[10-Q] Monarch Casino & Resort Inc Quarterly Earnings Report
Monarch Casino & Resort (MCRI) posted solid Q2-25 results while absorbing a sizable litigation reserve. Net revenue rose 6.8% YoY to $136.9 million, led by a 12.1% jump in casino win; F&B was up 1.1%, while hotel revenue dipped 3.1%. Tight cost controls pared casino expense to 35.7% of casino revenue (37.7% LY), lifting operating income 18.3% to $34.9 million.
Profitability strengthened. Net income climbed 19.1% to $27.0 million and diluted EPS grew 21% to $1.44. H1-25 EPS reached $2.50 (+17.9%). Cash from operations advanced to $70.6 million for the six-month period, comfortably funding $27.9 million of capex, $20.0 million of buybacks (240k shares) and $11.0 million of dividends ($0.60/sh).
Balance sheet remains debt-free. Cash ended at $71.6 million, with the $100 million revolver undrawn (Total Leverage 0.0x). Shareholders’ equity grew to $539.3 million despite treasury stock rising to $83.7 million.
Key overhang: construction litigation. The company recorded a $76.5 million liability tied to a February court judgment ($74.6 million plus interest) against contractor PCL; Monarch has appealed and posted bond, but post-judgment interest accrues at 6%.
Capital returns continue: quarterly dividend of $0.30 paid June 15; next $0.30 dividend announced for September 15. Repurchase authorization stands at 1.71 million shares.
Monarch Casino & Resort (MCRI) ha registrato solidi risultati nel secondo trimestre del 2025 nonostante abbia dovuto affrontare una consistente riserva per contenziosi. I ricavi netti sono aumentati del 6,8% su base annua, raggiungendo 136,9 milioni di dollari, trainati da un incremento del 12,1% nelle vincite del casinò; il settore F&B è cresciuto dell'1,1%, mentre i ricavi dell'hotel sono diminuiti del 3,1%. Un rigoroso controllo dei costi ha ridotto le spese del casinò al 35,7% dei ricavi del casinò (rispetto al 37,7% dell'anno precedente), portando l'utile operativo a un aumento del 18,3% a 34,9 milioni di dollari.
La redditività è migliorata. L'utile netto è salito del 19,1% a 27,0 milioni di dollari e l'utile per azione diluito è cresciuto del 21% a 1,44 dollari. L'utile per azione nel primo semestre del 2025 ha raggiunto 2,50 dollari (+17,9%). La liquidità generata dalle operazioni è aumentata a 70,6 milioni di dollari nel semestre, finanziando agevolmente 27,9 milioni di dollari di investimenti, 20,0 milioni di riacquisti di azioni (240.000 azioni) e 11,0 milioni di dividendi (0,60 dollari per azione).
Il bilancio rimane privo di debiti. La liquidità finale ammonta a 71,6 milioni di dollari, con la linea di credito da 100 milioni di dollari non utilizzata (leva finanziaria totale pari a 0,0x). Il patrimonio netto degli azionisti è cresciuto a 539,3 milioni di dollari nonostante l'aumento delle azioni proprie a 83,7 milioni di dollari.
Principale criticità: contenzioso sulla costruzione. La società ha registrato una passività di 76,5 milioni di dollari legata a una sentenza del tribunale di febbraio (74,6 milioni più interessi) contro l'appaltatore PCL; Monarch ha presentato appello e depositato una cauzione, ma gli interessi post-sentenza maturano al 6%.
Continuano i ritorni per il capitale: dividendo trimestrale di 0,30 dollari pagato il 15 giugno; prossimo dividendo di 0,30 dollari annunciato per il 15 settembre. L'autorizzazione per il riacquisto di azioni è pari a 1,71 milioni di azioni.
Monarch Casino & Resort (MCRI) presentó sólidos resultados en el segundo trimestre de 2025 a pesar de asumir una considerable provisión por litigios. Los ingresos netos aumentaron un 6,8% interanual hasta 136,9 millones de dólares, impulsados por un salto del 12,1% en las ganancias del casino; alimentos y bebidas crecieron un 1,1%, mientras que los ingresos hoteleros disminuyeron un 3,1%. Un estricto control de costos redujo los gastos del casino al 35,7% de los ingresos del casino (frente al 37,7% del año anterior), elevando el ingreso operativo un 18,3% hasta 34,9 millones de dólares.
La rentabilidad se fortaleció. La utilidad neta aumentó un 19,1% hasta 27,0 millones de dólares y las ganancias diluidas por acción crecieron un 21% hasta 1,44 dólares. Las ganancias por acción en el primer semestre de 2025 alcanzaron 2,50 dólares (+17,9%). El efectivo generado por operaciones subió a 70,6 millones de dólares en el período de seis meses, financiando cómodamente 27,9 millones en gastos de capital, 20,0 millones en recompras (240,000 acciones) y 11,0 millones en dividendos (0,60 dólares por acción).
El balance continúa libre de deuda. El efectivo finalizó en 71,6 millones de dólares, con la línea de crédito revolvente de 100 millones sin utilizarse (apalancamiento total 0,0x). El patrimonio de los accionistas creció a 539,3 millones de dólares a pesar del aumento en acciones en tesorería a 83,7 millones de dólares.
Principal preocupación: litigio por construcción. La compañía registró un pasivo de 76,5 millones de dólares relacionado con un fallo judicial de febrero (74,6 millones más intereses) contra el contratista PCL; Monarch apeló y depositó una fianza, pero los intereses posteriores al fallo se acumulan al 6%.
Continúan las devoluciones de capital: dividendo trimestral de 0,30 dólares pagado el 15 de junio; próximo dividendo de 0,30 dólares anunciado para el 15 de septiembre. La autorización para recompras se mantiene en 1,71 millones de acciones.
Monarch Casino & Resort (MCRI)는 상당한 소송 충당금을 반영하면서도 2025년 2분기에 견고한 실적을 발표했습니다. 순수익은 전년 동기 대비 6.8% 증가한 1억 3,690만 달러를 기록했으며, 카지노 수익은 12.1% 급증했습니다; 식음료 매출은 1.1% 증가한 반면, 호텔 매출은 3.1% 감소했습니다. 엄격한 비용 관리로 카지노 비용은 카지노 수익의 35.7%(전년 37.7%)로 줄어들어 영업이익은 18.3% 증가한 3,490만 달러를 기록했습니다.
수익성이 강화되었습니다. 순이익은 19.1% 증가한 2,700만 달러, 희석 주당순이익은 21% 증가한 1.44달러를 기록했습니다. 2025년 상반기 주당순이익은 2.50달러로 17.9% 상승했습니다. 영업활동 현금흐름은 6개월 동안 7,060만 달러로 증가하여 2,790만 달러의 자본적지출, 2,000만 달러의 자사주 매입(24만 주), 1,100만 달러의 배당금(주당 0.60달러)을 무리 없이 충당했습니다.
재무상태표는 무부채 상태를 유지하고 있습니다. 현금 잔액은 7,160만 달러이며, 1억 달러의 신용한도는 사용되지 않아(총 레버리지 0.0배) 안정적입니다. 자본총계는 자사주가 8,370만 달러로 증가했음에도 불구하고 5억 3,930만 달러로 성장했습니다.
주요 부담 요인: 건설 소송. 회사는 2월 법원 판결과 관련해 7,650만 달러의 부채를 기록했으며(7,460만 달러와 이자 포함), 계약업체 PCL을 상대로 항소를 제기하고 보증금을 제출했지만 판결 후 이자는 6%로 계산됩니다.
자본 환원 지속: 6월 15일에 분기별 배당금 0.30달러 지급; 9월 15일에 다음 0.30달러 배당금 발표. 자사주 매입 승인 한도는 171만 주입니다.
Monarch Casino & Resort (MCRI) a publié de solides résultats pour le deuxième trimestre 2025 tout en absorbant une importante provision pour litige. Le chiffre d'affaires net a augmenté de 6,8 % en glissement annuel pour atteindre 136,9 millions de dollars, porté par une hausse de 12,1 % des gains du casino ; la restauration a progressé de 1,1 %, tandis que les revenus hôteliers ont diminué de 3,1 %. Un contrôle strict des coûts a réduit les dépenses du casino à 35,7 % des revenus du casino (contre 37,7 % l'an dernier), faisant grimper le résultat d'exploitation de 18,3 % à 34,9 millions de dollars.
La rentabilité s’est renforcée. Le bénéfice net a progressé de 19,1 % pour atteindre 27,0 millions de dollars et le BPA dilué a augmenté de 21 % à 1,44 dollar. Le BPA du premier semestre 2025 a atteint 2,50 dollars (+17,9 %). Les flux de trésorerie provenant des opérations ont atteint 70,6 millions de dollars sur la période de six mois, finançant aisément 27,9 millions de dollars d’investissements, 20,0 millions de rachats d’actions (240 000 actions) et 11,0 millions de dividendes (0,60 $/action).
Le bilan reste sans dette. La trésorerie s’est élevée à 71,6 millions de dollars, la ligne de crédit renouvelable de 100 millions n’ayant pas été utilisée (levier total 0,0x). Les capitaux propres ont augmenté à 539,3 millions de dollars malgré une hausse des actions propres à 83,7 millions de dollars.
Point d’attention majeur : litige lié à la construction. La société a enregistré une dette de 76,5 millions de dollars liée à un jugement de février (74,6 millions plus intérêts) contre l’entrepreneur PCL ; Monarch a fait appel et déposé une caution, mais les intérêts post-jugement courent à 6 %.
Les retours de capital se poursuivent : dividende trimestriel de 0,30 $ versé le 15 juin ; prochain dividende de 0,30 $ annoncé pour le 15 septembre. L’autorisation de rachat d’actions reste fixée à 1,71 million d’actions.
Monarch Casino & Resort (MCRI) veröffentlichte solide Ergebnisse für das zweite Quartal 2025, obwohl eine erhebliche Rückstellung für Rechtsstreitigkeiten gebildet wurde. Der Nettoumsatz stieg im Jahresvergleich um 6,8 % auf 136,9 Millionen US-Dollar, angeführt von einem 12,1%igen Anstieg beim Casino-Gewinn; Food & Beverage legte um 1,1 % zu, während die Hotelerlöse um 3,1 % zurückgingen. Strenge Kosteneinsparungen senkten die Casino-Ausgaben auf 35,7 % der Casino-Einnahmen (gegenüber 37,7 % im Vorjahr), was das Betriebsergebnis um 18,3 % auf 34,9 Millionen US-Dollar anhob.
Die Rentabilität verbesserte sich. Der Nettogewinn stieg um 19,1 % auf 27,0 Millionen US-Dollar, und das verwässerte Ergebnis je Aktie wuchs um 21 % auf 1,44 US-Dollar. Das Ergebnis je Aktie für das erste Halbjahr 2025 erreichte 2,50 US-Dollar (+17,9 %). Der operative Cashflow stieg im Sechsmonatszeitraum auf 70,6 Millionen US-Dollar und finanzierte problemlos 27,9 Millionen US-Dollar an Investitionen, 20,0 Millionen US-Dollar an Aktienrückkäufen (240.000 Aktien) und 11,0 Millionen US-Dollar an Dividenden (0,60 US-Dollar je Aktie).
Die Bilanz bleibt schuldenfrei. Der Kassenbestand belief sich auf 71,6 Millionen US-Dollar, und die revolvierende Kreditlinie von 100 Millionen US-Dollar wurde nicht in Anspruch genommen (Gesamtverschuldung 0,0x). Das Eigenkapital der Aktionäre stieg auf 539,3 Millionen US-Dollar, obwohl die eigenen Aktien auf 83,7 Millionen US-Dollar zunahmen.
Wichtiges Risiko: Bau-Litigation. Das Unternehmen verbuchte eine Verbindlichkeit in Höhe von 76,5 Millionen US-Dollar im Zusammenhang mit einem Gerichtsurteil im Februar (74,6 Millionen plus Zinsen) gegen den Auftragnehmer PCL; Monarch hat Berufung eingelegt und eine Kaution hinterlegt, aber die Nachurteilzinsen betragen 6 %.
Kapitalrückflüsse gehen weiter: Quartalsdividende von 0,30 US-Dollar wurde am 15. Juni gezahlt; nächste Dividende von 0,30 US-Dollar für den 15. September angekündigt. Die Rückkaufgenehmigung beläuft sich auf 1,71 Millionen Aktien.
- EPS growth: Diluted Q2-25 EPS up 21% YoY to $1.44, six-month EPS up 18% to $2.50.
- Margin expansion: Casino expense ratio fell 200 bps, lifting operating income 18%.
- Strong cash & zero debt: $71.6 m cash, full $99.4 m revolver available; leverage 0.0×.
- Robust FCF deployment: $20 m share buyback and $11 m dividends funded from operations.
- Positive cash flow: Operating cash flow rose to $70.6 m (+13% YoY) in H1-25.
- Litigation liability: $74.6 m court judgment recorded; additional interest (6%) and fees pending.
- Hotel softness: Q2 hotel revenue fell 3.1% as occupancy dropped to 79.6%.
- Buybacks drained cash: Treasury stock balance up $20 m in Q2, reducing liquidity for other uses.
- Potential earnings drag: Future litigation costs recognised under Other operating items, net ($1.4 m YTD).
Insights
TL;DR – Core operations beat on growth & margins; cash rich, no debt.
Casino-driven revenue acceleration (+12%) and lower relative expenses expanded EBITDA and EPS ahead of most sell-side models. Free cash generation fully funds dividends and buybacks with $43 million net cash after Q2. Zero revolver draw and 0.0× leverage provide flexibility if appeal overturns or reduces the $74.6 million judgment. Valuation catalysts include continued Colorado share gains and ongoing Reno remodel completion.
TL;DR – $74.6 m judgment plus 6% interest is a material drag.
The PCL verdict equals ~10% of equity and 1.6× FY-24 net income. While management appealed, interest accrues and attorneys’ fees are unresolved. A bond stays enforcement but ties up capital. Outcome uncertainty could cap multiple expansion despite healthy fundamentals. Investors should monitor appellate briefs (filed Q4-25) and potential settlement discussions.
Monarch Casino & Resort (MCRI) ha registrato solidi risultati nel secondo trimestre del 2025 nonostante abbia dovuto affrontare una consistente riserva per contenziosi. I ricavi netti sono aumentati del 6,8% su base annua, raggiungendo 136,9 milioni di dollari, trainati da un incremento del 12,1% nelle vincite del casinò; il settore F&B è cresciuto dell'1,1%, mentre i ricavi dell'hotel sono diminuiti del 3,1%. Un rigoroso controllo dei costi ha ridotto le spese del casinò al 35,7% dei ricavi del casinò (rispetto al 37,7% dell'anno precedente), portando l'utile operativo a un aumento del 18,3% a 34,9 milioni di dollari.
La redditività è migliorata. L'utile netto è salito del 19,1% a 27,0 milioni di dollari e l'utile per azione diluito è cresciuto del 21% a 1,44 dollari. L'utile per azione nel primo semestre del 2025 ha raggiunto 2,50 dollari (+17,9%). La liquidità generata dalle operazioni è aumentata a 70,6 milioni di dollari nel semestre, finanziando agevolmente 27,9 milioni di dollari di investimenti, 20,0 milioni di riacquisti di azioni (240.000 azioni) e 11,0 milioni di dividendi (0,60 dollari per azione).
Il bilancio rimane privo di debiti. La liquidità finale ammonta a 71,6 milioni di dollari, con la linea di credito da 100 milioni di dollari non utilizzata (leva finanziaria totale pari a 0,0x). Il patrimonio netto degli azionisti è cresciuto a 539,3 milioni di dollari nonostante l'aumento delle azioni proprie a 83,7 milioni di dollari.
Principale criticità: contenzioso sulla costruzione. La società ha registrato una passività di 76,5 milioni di dollari legata a una sentenza del tribunale di febbraio (74,6 milioni più interessi) contro l'appaltatore PCL; Monarch ha presentato appello e depositato una cauzione, ma gli interessi post-sentenza maturano al 6%.
Continuano i ritorni per il capitale: dividendo trimestrale di 0,30 dollari pagato il 15 giugno; prossimo dividendo di 0,30 dollari annunciato per il 15 settembre. L'autorizzazione per il riacquisto di azioni è pari a 1,71 milioni di azioni.
Monarch Casino & Resort (MCRI) presentó sólidos resultados en el segundo trimestre de 2025 a pesar de asumir una considerable provisión por litigios. Los ingresos netos aumentaron un 6,8% interanual hasta 136,9 millones de dólares, impulsados por un salto del 12,1% en las ganancias del casino; alimentos y bebidas crecieron un 1,1%, mientras que los ingresos hoteleros disminuyeron un 3,1%. Un estricto control de costos redujo los gastos del casino al 35,7% de los ingresos del casino (frente al 37,7% del año anterior), elevando el ingreso operativo un 18,3% hasta 34,9 millones de dólares.
La rentabilidad se fortaleció. La utilidad neta aumentó un 19,1% hasta 27,0 millones de dólares y las ganancias diluidas por acción crecieron un 21% hasta 1,44 dólares. Las ganancias por acción en el primer semestre de 2025 alcanzaron 2,50 dólares (+17,9%). El efectivo generado por operaciones subió a 70,6 millones de dólares en el período de seis meses, financiando cómodamente 27,9 millones en gastos de capital, 20,0 millones en recompras (240,000 acciones) y 11,0 millones en dividendos (0,60 dólares por acción).
El balance continúa libre de deuda. El efectivo finalizó en 71,6 millones de dólares, con la línea de crédito revolvente de 100 millones sin utilizarse (apalancamiento total 0,0x). El patrimonio de los accionistas creció a 539,3 millones de dólares a pesar del aumento en acciones en tesorería a 83,7 millones de dólares.
Principal preocupación: litigio por construcción. La compañía registró un pasivo de 76,5 millones de dólares relacionado con un fallo judicial de febrero (74,6 millones más intereses) contra el contratista PCL; Monarch apeló y depositó una fianza, pero los intereses posteriores al fallo se acumulan al 6%.
Continúan las devoluciones de capital: dividendo trimestral de 0,30 dólares pagado el 15 de junio; próximo dividendo de 0,30 dólares anunciado para el 15 de septiembre. La autorización para recompras se mantiene en 1,71 millones de acciones.
Monarch Casino & Resort (MCRI)는 상당한 소송 충당금을 반영하면서도 2025년 2분기에 견고한 실적을 발표했습니다. 순수익은 전년 동기 대비 6.8% 증가한 1억 3,690만 달러를 기록했으며, 카지노 수익은 12.1% 급증했습니다; 식음료 매출은 1.1% 증가한 반면, 호텔 매출은 3.1% 감소했습니다. 엄격한 비용 관리로 카지노 비용은 카지노 수익의 35.7%(전년 37.7%)로 줄어들어 영업이익은 18.3% 증가한 3,490만 달러를 기록했습니다.
수익성이 강화되었습니다. 순이익은 19.1% 증가한 2,700만 달러, 희석 주당순이익은 21% 증가한 1.44달러를 기록했습니다. 2025년 상반기 주당순이익은 2.50달러로 17.9% 상승했습니다. 영업활동 현금흐름은 6개월 동안 7,060만 달러로 증가하여 2,790만 달러의 자본적지출, 2,000만 달러의 자사주 매입(24만 주), 1,100만 달러의 배당금(주당 0.60달러)을 무리 없이 충당했습니다.
재무상태표는 무부채 상태를 유지하고 있습니다. 현금 잔액은 7,160만 달러이며, 1억 달러의 신용한도는 사용되지 않아(총 레버리지 0.0배) 안정적입니다. 자본총계는 자사주가 8,370만 달러로 증가했음에도 불구하고 5억 3,930만 달러로 성장했습니다.
주요 부담 요인: 건설 소송. 회사는 2월 법원 판결과 관련해 7,650만 달러의 부채를 기록했으며(7,460만 달러와 이자 포함), 계약업체 PCL을 상대로 항소를 제기하고 보증금을 제출했지만 판결 후 이자는 6%로 계산됩니다.
자본 환원 지속: 6월 15일에 분기별 배당금 0.30달러 지급; 9월 15일에 다음 0.30달러 배당금 발표. 자사주 매입 승인 한도는 171만 주입니다.
Monarch Casino & Resort (MCRI) a publié de solides résultats pour le deuxième trimestre 2025 tout en absorbant une importante provision pour litige. Le chiffre d'affaires net a augmenté de 6,8 % en glissement annuel pour atteindre 136,9 millions de dollars, porté par une hausse de 12,1 % des gains du casino ; la restauration a progressé de 1,1 %, tandis que les revenus hôteliers ont diminué de 3,1 %. Un contrôle strict des coûts a réduit les dépenses du casino à 35,7 % des revenus du casino (contre 37,7 % l'an dernier), faisant grimper le résultat d'exploitation de 18,3 % à 34,9 millions de dollars.
La rentabilité s’est renforcée. Le bénéfice net a progressé de 19,1 % pour atteindre 27,0 millions de dollars et le BPA dilué a augmenté de 21 % à 1,44 dollar. Le BPA du premier semestre 2025 a atteint 2,50 dollars (+17,9 %). Les flux de trésorerie provenant des opérations ont atteint 70,6 millions de dollars sur la période de six mois, finançant aisément 27,9 millions de dollars d’investissements, 20,0 millions de rachats d’actions (240 000 actions) et 11,0 millions de dividendes (0,60 $/action).
Le bilan reste sans dette. La trésorerie s’est élevée à 71,6 millions de dollars, la ligne de crédit renouvelable de 100 millions n’ayant pas été utilisée (levier total 0,0x). Les capitaux propres ont augmenté à 539,3 millions de dollars malgré une hausse des actions propres à 83,7 millions de dollars.
Point d’attention majeur : litige lié à la construction. La société a enregistré une dette de 76,5 millions de dollars liée à un jugement de février (74,6 millions plus intérêts) contre l’entrepreneur PCL ; Monarch a fait appel et déposé une caution, mais les intérêts post-jugement courent à 6 %.
Les retours de capital se poursuivent : dividende trimestriel de 0,30 $ versé le 15 juin ; prochain dividende de 0,30 $ annoncé pour le 15 septembre. L’autorisation de rachat d’actions reste fixée à 1,71 million d’actions.
Monarch Casino & Resort (MCRI) veröffentlichte solide Ergebnisse für das zweite Quartal 2025, obwohl eine erhebliche Rückstellung für Rechtsstreitigkeiten gebildet wurde. Der Nettoumsatz stieg im Jahresvergleich um 6,8 % auf 136,9 Millionen US-Dollar, angeführt von einem 12,1%igen Anstieg beim Casino-Gewinn; Food & Beverage legte um 1,1 % zu, während die Hotelerlöse um 3,1 % zurückgingen. Strenge Kosteneinsparungen senkten die Casino-Ausgaben auf 35,7 % der Casino-Einnahmen (gegenüber 37,7 % im Vorjahr), was das Betriebsergebnis um 18,3 % auf 34,9 Millionen US-Dollar anhob.
Die Rentabilität verbesserte sich. Der Nettogewinn stieg um 19,1 % auf 27,0 Millionen US-Dollar, und das verwässerte Ergebnis je Aktie wuchs um 21 % auf 1,44 US-Dollar. Das Ergebnis je Aktie für das erste Halbjahr 2025 erreichte 2,50 US-Dollar (+17,9 %). Der operative Cashflow stieg im Sechsmonatszeitraum auf 70,6 Millionen US-Dollar und finanzierte problemlos 27,9 Millionen US-Dollar an Investitionen, 20,0 Millionen US-Dollar an Aktienrückkäufen (240.000 Aktien) und 11,0 Millionen US-Dollar an Dividenden (0,60 US-Dollar je Aktie).
Die Bilanz bleibt schuldenfrei. Der Kassenbestand belief sich auf 71,6 Millionen US-Dollar, und die revolvierende Kreditlinie von 100 Millionen US-Dollar wurde nicht in Anspruch genommen (Gesamtverschuldung 0,0x). Das Eigenkapital der Aktionäre stieg auf 539,3 Millionen US-Dollar, obwohl die eigenen Aktien auf 83,7 Millionen US-Dollar zunahmen.
Wichtiges Risiko: Bau-Litigation. Das Unternehmen verbuchte eine Verbindlichkeit in Höhe von 76,5 Millionen US-Dollar im Zusammenhang mit einem Gerichtsurteil im Februar (74,6 Millionen plus Zinsen) gegen den Auftragnehmer PCL; Monarch hat Berufung eingelegt und eine Kaution hinterlegt, aber die Nachurteilzinsen betragen 6 %.
Kapitalrückflüsse gehen weiter: Quartalsdividende von 0,30 US-Dollar wurde am 15. Juni gezahlt; nächste Dividende von 0,30 US-Dollar für den 15. September angekündigt. Die Rückkaufgenehmigung beläuft sich auf 1,71 Millionen Aktien.
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c
United States
Securities and Exchange Commission
Washington, D.C. 20549
Form
For the quarterly period ended
OR
For the transition period from to .
Commission File No.
(Exact name of registrant as specified in its charter)
(State or Other Jurisdiction of | (I.R.S. Employer | |
Incorporation or Organization) | Identification No.) | |
(Address of Principal Executive Offices) | (ZIP Code) |
Registrant’s telephone number, including area code: (
N/A
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
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.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Accelerated filer ◻ | Non-accelerated filer ◻ | ||
Smaller reporting company | Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
Table of Contents
TABLE OF CONTENTS
Item | Page |
PART I - FINANCIAL INFORMATION | |
Item 1. Financial Statements | |
Consolidated Statements of Income for the three- and six months ended June 30, 2025 and 2024 (unaudited) | 3 |
Consolidated Balance Sheets at June 30, 2025 (unaudited) and December 31, 2024 | 4 |
Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2025 and 2024 (unaudited) | 5 |
Consolidated Statements of Cash Flows for the six three months ended June 30, 2025 and 2024 (unaudited) | 6 |
Notes to Consolidated Financial Statements (unaudited) | 7 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 18 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 23 |
Item 4. Controls and Procedures | 23 |
PART II - OTHER INFORMATION | |
Item 1. Legal Proceedings | 24 |
Item 1A. Risk Factors | 24 |
Item 2. Unregistered Sales of Equity Securities and use of Proceeds | 24 |
Item 5. Other Information | 24 |
Item 6. Exhibits | 25 |
Signatures | 25 |
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MONARCH CASINO & RESORT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three months ended | Six months ended | ||||||||||||
June 30, | June 30, | ||||||||||||
| 2025 |
| 2024 |
| 2025 |
| 2024 |
| |||||
Revenues | |||||||||||||
Casino | $ | | $ | | $ | | $ | | |||||
Food and beverage | | | | | |||||||||
Hotel | | | | | |||||||||
Other | | | | | |||||||||
Net revenues | | | | | |||||||||
Operating expenses | |||||||||||||
Casino | | | | | |||||||||
Food and beverage | | | | | |||||||||
Hotel | | | | | |||||||||
Other | | | | | |||||||||
Selling, general and administrative | | | | | |||||||||
Depreciation and amortization | | | | | |||||||||
Other operating items, net | | | | | |||||||||
Total operating expenses | | | | | |||||||||
Income from operations | | | | | |||||||||
Other income (expense) | |||||||||||||
Interest expense, net | | ( | | ( | |||||||||
Income before income taxes | | | | | |||||||||
Provision for income taxes | ( | ( | ( | ( | |||||||||
Net income | $ | | $ | | $ | | $ | | |||||
Earnings per share of common stock | |||||||||||||
Net income | |||||||||||||
Basic | $ | | $ | | $ | | $ | | |||||
Diluted | $ | | $ | | $ | | $ | | |||||
Weighted average number of common shares and potential common shares outstanding | |||||||||||||
Basic | | | | | |||||||||
Diluted | | | | | |||||||||
The Notes to the Consolidated Financial Statements are an integral part of these statements.
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MONARCH CASINO & RESORT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except shares)
| June 30, 2025 |
| December 31, 2024 |
| |||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | |
| $ | | ||
Receivables, net of provision for credit losses | |
| | ||||
Income taxes receivable | |
| | ||||
Inventories | |
| | ||||
Prepaid expenses and other | |
| | ||||
Total current assets |
| |
| | |||
Property and equipment, net |
| |
| | |||
Goodwill |
| |
| | |||
Intangible assets, net |
| |
| | |||
Other assets, net |
| |
| | |||
Total assets | $ | |
| $ | | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities | |||||||
Accounts payable | $ | |
| $ | | ||
Construction accounts payable | | | |||||
Accrued expenses |
| |
| | |||
Short-term lease liability | | | |||||
Total current liabilities |
| |
| |
| ||
Deferred income taxes | | | |||||
Long-term lease liability | | | |||||
Other long-term liability | | | |||||
Total liabilities |
| |
| | |||
Stockholders’ equity |
| ||||||
Preferred stock, $ |
| ||||||
Common stock, $ | | | |||||
Additional paid-in capital |
| |
| | |||
Treasury stock, | ( | ( | |||||
Retained earnings |
| |
| | |||
Total stockholders’ equity |
| |
| | |||
Total liabilities and stockholders’ equity | $ | |
| $ | | ||
The Notes to the Consolidated Financial Statements are an integral part of these statements.
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MONARCH CASINO & RESORT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except shares, Unaudited)
Common Stock | Additional | |||||||||||||||||
Shares | Paid-in | Retained | Treasury | |||||||||||||||
| Outstanding |
| Amount |
| Capital |
| Earnings |
| Stock |
| Total | |||||||
Balance, January 1, 2025 |
| |
| $ | |
| $ | |
| $ | |
| $ | ( |
| $ | | |
Exercise of stock options, net |
| | |
| |
| — |
| — | | ||||||||
Stock-based compensation expense |
| — |
| — |
| |
| — |
| — |
| | ||||||
Dividend payment | — | — | — | ( | — | ( | ||||||||||||
Net income |
| — |
| — |
| — |
| |
| — |
| | ||||||
Balance, March 31, 2025 | |
| $ | |
| $ | |
| $ | |
| $ | ( |
| $ | | ||
Exercise of stock options, net |
| | — |
| |
| — |
| — | | ||||||||
Stock-based compensation expense |
| — |
| — |
| |
| — |
| — |
| | ||||||
Purchase of company common stock | ( | — | — | — | ( | ( | ||||||||||||
Dividend payment | — | — | — | ( | — | ( | ||||||||||||
Net income |
| — |
| — |
| — |
| |
| — |
| | ||||||
Balance, June 30, 2025 |
| |
| $ | |
| $ | |
| $ | |
| $ | ( |
| $ | | |
Common Stock | Additional | |||||||||||||||||
Shares | Paid-in | Retained | Treasury | |||||||||||||||
| Outstanding |
| Amount |
| Capital |
| Earnings |
| Stock |
| Total | |||||||
Balance, January 1, 2024 |
| |
| $ | |
| $ | |
| $ | |
| $ | ( |
| $ | | |
Exercise of stock options, net |
| | |
| |
| — |
| — | | ||||||||
Stock-based compensation expense | — | — | | — | — | | ||||||||||||
Purchase of company common stock | ( | — | — | — | ( | ( | ||||||||||||
Dividend payment | — | — | — | ( | — | ( | ||||||||||||
Net income | — |
| — |
| — |
| |
| — |
| | |||||||
Balance, March 31, 2024 |
| |
| $ | |
| $ | |
| $ | |
| $ | ( |
| $ | | |
Exercise of stock options, net |
| | — |
| |
| — |
| — |
| | |||||||
Stock-based compensation expense |
| — |
| — |
| |
| — |
| — |
| | ||||||
Purchase of company common stock | ( | — | — | — | ( | ( | ||||||||||||
Dividend payment | — | — | — | ( | — | ( | ||||||||||||
Net income |
| — |
| — |
| — |
| |
| — |
| | ||||||
Balance, June 30, 2024 |
| |
| $ | |
| $ | |
| $ | |
| $ | ( |
| $ | | |
The Notes to the Consolidated Financial Statements are an integral part of these statements.
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MONARCH CASINO & RESORT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, Unaudited)
Six Months Ended June 30, | |||||||
| 2025 |
| 2024 |
| |||
Cash flows from operating activities: | |||||||
Net income | $ | |
| $ | | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization |
| |
| | |||
Amortization of deferred loan costs |
| |
| — | |||
Stock-based compensation - stock options |
| |
| | |||
Provision for bad debts |
| |
| | |||
Loss (gain) on disposition of assets |
| |
| | |||
Non-cash operating lease expense | ( | | |||||
Changes in operating assets and liabilities: | |||||||
Receivables | ( | | |||||
Income taxes receivable | ( | ( | |||||
Inventories | | ( | |||||
Prepaid expenses and other | | | |||||
Accounts payable |
| ( |
| ( | |||
Accrued expenses |
| ( |
| ( | |||
Net cash provided by operating activities |
| |
| | |||
Cash flows from investing activities: | |||||||
Proceeds from sale of assets |
| |
| | |||
Change in construction accounts payable | ( | | |||||
Acquisition of property and equipment | ( | ( | |||||
Net cash used in investing activities |
| ( |
| ( | |||
Cash flows from financing activities: | |||||||
Payroll taxes from net exercise of stock options |
| — |
| ( | |||
Proceeds from exercise of stock options | | | |||||
Line-of-credit borrowings | — | | |||||
Line-of-credit payments | — | ( | |||||
Payment of dividends | ( | ( | |||||
Purchase of company common stock | ( | ( | |||||
Net cash used in financing activities |
| ( |
| ( | |||
Change in cash and cash equivalents |
| |
| ( | |||
Cash and cash equivalents at beginning of period |
| |
| | |||
Cash and cash equivalents at end of period | $ | |
| $ | | ||
Supplemental disclosure of cash flow information: | |||||||
Cash paid for interest | $ | |
| $ | | ||
Cash paid for income taxes | $ | |
| $ | | ||
The Notes to the Consolidated Financial Statements are an integral part of these statements.
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MONARCH CASINO & RESORT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
QUARTERLY PERIOD ENDED JUNE 30, 2025
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation:
Monarch Casino & Resort, Inc. was incorporated in 1993. Unless otherwise indicated, “Monarch,” “us,” “we,” and the “Company” refers to Monarch Casino & Resort, Inc. and its subsidiaries. Monarch owns and operates the Atlantis Casino Resort Spa, a hotel and casino in Reno, Nevada (the “Atlantis”) and Monarch Casino Resort Spa Black Hawk, a hotel and casino in Black Hawk, Colorado (the “Monarch Black Hawk”). In addition, Monarch owns separate parcels of land located next to the Atlantis and a parcel of land with an industrial warehouse located between Denver, Colorado and Monarch Black Hawk. Monarch also owns Chicago Dogs Eatery, Inc. and Monarch Promotional Association, both of which were formed in relation to licensure requirements for extended hours of liquor operation in Black Hawk, Colorado.
The accompanying unaudited consolidated financial statements include the accounts of Monarch and its subsidiaries (the “Consolidated Financial Statements”). Intercompany balances and transactions are eliminated.
Interim Financial Statements:
The Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the management of the Company, all adjustments considered necessary for a fair presentation, consisting of normal recurring accruals, are reflected in the interim financial statements. Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.
The balance sheet at December 31, 2024, has been derived from the audited consolidated financial statements of the Company at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2024.
Segment Reporting:
The accounting guidance for disclosures about segments of an enterprise and related information requires separate financial information to be disclosed for all reporting segments of a business. The Company determined that the Company’s
The Company’s Chief Operating Decision Maker (CODM) is our Chief Executive Officer. The CODM assesses performance for our properties and decides how to allocate resources based on net income as reported on our Consolidated Statements of Income. The measure of segment assets is reported on our Consolidated Balance Sheets as total assets.
Our operating revenues are recognized with the delivery of products or when services are performed at either of our operating segments. Our significant segment expenses as monitored by the CODM are shown in the table below. This breakout of expenses is used by the CODM to monitor and assess the financial performance by comparing actual results to prior years and plans (in thousands).
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Six Months Ended June 30, | |||||||
2025 | 2024 | ||||||
Net revenues | $ | | $ | | |||
Operating Expenses | |||||||
Labor expense | | | |||||
Cost of sales | | | |||||
Tax and license expense [a] | | | |||||
Other operating expense [b] | | | |||||
Depreciation and amortization | | | |||||
Other operating items, net [c] | | | |||||
Interest income, net | ( | | |||||
Income tax expense | | | |||||
Total expenses | $ | | $ | | |||
Net income | $ | | $ | | |||
[a] Tax and license includes gaming taxes and licenses, commerce taxes, use taxes and property taxes.
[b] Operating expenses includes expenses for casino, food and beverage, hotel, other, selling general and administrative expenses labor expense, cost of sales, tax and license expense.
[c] Other operating items, net includes construction litigation expenses, lobbying expenses, and (gain) loss on disposition of assets.
Concentrations of Credit Risk and Credit Losses:
Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of bank deposits and trade receivables.
The Company accounts for credit losses in accordance with Accounting Standards Update (“ASU”) 2016-13 using a forward-looking expected loss model.
The Company maintains its surplus cash in bank accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.
The Company extends short-term credit to its gaming customers. Such credit is non-interest bearing and is due on demand. In addition, the Company also has receivables due from hotel guests and convention groups and events, which are primarily secured with a credit card. An allowance for current expected credit losses is determined to reduce the Company’s receivables to their carrying value, which approximates fair value. The allowance is estimated based on historical collection experience, specific review of individual customer accounts, current economic and business conditions and management’s expectations of future economic and business conditions. The allowance is applied even when the risk of credit loss is remote. When a situation warrants, the Company may create a specific identification reserve for high collection risk receivables. The Company writes off its uncollectible receivables once all efforts have been made to collect such receivables. Recoveries of accounts previously written off are recorded when received. Concentrations of credit risk with respect to gaming and non-gaming receivables are limited due to the large number of customers comprising the Company’s customer base. Historically, the Company has not incurred any significant credit-related losses.
As of June 30, 2025, the Company has recorded a reserve of $
The Company believes it is not exposed to any significant credit risk on cash and accounts receivable.
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Table of Contents
Inventories:
Inventories, consisting primarily of food, beverages, and retail merchandise, are stated at the lower of cost and net realizable value. Cost is determined by the weighted average and specific identification methods. Net realizable value is defined by the Financial Accounting Standards Board (“FASB”) as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.
Property and Equipment, net:
Property and equipment, net consists of the following (in thousands):
| June 30, 2025 |
| December 31, 2024 |
| |||
Land | $ | | $ | | |||
Land improvements |
| |
| | |||
Buildings |
| |
| | |||
Building improvements |
| |
| | |||
Furniture and equipment |
| |
| | |||
Construction in progress |
| |
| | |||
Right of use assets | | | |||||
Leasehold improvements |
| |
| | |||
| |
| | ||||
Less accumulated depreciation and amortization |
| ( |
| ( | |||
Property and equipment, net | $ | | $ | | |||
|
| ||||||
Property and equipment are stated at cost, less accumulated depreciation and amortization. Property and equipment is depreciated principally on a straight-line basis over its estimated useful lives as follows:
Land improvements |
| - | years | ||
Buildings |
| - | years | ||
Building improvements |
| - | years | ||
Leasehold improvements | - | years | |||
Furniture |
| - | years | ||
Equipment |
| - | years |
The Company evaluates property and equipment and other long-lived assets for impairment in accordance with the guidance for accounting for the impairment or disposal of long-lived assets.
For assets to be disposed of, the Company recognizes the asset to be sold at the lower of carrying value or fair value less costs of disposal. Fair value for assets to be disposed of is generally estimated based on comparable asset sales, solicited offers or a discounted cash flow model.
For assets to be held and used, the Company reviews fixed assets for impairment indicators at the end of the fiscal year and whenever indicators of impairment exist. If an indicator of impairment exists, we compare the estimated future cash flows of the asset, on an undiscounted basis, to the carrying value of the asset. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, the impairment is measured based on fair value compared to carrying value, with fair value typically based on a discounted cash flow model or market comparable, when available. For the six-month periods ended June 30, 2025 and 2024, respectively, there were
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Goodwill:
The Company accounts for goodwill in accordance with ASC Topic 350, Intangibles-Goodwill and Other (“ASC Topic 350”). ASC Topic 350 gives companies the option to perform a qualitative assessment that may allow them to skip the quantitative test as appropriate. The Company tests its goodwill for impairment annually during the fourth quarter, or whenever events or circumstances make it more likely than not that impairment may have occurred. Impairment testing for goodwill is performed at the reporting unit level, and each of the Company’s casino properties is considered to be a reporting unit.
As of June 30, 2025, we had goodwill totaling $
ASC Topic 350 requires that goodwill be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. We performed an assessment to determine whether events or circumstances such as those described in ASC 350-20-35-3C existed and we determined that they did not exist during the interim period; therefore, an interim impairment test was not performed.
Revenue Recognition:
The majority of the Company’s revenue is recognized when products are delivered or services are performed. For certain revenue transactions (when a patron uses a club loyalty card), in accordance with ASU No. 2014-09 (“ASC 606”), a portion of the revenue is deferred until the points earned by the patron are redeemed or expire.
Casino revenue: Casino revenues represent the net win from gaming activity, which is the difference between the amounts won and lost, which represents the transaction price. Jackpots, other than the incremental amount of progressive jackpots, are recognized at the time they are won by customers. Funds deposited by customers in advance and outstanding chips and slot tickets in the customers’ possession are recognized as a liability until such amounts are redeemed or used in gaming play by the customer. Additionally, net win is reduced by the performance obligations for the players’ club program, progressive jackpots and any pre-arranged marker discounts. Progressive jackpot provisions are recognized in two components: 1) as wagers are made for the share of players’ wagers that are contributed to the progressive jackpot award, and 2) as jackpots are won for the portion of the progressive jackpot award contributed by the Company. Cash discounts and other cash incentives to guests related to gaming play are recorded as a reduction to gaming revenue.
Players’ Club Program: The Company operates a players’ club program under which as players perform gaming activities they earn and accumulate points, which may be redeemed for a variety of goods and services. Given the significance of the players’ club program and the ability for members to bank such points based on their past play, the Company has determined that players’ club program points granted in conjunction with gaming activity constitute a material right and, as such, represent a performance obligation associated with the gaming contracts. At the time points are earned, the Company recognizes deferred revenue at the standalone selling prices (“SSP”) of the goods and services that the points are expected to be redeemed for, with a corresponding decrease in gaming revenue. The points estimated SSP is computed as the cash redemption value of the points expected to be redeemed, which is determined through an analysis of all redemption activity over the preceding
Food and Beverage, Hotel and Other (retail) Revenues: Food and Beverage, Hotel and Other Revenues in general are recognized when products are delivered or services are performed. The Company recognizes revenue related to the products and services associated with the players points’ redemptions at the time products are delivered or services are performed, with corresponding reduction in the deferred revenue, at SSP. Other complimentaries in conjunction with the gaming and other business are also valued at SSP. Hotel revenue is presented net of non-third-party rebates and commissions. The cost of providing these complimentary goods and services are included as expenses within their respective categories.
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Other Revenues: Other revenues (excluding retail) primarily consist of commissions received on ATM transactions and cash advances, which are recorded on a net basis as the Company represents the agent in its relationship with the third-party service providers, and commissions and fees received in connection with pari-mutuel wagering, which are also recorded on a net basis.
Sales and other taxes: Sales taxes and other taxes collected from customers on behalf of governmental authorities are accounted for on a net basis and are not included in revenues or operating expenses. In addition, tips and other gratuities, excluding service charges, collected from customers on behalf of the Company’s employees are also accounted for on a net basis and are not included in revenues or operating expenses.
Outstanding chip liability: Outstanding chip liability represents the amounts owed in exchange for gaming chips held by a customer, that can be redeemed by the customers at any time.
Customer advances and other: Customer advances and other primarily consist of funds deposited by customers before gaming play occurs and advance payments on goods and services yet to be provided, such as advance gift cards sales and deposits on rooms and convention space or for unpaid wagers. These liabilities are generally expected to be recognized as revenue within one year of being purchased, earned, or deposited and are recorded within “Accrued expenses” on the consolidated balance sheets.
The following table summarizes the activity related to contract and contract-related liabilities as of June 30, 2025 and 2024 compared to December 31, 2024 and 2023, respectevly:
June 30, | December 31, | Decrease | June 30, | December 31, | Decrease | ||||||||||||||
2025 | 2024 | 2024 | 2023 | ||||||||||||||||
Contractual Liability | |||||||||||||||||||
Players Club Liability | $ | | $ | | $ | ( | $ | | $ | | $ | — | |||||||
Outstanding Chip Liability | | | ( | | | ( | |||||||||||||
Customer Advances and Other | | | ( | | | ( | |||||||||||||
Total Contractual Liability | $ | | $ | | $ | ( | $ | | $ | | $ | ( | |||||||
Other operating items, net:
Other operating items, net, in general consist of miscellaneous operating charges or proceeds.
For the three months ended June 30, 2025, Other operating items, net, was $
For the six months ended June 30, 2025, Other operating items, net, was $
Impact of Recently Adopted Accounting Standards:
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires business entities to expand their annual disclosures of the effective rate reconciliation and income taxes paid. The ASU is effective for fiscal years beginning after December 15, 2024, may be adopted on a prospective or retrospective basis, and early adoption is permitted. The Company is currently evaluating the effect that the new guidance will have on our related disclosures.
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In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires business entities to disclose, for interim and annual reporting periods, additional information about certain income statement expense categories. The requirements are effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Entities are permitted to apply either the prospective or retrospective transition methods. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements.
A variety of proposed or otherwise potential accounting standards are currently under review and study by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, we have not yet determined the effect, if any, the implementation of any such proposed or revised standards would have on the Company’s Consolidated Financial Statements.
NOTE 2. ACCOUNTING FOR LEASES
For operating leases with terms greater than 12 months, the Company records the related asset and obligation at the present value of the lease payments over the lease term. Certain of the Company’s leases include rental escalation clauses, renewal options and/or termination options that are factored into its determination of lease payments when appropriate. As permitted by ASC 842, the Company elected not to separate non-lease
As of June 30, 2025, the Company’s right of use assets consisted of the Parking Lot Lease, the Driveway Lease (each as defined and discussed in NOTE 5. RELATED PARTY TRANSACTIONS), as well as certain billboard leases.
The weighted-average incremental borrowing rate of the leases presented in the lease liability as of June 30, 2025, was
The weighted-average remaining lease term of the leases presented in the lease liability as of June 30, 2025, was
Cash paid related to the operating leases presented in the lease liability for each of the six months ended June 30, 2025 and 2024, was $
NOTE 3. STOCK-BASED COMPENSATION
In accordance with ASC 718, the Company records any excess tax benefits or deficiencies from its equity awards in its Consolidated Statements of Income in the reporting periods in which vesting occurs. As a result, the Company’s income tax expense and associated effective tax rate are impacted by fluctuations in stock price between the grant dates and vesting dates of equity awards.
Reported stock-based compensation expense was classified as follows (in thousands):
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NOTE 4. 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 reflect the additional dilution for all potentially dilutive securities such as stock options.
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Excluded from the computation of diluted earnings per share are options where the exercise prices are greater than the weighted assumed proceeds per share as their effects would be anti-dilutive in the computation of diluted earnings per share. For the three months ended June 30, 2025 and 2024, options for approximately
NOTE 5. RELATED PARTY TRANSACTIONS
The shopping center adjacent to the Atlantis (the “Shopping Center”) is owned by Biggest Little Investments, L.P. (“BLI”). John Farahi and Bob Farahi, Co-Chairmen of the Board and executive officers of the Company, and Ben Farahi have significant holdings (the “Farahi Family Stockholders”) in 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.
On August 28, 2015, Monarch, through its subsidiary Golden Road Motor Inn, Inc., entered into a
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In addition, the Atlantis shares a driveway with the Shopping Center and leases approximately
The Company occasionally leases billboard advertising, storage space and parking lot space from affiliates controlled by the Farahi Family Stockholders, and paid $
NOTE 6. LONG-TERM DEBT
On December 31, 2024, the Company entered into the Sixth Amended and Restated Credit Agreement (the “Amended Credit Facility”) with Wells Fargo Bank, N.A., as administrative agent. The Amended Credit Facility amends and restates the Company’s $
The Amended Credit Facility extends the maturity date to January 1, 2028 and removes the lien on real property under the Prior Facility. Additionally, the interest rate under the Amended Credit Facility is either SOFR (the Secured Overnight Financing Rate) plus a margin of
In addition to other customary covenants for a facility of this nature, as of June 30, 2025, the Company is required to maintain a Total Leverage Ratio (as defined in the Amended Credit Facility) of no more than
As of June 30, 2025, the Company had
NOTE 7. TAXES
For the six months ended June 30, 2025 and 2024, the Company’s effective tax rate was
Deferred tax assets were evaluated by considering historical levels of income, estimates of future taxable income and the impact of tax planning strategies.
On July 4, 2025, the “One Big Beautiful Bill Act” (the “Act”) was enacted into law, making permanent certain key elements of the Tax Cuts and Jobs Act that are applicable to the Company, including 100% bonus depreciation. The Company is in the process of evaluating the impact of the Act to the Consolidated Financial Statements.
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NOTE 8. STOCK REPURCHASE PLAN
On October 22, 2014, the board of directors of Monarch authorized a stock repurchase plan (the “Repurchase Plan”). Under the Repurchase Plan, the board of directors authorized a program to repurchase up to
In the second quarter of 2025, under its existing Repurchase Plan, the Company purchased
NOTE 9. LEGAL MATTERS
On August 30, 2019, PCL Construction Services, Inc. (“PCL”) filed a complaint in District Court, City and County of Denver, Colorado, against the Company and its Colorado subsidiaries, in connection with the Company’s now completed expansion of the Monarch Casino Resort Spa Black Hawk (the “Project”). The case is captioned PCL Construction Services, Inc. v. Monarch Growth Inc., et al., Case No. 2019CV33368 (the “First Denver Lawsuit”). The complaint alleges, among other things, that the defendants breached the construction contract with PCL and certain implied warranties. On December 5, 2019, the Company filed its answer and counterclaim, which alleges, among other items, that PCL breached the construction contract, duties of good faith and fair dealing, and implied and express warranties, made fraudulent or negligent misrepresentations on which the Company and its Colorado subsidiaries relied, and included claims for monetary damages as well as equitable and declaratory relief.
On March 26, 2021, PCL filed a mechanics’ lien foreclosure action in the District Court, County of Gilpin, Colorado, against the Company and its Colorado subsidiaries, in connection with the Company’s now completed expansion of the Monarch Casino Resort Spa Black Hawk. The case is captioned PCL Construction Services, Inc., v. Monarch Growth Inc., et al., Case No. 2021CV30006 (the “Gilpin Lawsuit”). The complaint essentially mirrors the claims and allegations made by PCL in the First Denver Lawsuit, as described above. The Gilpin Lawsuit includes an additional claim, however, for foreclosure of PCL’s purported mechanics’ lien against the property on which the Monarch Casino Resort Spa Black Hawk is situated (the “Property”). PCL also joined additional parties who may claim a purported lien against the Property, as defendants. Effective May 10, 2021, PCL filed its second amended complaint, joining more such parties as defendants. Many of the Company’s co-defendants have filed cross claims against Monarch for foreclosure of mechanics’ liens and related claims, including unjust enrichment.
Monarch filed its answer and counterclaims to PCL’s second amended complaint in the Gilpin Lawsuit on July 15, 2021, but a trial of the matter has not been set. Monarch has also filed answers to all cross claims due to date, denying the claimants’ rights to relief. Monarch anticipates filing further answers to additional cross claims, also denying the claimants’ rights to relief. The case remains stayed, however, pending the outcome of the First Denver Lawsuit, Case No. 2019CV33368. We are currently unable to determine the probability of the outcome or reasonably estimate the loss or gain, if any.
On February 9, 2023, Monarch Growth, Inc., Monarch Casino & Resort, Inc. and Monarch Black Hawk, Inc. filed a complaint in District Court, City and County of Denver, Colorado, against PCL, in connection with the Company’s now completed expansion of the Monarch Casino Resort Spa Black Hawk. The case is captioned Monarch Growth Inc., et al., v. PCL Construction Services, Inc., Case No. 2023CV30458 (the “Second Denver Lawsuit”). The complaint alleges, among other things, that PCL breached the construction contract, duties of good faith and fair dealing, and implied and express warranties based on defective and/or nonconforming construction work at the project, and includes claims for monetary damages as well as equitable and declaratory relief.
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On April 18, 2023, at the parties’ joint request, the Court ordered the Second Denver Lawsuit stayed for ninety days from the date of the stay order until July 17, 2023. Following the expiration of the stay and the filing of a motion to dismiss by PCL, Monarch amended its complaint in the Second Denver Lawsuit. On January 22, 2025, the Court granted Monarch’s motion to file a second amended complaint and set the trial of the matter for a 7-day trial beginning on August 18, 2025.
On September 5, 2023, trial commenced in the First Denver Lawsuit in the District Court for the City and County of Denver, Colorado. The bench trial concluded on November 22, 2023, after 28 total court days. PCL and the Company each submitted proposed Findings of Fact, Conclusions of Law and Order for the Court’s consideration on February 7, 2024.
On February 14, 2025, the Court issued its Findings of Fact, Conclusions of Law and Order of Judgment in the litigation between the Company and PCL. The Court awarded damages in favor of PCL of $
On February 28, 2025, PCL filed with the court a Motion to Amend the Judgment to Add Prejudgment Interest, which the Court denied on May 23, 2025. On March 13, 2025, PCL also filed a bill of costs and a motion for attorneys’ fees. Monarch has filed an opposition, challenging PCL’s entitlement to such fees and costs, as well as the computation and amount of the fees and costs PCL seeks. The Court has yet to rule on PCL’s Bill of Costs and Motion for Attorneys’ Fees.
On March 21, 2025, Monarch filed a Motion for a New Trial pursuant to C.R.C.P. 59(a)(1), which Judge Luxen denied on May 21, 2025. On March 21, 20025, Monarch also filed a Motion to Amend the Judgment under C.R.C.P. 59(a)(4) to (a) to include additional $
On May 30, 2025, Monarch filed a Notice of Appeal with the Colorado Court of Appeals of the District Court’s February 14, 2025 Judgment and the District Court’s post-trial orders. On June 13, 2025, PCL filed a Notice of Cross Appeal of the District Court’s denial of PCL’s Motion for Prejudgment Interest. Monarch has posted a bond to stay enforcement of the Judgment pending such appeal. The Company does not expect any further proceedings in the lower court.
As of June 30, 2025, the Company has $
The Company recognized $
From time to time, we may be subject to other legal proceedings and claims in the ordinary course of business. Management believes that the amount of any reasonably possible or probable loss for such other known matters would not have a material adverse impact on our financial conditions, cash flows or results of operations; however, the outcome of these actions is inherently difficult to predict.
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NOTE 10. DIVIDENDS
On
On
On
The Company’s declaration of each cash dividend amount shall be subject to the Board’s review of the then-current financial statements of the Company, available acquisition opportunities and other prudent uses of the Company’s cash resources. As such, the Board of Directors may suspend the dividend program at any time and no assurances can be given that a quarterly dividend will be paid.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Unless otherwise indicated, “Monarch,” “Company,” “we,” “our,” and “us” refer to Monarch Casino & Resort, Inc. and its subsidiaries.
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “believes,” “expects,” “anticipates,” “estimates,” “plans,” “intends,” “objectives,” “goals,” “aims,” “projects,” “forecasts,” “possible,” “seeks,” “may,” “will,” “could,” “should,” “might,” “likely,” “enable,” or similar words or expressions, as well as statements containing phrases such as “in our view,” or “we cannot assure you,” “although no assurance can be given.” Examples of forward-looking statements include, among others, statements we make regarding: (i) our belief regarding the exposure of our cash and accounts receivable to credit risk; (ii) our expectations regarding the litigation and any appeal relating to the construction of the Monarch Black Hawk expansion and related liens recorded by the general contractor and certain subcontractors against the Monarch Black Hawk; (iii) our expectations regarding our business prospects, strategies, estimates and outlook; (iv) our expectations regarding the positioning of our properties to benefit from future macro and local economic growth; (v) our expectations regarding future capital requirements; (vi) our anticipated sources of funds and adequacy of such funds to meet our debt obligations and capital requirements; and (vii) our expectations regarding legal and other matters.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the impact of the events occurring in the Middle East and the conflict taking place in Israel, as well as those risks discussed in Part I, Item 1A-Risk Factors and throughout Part II, Item 7-Management’s Discussion and Analysis of Financial Condition and Results of our Annual Report on Form 10-K for the year ended December 31, 2024, and in Part II, Item 1A-Risk Factors and elsewhere of this Form 10-Q. In addition, you should consult other disclosures made by us (such as in our other filings with the Securities and Exchange Commission (“SEC”) or in Company press releases) for other factors that may cause actual results to differ materially from those projected by us. You should read this Form 10-Q, and the documents that we reference in this Form 10-Q and have filed with the SEC, and our Annual Report on Form 10-K for the year ended December 31, 2024, with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect.
Any forward-looking statement made by us in this Form 10-Q is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update or revise any forward-looking statements as a result of future developments, events or conditions, except as required by law. New risks emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ significantly from those forecast in any forward-looking statements.
OVERVIEW
Monarch was incorporated in the state of Nevada in 1993. We own and operate the Atlantis Casino Resort Spa, a hotel and casino in Reno, Nevada (the “Atlantis”) and Monarch Casino Resort Spa Black Hawk (the “Monarch Black Hawk”), a casino in Black Hawk, Colorado. In addition, we own separate parcels of land located next to the Atlantis and a parcel of land with an industrial warehouse located between Denver, Colorado and Monarch Black Hawk.
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We earn revenues, operating income and cash flow from Atlantis and Monarch Black Hawk, primarily through our casino, food and beverage, and hotel operations. We focus on delivering exceptional service and value to our guests. Our hands-on management style focuses on customer services and cost efficiencies.
Atlantis: We continuously upgrade our property. With quality gaming, hotel and dining products, we believe the Atlantis is well positioned to benefit from future macro and local economic growth. Reno remains a healthy local-oriented market, but at the same time a very competitive market. The market’s employment growth is broad based and we expect this positive indicator will support the continued strength of our business at Atlantis. At the same time, the tight employment environment has created labor challenges, including wage inflation, which we continue to actively manage. In addition, we are facing increased competition from the continued growth of California tribal gaming and an extremely competitive promotional environment in Northern Nevada. The increase in the labor costs and the other inflationary pressures, combined with continued aggressive marketing programs by our competitors, has applied pressure on Atlantis’ revenue growth, operating costs and profit margins.
Monarch Black Hawk: Monarch Black Hawk is the first property encountered by visitors arriving from Denver and other major population centers via Colorado State Highway 119. The Denver metro economy remains strong with higher than the national average per capita personal income. At the beginning of 2022, we completed the master planned renovation and expansion, transforming the property into a world-class resort. Monarch Black Hawk is positioned to leverage the expanded operation, the elimination of betting limits and new game types in Black Hawk, Colorado, as well as to benefit from the growing state-wide online and retail sports betting. Monarch Black Hawk also is experiencing labor challenges, resulting from the distance to the staffing filter markets of Golden, Colorado and the Denver Metro area. We continue to attract high-value players from Denver and Boulder metro areas, who had previously traveled to other markets, such as Las Vegas, for a high-end casino entertainment experience. We believe that the quality of our expanded product and exceptional guest service will meet the demand of the high-end segment of the market and will grow revenue and accelerate market share.
KEY PERFORMANCE INDICATORS
We use the following Key Performance Indicators (“KPI”) to manage our operation and measure our performance:
Gaming revenue KPI: Our management reviews on a consistent basis the volume metrics and hold percentage metrics for each gaming area. The main volume measurements are slot coin-in, table games drop, sportsbook write and keno write. Slot coin-in represents the dollar amount wagered in slot machines, including free promotional wagers. Table games drop represents the total amount of cash and net markers deposited in the table drop box. Keno write and sportsbook write represents the dollar amount wagered at our counters, along with sportsbook write made through our mobile wagering system. Volume metrics are important in managing the business, as our gaming win is affected by actual hold percentage, which in general varies from the expected hold percentage and historical hold percentage. Gaming win represents the amount of wagers retained by us. Hold percentage represents win as a percentage of slot coin-in, table game drop, sportsbook write, or keno write. Our win and hold percentages are calculated before discounts, commissions, deferring revenue associated with our loyalty programs and allocating casino revenues related to goods and services provided to patrons on a complimentary basis.
Food and Beverage revenue KPI: The main KPIs in managing our food and beverage (“F&B”) operations are covers and average revenue per cover. A cover represents the number of guests served and is an indicator of volume. Average revenue per cover represents the average amount spent per food and beverage outlets’ served guests. Changes in the average revenue per cover might be an indicator for changes in menu offerings, changes in menu prices or may indicate changes in our guests’ preferences and purchasing habits.
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Hotel revenue KPI: The main KPIs used in managing our hotel operation are the occupancy rate (a volume indicator), which is the average percentage of available hotel rooms occupied during a period, and the average daily rate (“ADR”, a price indicator), which is the average price per sold room. Available rooms exclude those rooms unavailable for occupancy during the period due to renovation, development, or other requirements. Sold rooms include rooms where the guests do not show up for their stay and lose their deposit. The calculations of the occupancy rate and ADR include the impact of rooms provided on a complimentary basis. Revenue per available room ("RevPAR") represents total hotel revenue per available room and is a representation of the occupancy rate, ADR and miscellaneous hotel sales.
Operating margins: Our management is consistently focused on controlling expenses and finding cost savings, without affecting the quality of the product we offer and our guests’ services and experience. We measure our performance using expense margin, which is a percentage of direct expenses, including labor, cost of product and any other operating expenses related to the gaming, food and beverage, or hotel operation to the net gaming, food and beverage, or hotel revenues. Selling, general and administrative (“SG&A”) margin represents SG&A expenses for a period as a percentage of total net revenue for a period. In managing the food and beverage operation, we use Cost Of Goods Sold (“COGS”) percentage, which represents a percentage of product cost to the food and beverage revenue and is a measurement of commodity prices and menu sales prices.
Our management evaluates the KPI as compared to prior periods, the peer group, or market, as well as for any trends.
RESULTS OF OPERATIONS
Comparison of Operating Results for the Three-Month Periods Ended June 30, 2025 and 2024
For the three months ended June 30, 2025, our net income totaled $27.0 million, or $1.44 per diluted share, compared to net income of $22.7 million, or $1.19 per diluted share, for the same period in 2024, reflecting a 19.1% and 21.0% increase in net income and diluted earnings per share, respectively. Net revenues in the three months ended June 30, 2025, totaled $136.9 million, an increase of $8.8 million, or 6.8%, compared to the three months ended June 30, 2024. Income from operations for the three months ended June 30, 2025, totaled $34.9 million compared to income from operations of $29.5 million for the same period in 2024.
Casino revenue increased 12.1% in the second quarter of 2025 compared to the second quarter of 2024. The increase in casino revenue was driven primarily by the continued increase in market share at our properties. Casino operating expense as a percentage of casino revenue decreased to 35.7% for the three months ended June 30, 2025, compared to 37.7% for the three months ended June 30, 2024, primarily due to better labor management and operational efficiency.
Food and beverage revenue for the second quarter of 2025 increased 1.1% compared to the second quarter of 2024 due to 4.0% increase in food and beverage revenue per cover, partially offset by a decrease in food and beverage covers by 2.8%. Food and beverage operating expense as a percentage of food and beverage revenue in the second quarter of 2025 decreased to 70.3% compared to 73.8% in the second quarter of 2024 due primarily to decrease in labor expense and increase in revenue per cover.
Hotel revenue decreased 3.1% in the second quarter of 2025 compared to the same quarter of 2024 primarily as a result of decrease in occupancy percentage to 79.6% during the second quarter of 2025 compared to 85.5% during the second quarter of 2024 resulting from lower convention group business in the current year than in the prior year. ADR increased by $4.08 ($189.42 in the second quarter of 2025 and $185.34 in the second quarter of 2024). Hotel RevPAR was $162.57 and $172.06 for the three months ended June 30, 2025 and 2024, respectively. Hotel operating expense as a percentage of hotel revenue increased to 34.3% in the second quarter of 2025 compared to 33.5% for the comparable prior year period primarily due to lower revenue.
Other revenue increased 7.7% in the second quarter of 2025 compared to the same prior year period primarily due to increases in spa and commission revenues at both properties.
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SG&A expense increased to $26.8 million in the second quarter of 2025 from $26.2 million in the second quarter of 2024. As a percentage of net revenue, SG&A expense decreased to 19.6% in the second quarter of 2025 compared to 20.4% in the same period in 2024.
Depreciation and amortization expense increased to $13.6 million for the three months ended June 30, 2025, compared to $12.4 million for the same prior year period, due to new assets placed into service with the ongoing renovation at Atlantis.
We recognized $0.9 million and $0.1 million for the three months ended June 30, 2025 and 2024, respectively, in professional service fees relating to our construction litigation.
In the second quarter of 2025, we recognized $0.4 million of interest income, net of interest expense. In the second quarter of 2024, we recognized $0.2 million of interest expense, net of interest income. See further discussion of our Amended Credit Facility in the LIQUIDITY AND CAPITAL RESOURCES section below.
Comparison of Operating Results for the Six-Month Periods Ended June 30, 2025 and 2024
For the six months ended June 30, 2025, we had a net income of $46.9 million, or $2.50 per diluted share, compared to net income of $41.0 million, or $2.12 per diluted share for the same period in 2024, reflecting a 14.4% and 17.9% increase in net income and diluted earnings per share, respectively. Net revenues in the six months ended June 30, 2025, totaled $262.3 million, an increase of 5.0%, compared to the six months ended June 30, 2024. Income from operations for the six months ended June 30, 2025 totaled $60.2 million compared to $53.3 million income from operations for the same period in 2024.
Casino revenue increased 8.6% in the first six months of 2025 compared to the first six months of 2024 and was driven by an increase in market share at both properties. Casino operating expense as a percentage of casino revenue decreased to 36.7% for the six months ended June 30, 2025 compared to 37.8% for the six months ended June 30, 2024 primarily as a result of decrease in labor expense as a percentage of revenue and decrease in promotional allowances.
Food and beverage revenue for the first six months of 2025 increased 0.3% compared to the 2024 same period due to a 2.1% increase in food and beverage revenue per cover, partially offset by a decrease of food and beverage covers by 1.8%. Food and beverage operating expense as a percentage of food and beverage revenue decreased in the first six months of 2025 to 72.2% from 74.3% for the same period in 2024 primarily as a result of operational improvenents and eficiancies.
Hotel revenue decreased 1.9% in the first six months of 2025 compared to the first six months of 2024 primarily due to a decrease in occupancy from 82.2% during the first six months of 2024 to 80.2% during the same period of 2025 partially offset by an increase in ADR by $7.22, from $183.54 in the first six months of 2024 to $190.76 in the first six months of 2025. RevPAR was $164.91 for the first six months of 2025 and $162.96 for the first six months of 2024. Hotel operating expense as a percentage of hotel revenue increased to 35.9% in the first six months of 2025 compared to 34.5% for the comparable prior year period primarily as a result of lower revenue.
Other revenue increased 8.4% in the first six months of 2025 compared to the same prior year period.
SG&A expense increased to $54.0 million in the first six months of 2025 from $53.3 million in the first six months of 2024 primarily due to: $1.1 million increase in labor expense, partially offset by $0.4 million decrease in advertising and marketing expense. As a percentage of net revenue, SG&A expense decreased to 20.6% in the first six months of 2025 compared to 21.3% in the same period in 2024.
Depreciation and amortization expense increased to $26.8 million for the six months ended June 30, 2025 compared to $24.9 million for the same prior year period, due to new assets placed into service with the ongoing renovation at Atlantis.
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During the first six months of 2025 we recognized $1.4 million in professional services fees relating to our construction litigation. During the first six months of 2024, we recognized $0.6 million in professional services fees relating to our construction litigation and $0.1 million in loss on disposal of assets..
During the first six months of 2025, we recognized $0.7 million of interest income, net of interest expense. During the first six months of 2024, we expensed $0.2 million of interest, net of interest income. See further discussion of our Amended Credit Facility in the LIQUIDITY AND CAPITAL RESOURCES section below.
CAPITAL SPENDING AND DEVELOPMENT
We seek to continually upgrade and maintain our facilities in order to present a fresh, high quality product to our guests.
Cash paid for capital expenditures for the six-month periods ended June 30, 2025 and 2024 totaled $28.4 million and $30.7 million, respectively. During each of the six-month periods ended June 30, 2025 and 2024, our capital expenditures related primarily to the redesign and upgrade of hotel rooms in the third tower at Atlantis, and the acquisition of gaming, and other equipment to upgrade and replace existing equipment at Atlantis and Monarch Black Hawk.
LIQUIDITY AND CAPITAL RESOURCES
Our principal sources of liquidity have been cash provided by operations and, for capital expansion projects, borrowings available under our Amended Credit Facility.
For the six months ended June 30, 2025, net cash provided by operating activities totaled $70.6 million, compared to net cash provided by operating activities of $62.6 million in the same prior year period. This increase was primarily a result of an increase in net income and an increase in depreciation expense.
Net cash used in investing activities totaled $28.4 million and $30.7 million during each of the six months ended June 30, 2025 and 2024, respectively. Net cash used in investing activities during each of the first six months of 2025 and 2024 consisted primarily of cash used for the redesign and upgrade of hotel rooms in the third tower at Atlantis and the acquisition of gaming and other equipment at both properties.
Net cash used in financing activities in the first six months of 2025 totaled $29.4 million and consisted of $20.0 million cash used for purchase of Company stock under the Repurchase Plan and $11.0 million used for payment of dividends, partially offset by $1.6 million of net proceeds from stock options exercise. Net cash used in financing activities in the first six months of 2024 totaled $41.8 million and consisted of $50.4 million cash used for purchase of Company stock under the Repurchase Plan and $11.2 million used for payment of dividends, partially offset by $17.5 million of borrowings under the Amended Credit Facility, net of the payments to the lender under the Amended Credit Facility, and $2.3 million of net proceeds from stock options exercise.
Sixth Amended Credit Facility
On December 31, 2024, the Company entered into the Amended and Restated Credit Agreement (the “Amended Credit Facility”) with Wells Fargo Bank, N.A., as administrative agent. The Amended Credit Facility amends and restates the Company’s $100.0 million credit facility, dated as of February 1, 2023 (the “Prior Facility”).
The Amended Credit Facility extends the maturity date to January 1, 2028 and removes the lien on real property under the Prior Facility. As of June 30, 2025, the Company had no outstanding principal balance under the Amended Credit Facility, a $0.6 million standby letter of credit and $99.4 million remained available for borrowing.
In addition to other customary covenants for a facility of this nature, as of June 30, 2025, we were required to maintain a Total Leverage Ratio (as defined in the Amended Credit Facility) of no more than 1.5:1 and Fixed Charge Coverage Ratio (as defined in the Amended Credit Facility) of at least 1.1:1.0. As of June 30, 2025, our Total Leverage Ratio and Fixed Charge Coverage Ratio were 0.0:1.0 and 77.0:1.0, respectively.
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On February 24, 2025, Wells Fargo Bank agreed to waive its right to declaring an event of default under the Amended Credit Facility arising out of the February 14, 2025 judgment on the litigation between Monarch and PCL, so long as we strictly comply with each and every other provision of the Amended Credit Facility. We believe that we are in full compliance.
The interest rate under the Amended Credit Facility is either SOFR (the Secured Overnight Financing Rate) plus a margin of 1.25%, or a base rate (as defined in the Amended Credit Facility) plus a margin ranging of 0.25% per annum. The Commitment Fee Percentage (as defined in the Amended Credit Facility) was revised to be 0.25% per annum.
We believe that our anticipated operating cash flows will be sufficient to sustain operations for the twelve months from the filing of this Form 10-Q for the quarter ended June 30, 2025 and fulfill our capital expenditure plans and authorized dividend distributions. However financial, economic, competitive, regulatory, and other factors, many of which are beyond our control, could negatively impact our operations. If we are unable to generate sufficient cash flow in the upcoming months 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 issuing additional equity.
For a discussion regarding our material commitments for capital expenditures, see the CAPITAL SPENDING AND DEVELOPMENT section above.
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 2024 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 2024 Form 10-K filed with the SEC on March 3, 2025.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the risk of loss arising from adverse changes in interest rates, foreign currency exchange rates and commodity prices.
As of June 30, 2025, we had no outstanding balance under our Amended Credit Facility. Our current primary market risk exposure, when we incur and have outstanding debt is interest rate risk relating to the impact of interest rate movements under our Amended Credit Facility.
See “Liquidity and Capital Resources” for further discussion of our Amended Credit Facility and capital structure.
We have not entered into derivative financial instruments for trading or speculative purposes.
We do not have any cash or cash equivalents as of June 30, 2025 that are subject to market risk.
ITEM 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”), an evaluation was carried out by our management, with the participation of our Chief Executive Officer and our Chief Accounting Officer, of the effectiveness of our disclosure controls and procedures (as defined by Rule 13a-15(e) under the Exchange Act). Based upon the evaluation, our Chief Executive Officer and Chief Accounting Officer concluded that our disclosure controls and procedures were effective as of the Evaluation Date. During the quarter ended June 30, 2025, there were no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
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PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information set forth in Note 9 “Legal Matters” to our consolidated financial statements in Part I, Item 1 of this Form 10-Q is incorporated by reference herein.
ITEM 1A. RISK FACTORS
There have been no material changes to the risk factors we previously disclosed in Item 1A of our 2024 Form 10-K.
We encourage investors to review the risks and uncertainties relating to our business disclosed under the heading Risk Factors or otherwise in the 2024 Form 10-K, as well as those contained in Part I - Forward-Looking Statements thereof, as revised or supplemented by our Quarterly Reports filed with the SEC since the filing of the 2024 Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table presents the number and average price of shares purchased in each fiscal month of the quarter ended June 30, 2025:
| Total number of shares purchased (1) |
| Average price paid per share (2) | Total number of shares purchased as part of publicly announced plans or programs (1) (2) | Maximum number of shares that may yet be purchased under the plans or programs (2) | ||||
April 1, 2025 - April 30, 2025 | 6,800 | $ | 77.82 | 1,056,760 | 1,943,240 | ||||
May 1, 2025 - May 31, 2025 | 131,974 | 81.69 | 1,188,734 | 1,811,266 | |||||
June 1, 2025 - June 30, 2025 | 101,621 | 83.98 | 1,290,355 | 1,709,645 | |||||
Total | 240,395 | $ | 82.55 | 1,290,355 | 1,709,645 | ||||
| (1) | This amount represents a repurchase pursuant to our Repurchase Plan, see Note 8. STOCK REPURCHASE PLAN. |
| (2) | In the second quarter of 2025, under the authority of the Repurchase Plan, the Company purchased 240,395 shares at average price between $77.82 and $85.00 per share on the open market. |
ITEM 5. OTHER INFORMATION
During the quarter ended June 30, 2025,
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ITEM 6. EXHIBITS
Exhibit No |
| Description | |
31.1* | Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
31.2* | Certification of Principal Financial Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
32.1** | Certification of Principal Executive Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
32.2** | Certification of Principal Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
101.INS* | Inline XBRL Instance - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | ||
101.SCH* | Inline XBRL Taxonomy Extension Schema | ||
101.CAL* | Inline XBRL Taxonomy Extension Calculation | ||
101.DEF* | Inline XBRL Taxonomy Extension Definition | ||
101.LAB* | Inline XBRL Taxonomy Extension Labels | ||
101.PRE* 104 | Inline XBRL Taxonomy Extension Presentation Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) | ||
* Filed herewith.
** Furnished herewith
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) | ||
Date: July 29, 2025 | By: | /s/ EDWIN S. KOENIG |
Edwin S. Koenig, Chief Accounting Officer | ||
(Principal Financial and Accounting Officer and Duly Authorized Officer) | ||
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FAQ
How did MCRI's Q2-25 revenue and EPS compare to last year?
What is the status and size of the PCL construction lawsuit liability?
Does Monarch have any outstanding debt?
What shareholder returns were made in Q2-25?
How much capacity remains under the share repurchase plan?
Which segment drove growth this quarter?
