Atlantis. The primary purpose of the Parking Lot Lease is to provide additional, convenient, Atlantis surface parking. The Company demolished the commercial building and converted the land into approximately 300 additional surface parking spaces for the Atlantis. The minimum annual rent under the Parking Lot Lease is $695 thousand, commencing on November 17, 2015. The minimum annual rent is subject to a cost of living adjustment increase on each five-year anniversary. In addition, the Company is responsible for payment of property taxes, utilities and maintenance expenses related to the leased property. The Company has an option to renew the Parking Lot Lease for an additional 10-year term. If the Company elects not to exercise its renewal option, the Company will be obligated to pay BLI $1.6 million. For each of the three-month periods ended March 31, 2018 and 2017, the Company paid $174 thousand in rent, plus $8 thousand and $7 thousand, respectively, in operating expenses relating to this lease. In addition, the Atlantis shares a driveway with the Shopping Center and leases approximately 37,400 square feet from BLI (the “Driveway Lease”) for an initial lease term of 15 years, which commenced on September 30, 2004, at an original annual rent of $300 thousand plus common area expenses. The annual rent of the Driveway Lease is subject to a cost of living adjustment increase on each five year anniversary of the Driveway Lease. The total cost of the improvements was $2.0 million of which $1.35 million was paid by the Company. The cost of the driveway improvements is being depreciated over the 15-year expected economic life of the asset; some components of the driveway were depreciated over a shorter period of time. Effective August 28, 2015, in connection with the Company entering into the Parking Lot Lease, the Driveway Lease was amended to: (i) make the Company solely responsible for the operation and maintenance costs of the shared driveway (including the fountains thereon); (ii) eliminate the Company’s obligation to reimburse the Shopping Center for its proportionate share of common area expenses; and (iii) exercise the three successive five-year renewal terms beyond the initial 15 year term in the existing Driveway Lease agreement. At the end of the renewal terms, the Company has the option to purchase the leased driveway section of the Shopping Center. For each of the three-month periods ended March 31, 2018 and 2017, the Company paid $94 thousand in rent, plus $5 thousand and $7 thousand, respectively, in operating expenses relating to this lease. We occasionally lease billboard advertising, storage space and parking lot space from affiliates controlled by the Farahi Family Stockholders and paid $32 thousand and $27 thousand for the three-month periods ended March 31, 2018 and 2017, respectively, for such leases. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2018 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | NOTE 7. LONG-TERM DEBT On July 20, 2016, the Company entered into an amended and restated credit facility agreement (the “Amended Credit Facility”), under which our former $100.0 million credit facility (under which as of June 30, 2016 the borrowing capacity had been reduced to $45.5 million as a result of $19.5 million in mandatory reductions pursuant to the agreement and $35.0 million in voluntary reductions, as allowed by the agreement) was increased to $250.0 million, and the maturity date was extended from November 15, 2016 to July 20, 2021. As of March 31, 2018, we had borrowed $26.2 million of the principal under the Amended Credit Facility, and had a $0.6 million standby letter of credit and $223.2 million remaining in available borrowings under the $250.0 million Amended Credit Facility. As of March 31, 2018, there have been no withdrawals from the standby letter of credit. The total revolving loan commitment under the Amended Credit Facility will be automatically and permanently reduced to $50.0 million in the first full quarter after completion of the expansion project at the Monarch Casino Black Hawk (the “Monarch Black Hawk Expansion”) and all then outstanding revolving loans up to $200.0 million under the Amended Credit Facility will be converted to a term loan at such time. We may be required to prepay borrowings under the Amended Credit Facility using excess cash flows depending on our leverage ratio no later than December 31, 2019. We have an option to permanently reduce the maximum revolving available credit at any time so long as the amount of such reduction is at least $0.5 million and in multiples of $50 thousand. Borrowings are secured by liens on substantially all of the Company’s real and personal property. In addition to other customary covenants for a facility of this nature, as of March 31, 2018, we are required to maintain a leverage ratio, defined as consolidated debt divided by Adjusted EBITDA, of no more than 3.5:1 and a fixed charge coverage ratio (Adjusted EBITDA divided by fixed charges, as defined in the Amended Credit Facility) of at least 1.15:1. As of March 31, 2018, the Company’s leverage ratio and fixed charge coverage ratios were 0.45:1 and 39.9:1, respectively. The interest rate under the Amended Credit Facility is LIBOR plus a margin ranging from 1.00% to 2.50%, or a base rate (as defined in the Amended Credit Facility) plus a margin ranging from 0.00% to 1.50%, or the Prime Rate. The applicable margins will vary depending on our leverage ratio. Commitment fees are equal to the daily average unused revolving commitment multiplied by the commitment fee percentage, ranging from 0.175% to 0.45%, based on our leverage ratio. At March 31, 2018, our interest rate was based on LIBOR and our leverage ratio was such that pricing for borrowings under the Amended Credit Facility was LIBOR plus 1.00%. At March 31, 2018, the one-month LIBOR interest rate was 1.88%. The carrying value of the debt outstanding under the Amended Credit Facility approximates fair value because the interest fluctuates with the lender’s prime rate or other market rates of interest. We may prepay borrowings under the Amended Credit Facility without penalty (subject to certain charges applicable to the prepayment of LIBOR borrowings prior to the end of the applicable interest period). Amounts prepaid may be re-borrowed so long as the total borrowings outstanding do not exceed the maximum principal available. We believe that our existing cash balances, cash flow from operations and borrowings available under the Amended Credit Facility will provide us with sufficient resources to fund our operations, meet our debt obligations, and fulfill our capital expenditure plans over the next twelve months; however, our operations are subject to financial, economic, competitive, regulatory, and other factors, many of which are beyond our control. If we are unable to generate sufficient cash flow or if our cash needs exceed our borrowing capacity under the Amended Credit Facility, we could be required to adopt one or more alternatives, such as reducing, delaying or eliminating planned capital expenditures, selling assets, restructuring debt or obtaining additional equity capital. |
TAXES
TAXES | 3 Months Ended |
Mar. 31, 2018 | |
TAXES | |
TAXES | NOTE 8. TAXES For the three months ended March 31, 2018 and 2017, the Company’s effective tax rate was 20.5% and 34.6%, respectively. The lower effective tax rate in the first quarter of 2018 compared to the effective tax rate for the same period in 2017 is primarily attributable to the Tax Cuts and Jobs Act enacted on December 22, 2017, that reduced the U.S. federal corporate tax rate to a flat rate of 21%. On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. During the first quarter of 2018, The Company did not have any significant adjustments to the provisional amounts recorded during the year ended December 31, 2017, related to the re-measurement of certain deferred tax assets and liabilities. As the Company collects and prepares necessary data, and interprets the Tax Act and any additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service (IRS), and other standard-setting bodies, the Company may make adjustments to the provisional amounts. The accounting for the tax effects of the Tax Act will be completed later in 2018. |
STOCK REPURCHASE PLAN
STOCK REPURCHASE PLAN | 3 Months Ended |
Mar. 31, 2018 | |
STOCK REPURCHASE PLAN | |
STOCK REPURCHASE PLAN | NOTE 9. STOCK REPURCHASE PLAN On October 22, 2014, the board of directors of Monarch authorized a stock repurchase plan (the “Repurchase Plan”). Under the Repurchase Plan, the board of directors authorized a program to repurchase up to 3,000,000 shares of the Company’s common stock in the open market or in privately negotiated transactions from time to time, in compliance with Rule 10b-18 of the Securities and Exchange Act of 1934, subject to market conditions, applicable legal requirements and other factors. The Repurchase Plan does not obligate the Company to acquire any particular amount of common stock and the plan may be suspended at any time at the Company’s discretion, and it will continue until exhausted. The actual timing, number and value of shares repurchased under the repurchase program will be determined by management at its discretion and will depend on a number of factors, including the market price of the Company’s stock, general market economic conditions and applicable legal requirements. The Company has made no purchases under the Repurchase Plan. |
SUMMARY OF SIGNIFICANT ACCOUN15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation : Monarch Casino & Resort, Inc. was incorporated in 1993. Unless otherwise indicated, “Monarch” and the “Company” refer to Monarch Casino & Resort, Inc. and its subsidiaries. Monarch owns and operates the Atlantis Casino Resort Spa, a hotel and casino in Reno, Nevada (the “Atlantis”) and Monarch Casino Black Hawk, a casino in Black Hawk, Colorado. In addition, Monarch owns separate parcels of land located next to the Atlantis, a parcel of land located next to Monarch Casino Black Hawk and a parcel of land with an industrial warehouse located between Denver, Colorado and Monarch Casino Black Hawk. Monarch also owns Chicago Dogs Eatery, Inc. and Monarch Promotional Association, both of which were formed in relation to extended licensure requirements for extended hours of liquor operation in Black Hawk, Colorado. The accompanying unaudited condensed consolidated financial statements include the accounts of Monarch and its subsidiaries (the “Consolidated Financial Statements”). Intercompany balances and transactions are eliminated. |
Interim Financial Statements | Interim Financial Statements : The Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the management of the Company, all adjustments considered necessary for a fair presentation are included. Operating results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The balance sheet at December 31, 2017 has been derived from the audited consolidated financial statements of the Company at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2017. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments : The estimated fair value of the Company’s financial instruments has been determined by the Company, using available market information and valuation methodologies. However, considerable judgment is required to develop the estimates of fair value; thus, the estimates provided herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The carrying amounts of cash, receivables, accounts payable and accrued expenses approximate fair value because of the short-term nature of these instruments. Additionally, the carrying value of our debt approximates fair value due to the variable nature of applicable interest rates and relatively short-term maturity. |
Debt Issuance Costs | Debt Issuance Costs: Costs incurred in connection with the issuance of long-term debt are capitalized and amortized to interest expense over the term of the related debt agreement. Loan issuance costs are included in “Other assets, net” on the Company’s condensed consolidated balance sheets. As of March 31, 2018, loan issuance costs, net of amortization was $1.8 million. |
Segment Reporting | Segment Reporting: The accounting guidance for disclosures about segments of an enterprise and related information requires separate financial information to be disclosed for all operating segments of a business. The Company determined that the Company’s two operating segments, Atlantis and Monarch Casino Black Hawk, meet all of the aggregation criteria stipulated by ASC 280-10-50-11. The Company views each property as an operating segment and the two operating segments have been aggregated into one reporting segment. |
Inventories | Inventories Inventories, consisting primarily of food, beverages, and retail merchandise, are stated at the lower of cost and net realizable value. Cost is determined based on the weighted average, which approximates a first-in, first out method. |
New Accounting Pronouncements | In November 2016, the FASB issued amended accounting guidance on the presentation of restricted cash in the statement of cash flows. Entities are required to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The amended guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We adopted this ASU on January 1, 2018, with no impact to our presentation on the Consolidated Statements of Cash Flows. In August 2016, the FASB issued an ASU that provides clarifying guidance on the presentation of certain cash receipts and cash payments in the statement of cash flows. The guidance clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows and how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The ASU is effective for annual reporting periods beginning after December 15, 2017. We adopted this ASU on January 1, 2018, with no impact to our presentation of cash receipts and payments on our Consolidated Statements of Cash Flows. In February 2016, the FASB issued an ASU, amended January 2017, which addresses the recognition and measurement of leases. Under the new guidance, for all leases (with the exception of short-term leases), at the commencement date, lessees will be required to recognize a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Further, the new lease guidance simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and liabilities, which no longer provides a source for off- balance sheet financing. The effective date for this update is for the annual and interim periods beginning after December 15, 2018 with early adoption permitted. Lessees and lessors must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently assessing the impact the adoption of this standard will have on its Consolidated Financial Statements. A variety of proposed or otherwise potential accounting standards are currently under review and study by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, we have not yet determined the effect, if any, the implementation of any such proposed or revised standards would have on the Company’s Consolidated Financial Statements. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
ASU 2014-09 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Impact of adoption of ASC 606 on consolidated income statement | In accordance with the new revenue standard requirements, below is a disclosure of the impact of the adoption of ASC 606 on our consolidated income statement for the period ended March 31, 2018 (in thousands): Three Months Ended March 31, 2018 Post ASC 606 Adoption Other ASC 606 Changes Pre ASC 606 Adoption Revenues Casino $ 29,945 $ 13,761 (a) (b) (c) (d) $ 43,706 Food and beverage 16,938 (1,453) (a) (d) (e) 15,485 Hotel 6,363 (658) (a) (f) 5,705 Other 3,022 24 (a) (d) 3,046 Gross revenues 56,268 11,674 67,942 Less promotional allowances — (11,819) (a) (d) (11,819) Net revenues 56,268 (145) (b) (c) (e) (f) 56,123 Operating Expenses — Casino 10,696 8,282 (b) (c) (g) 18,978 Food and beverage 13,094 (6,923) (e) (g) 6,171 Hotel 3,499 (973) (f) (g) 2,526 Other 1,545 (531) (g) 1,014 Selling, general and administrative 15,185 — 15,185 Depreciation and amortization 3,692 — 3,692 Total operating expenses 47,711 (145) 47,566 — Net income $ 6,741 $ — $ 6,741 Earnings per share of common stock Net income Basic $ 0.38 $ — $ 0.38 Diluted $ 0.36 $ — $ 0.36 (a) Change as a result of reclassification of current period complimentaries at estimated retail price from promotional allowances to casino, food and beverage, hotel, spa and retail revenues. (b) Change as a result of reclassification of the earned and unused points during the period from casino expense to casino revenue. (c) Change as a result of reclassification of the wide area progressive system expense from casino revenue to casino expense. (d) Change as a result of the change of the casino floor bars menu prices and some retail outlets prices from discounted to retail price. (e) Change as a result of reclassification of the banquets service fees from food and beverage expense to food and beverage revenue. (f) Change as a result of reclassification of the groups rebate and commissions from hotel expense to hotel revenue. Change as a result of the elimination of the reclassification journal entry that reclassified the costs of complimentaries from hotel, food and beverage and other expense categories to casino expense. Under ASC 606, the costs of complimentaries stay in the complimentaries revenue producing department. |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
STOCK-BASED COMPENSATION | |
Schedule of stock-based compensation expense | Reported stock-based compensation expense was classified as follows (in thousands): Three months ended March 31, 2018 2017 Casino $ 38 $ 32 Food and beverage 38 34 Hotel 10 8 Selling, general and administrative 480 391 Total stock-based compensation, before taxes 566 465 Tax benefit (119) (163) Total stock-based compensation, net of tax $ 447 $ 302 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
EARNINGS PER SHARE | |
Schedule of reconciliation of the number of shares (denominator) used in the basic and diluted earnings per share computations | The following is a reconciliation of the number of shares (denominator) used in the basic and diluted earnings per share computations (shares in thousands): Three months ended March 31, 2018 2017 Per Share Per Share Shares Amount Shares Amount Basic 17,770 $ 0.38 17,477 $ 0.28 Effect of dilutive stock options 940 (0.02) 544 (0.01) Diluted 18,710 $ 0.36 18,021 $ 0.27 |
SUMMARY OF SIGNIFICANT ACCOUN19
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Debt Issuance Costs (Details) $ in Millions | Mar. 31, 2018USD ($) |
Other assets, net | |
Debt Issuance Costs | |
Loan issuance costs, net of amortization | $ 1.8 |
SUMMARY OF SIGNIFICANT ACCOUN20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Segment Reporting (Details) | 3 Months Ended |
Mar. 31, 2018segment | |
Segment Reporting | |
Number of operating segments | 2 |
Number of reportable segments | 1 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Jan. 01, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Deferred revenue obligations included in Liabilities and Stockholders' Equity | $ 8,900 | |
Changes resulting in increase in net revenue | $ 145 | |
ASU 2014-09 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Cumulative effect adjustment recognized | $ 4,860 |
REVENUE RECOGNITION - Impact of
REVENUE RECOGNITION - Impact of Adoption on Income Statement (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues: | ||
Gross revenues | $ 56,268 | $ 65,218 |
Less promotional allowances | (11,804) | |
Net revenues | 56,268 | 53,414 |
Operating expenses: | ||
Selling, general and administrative | 15,185 | 14,639 |
Depreciation and amortization | 3,692 | 3,906 |
Total operating expenses | 47,711 | 45,688 |
Net income | $ 6,741 | $ 4,872 |
Earnings per share of common stock | ||
Basic (in dollars per share) | $ 0.38 | $ 0.28 |
Diluted (in dollars per share) | $ 0.36 | $ 0.27 |
Casino | ||
Revenues: | ||
Gross revenues | $ 29,945 | $ 41,310 |
Operating expenses: | ||
Operating expenses | 10,696 | 17,680 |
Food and beverage | ||
Revenues: | ||
Gross revenues | 16,938 | 15,490 |
Operating expenses: | ||
Operating expenses | 13,094 | 6,252 |
Hotel | ||
Revenues: | ||
Gross revenues | 6,363 | 5,640 |
Operating expenses: | ||
Operating expenses | 3,499 | 2,208 |
Other | ||
Revenues: | ||
Gross revenues | 3,022 | 2,778 |
Operating expenses: | ||
Operating expenses | 1,545 | $ 985 |
ASC 606 Changes | ASU 2014-09 | ||
Revenues: | ||
Gross revenues | 11,674 | |
Less promotional allowances | (11,819) | |
Net revenues | (145) | |
Operating expenses: | ||
Total operating expenses | (145) | |
ASC 606 Changes | ASU 2014-09 | Casino | ||
Revenues: | ||
Gross revenues | 13,761 | |
Operating expenses: | ||
Operating expenses | 8,282 | |
ASC 606 Changes | ASU 2014-09 | Food and beverage | ||
Revenues: | ||
Gross revenues | (1,453) | |
Operating expenses: | ||
Operating expenses | (6,923) | |
ASC 606 Changes | ASU 2014-09 | Hotel | ||
Revenues: | ||
Gross revenues | (658) | |
Operating expenses: | ||
Operating expenses | (973) | |
ASC 606 Changes | ASU 2014-09 | Other | ||
Revenues: | ||
Gross revenues | 24 | |
Operating expenses: | ||
Operating expenses | (531) | |
Pre ASC 606 Adoption | ASU 2014-09 | ||
Revenues: | ||
Gross revenues | 67,942 | |
Less promotional allowances | (11,819) | |
Net revenues | 56,123 | |
Operating expenses: | ||
Selling, general and administrative | 15,185 | |
Depreciation and amortization | 3,692 | |
Total operating expenses | 47,566 | |
Net income | $ 6,741 | |
Earnings per share of common stock | ||
Basic (in dollars per share) | $ 0.38 | |
Diluted (in dollars per share) | $ 0.36 | |
Pre ASC 606 Adoption | ASU 2014-09 | Casino | ||
Revenues: | ||
Gross revenues | $ 43,706 | |
Operating expenses: | ||
Operating expenses | 18,978 | |
Pre ASC 606 Adoption | ASU 2014-09 | Food and beverage | ||
Revenues: | ||
Gross revenues | 15,485 | |
Operating expenses: | ||
Operating expenses | 6,171 | |
Pre ASC 606 Adoption | ASU 2014-09 | Hotel | ||
Revenues: | ||
Gross revenues | 5,705 | |
Operating expenses: | ||
Operating expenses | 2,526 | |
Pre ASC 606 Adoption | ASU 2014-09 | Other | ||
Revenues: | ||
Gross revenues | 3,046 | |
Operating expenses: | ||
Operating expenses | $ 1,014 |
STOCK-BASED COMPENSATION - Adop
STOCK-BASED COMPENSATION - Adoption of ASU No. 2016-09 (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | |
Prospective adoption | |||
Provision for income taxes | $ (1,736) | $ (2,582) | |
ASU 2016-09 | |||
Prospective adoption | |||
Provision for income taxes | $ 145 | $ 64 | |
Cumulative effect adjustment to retained earnings | $ 0 | ||
Maximum | ASU 2016-09 | |||
Prospective adoption | |||
Increase of basic and diluted earnings per share | $ 0.01 | $ 0.01 |
STOCK-BASED COMPENSATION - Repo
STOCK-BASED COMPENSATION - Reported Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock-based compensation expense | ||
Total stock-based compensation, before taxes | $ 566 | $ 465 |
Tax benefit | (119) | (163) |
Total stock-based compensation, net of tax | 447 | 302 |
Casino | ||
Stock-based compensation expense | ||
Total stock-based compensation, before taxes | 38 | 32 |
Food and beverage | ||
Stock-based compensation expense | ||
Total stock-based compensation, before taxes | 38 | 34 |
Hotel | ||
Stock-based compensation expense | ||
Total stock-based compensation, before taxes | 10 | 8 |
Selling, general and administrative | ||
Stock-based compensation expense | ||
Total stock-based compensation, before taxes | $ 480 | $ 391 |
EARNINGS PER SHARE - (Details)
EARNINGS PER SHARE - (Details) - $ / shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Shares | ||
Basic (in shares) | 17,770 | 17,477 |
Effect of dilutive stock options (in shares) | 940 | 544 |
Diluted (in shares) | 18,710 | 18,021 |
Per Share Amount | ||
Basic (in dollars per share) | $ 0.38 | $ 0.28 |
Effect of dilutive stock options (in dollars per share) | (0.02) | (0.01) |
Diluted (in dollars per share) | $ 0.36 | $ 0.27 |
Disclosure - EARNINGS PER SHARE
Disclosure - EARNINGS PER SHARE - Anti-dilutive Options (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock options | ||
Anti-dilutive securities | ||
Anti-dilutive securities excluded from the computation of diluted earnings per share (in shares) | 236 | 468 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | Aug. 28, 2015USD ($)ft²aitem | Aug. 15, 2015item | Sep. 30, 2004USD ($) | Sep. 30, 2004USD ($) | Mar. 31, 2018USD ($)ft² | Mar. 31, 2017USD ($) | Nov. 17, 2017USD ($) |
BLI Driveway Lease | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Operating expenses related to lease | $ 1,350 | ||||||
Biggest Little Investments, L.P. | BLI Parking Lot Lease | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Number of parking spaces | item | 300 | ||||||
Minimum annual rent | $ 695 | ||||||
Anniversary years subject to cost of living adjustment rent increases | 5 years | ||||||
Lease renewal option additional term | 10 years | ||||||
Amount due to related party if lease is not renewed | $ 1,600 | ||||||
Operating expenses related to lease | $ 8 | $ 7 | |||||
Lease rent paid | $ 174 | 174 | |||||
Biggest Little Investments, L.P. | BLI Driveway Lease | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Lease term | 15 years | ||||||
Area of property | ft² | 37,400 | ||||||
Minimum annual rent | 300 | $ 300 | |||||
Anniversary years subject to cost of living adjustment rent increases | 5 years | ||||||
Number of terms for which the lease can be renewed | item | 3 | ||||||
Lease renewal option additional term | 5 years | ||||||
Operating expenses related to lease | $ 2,000 | $ 5 | 7 | ||||
Cost of improvements, useful life | 15 years | ||||||
Lease rent paid | 94 | 94 | |||||
Affiliates | Leases for billboard advertising, storage space and parking lot space | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Lease rent paid | $ 32 | $ 27 | |||||
Golden Road | Biggest Little Investments, L.P. | BLI Parking Lot Lease | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Lease term | 20 years | ||||||
Golden Road | Biggest Little Investments, L.P. | BLI Parking Lot Lease | Buildings | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Area of property | ft² | 46,000 | ||||||
Area of land | a | 4.2 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) | 3 Months Ended | ||
Mar. 31, 2018USD ($) | Jul. 20, 2016USD ($) | Jun. 30, 2016USD ($) | |
Amended and restated credit facility agreement, July 20, 2016 | |||
Long-term debt | |||
Maximum borrowing capacity | $ 250,000,000 | $ 250,000,000 | |
Remaining available borrowings | 223,200,000 | ||
Amount in which the maximum borrowing capacity can be permanently reduced | 500,000 | ||
Multiple which may be used to permanently reduce the maximum borrowing capacity under the credit facility | $ 50,000 | ||
Covenant fixed charge coverage ratio | 39.9 | ||
Actual leverage ratio | 0.45 | ||
Amended and restated credit facility agreement, July 20, 2016 | Completion of expansion project at Monarch Casino Black Hawk | |||
Long-term debt | |||
Maximum borrowing capacity | $ 50,000,000 | ||
Amended and restated credit facility agreement, July 20, 2016 | LIBOR | |||
Long-term debt | |||
Margin added to variable rate (as a percent) | 1.00% | ||
Variable interest rate (as a percent) | 1.88% | ||
Amended and restated credit facility agreement, July 20, 2016 | Minimum | |||
Long-term debt | |||
Covenant fixed charge coverage ratio | 1.15 | ||
Commitment fee as a percentage of daily average unused revolving commitment | 0.175% | ||
Amended and restated credit facility agreement, July 20, 2016 | Minimum | LIBOR | |||
Long-term debt | |||
Margin added to variable rate (as a percent) | 1.00% | ||
Amended and restated credit facility agreement, July 20, 2016 | Minimum | Base Rate | |||
Long-term debt | |||
Margin added to variable rate (as a percent) | 0.00% | ||
Amended and restated credit facility agreement, July 20, 2016 | Maximum | |||
Long-term debt | |||
Covenant leverage ratio | 3.5 | ||
Commitment fee as a percentage of daily average unused revolving commitment | 0.45% | ||
Amended and restated credit facility agreement, July 20, 2016 | Maximum | Completion of expansion project at Monarch Casino Black Hawk | |||
Long-term debt | |||
Face amount of debt | $ 200,000,000 | ||
Amended and restated credit facility agreement, July 20, 2016 | Maximum | LIBOR | |||
Long-term debt | |||
Margin added to variable rate (as a percent) | 2.50% | ||
Amended and restated credit facility agreement, July 20, 2016 | Maximum | Base Rate | |||
Long-term debt | |||
Margin added to variable rate (as a percent) | 1.50% | ||
Credit facility, November 15, 2011 | |||
Long-term debt | |||
Maximum borrowing capacity | $ 100,000,000 | ||
Current borrowing capacity | 45,500,000 | ||
Mandatory reductions in borrowing capacity | 19,500,000 | ||
Voluntary reductions in borrowing capacity | $ 35,000,000 | ||
Revolving credit facility | Amended and restated credit facility agreement, July 20, 2016 | |||
Long-term debt | |||
Amount outstanding | $ 26,200,000 | ||
Standby Letter of Credit | Amended and restated credit facility agreement, July 20, 2016 | |||
Long-term debt | |||
Amount outstanding | 600,000 | ||
Amount drawn under the facility | $ 0 |
TAXES (Details)
TAXES (Details) | Dec. 22, 2017 | Mar. 31, 2018 | Mar. 31, 2017 |
TAXES | |||
Effective tax rate (as a percent) | 21.00% | 20.50% | 34.60% |
STOCK REPURCHASE PLAN (Details)
STOCK REPURCHASE PLAN (Details) - Repurchase Plan - shares | 35 Months Ended | |
Sep. 30, 2017 | Oct. 22, 2014 | |
Stock repurchase plan | ||
Shares authorized for repurchase under program | 3,000,000 | |
Stock repurchases made | 0 |