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4-Traders Homepage  >  Equities  >  Nasdaq  >  Monarch Casino & Resort, Inc.    MCRI

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MONARCH CASINO & RESORT : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

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11/07/2017 | 06:53pm CET

STATEMENT ON FORWARD-LOOKING INFORMATION

When used in this report and elsewhere by management from time to time, the words "believes," "anticipates" and "expects" and similar expressions are intended to identify forward-looking statements with respect to our financial condition, results of operations and our business, including our expansion, financing for such expansion, construction timelines, development activities, our ability to benefit from future economic growth, our ability to fund our operations and meet debt obligations, legal proceedings and employee matters. Certain important factors, including, but not limited to, competition from other gaming operations, factors affecting our ability to compete, acquisitions of gaming properties, legalization of additional gaming operations in our markets, leverage, construction risks, availability of financing, economic downturn, the inherent uncertainty and costs associated with litigation and governmental and regulatory investigations, and licensing and other regulatory risks, could cause our actual results to differ materially from those expressed in our forward-looking statements. Any changes in the law that would permit the establishment of gaming operations in or near Denver could materially impact Monarch Casino Black Hawk operations and could alter, delay or cause us to reconsider our master development plan to expand our Monarch Casino Black Hawk property. Further information on potential factors which could affect our financial condition, results of operations and business including, without limitation, our expansion, development activities, legal proceedings and employee matters, are included in our filings with the Securities and Exchange Commission (the "SEC"). Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date thereof. We undertake no obligation to publicly release any revisions to such forward-looking statement to reflect events or circumstances after the date hereof.

Unless otherwise indicated, "Monarch," "Company," "we," "our" and "us" refer to Monarch Casino & Resort, Inc. and its subsidiaries.



OPERATING RESULTS SUMMARY


Our operating results may be affected by, among other things, competitive factors, gaming tax increases, the commencement of new competitive gaming operations, construction at our facilities, general public sentiment regarding travel and leisure activities, including gaming, overall economic conditions and governmental policies affecting the disposable income of our patrons and weather conditions affecting our properties.

The following significant factors and trends should be considered in analyzing our operating performance:

Atlantis: Our business strategy is to maximize revenues, operating income and cash flow primarily through our casino, food and beverage operations and hotel operations. We continually make upgrades to the facility and improve our products. With quality gaming, hotel and dining products, we believe the Atlantis is well positioned to benefit from future macro and local economic growth. Several national businesses have relocated or have announced plans to expand or relocate operations to Northern Nevada. While such economic activity could ultimately drive additional revenue and profit at Atlantis, we are experiencing the more immediate effect of increased labor costs which, combined with continued aggressive marketing programs by our competitors, have applied upward pressure on Atlantis operating costs.




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Monarch Casino Black Hawk: Since the acquisition of Monarch Casino Black Hawk in April 2012, our focus has been to maximize casino and food and beverage revenues while upgrading the existing facility and laying the groundwork for the planed major expansion. There is currently no hotel on the property. In October 2012, we began a project to redesign and upgrade the existing Monarch Casino Black Hawk facility. In September 2013, we opened a new buffet. In August 2015, we completed the redesign and upgrade of the existing Monarch Casino Black Hawk, bringing to the facility's interior the same quality, ambiance and finishes of the ongoing master planned expansion that will transform Monarch Casino Black Hawk into a full-scale casino resort. In the fourth quarter of 2013, we began work on a multi-phased expansion of the Monarch Casino Black Hawk, which we refer to herein as the "Monarch Black Hawk Expansion Plan." The first phase of the Monarch Black Hawk Expansion Plan is completed. In November 2016, we opened for guest use our nine-story parking facility with about 1,350 spaces. Construction of a new hotel tower and casino expansion on the site where the old parking structure was sitting is under way (see CAPITAL SPENDING AND DEVELOPMENT - Monarch Black Hawk Expansion Plan). Once completed, the Monarch Black Hawk Expansion Plan will nearly double the casino space and will add a 23-story hotel tower with approximately 500 guest rooms and suites, an upscale spa and pool facility, three additional restaurants (increasing the total to four), additional bars and associated support facilities. We currently expect completion of the entire expansion in the second quarter of 2019.

CAPITAL SPENDING AND DEVELOPMENT

We seek to continuously upgrade and maintain our facilities in order to present a fresh, high quality product to our guests.

Capital expenditures for the nine-month periods ended September 30, 2017 and 2016 totaled approximately $34.4 million and $19.8 million, respectively. During the nine-month period ended September 30, 2017, our capital expenditures related primarily to the new hotel tower and casino expansion at Monarch Casino Black Hawk, the acquisition of a parcel of land with an industrial warehouse in proximity to the Monarch Casino Black Hawk, the re-carpeting of the entire casino floor and more than one third of the hotel rooms at Atlantis, as well as acquisition of gaming and other equipment to upgrade and replace existing equipment at the Atlantis and the Monarch Casino Black Hawk. The capital expenditures were funded from operating cash flows. During the nine-month period ended September 30, 2016, our capital expenditures related primarily to the major redesign and upgrade of the Toucan Charlie's Buffet, improvements to new additional parking spaces at Atlantis, continued work on the new parking garage at Monarch Casino Black Hawk as well as acquisition of gaming equipment to upgrade and replace existing equipment in the Atlantis and Monarch Casino Black Hawk.

Monarch Black Hawk Expansion Plan

We have commenced its Monarch Black Hawk Expansion Plan, which will convert Monarch Casino Black Hawk into a full-scale hotel casino resort spa.

In the fourth quarter of 2013, we began work on a multi-phased expansion of the Monarch Casino Black Hawk which involves construction of a new parking structure, demolition of the existing parking structure followed by the construction of a new hotel tower and casino expansion. In November 2016, the new nine-story parking structure, offering approximately 1,350 parking spaces, was completed and became available for use by Monarch Casino Black Hawk guests. Immediately following the new garage opening, we began work on demolition and removal of the old parking structure. This work, which included a controlled implosion of the old garage, was completed in the first quarter of 2017.

On February 8, 2017, the Company broke ground and construction on the foundation for the hotel tower and casino expansion is underway. The new 23-story tower will nearly double the existing casino space and will include approximately 500 hotel rooms, an upscale spa and pool facility, three additional restaurants and additional bars. Tower floors will be opened as they are finished beginning with the casino expansion and additional restaurants. We currently expect completion of the entire tower in the second quarter of 2019 at a total cost of approximately $229-$234 million. The cost is expected to be financed through a combination of operating cash flow and the Amended Credit Facility. We can provide no assurance that any project will be completed on schedule, if at all, or within established budgets, or that any project will result in increased earnings to us.




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RESULTS OF OPERATIONS


Comparison of Operating Results for the Three-Month Periods Ended September 30, 2017 and 2016

For the three months ended September 30, 2017, our net income totaled $9.0 million, or $0.49 per diluted share, compared to net income of $7.8 million, or $0.45 per diluted share for the same period in 2016, reflecting a 15.3% increase in net income and an 8.9% increase in diluted earnings per share. Net revenues totaled $63.0 million in the third quarter of 2017, an increase of $5.9 million, or 10.4%, compared to the third quarter of 2016. Income from operations for the three months ended September 30, 2017 totaled $13.3 million compared to $12.3 million for the same period in 2016.

Casino revenue increased 10.7% in the third quarter of 2017 compared to the third quarter of 2016, as we continue to increase market share in two growing markets. Casino operating expense as a percentage of casino revenue decreased from 40.3% in the third quarter of 2016 to 39.3% in the same quarter of 2017 primarily due to the increase in casino revenue in the third quarter of 2017 combined with operating cost efficiencies.

Food and beverage revenue for the third quarter of 2017 increased 4.6% over the third quarter of 2016, due to a 5.6% increase in covers, offset by a 0.9% decrease in food and beverage revenue per cover. Food and beverage operating expense as a percentage of food and beverage revenue increased in the third quarter of 2017 to 41.0% compared to 39.4% for the same period in 2016 primarily as a result of an increase in payroll and employee benefits expense.

Hotel revenue increased 6.0% in the third quarter of 2017 compared to the third quarter of 2016. Average daily room rate ("ADR") of $86.78 in the third quarter of 2017 was $2.20 higher than the ADR of $84.58 in the third quarter of 2016 and the occupancy of 97.8% during the third quarter of 2017 was slightly higher compared to 97.1% during the third quarter of 2016. Revenue per Available Room ("REVPAR"), calculated by dividing total room revenue (less service charges, if any) by total rooms available, was $96.51 and $91.03 for the three months ended September 30, 2017 and 2016, respectively. Hotel operating expense as a percentage of hotel revenue increased to 37.4% in the third quarter of 2017 as compared to 28.4% for the comparable prior year period primarily due to higher labor related expense and hotel repair and maintenance expense, as well as expenses related to the shuttle service and expanded valet services implemented at Monarch Casino Black Hawk.

Other revenue increased 10.4% in the third quarter of 2017 compared to the third quarter of 2016 driven primarily by increased arcade, spa and retail revenues.

Promotional allowances as a percentage of gross revenues decreased to 16.4% during the third quarter of 2017 compared to 17.6% in the comparable 2016 quarter. This decrease was primarily due to higher revenues and increase in the profitability of the promotional programs.

Selling, General and Administrative ("SG&A") expense increased to $16.4 million in the third quarter of 2017 from $14.4 million in the third quarter of 2016 primarily due to a $1.2 million increase in salaries, wages and related benefits expense, $0.4 million increase in repairs and maintenance expense, $0.1 million increase in property taxes and $0.1 million increase in utilities. As a percentage of net revenue, SG&A expense increased to 26.0% in the third quarter of 2017 compared to 25.3% in the same period in 2016.

Depreciation and amortization expense increased to $3.7 million for the three months ended September 30, 2017 as compared to $3.6 million for the three months ended September 30, 2016. The increase is primarily a result of the additional depreciation expense related to the new parking garage at Monarch Casino Black Hawk, offset by the decrease in depreciation expense at Monarch Casino Black Hawk due to five-year assets (assets that are depreciated over a 5 year time period) having become fully depreciated.

Interest expense, net of amounts capitalized, increased to $161.0 thousand in the third quarter of 2017 from $130.0 thousand in the third quarter of 2016 primarily due to higher bank commitment fees related to the Amended Credit Facility.




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Comparison of Operating Results for the Nine-Month Periods Ended September 30, 2017 and 2016

For the nine months ended September 30, 2017, our net income totaled $21.1 million, or $1.16 per diluted share, compared to net income of $18.1 million, or $1.03 per diluted share, for the same period in 2016, reflecting a 16.8% increase in net income and 12.6% increase in diluted earnings per share. Net revenues totaled $174.7 million in the nine-month period of 2017, reflecting an increase of $13.2 million, or 8.2%, compared to the same period in 2016. Income from operations for the nine months ended September 30, 2017 totaled $32.5 million compared to $28.4 million for the same period in 2016, representing an increase of $4.2 million or 14.7%.

Casino revenue increased 7.6% in the first nine months of 2017 compared to the first nine months of 2016. Casino operating expense as a percentage of casino revenue decreased to 40.6% in the first nine months of 2017 compared to 41.8% in the first nine months of 2016 due to higher casino revenue combined with operating cost efficiencies.

Food and beverage revenue for the first nine months of 2017 increased 6.3% over the first nine months of 2016, due to a 3.8% increase in covers and a 2.4% increase in average revenue per cover. In 2016, Toucan Charlie's Buffet was closed for redesign and upgrade for 70 days, which unfavorably affected the 2016 total food and beverage covers. Food and beverage operating expense as a percentage of food and beverage revenue in the first nine months of 2017 and 2016 was flat at 41.1% as a result of the repair and maintenance expenses related to the Atlantis buffet redesign and upgrade at the beginning of 2016 offset by an increase in payroll and employee benefits expenses in 2017 due to a labor shortage in both operating units' markets.

Hotel revenue increased 6.5% due to an increase in ADR to $82.56 in the first nine months of 2017 compared to $80.76 in the first nine months of 2016 and an increase in occupancy to 91.2% during the first nine months of 2017 compared to 89.7% during the first nine months of 2016. REVPAR was $85.37 and $79.89 for the nine months ended September 30, 2017 and 2016, respectively. Hotel operating expense as a percentage of hotel revenue increased to 37.5% in the first nine months of 2017 as compared to 30.1% for the comparable prior year period due to higher payroll and employee benefits expense and repair and maintenance expense in the first nine months of 2017, combined with expenses related to the shuttle service and expanded valet services implemented at Monarch Casino Black Hawk.

Other revenue increased 7.7% in the first nine months of 2017 compared to the first nine months of 2016 driven primarily by increased arcade, commission and spa revenues.

Promotional allowances as a percentage of gross revenues decreased to 17.2% during the first nine months of 2017 from 17.9% in the comparable 2016 period primarily as a result of the increase in gross revenues and increase in the profitability of the promotional programs.

SG&A expense increased by $4.0 million to $46.1 million in the first nine months of 2017 primarily due to: (i) a $2.6 million increase in salaries, wages and employee benefit expenses; (ii) a $0.8 million increase in repair and maintenance expense and properties' improvement expenses, (iii) a $0.3 million increase in property tax expense related to the new parking garage at Monarch Casino Black Hawk, (iv) a $0.2 million increase in advertising expense, and (v) a $0.1 million increase in charitable contributions. As a percentage of net revenue, SG&A expense increased to 26.4% in the first nine months of 2017 from 26.1% in the first nine months of 2016.

Depreciation and amortization expense increased to $11.4 million for the nine months ended September 30, 2017 as compared to $11.1 million for the nine months ended September 30, 2016 primarily as a result of the additional depreciation expense related to the new parking garage at Monarch Casino Black Hawk.

Interest expense, net of amounts capitalized increased to $639.0 thousand in the first nine months of 2017 from $275.0 thousand in the first nine months of 2016 primarily as a result of the higher bank commitment fees related to the Amended Credit Facility and higher amortization of deferred loan costs expense related to the Amended Credit Facility.

In 2016, the Company completed the hotel towers' doors replacement capital project at the Atlantis and as a result, the Company wrote off the remaining net book value of the existing doors, incurring a $0.6 million loss on the disposal.





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Liquidity and Capital Resources

Our principal sources of liquidity have been cash provided by operations and, for capital expansion projects, borrowings available under our credit facilities.

For the nine months ended September 30, 2017, net cash provided by operating activities totaled $34.7 million, an increase of $5.6 million, or 19.1% compared to the same period in the prior year. This increase was primarily the result of an increase in net income and an increase in depreciation and amortization expense, offset by an increase in working capital. The net cash provided by operating activities was also positively affected by the adoption of the ASU No. 2016-09, which changes the classification and presentation of the stock-based compensation in the Statement of Cash Flows.

Net cash used in investing activities totaled $34.3 million and $19.8 million during the nine months ended June 30, 2017 and 2016, respectively. Net cash used in investing activities during the first nine months of 2017 consisted primarily of cash used for the new hotel tower and casino expansion at Monarch Casino Black Hawk, the purchase of a parcel of land with an industrial warehouse in proximity to the Monarch Casino Black Hawk, the re-carpeting of the casino floor and hotel rooms at Atlantis, and for acquisition of gaming and other equipment at both properties. Net cash used in investing activities during the first nine months of 2016 consisted primarily of cash used for the new parking garage at Monarch Casino Black Hawk, the redesign and upgrade of Toucan Charlie's Buffet at Atlantis, improvements to new additional parking spaces at Atlantis, and for acquisition of gaming and other equipment at both properties.

There were no financing activities during the first nine months of 2017. Net cash used in financing activities during the first nine months of 2016 was $11.1 million and represented $11.0 million in payments under our credit facility and $2.6 million in loan issuance cost, offset by $2.5 million in proceeds from stock option exercises, including excess tax benefit from options exercised.

Under the Amended Credit Facility, our available borrowing capacity is $250.0 million with a maturity date of July 20, 2021. The proceeds from the Amended Credit Facility will be used to fund the Monarch Black Hawk Expansion Plan, for ongoing capital expenditure, for working capital needs and general corporate purposes and requirements.

As of September 30, 2017, we had borrowed $26.2 million of the principal under the Amended Credit Facility, and had a $0.6 million Standby Letter of Credit and $223.2 million remaining in available borrowings of the $250.0 million maximum principal available under the Amended Credit Facility. As of September 30, 2017, there have been no withdrawals from the Standby Letter of Credit.

The total revolving loan commitment under the Amended Credit Facility will be automatically and permanently reduced to $50.0 million in the first full quarter after completion of the expansion project at the Monarch Casino Black Hawk and all then outstanding revolving loans up to $200.0 million under the Amended Credit Facility will be converted to a term loan at such time. We may be required to prepay borrowings under the Amended Credit Facility using excess cash flows depending on our leverage ratio no later than December 31, 2019. We have an option to permanently reduce the maximum revolving available credit at any time so long as the amount of such reduction is at least $0.5 million and in multiples of $50,000.

Borrowings are secured by liens on substantially all of our real and personal property.

In addition to other customary covenants for a facility of this nature, as of September 30, 2017, we are required to maintain a leverage ratio, defined as consolidated debt divided by Adjusted EBITDA, of no more than 3.5:1 and a fixed charge coverage ratio (Adjusted EBITDA divided by fixed charges, as defined in the Amended Credit Facility) of at least 1.15:1. As of September 30, 2017, the Company's leverage ratio and fixed charge coverage ratios were 0.4:1 and 41.3:1, respectively.




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The interest rate under the Amended Credit Facility is LIBOR plus a margin ranging from 1.00% to 2.50%, or a base rate (as defined in the Amended Credit Facility) plus a margin ranging from 0.00% to 1.50%, or the Prime Rate. The applicable margins will vary depending on our leverage ratio. Commitment fees are equal to the daily average unused revolving commitment multiplied by the commitment fee percentage, ranging from 0.175% to 0.45%, based on our leverage ratio.

At September 30, 2017, our interest rate was based on LIBOR and our leverage ratio was such that pricing for borrowings under the Amended Credit Facility was LIBOR plus 1.00%. At September 30, 2017, the one-month LIBOR interest rate was 1.24%. The carrying value of the debt outstanding under the Amended Credit Facility approximates fair value because the interest fluctuates with the lender's prime rate or other market rates of interest.

We may prepay borrowings under the Amended Credit Facility without penalty (subject to certain charges applicable to the prepayment of LIBOR borrowings prior to the end of the applicable interest period). Amounts prepaid may be re-borrowed so long as the total borrowings outstanding do not exceed the maximum principal available.

We believe that our existing cash balances, cash flow from operations and borrowings available under the Amended Credit Facility will provide us with sufficient resources to fund our operations, meet our debt obligations, and fulfill our capital expenditure plans over the next twelve months; however, our operations are subject to financial, economic, competitive, regulatory, and other factors, many of which are beyond our control. If we are unable to generate sufficient cash flow or if our cash needs exceed our borrowing capacity under the Amended Credit Facility, we could 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.

OFF BALANCE SHEET ARRANGEMENTS

John Farahi and Bob Farahi, Co-Chairmen of the Board and executive officers of the Company, and Ben Farahi are the three largest stockholders of Monarch and each also beneficially owns limited partnership interests in BLI. Maxum LLC is the sole general partner of BLI, and Ben Farahi is the sole managing member of Maxum LLC. Neither John Farahi nor Bob Farahi has any management or operational control over BLI or the Shopping Center. Until May 2006, Ben Farahi held the positions of Co-Chairman of the Board, Secretary, Treasurer and Chief Financial Officer of the Company.

In response to customer demand for more convenient surface parking at the Atlantis, and after detailed analysis, on August 28, 2015, the Company, through its subsidiary Golden Road, entered into a 20-year lease (the "Parking Lot Lease") with BLI with respect to a portion of the Shopping Center. This lease gives the Atlantis the right to use a parcel, approximately 4.15 acres, comprised of a commercial building and surrounding land adjacent to the Atlantis (the "Leased Property"). The primary purpose of the Parking Lot Lease is to provide additional, convenient, Atlantis surface parking. We demolished the commercial building on the Leased Property and converted the land into approximately 300 additional surface parking spaces for the Atlantis. The minimum annual rent under the Parking Lot Lease is $695 thousand commencing November 17, 2015. The minimum annual rent is subject to a cost of living adjustment increase on each five-year anniversary. In addition, we are responsible for payment of property taxes, utilities and maintenance expenses related to the Leased Property. We have an option to renew the Parking Lot Lease for an additional 10-year term. If we elect not to exercise the renewal option, we will be obligated to pay BLI $1.6 million. During each of the three-month periods ended September 30, 2017 and 2016, we paid approximately $174 thousand in parking lot rent payments. During each of the nine-month periods ended September 30, 2017 and 2016, we paid approximately $522 thousand in parking lot rent payments.




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A driveway (the "Driveway Project") that is being shared between the Atlantis and the Shopping Center was completed and opened on September 30, 2004. The Shopping Center is controlled by BLI. As part of the Driveway Project, in January 2004, we leased (the "Driveway Lease") approximately 37,400 square-foot corner section of the Shopping Center, for a minimum lease term of 15 years at an annual rent of $300 thousand, subject to a cost of living increase on each five year anniversary of the Driveway Lease. As of September 30, 2017, the annual rent is $377 thousand. In August 2015, we exercised our option to extend the lease for three individual five-year terms in addition to the 15-year initial term. At the end of the extension periods, we have the option to purchase the leased section of the Shopping Center. The leased space is being used by us for pedestrian and vehicle access to the Atlantis, and we may use a portion of the parking spaces at the Shopping Center. The total cost of the project was $2.0 million. We were responsible for two thirds of the total cost, or $1.35 million. The cost of the new driveway is being depreciated over the 15-year expected economic useful life of the asset; some components of the new driveway are being depreciated over a shorter period of time. During each of the three-month periods ended September 30, 2017 and 2016, we paid approximately $94 thousand in driveway rent payments. During each of the nine-month periods ended September 30, 2017 and 2016, we paid approximately $282 thousand in driveway rent payments.

CRITICAL ACCOUNTING POLICIES

A description of our critical accounting policies and estimates can be found in Item 7 - "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the year ended December 31, 2016 (the "2016 Form 10-K"). For a more extensive discussion of our accounting policies, see Note 1. "Summary of Significant Accounting Policies" in the Notes to the Consolidated Financial Statements in our 2016 Form 10-K filed on March 14, 2017.

OTHER FACTORS AFFECTING CURRENT AND FUTURE RESULTS

Negative economic developments in Northern Nevada, the Denver metropolitan area, or in our feeder markets, could adversely impact discretionary incomes of our target customers, which, in turn could adversely impact our business. Our target customers might curtail discretionary spending for leisure activities and businesses may reduce spending for conventions and meetings, both of which would adversely impact our business. Management continues to monitor economic trends and intends, as appropriate, to adopt operating strategies to attempt to mitigate the effects of such adverse conditions. We can make no assurances that such strategies will be effective should negative economic developments in our markets occur.

The expansion of Native American casinos in California has had an impact on casino revenues in Nevada, in general, and many analysts have continued to predict the impact will be more significant on the Reno-Lake Tahoe market. If other Reno-area casinos continue to suffer business losses due to increased pressure from California Native American casinos, such casinos may intensify their marketing efforts to northern Nevada residents as well, greatly increasing competitive activities for our local customers.

Higher fuel costs may deter California, Denver area, and other drive-in customers from coming to the Atlantis or the Monarch Casino Black Hawk.

We also believe that unrestricted land-based casino gaming in or near any major metropolitan area in the Atlantis' key feeder market areas, such as San Francisco or Sacramento, or in other areas near Denver, Colorado, the Black Hawk key feeder markets, could have a material adverse effect on our business.

We rely on information technology and other systems to maintain and transmit customer financial information, credit card settlements, credit card funds transmissions, mailing lists and reservations information. The systems and processes we have implemented to protect customers, employees and company information are subject to the ever-changing risk of compromised security. These risks include cyber and physical security breaches, system failure, computer viruses, and negligent or intentional misuse by customers, company employees, or employees of third party vendors. The steps we take to deter and mitigate these risks may not be successful and our insurance coverage for protecting against cybersecurity risks may not be sufficient. Any disruption, compromise or loss of data or systems that results from a cybersecurity attack or breach could materially adversely impact operations or regulatory compliance and could result in remedial expenses, fines, litigation, and loss of reputation, potentially impacting our financial results.




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COMMITMENTS AND CONTINGENCIES


Our contractual cash obligations as of September 30, 2017 and the next five years and thereafter are as follows (in millions):




                                                    Payments due by period (1)
                                                   Less                              Greater
                                                  than 1      1 to 3     3 to 5      than 5
                                       Total       year       years      years        years
Operating Leases (2)                  $  26.6    $    1.1    $    2.2   $    2.2    $    21.1
Purchase Obligations (3)                 12.9         9.7         3.0        0.2            -
Borrowings Under Amended Credit
Facility (4)                             26.2           -           -       26.2            -

Total Contractual Cash Obligations $ 65.7 $ 10.8 $ 5.2 $ 28.6 $ 21.1

(1) Because interest payments under our Amended Credit Facility are subject to

      factors that, in our judgment, vary materially, the amount of future interest
      payments is not presently determinable. These factors include: i) future
      short-term interest rates; ii) our future leverage ratio which varies with
      EBITDA and our borrowing levels; and iii) the rate at which we deploy capital
      and other spending which, in turn, impacts the level of future borrowings.
      The interest rate under the Amended Credit Facility is LIBOR plus a margin
      ranging from 1.00% to 2.50%, or a base rate (as defined in the Amended Credit
      Facility) plus an interest rate margin ranging from 0.00% to 1.50%, or the
      Prime Rate. The interest rate is adjusted quarterly based on our leverage
      ratio, which is calculated using operating results over the previous four
      quarters and borrowings at the end of the most recent quarter. Based on our
      leverage ratio, at September 30, 2017, pricing was LIBOR plus 1.00% and will
      be adjusted in subsequent quarters in accordance with our leverage ratio. At
      September 30, 2017, the one-month LIBOR was 1.24%.



(2) Operating leases include the Driveway Lease and the Parking Lot Lease.

(3) Purchase obligations represent approximately $6.6 million of commitments

      related to capital projects and approximately $6.3 million of materials and
      supplies used in the normal operation of our business. Of the total purchase
      order and construction commitments, approximately $12.9 million are
      cancelable by us upon providing a 30-day notice.



(4) The amount represents outstanding draws against the Amended Credit Facility

as of September 30, 2017.

As described in above under "Capital Spending and Development", we have begun commencement of the Monarch Black Hawk Expansion Plan, which started in the fourth quarter of 2013. While we have disclosed the estimated cost of that expansion, we have not yet entered into contracts for substantial portions of the work. For this reason, we have included in the table above only the amounts for which we have contractual commitments. At September 30, 2017, we estimate that the remaining cost to complete the Black Hawk Expansion Plan is between $218 million and $225 million.

© Edgar Online, source Glimpses

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Financials ($)
Sales 2017 234 M
EBIT 2017 43,9 M
Net income 2017 27,8 M
Debt 2017 1,47 M
Yield 2017 -
P/E ratio 2017 30,25
P/E ratio 2018 28,87
EV / Sales 2017 3,52x
EV / Sales 2018 3,54x
Capitalization 821 M
Chart MONARCH CASINO & RESORT, I
Duration : Period :
Monarch Casino & Resort, I Technical Analysis Chart | MCRI | US6090271072 | 4-Traders
Technical analysis trends MONARCH CASINO & RESORT, I
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
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Mean consensus OUTPERFORM
Number of Analysts 5
Average target price 47,3 $
Spread / Average Target 1,7%
EPS Revisions
Managers
NameTitle
John Farahi Co-Chairman & Chief Executive Officer
Bob Farahi Co-Chairman, President & Secretary
David-Jacques Farahi Chief Operating Officer
Richard L. Cooley Vice President-Finance
Craig F. Sullivan Independent Director
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