8K Related to Monarch Casino Third Quarter 2007 Earnings

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 24, 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 October 24, 2007, Monarch Casino & Resort, Inc. issued a press release announcing its financial results for the third quarter ended September 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 October 24, 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: October 24, 2007
/s/ Ronald Rowan
 
Ronald Rowan
Chief Financial Officer and Treasurer


— —
 
 
 
 

Exhibit 99.1

MONARCH CASINO REPORTS RECORD RESULTS

·  
Net revenue of $43.6 million
·  
Income from operations of $11.7 million
·  
EBITDA(1) of $13.7 million
·  
Diluted EPS of 41 cents

RENO, NV - October 24, 2007 - Monarch Casino & Resort, Inc. (NASDAQ: MCRI) (the "Company"), owner of the Atlantis Casino Resort Spa in Reno, Nevada, today announced record quarterly results for casino and food and beverage gross revenue, net revenue, income from operations, EBITDA (1) and diluted EPS.
 
The Company reported record quarterly net revenue of $43.6 million, a 4.5% increase over the third quarter of 2006, driven primarily by quarterly records for gross revenue from its casino and food and beverage operations of $29.9 million and $11.0 million, respectively. Gross revenue from the hotel operation of $8.0 million was slightly lower than prior year’s third quarter all-time record of $8.1 million.
 
The Company announced quarterly income from operations of $11.7 million, EBITDA(1) of $13.7 million and diluted EPS of 41 cents, each of which was also the highest ever reported for any quarter. The Company’s operating margin of 26.9% was consistent with the 26.8% operating margin reported for the third quarter of the prior year.
 
The Company remained debt-free during the quarter, funded approximately $11.0 million of expenditures related to its ongoing expansion and the remodeling of its existing facilities, and increased its cash balance to $52.9 million, an increase of $15.9 million from the $37.0 million balance at December 31, 2006.
 
When asked about the Company’s performance, Monarch’s CEO and Co-Chairman John Farahi commented: “We delivered another record quarter despite softness in the Reno gaming market and disruption from the construction of our ongoing expansion project. We are very proud of our team for delivering these results in the face of this challenging market and operating environment.” With respect to the Company’s expansion project, Mr. Farahi added, “The expansion we began constructing in the second quarter of this year is progressing according to plan and remains on track for completion in the second quarter of 2008.”
 
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 the land 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 and (iii) construction progress disruption and completion. 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
  
Nine Months Ended
  
   
September 30,
  
September 30,
  
   
2007
  
2006
  
2007
  
2006
  
Revenues
                          
Casino
  
$
29,936,988
  
$
27,716,814
  
$
84,512,978
  
$
77,621,373
  
Food and beverage
    
11,011,808
    
10,889,609
    
32,084,196
    
30,769,768
  
Hotel
    
8,002,564
    
8,101,167
    
21,857,687
    
20,580,811
  
Other
    
1,229,521
    
1,254,264
    
3,703,972
    
3,648,862
  
 Gross revenues
    
50,180,881
    
47,961,854
    
142,158,833
    
132,620,814
  
Less promotional allowances
    
(6,557,585
)
  
(6,213,477
)
  
(19,192,626
)
  
(17,644,527
)
 Net revenues
    
43,623,296
    
41,748,377
    
122,966,207
    
114,976,287
  
Operating expenses
                          
Casino
    
9,232,990
    
8,991,885
    
26,970,411
    
25,483,766
  
Food and beverage
    
5,381,681
    
5,143,751
    
15,217,367
    
14,634,537
  
Hotel
    
2,161,564
    
2,206,631
    
6,416,669
    
6,312,500
  
Other
    
386,056
    
384,033
    
1,127,113
    
1,116,317
  
Selling, general and administrative
    
12,731,275
    
11,681,175
    
37,054,086
    
35,156,852
  
Depreciation and amortization
    
1,982,184
    
2,139,592
    
6,122,600
    
6,430,831
  
 Total operating expenses
    
31,875,750
    
30,547,067
    
92,908,246
    
89,134,803
  
 Income from operations
    
11,747,546
    
11,201,310
    
30,057,961
    
25,841,484
  
                           
Other income (expense)
                          
Interest income
    
568,462
    
154,230
    
1,385,883
    
190,732
  
Interest expense
    
-
    
(15,401
)
  
(152,274
)
  
(74,845
)
 Total other income (expense)
    
568,462
    
138,829
    
1,233,609
    
115,887
  
                           
 Income before income taxes
    
12,316,008
    
11,340,139
    
31,291,570
    
25,957,371
  
                           
Provision for income taxes
    
(4,280,000
)
  
(3,969,098
)
  
(10,860,000
)
  
(8,996,000
)
                         
 Net income
  
$
8,036,008
  
$
7,371,041
  
$
20,431,570
  
$
16,961,371
  
                           
Earnings per share of common stock:
                          
Net income
                          
 Basic
  
$
0.42
  
$
0.39
  
$
1.07
  
$
0.89
  
 Diluted
  
$
0.41
  
$
0.38
  
$
1.06
  
$
0.88
  
                           
Weighted average number of common
                          
shares and potential common
                          
shares outstanding:
                          
 Basic
    
19,079,062
    
19,058,896
    
19,080,347
    
18,965,694
  
 Diluted
    
19,366,043
    
19,245,639
    
19,352,064
    
19,263,869
  

Monarch Casino & Resort, Inc.
Condensed Consolidated Balance Sheets
   
September 30,
  
December 31,
  
   
2007
  
2006
  
ASSETS
  
(UNAUDITED)
      
Current assets
          
Cash and cash equivalents
  
$
52,949,354
  
$
36,985,187
  
Receivables, net
    
4,590,222
    
3,268,970
 
Inventories
    
1,478,542
    
1,471,667
 
Prepaid expenses
    
3,572,182
    
2,833,126
 
Deferred income taxes
    
1,547,144
    
965,025
 
Total current assets
    
64,137,444
    
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 and equipment
    
71,746,192
    
72,708,061
 
Leasehold improvements
    
1,346,965
   
1,346,965
 
     
175,989,394
    
176,951,263
 
Less accumulated depreciation and amortization
    
(90,245,245
)
  
(84,325,578
)
     
85,744,149
    
92,625,685
 
Construction in progress
    
10,968,149
    
-
  
Net property and equipment
    
96,712,298
    
92,625,685
 
Other assets, net
    
84,822
    
231,247
 
Total assets
  
$
160,934,564
  
$
138,380,907
  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
              
Current liabilities
              
Accounts payable
 
$
8,053,256
  
$
8,590,669
  
Construction payable
    
1,525,987
    
-
  
Accrued expenses
    
8,770,601
    
9,878,851
 
Federal income taxes payable
    
1,371,747
    
16,457
 
Total current liabilities
    
19,721,591
    
18,485,977
 
               
Deferred income taxes
    
3,708,614
    
4,248,614
 
Total liabilities
    
23,430,205
    
22,734,591
  
               
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;
              
19,067,518 outstanding at 9/30/07
              
19,065,968 outstanding at 12/31/06
    
190,963
    
190,726
 
Additional paid-in capital
    
25,285,175
    
23,205,045
 
Treasury stock, 28,782 shares at 9/30/07
              
6,582 shares at 12/31/06, at cost
    
(678,039
)
  
(24,145
)
Retained earnings
   
112,706,260
    
92,274,690
 
Total stockholders' equity
    
137,504,359
    
115,646,316
 
Total liability and stockholder's equity
  
$
160,934,564
  
$
138,380,907
  


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

   
Three Months Ended
September 30,
  
Nine Months Ended
September 30,
  
   
2007
(unaudited)
  
2006
(unaudited)
  
2007
(unaudited)
  
2006
(unaudited)
  
Net income
  
$
8,036,008
  
$
7,371,041
  
$
20,431,570
  
$
16,961,371
  
Adjustments
                          
   Provision for income taxes
    
4,280,000
    
3,969,098
    
10,860,000
    
8,996,000
  
   Interest expense
    
-
    
15,401
    
152,274
    
74,845
  
   Depreciation & amortization
    
1,982,184
    
2,139,592
    
6,122,600
    
6,430,831
  
   Interest income
    
(568,462
)
  
(154,230
)
  
(1,385,883
)
  
(190,732
)
EBITDA (1) (unaudited)
  
$
13,729,730
  
$
13,340,902
  
$
36,180,561
  
$
32,272,315
  



















(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.