Winter storms chill earnings at Atlantis parent company

You can't fight Mother Nature, executives of the parent company of Atlantis Casino Resort Spa acknowledged last week.

First-quarter profits for Monarch Casino & Resort Inc., the publicly held parent of the Reno casino, fell to $1.54 million from $2.44 million a year earlier.

The company blamed near-record snowfall in the Sierra, saying it kept its California customers from making a trek to Reno. Northern and central California are the primary feeder markets for Atlantis.

In fact, the company said snowstorms, or threats of snowstorms, hampered business during seven of the 13 weekends during the first quarter.

"While we continued to increase our market share, we could not overcome the impact that the numerous snow storms in the region had on the market as a whole," said John Farahi, chief executive officer and co-chairman of Monarch Casino & Resort.

Higher costs for raw ingredients in eight food outlets at Atlantis also acted as a drag on earnings.

The company said food and beverage operating expenses took more than 46 cents from every sales dollar, mostly because of higher commodity prices. Food and beverage sales account for about a quarter of the property's revenues.

The company's hotel revenues fell to $5 million during the first quarter compared with $5.2 million a year earlier, mostly because winter weather kept guests away.

Casino revenues of $23 million compared with year-earlier revenues of $24.12 million. Farahi said casino profits continue to be pressured by higher costs for comps food, beverage and other services provided to gaming customers.

Property-wide, revenues during the first quarter totaled $33.3 million, down about 3 percent from the $34.4 million in the first quarter of 2010.

The casino produced about 57 percent of the revenues at Atlantis during the quarter while the hotel produced about 12.5 percent.

On the other hand, Monarch continued to pay down its debt during the quarter, reducing the balance to $22 million on March 31 compared with $28.6 million at the start of the year.

That, combined with lower interest rates, cut the company's interest expense to $289,000 compared with $458,000 a year earlier.

The company's stock, which has traded between $9.25 and $13.51 a share in the past year, was at $11.16 after the earnings were reported last week.