Monarch Casino & Resort, Inc. (NASDAQ: MCRI) ("Monarch" or the
"Company"), owner of the Atlantis Casino Resort Spa (the
"Atlantis") in Reno, Nevada, and the Riviera Black Hawk Casino
("Black Hawk") in Black Hawk, Colorado, today announced results for
the quarter and year ended December 31, 2012.
RESULTS FOR THE QUARTER ENDED DECEMBER 31, 2012 This is the
third quarterly earnings announcement to include results from the
Company's Black Hawk Casino which was acquired on April 26, 2012
(the "Acquisition Date"). The Company's financial results include
the Black Hawk operations subsequent to the Acquisition Date.
Periods prior to that date exclude Black Hawk's operations.
Net Revenue:
Three months ended
December 31, Increase/(Decrease)
-------------------------- -------------------
2012 2011 $ %
------------ ------------ ----------- ------
Atlantis $ 33,175,496 $ 34,012,130 $ (836,634) -2.5%
Black Hawk 10,473,071 - 10,473,071 n/a
------------ ------------ ----------- ------
Total net revenue $ 43,648,567 $ 34,012,130 $ 9,636,437 28.3%
============ ============ =========== ======
Each of Atlantis' revenue centers experienced lower revenue in
the 2012 fourth quarter. Black Hawk net revenue of $10.5 million
represents 14.1% growth over the $9.2 million the property
generated during the same quarter of the prior year before it was
acquired by Monarch.
Adjusted EBITDA(1):
Three months ended
December 31, Increase/(Decrease)
-------------------------- --------------------
2012 2011 $ %
------------ ------------ ------------ ------
Atlantis $ 5,850,257 $ 6,453,391 $ (603,134) -9.3%
Black Hawk 2,998,758 - 2,998,758 n/a
------------ ------------ ------------ ------
8,849,015 6,453,391 2,395,624 37.1%
Corporate and other
expense (1,182,305) (1,008,395) (173,910) 17.2%
------------ ------------ ------------ ------
Total Adjusted EBITDA $ 7,666,710 $ 5,444,996 $ 2,221,714 40.8%
============ ============ ============ ======
Atlantis Adjusted EBITDA for the 2012 fourth quarter decreased
due to lower gross revenue; higher complimentary food, beverage and
other services provided to casino patrons ("Complimentaries") and
higher use tax expense; partially offset by lower bad debt and
marketing expense.
Black Hawk Adjusted EBITDA for the 2012 fourth quarter of $3.0
million grew $800 thousand, or 36.4% over the $2.2 million Adjusted
EBITDA reported for Black Hawk during the same quarter in 2011
before it was acquired by Monarch.
Consolidated corporate and other expense increased $174 thousand
due primarily to higher payroll and benefits expense.
Consolidated Operating Expense: Casino operating expense as a
percentage of casino revenue was relatively flat at 40.0% for the
fourth quarter of 2012 compared to 40.3% for the fourth quarter of
the prior year. Food and beverage operating expense as a percentage
of food and beverage revenue for the 2012 fourth quarter improved
to 43.1% as compared to 46.5% for the 2011 fourth quarter primarily
due to operational efficiencies combined with menu pricing
strategies in anticipation of higher commodity costs. Hotel
operating expense as a percentage of hotel revenue for the 2012
fourth quarter increased slightly to 28.9% from 27.6% for the
comparable prior quarter due to lower hotel revenue.
Selling, general and administrative expense ("SG&A Expense")
for the 2012 fourth quarter increased $2.6 million, $2.5 million of
which represents SG&A Expense from the Black Hawk operation for
which the fourth quarter of the prior year reflects no expense. The
primary drivers of the remaining $100 thousand of increased Monarch
corporate and Atlantis SG&A Expense are: higher Monarch
corporate payroll and benefits expense and higher use tax expense
partially offset by lower bad debt and lower marketing expense. Use
tax expense increased $115 thousand as a result of the Nevada
Department of Taxation ruling which subjects complimentary meals to
use tax effective February 2012. Following Nevada casino industry
practice, the Company did not recognize use tax on complimentary
meals in the prior year.
Credit Facility: During the 2012 fourth quarter, the Company
made net principal payments of $1.0 million against the outstanding
credit facility, decreasing it to $81.1 million at December 31,
2012. Capital expenditures of $2.4 million in the fourth quarter of
2012, primarily related to redesign and upgrade of the Black Hawk
facility, were funded out of operating cash flow.
Interest expense for the 2012 fourth quarter increased to $627
thousand from $271 thousand for the fourth quarter of 2011 due to
higher amounts of debt outstanding under the credit facility in the
2012 fourth quarter compared to the 2011 fourth quarter.
RESULTS FOR THE YEAR ENDED DECEMBER 31, 2012 The Company's
financial results include the Black Hawk operations subsequent to
the Acquisition Date. Periods prior to that date exclude Black
Hawk's operations.
Net Revenue:
Twelve months ended
December 31, Increase
------------------------- -------------------
2012 2011 $ %
------------ ------------ ------------ ------
Atlantis $140,928,245 $140,632,205 $ 296,040 0.2%
Black Hawk 29,428,719 - 29,428,719 n/a
------------ ------------ ------------ ------
Total net revenue $170,356,964 $140,632,205 $ 29,724,759 21.1%
============ ============ ============ ======
The increase in Atlantis net revenue for 2012 was due to higher
casino, food and beverage and other revenue partially offset by
lower hotel revenue and higher promotional allowance from increased
Complimentaries. Black Hawk net revenue of $29.4 million represents
11.4% growth over the $26.4 million the property generated during
the comparable prior year period before it was acquired by
Monarch.
Adjusted EBITDA(1):
Twelve months ended
December 31, Increase/(Decrease)
------------------------ -------------------
2012 2011 $ %
----------- ----------- ----------- ------
Atlantis $31,111,370 $33,310,003 $(2,198,633) -6.6%
Black Hawk (2) 9,630,100 - 9,630,100 n/a
----------- ----------- ----------- ------
40,741,470 33,310,003 7,431,467 22.3%
Corporate and other expense (4,584,220) (4,047,823) (536,397) 13.3%
----------- ----------- ----------- ------
Total Adjusted EBITDA $36,157,250 $29,262,180 $ 6,895,070 23.6%
=========== =========== =========== ======
(2) Represents Adjusted EBITDA from April 26, 2012 through
December 31, 2012.
Atlantis Adjusted EBITDA for 2012 decreased due primarily to
higher Complimentaries and marketing expense partially offset by
higher gross revenue. Black Hawk adjusted EBITDA represents the
period from April 26, 2012 through December 31, 2012. Black Hawk
adjusted EBITDA of $9.6 million reflects 45.6% growth over the $6.6
million Adjusted EBITDA reported for Black Hawk during the
comparable period of 2011 before it was acquired by Monarch.
Consolidated corporate and other expense increased $536 thousand
due primarily to higher payroll and benefits expense.
Consolidated Operating Expense: Casino operating expense as a
percentage of casino revenue improved slightly to 38.6% for 2012
compared to 39.3% for the prior year due primarily to higher casino
revenue. Food and beverage operating expense as a percentage of
food and beverage revenue for 2012 improved significantly to 41.9%
as compared to 46.3% for 2011 primarily due to operational
efficiencies combined with menu pricing strategies in anticipation
of higher commodity costs. Hotel operating expense as a percentage
of hotel revenue for 2012 increased slightly to 27.7% from 27.2%
for 2011 due to lower hotel revenue.
SG&A Expense for 2012 increased by $9.1 million, $6.6
million of which represents SG&A Expense from the Black Hawk
operation for which the prior year reflects no expense. The primary
drivers of the remaining $2.5 million of increased Monarch
corporate and Atlantis SG&A Expense are: higher marketing and
higher Monarch corporate salaries and benefits.
Credit Facility: The balance outstanding under the Company's
credit facility increased from $24.7 million at December 31, 2011
to $81.1 million at December 31, 2012. The $56.4 million increase
in the outstanding balance relates to advances drawn in the 2012
second quarter to complete the acquisition of Black Hawk. As a
result of the higher balance outstanding, interest expense in 2012
increased to $2.0 million from $914 thousand for 2011.
John Farahi, Monarch CEO Comment: Monarch's CEO and Co-Chairman
John Farahi commented: "Our fourth quarter and annual results for
Atlantis continue to reflect the ongoing difficult national and
northern Nevada economic climate. While we increased our market
share in both the fourth quarter and full year of 2012, higher
Complimentaries and marketing expense drove Adjusted EBITDA lower
than the prior year for both periods."
Referring to the Company's Black Hawk property, Mr. Farahi
added: "The integration of the Black Hawk operation has gone very
well. In the short time that we have owned the property, we have
increased net revenue and Adjusted EBITDA by 11.4% and 45.6%,
respectively, over the results achieved under the prior
ownership."
"We are in the process of completely redesigning and upgrading
the existing Black Hawk facility. We also are close to finalizing
conceptual plans that will utilize our adjacent land parcel to
expand the existing casino and convert the facility to an upscale
casino-resort. The plans include the addition of a hotel, a new and
larger parking structure, additional restaurants and other resort
amenities."
The Company's 2013 Annual Meeting of Stockholders will be held
on Friday, May 10, 2013 at 10:00 am local time at the Company's
Atlantis Casino Resort Spa, 3800 South Virginia Street in Reno,
Nevada. The record date for stockholders entitled to vote at the
Annual Meeting is Tuesday, March 12, 2013.
About Monarch Casino & Resort, Inc.
(NASDAQ: MCRI): Monarch Casino & Resort,
Inc., through its subsidiaries, owns and operates the Atlantis
Casino Resort Spa, a hotel/casino facility in Reno, Nevada, and the
Riviera Black Hawk casino in Black Hawk, Colorado. Black Hawk is
approximately 40 miles west of Denver. For additional information
on Monarch, visit Monarch's website at www.MonarchCasino.com.
The Atlantis features approximately 61,000 square feet of casino
space; 824 guest rooms; eight food outlets; two espresso and pastry
bars; a 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
race and 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. For more Atlantis Casino Resort Spa
information, please visit www.atlantiscasino.com or call
800.723.6500. Also see Atlantis on Facebook,
www.facebook.com/AtlantisCasinoResortSpa or on Twitter at
@AtlantisCasino.
The Riviera Black Hawk Casino, which opened in 2000, is the
first casino encountered by visitors arriving from Denver on
Highway 119 and features approximately 32,000 square feet of casino
space, approximately 700 slot machines, 10 table games, a 250 seat
buffet-style restaurant, a snack bar and a parking structure with
approximately 500 spaces. Monarch owns a 1.5 acre land parcel
contiguous to the Riviera Black Hawk Casino which is zoned for
gaming and can be utilized for future expansion. For more Riviera
Black Hawk information, please visit www.rivierablackhawk.com or
call 303.582.1000. Also see Riviera Black Hawk on Facebook,
www.facebook.com/RivieraCasino or on Twitter at @RivieraCasino.
Forward-Looking Information: 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, (iii)
plans, objectives and expectations regarding Black Hawk, (iv)
integration of Black Hawk; and (v) plans, construction, completion
and opening of new and expanded facilities at Black Hawk. 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.
(1) "Adjusted EBITDA" - see the separate Reconciliation of Net
Income to Adjusted EBITDA. Adjusted 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
Adjusted 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.
For additional information visit Monarch's website at
MonarchCasino.com
Monarch Casino & Resort, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------------- --------------------------
2012 2011 2012 2011
------------ ------------ ------------ ------------
(unaudited) (unaudited) (unaudited)
Revenues
Casino $ 36,117,315 $ 23,930,400 $134,613,470 $ 97,367,121
Food and beverage 11,875,467 10,835,969 47,238,348 42,933,675
Hotel 4,351,560 4,611,374 20,199,517 21,438,854
Other 2,305,198 2,197,984 8,994,127 8,025,571
------------ ------------ ------------ ------------
Gross revenues 54,649,540 41,575,727 211,045,462 169,765,221
Less promotional
allowances (11,000,973) (7,563,597) (40,688,498) (29,133,016)
------------ ------------ ------------ ------------
Net revenues 43,648,567 34,012,130 170,356,964 140,632,205
------------ ------------ ------------ ------------
Operating expenses
Casino 14,451,256 9,636,182 52,000,036 38,275,637
Food and beverage 5,116,629 5,040,700 19,774,844 19,861,195
Hotel 1,257,809 1,272,614 5,585,800 5,824,382
Other 724,874 714,164 2,978,007 2,891,231
Selling, general
and
administrative 14,860,998 12,284,155 55,228,994 46,137,232
Depreciation and
amortization 4,368,313 3,234,539 16,650,604 13,379,538
Building
demolition
expense - - - 3,519,148
Acquisition
expense - 536,207 2,155,521 973,607
------------ ------------ ------------ ------------
Total operating
expenses 40,779,879 32,718,561 154,373,806 130,861,970
------------ ------------ ------------ ------------
Income from
operations 2,868,688 1,293,569 15,983,158 9,770,235
------------ ------------ ------------ ------------
Other expenses
Interest expense (627,325) (270,803) (2,023,957) (914,308)
------------ ------------ ------------ ------------
Total other
expense (627,325) (270,803) (2,023,957) (914,308)
------------ ------------ ------------ ------------
Income before
income taxes 2,241,363 1,022,766 13,959,201 8,855,927
Provision for income
taxes (901,720) (455,473) (5,048,353) (3,180,073)
------------ ------------ ------------ ------------
Net income $ 1,339,643 $ 567,293 $ 8,910,848 $ 5,675,854
============ ============ ============ ============
Earnings per share
of common stock
Net income
Basic $ 0.08 $ 0.04 $ 0.55 $ 0.35
Diluted $ 0.08 $ 0.03 $ 0.55 $ 0.35
Weighted average
number of common
shares and
potential common
shares outstanding
Basic 16,141,555 16,138,158 16,140,078 16,138,158
Diluted 16,257,986 16,245,649 16,250,088 16,231,325
Monarch Casino & Resort, Inc.
Condensed Consolidated Balance Sheets
December 31,
----------------------------
2012 2011
------------- -------------
ASSETS (unaudited)
Current assets
Cash and cash equivalents $ 19,043,213 $ 13,582,659
Receivables, net 2,456,883 2,299,847
Inventories 2,382,802 2,165,109
Prepaid expenses and other current assets 2,636,422 6,198,882
Deferred income taxes 5,425,848 615,912
------------- -------------
Total current assets 31,945,168 24,862,409
------------- -------------
Property and equipment
Land 27,914,847 19,214,847
Land improvements 6,561,729 6,359,279
Buildings 150,843,298 135,643,298
Building improvements 11,681,100 11,575,883
Furniture and equipment 132,946,374 117,300,741
Leasehold improvements 1,346,965 1,346,965
------------- -------------
331,294,313 291,441,013
Less accumulated depreciation and
amortization (152,868,719) (138,227,868)
------------- -------------
Net property and equipment 178,425,594 153,213,145
Other assets
Goodwill 25,110,810 -
Intangible assets, net 10,204,691 -
Deferred income taxes 1,214,113 -
Other assets, net 1,219,579 1,524,050
------------- -------------
Total other assets 37,749,193 1,524,050
------------- -------------
Total assets $ 248,119,955 $ 179,599,604
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 8,061,570 $ 8,693,395
Accrued expenses 17,836,194 13,829,540
Federal income taxes payable 274,401 768,640
------------- -------------
Total current liabilities 26,172,165 23,291,575
------------- -------------
Long-term debt 81,100,000 24,680,000
Deferred income taxes - 1,112,049
------------- -------------
Total liabilities 107,272,165 49,083,624
------------- -------------
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; 16,147,324 outstanding at December
31, 2012 and 16,138,158 at December 31,
2011 190,963 190,963
Additional paid-in capital 34,363,690 33,178,345
Treasury stock, 2,948,976 shares at December
31, 2012 and 2,958,142 at December 31,
2011, at cost (48,306,046) (48,541,663)
Retained earnings 154,599,183 145,688,335
------------- -------------
Total stockholders' equity 140,847,790 130,515,980
------------- -------------
Total liability and stockholder's equity $ 248,119,955 $ 179,599,604
============= =============
Monarch Casino & Resort, Inc.
Reconciliation of Adjusted EBITDA (1) to Net Income
(Unaudited)
The following table sets forth a reconciliation of Adjusted EBITDA(1), a
non-GAAP financial measure, to net income, a GAAP financial measure.
Three months ended Twelve months ended
December 31, December 31,
------------------------ --------------------------
2012 2011 2012 2011
----------- ----------- ------------ ------------
Adjusted EBITDA
Atlantis $ 5,850,257 $ 6,453,391 $ 31,111,370 $ 33,310,003
Black Hawk (a) 2,998,758 - 9,630,100 -
----------- ----------- ------------ ------------
8,849,015 6,453,391 40,741,470 33,310,003
Corporate and other
expense (1,182,305) (1,008,395) (4,584,220) (4,047,823)
----------- ----------- ------------ ------------
Total Adjusted
EBITDA $ 7,666,710 $ 5,444,996 $ 36,157,250 $ 29,262,180
Expenses:
Stock based
compensation (429,709) (380,681) (1,367,967) (1,619,652)
Depreciation and
amortization (4,368,313) (3,234,539) (16,650,604) (13,379,538)
Acquisition expense - (536,207) (2,155,521) (973,607)
Building demolition
expense - - - (3,519,148)
Interest expense (627,325) (270,803) (2,023,957) (914,308)
Provision for income
taxes (901,720) (455,473) (5,048,353) (3,180,073)
----------- ----------- ------------ ------------
Net income $ 1,339,643 $ 567,293 $ 8,910,848 $ 5,675,854
=========== =========== ============ ============
(a) We acquired Riviera Black Hawk Casino on April 26, 2012.
(1) "Adjusted EBITDA" consists of net income plus provision for
income taxes, stock based compensation expense, other one-time
non-cash charges, interest expense, depreciation and amortization
less interest income and any benefit for income taxes. Adjusted
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 Adjusted 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 of Monarch (775) 825-4700 Email Contact
John Farahi CEO of Monarch (775) 825-4700 Email Contact
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