Monarch Casino & Resort Inc. boosted its share of the market and cut many of its costs during the first quarter of this year, but the gaming and hospitality market in Reno declined even more quickly.
The Reno-based company, parent of Atlantis Casino Resort Spa, last week reported revenues of $32.6 million and net income of $922,160 in the quarter. A year earlier, it posted revenues of $34.3 million and net income of $2.3 million.
Fierce competition for gaming customers brought an increase of nearly 2 percent in Monarch's casino expenses even though gaming revenues were down by nearly $1 million from a year earlier. Costs rose,
Monarch executives said, because they needed to provide higher levels of comps to woo players.
The company reduced operating costs in its hotel business by about $99,000 from year-earlier figures, but hotel revenues declined by about $451,000.
Food and beverage sales were down by nearly 2 percent, and Monarch executives said they were able to cut
costs at about the same pace.
Administrative and selling expenses were down by more than 11 percent, the result of lower payrolls, reduced benefits, and reductions in spending on marketing and legal work.
"Even though we successfully increased our market share throughout the quarter, we could not overcome the erosion of the market as a whole," said John Farahi, chief executive officer and co-chairman of the publicly held company.
Even so, the earnings handily beat the estimates of Wall Street analysts. Analysts surveyed by First Call had projected a loss of 2 cents a share by Monarch rather than the profit of 6 cents a share.
Completion of a $50 million expansion to Atlantis and completion of a $12 million skybridge linking the
property to the Reno-Sparks Convention Center impacted the company's bottom line during the first quarter.
Interest expense totaled $550,00 during the quarter, compared with almost nothing a year earlier, as the result of Monarch's borrowings for the construction.
The company currently has about $55 million in borrowings outstanding through its $60 million credit facility.
