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 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
----------------------------------------------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
----------------------------------------------------
(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 October 29, 2003.
ITEM 12. Disclosure of Results of Operations and Financial Condition
On October 29, 2003, Monarch Casino & Resort, Inc. (the "Company") issued
a press release announcing the Company's earnings for the third quarter ended
September 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.
-2-
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: October 30, 2003 By: /s/ Ben Farahi
-------------------------------
Name: Ben Farahi
Title: Chief Financial Officer,
Treasurer and Secretary
-3-
Exhibit 99.03
PRESS RELEASE
MONARCH CASINO & RESORT, INC. ACHIEVES RECORD REVENUES
AND EARNINGS FOR THIRD QUARTER ENDED SEPTEMBER 30, 2003
RENO, NV-October 29, 2003- Monarch Casino & Resort, Inc. (Nasdaq: MCRI)
(the "Company") today announced record net income, earnings per share, casino
revenues and net revenues for the third quarter ended September 30, 2003. Net
income for the Company increased 5.7% to $3,665,814, or $0.39 per share
(diluted), for the third quarter ended September 30, 2003, compared to
$3,467,460, or $0.36 per share (diluted), for the third quarter ended September
30, 2002. The Company also reported casino revenues of $19,893,383 for the
quarter, an increase of 4.8% over the $18,979,642 in the third quarter of 2002.
The increase in casino revenues was partially attributable to an increase in
slot machine win, as well as improved Keno and poker room revenues. Net
revenues reached record highs for the 2003 third quarter, increasing 2.6% over
last year's third quarter. Contributing to the record net revenues were
increases in food and beverage (3.6%) and other (18.8%) revenue centers over
the third quarter of 2002. Hotel revenues suffered a slight decrease of 1.3%
in the third quarter ended September 30, 2003 as compared to the third quarter
ended September 30, 2002. EBITDA (1), meanwhile, remained relatively unchanged
in the third quarter ended September 30, 2003 as compared to the third quarter
ended September 30, 2002, declining $36,376 from $8,834,010 in the 2002 third
quarter to $8,797,634 in the 2003 third quarter.
John Farahi, Co-chairman and Chief Executive Officer of Monarch commented
on the results: "Once again, we achieved record numbers despite continued
tightness in the Reno market. This, I believe, speaks for the quality and
location of our product as well as the strength of our management staff and the
friendliness of our employees. We also continued our aggressive approach in
reducing our debt load: we payed down our debt by $4.8 million during the third
quarter of 2003, and by $11.9 million since December 31, 2002. Our record
earnings were driven by a 35% reduction in interest and stockholder guarantee
fee expenses over last year's third quarter. Our operating income was flat in
the third quarter amid tightness in the local market and increased gaming
taxes. This increase in the gaming tax rate took effect August 1, 2003, and
had a $138 thousand impact on our bottom line." Mr. Farahi added, "we could
not have achieved our results if not for the strong efforts of the entire
Atlantis team and 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. It 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
-4-
Atlantis 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.
-5-
Monarch Casino & Resort, Inc.
Condensed Consolidated Statements of Income
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues
Casino........................... $ 19,893,383 $ 18,979,642 $ 56,247,540 $ 53,376,299
Food and beverage................ 9,146,124 8,826,254 26,093,733 25,202,895
Hotel............................ 6,259,807 6,344,964 16,483,022 15,651,826
Other............................ 1,169,165 984,037 3,040,978 2,753,073
------------ ------------ ------------ ------------
Gross revenues................ 36,468,479 35,134,897 101,865,273 96,984,093
Less promotional allowances...... (5,021,786) (4,483,316) (14,178,582) (12,907,439)
------------ ------------ ------------ ------------
Net revenues.................. 31,446,693 30,651,581 87,686,691 84,076,654
------------ ------------ ------------ ------------
Operating expenses
Casino........................... 7,550,337 6,982,318 22,035,163 20,358,504
Food and beverage................ 4,530,680 4,642,013 13,129,591 13,186,634
Hotel............................ 1,846,802 1,803,069 5,231,101 4,899,231
Other............................ 357,879 329,748 971,121 947,676
Selling, general and
administrative.................. 8,363,361 8,060,423 24,478,855 22,462,330
Depreciation and amortization.... 2,611,621 2,618,077 7,928,450 7,721,347
------------ ------------ ------------ ------------
Total operating expenses...... 25,260,680 24,435,648 73,774,281 69,575,722
------------ ------------ ------------ ------------
Income from operations........ 6,186,013 6,215,933 13,912,410 14,500,932
------------ ------------ ------------ ------------
Other expenses
Interest expense................. 372,063 647,346 1,244,145 2,122,107
Stockholder guarantee fee expense 250,334 315,027 792,613 1,000,405
Other............................ - - - 225,000
------------ ------------ ------------ ------------
Total other expenses.......... 622,397 962,373 2,036,758 3,347,512
------------ ------------ ------------ ------------
Income before income taxes.... 5,563,616 5,253,560 11,875,652 11,153,420
Provision for income taxes......... 1,897,802 1,786,100 4,040,802 3,848,710
------------ ------------ ------------ ------------
Net income.................... $ 3,665,814 $ 3,467,460 $ 7,834,850 $ 7,304,710
============ ============ ============ ============
Earnings per share of common stock
Net income
Basic.......................... $ 0.39 $ 0.37 $ 0.84 $ 0.77
Diluted........................ $ 0.39 $ 0.36 $ 0.83 $ 0.77
Weighted average number of common
shares and potential common
shares outstanding
Basic.......................... 9,339,567 9,468,880 9,379,446 9,452,279
Diluted........................ 9,373,006 9,529,212 9,411,771 9,494,602
-6-
Monarch Casino & Resort, Inc.
Condensed Consolidated Balance Sheets
September 30, December 31,
2003 2002
------------- -------------
(Unaudited)
ASSETS
Current assets
Cash............................................ $ 9,875,676 $ 9,961,484
Receivables, net................................ 2,607,884 2,724,726
Inventories..................................... 1,233,625 993,260
Prepaid expenses................................ 2,538,101 2,138,084
Prepaid federal income taxes.................... 278,278 176,321
Deferred income taxes........................... 542,457 492,457
------------- -------------
Total current assets......................... 17,076,021 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............... 59,839,989 58,086,570
------------- -------------
158,666,612 156,835,912
Less accumulated depreciation and amortization.. (62,027,745) (55,985,653)
------------- -------------
Net property and equipment................... 96,638,867 100,850,259
------------- -------------
Other assets, net................................. 175,790 319,817
------------- -------------
Total assets................................. $ 113,890,678 $ 117,480,087
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt............ $ 48,409,923 $ 8,279,095
Accounts payable................................ 5,883,950 6,227,124
Accrued expenses................................ 5,643,688 6,146,440
Federal income taxes payable.................... 1,947,800 -
------------- -------------
Total current liabilities.................... 61,885,361 20,652,659
Long-term debt, less current maturities........... - 52,000,000
Deferred income taxes............................. 5,053,587 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...................... 17,432,635 17,381,517
Treasury stock,
199,280 shares at 06/30/2003, 61,445 shares
at 12/31/2002, at cost......................... (1,437,614) (202,692)
Retained earnings............................... 30,861,346 23,026,496
------------- -------------
Total stockholders' equity................... 46,951,730 40,300,684
------------- -------------
Total liabilities and stockholders' equity... $ 113,890,678 $ 117,480,087
============= =============
-7-
Monarch Casino & Resort, Inc.
Reconciliation of Net Income to EBITDA (1)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- ------------------------
2003 2002 2003 2002
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Net income......................... $3,665,814 $3,467,460 $ 7,834,850 $7,304,710
Adjustments:
Provision for income taxes....... 1,897,802 1,786,100 4,040,802 3,848,710
Stock transaction expense........ - - - 225,000
Interest expense................. 622,397 962,373 2,036,758 3,122,512
Depreciation and amortization.... 2,611,621 2,618,077 7,928,450 7,721,347
----------- ----------- ----------- -----------
EBITDA (1) $8,797,634 $8,834,010 $21,840,860 $22,222,279
=========== =========== =========== ===========
(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.
-8-