form8ka.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K/A

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, 2008
 
Monarch Casino & Resort, Inc.
(Exact name of registrant as specified in its charter)

Nevada
0-22088
88-0300760
 
(State or other jurisdiction
(Commission
(IRS Employer
of incorporation)
File Number)
Identification No.)

3800 South Virginia Street, Reno, Nevada
89502
(Address of principal executive offices)
(Zip Code)
   
Registrant’s telephone number, including area code:
(775) 335-4600
 
Not applicable.
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

 
 
 

Explanatory Note:

The sole purpose of this amendment is to amend the Current Report of Monarch Casino and Resort, Inc. on Form 8-K, as originally filed with the Securities and Exchange Commission on February 21, 2008, to comply with proper form.  No changes have been made to the press release filed herewith as Exhibit 99.1.

Item 2.02 Results of Operations and Financial Condition.

On February 20, 2008, Monarch Casino & Resort, Inc. issued a press release announcing its financial results for the fourth quarter and twelve months ended December 31, 2007. A copy of the press release is attached to this Current Report as Exhibit 99.1.


Item 9.01 Financial Statements and Exhibits.

Exhibits.

99.1           Press Release, dated February 20, 2008, issued by Monarch Casino & Resort, Inc.


—  —

 
 
 

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
Monarch Casino and Resort, Inc.
   
Date: February 25, 2008
/s/ Ronald Rowan
 
Ronald Rowan
Chief Financial Officer and Treasurer


—  —

 
 
 

Exhibit 99.1

MONARCH CASINO REPORTS FOURTH QUARTER AND RECORD FULL-YEAR RESULTS

Highlights from the fourth quarter results:
·  
Net revenue of $36.9 million
·  
Income from operations of $5.6 million
·  
EBITDA(1) of $7.7 million
·  
Diluted EPS of 21 cents

Highlights from the full-year record results:
·  
Net revenue of $159.9 million
·  
Income from operations of $35.7 million
·  
EBITDA(1)  of $43.8 million
·  
Diluted EPS of $1.27


RENO, NV - February 20, 2008 - Monarch Casino & Resort, Inc. (NASDAQ: MCRI) (the "Company"), owner of the Atlantis Casino Resort Spa (the “Atlantis”) in Reno, Nevada, today announced fourth-quarter and full-year results for the periods ended December 31, 2007.

RESULTS FOR THE QUARTER ENDED DECEMBER 31, 2007
The Company reported fourth-quarter net revenue of $36.9 million, slightly lower than the $37.0 million reported for the comparative quarter in 2006. The Company announced quarterly income from operations of $5.6 million, EBITDA(1) of $7.7 million and diluted EPS of 21 cents which represent decreases of 26.4%, 21.8% and 22.2%, respectively, when compared to the prior year’s fourth quarter.  These decreases were driven primarily by an increase in selling, general and administrative expense of $1.7 million, or 14.7%, which resulted from higher marketing and promotional expenses, increased legal fees, higher bad debt expense and higher payroll and benefits costs.

   RESULTS FOR THE YEAR ENDED DECEMBER 31, 2007
For the year, the Company reported record net revenue of $159.9 million, a 5.2% increase over its 2006 net revenue, and announced that revenue generated by each of its revenue centers was the highest reported for any year.  Specifically, casino, food and beverage and hotel operations each drove revenue increases over the prior year of 6.7%, 3.2% and 5.6%, respectively.
 The Company announced income from operations of $35.7 million, EBITDA(1) of $43.8 million and diluted EPS of $1.27; each of which were also the highest ever reported for any year.  When compared to the prior year, these results represent increases of 6.6%, 4.2% and 10.4%, respectively.
The Company reported a $3.7 million, or 7.9%, increase in selling, general and administrative expenses over the prior year.  The primary drivers of this increase were higher legal expense and higher marketing and promotional expense all partially offset by the impact of a $1.2 million non-cash charge in the second quarter of 2006, which did not recur in 2007, related to early vesting of stock options for the Company’s former Co-Chairman and Chief Financial Officer who resigned in 2006.
Monarch’s CEO and Co-Chairman John Farahi commented on the Company’s performance: “Despite the challenging economic climate, disruption from construction related to our on-going $50 million expansion project and aggressive marketing programs by our nearest competitor to promote the grand opening of its major expansion project, we delivered fourth quarter net revenue consistent with that of the prior year. While achieving that result, we also incurred increased expenses that pushed our operating profit, EBITDA and EPS below prior year’s quarterly results.  The economy in Reno and our feeder markets, as in many other areas around the country, is responding to the effects of negative macroeconomic trends, which include higher fuel prices, home mortgage defaults, higher mortgage interest rates and declining residential real estate values.  Additionally, our guests experienced some unavoidable inconveniences at our Atlantis property related to the expansion construction.  To adjust for these challenging economic and operating conditions, we increased marketing and promotional expenditures to attract and retain guests.  We also incurred higher legal expenses associated with the ongoing and previously disclosed Kerzner litigation; greater bad debt expense; and higher payroll and benefits cost, compared to prior year’s fourth quarter.  We anticipate that upward pressure on expenses will persist as long as we must continue addressing the adverse effects of the negative macroeconomic environment, construction disruption, the marketing programs of our nearest competitor and protecting the Company’s rights in the Kerzner lawsuit.”
The Company remained debt-free during the quarter and reported a year end cash balance of $38.8 million.  Through December 31, 2007, the Company incurred approximately $17.2 million of the previously announced $50 million expansion which remains on track to be completed in June of 2008.  During the quarter, pursuant to previously announced authority issued by the Board of Directors, the Company repurchased in open market transactions 523,396 shares of the Company’s common stock at a weighted average purchase price of $25.03 per share.  The company continues to repurchase shares from time to time at its discretion and in accordance with regulations of the Securities and Exchange Commission.
The Company began construction on its previously announced Atlantis Convention Center Skybridge project which will provide guests with a convenient, traffic-free stroll between the Atlantis and the Reno-Sparks Convention Center (the “Convention Center”) in an enclosed, climate controlled environment. Upon completion of the project, the Atlantis will be the only hotel physically connected to the Convention Center, a facility that offers 500,000 square feet of exhibition and meeting space.  The Company commented that the skybridge uniquely positions the Atlantis, and future Atlantis expansions, to complement the Convention Center facilities and services.  The skybridge is expected to be completed late in the fourth quarter of 2008 at an estimated cost of $12.5 million.
The Company announced that its 2008 Annual Meeting of Stockholders will be held on Wednesday, June 18, 2008 at 10am local time, at the Company’s Atlantis Casino Resort Spa, 3800 South Virginia Street in Reno, Nevada.  The record date for stockholders entitled to vote at the Annual Meeting is Friday, April 25, 2008.
Monarch Casino & Resort, Inc., through its wholly-owned subsidiary, owns and operates the tropically-themed Atlantis Casino Resort Spa 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 features a 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 and growth. Currently, the Company uses it 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 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:                      Ron Rowan, CFO at (775) 825-4700 or rrowan@monarchcasino.com
John Farahi, CEO at (775) 825-4700 or JohnFarahi@monarchcasino.com

For additional information visit Monarch's web site at monarchcasino.com.
























(1)  
"EBITDA" consists of net income plus provision for income taxes, interest expense, depreciation and amortization less interest income.  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, as an alternative to cash flows from operating activities (as determined in accordance with generally accepted accounting principles) or 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.                                           
 
Monarch Casino & Resort, Inc.
               Condensed Consolidated Statements of Income
   
Three Months Ended
    
Twelve Months Ended
  
   
December 31,
    
December 31,
  
   
2007
    
2006
    
2007
    
2006
  
   
(UNAUDITED)
    
(UNAUDITED)
              
Revenues
                        
Casino
   $ 25,746,126     $ 25,711,186     $ 110,259,104     $ 103,332,559  
Food and beverage
     10,280,029       10,267,553       42,364,225       41,037,321  
Hotel
     6,028,171       5,831,944       27,885,858       26,412,755  
Other
     1,162,564       1,229,977       4,866,536       4,878,840  
Gross revenues
     43,216,890       43,040,660       185,375,723       175,661,475  
Less promotional allowances
     (6,326,726 )     (6,047,994 )     (25,519,352 )     (23,692,521 )
Net revenues
     36,890,164       36,992,666       159,856,371       151,968,954  
Operating expenses
                                
Casino
     8,957,261       8,650,752       35,927,672       34,134,518  
Food and beverage
     5,065,900       4,898,995       20,283,267       19,533,532  
Hotel
     1,940,872       2,070,882       8,357,541       8,383,382  
Other
     358,437       333,783       1,485,550       1,450,100  
Selling, general and administrative
     12,912,190       11,253,810       49,966,276       46,309,938  
Gaming development costs
     8,340       5,753       10,477       106,477  
Depreciation and amortization
     2,015,286       2,128,543       8,137,886       8,559,374  
Total operating expenses
     31,258,286       29,342,518       124,168,669       118,477,321  
Income from operations
     5,631,878       7,650,148       35,687,702       33,491,633  
                                 
Other income (expense)
                                
Interest income
     542,567       275,319       1,928,450       466,050  
Interest expense
     -       (22,877 )     (152,274 )     (97,722 )
Total other income
     542,567       252,442       1,776,176       368,328  
                                 
Income before income taxes
     6,174,445       7,902,590       37,463,878       33,859,961  
                                 
Provision for income taxes
     (2,123,660 )     (2,783,590 )     (12,983,660 )     (11,779,590 )
                                 
Net income
   $ 4,050,785     $ 5,119,000     $ 24,480,218     $ 22,080,371  
                                 
Earnings per share of common stock
                                
Net income
                                
Basic
   $ 0.21     $ 0.27     $ 1.28     $ 1.16  
Diluted
   $ 0.21     $ 0.27     $ 1.27     $ 1.15  
                                 
Weighted average number of common
                                
  shares and potential common
                                
  shares outstanding
                                
Basic
     18,990,032       19,063,439       19,057,583       18,990,331  
Diluted
     19,260,561       19,289,563       19,329,131       19,274,847  






Monarch Casino & Resort, Inc.
Condensed Consolidated Balance Sheets
   
December 31,
  
   
2007
    
2006
  
ASSETS
            
Current assets
            
Cash and cash equivalents
   $ 38,835,820     $ 36,985,187  
Receivables, net
     4,134,099       3,268,970  
Federal income tax refund receivable
     998,123       -  
Inventories
     1,496,046       1,471,667  
Prepaid expenses
     3,144,374       2,833,126  
Deferred income taxes
     1,084,284       965,025  
Total current assets
     49,692,746       45,523,975  
                 
Property and equipment
                
Land
     10,339,530       10,339,530  
Land improvements
     3,166,107       3,166,107  
Buildings
     78,955,538       78,955,538  
Building improvements
     10,435,062       10,435,062  
Furniture & equipment
     72,511,165       72,708,061  
Leasehold improvements
     1,346,965       1,346,965  
      176,754,367       176,951,263  
Less accumulated depreciation and amortization
     (92,215,149 )     (84,325,578 )
      84,539,218       92,625,685  
Construction in progress
     17,236,062       -  
Net property and equipment
     101,775,280       92,625,685  
                 
Other assets, net
     2,817,842       231,247  
Total assets
   $ 154,285,868     $ 138,380,907  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                
Current liabilities
                
Accounts payable
     10,840,318       8,590,669  
Accounts payable construction
     1,971,022       -  
Accrued expenses
     9,230,157       9,878,851  
Federal income taxes payable
     -       16,457  
Total current liabilities
     22,041,497       18,485,977  
                 
Deferred income taxes
     2,825,433       4,248,614  
       Total liabilities
     24,866,930       22,734,591  
                 
Stockholders' equity
                
Preferred stock, $.01 par value, 10,000,000 shares
                
  authorized; none issued
     -       -  
Common stock, $.01 par value, 30,000,000 shares
                
  authorized; 19,096,300 shares issued;
                
18,566,540 outstanding at 12/31/07
                
19,065,968 outstanding at 12/31/06
     190,963       190,726  
Additional paid-in capital
     25,741,972       23,205,045  
Treasury stock, 529,760 shares at 12/31/07
                
6,582 shares at 12/31/06, at cost
     (13,268,905 )     (24,145 )
Retained earnings
     116,754,908       92,274,690  
Total stockholders' equity
     129,418,938       115,646,316  
Total liability and stockholder's equity
   $ 154,285,868     $ 138,380,907  


Monarch Casino & Resort, Inc.
Reconciliation of Net Income to EBITDA (1)
Unaudited


   
Three Months Ended
    
Twelve Months Ended
  
   
December 31,
    
December 31,
  
   
2007
    
2006
    
2007
    
2006
  
Net Income
   $ 4,050,785     $ 5,119,000     $ 24,480,218     $ 22,080,371  
Adjustments
                                
  Provision for income taxes
     2,123,660       2,783,590       12,983,660       11,779,590  
  Interest expense
     -       22,877       152,274       97,722  
  Depreciation & amortization
     2,015,286       2,128,543       8,137,886       8,559,374  
  Interest income
     (542,567 )     (275,319 )     (1,928,450 )     (466,050 )
EBITDA (1)
   $ 7,647,164     $ 9,778,691     $ 43,825,588     $ 42,051,007  
                                 

















(1)  "EBITDA" consists of net income plus provision for income taxes, interest expense, depreciation and amortization less interest income.  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, as an alternative to cash flows from operating activities (as determined in accordance with generally accepted accounting principles) or 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.