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 29, 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
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(Former name or former address, if changed since last report)
ITEM 7. Financial Statements and Exhibits
(c) Exhibits
99.03 Text of press release dated July 29, 2003.
ITEM 12. Disclosure of Results of Operations and Financial Condition
On July 29, 2003, Monarch Casino & Resort, Inc. (the "Company") issued a
press release announcing the Company's earnings for the second quarter ended
June 30, 2003. The earnings press release is attached as Exhibit 99.03 to this
Form 8-K.
The earnings release contains non-GAAP financial measures. For purposes
of regulation G, a non-GAAP financial measure is a numerical measure of a
registrant's historical or future financial performance, financial position or
cash flows that excludes amounts, or is subject to adjustments that have the
effect of excluding amounts, that are included in the most directly comparable
measure calculated and presented in accordance with GAAP in the Statement of
Income, Balance Sheet or Statement of Cash Flows (or equivalent statements) of
the issuer, or includes amounts, or is subject to adjustments that have the
effect of including amounts, that are excluded from the most directly
comparable measure so calculated and presented. In this regard, GAAP refers to
generally accepted accounting principles in the United States. Pursuant to the
requirements of Regulation G, the Company has provided reconciliations within
the earnings release of the non-GAAP financial measures to the most directly
comparable financial measures.
EBITDA is presented in the earnings release because management believes
that it is of interest to its investors and is frequently used by analysts and
others in the evaluation of companies in our industry.
"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.
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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.
(Registrant)
Date: July 30, 2003 By: /s/ Ben Farahi
-------------------------------
Name: Ben Farahi
Title: Chief Financial Officer,
Treasurer and Secretary
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Exhibit 99.03
PRESS RELEASE
MONARCH CASINO & RESORT, INC. REPORTS SECOND QUARTER
RECORD RESULTS FOR QUARTER ENDED JUNE 30, 2003
RENO, NV -July 29, 2003- Monarch Casino & Resort, Inc. (Nasdaq: MCRI)
today announced record second quarter net income, earnings per share, casino
revenue, hotel revenue and net revenue results for the second quarter ended
June 30, 2003. The Company reported net income of $2,331,109, or $0.25 per
share (diluted), an increase of approximately 3.5% from the $2,252,166 net
income, or $0.24 per share (diluted), for the same period last year. Each of
the Company's revenue centers experienced gains during the three months ended
June 30, 2003 over the three months ended June 30, 2002: Casino revenue was
$18,614,452, a 4.5% increase from $17,817,343; Hotel revenue increased 11.8%
from $4,927,946 to $5,507,037; Food and Beverage, $8,736,201, and Other,
$993,048, revenue centers increased 4.3% and 5.8%, respectively. Net revenue
for the current three-month period was $29,079,050, an increase of 5.2% when
compared to $27,628,872 for the second quarter ended June 30, 2002. EBITDA (1)
for the current three-month period was $6,927,868, a decrease of 5.6% from the
$7,334,969 EBITDA during the same period in 2002. Although net revenue
increased, the decrease in EBITDA was primarily due to lower hold percentages
at our table games and to higher marketing and promotional costs as well as
costs of litigation against the City of Reno and other third parties.
John Farahi, Co-chairman and Chief Executive Officer of Monarch commented
on the results: "Despite experiencing factors that negatively impacted our cash
flow, we again achieved record second quarter net income, earnings per share,
casino revenue, hotel revenue and net revenue of which we are very proud. In
addition, we continued to significantly reduce our debt load which, combined
with lower interest rates, resulted in a marked reduction in interest expense."
The Company incurred 34.4% less interest expense during the second quarter of
2003 compared to the second quarter of 2002, while reducing its debt
outstanding by $13.1 million over the same period from $66.3 million to $53.2
million, and by $7.0 million since December 31, 2002. Mr. Farahi concluded,
"We are pleased with our improving results and are confident with the direction
in which the Company is heading. I would like to thank the entire Atlantis
team for their effective efforts, as well as the continued loyalty of our
guests."
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, which completed a $105 million expansion and
renovation in August 2002. 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, which offers almost 1,000 guest rooms in three
contiguous high-rise hotel towers and a motor lodge, has been given approval by
the City of Reno to build an additional 500 hotel rooms with expansion of the
casino and other amenities. The tropically-themed Atlantis
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features approximately 51,000 square feet of high-energy casino space with 37
table games and approximately 1,500 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, (ii) market share of the Company operations, (iii) the
financial benefits that may result from future operations (iv) the and recent
opening and impact on operations of the expanded convention center. 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.
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.
Condensed Consolidated Statements of Income
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues
Casino........................... $ 18,614,452 $ 17,817,343 $ 36,354,157 $ 34,396,657
Food and beverage................ 8,736,201 8,373,075 16,947,609 16,376,641
Hotel............................ 5,507,037 4,927,946 10,223,215 9,306,862
Other............................ 993,048 938,433 1,878,793 1,769,036
------------ ------------ ------------ ------------
Gross revenues................ 33,850,738 32,056,797 65,403,774 61,849,196
Less promotional allowances...... (4,771,688) (4,427,925) (9,156,796) (8,424,123)
------------ ------------ ------------ ------------
Net revenues.................. 29,079,050 27,628,872 56,246,978 53,425,073
------------ ------------ ------------ ------------
Operating expenses
Casino........................... 7,358,723 6,838,392 14,484,826 13,376,186
Food and beverage................ 4,475,173 4,295,114 8,598,911 8,544,621
Hotel............................ 1,738,320 1,578,549 3,384,299 3,096,162
Other............................ 308,676 296,096 613,242 617,928
Selling, general and
administrative.................. 8,270,290 7,285,752 16,122,474 14,401,907
Depreciation and amortization.... 2,716,420 2,556,368 5,316,829 5,103,270
------------ ------------ ------------ ------------
Total operating expenses...... 24,867,602 22,850,271 48,520,581 45,140,074
------------ ------------ ------------ ------------
Income from operations........ 4,211,448 4,778,601 7,726,397 8,284,999
------------ ------------ ------------ ------------
Other expenses
Interest expense................. 683,139 1,042,149 1,414,361 2,160,139
Other............................ - 225,000 - 225,000
------------ ------------ ------------ ------------
Total other expenses.......... 683,139 1,267,149 1,414,361 2,385,139
------------ ------------ ------------ ------------
Income before income taxes.... 3,528,309 3,511,452 6,312,036 5,899,860
Provision for income taxes......... 1,197,200 1,259,286 2,143,000 2,062,610
------------ ------------ ------------ ------------
Net income.................... $ 2,331,109 $ 2,252,166 $ 4,169,036 $ 3,837,250
============ ============ ============ ============
Earnings per share of common stock
Net income
Basic.......................... $ 0.25 $ 0.24 $ 0.44 $ 0.41
Diluted........................ $ 0.25 $ 0.24 $ 0.44 $ 0.40
Weighted average number of common
shares and potential common
shares outstanding
Basic.......................... 9,331,877 9,451,323 9,399,716 9,443,841
Diluted........................ 9,361,060 9,521,513 9,431,942 9,513,290
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Monarch Casino & Resort, Inc.
Condensed Consolidated Balance Sheets
June 30, December 31,
2003 2002
------------- -------------
(Unaudited)
ASSETS
Current assets
Cash............................................ $ 7,322,499 $ 9,961,484
Receivables, net................................ 3,221,768 2,724,726
Inventories..................................... 1,006,439 993,260
Prepaid expenses................................ 2,038,286 2,138,084
Prepaid federal income taxes.................... 278,278 176,321
Deferred income taxes........................... 492,457 492,457
------------- -------------
Total current assets......................... 14,359,727 16,310,011
------------- -------------
Property and equipment
Land............................................ 10,339,530 10,339,530
Land improvements............................... 3,226,913 3,191,371
Buildings....................................... 78,955,538 78,955,538
Building improvements........................... 6,304,642 6,262,903
Furniture, fixtures and equipment............... 59,711,366 58,086,570
------------- -------------
158,537,989 156,835,912
Less accumulated depreciation and amortization.. (59,786,172) (55,985,653)
------------- -------------
Net property and equipment................... 98,751,817 100,850,259
------------- -------------
Other assets, net................................. 223,318 319,817
------------- -------------
Total assets................................. $ 113,334,862 $ 117,480,087
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt............ $ 53,242,336 $ 8,279,095
Accounts payable................................ 5,593,567 6,227,124
Accrued expenses................................ 6,177,789 6,146,440
------------- -------------
Total current liabilities.................... 65,013,692 20,652,659
Long-term debt, less current maturities........... - 52,000,000
Deferred income taxes............................. 5,053,586 4,526,744
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;
9,336,995 outstanding at 06/30/2003,
9,474,830 outstanding at 12/31/2002............ 95,363 95,363
Additional paid-in capital...................... 17,438,757 17,381,517
Treasury stock,
199,280 shares at 06/30/2003, 61,445 shares
at 12/31/2002, at cost......................... (1,462,068) (202,692)
Retained earnings............................... 27,195,532 23,026,496
------------- -------------
Total stockholders' equity................... 43,267,584 40,300,684
------------- -------------
Total liabilities and stockholders' equity... $ 113,334,862 $ 117,480,087
============= =============
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Monarch Casino & Resort, Inc.
Reconciliation of Net Income to EBITDA (1)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- ------------------------
2003 2002 2003 2002
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Net income......................... $2,331,109 $2,252,166 $ 4,169,036 $3,837,250
Adjustments:
Provision for income taxes....... 1,197,200 1,259,286 2,143,000 2,062,610
Stock transaction expense........ - 225,000 - 225,000
Interest expense................. 683,139 1,042,149 1,414,361 2,160,139
Depreciation and amortization.... 2,716,420 2,556,368 5,316,829 5,103,270
----------- ----------- ----------- -----------
EBITDA (1) $6,927,868 $7,334,969 $13,043,226 $13,388,269
=========== =========== =========== ===========
(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.
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