Monarch Casino Reports 2010 Third Quarter Results

Monarch Casino Reports 2010 Third Quarter Results

Press Release Source: Monarch Casino and Resort, Inc. On Wednesday October 20, 2010, 4:23 pm EDT

RENO, NV--(Marketwire - 10/20/10) - Monarch Casino & Resort, Inc. (NASDAQ:MCRI - News) (the "Company"), owner of the Atlantis Casino Resort Spa (the "Atlantis") in Reno, Nevada, today announced results for the quarter ended September 30, 2010.

The Company reported net revenue of $37.7 million which is $2.8 million, or 8.0%, higher than the $34.9 million reported for the comparative quarter in 2009. The Company announced quarterly income from operations of $4.4 million, EBITDA(1) of $7.8 million and diluted EPS of $0.17 which represent increases of 22.9%, 17.9% and 30.8%, respectively, when compared to the prior year's third quarter. Revenue generated in the casino, food and beverage, hotel and other operating departments increased by 6.8%, 11.0%, 12.5% and 24.7%, respectively.

Casino operating expense increased approximately $863 thousand, or 9.6%, over the prior year's third quarter primarily due to the cost of increased complimentary food, beverages and other services provided to casino patrons ("Complimentaries"). As a percentage of casino revenue, casino operating expense increased to 37.7% as compared to 36.7% in prior year's third quarter, primarily due to the higher Complimentaries.

Food and beverage operating expense as a percentage of food and beverage revenue decreased to 46.8% for the third quarter as compared to 48.2% in the third quarter of the prior year primarily due to the higher revenue. Hotel operating expense as a percentage of hotel revenue decreased to 24.7% from 32.0% in prior year's third quarter due to the increase in hotel revenue combined with lower hotel operating expense. Hotel operating expense decreased $237 thousand, or 13.1%, primarily related to lower small equipment and supplies expense resulting from the substantial completion of the Company's ongoing hotel upgrade project.

The Company reported that selling, general and administrative expense increased by $581 thousand, or 4.8%, due primarily to higher marketing, small equipment and bad debt expense.

During the quarter, the Company paid down the balance outstanding under its credit facility by $5.8 million, which decreased the outstanding balance of the credit facility from $37.8 million at June 30, 2010 to $32.0 million at September 30, 2010. Decreased borrowing levels, combined with lower interest rates, drove interest expense down from $487 thousand in prior year's third quarter to $334 thousand in the quarter ended September 30, 2010.

Monarch's CEO and Co-Chairman John Farahi commented on the Company's performance: "We are pleased to report revenue increases for the third consecutive quarter despite the ongoing macroeconomic weakness of our national and local economies. We believe that our continuing gain in market share is driven by our conscious commitment to make Atlantis the premier resort destination in northern Nevada by perpetually renewing and upgrading our facilities, while consistently delivering our signature outstanding quality of service to our guests."

Monarch Casino & Resort, Inc., through its subsidiary, Golden Road Motor Inn, Inc., owns and operates the Atlantis Casino Resort Spa, a hotel/casino facility in Reno, Nevada which features approximately 61,000 square feet of casino space; approximately 1,000 guest rooms; eight food outlets; two espresso and pastry bars; an approximate 30,000 square foot health spa and salon with an enclosed year-round pool; two retail outlets offering clothing and traditional gift shop merchandise; an 8,000 square-foot family entertainment center; and approximately 52,000 square feet of banquet, convention and meeting room space. The casino features approximately 1,450 slot and video poker machines; approximately 38 table games, including blackjack, craps, roulette, and others; a sports book; a 24-hour live keno lounge and a poker room. The Company and its predecessors have operated a facility on the Atlantis site since 1972.

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) economic and market conditions, and (iii) the liquidity requirements of the Company. Actual results and future events and conditions 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 at www.monarchcasino.com.

 
MONARCH CASINO & RESORT, INC.
Condensed Consolidated Statements of Income
(Unaudited)


Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
2010 2009 2010 2009
------------ ------------ ------------ ------------
Revenues
Casino $ 26,039,912 $ 24,385,970 $ 75,214,951 $ 71,336,715
Food and beverage 10,595,591 9,546,449 30,949,116 28,965,730
Hotel 6,361,763 5,653,926 17,471,295 15,680,384
Other 2,075,795 1,665,197 5,910,951 5,112,754
------------ ------------ ------------ ------------
Gross revenues 45,073,061 41,251,542 129,546,313 121,095,583
Less promotional
allowances (7,392,963) (6,405,742) (21,358,767) (19,279,190)
------------ ------------ ------------ ------------
Net revenues 37,680,098 34,845,800 108,187,546 101,816,393
------------ ------------ ------------ ------------
Operating expenses
Casino 9,822,885 8,959,794 28,676,670 26,820,573
Food and beverage 4,955,400 4,600,471 13,976,186 13,774,017
Hotel 1,570,286 1,807,230 4,621,108 5,021,467
Other 745,261 654,750 2,151,185 2,000,936
Selling, general
and
administrative 12,785,043 12,203,807 35,757,641 36,133,433
Depreciation and
amortization 3,394,258 3,034,674 9,919,984 9,310,580
------------ ------------ ------------ ------------
Total operating
expenses 33,273,133 31,260,726 95,102,774 93,061,006
------------ ------------ ------------ ------------
Income from
operations 4,406,965 3,585,074 13,084,772 8,755,387
------------ ------------ ------------ ------------
Other income
(expense)
Other income - 36,205 16,000 171,912
Interest expense (334,028) (486,921) (1,158,303) (1,608,138)
------------ ------------ ------------ ------------
Total other
expense (334,028) (450,716) (1,142,303) (1,436,226)
------------ ------------ ------------ ------------
Income before
income taxes 4,072,937 3,134,358 11,942,469 7,319,161
Provision for
income taxes (1,407,000) (1,096,500) (4,174,055) (2,561,225)
------------ ------------ ------------ ------------
Net income $ 2,665,937 $ 2,037,858 $ 7,768,414 $ 4,757,936
============ ============ ============ ============

Earnings per share
of common stock
Net income
Basic $ 0.17 $ 0.13 $ 0.48 $ 0.30
Diluted $ 0.17 $ 0.13 $ 0.48 $ 0.29

Weighted average
number of common
shares and
potential common
shares outstanding
Basic 16,132,531 16,122,593 16,129,017 16,122,232
Diluted 16,209,724 16,180,168 16,194,332 16,159,669





MONARCH CASINO & RESORT, INC.
Condensed Consolidated Balance Sheets


September 30, December 31,
------------- -------------
2010 2009
------------- -------------
ASSETS (Unaudited)
Current assets
Cash and cash equivalents $ 10,843,738 $ 14,420,323
Receivables, net 3,606,120 2,294,703
Federal income tax receivable 1,050,849 -
Inventories 1,800,217 1,706,867
Prepaid expenses 2,450,672 2,623,650
Deferred income taxes 780,550 1,090,063
------------- -------------
Total current assets 20,532,146 22,135,606
------------- -------------
Property and equipment
Land 13,172,522 13,172,522
Land improvements 3,511,484 3,511,484
Buildings 140,522,106 140,522,106
Building improvements 10,597,698 10,410,770
Furniture and equipment 111,238,662 107,655,784
Leasehold improvements 1,346,965 1,346,965
------------- -------------
280,389,437 276,619,631
Less accumulated depreciation and
amortization (123,287,532) (113,538,145)
------------- -------------
Net property and equipment 157,101,905 163,081,486
Other assets, net 376,438 569,622
------------- -------------
Total assets $ 178,010,489 $ 185,786,714
============= =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Borrowings under credit facility $ - $ 1,000,000
Accounts payable 6,972,541 8,984,010
Accrued expenses 12,740,776 11,056,079
Federal income taxes payable - 46,546
------------- -------------
Total current liabilities 19,713,317 21,086,635
------------- -------------
Long-term debt, less current maturities 32,000,000 47,500,000
Deferred income taxes 4,707,594 4,695,657
------------- -------------
Total Liabilities 56,420,911 73,282,292
------------- -------------

Stockholders' equity
Preferred stock, $.01 par value, 10,000,000
shares authorized; none issued - -
Common stock, $.01 par value, 30,000,000
shares authorized; 19,096,300 shares issued;
16,138,158 outstanding at 9/30/10
16,125,388 outstanding at 12/31/09 190,963 190,963
Additional paid-in capital 31,034,509 30,041,083
Treasury stock, 2,958,142 shares at 9/30/10
2,970,912 shares at 12/31/09, at cost (48,541,663) (48,864,979)
Retained earnings 138,905,769 131,137,355
------------- -------------
Total stockholders' equity 121,589,578 112,504,422
------------- -------------
Total liability and stockholder's equity $ 178,010,489 $ 185,786,714
============= =============






MONARCH CASINO & RESORT, INC.
Reconciliation of Net Income to EBITDA (1)
(Unaudited)


Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
2010 2009 2010 2009
------------- ------------ ------------ ------------
Net income $ 2,665,937 $ 2,037,858 $ 7,768,414 $ 4,757,936
Adjustments
Provision for
income taxes 1,407,000 1,096,500 4,174,055 2,561,225
Interest expense 334,028 486,921 1,158,303 1,608,138
Depreciation &
amortization 3,394,258 3,034,674 9,919,984 9,310,580
Other income - (36,205) (16,000) (171,912)
------------- ------------ ------------ ------------
EBITDA (1) $ 7,801,223 $ 6,619,748 $ 23,004,756 $ 18,065,967
============= ============ ============ ============

(1) "EBITDA" consists of net income plus provision for income taxes, interest expense, depreciation and amortization less interest income. 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, as an alternative to cash flows from operating activities (as determined in accordance with generally accepted accounting principles) or 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.



Contacts:

Ron Rowan
CFO
(775) 825-4700
RRowan@MonarchCasino.com


John Farahi
CEO
(775) 825-4700
JohnFarahi@MonarchCasino.com

For additional information visit Monarch's web site at MonarchCasino.com.