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, 2006
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 April 26, 2006, Monarch Casino & Resort, Inc. (the "Company") issued a
press release reporting the Company's financial results for the first quarter
ended March 31, 2006. 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 April 26, 2006.
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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 27, 2006 By: /s/ Ben Farahi
-------------------------------
Name: Ben Farahi
Title: Chief Financial Officer,
Treasurer and Secretary
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Exhibit 99.1
PRESS RELEASE
NEW RECORD FIRST QUARTER RESULTS FOR MONARCH CASINO
- EBITDA (1) IMPROVES 15.5%, DILUTED EPS INCREASES 25.0%
DESPITE IMPLEMENTATION OF SFAS 123R -
RENO, NV-April 26, 2006- Monarch Casino & Resort, Inc. (Nasdaq: MCRI)
(the "Company"), owner of the Atlantis Casino Resort in Reno, Nevada, today
announced record financial results for its first quarter ended March 31, 2006.
The Company reported EBITDA (1) of $9.5 million, a 15.5% improvement over
the $8.2 million EBITDA (1) reported for the first quarter of 2005. The
improved EBITDA (1) beat published consensus analysts' estimate of $9.2
million and was the result of record first quarter net revenues of $35.6
million and better operating margins. The Company's operating margin for the
period improved to 20.6% of net revenues from 19.6% of net revenues during the
same period a year earlier. The record revenues were driven by a 15.4%
increase in casino revenue, an 8.0% increase in both food and beverage and
hotel revenues, and a 4.0% improvement in other revenues.
Record first quarter 2006 net income of $4.8 million is a 23.7% increase
from first quarter 2005 net income of $3.9 million and translates into
earnings per diluted share (EPS) of $0.25 versus $0.20 for the same period
last year. The Company's first quarter 2006 diluted EPS beat the published
consensus analysts' estimate of $0.24.
The Company achieved record results despite implementing the requirements
of SFAS 123R in the first quarter of 2006. The Company booked approximately
$548,000 in additional pre-tax equity compensation expense during the quarter
as a result of implementing the provisions of SFAS 123R, which went into
effect January 1, 2006. SFAS 123R requires fair value measurement and
recognition in the financial statements for all share-based compensation
arrangements. Excluding this share based compensation expense, the Company's
reported after-tax earnings would have been $0.27 per diluted share for the
first quarter 2006, which would have been a 35% increase from the $0.20
diluted EPS reported in the first quarter 2005. Had SFAS 123R been in effect
during the first quarter 2005, pre-tax expenses for that period would have
increased by approximately $252,000.
Also during the first quarter of 2006, the Company became debt free,
having paid off the $8.1 million December 31, 2005 balance on its revolving
credit facility. $24 million remains available to be drawn down under the
revolving credit facility should the Company require such funds.
John Farahi, Monarch's CEO and Co-Chairman commended his team for the
positive results: "Our management continues to do a fabulous job of making
the Atlantis one of the premier properties in northern Nevada. As a result,
we benefit from the frequent repeat business of our established guests, and
also attract fresh patronage from first time visitors, as well as locals who
are new to the area. Circumstances that allow us to thrive and continue to be
the foundation of our success are our location, strong local economy and the
quality of the product and services we provide. But it is the vibrant
hospitality, attention to detail, and tireless effort of our team members that
maximize our potential. One measure of our success is our continuing strong
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flow through: This quarter we produced an increase to our net revenues by
almost thirteen percent, yet our promotional allowances increased by less than
eight percent." Mr. Farahi also observed: "Being debt free gives our Board
even greater opportunity to explore corporate growth opportunities. At the
same time, we continue work on our Atlantis expansion plans which are in the
preliminary design phase."
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 above 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, and (ii) future expansion plans. 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, interest
expense, 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
March 31,
----------------------------
2006 2005
------------ ------------
(Unaudited) (Unaudited)
Revenues
Casino...................................... $ 24,124,047 $ 20,901,908
Food and beverage........................... 9,744,817 9,026,336
Hotel....................................... 6,033,935 5,588,152
Other....................................... 1,090,576 1,048,337
------------ ------------
Gross revenues........................... 40,993,375 36,564,733
Less promotional allowances................. (5,387,714) (5,002,031)
------------ ------------
Net revenues............................. 35,605,661 31,562,702
------------ ------------
Operating expenses
Casino...................................... 8,012,162 7,534,847
Food and beverage........................... 4,790,771 4,437,365
Hotel....................................... 2,103,723 2,027,873
Other....................................... 314,454 321,646
Selling, general, and administrative........ 10,841,486 8,809,293
Gaming development expense.................. 43,765 204,398
Depreciation and amortization............... 2,146,758 2,038,200
------------ ------------
Total operating expenses................. 28,253,119 25,373,622
------------ ------------
Income from operations................... 7,352,542 6,189,080
Other expense
Interest expense............................ (59,444) (305,374)
------------ ------------
Income before income taxes............... 7,293,098 5,883,706
Provision for income taxes.................... 2,525,000 2,030,000
------------ ------------
Net income............................... $ 4,768,098 $ 3,853,706
============ ============
Earnings per share of common stock
Net income
Basic..................................... $ 0.25 $ 0.20
Diluted................................... $ 0.25 $ 0.20
Weighted average number of common
shares and potential common
shares outstanding
Basic................................... 18,885,595 18,816,819
Diluted................................. 19,252,277 19,043,546
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MONARCH CASINO & RESORT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2006 2005
------------- -------------
(Unaudited)
ASSETS
Current assets
Cash............................................ $ 12,010,163 $ 12,886,494
Receivables, net................................ 3,091,337 3,559,602
Federal income tax refund receivable............ - 286,760
Inventories..................................... 1,458,070 1,456,453
Prepaid expenses................................ 2,537,300 2,401,619
Deferred income taxes........................... 1,518,152 1,326,224
------------- -------------
Total current assets......................... 20,615,022 21,917,152
------------- -------------
Property and equipment
Land............................................ 10,339,530 10,339,530
Land improvements............................... 3,166,107 3,166,107
Buildings....................................... 78,955,538 78,955,538
Building improvements........................... 10,398,814 10,398,814
Furniture and equipment......................... 68,826,326 67,393,755
Leasehold improvement........................... 1,346,965 1,346,965
------------- -------------
173,033,280 171,600,709
------------- -------------
Less accumulated depreciation and amortization.. (78,138,462) (76,117,346)
------------- -------------
Net property and equipment................... 94,894,818 95,483,363
------------- -------------
Other assets, net................................. 269,524 269,524
------------- -------------
Total assets................................. $ 115,779,364 $ 117,670,039
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable................................ 6,761,798 7,335,630
Accrued expenses................................ 7,590,609 8,722,221
Federal income taxes payable.................... 2,548,782 -
------------- -------------
Total current liabilities.................... 16,901,189 16,057,851
Long-term debt, less current maturities........... - 8,100,000
Deferred income taxes............................. 5,747,192 5,953,193
Commitments and contingencies.....................
Stockholders' equity
Preferred stock, $.01 par value, 10,000,000
shares authorized; none issued................. - -
Common stock, $.005 par value, 30,000,000
shares authorized; 19,072,550 shares issued;
18,885,595 outstanding at 03/31/2006,
18,879,310 outstanding at 12/31/2005........... 190,726 190,726
Additional paid-in capital...................... 18,630,715 17,882,827
Treasury stock,
177,974 shares at 03/31/2006, 193,240 shares
at 12/31/2005, at cost......................... (652,875) (708,877)
Retained earnings............................... 74,962,417 70,194,319
------------- -------------
Total stockholders' equity................... 93,130,983 87,558,995
------------- -------------
Total liabilities and stockholders' equity... $ 115,779,364 $ 117,670,039
============= =============
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MONARCH CASINO & RESORT, INC.
RECONCILIATION OF NET INCOME TO EBITDA (1)
Three Months Ended
March 31,
-----------------------
2006 2005
(unaudited) (unaudited)
----------- -----------
Net income......................... $4,768,098 $3,853,706
Adjustments:
Provision for income taxes....... 2,525,000 2,030,000
Interest expense................. 59,444 305,374
Depreciation and amortization.... 2,146,758 2,038,200
----------- -----------
EBITDA (1) $9,499,300 $8,227,280
=========== ===========
(1) "EBITDA" consists of net income plus provision for income taxes, interest
and stockholder guarantee fee expense, 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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