Monarch Casino & Resort, Inc. (Nasdaq: MCRI) (“Monarch,” “we,”
“our,” or “the Company”) today reported record Net revenue and
Adjusted EBITDA for the first quarter ended March 31, 2023, as
summarized below:
($ in thousands, except per share data and percentages) |
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
Increase /(Decrease) |
Net revenue |
|
$ |
116,644 |
|
|
$ |
108,318 |
|
|
7.7% |
|
Net income (1) |
|
|
17,670 |
|
|
|
18,118 |
|
|
(2.5%) |
|
Adjusted EBITDA (3) |
|
$ |
36,480 |
|
|
$ |
34,342 |
|
|
6.2% |
|
|
|
|
|
|
|
|
Basic EPS |
|
$ |
0.92 |
|
|
$ |
0.96 |
|
|
(4.2%) |
|
Diluted EPS (2) |
|
$ |
0.90 |
|
|
$ |
0.92 |
|
|
(2.2%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Net Income was impacted by the effective tax rate (21.7% in the
first quarter of 2023 and 12.5% in the first quarter of 2022),
which varies based on the amount of the excess tax benefit on stock
compensation. The income tax deduction attributable to the excess
tax benefit decreased from the first quarter of 2022 to the first
quarter of 2023, which resulted in a $1.7 million increase in the
income tax provision.(2) Diluted EPS was impacted by the effective
tax rate (21.7% in the first quarter of 2023 and 12.5% in the first
quarter of 2022), which varies based on the amount of the excess
tax benefit on stock compensation. The income tax deduction
attributable to the excess tax benefit decreased from the first
quarter of 2022 to the first quarter of 2023, which resulted in a
$0.09 decrease in diluted EPS.(3) Definitions, disclosures and
reconciliations of non-GAAP financial information are included
later in the release. |
CEO CommentJohn Farahi,
Co-Chairman and Chief Executive Officer of Monarch, commented: “Our
2023 fiscal year is off to a strong start as the operating momentum
builds at Monarch in Black Hawk, Colorado. In Reno, the first
quarter results were materially impacted by unprecedented weather
disruptions in Northern California, which is a key feeder market
for Atlantis. Net revenue and Adjusted EBITDA grew to all-time
first quarter records of $116.6 million and $36.5 million,
respectively. The Company’s performance in Black Hawk was a primary
driver in generating a healthy consolidated Adjusted EBITDA margin
of 31.3% in what is historically our slowest quarter of the year in
both markets.
“In Black Hawk, we continued to expand market
share. All revenue categories, including casino, food and beverage
and hotel continued their growth and we believe Monarch Black Hawk
has yet to realize its full potential.
“At Atlantis, our primary focus remains the
ongoing enhancement of the property. We believe, our newly
installed casino carpet has revitalized the casino floor. The
redesign and upgrade of the hotel rooms in the second tower is on
schedule for an anticipated completion before Memorial Day
2023.
“With our strong balance sheet and free cash
flow, Monarch remains ideally positioned to evaluate and act on
potential acquisitions where we can employ our development and
operating disciplines to drive long-term value for our
stockholders. In the mean-time, we will continue to invest in our
existing properties and remain committed to returning capital to
stockholders. In the first quarter of 2023, we paid a one-time cash
dividend of $5.00 per outstanding share of common stock. In the
second quarter of 2023, we will pay cash dividend of $0.30 per
outstanding share of common stock and we intend to continue to make
quarterly payments as part of the previously announced annual cash
dividend of $1.20 per share.
Summary of 2023 First Quarter Operating
Results In the first quarter of 2023, the Company
generated net revenue of $116.6 million, an increase of 7.7% from
$108.3 million in the prior year same quarter. Casino, food and
beverage (“F&B”), and hotel revenues increased 6.5%, 12.6% and
1.8% year over year, respectively. The revenue increase was driven
primarily by the ongoing growth in business at Monarch Black
Hawk.
Selling, general and administrative (“SG&A”)
expenses for the first quarter of 2023 were $25.1 million compared
to $24.2 million in the prior-year period, driven primarily by
increases in utility expense and repair and maintenance expense. As
a percentage of net revenue, SG&A expense decreased to 21.5%
compared to 22.3% in the prior-year period. Casino operating
expense as a percentage of casino revenue increased to 37.7% during
the first quarter of 2023 from 35.6% in the prior-year period,
primarily due to increased labor expense. F&B operating expense
as a percentage of F&B revenue decreased to 74.8% during the
first quarter of 2023 from 79.6% in the prior-year period due to an
increase in average check and improved cost management. Hotel
operating expense as a percentage of hotel revenue increased to
41.3% in the first quarter of 2023, compared to 38.0% in the same
period a year ago, primarily due to a decrease in average daily
rate and an increase in labor expense.
Income from operations for the first quarter of
2023 increased 8.5% compared to the same period last year. Net
income decreased 2.5% compared to the same period last year and
diluted EPS decreased 2.2% due primarily to an increase in the
effective tax rate, which varies based on the amount of the excess
tax benefit on stock compensation. The Company generated first
quarter 2023 Adjusted EBITDA of $36.5 million, an increase of $2.1
million, or 6.2%, over the same period a year ago.
Credit Facility and Liquidity
Capital expenditures of $15.2 million in the first quarter of 2023
were funded from operating cash flow and primarily consisted of the
redesign and upgrade of hotel rooms in the second tower at
Atlantis, re-carpeting the casino floor at Atlantis and maintenance
capital spending at both properties. The Company recognized $0.6
million of net interest expense in the first quarter of 2023
compared to $0.7 million in the prior-year period.
As of March 31, 2023, the Company had cash and
cash equivalents of $34 million and an outstanding principal
balance of $51 million under its credit facility. On March 15,
2023, the Company paid a one-time cash dividend of $5.00 per share
to its stockholders of record on March 1, 2023. The one-time
dividend was funded from a combination of cash on hand and
borrowings against the Company’s credit facility.
Quarterly Dividend Declaration
The Company is announcing a cash dividend of $0.30 per share of its
outstanding common stock. The cash dividend is payable on June 15,
2023, to stockholders of record on June 1, 2023. This cash dividend
is part of the previously announced annual cash dividend of $1.20
per share payable in quarterly payments. The Company’s regular cash
dividend is reviewed quarterly by the Board.
Forward-Looking Statements This
press release contains forward-looking statements within the
meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by words such as "plan," "believe,"
"expect," "seem," "look," "look forward," "positioning," "future,"
"will," "confident" and similar references to future periods.
Example of forward-looking statements include, among others,
statements we make regarding: (i) the continuing strength of our
balance sheet and our expected free cash flow; (ii) our
expectations regarding continuing our dividend payments in the
future; (iii) our expectations regarding future cash dividends to
stockholders; (iv) our beliefs regarding the strengths of the local
markets we serve in Reno and Black Hawk; (v) our expectations
regarding the completion of room renovations at the Atlantis; and
(vi) our beliefs regarding the potential for growth at Monarch
Black Hawk. Actual results and future events and conditions may
differ materially from those described in any forward-looking
statements. Therefore, you should not rely on any of these
forward-looking statements. Important factors that could cause
actual results to differ materially from estimates or projections
contained in the forward-looking statements include, without
limitation:
- continuing adverse impacts of
COVID-19, including new variants, on our business, financial
condition and operating results;
- continuing actions by government
officials at the federal, state and/or local level with respect to
steps to be taken, including, without limitation, temporary or
extended shutdowns, travel restrictions, social distancing and
shelter-in-place orders, in connection with COVID-19 and its
variants;
- our ability to manage guest safety
concerns, whether caused by COVID-19, its variants or other
causes;
- our ability to maintain compliance
with the terms and conditions of our credit facilities and other
material contracts in the event of any unexpected or unplanned
events, such as temporary or extended shutdowns;
- access to available and reasonable
financing on a timely basis;
- our ability to maintain strong
working relationships with our regulators, employees, lenders,
suppliers, insurance carriers, customers, and other
stakeholders;
- impacts of any uninsured
losses;
- changes in guest visitation or
spending patterns due to economic conditions, health or other
concerns;
- construction factors, including
delays, disruptions, availability of labor and materials, increased
costs of labor and materials, contractor disagreements, zoning
issues, environmental restrictions, soil and water conditions,
weather and other hazards, site access matters, building permit
issues and other regulatory approvals or issues;
- ongoing disagreements over costs of
and responsibility for delays and other construction related
matters with our general contractor at Monarch Black Hawk, PCL
Construction Services, Inc., including, as previously reported, the
litigation against us by such contractor;
- claims for construction defects,
breach of contract, breach of warranty, fraud, fraudulent
inducement, negligence or other construction related claims that we
may have in connection with construction and completion of Monarch
Black Hawk and any adverse impacts on operations required to
correct the same;
- our litigation against the general
contractor of Monarch Black Hawk, PCL Construction Services, Inc.,
in the above-mentioned litigation in which litigation the parties
are preparing for trial in the second half of 2023;
- our potential need to post bonds or
other forms of surety to support our legal remedies;
- risks related to development and
construction activities (including disputes with and defaults by
contractors and subcontractors; construction, equipment or staffing
problems and delays; shortages of materials or skilled labor;
environmental, health and safety issues; weather and other hazards,
site access matters, and unanticipated cost increases);
- our ability to generate sufficient
operating cash flow to help finance our expansion plans and any
subsequent debt reduction;
- changes in laws mandating increases
in minimum wages and employee benefits;
- changes in laws and regulations
permitting expanded and other forms of gaming in our key
markets;
- the effects of local and national
economic, credit and capital market conditions on the economy in
general and on the gaming industry and our business in particular,
including predictions for a potential recession;
- the effects of labor shortages on
our market position, growth and financial results;
- the potential of increases in state
and federal taxation;
- potential of increased regulatory
and other burdens;
- guest acceptance of our expanded
facilities once completed and the resulting impact on our market
position, growth and financial results;
- competition in our target market
areas;
- broad-based inflation, including
wage inflation; and
- the impact of the events occurring
in Eastern Europe, other parts of the world and the conflict taking
place in Ukraine.
Additional information concerning potential
factors that could adversely affect all forward-looking statements,
including the Company's financial results, is included in our
Securities and Exchange Commission filings, including our most
recent annual report on Form 10-K and quarterly reports on Form
10-Q, which are available on our website at
www.monarchcasino.com.
About Monarch Casino & Resort,
Inc. Monarch Casino & Resort, Inc., through its
subsidiaries, owns and operates the Monarch Casino Resort Spa Black
Hawk (“Monarch Black Hawk”) in Black Hawk, Colorado, approximately
40 miles west of Denver and the Atlantis Casino Resort Spa
(“Atlantis”), a hotel/casino facility in Reno, Nevada. For
additional information on Monarch, visit the Company's website at
www.monarchcasino.com.
The Monarch Black Hawk features approximately
60,000 square feet of casino space; more than 1,000 slot machines;
43 table games; a live poker room; a keno; and a sports book. The
resort also includes 10 bars and lounges, as well as four dining
options: a twenty-four-hour full-service restaurant, a buffet-style
restaurant, the Monarch Chophouse (a fine-dining steakhouse), and
Bistro Mariposa (elevated Southwest cuisine). The resort offers 516
guest rooms and suites, banquet and meeting room space, a retail
store, a concierge lounge and an upscale spa and pool facility
located on the top floor of the tower. The resort is connected to a
nine-story parking structure with approximately 1,350 parking
spaces, and additional valet parking, with total property capacity
of approximately 1,500 spaces.
Atlantis features approximately 61,000 square
feet of casino space; 818 guest rooms and suites; eight food
outlets; two gourmet coffee and pastry bars; a 30,000 square foot
health spa and salon with an enclosed year-round pool; retail
outlet offering clothing and traditional gift shop merchandise; an
8,000 square-foot family entertainment center; and approximately
52,000 square feet of banquet, convention and meeting room space.
The casino features approximately 1,300 slot and video poker
machines; approximately 37 table games, including blackjack, craps,
roulette, and others; a race and sports book; a 24-hour live keno
lounge; and a poker room.
Contacts: John Farahi Chief
Executive Officer 775/824-4401 or jfarahi@monarchcasino.com
Joseph Jaffoni, Richard Land, James Leahy JCIR
212/835-8500 or mcri@jcir.com
- financial tables follow -
MONARCH CASINO & RESORT, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
INCOME(In thousands, except per share data) |
|
|
Three months ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
(Unaudited) |
|
(Unaudited) |
Revenues |
|
|
|
|
Casino |
|
$ |
66,905 |
|
|
$ |
62,831 |
|
Food and beverage |
|
|
29,317 |
|
|
|
26,047 |
|
Hotel |
|
|
15,471 |
|
|
|
15,192 |
|
Other |
|
|
4,951 |
|
|
|
4,248 |
|
Net revenues |
|
|
116,644 |
|
|
|
108,318 |
|
|
|
|
|
|
Operating expenses |
|
|
|
|
Casino |
|
|
25,252 |
|
|
|
22,367 |
|
Food and beverage |
|
|
21,937 |
|
|
|
20,731 |
|
Hotel |
|
|
6,390 |
|
|
|
5,773 |
|
Other |
|
|
2,943 |
|
|
|
2,082 |
|
Selling, general and administrative |
|
|
25,116 |
|
|
|
24,183 |
|
Depreciation and amortization |
|
|
11,337 |
|
|
|
10,516 |
|
Other operating items, net |
|
|
510 |
|
|
|
1,317 |
|
Total operating expenses |
|
|
93,485 |
|
|
|
86,969 |
|
Income from operations |
|
|
23,159 |
|
|
|
21,349 |
|
Interest expense, net |
|
|
(587) |
|
|
|
(650) |
|
Income before income taxes |
|
|
22,572 |
|
|
|
20,699 |
|
Provision for income taxes |
|
|
(4,902) |
|
|
|
(2,581) |
|
Net income |
|
$ |
17,670 |
|
|
$ |
18,118 |
|
|
|
|
|
|
Earnings per share of common stock |
|
|
|
|
Net income |
|
|
|
|
Basic |
|
$ |
0.92 |
|
|
$ |
0.96 |
|
Diluted |
|
$ |
0.90 |
|
|
$ |
0.92 |
|
|
|
|
|
|
Weighted average number of common shares and potential common
shares outstanding |
|
|
|
|
Basic |
|
|
19,215 |
|
|
|
18,868 |
|
Diluted |
|
|
19,654 |
|
|
|
19,592 |
|
MONARCH CASINO & RESORT, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEET(In
thousands, except per share data) |
|
|
March 31, 2023 |
|
December 31, 2022 |
ASSETS |
|
(unaudited) |
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
34,430 |
|
|
$ |
38,779 |
|
Receivables, net |
|
|
8,004 |
|
|
|
9,566 |
|
Income taxes receivable |
|
|
- |
|
|
|
24,989 |
|
Inventories |
|
|
6,933 |
|
|
|
7,558 |
|
Prepaid expenses |
|
|
7,650 |
|
|
|
8,537 |
|
Total current assets |
|
|
57,017 |
|
|
|
89,429 |
|
Property and equipment, net |
|
|
581,360 |
|
|
|
578,050 |
|
Goodwill |
|
|
25,111 |
|
|
|
25,111 |
|
Intangible assets, net |
|
|
321 |
|
|
|
352 |
|
Total assets |
|
$ |
663,809 |
|
|
$ |
692,942 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
Current liabilities |
|
|
|
|
Current maturities of long-term debt |
|
$ |
- |
|
|
$ |
6,693 |
|
Accounts payable |
|
|
15,247 |
|
|
|
14,418 |
|
Construction accounts payable |
|
|
49,543 |
|
|
|
49,957 |
|
Income taxes payable |
|
|
3,651 |
|
|
|
- |
|
Accrued expenses |
|
|
44,235 |
|
|
|
46,037 |
|
Short-term lease liability |
|
|
649 |
|
|
|
639 |
|
Total current liabilities |
|
|
113,325 |
|
|
|
117,744 |
|
Deferred income taxes |
|
|
23,016 |
|
|
|
23,016 |
|
Long-term lease liability |
|
|
13,062 |
|
|
|
13,228 |
|
Long-term debt |
|
|
51,000 |
|
|
|
- |
|
Total liabilities |
|
|
200,403 |
|
|
|
153,988 |
|
Stockholders' equity |
|
|
|
|
Preferred stock, $.01 par value, 10,000,000 shares authorized; none
issued |
|
|
- |
|
|
|
- |
|
Common stock, $.01 par value, 30,000,000 shares authorized; |
|
|
191 |
|
|
|
191 |
|
19,132,599 shares issued and 19,131,641 outstanding at March 31,
2023; |
|
|
|
|
19,096,300 shares issued and 19,093,676 outstanding at December 31,
2022 |
|
|
|
|
Additional paid-in capital |
|
|
42,998 |
|
|
|
40,716 |
|
Treasury stock, 958 shares at March 31, 2023; 2,624 shares at |
|
|
(62) |
|
|
|
(170) |
|
December 31, 2022 |
|
|
|
|
Retained earnings |
|
|
420,279 |
|
|
|
498,217 |
|
Total stockholders' equity |
|
|
463,406 |
|
|
|
538,954 |
|
Total liabilities and stockholders' equity |
|
$ |
663,809 |
|
|
$ |
692,942 |
|
MONARCH CASINO & RESORT, INC. AND
SUBSIDIARIESRECONCILIATION OF ADJUSTED EBITDA TO
NET INCOME(In thousands, unaudited) |
The following table sets forth a reconciliation of Adjusted EBITDA,
a non-GAAP financial measure, to net income, a GAAP financial
measure: |
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
Net income |
|
$ |
17,670 |
|
|
$ |
18,118 |
|
Expenses: |
|
|
|
|
Stock based compensation |
|
|
1,474 |
|
|
|
1,160 |
|
Depreciation and amortization |
|
|
11,337 |
|
|
|
10,516 |
|
Provision for income taxes |
|
|
4,902 |
|
|
|
2,581 |
|
Interest expense, net |
|
|
587 |
|
|
|
650 |
|
Construction litigation expenses (2) |
|
|
510 |
|
|
|
1,342 |
|
Gain on disposition of assets (2) |
|
|
- |
|
|
|
(25) |
|
Adjusted EBITDA (1) |
|
$ |
36,480 |
|
|
$ |
34,342 |
|
|
(1) Adjusted EBITDA, a non-GAAP financial measure, consists of
net income plus loss on disposal of assets, provision for
income taxes, stock-based compensation expense, other one-time
charges, pre-opening expenses, construction litigation expenses,
acquisition expenses, interest expense, depreciation and
amortization less interest income, any benefit for income
taxes and gain on disposal of assets. Adjusted EBITDA should not be
construed as an alternative to operating income (as determined in
accordance with US Generally Accepted Accounting Principles), as an
indicator of the Monarch's operating performance, as an alternative
to cash flows from operating activities (as determined in
accordance with US GAAP) or as a measure of liquidity. This measure
enables comparison of the Monarch's performance over multiple
periods, as well as against the performance of other companies in
our industry that report Adjusted 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 defines Adjusted
EBITDA margin as Adjusted EBITDA divided by Net
revenue.(2) Amount included in the “Other operating items,
net” on the Consolidated Statement of Income. |
Monarch Casino and Resort (NASDAQ:MCRI)
Gráfica de Acción Histórica
De Jun 2024 a Jul 2024
Monarch Casino and Resort (NASDAQ:MCRI)
Gráfica de Acción Histórica
De Jul 2023 a Jul 2024