UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______TO______
Commission File No. 0-22088
MONARCH CASINO & RESORT, INC.
(Exact name of registrant as specified in its charter)
-------------------------
NEVADA 88-0300760
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1175 W. MOANA LANE, SUITE 200
RENO, NEVADA 89509
(Address of principal (Zip code)
executive offices)
Registrant's telephone number, including area code: (775) 825-3355
-------------------------
NOT APPLICABLE
(Former name, former address and former fiscal
year, if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES _X_ NO ___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. YES ___ NO ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
As of November 9, 2000, there were 9,436,275 shares of Monarch Casino &
Resort, Inc. $0.01 par value common stock outstanding.
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MONARCH CASINO & RESORT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues
Casino............................... $15,848,849 $ 13,744,711 $45,399,037 $ 35,623,157
Food and beverage.................... 8,116,661 7,467,982 22,292,559 17,832,428
Hotel................................ 5,604,076 5,054,669 14,356,205 10,832,779
Other................................ 968,159 829,793 2,674,310 2,129,621
----------- ------------ ----------- ------------
Gross revenues.................... 30,537,745 27,097,155 84,722,111 66,417,985
Less promotional allowances.......... (3,959,558) (3,538,745) (10,515,705) (9,347,854)
----------- ------------ ----------- ------------
Net revenues...................... 26,578,187 23,558,410 74,206,406 57,070,131
----------- ------------ ----------- ------------
Operating expenses
Casino............................... 6,960,454 5,945,758 19,180,481 15,565,767
Food and beverage.................... 5,010,792 4,907,518 13,847,679 11,070,611
Hotel................................ 1,737,449 1,400,690 4,962,350 3,058,834
Other................................ 371,929 322,388 1,036,124 821,428
Selling, general and administrative.. 6,930,928 6,398,733 18,957,890 16,777,993
Depreciation and amortization........ 2,555,859 1,668,726 7,574,260 4,401,792
----------- ------------ ----------- ------------
Total operating expenses.......... 23,567,411 20,643,813 65,558,784 51,696,425
----------- ------------ ----------- ------------
Income from operations............ 3,010,776 2,914,597 8,647,622 5,373,706
----------- ------------ ----------- ------------
Other expense
Interest expense, net................ 2,140,797 1,780,613 6,358,809 3,320,813
----------- ------------ ----------- ------------
Total other expense............... 2,140,797 1,780,613 6,358,809 3,320,813
----------- ------------ ----------- ------------
Income before income taxes........ 869,979 1,133,984 2,288,813 2,052,893
Provision for income taxes............. 287,705 385,555 783,514 697,984
----------- ------------ ----------- ------------
Net Income........................ $ 582,274 $ 748,429 $ 1,505,299 $ 1,354,909
=========== ============ =========== ============
Income per share of common stock
Net income
Basic.............................. $ 0.06 $ 0.08 $ 0.16 $ 0.14
Diluted............................ $ 0.06 $ 0.08 $ 0.16 $ 0.14
Weighted average number of common
shares and potential common
shares outstanding
Basic.............................. 9,436,275 9,436,275 9,436,275 9,436,275
Diluted............................ 9,481,878 9,503,403 9,479,076 9,500,346
</TABLE>
The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of these statements.
-2-
MONARCH CASINO & RESORT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
-------------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash................................................. $ 6,533,089 $ 6,367,507
Receivables, net..................................... 3,515,824 1,954,447
Federal income tax refund receivable................. 280,000 -
Related party receivables............................ 64,310 83,205
Inventories.......................................... 1,143,300 1,456,602
Prepaid expenses..................................... 1,797,701 1,600,249
Prepaid federal income taxes ........................ - 443,870
Deferred income taxes................................ 1,475,380 1,174,626
------------- ------------
Total current assets.............................. 14,809,604 13,080,506
------------- ------------
Property and equipment
Land................................................. 10,339,530 10,339,530
Land improvements.................................... 3,066,402 3,034,095
Buildings............................................ 78,944,938 78,432,078
Building improvements................................ 4,687,778 4,462,520
Furniture and equipment.............................. 50,749,060 49,392,494
------------- ------------
147,787,708 145,660,717
Less accumulated depreciation and amortization....... (35,517,254) (27,964,180)
------------- ------------
112,270,454 117,696,537
Construction in progress............................. 72,963 -
------------- ------------
Net property and equipment........................ 112,343,417 117,696,537
------------- ------------
Other assets, net...................................... 722,349 877,382
------------- ------------
Total assets...................................... $ 127,875,370 $ 131,654,425
============= =============
</TABLE>
The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of these statements.
-3-
MONARCH CASINO & RESORT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
-------------- -------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt................. $ 7,954,177 $ 7,333,921
Accounts payable..................................... 6,552,672 7,238,084
Accounts payable construction........................ 37,564 942,264
Accrued expenses..................................... 6,565,976 5,156,363
Federal income taxes payable......................... 249,818 213,686
------------- ------------
Total current liabilities......................... 21,360,207 20,884,318
Long-term debt, less current maturities................ 75,591,000 82,235,509
Deferred income taxes.................................. 3,550,283 2,666,017
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;
9,436,275 outstanding............................... 95,363 95,363
Additional paid-in capital........................... 17,241,788 17,241,788
Treasury stock....................................... (329,875) (329,875)
Retained earnings.................................... 10,366,604 8,861,305
------------- ------------
Total stockholders' equity........................ 27,373,880 25,868,581
------------- ------------
Total liabilities and stockholders' equity........ $ 127,875,370 $ 131,654,425
============= =============
</TABLE>
The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of these statements.
-4-
MONARCH CASINO & RESORT, INC.
CONDENSED CONSOLIDATED STATMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------
2000 1999
------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income............................................ $ 1,505,299 $ 1,354,907
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization....................... 7,710,391 4,542,584
Gain on disposal of assets.......................... (89,995) (15,044)
Increase in deferred income taxes................... 583,512 137,719
Increase in receivables, net........................ (1,822,482) (995,505)
Decrease (increase) in inventories.................. 313,302 (633,137)
Decrease in prepaid expenses........................ 246,418 298,671
Decrease (increase) in other assets................. 16,306 (22,053)
(Decrease) increase in accounts payable............ (685,412) 2,041,371
Increase in accrued expenses and
federal income taxes payable....................... 1,445,745 826,719
------------ ------------
Net cash provided by operating activities.......... 9,223,084 7,536,232
------------ ------------
Cash flows from investing activities:
Proceeds from sale of assets.......................... 240,023 21,018
Acquisition of property and equipment................. (2,018,065) (28,763,396)
Decrease in accounts payable construction............. (904,700) (3,887,148)
------------ ------------
Net cash used in investing activities.............. (2,682,742) (32,629,526)
------------ ------------
Cash flows from financing activities:
Proceeds from long-term debt.......................... - 27,492,634
Principal payments on long-term debt.................. (6,374,760) (1,496,268)
------------ ------------
Net cash (used in) provided by
financing activities............................. (6,374,760) 25,996,366
------------ ------------
Net increase in cash............................... 165,582 903,072
Cash at beginning of period............................. 6,367,507 4,919,143
------------ ------------
Cash at end of period................................... $ 6,533,089 $ 5,822,215
============ ============
Supplemental disclosure of
cash flow information:
Cash paid for interest,
net of capitalized interest.......................... $ 5,932,562 $ 3,352,036
Capitalized interest.................................. - 1,090,428
Cash paid for income taxes............................ - -
Supplemental schedule of non-cash
investing and financing activities:
The Company financed the purchase of property
and equipment in the following amounts............... $ 350,507 $ 6,847,232
</TABLE>
The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of these statements.
-5-
MONARCH CASINO & RESORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Monarch Casino & Resort, Inc. ("Monarch") was incorporated in 1993.
Monarch's wholly-owned subsidiary, Golden Road Motor Inn, Inc. ("Golden
Road"), owns and operates the Atlantis Casino Resort (the "Atlantis"), a
hotel/casino facility in Reno, Nevada. Unless stated otherwise, "Monarch" or
the "Company" refers to Monarch Casino & Resort, Inc. and its Golden Road
subsidiary.
The consolidated financial statements include the accounts of Monarch and
Golden Road. Intercompany balances and transactions are eliminated.
Use of Estimates
In preparing these financial statements in conformity with generally
accepted accounting principles, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and revenues and expenses during the year. Actual results could
differ from those estimates.
Reclassifications
Certain amounts in the 1999 condensed consolidated financial statements
have been reclassified to conform with the 2000 presentation. These
reclassifications had no effect on the Company's previously reported net
income.
Related Party Receivables
Receivables from officers, employees, or affiliated companies are
primarily for banquet related services and are priced at the retail value of
the goods or services provided.
NOTE 2. INTERIM FINANCIAL STATEMENTS
The accompanying condensed consolidated financial statements for the
three month and nine month periods ended September 30, 2000 and September 30,
1999 are unaudited. In the opinion of management, all adjustments, consisting
of normal recurring adjustments necessary for a fair presentation of the
Company's financial position and results of operations for such periods, have
been included. The accompanying unaudited condensed consolidated financial
statements should be read in conjunction with the Company's audited financial
statements included in its Annual Report on Form 10-K for the year ended
December 31, 1999. The results for the three month and nine month periods
ended September 30, 2000 are not necessarily indicative of the results that
may be expected for the year ending December 31, 2000, or for any other
period.
-6-
NOTE 3. EARNINGS PER SHARE
In 1997, the Company adopted the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 128, "Earnings Per Share." SFAS No. 128
replaces previously reported earnings per share with "basic" earnings per
share and "diluted" earnings per share. Basic earnings per share is computed
by dividing reported net earnings by the weighted-average number of common
shares outstanding during the period. Diluted earnings per share reflects the
additional dilution for all potentially dilutive securities such as stock
options.
The following is a reconciliation of the number of shares (denominator)
used in the basic and diluted earnings per share computations (shares in
thousands):
<TABLE>
<CAPTION>
Three Months ended September 30,
-----------------------------------
2000 1999
---------------- ----------------
Per Share Per Share
Shares Amount Shares Amount
------ --------- ------ ---------
<S> <C> <C> <C> <C>
Net Income
Basic..................... 9,436 $ 0.06 9,436 $ 0.08
Effect of dilutive
stock options............ 46 - 67 -
----- ------ ----- ------
Diluted................... 9,482 $ 0.06 9,503 $ 0.08
====== ======= ====== =======
</TABLE>
<TABLE>
<CAPTION>
Nine Months ended September 30,
-----------------------------------
2000 1999
---------------- ----------------
Per Share Per Share
Shares Amount Shares Amount
------ --------- ------ ---------
<S> <C> <C> <C> <C>
Net Income
Basic..................... 9,436 $ 0.16 9,436 $ 0.14
Effect of dilutive
stock options............ 43 - 64 -
----- ------ ----- ------
Diluted................... 9,479 $ 0.16 9,500 $ 0.14
====== ======= ====== =======
</TABLE>
The following options were not included in the computation of diluted
earnings per share because the options' exercise price was greater than the
average market price of the common shares and their inclusion would be
antidilutive.
-7-
<TABLE>
<CAPTION>
Three Months ended September 30,
-----------------------------------
2000 1999
---------------- ----------------
<S> <C> <C>
Options to purchase shares of
common stock (in thousands)... 16 10
Exercise prices................. $5.50-$6.00 $7.56
Expiration dates................ 6/03-2/10 7/09
</TABLE>
<TABLE>
<CAPTION>
Nine Months ended September 30,
-----------------------------------
2000 1999
---------------- ----------------
<S> <C> <C>
Options to purchase shares of
common stock (in thousands)... 24 10
Exercise prices................. $5.25-$6.00 $7.56
Expiration dates................ 6/03-2/10 7/09
</TABLE>
-8-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
STATEMENT ON FORWARD-LOOKING INFORMATION
Certain information included herein contains statements that may be
considered forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934,
such as statements relating to anticipated expenses, capital spending, and
financing sources. Such forward-looking information involves important risks
and uncertainties that could significantly affect anticipated results in the
future and, accordingly, such results may differ from those expressed in any
forward-looking statements made herein. These risks and uncertainties
include, but are not limited to, those relating to competitive industry
conditions, and expansion of Indian casinos in California, Reno-area tourism
conditions, dependence on existing management, leverage and debt service
(including sensitivity to fluctuations in interest rates), the regulation of
the gaming industry (including actions affecting licensing), outcome of
litigation, domestic or global economic conditions, changes in federal or
state tax laws or the administration of such laws.
RESULTS OF OPERATIONS
Comparison of Operating Results for the Three Month
Periods Ended September 30, 2000 and 1999
For the three month period ended September 30, 2000, the Company earned
$582 thousand, or $0.06 per share, on net revenues of $26.6 million, compared
to earnings of $748 thousand, or $0.08 per share, on net revenues of $23.6
million for the three months ended September 30, 1999. The Company's income
from operations totaled $3.0 million in the 2000 third quarter, compared to
$2.9 million in the 1999 third quarter. Net revenues for the third quarter
constitute a new third quarter record for the Company; however, third quarter
net income and earnings per share were impacted primarily due to a 53.2%
increase in depreciation and amortization and a 20.2% increase in interest
expense when compared to last year's third quarter, both as a direct result of
the Atlantis expansion.
Casino revenues totaled $15.8 million in the third quarter of 2000, a
15.3% increase from $13.7 million in the 1999 third quarter, reflecting
increases in both slot and table game win. Slot revenues were up 17.6% in the
third quarter of 2000 compared to the third quarter of 1999 due to an increase
in the volume of slot machine play. Table game revenues were up 10.1% in the
third quarter of 2000 compared to the third quarter of 1999 primarily due to
an increase in table game play. Casino operating expenses remained relatively
constant at 43.9% of casino revenues in the 2000 third quarter compared to
43.3% in the 1999 third quarter.
Food and beverage revenues for the 2000 third quarter totaled $8.1
million, an increase of 8.7% compared to $7.5 million for the 1999 third
quarter, due primarily to the operation of one new restaurant and beverage
lounge, and an increase in the hotel guest traffic created by the new hotel
rooms. While food and beverage operating margins remained relatively
constant, reported food and beverage operating expenses during the 2000 third
-9-
quarter amounted to 61.7% of food and beverage revenues, down from 65.7% for
the third quarter of 1999, which was primarily caused by classifying certain
food and beverage costs in accordance with accounting requirements prescribed
by the Securities and Exchange Commission.
Hotel revenues in the 2000 third quarter increased 10.9% to $5.6 million
from $5.1 million in the 1999 third quarter, as a result of phasing in 106
additional new hotel rooms during the 1999 third quarter, a slight decrease in
the average daily room rate, and an occupancy rate increase of 7.5 percentage
points. The Atlantis' average daily room rate ("ADR") was $62.68 for the 2000
third quarter compared to $63.83 in the third quarter of 1999. During the
third quarter of 2000, the Atlantis experienced a 94.5% occupancy rate, up
from an 87.0% occupancy rate for the same period in 1999. Hotel operating
expenses in the 2000 third quarter were 31.0% of hotel revenues, compared to
27.7% for the same quarter in 1999, due to increased payroll and operating
costs.
Other revenues in the 2000 third quarter totaled $968 thousand, up 16.7%
from $830 thousand in the 1999 third quarter, primarily due to the opening of
a logo gift shop during the 1999 third quarter. Other expenses decreased
slightly as a percentage of other revenues, decreasing to 38.4% in the 2000
third quarter from 38.9% in the 1999 third quarter.
Selling, general and administrative expenses were $6.9 million in the
2000 third quarter or 26.1% of net revenues, compared to $6.4 million or 27.2%
of net revenues in the third quarter of 1999. The decrease in these expenses
as a percentage of revenues reflects certain economies of scale achieved from
the Atlantis expansion.
Interest expense for the 2000 third quarter totaled $2.1 million, up
20.2% from $1.8 million in the third quarter of 1999. The increase reflects
an increase in interest rates.
Comparison of Operating Results for the Nine Month
Periods Ended September 30, 2000 and 1999
For the nine months ended September 30, 2000, the Company earned $1.5
million, or $0.16 per share, on net revenues of $74.2 million, compared to
earnings of $1.4 million, or $0.14 per share, on net revenues of $57.1 million
during the nine months ended September 30, 1999. Operating income for the
2000 nine month period totaled $8.6 million, compared to $5.4 million for the
same period in 1999. In the first nine months of 2000, net revenues reflect a
record high for any of the Company's comparable nine month periods; however,
net income was impacted by a 72.1% increase in depreciation and amortization
and a 91.5% increase in interest expense, when compared to last year's nine
month period, which can be attributed directly to the Atlantis expansion.
Casino revenues for the first nine months of 2000 totaled $45.4 million,
an increase of 27.4% from $35.6 million for the first nine months of 1999,
driven by increases in both slot and table game win. Slot revenues were up
26.2% in the first nine months of 2000 compared to the first nine months of
-10-
1999 due to an increase in the volume of slot machine play and an increase in
the average number of slot machines for the nine month period. Table game
revenues for the nine months ended September 30, 2000 increased 31.5% compared
to the same period in 1999, primarily due to an increase in table game drop
and an increase in the average number of table games for the nine month
period. Also, a new poker room was added as a part of the Atlantis expansion
in the third quarter of 1999 generating revenue for nine months in 2000
compared to a little over two months in 1999. Casino operating expenses
amounted to 42.2% of casino revenues for the nine months ended September 30,
2000, compared to 43.7% for the nine month period ending September 30, 1999,
primarily due to a decrease in operating costs.
Food and beverage revenues totaled $22.3 million for the nine months
ended September 30, 2000, an increase of 25.0% from the $17.8 million for the
nine months ended September 30, 1999, due primarily to the addition of two new
restaurants, an additional beverage lounge, expansion of the buffet
restaurant, and an increase in the number of guest checks due principally to
the newly expanded hotel. Food and beverage operating expenses remained
constant at 62.1% of food and beverage revenues for the nine months ended
September 30, 2000, and September 30, 1999.
Hotel revenues for the first nine months of 2000 increased 32.5% to $14.4
million from $10.8 million for the first nine months of 1999. The increase
reflects a 27.3% increase in room nights available during the nine month
period of 2000 compared to the same period in 1999 and an increased occupancy
rate. The Atlantis experienced a 92.6% occupancy rate for the 2000 nine month
period, compared to an 88.2% occupancy rate for the 1999 nine month period.
The average daily room rate ("ADR") was $55.15 for the nine month period in
2000, down slightly compared to $56.53 for the same period in 1999. Hotel
operating expenses for the nine month period ended September 30, 2000
increased to 34.6% of hotel revenues, compared to 28.2% for the first nine
months of 1999. This increase in operating expenses as a percentage of hotel
revenues resulted from increased payroll and operating costs for the expanded
hotel and additional amenities.
Other revenues increased 25.6% to $2.7 million for the 2000 nine month
period compared to $2.1 million for the same period in 1999, reflecting the
opening of a logo gift shop in August 1999. Other expenses as a percentage of
revenue remained fairly constant for the nine month period in 2000 at 38.7%,
compared to 38.6% for the same period of 1999.
Selling, general and administrative expenses were $19.0 million in the
first nine months of 2000, or 25.5% of net revenues, compared to $16.8 million
or 29.4% of net revenues in the first nine months of 1999. The decrease in
these expenses as a percentage of revenues reflects the fact that certain
payroll and operating costs have not increased to the same extent as revenues
have increased because of certain economies of scale from the Atlantis
expansion.
Interest expense for the first nine months of 2000 totaled $6.4 million,
up 91.5% from $3.3 million in the first nine months of 1999, reflecting an
increase in average outstanding debt primarily from the Atlantis expansion and
an increase in interest rates. Because the Atlantis expansion was in
operation in the first nine months of 2000, the Company did not capitalize
-11-
any interest costs; however, during the first nine months of 1999, while
construction was still in progress, $1.1 million in interest costs were
capitalized.
OTHER FACTORS AFFECTING CURRENT AND FUTURE RESULTS
The recent constitutional amendment approved by California voters
allowing the expansion of Indian casinos in certain areas of California will
have an impact on casino revenues in Nevada in general, and many analysts have
predicted the impact will be more significant on the Reno-Lake Tahoe market.
The extent of this impact is difficult to predict, but the Company believes
that the impact on the Company will be mitigated to an extent due to the
Atlantis' emphasis on Reno area residents as a significant base of its
business. However, if other Reno area casinos suffer business losses due to
increased pressure from California Indian casinos, they may intensify their
marketing efforts to Reno area residents as well.
The Company also believes that unlimited land-based casino gaming in or
near any major metropolitan area in the Atlantis' key non-Reno marketing
areas, such as San Francisco or Sacramento, could have a material adverse
effect on its business.
The gaming industry represents a significant source of tax revenues to
the State of Nevada. A recent proposal in Nevada, which may be discussed in
the 2001 Nevada legislative session, would increase the tax on gaming revenues
from 6.25% to as high as 11.25%. If enacted, this proposal would have a
material adverse impact on the Company's results of operations.
LIQUIDITY AND CAPITAL RESOURCES
For the nine months ended September 30, 2000, net cash provided by
operating activities totaled $9.2 million. Net cash used in investing
activities for the same period totaled $2.7 million, which consisted primarily
of acquisitions of property and equipment at the Atlantis. Net cash used in
financing activities totaled $6.4 million, as the Company used funds to reduce
long-term debt. At September 30, 2000 the Company had cash of $6.5 million
compared to $5.8 million at September 30, 1999.
The Company has an $80.0 million construction and reducing revolving
credit facility with a group of banks (the "Credit Facility"). The principal
terms of the Credit Facility are summarized in the Company's Annual Report on
Form 10-K for the year ended December 31, 1999. At September 30, 2000, the
outstanding balance of the Credit Facility was $76.5 million.
The Company believes that its existing cash balances, cash flow from
operations, and borrowings available under the Credit Facility, will provide
the Company with sufficient resources to fund its operations, meet its
existing debt obligations, and fulfill its capital expenditure requirements;
however, the Company's operations are subject to financial, economic,
competitive, regulatory, and other factors, many of which are beyond its
control. If the Company is unable to generate sufficient cash flow, it could
-12-
be required to adopt one or more alternatives, such as reducing, delaying, or
eliminating planned capital expenditures, selling assets, restructuring debt,
or obtaining additional equity capital.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No. Description
----------- -----------
10.01 Agreement dated November 3, 1999 between
Golden Road Motor Inn, Inc. and First
Security Leasing Company of Nevada.
10.02 Agreement dated November 3, 1999 between
Golden Road Motor Inn, Inc. and First
Security Leasing Company of Nevada.
27.01 Financial Data Schedule
(b) Reports on Form 8-K
None
-13-
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 thereunto duly authorized.
MONARCH CASINO & RESORT, INC.
(Registrant)
<TABLE>
<S> <C>
Date: November 13, 2000 By:/s/Ben Farahi
------------------------------------
Ben Farahi, Co-Chairman of the Board,
Secretary, Treasurer and Chief
Financial Officer(Principal Financial
Officer and Duly Authorized Officer)
</TABLE>
-14-
EXHIBIT INDEX
<TABLE>
<S> <C> <C>
Exhibit No. Description Page No.
----------- ------------ -------
10.01 Agreement dated November 3, 1999 between Golden 16
Road Motor Inn, Inc. and First Security Leasing
Company of Nevada.
10.02 Agreement dated November 3, 1999 between Golden 34
Road Motor Inn, Inc. and First Security Leasing
Company of Nevada.
27.01 Financial Data Schedule 49
</TABLE>
-15-
