Monarch Casino & Resort Inc.
continues to pay down its debt as fast as it can, and the tactic made a big difference in the Reno-based company's bottom line.
Monarch, which owns The Atlantis Casino Resort, reported last week that it paid down its debt by $7 million in the first half of the year, continuing an effort that has reduced its debt to $53.2 million from $66.3 million a year ago.
The upshot of lower interest rates and a smaller debt load? Monarch's interest expense in the second quarter was down by 34 percent from a year earlier.
That amounts to the addition of about $359,000 to the company's bottom line.
Given that Monarch's year-over-year net income for the quarter grew by about $79,000, the importance of the reduced interest cost becomes even more apparent.
Monarch's core business grew solidly during the second quarter, the company said as it reported second-quarter earnings.
Its casino revenue was up 4.5 percent.
Hotel revenue was up 11.8 percent.
Foodand- beverage business was up by 4.3 percent.
Net income for the quarter was $2.33 million compared with $2.25 million in the same period a year ago.
For the first half of the year,Monarch reported earnings of $4.2 million compared with $3.8 million in the same period last year.
Although net income was up John Farahi, the company's co-chairman and chief executive officer, said three factors dragged Monarch's earnings in the second quarter:
* The company's hold was lower at the 37 table games in operates at The Atlantis.
* Marketing and promotional costs were up.
* Legal costs were up.
The rise in legal costs reflects Monarch's opposition to the City of Reno's condemnation of the Old Reno Casino.
That condemnation allows the Old Reno Casino license to be transferred elsewhere in the city.
Monarch seeks to block the condemnation and transfer of the license, saying it would allow development of a casino without accompanying facilities such as hotel rooms and landscaping that are required of
newly constructed properties.
