The debt-free parent of Atlantis Casino Resort will finance its $50 million expansion from cash flow, and the company is aggressively scouting growth targets.
"We are looking at expansion opportunities outside of this location on a daily basis," John Farahi, the co-chairman and chief executive officer of Monarch Casino & Resort Inc.
, told shareholders last week.
Even though bankers are falling all over themselves to loan the company money, Farahi said Monarch plans to pay for the 116,000-square-foot expansion of its south-Reno property without borrowing.
In its most recent quarter, the company generated more than $9 million in cash flow.
The expansion to begin late this year or early in 2007 will include a 40 percent increase in the size of the Atlantis gaming floor along with a new sports book, a new restaurant, additional ballroom and meeting space and other facilities.
It will be built as an addition to the southeast side of Atlantis the side that's closest to the Reno-Sparks Convention Center.
The company hopes to build a pedestrian skybridge over Peckham Lane to link Atlantis and the convention center.
In the meantime, Monarch reported last week that it expects its earnings in the current quarter to be reduced by a 4- or 5-cent non-cash charge resulting from the early vesting of options held by Ben Farahi.
He resigned last week as the company's co-chairman and chief financial officer.
Publicly traded Monarch's earnings in the first quarter were 25 cents a share.
If he hadn't resigned, the company said the options would have vested between now and 2008, so the expense to be recorded this quarter just comes earlier than it otherwise might have.
Ben Farahi is the youngest of the three Farahi brothers John, Bob and Ben who developed the property with their father.
He will be succeeded as CFO by Ronald Rowan, a native of Carson City and a one-time CFO of Casino Data Systems in Las Vegas.
Ben Farahi, 53, had controlled the largest bloc of Monarch stock 17.6 percent until April, when he stepped down as a trustee of a trust that holds company shares on behalf of Jila Farahi, his sister.
Even after that move, he held 2.4 million shares, about 12.6 percent of the company and second only to the 15.3 percent ownership of John Farahi.
Ben Farahi oversaw financial planning and construction for the predecessor of Monarch as the Farahi family built the Atlantis from the 142-room Golden Door Motel they purchased in 1972.
When Monarch was created in 1993, he became co-chairman with his brothers and CFO.
He also is the managing partner of a company that owns the Sierra Marketplace shopping just north of the Atlantis property.
Earlier this year, a zoning application was filed that would allow redevelopment of the shopping center.
A year ago, Monarch said in a presentation to shareholders it was studying ways to "generate synergies between Sierra Marketplace and Atlantis," and an application to rezone the shopping center was filed last winter.
