Monarch Casino & Resort crossed a major milestone as the Reno-based company builds strength for an as-yet-undisclosed expansion program.
The company, the parent of Atlantis Casino Resort, said last week it became debt-free during the first quarter, paying off the last $8.1 million it owed at the start of the year. As recently as the beginning of 2004, the debt stood at $47 million.
John Farahi, the chief executive officer and co-chairman of Monarch, said the company has $24 million available through its credit lines to finance expansion or acquisition plans.
"Being debt-free gives our board even greater opportunity to explore corporate growth opportunities," he said in a prepared statement.
The company is in preliminary design of an expansion of Atlantis.
Paying off the debt also helped boost Monarch's earnings.
In the first quarter, it earned $4.7 million on revenues of nearly $41 million. Interest expenses during the quarter totaled $59,444.
In the first quarter of 2005, Monarch posted earnings of $3.85 million on revenues of $36.6 million. Interest expenses in last year's first quarter amounted to $305,000.
Even more important, the company continued to strengthen the profit margins, which ran 20.6 percent of net revenues compared with 19.6 percent a year ago.
Casino revenues were up 15.4 percent, food and beverage revenues were up 8 percent, hotel revenues were up 8 percent and other revenues rose 4 percent.
The casino revenues of $24 million accounted for about 58 percent of Monarch's first-quarter gross.
Farahi noted that the company's 13 percent increase in net revenue during the quarter required less than 8 percent increase in promotional allowances.
Monarch said its earnings for the quarter set a company record despite the costs of implementing new rules concerning stock-based compensation.
The implementation of those rules, the company said, resulted in an expense of about $548,000 during the quarter, trimming reported income by 2 cents a share.
