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 June 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 July 31, 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 Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues
Casino........................... $ 15,501,459 $ 11,827,740 $ 29,550,188 $ 21,878,446
Food and beverage................ 7,400,521 5,802,959 14,175,898 10,364,446
Hotel............................ 4,642,868 3,415,218 8,752,129 5,778,110
Other............................ 896,375 666,772 1,706,151 1,299,828
------------ ------------ ------------ ------------
Gross revenues................ 28,441,223 21,712,689 54,184,366 39,320,830
Less promotional allowances...... (3,462,731) (3,134,502) (6,556,147) (5,809,109)
------------ ------------ ------------ ------------
Net revenues.................. 24,978,492 18,578,187 47,628,219 33,511,721
------------ ------------ ------------ ------------
Operating expenses
Casino........................... 6,386,124 5,091,534 12,220,027 9,620,009
Food and beverage................ 4,585,251 3,632,785 8,836,887 6,163,093
Hotel............................ 1,608,437 950,546 3,224,901 1,658,144
Other............................ 357,119 282,268 664,195 499,040
Selling, general and
administrative.................. 6,068,891 5,548,029 12,026,962 10,379,260
Depreciation and amortization.... 2,518,646 1,555,122 5,018,401 2,733,066
------------ ------------ ------------ ------------
Total operating expenses...... 21,524,468 17,060,284 41,991,373 31,052,612
------------ ------------ ------------ ------------
Income from operations........ 3,454,024 1,517,903 5,636,846 2,459,109
------------ ------------ ------------ ------------
Other expense
Interest expense................. 2,178,903 920,265 4,218,012 1,540,200
------------ ------------ ------------ ------------
Total other expenses.......... 2,178,903 920,265 4,218,012 1,540,200
------------ ------------ ------------ ------------
Income before income taxes.... 1,275,121 597,638 1,418,834 918,909
Provision for income taxes......... 445,301 203,197 495,809 312,429
------------ ------------ ------------ ------------
Net income.................... $ 829,820 $ 394,441 $ 923,025 $ 606,480
============ ============ ============ ============
Income per share of common stock
Net income
Basic.......................... $ 0.09 $ 0.04 $ 0.10 $ 0.06
Diluted........................ $ 0.09 $ 0.04 $ 0.10 $ 0.06
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........................ 9,478,796 9,493,765 9,481,390 9,497,903
</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>
June 30, December 31,
2000 1999
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash................................................. $ 3,903,609 $ 6,367,507
Receivables, net..................................... 3,258,471 1,954,447
Related party receivables............................ 59,773 83,205
Inventories.......................................... 1,233,955 1,456,602
Prepaid expenses..................................... 2,049,791 1,600,249
Prepaid federal income taxes ........................ 443,870 443,870
Deferred income taxes................................ 1,602,772 1,174,626
------------- ------------
Total current assets.............................. 12,552,241 13,080,506
------------- ------------
Property and equipment
Land................................................. 10,339,530 10,339,530
Land improvements.................................... 3,074,414 3,034,095
Buildings............................................ 78,785,911 78,432,078
Furniture and equipment.............................. 50,332,559 49,392,494
Building improvements................................ 4,515,799 4,462,520
------------- ------------
147,048,213 145,660,717
Less accumulated depreciation and amortization....... (32,980,850) (27,964,180)
------------- ------------
114,067,363 117,696,537
Construction in progress............................. 419,042 -
------------- ------------
Net property and equipment........................ 114,486,405 117,696,537
------------- ------------
Other assets, net...................................... 774,026 877,382
------------- ------------
Total assets...................................... $ 127,812,672 $ 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>
June 30, December 31,
2000 1999
------------ ------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt................. $ 8,287,476 $ 7,333,921
Accounts payable..................................... 5,797,581 7,238,084
Accounts payable-construction........................ 496,557 942,264
Accrued expenses..................................... 5,241,093 5,156,363
Federal income taxes payable......................... 580,080 213,686
------------- ------------
Total current liabilities......................... 20,402,787 20,884,318
Long-term debt, less current maturities................ 77,394,700 82,235,509
Deferred income taxes.................................. 3,223,579 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.................................... 9,784,330 8,861,305
------------- ------------
Total stockholders' equity........................ 26,791,606 25,868,581
------------- ------------
Total liabilities and stockholders' equity........ $127,812,672 $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 STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------------
2000 1999
------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income............................................ $ 923,025 $ 606,480
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization....................... 5,109,154 2,823,559
Gain on disposal of assets.......................... (87,980) (5,294)
Deferred income taxes............................... 129,416 (97,143)
Increase in receivables, net........................ (1,280,592) (311,759)
Decrease (increase) in inventories.................. 222,647 (435,245)
(Increase) decrease in prepaid expenses............. (449,542) 352,707
Decrease in other assets............................ 10,872 19,228
(Decrease) increase in accounts payable............. (1,440,503) 1,543,214
Increase (decrease) in accrued expenses,
and federal income taxes.......................... 451,124 (203,754)
------------ ------------
Net cash provided by operating activities.......... 3,587,621 4,291,993
------------ ------------
Cash flows from investing activities:
Proceeds from sale of assets.......................... 87,980 11,268
Acquisition of property and equipment................. (1,670,529) (24,876,590)
Decrease in accounts payable construction............. (445,707) (2,056,375)
------------ ------------
Net cash used in investing activities.............. (2,028,256) (26,921,697)
------------ ------------
Cash flows from financing activities:
Proceeds from long-term debt.......................... - 23,249,498
Principal payments on long-term debt.................. (4,023,263) (746,082)
------------ ------------
Net cash (used in) provided by
financing activities.............................. (4,023,263) 22,503,416
------------ ------------
Net decrease in cash............................... (2,463,898) (126,288)
Cash at beginning of period............................. 6,367,507 4,919,143
------------ ------------
Cash at end of period................................... $ 3,903,609 $ 4,792,855
============ ============
Supplemental disclosure of
cash flow information:
Cash paid for interest,
net of capitalized interest.......................... $ 4,101,751 $ 1,642,151
Capitalized interest.................................. $ - $ 1,090,428
Supplemental schedule of non-cash
investing and financing activities:
The Company financed the purchase of property
and equipment in the following amounts............... $ 136,009 $ 6,425,760
</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 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 six month periods ended June 30, 2000 and June 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 six month periods
ended June 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 June 30,
-----------------------------------
2000 1999
---------------- ----------------
Per Share Per Share
Shares Amount Shares Amount
------ --------- ------ ---------
<S> <C> <C> <C> <C>
Net Income
Basic..................... 9,436 $0.09 9,436 $0.04
Effect of dilutive
stock options............ 43 - 58 -
------ ------- ------ -------
Diluted................... 9,479 $0.09 9,494 $0.04
====== ======= ====== =======
</TABLE>
<TABLE>
<CAPTION>
Six Months ended June 30,
-----------------------------------
2000 1999
---------------- ----------------
Per Share Per Share
Shares Amount Shares Amount
------ --------- ------ ---------
<S> <C> <C> <C> <C>
Net Income
Basic..................... 9,436 $0.10 9,436 $0.06
Effect of dilutive
stock options............ 45 - 62 -
------ ------ ------ ------
Diluted................... 9,481 $0.10 9,498 $0.06
====== ====== ====== ======
</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 June 30,
----------------------------
2000 1999
----------- -----------
<S> <C> <C>
Options to purchase shares of
common stock (in thousands)..... 19 -
Exercise prices.................. $5.25-$6.00 -
Expiration dates................. 6/03-2/10 -
</TABLE>
<TABLE>
<CAPTION>
Six Months ended June 30,
----------------------------
2000 1999
----------- -----------
<S> <C> <C>
Options to purchase shares of
common stock (in thousands)..... 19 -
Exercise prices.................. $5.25-$6.00 -
Expiration dates................. 6/03-2/10 -
</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 June 30, 2000 and 1999
For the three month period ended June 30, 2000, the Company earned $830
thousand, or $0.09 per share, on net revenues of $25.0 million, compared to
earnings of $394 thousand, or $0.04 per share, on net revenues of $18.6
million for the three months ended June 30, 1999. Income from operations for
the three months ended June 30, 2000 totaled $3.5 million, compared to $1.5
million for the 1999 second quarter. Net revenues for the second quarter of
2000 represents a new second quarter record for the Company, but net income
and earnings per share were negatively impacted primarily due to a 62.0%
increase in depreciation and amortization and a 136.8% increase in interest
expense when compared to last year's second quarter, both as a direct result
of the Atlantis expansion.
Casino revenues totaled $15.5 million in the second quarter of 2000, an
increase of 31.1% from $11.8 million in the 1999 second quarter, reflecting
increases in both slot and table game win. Slot revenues were up 23.4% in the
second quarter of 2000 compared to the second quarter of 1999 due to an
increase in the volume of slot machine play and an increase in the average
number of slot machines for the quarter. Table game revenue for the three
months ended June 30, 2000 increased 57.0% 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 quarter. Casino operating expenses
amounted to 41.2% of casino revenues in the 2000 second quarter, compared to
43.0% in the 1999 second quarter, primarily due to a decrease in operating
costs.
Food and beverage revenues for the 2000 second quarter totaled $7.4
million, an increase of 27.5% from $5.8 million in the 1999 second quarter,
due primarily to the operation of one new restaurant, an additional beverage
lounge, expansion of the buffet, and an increase in the hotel guest traffic
-9-
created by the new hotel rooms. Food and beverage operating expenses remained
relatively constant as a percent of food and beverage revenue at 62.0% in the
2000 second quarter compared to 62.6% in the second quarter of 1999.
Hotel revenues increased 35.9% to $4.6 million from the 1999 second
quarter, as a result of opening 385 new hotel tower rooms, a slight decrease
in the average daily room rate, and an occupancy rate increase. The Atlantis'
average daily room rate ("ADR") was $51.73 for the 2000 second quarter
compared to $52.45 in the second quarter of 1999. The Atlantis experienced an
occupancy rate of 96.7% during the 2000 second quarter, up from an occupancy
rate of 90.8% during the same period last year. Hotel operating expenses in
the 2000 second quarter were 34.6% of hotel revenues, compared to 27.8% in the
1999 second quarter, as a result of increased payroll and operating costs for
the hotel expansion, including the new concierge tower rooms.
Other revenues totaled $896 thousand in the second quarter of 2000, up
34.4% from $667 thousand in the second quarter of 1999, primarily reflecting
the opening of a logo gift shop. Other expenses in the 2000 second quarter
were 39.8% of other revenues, compared to 42.3% in the 1999 second quarter.
Selling, general and administrative expenses were $6.1 million in the
2000 second quarter or 24.3% of net revenues, compared to $5.5 million or
29.9% of net revenues in the second quarter of 1999. The decrease in these
expenses as a percentage of revenue reflects the fact that certain payroll and
operating costs have not increased to the same extent as revenues have
increased, thereby resulting in certain economies of scale from the expansion.
Interest expense for the 2000 second quarter totaled $2.2 million, an
increase of 136.8% from $920 thousand in the second quarter of 1999. The
increase reflects the Company's increased debt incurred in connection with the
Atlantis expansion and an increase in interest rates. Because the Atlantis
expansion was in operation in the second quarter of 2000, the Company did not
capitalize any interest costs; however, during the 1999 second quarter, while
construction was still in progress, $561 thousand in interest costs were
capitalized.
Comparison of Operating Results for the Six Month
Periods Ended June 30, 2000 and 1999
For the six months ended June 30, 2000, the Company earned $923 thousand,
or $0.10 per share, on net revenues of $47.6 million, compared to earnings of
$606 thousand, or $0.06 per share, on net revenues of $33.5 million during the
six months ended June 30, 1999. Operating income for the 2000 six month
period totaled $5.6 million, compared to $2.5 million for the same period in
1999. Net revenues for the six months ended June 30, 2000 represents a new
record for the Company, but net income and earnings per share were negatively
impacted primarily due to an 83.6% increase in depreciation and amortization
and a 173.9% increase in interest expense when compared to last year's six
month period.
Casino revenues for the first six months of 2000 totaled $29.6 million, a
35.1% increase from $21.9 million for the first six months of 1999, reflecting
increases in both slot and table game win. Slot revenues were up 31.5% in the
first six months of 2000 compared to the first six 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 six month period. Table game
revenue for the six months ended June 30, 2000 increased 45.7% 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 six month period.
Casino operating expenses amounted to 41.4% of casino revenues for the six
months ended June 30, 2000, compared to 44.0% for the same period in 1999,
primarily due to a decrease in operating costs.
Food and beverage revenues totaled $14.2 million for the six months ended
June 30, 2000, an increase of 36.8% from the $10.4 million for the six months
ended June 30, 1999, due primarily to the addition of two new restaurants, an
additional beverage lounge, expansion of the buffet, and an increase in the
number of hotel guests in the newly expanded hotel. While food and beverage
operating margins remained relatively constant, reported food and beverage
expenses amounted to 62.3% of food and beverage revenues during the 2000 six
month period, compared to 59.5% for the same period in 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 for the first six months of 2000 increased 51.5% to a
total of $8.8 million, up from $5.8 million for the first six months of 1999.
The increase reflects a 45.6% increase in room nights available in the first
six month period of 2000 compared to the same period for 1999 and an increased
occupancy rate. The Atlantis experienced a 91.6% occupancy rate during the
2000 six month period, compared to 89.1% for the same period in 1999. The
average daily room rate ("ADR") was $51.23 for the six month period in 2000,
down only slightly compared to $51.39 for the same period in 1999. Hotel
operating expenses in the first six months of 2000 were 36.8% of hotel
revenues, compared to 28.7% for the same period in 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 were $1.7 million for the six months ended June 30, 2000,
an increase of 31.3% from $1.3 million in the same period in 1999, reflecting
the opening of a logo gift shop. Other expenses as a percentage of revenue
remained fairly constant at 38.9% and 38.4% for the six month periods ended
June 30, 2000 and 1999, respectively.
Selling, general and administrative expenses were $12.0 million in the
first six months of 2000, or 25.3% of net revenues, compared to $10.4 million
or 31.0% of net revenues in the first six months of 1999. The decrease in
these expenses as a percentage of revenue reflects the fact that certain
payroll and operating costs have not increased to the same extent as revenues
have increased, thereby resulting in certain economies of scale from the
expansion.
Interest expense for the first six months of 2000 totaled $4.2 million,
an increase of 173.9%, compared to $1.5 million for the same period one year
earlier. The increase reflects the Company's increased debt due to the
Atlantis expansion and an increase in interest rates. Because the Atlantis
expansion was in operation in the first six months of 2000, the Company did
not capitalize any interest costs; however, during the first six months of
1999, while construction was still in progress, $1.1 million in interest costs
were capitalized.
-11-
OTHER FACTORS AFFECTING CURRENT AND FUTURE RESULTS
The recent constitutional amendment approved by California voters
allowing the expansion of Indian casinos in 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. However, the Company's numerous amenities such as a
wide array of restaurants and other venues are a key factor in the Company's
ability to attract Reno area residents which competitor facilities will not
easily be able to match.
The Company also believes that unlimited land-based casino gaming in or
near any major metropolitan area in the Atlantis' key 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 is currently under
discussion, would increase the tax on gaming revenues from 6.25% to 11.25%.
If enacted, this proposal would have a material impact on the Company's
results of operations.
LIQUIDITY AND CAPITAL RESOURCES
For the six months ended June 30, 2000, net cash provided by operating
activities totaled $3.6 million. Net cash used in investing activities for
the same period totaled $2.0 million, which consisted primarily of
acquisitions of property and equipment at the Atlantis. Net cash used in
financing activities totaled $4.0 million as the Company used funds to reduce
long-term debt. As a result, at June 30, 2000, the Company had cash of $3.9
million, compared to $6.4 million at December 31, 1999.
The Company has an $80 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 June 30, 2000, the outstanding
balance of the Credit Facility was $77.9 million.
The Company continues to monitor expansion and development opportunities
at its other Reno site and elsewhere in Nevada and in other jurisdictions.
The decision by the Company to proceed with any substantial project will
require the Company to secure adequate financing on acceptable terms. No
assurances can be made that if such projects are pursued that adequate
financing would be available on acceptable terms, if at all.
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 fund 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 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On June 21, 2000, the Company conducted its annual meeting of stockholders in
Reno, Nevada, in which the only action taken was the election of directors
whose term expired in 2000. The results were as follows:
Votes Cast
--------------------
Against or
Name of Director Elected For Withheld
------------------------ --------------------
John Farahi 9,349,688 14,750
Ronald R. Zideck 9,349,688 14,750
Craig F. Sullivan 9,349,688 14,750
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No. Description
----------- -----------
EX-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: August 11, 2000 By: /s/ BEN FARAHI
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Ben Farahi, Co-Chairman of the Board,
Secretary, Treasurer and Chief
Financial Officer(Principal Financial
Officer and Duly Authorized Officer)
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EXHIBIT INDEX
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<S> <C> <C>
Exhibit No. Description Page
No.
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EX-27.01 Financial Data Schedule 16
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