RENO, NV--(Marketwired - Jul 24, 2013) - Monarch Casino & Resort, Inc. (
The Company reported the following net revenues for the three month periods ended June 30, 2013 and 2012, respectively. Note that Black Hawk was acquired on April 26, 2012 (the "Acquisition Date"); therefore, 2012 Black Hawk information represents only results subsequent to the Acquisition Date.
| Three months ended June 30, | Increase | |||||||||||||
| 2013 | 2012 | $ | % | |||||||||||
| Net revenue | ||||||||||||||
| Atlantis | $ | 37,231,961 | $ | 34,468,122 | $ | 2,763,839 | 8.0 | % | ||||||
| Black Hawk | 12,419,133 | 8,003,028 | 4,416,105 | 55.2 | % | |||||||||
| Net revenue | $ | 49,651,094 | $ | 42,471,150 | $ | 7,179,944 | 16.9 | % | ||||||
Atlantis net revenue for the second quarter of 2013 increased primarily due to higher casino and hotel revenue. The increase in Black Hawk net revenue is primarily due to the fact that the 2013 second quarter reflects a complete three-month period (91 days) while the 2012 second quarter only reflects Black Hawk revenue subsequent to the Acquisition Date (65 days). However, for illustration purposes only, Black Hawk second quarter 2013 net revenue for the period subsequent to April 26, 2013 increased 16% when compared to the same period subsequent to the Acquisition Date for the 2012 second quarter.
| Three months ended June 30, | Increase(Decrease) | |||||||||||||
| 2013 | 2012 | $ | % | |||||||||||
| Adjusted EBITDA (1) | ||||||||||||||
| Atlantis | $ | 11,173,417 | $ | 7,789,198 | $ | 3,384,219 | 43.4 | % | ||||||
| Black Hawk | 4,821,254 | 2,546,186 | 2,275,068 | 89.4 | % | |||||||||
| 15,994,671 | 10,335,384 | 5,659,287 | 54.8 | % | ||||||||||
| Corporate and other expense | (1,159,940 | ) | (747,950 | ) | (411,990 | ) | 55.1 | % | ||||||
| Total Adjusted EBITDA | $ | 14,834,731 | $ | 9,587,434 | $ | 5,247,297 | 54.7 | % | ||||||
The Company generated record all-time Adjusted EBITDA of $14.8 million in the second quarter of 2013 representing a "Flow Through Rate" (2) of 73.1%.
After eliminating the effect of the $560 thousand nonrecurring sales tax benefit described in the consolidated operating expense section below, Atlantis Adjusted EBITDA increased $2.8 million or 36.3% compared to prior year's second quarter. This $2.8 million increase was due primarily to higher net revenue combined with lower selling, general and administrative ("SG&A Expense") expenses.
The increase in Black Hawk Adjusted EBITDA is primarily due to the fact that the 2013 second quarter reflects a complete three-month period while the 2012 second quarter only reflects results subsequent to the Acquisition Date. However, for illustrative purposes only, Black Hawk second quarter 2013 Adjusted EBITDA for the period subsequent to April 26, 2013 increased 47% when compared to the same period subsequent to the Acquisition Date for the 2012 second quarter.
The increase in corporate and other expense included in SG&A expense is primarily related to higher salaries and benefits expense.
Consolidated Operating Expense : Casino operating expense as a percentage of casino revenue ("Casino Expense Margin") improved to 37.5% for the second quarter of 2013 compared to 40.8% for the second quarter of the prior year due primarily to lower Atlantis complimentaries expense and the inclusion of Black Hawk for an entire quarter which has a lower Casino Expense Margin than Atlantis.
Food and beverage operating expense as a percentage of food and beverage revenue for the 2013 second quarter remained relatively flat at 40.0% for the 2013 second quarter compared to 39.2% for the 2012 second quarter. Hotel operating expense as a percentage of hotel revenue for the 2013 second quarter improved to 27.1% from 29.2% for the comparable prior year quarter due primarily to higher hotel revenue.
SG&A Expense remained flat at $12.6 million for both the 2013 and 2012 second quarters. The Company recognized a nonrecurring benefit of $560 thousand during the 2013 second quarter from the reversal of accrued sales tax expense related to complimentary and employee meals in response to a ruling by the Nevada Tax Commission (affecting the entire Nevada hotel-casino industry) that complimentary and employee meals were no longer subject to taxation.
Credit Facility : During the 2013 second quarter, the Company made net principal payments of $7.0 million reducing the outstanding credit facility to $64.8 million at June 30, 2013. Capital expenditures of $3.0 million in the second quarter of 2013 were funded out of operating cash flow and primarily represent costs related to the Black Hawk master development plan and capital expenditures associated with the ongoing redesign and upgrade of the existing Black Hawk facility.
Interest expense for the 2013 second quarter decreased to $516 thousand from $577 thousand for the second quarter of 2012 due to a lower interest rate combined with lower outstanding debt in the 2013 second quarter compared to the 2012 second quarter.
Reclassification of 2012 Expenses and Revenues: Certain promotional allowance, casino, food and beverage, and SG&A expenses and certain casino and food and beverage revenues in the 2012 unaudited consolidated financial statements have been reclassified to conform to the 2013 presentation. These reclassifications had no effect on the previously reported income from operations, net income, consolidated Adjusted EBITDA or statements of cash flows.
John Farahi, Monarch CEO and Co-Chairman Comment : Monarch's CEO and Co-Chairman John Farahi commented: "Our Atlantis and Black Hawk teams continue to deliver impressive results. On a consolidated basis in the second quarter of 2013, we achieved increased revenues, Adjusted EBITDA and net income, while also achieving a Flow Through rate of 73%."
Referring to the Black Hawk expansion plans, Mr. Farahi commented: "As we announced last quarter, our master planned expansion was approved by the Black Hawk City Council subject to certain conditions, meanwhile we are in the process of completely redesigning and upgrading the existing Black Hawk facility. Once completed, the approved master plan will nearly double the existing casino space, converting the facility into a full-scale, high end resort including a 335 foot hotel tower with 507 guest rooms and suites, an upscale spa and pool facility, four restaurants, additional bars, and associated support facilities. The planned ten story parking structure, together with existing parking, includes 1,551 parking spaces. Once the detailed design and construction plans are completed, we intend to finalize the cost estimate and construction timeline for the expansion project and secure necessary financing. We remain on-track to announce that cost estimate and construction timeline in late 2013."
About Monarch Casino & Resort, Inc. (
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 is included in the city approved master planned 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, financing, 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 all forward looking statements, including 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.
(2) "Flow Through Rate" is calculated as the increase in Adjusted EBITDA over the comparable prior year period divided by the increase in net revenue and 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 calculation provides a measure of operational efficiency.
For additional information visit Monarch's website at MonarchCasino.com
| Monarch Casino & Resort, Inc. | ||||||||||||||||||
| Consolidated Statements of Income | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| June 30, | June 30, | |||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||
| Revenue | ||||||||||||||||||
| Casino | $ | 39,792,123 | $ | 33,452,976 | $ | 76,787,306 | $ | 57,175,297 | ||||||||||
| Food and beverage | 12,494,373 | 11,788,422 | 24,385,133 | 22,092,620 | ||||||||||||||
| Hotel | 6,368,349 | 5,305,178 | 11,679,577 | 9,673,620 | ||||||||||||||
| Other | 2,314,753 | 2,245,285 | 4,644,733 | 4,382,641 | ||||||||||||||
| Gross revenue | 60,969,598 | 52,791,861 | 117,496,749 | 93,324,178 | ||||||||||||||
| Less promotional allowances | (11,318,504 | ) | (10,320,711 | ) | (22,241,018 | ) | (17,953,767 | ) | ||||||||||
| Net revenue | 49,651,094 | 42,471,150 | 95,255,731 | 75,370,411 | ||||||||||||||
| Operating expenses | ||||||||||||||||||
| Casino | 14,923,240 | 13,632,111 | 29,429,025 | 23,765,661 | ||||||||||||||
| Food and beverage | 4,994,464 | 4,620,609 | 9,838,898 | 9,064,765 | ||||||||||||||
| Hotel | 1,728,556 | 1,546,694 | 3,132,434 | 2,841,888 | ||||||||||||||
| Other | 813,181 | 765,841 | 1,564,824 | 1,492,065 | ||||||||||||||
| Selling, general and administrative | 12,643,311 | 12,635,327 | 24,913,865 | 22,633,511 | ||||||||||||||
| Depreciation and amortization | 4,379,873 | 4,260,205 | 9,023,308 | 7,635,289 | ||||||||||||||
| Acquisition expense | - | 1,625,930 | - | 1,700,521 | ||||||||||||||
| Total operating expenses | 39,482,625 | 39,086,717 | 77,902,354 | 69,133,700 | ||||||||||||||
| Income from operations | 10,168,469 | 3,384,433 | 17,353,377 | 6,236,711 | ||||||||||||||
| Other expenses | ||||||||||||||||||
| Interest expense | (516,231 | ) | (577,000 | ) | (1,082,327 | ) | (905,661 | ) | ||||||||||
| Total other expense | (516,231 | ) | (577,000 | ) | (1,082,327 | ) | (905,661 | ) | ||||||||||
| Income before income taxes | 9,652,238 | 2,807,433 | 16,271,050 | 5,331,050 | ||||||||||||||
| Provision for income taxes | (3,531,994 | ) | (1,014,675 | ) | (5,888,810 | ) | (1,896,925 | ) | ||||||||||
| Net income | $ | 6,120,244 | $ | 1,792,758 | $ | 10,382,240 | $ | 3,434,125 | ||||||||||
| Earnings per share of common stock | ||||||||||||||||||
| Net income | ||||||||||||||||||
| Basic | $ | 0.38 | $ | 0.11 | $ | 0.64 | $ | 0.21 | ||||||||||
| Diluted | $ | 0.37 | $ | 0.11 | $ | 0.63 | $ | 0.21 | ||||||||||
| Weighted average number of common shares and potential common shares outstanding | ||||||||||||||||||
| Basic | 16,191,852 | 16,139,074 | 16,169,711 | 16,138,616 | ||||||||||||||
| Diluted | 16,702,137 | 16,249,450 | 16,537,330 | 16,253,730 | ||||||||||||||
| Monarch Casino & Resort, Inc. | |||||||||||
| Consolidated Balance Sheets | |||||||||||
| June 30, 2013 | December 31, 2012 | ||||||||||
| (unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 17,768,818 | $ | 19,043,213 | |||||||
| Receivables, net | 2,295,188 | 2,456,883 | |||||||||
| Inventories | 2,270,474 | 2,382,802 | |||||||||
| Prepaid expenses | 2,484,506 | 2,636,422 | |||||||||
| Deferred income taxes | 5,425,848 | 5,425,848 | |||||||||
| Total current assets | 30,244,834 | 31,945,168 | |||||||||
| Property and equipment | |||||||||||
| Land | 27,914,847 | 27,914,847 | |||||||||
| Land improvements | 6,561,729 | 6,561,729 | |||||||||
| Buildings | 150,843,298 | 150,843,298 | |||||||||
| Building improvements | 11,681,100 | 11,681,100 | |||||||||
| Furniture and equipment | 137,523,457 | 132,946,374 | |||||||||
| Leasehold improvements | 1,346,965 | 1,346,965 | |||||||||
| 335,871,396 | 331,294,313 | ||||||||||
| Less accumulated depreciation and amortization | (160,001,038 | ) | (152,868,719 | ) | |||||||
| Net property and equipment | 175,870,358 | 178,425,594 | |||||||||
| Other assets | |||||||||||
| Goodwill | 25,110,810 | 25,110,810 | |||||||||
| Intangible assets, net | 9,078,627 | 10,204,691 | |||||||||
| Deferred income taxes | 1,214,113 | 1,214,113 | |||||||||
| Other assets, net | 1,067,020 | 1,219,579 | |||||||||
| Total other assets | 36,470,570 | 37,749,193 | |||||||||
| Total assets | $ | 242,585,762 | $ | 248,119,955 | |||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | 8,068,523 | $ | 8,061,570 | |||||||
| Accrued expenses | 16,644,425 | 17,836,194 | |||||||||
| Income taxes payable | 13,211 | 274,401 | |||||||||
| Total current liabilities | 24,726,159 | 26,172,165 | |||||||||
| Long-term debt | 64,800,000 | 81,100,000 | |||||||||
| Total liabilities | 89,526,159 | 107,272,165 | |||||||||
| 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; 16,277,765 outstanding at June 30, 2013 and 16,147,324 at December 31, 2012 | 190,963 | 190,963 | |||||||||
| Additional paid-in capital | 32,822,167 | 34,363,690 | |||||||||
| Treasury stock, 2,818,535 shares at June 30, 2013 and 2,948,976 at December 31, 2012, at cost | (44,934,950 | ) | (48,306,046 | ) | |||||||
| Retained earnings | 164,981,423 | 154,599,183 | |||||||||
| Total stockholders' equity | 153,059,603 | 140,847,790 | |||||||||
| Total liability and stockholder's equity | $ | 242,585,762 | $ | 248,119,955 | |||||||
| 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 June 30, | Six months ended June 30, | |||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||
| Adjusted EBITDA (1) | ||||||||||||||||||
| Atlantis | $ | 11,173,417 | $ | 7,789,198 | $ | 20,379,488 | $ | 15,588,817 | ||||||||||
| Black Hawk (a) | 4,821,254 | 2,546,186 | 8,837,949 | 2,546,186 | ||||||||||||||
| 15,994,671 | 10,335,384 | 29,217,437 | 18,135,003 | |||||||||||||||
| Corporate and other expense | (1,159,940 | ) | (747,950 | ) | (2,318,497 | ) | (1,977,130 | ) | ||||||||||
| Total Adjusted EBITDA | $ | 14,834,731 | $ | 9,587,434 | $ | 26,898,940 | $ | 16,157,873 | ||||||||||
| Expenses | ||||||||||||||||||
| Stock based compensation | (286,389 | ) | (316,866 | ) | (522,255 | ) | (585,352 | ) | ||||||||||
| Depreciation and amortization | (4,379,873 | ) | (4,260,205 | ) | (9,023,308 | ) | (7,635,289 | ) | ||||||||||
| Acquisition expense | - | (1,625,930 | ) | - | (1,700,521 | ) | ||||||||||||
| Interest expense | (516,231 | ) | (577,000 | ) | (1,082,327 | ) | (905,661 | ) | ||||||||||
| Provision for income taxes | (3,531,994 | ) | (1,014,675 | ) | (5,888,810 | ) | (1,896,925 | ) | ||||||||||
| Net income | $ | 6,120,244 | $ | 1,792,758 | $ | 10,382,240 | $ | 3,434,125 | ||||||||||
| (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
