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): February 20, 2004
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
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(Former name or former address, if changed since last report)
ITEM 2. Acquisition or Disposition of Assets
On February 20, 2004, Monarch Casino & Resort, Inc. (the "Company")
refinanced its reducing revolving term loan credit facility (the "Credit
Facility") that was scheduled to mature on June 30, 2004.
The new Credit Facility of $50 million, which includes a $46 million
payoff for the unpaid balance, replaces the original $80 million loan. The
amount of the new Credit Facility may be increased by up to $30 million on a
one-time basis if requested by the Company before the second anniversary of the
closing date. At the Company's option, borrowings under the Credit Facility
can accrue interest at the agent bank's base rate (the "Base Rate") or at the
London Interbank Offered Rate ("LIBOR") for one, two, three or six month
periods. The rate of interest paid by the Company will include a margin added
to either the Base Rate or to LIBOR that is tied to the Company's ratio of
funded debt to EBITDA (1) (the "Leverage Ratio"). Depending on the Company's
Leverage Ratio, this margin can vary between 0.25 percent and 1.25 percent
above the Base Rate, and between 1.50 percent and 2.50 percent above LIBOR.
The Company may utilize proceeds from the new Credit Facility for working
capital needs and general corporate purposes relating to the Company's Atlantis
Casino Resort and for ongoing capital expenditure requirements at the Atlantis.
The Credit Facility is secured by liens on substantially all of the real
and personal property of the Atlantis, and is guaranteed by Monarch. The
Credit Facility contains covenants customary and typical for a facility of this
nature, including, but not limited to, covenants requiring the preservation and
maintenance of the Company's assets and covenants restricting the Company's
ability to merge, transfer ownership of Monarch, incur additional indebtedness,
encumber assets, and make certain investments. The Credit Facility also
contains covenants requiring the Company to maintain certain financial ratios,
and provisions restricting transfers between Monarch and its affiliates. The
Credit Facility also contains provisions requiring the achievement of certain
financial ratios before the Company can repurchase its common stock.
The maturity date of the new Credit Facility is February 23, 2009.
Beginning June 30, 2004, the maximum principal borrowable under the Credit
Facility is reduced in equal increments of $1.625 million per quarter with the
remaining balance due at the maturity date. The Company may prepay borrowings
under the 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 under the Credit Facility may be
reborrowed so long as the total borrowings outstanding do not exceed the
maximum principal available. The Company may also permanently reduce the
maximum principal available under the Credit Facility at any time so long as
the amount of such reduction is at least $500 thousand and a multiple of $50
thousand.
The Company paid various fees and other loan costs upon the closing of the
refinancing of the Credit Facility that are being amortized over the term of
the Credit Facility using the straight-line method, which approximates the
effective interest rate method. Management does not consider the covenants to
restrict the Company's operations.
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BACKGROUND
At origination in 1997, the Company had an $80 million reducing revolving
term loan credit facility with a consortium of banks. Prior to the just
completed refinancing, the Credit Facility was also guaranteed individually by
John Farahi, Co-Chairman of the Board, Chief Executive Officer and Chief
Operating Officer of Monarch and General Manager of the Atlantis; Bahram (Bob)
Farahi, Co-Chairman of the Board and President of Monarch; and Behrouz Ben
Farahi, Co-Chairman of the Board, Chief Financial Officer, Secretary and
Treasurer of Monarch. These individuals did not provide any personal
guarantees for the new Credit Facility.
A copy of the final loan documents is filed herewith as Exhibit 99.1 and
incorporated herein by reference.
Also attached hereto and incorporated by reference is Exhibit 99.2, the
actual text of the press release dated March 1, 2004.
ITEM 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Credit Agreement dated as of February 20, 2004 between Golden
Road Motor Inn, Inc. as Borrower, Monarch Casino & Resort, Inc.
as Guarantor, the Lenders as defined therein, and Wells Fargo
Bank as administrative and collateral Agent for the Lenders and
Swingline Lender; Revolving Credit Note; Swingline Note; Form of
Notice of Borrowing; Continuation / Conversion Notice;
Compliance Certificate; Pricing Certificate; Authorized Officers
Certificate; Closing Certificate; General Continuing Guaranty;
Form of Legal Opinion; Form of Notice of Swingline Advance;
Assumption and Consent Agreement - Form; Assumption, Assignment
and Consent Agreement; Pledge and Assignment of Savings Account
Agreement; Schedule of Spaceleases; Schedule of Equipment Leases
and Contracts; Hotel/Casino Property; and V/P Property.
99.2 Text of press release dated March 1, 2004.
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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.
(Registrant)
Date: March 8, 2004 By: /s/ Ben Farahi
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Name: Ben Farahi
Title: Chief Financial Officer,
Treasurer and Secretary
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Exhibit 99.2
PRESS RELEASE
MONARCH CASINO & RESORT, INC. ANNOUNCES SUCCESSFUL
REFINANCING OF ITS REDUCING REVOLVING CREDIT FACILITY
Reno, NV - March 1, 2004 - Monarch Casino & Resort, Inc. (Nasdaq: MCRI)
(the "Company") today announced it has refinanced its reducing revolving term
loan credit facility (the "Credit Facility") that was scheduled to mature on
June 30, 2004.
The new Credit Facility of $50 million, which includes a $46 million
payoff for the unpaid balance, replaces the original $80 million loan. The
amount of the new credit Facility may be increased by up to $30 million on a
one-time basis if requested by the Company before the second anniversary of the
closing date. At the Company's option, borrowings under the Credit Facility
can accrue interest at the agent bank's base rate (the "Base Rate") or at the
London Interbank Offered Rate ("LIBOR") for one, two, three or six month
periods. The rate of interest paid by the Company will include a margin added
to either the Base Rate or to LIBOR that is tied to the Company's ratio of
funded debt to EBITDA (1) (the "Leverage Ratio"). Depending on the Company's
Leverage Ratio, this margin can vary between 0.25 percent and 1.25 percent
above the Base Rate, and between 1.50 percent and 2.50 percent above LIBOR.
The Company may utilize proceeds from the new Credit Facility for working
capital needs and general corporate purposes relating to the Company's Atlantis
Casino Resort and for ongoing capital expenditure requirements at the Atlantis.
The Credit Facility is secured by liens on substantially all of the real
and personal property of the Atlantis, and is guaranteed by Monarch. The
Credit Facility contains covenants customary and typical for a facility of this
nature, including, but not limited to, covenants requiring the preservation and
maintenance of the Company's assets and covenants restricting the Company's
ability to merge, transfer ownership of Monarch, incur additional indebtedness,
encumber assets, and make certain investments. The Credit Facility also
contains covenants requiring the Company to maintain certain financial ratios,
and provisions restricting transfers between Monarch and its affiliates. The
Credit Facility also contains provisions requiring the achievement of certain
financial ratios before the Company can repurchase its common stock or pay or
declare dividends.
The maturity date of the new Credit Facility is February 23, 2009.
Beginning June 30, 2004, the maximum principal borrowable under the Credit
Facility is reduced in equal increments of $1.625 million per quarter with the
remaining balance due at the maturity date. The Company may prepay borrowings
under the 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 under the Credit Facility may be
reborrowed so long as the total borrowings outstanding do not exceed the
maximum principal available. The Company may also permanently reduce the
maximum principal available under the Credit Facility at any time so long as
the amount of such reduction is at least $500 thousand and a multiple of $50
thousand.
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The Company paid various fees and other loan costs upon the closing of the
refinancing of the Credit Facility that are being amortized over the term of
the Credit Facility using the straight-line method, which approximates the
effective interest rate method. Management does not consider the covenants to
restrict the Company's operations.
BACKGROUND
At origination in 1997, the Company had an $80 million reducing revolving
term loan credit facility with a consortium of banks. Prior to the just
completed refinancing, the Credit Facility was also guaranteed individually by
John Farahi, Co-Chairman of the Board, Chief Executive Officer and Chief
Operating Officer of Monarch and General Manager of the Atlantis; Bahram (Bob)
Farahi, Co-Chairman of the Board and President of Monarch; and Behrouz Ben
Farahi, Co-Chairman of the Board, Chief Financial Officer, Secretary and
Treasurer of Monarch. These individuals did not provide any personal
guarantees for the just completed refinancing of the Credit Facility.
Monarch, 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, which completed a $105 million expansion and
renovation in August 2002. 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 while featuring approximately 51,000
square feet of high-energy casino space with 37 table games and approximately
1,450 slot and video poker machines, a sports book, Keno and a poker room, and
a variety of dining choices in the form of nine high-quality food outlets.
This press release may contain 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 the refinancing
of its Credit Facility. 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 are
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
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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.
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