SOURCE: Monarch Casino and Resort, Inc.

July 20, 2011 16:05 ET

Monarch Casino Reports 2011 Second Quarter Results

RENO, NV--(Marketwire - Jul 20, 2011) - 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, 2011.

The Company reported net revenue of $37.2 million which is $1.0 million, or 2.8%, higher than the $36.2 million reported for the comparative quarter in 2010. The Company announced quarterly income from operations of $5.7 million, Adjusted EBITDA(1) of $9.5 million and diluted EPS of $0.22 which represent increases of 27.0%, 16.8% and 37.5%, respectively, when compared to the prior year's second quarter. Revenue generated in the casino, food and beverage and other operating departments increased by 4.2%, 5.4% and 4.1%, respectively.

Hotel revenue decreased 7.4% in the second quarter of 2011 compared to the prior year's second quarter due to fewer available rooms. In the fourth quarter of 2010 the Company demolished its 149 room motor lodge. 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 premium paved surface parking.

Casino operating expense remained relatively flat at $9.6 million for the second quarter of 2011 as compared to $9.5 million for prior year's second quarter. Because of the higher casino revenue, casino operating expense as a percentage of casino revenue decreased to 36.8% from 38.1% in prior year's second quarter.

Food and beverage operating expense as a percentage of food and beverage revenue remained flat compared with prior year's second quarter at 44.9%. Hotel operating expense was flat compared to prior year's second quarter at $1.6 million; however, because of the lower hotel revenue, hotel operating expenses as a percentage of hotel revenue increased to 28.6% from 27.3% in prior year's second quarter.

The Company reported that selling, general and administrative expense decreased by approximately $640 thousand, or 5.4%, due primarily to reductions in bad debt, utilities and legal expense, partially offset by higher marketing expense.

During the quarter, the Company paid down the balance outstanding under its credit facility by $5.0 million, which decreased the outstanding balance of the credit facility from $22.0 million at March 31, 2011 to $17.0 million at June 30, 2011. Decreased borrowing levels drove interest expense down from $366 thousand in prior year's second quarter to $195 thousand in the second quarter of 2011.

Monarch's CEO and Co-Chairman John Farahi commented on the Company's performance: "We are pleased with this quarter's results. Despite the ongoing weakness of our national and local economies, we increased net revenue, gained market share and grew EBITDA. We believe that our continuing gain in market share is driven by our commitment to make Atlantis the premier resort destination in northern Nevada by perpetually renewing and upgrading our facilities, while consistently delivering our signature outstanding quality of service to 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; 824 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.

For additional information visit Monarch's web site at MonarchCasino.com.

Monarch Casino & Resort, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2011 2010 2011 2010
Revenues
Casino $ 26,076,953 $ 25,020,899 $ 49,289,639 $ 49,175,039
Food and beverage 10,933,018 10,369,922 21,025,756 20,353,525
Hotel 5,490,621 5,931,465 10,494,662 11,109,532
Other 1,930,784 1,855,462 3,830,046 3,835,156
Gross revenues 44,431,376 43,177,748 84,640,103 84,473,252
Less promotional allowances (7,271,503 ) (7,021,852 ) (14,194,414 ) (13,965,804 )
Net revenues 37,159,873 36,155,896 70,445,689 70,507,448
Operating expenses
Casino 9,589,732 9,525,444 19,066,039 18,853,785
Food and beverage 4,903,568 4,656,332 9,592,125 9,020,786
Hotel 1,568,538 1,617,683 2,997,491 3,050,822
Other 719,231 765,813 1,453,177 1,405,924
Selling, general and administrative 11,274,007 11,913,997 22,181,235 22,972,598
Depreciation and amortization 3,436,015 3,214,390 6,830,401 6,525,726
Total operating expenses 31,491,091 31,693,659 62,120,468 61,829,641
Income from operations 5,668,782 4,462,237 8,325,221 8,677,807
Other income (expenses)
Other income - 16,000 - 16,000
Interest expense (194,746 ) (365,851 ) (483,268 ) (824,275 )
Total other income (expense) (194,746 ) (349,851 ) (483,268 ) (808,275 )
Income before income taxes 5,474,036 4,112,386 7,841,953 7,869,532
Provision for income taxes (1,915,900 ) (1,452,055 ) (2,744,671 ) (2,767,055 )
Net income $ 3,558,136 $ 2,660,331 $ 5,097,282 $ 5,102,477
Earnings per share of common stock
Net income
Basic $ 0.22 $ 0.16 $ 0.32 $ 0.32
Diluted $ 0.22 $ 0.16 $ 0.31 $ 0.32
Weighted average number of common shares and potential common shares outstanding
Basic 16,138,158 16,129,053 16,138,158 16,127,231
Diluted 16,223,488 16,220,865 16,223,207 16,186,154
Monarch Casino & Resort, Inc.
Condensed Consolidated Balance Sheets
June 30, December 31,
2011 2010
ASSETS (Unaudited)
Current assets
Cash and cash equivalents $ 10,007,582 $ 13,800,604
Receivables, net 2,505,230 3,269,250
Federal income tax receivable - 99,202
Inventories 1,965,832 1,883,816
Prepaid expenses 3,240,292 2,553,341
Deferred income taxes 1,384,443 1,384,443
Total current assets 19,103,379 22,990,656
Property and equipment
Land 13,172,522 13,172,522
Land improvements 4,026,175 3,891,990
Buildings 139,843,299 139,843,299
Building improvements 10,973,521 10,766,414
Furniture and equipment 114,948,175 112,847,107
Leasehold improvements 1,346,965 1,346,965
284,310,657 281,868,297
Less accumulated depreciation and amortization (132,244,423 ) (125,437,458 )
Net property and equipment 152,066,234 156,430,839
Other assets, net 183,254 312,043
Total assets $ 171,352,867 $ 179,733,538
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Borrowings under credit facility $ 17,000,000 $ -
Accounts payable 8,238,242 10,216,495
Accrued expenses 12,115,470 14,077,344
Federal income taxes payable 545,469 -
Total current liabilities 37,899,181 24,293,839
Long-term debt, less current maturities - 28,600,000
Deferred income taxes 3,384,218 3,384,218
Other long term liabilities 873,872 873,872
Total Liabilities 42,157,271 57,151,929
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 June 30, 2011 and December 31, 2010
190,963


190,963
Additional paid-in capital 32,436,533 31,558,693
Treasury stock, 2,958,142 shares at June 30, 2011 and December 31, 2010, at cost
(48,541,663

)

(48,541,663

)
Retained earnings 145,109,763 139,373,616
Total stockholders' equity 129,195,596 122,581,609
Total liability and stockholder's equity $ 171,352,867 $ 179,733,538
Monarch Casino & Resort, Inc.
Reconciliation of Net Income to Adjusted EBITDA (1)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2011 2010 2011 2010
Net income $ 3,558,136 $ 2,660,331 $ 5,097,282 $ 5,102,477
Adjustments
Provision for income taxes 1,915,900 1,452,055 2,744,671 2,767,055
Interest expense 194,746 365,851 483,268 824,275
Depreciation and amortization 3,436,015 3,214,390 6,830,401 6,525,726
EBITDA 9,104,797 7,692,627 15,155,622 15,219,533
Stock based compensation 412,959 456,706 877,840 900,663
Adjusted EBITDA(1) $ 9,517,756 $ 8,149,333 $ 16,033,462 $ 16,120,196

(1) "Adjusted EBITDA" consists of net income plus provision for income taxes, stock based compensation expense, other one-time non-cash charges, interest expense, depreciation and amortization less interest income and any benefit for income taxes. Adjusted 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 Adjusted 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.

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