Monarch Casino Reports Record Breaking Second Quarter Results

RENO, Nev., July 25 /PRNewswire-FirstCall/ -- Monarch Casino & Resort, Inc. (the "Company"), owner of the Atlantis Casino Resort Spa in Reno, Nevada, today announced the highest net revenue, income from operations, EBITDA(1) and diluted EPS for a second quarter.

The Company reported record net revenue for a second quarter of $41.6 million, a 10.5% increase over the second quarter of 2006, and announced that the gross revenue generated by each of its revenue centers also was the highest ever reported for a second quarter. Specifically, casino, food and beverage and hotel operations each drove gross revenue increases over the same quarter of the prior year of 13.6%, 4.3% and 9.0%, respectively. Gross casino revenue of $29.3 was the highest ever reported by the Company for any quarter.

The Company announced quarterly income from operations of $10.1 million, EBITDA(1) of $12.1 million and diluted EPS of 36 cents, each of which also were the highest ever reported for a second quarter. Each of the Company's revenue centers reported improved operating margins as compared to the second quarter of the prior year while selling, general and administrative expense increased slightly by 1.8% to $12.8 million.

The Company remained debt-free during the quarter and increased its cash balance to $51.4 million as of June 30, 2007, an increase of $14.4 million from the $37.0 million balance at December 31, 2006.

Monarch's CEO and Co-Chairman John Farahi commented on the Company's performance: "Our team continues to excel and has delivered another in what has been a long string of record quarters. Total gaming revenues in the Reno market, as reported by the Nevada Gaming Commission, have been slightly lower than in the prior year for eight out of the last ten reported months. We have been able to overcome this market softness by continuing to deliver an experience that engenders loyal patronage from our existing guests and attracts additional guests to the Atlantis." Mr. Farahi added, "As was previously announced, we broke ground on our latest expansion of the Atlantis in June and expect construction to take approximately twelve months."

Monarch Casino & Resort, Inc., through its wholly-owned subsidiary, owns and operates the tropically-themed Atlantis Casino Resort Spa in Reno, Nevada. The Atlantis is the closest hotel-casino to, and is directly across the street from, the Reno-Sparks Convention Center. The Atlantis features a Sky Terrace, a unique structure rising approximately 55 feet above street level and spanning 160 feet across Virginia Street with no intermediate support pillars. The Sky Terrace connects the Atlantis to a 16-acre parcel of land owned by the Company, that is compliant with all casino zoning requirements and is suitable and available for future expansion and growth. Currently, the Company uses it as additional paved parking for the Atlantis. The existing Atlantis site offers almost 1,000 guest rooms in three contiguous high-rise hotel towers and a motor lodge. The Atlantis features approximately 51,000 square feet of high- energy casino space with 38 table games and approximately 1,450 slot and video poker machines, a sports book, Keno and a poker room, and offers a variety of dining choices in the form of nine high-quality food outlets.

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 which are subject to change, including, but not limited to, comments relating to (i) future operating performance and (ii) future expansion plans. The actual results may differ materially from those described in any forward-looking statements. Additional information concerning potential factors that could affect the Company's financial results is included in the Company's Securities and Exchange Commission filings, which are available on the Company's web site.

For additional information visit Monarch's web site at http://www.monarchcasino.com/ .

(1) "EBITDA" consists of net income plus provision for income taxes, interest expense, depreciation and amortization less interest income. EBITDA should not be construed as an alternative to operating income (as determined in accordance with generally accepted accounting principles) as an indicator of the Company's operating performance, as an alternative to cash flows from operating activities (as determined in accordance with generally accepted accounting principles) or as a measure of liquidity. This item enables comparison of the Company's performance with the performance of other companies that report EBITDA, although some companies do not calculate this measure in the same manner and therefore, the measure as presented may not be comparable to similarly titled measures presented by other companies.

Monarch Casino & Resort, Inc. Condensed Consolidated Statements of Income Three Months Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006 (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) Revenues Casino $29,277,718 $25,780,512 $54,575,990 $49,904,559 Food and beverage 10,568,173 10,135,342 21,072,388 19,880,159 Hotel 7,027,156 6,445,709 13,855,123 12,479,644 Other 1,285,828 1,304,549 2,474,451 2,394,599 Gross revenues 48,158,875 43,666,112 91,977,952 84,658,961 Less promotional allowances (6,597,555) (6,043,336) (12,635,041) (11,431,050) Net revenues 41,561,320 37,622,776 79,342,911 73,227,911 Operating expenses Casino 9,268,084 8,479,719 17,737,421 16,491,881 Food and beverage 4,866,969 4,700,015 9,835,686 9,490,786 Hotel 2,111,765 2,002,146 4,255,105 4,105,869 Other 377,437 417,830 741,057 732,284 Selling, general and administrative 12,792,008 12,590,426 24,322,811 23,475,677 Depreciation and amortization 2,064,970 2,144,481 4,140,416 4,291,239 Total operating expenses 31,481,233 30,334,617 61,032,496 58,587,736 Income from operations 10,080,087 7,288,159 18,310,415 14,640,175 Other income (expense) Interest income 473,537 35,975 817,421 36,501 Interest expense (3,174) -- (152,274) (59,444) Total other income (expense) 470,363 35,975 665,147 (22,943) Income before income taxes 10,550,450 7,324,134 18,975,562 14,617,232 Provision for income taxes (3,650,000) (2,501,902) (6,580,000) (5,026,902) Net income $6,900,450 $4,822,232 $12,395,562 $9,590,330 Earnings per share of common stock: Basic $0.36 $0.25 $0.65 $0.51 Diluted $0.36 $0.25 $0.64 $0.50 Weighted average number of common shares and potential common shares outstanding: Basic 19,091,756 18,950,687 19,081,173 18,918,321 Diluted 19,366,442 19,282,501 19,345,213 19,268,889 MONARCH CASINO & RESORT, INC. CONDENSED CONSOLIDATED BALANCE SHEETS June 30, December 31, 2007 2006 ASSETS (UNAUDITED) Current assets Cash $51,416,738 $36,985,187 Receivables, net 3,625,668 3,268,970 Inventories 1,494,922 1,471,667 Prepaid expenses 3,007,904 2,833,126 Deferred income taxes 1,340,232 965,025 Total current assets 60,885,464 45,523,975 Property and equipment Land 10,339,530 10,339,530 Land improvements 3,166,107 3,166,107 Buildings 78,955,538 78,955,538 Building improvements 10,435,062 10,435,062 Furniture & equipment 71,637,884 72,708,061 Leasehold improvements 1,346,965 1,346,965 175,881,086 176,951,263 Less accumulated depreciation and amortization (88,263,060) (84,325,578) 87,618,026 92,625,685 Construction in progress 6,131,220 -- Net property and equipment 93,749,246 92,625,685 Other assets, net 87,235 231,247 Total assets $154,721,945 $138,380,907 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $8,617,963 $8,590,669 Construction payable 1,767,610 -- Accrued expenses 9,938,770 9,878,851 Federal income taxes payable 947,056 16,457 Total current liabilities 21,271,399 18,485,977 Deferred income taxes 3,883,614 4,248,614 Stockholders' equity Preferred stock, $.01 par value, 10,000,000 shares authorized; none issued -- -- Common stock, $.01 par value, 30,000,000 shares authorized; 19,094,900 shares issued; 19,094,900 outstanding at 6/30/07 19,065,968 outstanding at 12/31/06 190,949 190,726 Additional paid-in capital 24,705,731 23,205,045 Treasury stock, 0 shares at 6/30/07 6,582 shares at 12/31/06, at cost -- (24,145) Retained earnings 104,670,252 92,274,690 Total stockholders' equity 129,566,932 115,646,316 Total liability and stockholder's equity $154,721,945 $138,380,907 Monarch Casino & Resort, Inc. Reconciliation of Net Income to EBITDA (1) Three Months Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006 (unaudited) (unaudited) (unaudited) (unaudited) Net income $6,900,450 $4,822,232 $12,395,562 $9,590,330 Adjustments Provision for income taxes 3,650,000 2,501,902 6,580,000 5,026,902 Interest expense 3,174 -- 152,274 59,444 Depreciation & amortization 2,064,970 2,144,481 4,140,416 4,291,239 Interest income (473,537) (35,975) (817,421) (36,501) EBITDA (1) (unaudited) $12,145,057 $9,432,640 $22,450,831 $18,931,414 (1) "EBITDA" consists of net income plus provision for income taxes, interest expense, depreciation and amortization less interest income. EBITDA should not be construed as an alternative to operating income (as determined in accordance with generally accepted accounting principles) as an indicator of the Company's operating performance, as an alternative to cash flows from operating activities (as determined in accordance with generally accepted accounting principles) or as a measure of liquidity. This item enables comparison of the Company's performance with the performance of other companies that report EBITDA, although some companies do not calculate this measure in the same manner and therefore, the measure as presented may not be comparable to similarly titled measures presented by other companies.