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): October 25, 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 October 25, 2005, Monarch Casino & Resort, Inc. (the "Company") issued
a press release reporting the Company's financial results for the third
quarter ended September 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 October 25, 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: October 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 ALL-TIME RECORD QUARTER
- EBITDA (1) IMPROVES 22.2%; NET INCOME INCREASES 27.6% -
RENO, NV-October 25, 2005- Monarch Casino & Resort, Inc. (Nasdaq: MCRI)
(the "Company"), owner of the Atlantis Casino Resort in Reno, Nevada, today
announced an all-time quarterly record for its third quarter ended September
30, 2005.
The Company reported 2005 third quarter EBITDA (1), of $13.3 million, a
new all-time Company quarterly record and a 22.2% improvement over the $10.9
million EBITDA (1) in the 2004 third quarter. The improvement was driven by
record net revenue and improved operating margins and beat published consensus
analysts' estimates of $12.0 million. Net revenues at the Company's Atlantis
Casino Resort were $38.3 million during the quarter, a 9.4% increase from
$35.1 million during the same period in 2004. The record net revenues were
driven primarily by a 12.2% increase in casino revenues, which reached an all-
time Company quarterly record of $25.4 million during the three months ended
September 30, 2005. Hotel revenues increased 3.9%, food and beverage revenues
improved 4.9% and other revenue centers grew 19.3% in the third quarter of
2005 compared to the third quarter of 2004. The 9.4% increase in net
revenues, combined with across-the-board operating margin improvements and an
increase of only 3.6% in operating costs and expenses, led to a 26.6% increase
in income from operations for the three months ended September 30, 2005, as
compared to the same period in 2004.
Net income for the 2005 third quarter was a record $7.1 million, a 27.6%
increase from net income of $5.6 million for the same period a year earlier
and translated into earnings per diluted share (EPS) of $0.37 versus $0.30 for
the same period last year. The Company's third quarter 2005 EPS of $0.37 beat
published consensus analysts' estimates of $0.33. During the 2005 third
quarter, the Company achieved 71.2% flow through of incremental net revenue to
income from operations leading to an operating margin of 29.1% for the period,
compared to 25.1% during last year's third quarter.
Monarch's CEO and Co-Chairman John Farahi commented on the Company's
third quarter performance: "I believe our record results stem from a
confluence of favorable factors. The vitality of our market manifested by the
area's strong economy and continuing population growth combined with our great
location and product drives these remarkable numbers. Our management team has
done a superb job taking advantage of these opportunities."
Mr. Farahi continued: "Our improving balance sheet also opens the
possibilities for new growth opportunities for Monarch which includes current
planning for the next phase of our expansion at Atlantis." During the third
quarter, the Company reduced the unpaid principal balance under its credit
facility, bringing its outstanding balance to $11.9 million at September 30,
2005 from $32.4 million at December 31, 2004.
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
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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, 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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MONARCH CASINO & RESORT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues
Casino................................ $ 25,397,320 $ 22,642,767 $ 70,322,452 $ 63,490,456
Food and beverage..................... 10,164,356 9,689,843 28,595,670 27,956,559
Hotel................................. 7,296,627 7,021,432 18,668,109 18,974,036
Other................................. 1,272,052 1,066,081 3,460,808 2,874,923
------------ ------------ ------------ ------------
Gross revenues..................... 44,130,355 40,420,123 121,047,039 113,295,974
Less promotional allowances........... (5,782,463) (5,359,370) (16,154,058) (15,035,242)
------------ ------------ ------------ ------------
Net revenues....................... 38,347,892 35,060,753 104,892,981 98,260,732
------------ ------------ ------------ ------------
Operating expenses
Casino................................ 8,189,181 7,870,607 23,676,274 22,977,956
Food and beverage..................... 4,862,299 4,912,576 14,030,259 14,122,051
Hotel................................. 2,024,190 1,949,466 5,863,026 6,006,341
Other................................. 354,625 352,855 999,689 1,047,509
Selling, general, and administrative.. 9,640,312 9,117,102 28,222,479 25,972,178
Gaming development expense............ 13,382 - 274,090 -
Depreciation and amortization......... 2,113,060 2,047,706 6,251,172 7,687,196
------------ ------------ ------------ ------------
Total operating expenses........... 27,197,049 26,250,312 79,316,989 77,813,231
------------ ------------ ------------ ------------
Income from operations............. 11,150,843 8,810,441 25,575,992 20,447,501
Other expense
Interest expense...................... (301,629) (333,483) (890,966) (1,125,121)
Stockholder guarantee fee expense..... - - - (136,164)
------------ ------------ ------------ ------------
Total other expense................ (301,629) (333,483) (890,966) (1,261,285)
------------ ------------ ------------ ------------
Income before income taxes......... 10,849,214 8,476,958 24,685,026 19,186,216
Provision for income taxes.............. 3,762,000 2,924,520 8,550,000 6,523,520
------------ ------------ ------------ ------------
Net income......................... $ 7,087,214 $ 5,552,438 $16,135,026 $ 12,662,696
============ ============ ============ ============
Earnings per share of common stock
Net income
Basic............................... $ 0.38 $ 0.30 $ 0.86 $ 0.68
Diluted............................. $ 0.37 $ 0.30 $ 0.85 $ 0.67
Weighted average number of common
shares and potential common
shares outstanding
Basic............................. 18,867,748 18,777,844 18,840,034 18,737,648
Diluted........................... 19,103,711 18,817,744 19,082,667 18,794,422
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MONARCH CASINO & RESORT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2005 2004
------------- -------------
(Unaudited)
ASSETS
Current assets
Cash............................................ $ 10,933,455 $ 11,814,778
Receivables, net................................ 2,985,691 2,959,894
Federal income tax refund receivable............ - 493,797
Inventories..................................... 1,277,645 1,452,696
Prepaid expenses................................ 2,515,396 2,346,242
Deferred income taxes........................... 1,115,719 1,115,719
------------- -------------
Total current assets......................... 18,827,906 20,183,126
------------- -------------
Property and equipment
Land............................................ 10,339,530 10,339,530
Land improvements............................... 3,166,106 3,226,913
Buildings....................................... 78,955,538 78,955,538
Building improvements........................... 10,269,844 7,524,680
Furniture and equipment......................... 66,686,391 65,146,594
Leasehold improvement........................... 1,346,965 1,346,965
------------- -------------
170,764,374 166,540,220
Less accumulated depreciation and amortization.. (74,114,213) (68,791,045)
------------- -------------
Net property and equipment................... 96,650,161 97,749,175
------------- -------------
Other assets, net................................. 269,524 406,620
------------- -------------
Total assets................................. $ 115,747,591 $ 118,338,921
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt............ $ - $ -
Accounts payable................................ 7,351,459 5,747,775
Accrued expenses................................ 6,782,698 7,918,299
Federal income taxes payable.................... 1,207,203 -
------------- -------------
Total current liabilities.................... 15,341,360 13,666,074
Long-term debt, less current maturities........... 11,900,000 32,400,000
Deferred income taxes............................. 6,035,507 6,509,505
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;
18,868,146 outstanding at 09/30/2005,
18,812,448 outstanding at 12/31/2004........... 95,363 95,363
Additional paid-in capital...................... 17,831,307 17,463,272
Treasury stock,
204,404 shares at 09/30/2005, 260,102 shares
at 12/31/2004, at cost......................... (749,831) (954,152)
Retained earnings............................... 65,293,885 49,158,859
------------- -------------
Total stockholders' equity................... 82,470,724 65,763,342
------------- -------------
Total liabilities and stockholders' equity... $ 115,747,591 $ 118,338,921
============= =============
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MONARCH CASINO & RESORT, INC.
RECONCILIATION OF NET INCOME TO EBITDA (1)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- ------------------------
2005 2004 2005 2004
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Net income......................... $ 7,087,214 $ 5,552,438 $16,135,026 $12,662,696
Adjustments:
Provision for income taxes....... 3,762,000 2,924,520 8,550,000 6,523,520
Stockholder guarantee fee expense - - - 136,164
Interest expense................. 301,629 333,483 890,966 1,125,121
Depreciation and amortization.... 2,113,060 2,047,706 6,251,172 7,687,196
----------- ----------- ----------- -----------
EBITDA (1) $13,263,903 $10,858,147 $13,827,164 $28,134,697
=========== =========== =========== ===========
(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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