Here's a pretty good trick: The managers of Monarch Casino & Resort that's the publicly traded company that owns Atlantis Casino Resort increased the property's revenues by $1,076,724 during the first quarter compared to the same period a year earlier.
That's not bad on percentage terms an increase of 3.5 percent in a quarter when winter storms socked Reno.
But the remarkable thing is that Monarch increased its profitability by $1,095,461 during the same quarter.
In other words, the company not only managed to drop every dollar of new revenue directly to the bottom line, but it managed to wring an additional $18,000 of profits out its revenues.
The company's operational costs in its hotel, for instance,were down by $40,000 from a year earlier even though revenues were up by about $70,000.
And the story would have been even more remarkable had the company not expensed approximately $204,000 it spent on a failed effort to win city approval for a new hotel and casino farther south along Virginia Street.
John Farahi, the chief executive officer and co-chairman,may have been stating the obvious when he told investors last week,"Our management team remains focused on cost control." Without immediate plans to build a new hotel and casino,Monarch can continue paying down its long-term debt.
During the first quarter, the company paid down its debt to $23.1 million, a reduction of more than $11 million during the quarter.
The debt now stands at half its levels of a year ago.
The decline in debt provides further fuel for the company's earnings growth.
In the first quarter, it paid out about $305,000 in interest, a decline of about $124,000 from a year ago.
And the company saved another $136,000 in interest-related expense because it no longer needs to pay fees to Farahi and his brothers, Ben and Bob, for their personal guarantees of the company's debt.A new financing package arranged last year removed the requirement for those guarantees.
The Farahi family owns about 56 percent of the company's outstanding shares, according to a proxy statement filed last month in anticipation of Monarch's annual meeting on May 26.
The proxy statement shows the biggest single shareholder outside the family is Akre Capital Management LLC of Middleburg,Va., which holds about 9.5 percent of Monarch's stock.
For the quarter, the company's net income of $3.8 million was up 39.7 percent from the same quarter a year ago.
Per-share earnings of 20 cents were in line with analysts' expectations.
Although the Reno City Council turned down the company's proposal for a new south- Reno property, the 16 acres that Monarch owns across the street from the Atlantis is zoned for a casino.
The property currently is a parking lot.
