UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 26, 2005
MONARCH CASINO & RESORT, INC.
(Exact name of registrant as specified in its charter)
NEVADA 0-22088 88-0300760
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
1175 W. Moana Lane, Suite 200
Reno, NEVADA 89509
(Address of Principal Executive Offices) (Zip Code)
(775)825-3355
----------------------------------------------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
----------------------------------------------------
(Former name or former address, if changed since last report)
ITEM 2.02 Results of Operations and Financial Condition
On April 26, 2005, Monarch Casino & Resort, Inc. (the "Company") issued a
press release reporting the Company's financial results for the first quarter
ended March 31, 2005. A copy of the press release is attached hereto as
Exhibit 99.1 and incorporated herein by reference.
ITEM 9.01 Financial Statements and Exhibits
(c) EXHIBITS
99.1 Text of press release dated April 26, 2005.
-2-
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
MONARCH CASINO & RESORT, INC.
Date: April 27, 2005 By: /s/ Ben Farahi
-------------------------------
Name: Ben Farahi
Title: Chief Financial Officer,
Treasurer and Secretary
-3-
Exhibit 99.1
PRESS RELEASE
MONARCH CASINO & RESORT, INC. ANNOUNCES ANOTHER RECORD FIRST QUARTER
- - NET INCOME BEATS PREVIOUS RECORD BY 39.7% -
RENO, NV-April 26, 2005- Monarch Casino & Resort, Inc. (Nasdaq: MCRI)
(the "Company") today announced a record first quarter ended March 31, 2005.
Despite severe adverse weather conditions and a one-time gaming
development charge in the amount of approximately $204,000, the Company
achieved net income of $3.9 million, or $0.20 per diluted share, for the first
quarter ended March 31, 2005, a 39.7% improvement from the record $2.8 million
net income, or $0.15 per diluted share, set during the same period a year
earlier. The first quarter 2005 earnings per diluted share is in line with
consensus analysts' estimates of $0.20. Earnings per share for the 2004 first
quarter has been adjusted to give consideration to a 2 for 1 common stock
split effective March 31, 2005. Record revenues across all the Company's
revenue centers contributed to a new first quarter record net revenues of
$31.6 million, which was 3.5% better than the previous record of $30.5 million
set in 2004. The increase in revenues combined with effective cost controls
led to across the board margin improvements during the period. Income from
operations increased 30.5% year over year and, excluding depreciation and
amortization, the Company achieved 44.5% flow through of incremental net
revenue to income from operations. The Company reported record first quarter
EBITDA (1) of $8.2 million, a 6.2% improvement over its previous first quarter
best EBITDA (1) of $7.7 million achieved in 2004, and slightly better than the
$8.0 million average estimated by analysts.
"Our business fundamentals at the Atlantis Casino Resort remain strong
despite the challenging weather experienced during the first quarter of 2005
and the absence of a bowling tournament this year," said John Farahi, the
Company's CEO and Co-Chairman. "Our management team remains focused on cost
control while continuing to aggressively pursue new as well as repeat
business." he continued.
During the first quarter of 2005, the Company expensed approximately
$204,000 of previously deferred gaming development costs related to a proposed
South Reno project and does not expect any significant future costs related to
this project. On April 13, 2005 the Reno City Council denied the Company's
application for a master plan and zoning change on a parcel of land in South
Reno for possible development of a second hotel casino.
Also during the first quarter of 2005, the Company used its free cash
flow to continue paying down its outstanding bank debt to $23.1 million from
$32.4 million at 2004 year end and $46.4 at March 31, 2004.
Mr. Farahi further commented that "The Atlantis' location in South Reno,
amidst the growing local population and close proximity to the Reno-Sparks
Convention Center, continues to provide an advantage in a challenging market.
We are also doing our part in aggressively updating and renovating our
facilities, products and services in order to maintain our status as one of
Reno's top resort attractions for locals, visitors and conventioneers."
-4-
Monarch Casino & Resort, Inc., through its wholly-owned subsidiary, owns
and operates the tropically-themed Atlantis Casino Resort 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 is recognizable due to
its Sky Terrace, a unique structure rising approximately 55 feet from street
level and spanning 160 feet across the 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 of the Atlantis facilities
and is currently being used by the Company as 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 tropically-themed
Atlantis features approximately 51,000 square feet of high-energy casino space
with 38 table games and approximately 1,450 slot and video poker machines, a
sports book, Keno and a poker room, and offers a variety of dining choices in
the form of nine 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 and (ii) the financial benefits that may result from
future operations. The actual results 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.
Contacts: Ben Farahi at (775) 825-3355 or benfarahi@monarchcasino.com
Karl G. Brokmann at (775) 825-3355 or kbrokmann@monarchcasino.com
For additional information including artist renditions and photographs, visit
Monarch's web site at monarchcasino.com.
(1) "EBITDA" consists of net income plus provision for income taxes, other
expenses (income), and depreciation and amortization. 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, or as an alternative to cash flows from
operating activities (as determined in accordance with generally accepted
accounting principles) 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.
-5-
MONARCH CASINO & RESORT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended
March 31,
--------------------------
2005 2004
------------ ------------
Revenues
Casino............................. $ 20,901,908 $ 19,902,851
Food and beverage.................. 9,026,336 8,825,823
Hotel.............................. 5,588,152 5,518,305
Other.............................. 1,048,337 863,030
------------ ------------
Gross revenues.................. 36,564,733 35,110,009
Less promotional allowances........ (5,002,031) (4,624,031)
------------ ------------
Net revenues.................... 31,562,702 30,485,978
------------ ------------
Operating expenses
Casino............................. 7,534,847 7,440,671
Food and beverage.................. 4,437,365 4,391,722
Hotel.............................. 2,027,873 2,067,987
Other.............................. 321,646 318,463
Selling, general and
administrative.................... 8,809,293 8,519,406
Gaming development expense......... 204,398 -
Depreciation and amortization...... 2,038,200 3,003,359
------------ ------------
Total operating expenses........ 25,373,622 25,741,608
------------ ------------
Income from operations.......... 6,189,080 4,744,370
------------ ------------
Other expenses
Interest expense................... (305,374) (429,961)
Stockholder guarantee fee expense.. - (136,164)
------------ ------------
Total other expenses............ (305,374) (566,125)
------------ ------------
Income before income taxes...... 5,883,706 4,178,245
Provision for income taxes........... 2,030,000 1,420,000
------------ ------------
Net income...................... $ 3,853,706 $ 2,758,245
============ ============
Earnings per share of common stock
Net income
Basic............................ $ 0.20 $ 0.15
Diluted.......................... $ 0.20 $ 0.15
Weighted average number of common
shares and potential common
shares outstanding
Basic.......................... 18,816,819 18,689,472
Diluted........................ 19,403,546 18,764,512
-6-
MONARCH CASINO & RESORT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2005 2004
------------- -------------
(Unaudited)
ASSETS
Current assets
Cash............................................ $ 9,308,672 $ 11,814,778
Receivables, net................................ 2,414,332 2,959,894
Federal income tax refund receivable............ - 493,797
Inventories..................................... 1,252,778 1,452,696
Prepaid expenses................................ 2,535,061 2,346,242
Deferred income taxes........................... 1,115,719 1,115,719
------------- -------------
Total current assets......................... 16,626,562 20,183,126
------------- -------------
Property and equipment
Land............................................ 10,339,530 10,339,530
Land improvements............................... 3,226,913 3,226,913
Buildings....................................... 78,955,538 78,955,538
Building improvements........................... 7,524,680 7,524,680
Furniture and equipment......................... 65,561,447 65,146,594
Leasehold improvements.......................... 1,346,965 1,346,965
------------- -------------
166,955,073 166,540,220
Less accumulated depreciation and amortization.. (70,382,468) (68,791,045)
------------- -------------
Net property and equipment................... 96,572,605 97,749,175
------------- -------------
Other assets, net................................. 383,746 406,620
------------- -------------
Total assets................................. $ 113,582,913 $ 118,338,921
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt............ $ - $ -
Accounts payable................................ 6,680,008 5,747,775
Accrued expenses................................ 6,121,811 7,918,299
Federal income taxes payable.................... 1,710,203 -
------------- -------------
Total current liabilities.................... 14,512,022 13,666,074
Long-term debt, less current maturities........... 23,100,000 32,400,000
Deferred income taxes............................. 6,335,505 6,509,505
Commitments and contingencies.....................
Stockholders' equity
Preferred stock, $.01 par value, 10,000,000
shares authorized; none issued................. - -
Common stock, $.01 par value, 30,000,000
shares authorized; 19,072,550 issued;
18,819,116 outstanding at 03/31/2005,
18,812,448 outstanding at 12/31/2004........... 95,363 95,363
Additional paid-in capital...................... 17,457,149 17,463,272
Treasury stock,
253,434 shares at 03/31/2005, 260,102 shares
at 12/31/2004, at cost......................... (929,691) (954,152)
Retained earnings............................... 53,012,565 49,158,859
------------- -------------
Total stockholders' equity................... 69,635,386 65,763,342
------------- -------------
Total liabilities and stockholders' equity... $ 113,582,913 $ 118,338,921
============= =============
-7-
MONARCH CASINO & RESORT, INC.
RECONCILIATION OF NET INCOME TO EBITDA (1)
Three Months Ended
March 31,
-----------------------
2005 2004
(unaudited) (unaudited)
----------- -----------
Net income......................... $3,853,706 $2,758,245
Adjustments:
Provision for income taxes....... 2,030,000 1,420,000
Stockholder guarantee fee expense - 136,164
Interest expense................. 305,374 429,961
Depreciation and amortization.... 2,038,200 3,003,359
----------- -----------
EBITDA (1) $8,227,280 $7,747,729
=========== ===========
(1) "EBITDA" consists of net income plus provision for income taxes, other
expenses (income), and depreciation and amortization. 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, or as an alternative to cash flows from
operating activities (as determined in accordance with generally accepted
accounting principles) 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.
-8-