SOURCE: Monarch Casino and Resort, Inc.

April 18, 2012 16:05 ET

Monarch Casino Reports 2012 First Quarter Results

RENO, NV--(Marketwire - Apr 18, 2012) - Monarch Casino & Resort, Inc. (NASDAQ: MCRI) ("Monarch"), owner of the Atlantis Casino Resort Spa (the "Atlantis") in Reno, Nevada, today announced first quarter results for the quarter ended March 31, 2012.

The Company's net revenue of $34.6 million was $1.3 million, or 3.9%, higher than the $33.3 million reported for the comparative quarter in 2011. The Company's quarterly income from operations of $2.9 million was an increase of 7.4% over the prior year's first quarter. Adjusted EBITDA(1) of $6.6 million was $55 thousand, or 0.8%, higher than the $6.5 million Adjusted EBITDA in the first quarter of the prior year. First quarter 2012 revenue generated in the casino, food and beverage, and other operating departments increased by 8.4%, 4.9% and 12.5%, respectively, over the prior year's first quarter. However, first quarter 2012 hotel revenue decreased by 12.7% primarily due to a significant convention that traditionally had been held in Reno not doing so in 2012. On a positive note, that convention has announced that it plans to return to Reno in the first quarter of 2013.

Casino operating expense increased by approximately $419 thousand, or 4.4%, over the prior year's first quarter primarily due to an increase in the amount of complimentary food, beverages and other services provided to casino patrons ("complimentaries"). As a percentage of casino revenue, casino operating expense decreased to 39.3% as compared to 40.8% in the prior year's first quarter, primarily due to the effect of the higher casino revenue partially offset by the higher complimentaries.

Food and beverage operating expense as a percentage of food and beverage revenue decreased to 44.6% for the quarter as compared to 46.5% in the first quarter of the prior year primarily due to menu price increases in response to higher commodity costs. Hotel operating expense as a percentage of hotel revenue increased slightly to 29.6% from 28.6% in prior year's first quarter. Selling, general, and administrative expense for the first quarter of 2012 increased by $853 thousand, or 7.8%, due primarily to increased marketing, payroll benefits and bad debt expense.

During the quarter, the Company paid down the balance outstanding under its credit facility by $5.7 million, which decreased the outstanding balance of the credit facility from $24.7 million at December 31, 2011 to $19.0 million at March 31, 2012. Interest expense increased from $289 thousand in the prior year's first quarter to $329 thousand in the quarter ended March 31, 2012 due primarily to higher loan commitment fees paid on the unborrowed portion of the Company's credit facility.

Monarch's CEO and Co-Chairman John Farahi commented: ""The closing of our acquisition of the Riviera Black Hawk Casino remains on track to take place before the end of the second quarter of 2012."

Monarch, through its subsidiary Monarch Growth Inc., has entered into a definitive stock purchase agreement to acquire Riviera Black Hawk, Inc., the owner of the Riviera Black Hawk Casino (the "Acquisition"). The Riviera Black Hawk Casino opened in 2000 and is located in Black Hawk, Colorado, approximately 40 miles west of Denver. The property is the first casino encountered by visitors arriving from Denver on Highway 119 and features approximately 32,000 square feet of casino space, 750 slot machines, 8 table games, a 250 seat buffet-style restaurant and a parking structure with approximately 500 spaces. Monarch owns a 1.5 acre land parcel contiguous to the Riviera Black Hawk Casino which can be utilized for future expansion.

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; a 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, (iii) the liquidity requirements of the Company, (iv) completion of the Acquisition, (v) plans, objectives and expectations regarding the Acquisition, and (vi) integration of the Acquisition. 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.

(1) "Adjusted EBITDA" - see the separate Reconciliation of Net Income to Adjusted EBITDA. 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.

For additional information visit Monarch's website at MonarchCasino.com

Monarch Casino & Resort, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended
March 31,
2012 2011
Revenues
Casino $ 25,171,556 $ 23,212,686
Food and beverage 10,585,794 10,092,738
Hotel 4,368,442 5,004,041
Other 2,137,356 1,899,262
Gross revenues 42,263,148 40,208,727
Less promotional allowances (7,633,056 ) (6,922,911 )
Net revenues 34,630,092 33,285,816
Operating expenses
Casino 9,895,587 9,476,307
Food and beverage 4,725,753 4,688,557
Hotel 1,295,194 1,428,953
Other 726,224 733,946
Selling, general and administrative 11,759,972 10,907,228
Depreciation and amortization 3,375,084 3,394,386
Total operating expenses 31,777,814 30,629,377
Income from operations 2,852,278 2,656,439
Other expenses
Interest expense (328,661 ) (288,522 )
Total other expense (328,661 ) (288,522 )
Income before income taxes 2,523,617 2,367,917
Provision for income taxes (882,250 ) (828,771 )
Net income $ 1,641,367 $ 1,539,146
Earnings per share of common stock
Net income
Basic $ 0.10 $ 0.10
Diluted $ 0.10 $ 0.09
Weighted average number of common shares and potential common shares outstanding
Basic 16,138,158 16,138,158
Diluted 16,274,355 16,222,989
Monarch Casino & Resort, Inc.
Condensed Consolidated Balance Sheets
March 31, December 31,
2012 2011
ASSETS (Unaudited)
Current assets
Cash and cash equivalents $ 11,172,854 $ 13,582,659
Receivables, net 2,563,049 2,299,847
Inventories 1,968,048 2,165,109
Prepaid expenses and other current assets 6,624,273 6,198,882
Deferred income taxes 615,912 615,912
Total current assets 22,944,136 24,862,409
Property and equipment
Land 19,214,847 19,214,847
Land improvements 6,359,279 6,359,279
Buildings 135,643,298 135,643,298
Building improvements 11,575,883 11,575,883
Furniture and equipment 118,744,444 117,300,741
Leasehold improvements 1,346,965 1,346,965
292,884,716 291,441,013
Less accumulated depreciation and amortization (141,602,952 ) (138,227,868 )
Net property and equipment 151,281,764 153,213,145
Other assets, net 1,416,371 1,524,050
Total assets $ 175,642,271 $ 179,599,604
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 7,091,171 $ 8,693,395
Accrued expenses 14,382,328 13,829,540
Federal income taxes payable 1,650,890 768,640
Total current liabilities 23,124,389 23,291,575
Long-term debt 18,980,000 24,680,000
Deferred income taxes 1,112,049 1,112,049
Total liabilities 43,216,438 49,083,624
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 March 31, 2012 and December 31, 2012 190,963 190,963
Additional paid-in capital 33,446,831 33,178,345
Treasury stock, 2,958,142 shares at March 31, 2012 and December 31, 2012, at cost (48,541,663 ) (48,541,663 )
Retained earnings 147,329,702 145,688,335
Total stockholders' equity 132,425,833 130,515,980
Total liability and stockholder's equity $ 175,642,271 $ 179,599,604
Monarch Casino & Resort, Inc.
Reconciliation of Net Income to Adjusted EBITDA (1)
(Unaudited)
Three Months Ended
March 31,
2012 2011
Net income $ 1,641,367 $ 1,539,146
Adjustments
Provision for income taxes 882,250 828,771
Interest expense 328,661 288,522
Depreciation and amortization 3,375,084 3,394,386
EBITDA 6,227,362 6,050,825
Stock based compensation 268,485 464,881
Acquisition expense 74,591 -
Adjusted EBITDA (1) $ 6,570,438 $ 6,515,706

(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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