-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MzXg00aR1Nn6FDzY1J8TYR2QZ4/HuwLzC+UiFpg5fPEFXaQNM8bPPtCeY/gxr830 xscgGes74qsC1RlRkw2j0Q== 0000907242-04-000017.txt : 20041027 0000907242-04-000017.hdr.sgml : 20041027 20041026173419 ACCESSION NUMBER: 0000907242-04-000017 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20041025 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041027 DATE AS OF CHANGE: 20041026 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MONARCH CASINO & RESORT INC CENTRAL INDEX KEY: 0000907242 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 880300760 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22088 FILM NUMBER: 041097541 BUSINESS ADDRESS: STREET 1: 1175 W MOANA LANE STREET 2: STE 200 CITY: RENO STATE: NV ZIP: 89509 BUSINESS PHONE: 7758253355 MAIL ADDRESS: STREET 1: 1175 W MOANA LANE STREET 2: STE 200 CITY: RENO STATE: NV ZIP: 89509 8-K 1 q304earn8k.txt 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, 2004 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 ---------------------------------------------------- (Registrant's telephone number, including area code) NOT APPLICABLE ---------------------------------------------------- (Former name or former address, if changed since last report) ITEM 2.02 Results of Operations and Financial Condition On October 25, 2004, Monarch Casino & Resort, Inc. (the "Company") issued a press release reporting the Company's financial results for the third quarter ended September 30, 2004. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. ITEM 8.01 Other Informaiton Additional disclosures regarding the Company?s third quarter ended September 30, 2004: -Hotel occupancy at the Company?s Atlantis Casino Resort for the three months ended September 30, 2004 was 98.2%, unchanged when compared to the three months ended September 30, 2003. For the nine-month period ended September 30, 2004, the hotel occupancy was 95.9%, an improvement over the 94.3% during the same period of 2003. -The average daily room rate (?ADR?) at the Atlantis was $71.22 for the three months ended September 30, 2004, versus $64.48 for the three months ended September 30, 2003. For the nine months ended September 30, 2004, the ADR was $65.53, an improvement over the $58.93 ADR during the nine months ended September 30, 2003. -The decrease in depreciation expense during the third quarter of 2004 as compared to the third quarter of 2003 was mainly due to the fact that some of the assets from the Company?s previous major expansion had fully depreciated. -The increase in selling, general and administrative expenses during the third quarter ended September 30, 2004, was mainly attributable to increases in bonuses, insurance costs and other general operating expenses. ITEM 9.01 Financial Statements and Exhibits (c) EXHIBITS 99.1 Text of press release dated October 25, 2004. -2- 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 26, 2004 By: /s/ Ben Farahi ------------------------- Name: Ben Farahi Title: Chief Financial Officer, Treasurer and Secretary -3- Exhibit 99.1 PRESS RELEASE MONARCH CASINO & RESORT, INC. ANNOUNCES ALL-TIME RECORDS FOR THIRD QUARTER ENDED SEPTEMBER 30, 2004 - 9-MONTH EPS BEATS RECORD YEAR 2003 TOTAL - RENO, NV?October 25, 2004? Monarch Casino & Resort, Inc. (Nasdaq: MCRI) (the "Company") announced its second successive all-time Company record for the quarter ended September 30, 2004. The Company?s net income, earnings per share, EBITDA (1), casino revenue, hotel revenue, and net revenue during the 2004 third quarter eclipsed all such previous quarterly results, including its previous record-setting second quarter ended June 30, 2004. Net income for the Company during the third quarter ended September 30, 2004, was $5,552,438, or $0.59 per diluted share. This marks a 51.5% improvement over net income of $3,665,814, and $0.39 per diluted share, in the third quarter ended September 30, 2003, and a 27.6% improvement over its previous record quarterly net income set in the second quarter of 2004. The Company?s nine-month earnings per share of $1.35 is a 32% improvement over the full year 2003 per share earnings of $1.02. EBITDA (1) for the third quarter was $10,858,147, or 23.4% better than the $8,797,634 EBITDA (1) from the third quarter last year. Revenues in all major categories increased significantly in the third quarter of 2004 year over year. Casino revenues were $22,642,767 compared to $19,893,383, an increase of 13.8%. Food and beverage revenues increased 5.9%, from $9,146,124 to $9,689,843. Hotel revenues also jumped significantly, from $6,259,807 to $7,021,432, a 12.2% increase. Other revenues decreased approximately $103,000, or 8.8%. The strong increases in casino, food and beverage and hotel revenues combined to increase the Company?s gross revenues by 10.8%. Promotional allowances increased only 6.7%, leading to an 11.5% improvement in net revenue during the 2004 third quarter over the 2003 third quarter. Operating expenses in the quarter ended September 30, 2004, increased only 3.9% as compared to the quarter ended September 30, 2003, resulting in a 42.4% increase in income from operations. The increase in revenues and smaller increase in operating expenses, combined with a 46.4% decrease in interest expense and stockholder guarantee fee expense, led to an impressive 51.5% increase in net income during the 2004 third quarter over the 2003 third quarter. Commenting on the Company?s all-time record quarter, John Farahi, its Chief Executive Officer and Co-Chairman, said: ?Obviously, we are very pleased about the record results once again. The increase in our revenues and operating margins are attributable to our superior product and service. All in all, about 52% of the additional revenue flowed through to the bottom line, resulting in a 5.4 percentage point increase in operating margin year over year to 25.1%, our best ever. I am extremely proud of all our team members? continuing efforts and valuable contributions. We continue to benefit from local population growth, constant physical improvement to the property, increases in convention bookings at the Reno-Sparks Convention Center and management?s continuous attention to detail.? Mr. Farahi later added: ?We are also very excited about our latest physical enhancement to the Atlantis, a new expansive paver driveway and entrance to the Atlantis that are accentuated with three colossal, show-controlled water fountains. The water feature and -4- expanded driveway, which opened on September 30, 2004, is another distinguishing feature which will both provide a more customer efficient entrance to our resort and enhance our mystique as one of the premier hotel casinos in northern Nevada.? Continuing its trend of aggressively paying down debt, the Company reduced its bank debt by $6.5 million during the third quarter of 2004, and by $14.2 million for the first nine months of 2004. The Company?s long-term debt balance of $32.8 million at September 30, 2004, represented 95.6% of the Company?s trailing twelve months EBITDA (1). 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 the 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 37 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) 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. -5- MONARCH CASINO & RESORT, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Nine Months Ended September 30, September 30, -------------------------- -------------------------- 2004 2003 2004 2003 ------------ ------------ ------------ ------------ Revenues Casino............................. $ 22,642,767 $ 19,893,383 $ 63,490,456 $ 56,247,540 Food and beverage.................. 9,689,843 9,146,124 27,956,559 26,093,733 Hotel.............................. 7,021,432 6,259,807 18,974,036 16,483,022 Other.............................. 1,066,081 1,169,165 2,874,923 3,040,978 ------------ ------------ ------------ ------------ Gross revenues.................. 40,420,123 36,468,479 113,295,974 101,865,273 Less promotional allowances........ (5,359,370) (5,021,786) (15,035,242) (14,178,582) ------------ ------------ ------------ ------------ Net revenues.................... 35,060,753 31,446,693 98,260,732 87,686,691 ------------ ------------ ------------ ------------ Operating expenses Casino............................. 7,870,607 7,550,337 22,977,956 22,035,163 Food and beverage.................. 4,912,576 4,530,680 14,122,051 13,129,591 Hotel.............................. 1,949,466 1,846,802 6,006,341 5,231,101 Other.............................. 352,855 357,879 1,047,509 971,121 Selling, general and administrative.................... 9,117,102 8,363,361 25,972,178 24,478,855 Depreciation and amortization...... 2,047,706 2,611,621 7,687,196 7,928,450 ------------ ------------ ------------ ------------ Total operating expenses........ 26,250,312 25,260,680 77,813,231 73,774,281 ------------ ------------ ------------ ------------ Income from operations.......... 8,810,441 6,186,013 20,447,501 13,912,410 ------------ ------------ ------------ ------------ Other expenses Interest expense................... (333,483) (372,063) (1,125,121) (1,244,145) Stockholder guarantee fee expense.. - (250,334) (136,164) (792,613) ------------ ------------ ------------ ------------ Total other expenses............ (333,483) (622,397) (1,261,285) (2,036,758) ------------ ------------ ------------ ------------ Income before income taxes...... 8,476,958 5,563,616 19,186,216 11,875,652 Provision for income taxes........... 2,924,520 1,897,802 6,523,520 4,040,802 ------------ ------------ ------------ ------------ Net income...................... $ 5,552,438 $ 3,665,814 $ 12,662,696 $ 7,834,850 ============ ============ ============ ============ Earnings per share of common stock Net income Basic............................ $ 0.59 $ 0.39 $ 1.35 $ 0.84 Diluted.......................... $ 0.59 $ 0.39 $ 1.35 $ 0.83 Weighted average number of common shares and potential common shares outstanding Basic.......................... 9,388,922 9,339,567 9,368,824 9,379,446 Diluted........................ 9,408,872 9,373,006 9,397,211 9,411,771
-6- MONARCH CASINO & RESORT, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31, 2004 2003 ------------- ------------- (Unaudited) ASSETS Current assets Cash............................................ $ 6,893,209 $ 9,711,310 Receivables, net................................ 2,711,752 2,818,727 Federal income tax refund receivable............ - 756,698 Inventories..................................... 1,227,314 1,245,967 Prepaid expenses................................ 2,741,176 2,234,773 Deferred income taxes........................... 1,071,457 542,457 ------------- ------------- Total current assets......................... 14,644,908 17,309,932 ------------- ------------- 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........................... 7,060,680 6,304,642 Furniture and equipment......................... 65,241,991 63,230,354 Leasehold improvement........................... 1,200,000 - ------------- ------------- 166,024,652 162,056,977 Less accumulated depreciation and amortization.. (67,575,337) (63,618,047) ------------- ------------- Net property and equipment................... 98,449,315 98,438,930 ------------- ------------- Other assets, net................................. 429,495 128,263 ------------- ------------- Total assets................................. $ 113,523,718 $ 115,877,125 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current maturities of long-term debt............ $ - $ 6,059,591 Accounts payable................................ 6,234,682 8,407,887 Accrued expenses................................ 5,810,263 6,707,257 Federal income taxes payable.................... 1,390,981 - ------------- ------------- Total current liabilities.................... 13,435,926 21,174,735 Long-term debt, less current maturities........... 32,800,000 41,125,000 Deferred income taxes............................. 5,639,426 4,854,587 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; 9,536,275 issued; 9,405,224 outstanding at 09/30/2004, 9,340,328 outstanding at 12/31/2003............ 95,363 95,363 Additional paid-in capital...................... 17,219,376 17,432,635 Treasury stock, 131,051 shares at 09/30/2004, 195,947 shares at 12/31/2003, at cost......................... (961,488) (1,437,614) Retained earnings............................... 45,295,115 32,632,419 ------------- ------------- Total stockholders' equity................... 61,648,366 48,722,803 ------------- ------------- Total liabilities and stockholders' equity... $ 113,523,718 $ 115,877,125 ============= =============
-7- MONARCH CASINO & RESORT, INC. RECONCILIATION OF NET INCOME TO EBITDA (1)
Three Months Ended Nine Months Ended September 30, September 30, ----------------------- ------------------------ 2004 2003 2004 2003 (unaudited) (unaudited) (unaudited) (unaudited) ----------- ----------- ----------- ----------- Net income......................... $ 5,552,438 $3,665,814 $12,662,696 $7,834,850 Adjustments: Provision for income taxes....... 2,924,520 1,897,802 6,523,520 4,040,802 Stockholder guarantee fee expense - 250,334 136,164 792,613 Interest expense................. 333,483 372,063 1,125,121 1,244,145 Depreciation and amortization.... 2,047,706 2,611,621 7,687,196 7,928,450 ----------- ----------- ----------- ----------- EBITDA (1) $10,858,147 $8,797,634 $28,134,697 $21,840,860 =========== =========== =========== ===========
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