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): February 20, 2003
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 5. Other Events
On February 20, 2003, Monarch Casino & Resort, Inc. (the "Company")
issued a press release reporting the Company's financial results for the
fourth quarter and year ended December 31, 2002. A copy of the press release
is attached hereto as Exhibit 99 and incorporated herein by reference.
ITEM 7. Financial Statements and Exhibits
(c) Exhibits
99 Text of press release dated February 20, 2003.
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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: February 21, 2003 By: /s/ Ben Farahi
-------------------------------
Name: Ben Farahi
Title: Chief Financial Officer,
Treasurer and Secretary
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Exhibit 99
PRESS RELEASE
MONARCH CASINO & RESORT, INC. REPORTS RECORD
RESULTS FOR THE FOURTH QUARTER AND FISCAL YEAR ENDED DECEMBER 31, 2002
- Establishes Guidance For 2003 -
RENO, NV-February 20, 2002- Monarch Casino & Resort, Inc. (Nasdaq: MCRI)
(the "Company") today announced record financial results for the fourth quarter
and fiscal year ended December 31, 2002.
Financial highlights for the fourth quarter of 2002 compared to the prior
year period included:
Net income increased 612% to $1,298,636, or $0.14 per share (diluted)
EBITDA(1) increased 32.8% to $5,293,624
Casino revenue grew 11.9% to $17.4 million
Hotel revenue increased 9.5% to $4.7 million
Hotel occupancy improved 3.6% to 89.3%
Average daily room rate increased by 5.7% to $51.75
Net income for the year ended December 31, 2002 was $8,603,346, or $0.90
per share (diluted), an increase of 87.0% over $4,601,764, or $0.49 per share
(diluted), for the year ended December 31, 2001. EBITDA(1) for the year ended
December 31, 2002 increased 13.6% to $27.5 million, from $24.2 million in the
prior year. The Company continued its strategy of utilizing cash flow to reduce
debt. Long-term debt, including current maturities, decreased $12.0 million
during 2002 to $60.3 million at December 31, 2002.
For the full year ended December 31, 2002, hotel occupancy increased to
92.9% from 91.1% the previous year, and the average daily room rate for the
full year increased to $55.29 from $53.48 for the fiscal year ended December
31, 2001.
John Farahi, Co-Chairman and Chief Executive Officer of Monarch commented,
"We are extremely pleased with our performance for the fourth quarter and full
year 2002. Our results continue to be driven by a superior location, the
commitment of the entire Atlantis team, and our intense focus on the local,
tour and travel, and convention markets. We were able to achieve improvements
across all areas of our business despite the soft gaming market in Northern
Nevada and increased competition from California Indian casinos. We did this
by capitalizing on the continued growth of the local Reno area population base,
increasing our share of the tour and travel business, and generating additional
traffic due to the expanded Reno-Sparks Convention Center."
Farahi continued, "As we enter 2003, we are excited about the vibrancy of
the locals market, the opportunity to increase our market share by serving the
tour and travel business and the increase in room demand from conventions
booked at the Reno-Sparks Convention Center. We believe that these three
markets will be the cornerstones of our growth in 2003 and beyond."
The Company also established guidance for the first quarter ending March
31, 2003 and fiscal year ending December 31, 2003. Based on current business
trends and the Company's forecast for the remainder of the quarter, EBITDA and
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earnings per share for the first quarter are expected to be approximately $6.0 -
$6.25 million and $0.18 - $0.20, respectively. The Company also expects EBITDA
and earnings per share of approximately $28.6 - $29.2 million and $1.05 -
$1.10, respectively, for the year ending December 31, 2003.
The Company will host a conference call at 4:30 P.M. EST to discuss the
fourth quarter and 2002 financial results. To listen to the conference call,
please dial 800-341-2312 and enter passcode 2739, approximately five minutes
prior to the start of the call to register. A replay of the call will be
available until February 28, and it can be accessed by dialing 800-756-3819,
passcode 002739.
Monarch Casino & Resort, Inc., through a wholly-owned subsidiary, owns and
operates the tropically-themed Atlantis Casino Resort in Reno, Nevada. The
Atlantis is the closest hotel-casino to and directly across the street from the
Reno-Sparks Convention Center which completed a major renovation and expansion
to 600,000 square feet of meeting, exhibit and lobby facilities in August,
2002.
The Atlantis features a 51,000 square-foot casino with approximately 37
table games and approximately 1,500 slot and video poker machines, a sports
book, keno and a poker room; 980 guest rooms; six restaurants; an 8,000 square-
foot family entertainment center; and approximately 25,000 square feet of
banquet and meeting space.
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) market share of the Company's operations, (iii) the
financial benefits that may result from future operations, (iv) the impact on
operations of the expanded convention center and (v) focus on key market
segments. 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 are included in the
Company's Securities and Exchange Commission filings, which are available on
the Company's web site.
(1) "EBITDA" consists of income from operations plus 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. We are providing a supplemental schedule reconciling EBITDA
to Income from Operations, the most directly comparable GAAP financial measure,
following the Condensed Consolidated Statements of Income and Condensed Balance
Sheets below.
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.
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MONARCH CASINO & RESORT, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------ ------------------
2002 2001 2002 2001
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues
Casino................................ $ 17,396,640 $ 15,541,656 $ 70,772,939 $ 64,907,920
Food and beverage..................... 8,444 043 8,061 513 33,646,938 31,960,713
Hotel................................. 4,651,613 4,246,581 20,303,439 19,022,188
Other................................. 937,107 911,532 3,690,180 3,478,171
------------ ------------ ------------ ------------
Gross revenues..................... 31,429,403 28,761,282 128,413,496 119,368,992
Less promotional allowances........... (4,468,487) (3,949,493) (17,375,926) (14,853,399)
------------ ------------ ------------ ------------
Net revenues....................... 26,960,916 24,811,789 111,037,570 104,515,593
------------ ------------ ------------ ------------
Operating expenses
Casino................................ 7,331,529 6,720,965 27,690,033 26,036,133
Food and beverage..................... 4,405,311 4,422,984 17,591,945 18,171,412
Hotel................................. 1,644,379 1,968,528 6,543,610 7,133,937
Other................................. 306,503 317,909 1,254,179 1,300,419
Selling, general and administrative... 7,979,570 7,394,989 30,441,900 27,656,572
Depreciation and amortization......... 2,599,056 2,546,544 10,320,403 10,085,331
------------ ------------ ------------ ------------
Total operating expenses........... 24,266,348 23,371,919 93,842,070 90,383,804
------------ ------------ ------------ ------------
Income from operations............. 2,694,568 1,439,870 17,195,500 14,131,789
------------ ------------ ------------ ------------
Other expense
Interest expense, net................. (811,851) (1,251,083) (3,934,363) (7,243,330)
Stock transaction expense............. (3,020) - (228,020) -
------------ ------------ ------------ ------------
Total other........................ (814,871) (1,251,083) (4,162,383) (7,243,330)
------------ ------------ ------------ ------------
Income (loss) before income taxes.. 1,879,697 188,787 13,033,117 6,888,459
Provision (benefit) for income taxes.... 581,061 6,407 4,429,771 2,286,695
------------ ------------ ------------ ------------
Net income (loss).................. $ 1,298,636 $ 182,380 $ 8,603,346 $ 4,601,764
============ ============ ============ ============
INCOME (LOSS) PER SHARE OF COMMON STOCK
Net income (loss)
Basic.............................. $ 0.14 $ 0.02 $ 0.91 $ 0.49
Diluted............................ $ 0.14 $ 0.02 $ 0.90 $ 0.49
Weighted average number of
common shares and potential
common shares outstanding
Basic.............................. 9,473,664 9,436,275 9,457,669 9,436,275
Diluted............................ 9,533,751 9,491,323 9,521,353 9,479,830
EBITDA(1)............................... $ 5,293,624 $ 3,986,414 $ 27,515,903 $ 24,217,120
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MONARCH CASINO & RESORT, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31,
----------------------------
2002 2001
------------ ------------
ASSETS
Current assets
Cash........................................$ 9,961,484 $ 8,385,743
Receivables, net............................ 2,724,726 2,863,939
Federal income tax refund receivable........ - 770,019
Related party receivables................... - 4,759
Inventories................................. 993,260 976,141
Prepaid expenses............................ 1,961,763 1,635,125
Prepaid federal income tax.................. 176,321 -
Deferred income taxes....................... 492,457 1,146,058
------------ ------------
Total current assets..................... 16,310,011 15,781,784
------------ ------------
Property and equipment
Land........................................ 10,339,530 10,339,530
Land improvements........................... 3,191,371 3,173,676
Buildings................................... 78,955,538 78,955,538
Building improvements....................... 6,262,903 4,763,904
Furniture and equipment..................... 58,086,570 54,101,471
------------ ------------
156,835,912 151,334,119
Less accumulated
depreciation and amortization.............. (55,985,653) (47,164,026)
------------ -----------
100,850,259 104,170,093
Construction in progress - 625,048
------------ ------------
Net property and equipment............... 100,850,259 104,795,141
Other assets, net............................. 319,817 486,592
------------ ------------
$117,480,087 $121,063,517
============ ============
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MONARCH CASINO & RESORT, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31,
----------------------------
2002 2001
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt........ $ 8,279,095 $ 8,106,296
Accounts payable............................ 6,227,124 6,449,087
Accounts payable construction............... - 147,481
Accrued expenses............................ 6,146,440 5,702,850
------------ ------------
Total current liabilities................ 20,652,659 20,405,714
Long-term debt, less current maturities....... 52,000,000 64,236,548
Deferred income taxes......................... 4,526,744 4,990,829
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;
9,436,275 outstanding...................... 95,363 95,363
Additional paid-in capital.................. 17,381,517 17,241,788
Treasury stock, at cost.................... (202,692) (329,875)
Retained earnings........................... 23,026,496 14,423,150
------------ ------------
Total stockholders' equity............... 40,300,684 31,430,426
------------ ------------
$117,480,087 $121,063,517
============ ============
MONARCH CASINO & RESORT, INC. AND SUBSIDIARY
RECONCILIATION OF INCOME FROM OPERATIONS TO EBITDA
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- ------------------------
2002 2001 2002 2001
---------- ---------- ----------- -----------
Income from Operations $2,694,568 $1,439,870 $17,195,500 $14,131,789
Adjustments:
Depreciation and Amortization 2,599,056 2,546,544 10,320,403 10,085,331
---------- ---------- ----------- -----------
EBITDA $5,293,624 $3,986,414 $27,515,903 $24,217,120
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