8-K 1 earnings8k2q07.htm 8K RELATED TO MONARCH CASINO & RESORT, INC.'S 2ND QUARTER 2007 EARNINGS RELEASE 8K Related to Monarch Casino & Resort, Inc.'s 2nd Quarter 2007 Earnings Release

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):
July 25, 2007
 
Monarch Casino & Resort, Inc.
(Exact name of registrant as specified in its charter)

 
Nevada
 
0-22088
 
88-0300760
 
(State or other jurisdiction
(Commission
(IRS Employer
of incorporation)
File Number)
Identification No.)

 
3800 South Virginia Street, Reno, Nevada
 
89502
(Address of principal executive offices)
(Zip Code)
   
Registrant’s telephone number, including area code:
(775) 335-4600
 
Not applicable.
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

— —
 
 
 
 

Item 2.02 Results of Operations and Financial Condition

On July 25, 2007, Monarch Casino & Resort, Inc. issued a press release announcing its financial results for the second quarter ended June 30, 2007. A copy of the press release is attached to this Current Report as Exhibit 99.1.


Item 9.01 Financial Statements and Exhibits.

Exhibits.

99.1 Press Release, dated July 25, 2007, issued by Monarch Casino & Resort, Inc.


— —
 
 
 
 

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
Monarch Casino and Resort, Inc.
   
Date: July 26, 2007
/s/ Ronald Rowan
 
Ronald Rowan
Chief Financial Officer and Treasurer


— —
 
 
 
 

Exhibit 99.1

MONARCH CASINO REPORTS RECORD BREAKING SECOND QUARTER RESULTS

·  
Net revenue of $41.6 million
·  
Income from operations of $10.1 million
·  
EBITDA(1) of $12.1 million
·  
Diluted EPS of 36 cents

RENO, NV - July 25, 2007 - Monarch Casino & Resort, Inc. (NASDAQ: MCRI) (the "Company"), owner of the Atlantis Casino Resort Spa in Reno, Nevada, today announced the highest net revenue, income from operations, EBITDA (1) and diluted EPS for a second quarter.
 
The Company reported record net revenue for a second quarter of $41.6 million, a 10.5% increase over the second quarter of 2006, and announced that the gross revenue generated by each of its revenue centers also was the highest ever reported for a second quarter. Specifically, casino, food and beverage and hotel operations each drove gross revenue increases over the same quarter of the prior year of 13.6%, 4.3% and 9.0%, respectively. Gross casino revenue of $29.3 was the highest ever reported by the Company for any quarter.
 
The Company announced quarterly income from operations of $10.1 million, EBITDA(1) of $12.1 million and diluted EPS of 36 cents, each of which also were the highest ever reported for a second quarter. Each of the Company’s revenue centers reported improved operating margins as compared to the second quarter of the prior year while selling, general and administrative expense increased slightly by 1.8% to $12.8 million.
 
The Company remained debt-free during the quarter and increased its cash balance to $51.4 million as of June 30, 2007, an increase of $14.4 million from the $37.0 million balance at December 31, 2006.
 
Monarch’s CEO and Co-Chairman John Farahi commented on the Company’s performance: “Our team continues to excel and has delivered another in what has been a long string of record quarters. Total gaming revenues in the Reno market, as reported by the Nevada Gaming Commission, have been slightly lower than in the prior year for eight out of the last ten reported months. We have been able to overcome this market softness by continuing to deliver an experience that engenders loyal patronage from our existing guests and attracts additional guests to the Atlantis.” Mr. Farahi added, “As was previously announced, we broke ground on our latest expansion of the Atlantis in June and expect construction to take approximately twelve months.”
 
Monarch Casino & Resort, Inc., through its wholly-owned subsidiary, owns and operates the tropically-themed Atlantis Casino Resort Spa 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 features a 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 and growth. Currently, the Company uses it 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 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: Ron Rowan, CFO at (775) 825-4700 or rrowan@monarchcasino.com
John Farahi, CEO at (775) 825-4700 or JohnFarahi@monarchcasino.com

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


























(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.

— —
 
 
 
 

Monarch Casino & Resort, Inc.
Condensed Consolidated Statements of Income

 
  
Three Months Ended 
Six Months Ended
 
  
June 30, 
June 30,
     
2007
 
 
2006
 
 
2007
 
 
2006
  
 
    
(UNAUDITED) 
    
( UNAUDITED)
 
 
(UNAUDITED)
 
 
(UNAUDITED)
 
Revenues
                          
Casino
  
$
29,277,718
  
$
25,780,512
  
$
54,575,990
  
$
49,904,559
  
Food and beverage
    
10,568,173
    
10,135,342
    
21,072,388
    
19,880,159
  
Hotel
    
7,027,156
    
6,445,709
    
13,855,123
    
12,479,644
  
Other
    
1,285,828
    
1,304,549
    
2,474,451
    
2,394,599
  
 Gross revenues
    
48,158,875
    
43,666,112
    
91,977,952
    
84,658,961
  
Less promotional allowances
    
(6,597,555
)
  
(6,043,336
)
  
(12,635,041
)
  
(11,431,050
)
 Net revenues
    
41,561,320
    
37,622,776
    
79,342,911
    
73,227,911
  
Operating expenses
                          
Casino
    
9,268,084
    
8,479,719
    
17,737,421
    
16,491,881
  
Food and beverage
    
4,866,969
    
4,700,015
    
9,835,686
    
9,490,786
  
Hotel
    
2,111,765
    
2,002,146
    
4,255,105
    
4,105,869
  
Other
    
377,437
    
417,830
    
741,057
    
732,284
  
Selling, general and administrative
    
12,792,008
    
12,590,426
    
24,322,811
    
23,475,677
  
Depreciation and amortization
    
2,064,970
    
2,144,481
    
4,140,416
    
4,291,239
  
 Total operating expenses
    
31,481,233
    
30,334,617
    
61,032,496
    
58,587,736
  
 Income from operations
    
10,080,087
    
7,288,159
    
18,310,415
    
14,640,175
  
                           
Other income (expense)
                          
Interest income
    
473,537
    
35,975
    
817,421
    
36,501
  
Interest expense
    
(3,174
)
  
-
    
(152,274
)
  
(59,444
)
 Total other income (expense)
    
470,363
    
35,975
    
665,147
    
(22,943
)
                           
 Income before income taxes
    
10,550,450
    
7,324,134
    
18,975,562
    
14,617,232
  
                           
Provision for income taxes
    
(3,650,000
)
  
(2,501,902
)
  
(6,580,000
)
  
(5,026,902
)
                         
 Net income
  
$
6,900,450
  
$
4,822,232
  
$
12,395,562
  
$
9,590,330
  
                           
Earnings per share of common stock:
                          
 Basic
  
$
0.36
  
$
0.25
  
$
0.65
  
$
0.51
  
 Diluted
  
$
0.36
  
$
0.25
  
$
0.64
  
$
0.50
  
                           
Weighted average number of common
                          
shares and potential common
                          
shares outstanding:
                          
 Basic
    
19,091,756
    
18,950,687
    
19,081,173
    
18,918,321
  
 Diluted
    
19,366,442
    
19,282,501
    
19,345,213
    
19,268,889
  



— —
 
 
 
 

Monarch Casino & Resort, Inc.
Condensed Consolidated Balance Sheets

   
June 30,
  
December 31,
  
   
2007
  
2006
  
ASSETS
  
(UNAUDITED)
      
Current assets
          
Cash
  
$
51,416,738
  
$
36,985,187
  
Receivables, net
    
3,625,668
    
3,268,970
 
Inventories
    
1,494,922
    
1,471,667
 
Prepaid expenses
    
3,007,904
    
2,833,126
 
Deferred income taxes
    
1,340,232
    
965,025
 
Total current assets
    
60,885,464
    
45,523,975
 
               
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
    
10,435,062
   
10,435,062
 
Furniture & equipment
    
71,637,884
    
72,708,061
 
Leasehold improvements
    
1,346,965
   
1,346,965
 
     
175,881,086
    
176,951,263
 
Less accumulated depreciation and amortization
    
(88,263,060
)
  
(84,325,578
)
     
87,618,026
    
92,625,685
 
Construction in progress
    
6,131,220
    
-
  
Net property and equipment
    
93,749,246
    
92,625,685
 
Other assets, net
    
87,235
    
231,247
 
Total assets
  
$
154,721,945
  
$
138,380,907
  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
              
Current liabilities
              
Accounts payable
 
$
8,617,963
  
$
8,590,669
  
Construction payable
    
1,767,610
    
-
  
Accrued expenses
    
9,938,770
    
9,878,851
 
Federal income taxes payable
    
947,056
    
16,457
 
Total current liabilities
    
21,271,399
    
18,485,977
 
               
Deferred income taxes
    
3,883,614
    
4,248,614
 
               
Stockholders' equity
              
Preferred stock, $.01 par value, 10,000,000 shares
              
authorized; none issued
    
-
   
-
 
Common stock, $.01 par value, 30,000,000 shares
              
authorized; 19,094,900 shares issued;
              
19,094,900 outstanding at 6/30/07
              
19,065,968 outstanding at 12/31/06
    
190,949
    
190,726
 
Additional paid-in capital
    
24,705,731
    
23,205,045
 
Treasury stock, 0 shares at 6/30/07
              
6,582 shares at 12/31/06, at cost
    
-
   
(24,145
)
Retained earnings
   
104,670,252
    
92,274,690
 
Total stockholders' equity
    
129,566,932
    
115,646,316
 
Total liability and stockholder's equity
  
$
154,721,945
  
$
138,380,907
  


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Monarch Casino & Resort, Inc.
Reconciliation of Net Income to EBITDA (1)

 
Three Months Ended
June 30, 
Six Months Ended
June 30,
 
    
2007
(unaudited) 
 
 
2006
(unaudited)
 
 
2007
(unaudited)
 
 
2006
(unaudited)
 
Net income
  
$
6,900,450
  
$
4,822,232
  
$
12,395,562
  
$
9,590,330
  
Adjustments
                          
 Provision for income taxes
    
3,650,000
    
2,501,902
    
6,580,000
    
5,026,902
  
 Interest expense
    
3,174
    
-
    
152,274
    
59,444
  
 Depreciation & amortization
    
2,064,970
    
2,144,481
    
4,140,416
    
4,291,239
  
Interest income
    
(473,537
)
  
(35,975
)
  
(817,421
)
  
(36,501
)
EBITDA (1) (unaudited)
  
$
12,145,057
  
$
9,432,640
  
$
22,450,831
  
$
18,931,414
  



















(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.