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, 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 12. Results of Operations and Financial Condition
On April 26, 2004, Monarch Casino & Resort, Inc. (the "Company") issued a
press release reporting the Company's financial results for the first quarter
ended March 31, 2004. A copy of the press release is attached hereto as
Exhibit 99.1 and incorporated herein by reference.
ITEM 7. Financial Statements and Exhibits
(c) EXHIBITS
99.1 Text of press release dated April 26, 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.
Date: April 26, 2004 By: /s/ Ben Farahi
-------------------------------
Name: Ben Farahi
Title: Chief Financial Officer,
Treasurer and Secretary
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Exhibit 99.1
PRESS RELEASE
MONARCH CASINO & RESORT, INC. ANNOUNCES RECORD FIRST QUARTER RESULTS
- EPS BEATS 2003 RECORD FIRST QUARTER BY $0.10 -
RENO, NV-April 26, 2004- Monarch Casino & Resort, Inc. (Nasdaq: MCRI) (the
"Company") today announced strong results for the first quarter ended March
31, 2004. Net income, earnings per share, casino revenue, hotel revenue, net
revenue and EBITDA (1) all exceeded previously reported first quarter records.
For the first quarter ended March 31, 2004, the Company recorded net
income of $2,758,245, or $0.29 per diluted share, a 50.1% improvement over
last year's record first quarter net income of $1,837,927, or $0.19 per
diluted share. Net revenue improved 12.2% in the first quarter of 2004 as
compared to the same period in 2003, increasing from $27,167,928 to
$30,485,978. Casino revenue in the first quarter ended March 31, 2004, was
$19,902,851, a 12.2% improvement over the $17,739,705 from the previous year's
first quarter. The increase in casino revenue resulted from a greater volume
of play at the Atlantis. Hotel revenue increased 17.0% to $5,518,305 in the
2004 first quarter over the same period in 2003, driven primarily by a strong
increase in the average daily room rate, from $53.31 to $59.76, and a slight
increase in hotel occupancy, from 89.1% to 90.7%.
These first quarter revenue increases, combined with lower increases in
operating costs led to a 35% increase in income from operations and improved
the operating margin from 12.9% in the 2003 first quarter to 15.6% in the 2004
first quarter. The Company's cash flow, as measured by EBITDA (1), increased
26.7% in the 2004 first quarter as compared to the same period a year earlier,
reaching $7,747,729.
John Farahi, Co-chairman and Chief Executive Officer of Monarch commented
on the record earnings: "Our impressive first quarter results are a testament
to the quality of the Atlantis' management team, convenient location and fresh
product in a very competitive Reno environment. We achieved a strong flow-
through of the incremental revenue to both the operating income and net income
lines. The former is attributable to persistent and ongoing cost controls
leading to effective operating leverage. The latter was further assisted by
the elimination of the stockholder guarantee fee in late February. Our first
quarter performance confirmed the strength of the Company's business plan and
emphasis on the locals market." He continued, "the Company's refinancing of
its original $80 million credit facility on February 23rd for another five
years at the $50 million level sends a strong signal to the financial
community. Not only did our bank group demonstrate its confidence in the
Company by removing the controlling stockholders? guarantees and the
consequent need for the fee, but was further encouraged by the Company's
continuous debt reduction of the past few years. The Company's reduced debt
levels have resulted in one of the most conservative balance sheets in the
industry and, combined with its consistently improving operating performance,
attendant financial ratios."
Mr. Farahi further added, "the improvement in hotel revenue and margin
was particularly heartening in light of the extensive remodeling of all 283
rooms in our 18-story second tower throughout the quarter. We had substantial
disruption mid-week and still managed to post record results. Our hotel staff
is to be congratulated."
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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 37 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.
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MONARCH CASINO & RESORT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
March 31,
----------------------------
2004 2003
------------ ------------
(Unaudited) (Unaudited)
Revenues
Casino...................................... $ 19,902,851 $ 17,739,705
Food and beverage........................... 8,825,823 8,211,408
Hotel....................................... 5,518,305 4,716,178
Other....................................... 863,030 885,745
------------ ------------
Gross revenues........................... 35,110,009 31,553,036
Less promotional allowances................. (4,624,031) (4,385,108)
------------ ------------
Net revenues............................. 30,485,978 27,167,928
------------ ------------
Operating expenses
Casino...................................... 7,440,671 7,126,103
Food and beverage........................... 4,391,722 4,123,738
Hotel....................................... 2,067,987 1,645,979
Other....................................... 318,463 304,566
Selling, general, and administrative........ 8,519,406 7,852,184
Depreciation and amortization............... 3,003,359 2,600,409
------------ ------------
Total operating expenses................. 25,741,608 23,652,979
------------ ------------
Income from operations................... 4,744,370 3,514,949
Other expense
Interest expense............................ 429,961 449,880
Stockholder guarantee fee expense........... 136,164 281,342
------------ ------------
Total other expense...................... 566,125 731,222
------------ ------------
Income before income taxes............... 4,178,245 2,783,727
Provision for income taxes.................... 1,420,000 945,800
------------ ------------
Net income............................... $ 2,758,245 $ 1,837,927
============ ============
Earnings per share of common stock
Net income
Basic..................................... $ 0.30 $ 0.19
Diluted................................... $ 0.29 $ 0.19
Weighted average number of common
shares and potential common
shares outstanding
Basic................................... 9,344,736 9,468,308
Diluted................................. 9,382,256 9,503,599
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MONARCH CASINO & RESORT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2004 2003
------------- -------------
(Unaudited)
ASSETS
Current assets
Cash............................................ $ 11,076,465 $ 9,711,310
Receivables, net................................ 2,927,622 2,818,727
Federal income tax refund receivable............ - 756,698
Inventories..................................... 1,154,203 1,245,967
Prepaid expenses................................ 2,291,960 2,234,773
Deferred income taxes........................... 542,457 542,457
------------- -------------
Total current assets......................... 17,992,707 17,309,932
------------- -------------
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........................... 6,364,841 6,304,642
Furniture and equipment......................... 64,847,425 63,230,354
------------- -------------
163,734,247 162,056,977
Less accumulated depreciation and amortization.. (64,627,410) (63,618,047)
------------- -------------
Net property and equipment................... 99,106,837 98,438,930
------------- -------------
Other assets, net................................. 478,003 128,263
------------- -------------
Total assets................................. $ 117,577,547 $ 115,877,125
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt............ $ 6,574,981 $ 6,059,591
Accounts payable................................ 8,204,153 8,407,887
Accrued expenses................................ 5,766,059 6,707,257
Federal income taxes payable.................... 584,462 -
------------- -------------
Total current liabilities.................... 21,129,655 21,174,735
Long-term debt, less current maturities........... 39,900,000 41,125,000
Deferred income taxes............................. 4,933,427 4,854,587
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; 9,536,275 issued;
9,329,830 outstanding at 03/31/2003,
9,474,830 outstanding at 12/31/2002............ 95,363 95,363
Additional paid-in capital...................... 17,381,548 17,432,635
Treasury stock,
206,445 shares at 03/31/2003, 61,445 shares
at 12/31/2002, at cost......................... (1,253,110) (1,437,614)
Retained earnings............................... 35,390,664 32,632,419
------------- -------------
Total stockholders' equity................... 51,614,465 48,722,803
------------- -------------
Total liabilities and stockholders' equity... $ 117,577,547 $ 115,877,125
============= =============
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MONARCH CASINO & RESORT, INC.
RECONCILIATION OF NET INCOME TO EBITDA (1)
Three Months Ended
March 31,
-----------------------
2004 2003
(unaudited) (unaudited)
----------- -----------
Net income $2,758,245 $1,837,927
Adjustments
Provision for income taxes 1,420,000 945,800
Interest expense 429,961 449,880
Stockholder guarantee fee
Expense 136,164 281,342
Depreciation & amortization 3,003,359 2,600,409
----------- -----------
EBITDA (1) $7,747,729 $6,115,358
=========== ===========
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