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EXHIBIT 99.1
Monarch Casino & Resort Reports Record Second Quarter Financial Results
RENO, Nev., July 20, 2022 (GLOBE NEWSWIRE) -- Monarch Casino & Resort, Inc. (Nasdaq: MCRI) (“Monarch,” “we,” “our,” or “the Company”) today reported operating results for the second quarter ended June 30, 2022, as summarized below:
($ in thousands, except per share data and percentages)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2022 | 2021 | Increase | 2022 | 2021 | Increase | ||||||||||
| Net revenue | $ | 115,289 | $ | 97,719 | 18.0% | $ | 223,607 | $ | 172,679 | 29.5% | |||||
| Net income(1) | 19,435 | 18,149 | 7.1% | 37,553 | 26,303 | 42.8% | |||||||||
| Adjusted EBITDA(3) | $ | 39,461 | $ | 35,169 | 12.2% | $ | 73,803 | $ | 58,000 | 27.2% | |||||
| Basic EPS | $ | 1.02 | $ | 0.98 | 4.1% | $ | 1.98 | $ | 1.42 | 39.4% | |||||
| Diluted EPS(2) | $ | 0.99 | $ | 0.93 | 6.5% | $ | 1.92 | $ | 1.36 | 41.2% | |||||
CEO Comment
John Farahi, Co-Chairman and Chief Executive Officer of Monarch, commented: “Monarch’s solid second quarter results reflect our strong market position in both Reno and Black Hawk. Our quarterly financial results benefited from the continued successful ramp-up of our recently expanded and enhanced Black Hawk property as well as our team’s ability to efficiently manage the business in an ever-changing operating environment.
“Net revenue and Adjusted EBITDA of $115.3 million and $39.5 million, respectively, were both second quarter records. We have been able to partially offset ongoing cost increases with price adjustments. Our ability to nimbly manage and invest in our properties, while maintaining a pristine balance sheet, has positioned us well for the second half of the year.
“In Reno, our redesign and upgrade of the original hotel tower at Atlantis, representing approximately 20% of the property’s room inventory, was completed on schedule and on budget, with the rooms moving back into inventory ahead of the Memorial Day weekend. While Reno remains a very competitive market, we believe our focus on operational execution and capital investments in Atlantis will help us enhance our property's award-winning appeal and competitiveness. We recently commenced upgrades of the property’s retail space and expect that project to be completed early in the fourth quarter of this year.
“Our favorable balance sheet positions Monarch to continue to evaluate potential acquisitions to drive long-term value for our stockholders.”
Summary of 2022 Second Quarter Operating Results
In the 2022 second quarter, we generated net revenue of $115.3 million, an increase of 18.0% from $97.7 million in the prior-year quarter. Casino, food and beverage (“F&B”), and hotel revenues increased 10.7%, 28.7% and 31.1% year over year, respectively. The increase in revenues was driven primarily by the ongoing ramp-up of operations at Monarch Black Hawk. In the second quarter of 2021, both Atlantis and Black Hawk revenues benefited from COVID-19 related pent-up demand.
Selling, general and administrative (“SG&A”) expenses for the second quarter of 2022 were $23.1 million compared to $20.6 million in the prior-year period, driven primarily by an increase in labor and labor related expenses, as well as higher utility expense. As a percentage of net revenue, SG&A expense decreased to 20.0% compared to 21.1% in the prior-year period. Casino operating expense as a percentage of casino revenue increased to 36.5% during the second quarter of 2022 from 31.7% in the prior-year period, primarily due to an increase in labor expenses and increased promotional allowances. F&B operating expense as a percentage of F&B revenue decreased to 77.0% during the second quarter of 2022 from 79.2% in the prior-year period due to ongoing efforts to align menu prices with increased commodity prices and labor costs. Hotel operating expense as a percentage of hotel revenue decreased to 34.4% in the second quarter of 2022 compared to 38.6% in the same period a year ago, primarily due to an increase in Average Daily Rate.
Net income in the three months ended June 30, 2022 increased 7.1% and diluted EPS increased 6.5% compared to the same period in the prior year. Net income and diluted EPS for the quarters ending June 30, 2022 and 2021 were impacted by $2.4 million and $0.8 million, respectively, of legal and consultant costs related to litigation with Monarch Black Hawk’s general contractor.
We generated second quarter 2022 consolidated Adjusted EBITDA of $39.5 million, an increase of $4.3 million, or 12.2%, over the same period a year ago.
Credit Facility and Liquidity
Capital expenditures of $13.5 million in the second quarter of 2022 primarily included the redesign and upgrade of the hotel rooms in the original tower at Atlantis as well as ongoing maintenance capital spending at both properties. All capital expenditures were funded from operating cash flows. We expensed $0.7 million of interest in the second quarter of 2022 compared to $1.3 million in the second quarter of 2021.
During the quarter, we funded $15.0 million in principal reduction payments on our Term Loan Facility. As of June 30, 2022, we had an outstanding principal balance of $65.0 million under our Term Loan, and we had no amounts outstanding under our $70.0 million Revolving Credit Facility, which remains available to us for future needs.
Our Board has reaffirmed its prior authorizations for our previously disclosed Stock Repurchase Plan. We continue to be authorized to purchase up to 2,900,000 shares of our common stock under that plan. Our Repurchase Plan does not obligate us to acquire any particular amount of common stock, and our Repurchase Plan may be suspended at any time at our discretion. The actual timing, number and value of shares repurchased under our Repurchase Plan will be determined by us at our discretion and will depend on a number of factors, including the market price of our common stock, general market economic conditions, our liquidity and applicable legal requirements.
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) our expected operating results; (ii) our belief that we have sufficient liquidity to fund all remaining construction and litigation costs and ongoing capital expenditures; (iii) our belief that our business is well-positioned to benefit from any post-pandemic recovery and healthy macroeconomic trends; (iv) our expectation regarding the availability of future acquisition opportunities; (v) our belief regarding the quality of our products and guest services in Reno and Black Hawk, including as premier destination gaming resorts in their respective markets; (vi) our expectations regarding our guests' acceptance of the expanded casino, new hotel and enhanced amenities at Monarch Black Hawk; (vii) our expectations regarding our future position in, and share of, the gaming market and the quality of service we provide to our guests. 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:
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 Atlantis Casino Resort Spa (“Atlantis”), a hotel/casino facility in Reno, Nevada, and the Monarch Casino Resort Spa Black Hawk (“Monarch Black Hawk”) in Black Hawk, Colorado, approximately 40 miles west of Denver. For additional information on Monarch, visit the Company's website at www.monarchcasino.com.
The 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; two retail outlets 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.
The Monarch Black Hawk features approximately 60,000 square feet of casino space; more than 1,100 slot machines; approximately 40 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.
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 SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data; Unaudited)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenues | ||||||||||||||||
| Casino | $ | 63,865 | $ | 57,673 | $ | 126,696 | $ | 104,584 | ||||||||
| Food and beverage | 28,459 | 22,116 | 54,506 | 38,322 | ||||||||||||
| Hotel | 18,297 | 13,953 | 33,489 | 22,588 | ||||||||||||
| Other | 4,668 | 3,977 | 8,916 | 7,185 | ||||||||||||
| Net revenues | 115,289 | 97,719 | 223,607 | 172,679 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Casino | 23,315 | 18,304 | 45,682 | 31,922 | ||||||||||||
| Food and beverage | 21,901 | 17,505 | 42,632 | 31,600 | ||||||||||||
| Hotel | 6,293 | 5,389 | 12,066 | 9,640 | ||||||||||||
| Other | 2,247 | 1,992 | 4,329 | 3,512 | ||||||||||||
| Selling, general and administrative | 23,097 | 20,607 | 47,280 | 40,532 | ||||||||||||
| Depreciation and amortization | 10,546 | 9,360 | 21,062 | 18,874 | ||||||||||||
| Other operating items, net | 2,229 | 812 | 3,546 | 1,566 | ||||||||||||
| Total operating expenses | 89,628 | 73,969 | 176,597 | 137,646 | ||||||||||||
| Income from operations | 25,661 | 23,750 | 47,010 | 35,033 | ||||||||||||
| Interest expense | (700 | ) | (1,276 | ) | (1,350 | ) | (2,895 | ) | ||||||||
| Income before income taxes | 24,961 | 22,474 | 45,660 | 32,138 | ||||||||||||
| Provision for income taxes | (5,526 | ) | (4,325 | ) | (8,107 | ) | (5,835 | ) | ||||||||
| Net income | $ | 19,435 | $ | 18,149 | $ | 37,553 | $ | 26,303 | ||||||||
| Earnings per share of common stock | ||||||||||||||||
| Basic | $ | 1.02 | $ | 0.98 | $ | 1.98 | $ | 1.42 | ||||||||
| Diluted | $ | 0.99 | $ | 0.93 | $ | 1.92 | $ | 1.36 | ||||||||
| Weighted average number of common shares and potential common shares outstanding | ||||||||||||||||
| Basic | 18,987 | 18,595 | 18,928 | 18,538 | ||||||||||||
| Diluted | 19,582 | 19,465 | 19,586 | 19,381 | ||||||||||||
MONARCH CASINO & RESORT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In thousands, except per share data)
June 30, 2022 | December 31, 2021 | |||||||
| ASSETS | (unaudited) | |||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 30,580 | $ | 33,526 | ||||
| Receivables, net | 7,428 | 8,881 | ||||||
| Income taxes receivable | 28,269 | 26,946 | ||||||
| Inventories | 7,695 | 7,159 | ||||||
| Prepaid expenses | 6,291 | 7,552 | ||||||
| Total current assets | 80,263 | 84,064 | ||||||
| Property and equipment, net | 587,947 | 580,807 | ||||||
| Goodwill | 25,111 | 25,111 | ||||||
| Intangible assets, net | 414 | 477 | ||||||
| Total assets | $ | 693,735 | $ | 690,459 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Current maturities of long-term debt | $ | 20,000 | $ | 20,000 | ||||
| Accounts payable | 16,795 | 18,575 | ||||||
| Construction accounts payable | 50,222 | 58,891 | ||||||
| Accrued expenses | 43,077 | 42,967 | ||||||
| Short-term lease liability | 604 | 745 | ||||||
| Total current liabilities | 130,698 | 141,178 | ||||||
| Deferred income taxes | 19,617 | 19,617 | ||||||
| Long-term lease liability | 13,247 | 13,498 | ||||||
| Long-term debt, net | 43,837 | 68,152 | ||||||
| Total liabilities | 207,399 | 242,445 | ||||||
| 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 | ||||||
| 19,096,300 shares issued; 18,888,070 outstanding at June 30, 2022; | ||||||||
| 18,764,540 outstanding at December 31, 2021 | ||||||||
| Additional paid-in capital | 45,802 | 41,426 | ||||||
| Treasury stock, 208,230 shares at June 30, 2022; 331,760 shares at | (7,948 | ) | (4,341 | ) | ||||
| December 31, 2021 | ||||||||
| Retained earnings | 448,291 | 410,738 | ||||||
| Total stockholders' equity | 486,336 | 448,014 | ||||||
| Total liabilities and stockholders' equity | $ | 693,735 | $ | 690,459 | ||||
MONARCH CASINO & RESORT, INC. AND SUBSIDIARIES
RECONCILIATION 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 June 30, | Six Months Ended June 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Adjusted EBITDA (1) | $ | 39,461 | $ | 35,169 | $ | 73,803 | $ | 58,000 | |||||||
| Expenses: | |||||||||||||||
| Stock based compensation | (1,025 | ) | (1,247 | ) | (2,185 | ) | (2,527 | ) | |||||||
| Depreciation and amortization | (10,546 | ) | (9,360 | ) | (21,062 | ) | (18,874 | ) | |||||||
| Provision for income taxes | (5,526 | ) | (4,325 | ) | (8,107 | ) | (5,835 | ) | |||||||
| Interest expense | (700 | ) | (1,276 | ) | (1,350 | ) | (2,895 | ) | |||||||
| Pre-opening expenses (2) | - | (1 | ) | - | (2 | ) | |||||||||
| Construction litigation expenses (2) | (2,385 | ) | (824 | ) | (3,727 | ) | (1,469 | ) | |||||||
| COVID-19 expenses (2) | - | - | - | (108 | ) | ||||||||||
| Litigation proceeds, net (2) | 42 | - | 42 | - | |||||||||||
| Gain on disposition of assets (2) | 114 | 13 | 139 | 13 | |||||||||||
| Net income | $ | 19,435 | $ | 18,149 | $ | 37,553 | $ | 26,303 | |||||||
