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, 2006
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 2.02 Results of Operations and Financial Condition
On February 20, 2006, Monarch Casino & Resort, Inc. (the "Company")
issued a press release reporting the Company's financial results for the
fourth quarter and fiscal year ended December 31, 2005. A copy of the press
release is attached hereto as Exhibit 99.1 and incorporated herein by
reference.
ITEM 9.01 Financial Statements and Exhibits
(c) EXHIBITS
99.1 Text of press release dated February 20, 2006.
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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, 2006 By: /s/ Ben Farahi
-------------------------------
Name: Ben Farahi
Title: Chief Financial Officer,
Treasurer and Secretary
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Exhibit 99.1
PRESS RELEASE
MONARCH CASINO ANNOUNCES RECORD BREAKING
FOURTH QUARTER AND FULL YEAR RESULTS
- ANNUAL EBITDA (1) IMPROVES 15.5%; NET INCOME INCREASES 27.3% -
RENO, NV-February 20, 2006- Monarch Casino & Resort, Inc. (Nasdaq: MCRI)
(the "Company"), owner of the Atlantis Casino Resort in Reno, Nevada, today
announced record financial results for its fourth quarter and fiscal year
ended December 31, 2005.
During the fourth quarter ended December 31, 2005, the Company reported
EBITDA (1) of $9.6 million, a 23.9% improvement over the $7.8 million EBITDA
(1) reported in the fourth quarter of 2004. The improved EBITDA (1) beat
published consensus analysts' estimate of $8.9 million and was the result of
record fourth quarter net revenues of $34.9 million and improving operating
margins. Excluding depreciation and amortization, the Company's operating
margin for the period improved to 27.6% of net revenues from 24.9% during the
same period a year earlier. The record revenues were driven by a 17.1%
increase in casino revenue, a 6.3% jump in food and beverage revenue and a
20.8% improvement in other revenues. The increases were partially offset by a
1.9% decrease in hotel revenue.
Fourth quarter 2005 net income of $4.9 million was a record for the
fourth quarter, a 26.8% increase from fourth quarter 2004 net income of $3.9
million for the same period a year earlier and translated into earnings per
diluted share (EPS) of $0.26 versus $0.20 for the same period last year. The
Company's fourth quarter 2005 diluted EPS beat the published consensus
analysts' estimate of $0.23.
For the full year 2005, the Company achieved EBITDA (1) of $41.4 million,
a 15.5% improvement over the $35.9 million in 2004. Analysts had estimated a
consensus $40.5 million in EBITDA (1) for 2005. The full year 2005 EBITDA (1)
was also the result of record revenues combined with vastly improved margins
and, in some cases, decreases in departmental expenses. The Company saw
improved margins across all departments and, excluding depreciation and
amortization, its operating margin for 2005 improved to 29.7% from 27.7% a
year earlier. Net revenues increased 8.0% to $139.8 million in 2005 from
$129.5 million in 2004. The increase in net revenues was led by a 12.3%
improvement in casino revenue, a 3.3% increase in food and beverage revenue
and a 20.5% increase in other revenue. Hotel revenue decreased 1.7% year over
year.
Net income for 2005 reached $21.0 million, an increase of 27.3% and
easily beat the previous Company record of $16.5 million set in 2004. Diluted
EPS was $1.10 in 2005 versus $0.88 in 2004, beating the published consensus
analysts' estimate of $1.07.
Monarch's CEO and Co-Chairman John Farahi praised the many attributes
that led to the recent success: "Favorable economic factors in our area,
combined with our superior location, quality of our product and our
management's unmatched efforts and attention to detail, has led us to our
continued success." Mr. Farahi added: "With our healthy balance sheet, we
expect to explore a variety of options for our next expansion, which is
currently in the preliminary planning stage."
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During 2005, the Company reduced the unpaid principal balance under its
credit facility by $24.3 million, bringing its outstanding unpaid balance to
$8.1 million at year end 2005.
The Company also announced today that its 2006 Annual Meeting of
Stockholders will be held on Tuesday, May 23, 2006 at 10:00am local time, at
the Company's Atlantis Casino Resort, 3800 South Virginia Street, Reno,
Nevada. The record date for stockholders entitled to vote at the Annual
Meeting is Thursday, April 6, 2006.
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. The Atlantis is recognizable due to
its 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 of the
Atlantis facilities and is currently being used by the Company 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 tropically-themed 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: 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.
(1) "EBITDA" consists of net income plus provision for income taxes, interest
and stockholder guarantee fee expense, 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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MONARCH CASINO & RESORT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------------- --------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues
Casino................................ $ 24,178,576 $ 20,641,420 $ 94,501,028 $ 84,131,876
Food and beverage..................... 9,968,695 9,377,418 38,564,365 37,333,977
Hotel................................. 5,241,806 5,344,046 23,909,915 24,318,082
Other................................. 1,229,554 1,017,746 4,690,362 3,892,669
------------ ------------ ------------ ------------
Gross revenues..................... 40,618,631 36,380,630 161,665,670 149,676,604
Less promotional allowances........... (5,726,735) (5,184,472) (21,880,793) (20,219,714)
------------ ------------ ------------ ------------
Net revenues....................... 34,891,896 31,196,158 139,784,877 129,456,890
------------ ------------ ------------ ------------
Operating expenses
Casino................................ 8,314,484 7,535,435 31,990,758 30,513,391
Food and beverage..................... 4,765,009 4,737,160 18,795,268 18,859,211
Hotel................................. 1,833,550 1,852,275 7,696,576 7,858,616
Other................................. 340,867 296,654 1,340,556 1,344,163
Selling, general, and administrative.. 9,850,834 9,007,820 38,073,313 34,979,998
Gaming development expense............ 165,894 - 439,984 -
Depreciation and amortization......... 2,127,861 1,940,674 8,379,033 9,627,870
------------ ------------ ------------ ------------
Total operating expenses........... 27,398,499 25,370,018 106,715,488 103,183,249
------------ ------------ ------------ ------------
Income from operations............. 7,493,397 5,826,140 33,069,389 26,273,641
Other expense
Interest expense...................... (122,411) (323,004) (1,013,377) (1,448,125)
Stockholder guarantee fee expense..... - - - (136,164)
------------ ------------ ------------ ------------
Total other expense................ (122,411) (323,004) 1,013,377) (1,584,289)
------------ ------------ ------------ ------------
Income before income taxes......... 7,370,986 5,503,136 32,056,012 24,689,352
Provision for income taxes.............. 2,470,552 1,639,392 11,020,552 8,162,912
------------ ------------ ------------ ------------
Net income......................... $ 4,900,434 $ 3,863,744 $ 21,035,460 $ 16,526,440
============ ============ ============ ============
Earnings per share of common stock
Net income
Basic............................... $ 0.26 $ 0.21 $ 1.12 $ 0.88
Diluted............................. $ 0.26 $ 0.20 $ 1.10 $ 0.88
Weighted average number of common
shares and potential common
shares outstanding
Basic............................. 18,873,751 18,812,448 18,848,532 18,756,450
Diluted........................... 19,129,889 18,958,468 19,093,777 18,814,686
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MONARCH CASINO & RESORT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2005 2004
------------- -------------
(Unaudited)
ASSETS
Current assets
Cash............................................ $ 12,886,494 $ 11,814,778
Receivables, net................................ 3,559,602 2,959,894
Federal income tax refund receivable............ 286,760 493,797
Inventories..................................... 1,456,453 1,452,696
Prepaid expenses................................ 2,401,619 2,346,242
Deferred income taxes........................... 1,326,224 1,115,719
------------- -------------
Total current assets......................... 21,917,152 20,183,126
------------- -------------
Property and equipment
Land............................................ 10,339,530 10,339,530
Land improvements............................... 3,166,107 3,226,913
Buildings....................................... 78,955,538 78,955,538
Building improvements........................... 10,398,814 7,524,680
Furniture and equipment......................... 67,393,755 65,146,594
Leasehold improvement........................... 1,346,965 1,346,965
------------- -------------
171,600,709 166,540,220
Less accumulated depreciation and amortization.. (76,117,346) (68,791,045)
------------- -------------
Net property and equipment................... 95,483,363 97,749,175
------------- -------------
Other assets, net................................. 269,524 406,620
------------- -------------
Total assets................................. $ 117,670,039 $ 118,338,921
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt............ $ - $ -
Accounts payable................................ 7,335,630 5,747,775
Accrued expenses................................ 8,722,221 7,918,299
------------- -------------
Total current liabilities.................... 16,057,851 13,666,074
Long-term debt, less current maturities........... 8,100,000 32,400,000
Deferred income taxes............................. 5,953,193 6,509,505
Commitments and contingencies.....................
Stockholders' equity
Preferred stock, $.01 par value, 10,000,000
shares authorized; none issued................. - -
Common stock, $.005 par value, 30,000,000
shares authorized; 19,072,550 shares issued;
18,879,310 outstanding at 12/31/2005,
18,812,448 outstanding at 12/31/2004........... 95,363 95,363
Additional paid-in capital...................... 17,978,190 17,463,272
Treasury stock,
193,240 shares at 12/31/2005, 260,102 shares
at 12/31/2004, at cost......................... (708,877) (954,152)
Retained earnings............................... 70,194,319 49,158,859
------------- -------------
Total stockholders' equity................... 87,558,995 65,763,342
------------- -------------
Total liabilities and stockholders' equity... $ 117,670,039 $ 118,338,921
============= =============
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MONARCH CASINO & RESORT, INC.
RECONCILIATION OF NET INCOME TO EBITDA (1)
Three Months Ended Twelve Months Ended
December 31, December 31,
----------------------- ------------------------
2005 2004 2005 2004
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Net income......................... $ 4,900,434 $ 3,863,744 $21,035,460 $16,526,440
Adjustments:
Provision for income taxes....... 2,470,552 1,639,392 11,020,552 8,162,912
Stockholder guarantee fee expense - - - 136,164
Interest expense................. 122,411 323,004 1,013,377 1,448,125
Depreciation and amortization.... 2,127,861 1,940,674 8,379,033 9,627,870
----------- ----------- ----------- -----------
EBITDA (1) $ 9,621,258 $ 7,766,814 $41,448,422 $35,901,511
=========== =========== =========== ===========
(1) "EBITDA" consists of net income plus provision for income taxes, interest
and stockholder guarantee fee expense, 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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