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): July 27, 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
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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 2.02 Results of Operations and Financial Condition
On July 27, 2005, Monarch Casino & Resort, Inc. (the "Company") issued a
press release reporting the Company's financial results for the second quarter
ended June 30, 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 July 27, 2005.
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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: July 28, 2005 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 SECOND QUARTER
- CASINO REVENUES BEATS ALL-TIME RECORD -
RENO, NV-July 27, 2005- Monarch Casino & Resort, Inc. (Nasdaq: MCRI)
(the "Company"), owner of the Atlantis Casino Resort in Reno, Nevada, today
announced record second quarter net income, earnings per share, net revenues
and EBITDA (1) and an all-time quarterly Company record casino revenues, but
lower hotel revenues, for the three-month period ended June 30, 2005.
The Company reported net revenues of $35.0 million during the 2005 second
quarter, a 6.9% increase from $32.7 million during the same period in 2004.
The record net revenues were driven primarily by a 14.7% increase in casino
revenues, which reached an all-time Company quarterly record of $24.0 million
during the three months ended June 30, 2005. Hotel revenues, however,
decreased 10.1% in the second quarter of 2005 compared to the second quarter
of 2004, due primarily to the absence of a major bowling tournament in Reno in
2005 and lower than expected second quarter bookings at the adjacent Reno-
Sparks Convention Center. Reno traditionally hosts major international and
national bowling tournaments that bring thousands of bowlers to Reno and
typically generate hotel and other business. Food and beverage revenues
remained relatively unchanged at $9.4 million. Based on information provided
by the Reno-Sparks Convention and Visitors Authority and advance bookings, the
Company anticipates convention business for the remainder of 2005 to meet or
exceed that of comparable periods in 2004. Other revenue centers improved
20.6% to $1.1 million during the quarter. The 6.9% increase in net revenues,
combined with an increase of only 3.6% in operating costs and expenses, led to
a 19.5% increase in income from operations for the three months ended June 30,
2005, as compared to the same period in 2004.
Net income for the 2005 second quarter was a record $5.2 million, or
$0.27 per diluted share, a 19.3% increase from net income of $4.4 million, or
$0.23 per diluted share, for the same period a year earlier. EBITDA (1),
driven by improved margins, also reached a new second quarter record of $10.3
million, an 8.5% improvement over the $9.5 million EBITDA (1) in the 2004
second quarter. Excluding depreciation and amortization, the Company
achieved 35.6% flow through of incremental net revenue to income from
operations in the second quarter of 2005.
When asked about the Company's second quarter performance, John Farahi,
Monarch's CEO and Co-Chairman, commented: "We are obviously pleased with our
gaming and bottom line results, which continue to improve despite the absence
of a major Reno area bowling tournament this year. Additionally, the Reno-
Sparks Convention Center next door to our property experienced unexpectedly
slow business during the quarter, which impacted not only our hotel occupancy,
but also our food and beverage operations."
Mr. Farahi further commented: "I am proud of our management team for its
successful efforts to contain costs while continuing to deliver superior
service to our guests. Effective cost controls enabled us to apply more of
our free cash flow toward ongoing and continuous upgrades and renovations to
our property and continued reduction of our debt." The Company continued to
rapidly pay down its outstanding bank debt during the 2005 second quarter to
$19.9 million from $32.4 million at 2004 year end and $39.3 at June 30, 2004.
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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 Virginia 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, (ii) future convention business, and (iii) 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
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Revenues
Casino............................. $ 24,023,224 $ 20,944,838 $ 44,925,132 $ 40,847,689
Food and beverage.................. 9,404,978 9,440,893 18,431,314 18,266,716
Hotel.............................. 5,783,330 6,434,299 11,371,482 11,952,604
Other.............................. 1,140,419 945,812 2,188,756 1,808,842
------------ ------------ ------------ ------------
Gross revenues.................. 40,351,951 37,765,842 76,916,684 72,875,851
Less promotional allowances........ (5,369,564) (5,051,841) (10,371,595) (9,675,872)
------------ ------------ ------------ ------------
Net revenues.................... 34,982,387 32,714,001 66,545,089 63,199,979
------------ ------------ ------------ ------------
Operating expenses
Casino............................. 7,952,246 7,666,678 15,487,093 15,107,349
Food and beverage.................. 4,730,595 4,817,753 9,167,960 9,209,475
Hotel.............................. 1,810,963 1,988,888 3,838,836 4,056,875
Other.............................. 323,418 376,191 645,064 694,654
Selling, general and
administrative.................... 9,772,874 8,335,670 18,582,167 16,855,076
Gaming development cost............ 56,310 - 260,708 -
Depreciation and amortization...... 2,099,912 2,636,131 4,138,112 5,639,490
------------ ------------ ------------ ------------
Total operating expenses........ 26,746,318 25,821,311 52,119,940 51,562,919
------------ ------------ ------------ ------------
Income from operations.......... 8,236,069 6,892,690 14,425,149 11,637,060
------------ ------------ ------------ ------------
Other expenses
Interest expense................... (283,963) (361,677) (589,337) (791,638)
Stockholder guarantee fee expense.. - - - (136,164)
------------ ------------ ------------ ------------
Total other expenses............ (283,963) (361,677) (589,337) (927,802)
------------ ------------ ------------ ------------
Income before income taxes...... 7,952,106 6,531,013 13,835,812 10,709,258
Provision for income taxes........... 2,758,000 2,179,000 4,788,000 3,599,000
------------ ------------ ------------ ------------
Net income...................... $ 5,194,106 $ 4,352,013 $ 9,047,812 $ 7,110,258
============ ============ ============ ============
Earnings per share of common stock
Net income
Basic............................ $ 0.28 $ 0.23 $ 0.48 $ 0.38
Diluted.......................... $ 0.27 $ 0.23 $ 0.47 $ 0.38
Weighted average number of common
shares and potential common
shares outstanding
Basic.......................... 18,834,974 18,745,206 18,825,947 18,717,340
Diluted........................ 19,099,112 18,799,160 19,072,009 18,781,454
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MONARCH CASINO & RESORT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2005 2004
------------- -------------
(Unaudited)
ASSETS
Current assets
Cash............................................ $ 10,457,905 $ 11,814,778
Receivables, net................................ 2,860,006 2,959,894
Federal income tax refund receivable............ - 493,797
Inventories..................................... 1,411,648 1,452,696
Prepaid expenses................................ 2,597,110 2,346,242
Deferred income taxes........................... 1,115,719 1,115,719
------------- -------------
Total current assets......................... 18,442,388 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........................... 10,269,844 7,524,680
Furniture and equipment......................... 65,779,441 65,146,594
Leasehold improvements.......................... 1,346,965 1,346,965
------------- -------------
169,918,231 166,540,220
Less accumulated depreciation and amortization.. (72,161,153) (68,791,045)
------------- -------------
Net property and equipment................... 97,757,078 97,749,175
------------- -------------
Other assets, net................................. 360,871 406,620
------------- -------------
Total assets................................. $ 116,560,337 $ 118,338,921
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt............ $ - $ -
Accounts payable................................ 7,372,552 5,747,775
Accrued expenses................................ 7,492,380 7,918,299
Federal income taxes payable.................... 260,203 -
------------- -------------
Total current liabilities.................... 15,125,135 13,666,074
Long-term debt, less current maturities........... 19,900,000 32,400,000
Deferred income taxes............................. 6,170,506 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;
18,864,816 outstanding at 06/30/2005,
18,812,448 outstanding at 12/31/2004........... 95,363 95,363
Additional paid-in capital...................... 17,824,708 17,463,272
Treasury stock,
207,734 shares at 06/30/2005, 260,102 shares
at 12/31/2004, at cost......................... (762,046) (954,152)
Retained earnings............................... 58,206,671 49,158,859
------------- -------------
Total stockholders' equity................... 75,364,696 65,763,342
------------- -------------
Total liabilities and stockholders' equity... $ 116,560,337 $ 118,338,921
============= =============
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MONARCH CASINO & RESORT, INC.
RECONCILIATION OF NET INCOME TO EBITDA (1)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- ------------------------
2005 2004 2005 2004
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Net income......................... $ 5,194,106 $4,352,013 $ 9,047,812 $7,110,258
Adjustments:
Provision for income taxes....... 2,758,000 2,179,000 4,788,000 3,599,000
Stockholder guarantee fee expense - - - 136,164
Interest expense................. 283,963 361,677 589,337 791,638
Depreciation and amortization.... 2,099,912 2,636,131 4,138,112 5,639,490
----------- ----------- ----------- -----------
EBITDA (1) $10,335,981 $9,528,821 $18,563,261 $17,276,550
=========== =========== =========== ===========
(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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