Monarch Casino & Resort continuing to evaluate potential acquisitions

Monarch Casino Black Hawk

Monarch Casino & Resort has reiterated that it continues to evaluate potential acquisition opportunities, driven by a “strong balance sheet and free cash flow position”.

John Farahi, Co-Chair and Chief Executive Officer, noted that this is one of a number of options available to the group, and would permit the deployment of “our developmental and operational expertise in a financially prudent manner”.

In addition, the casino operator noted that other avenues available to the company include investment in existing properties, the payment of quarterly cash dividends and potential share repurchases under an existing share repurchase authorisation, as Monarch remains “committed to returning capital to our stockholders”.

The group, which owns and operates the Atlantis Casino Resort Spa in Reno, Nevada, and Colorado’s Monarch Casino Resort Spa Black Hawk, saw second quarter revenue increase 7.3 per cent to $123.7m (2022: $115.3m).

An increase in revenue across the food and beverage (10.8 per cent) and casino (7.8 per cent) segments was aligned to ongoing growth in Colorado, while 1.1 per cent drop in the hotels division is said to have been primarily driven by a decrease in average daily rates.

Net income for the second quarter of 2023 increased 15.3 per cent to $22.41m (2022: $19.43m), while adjusted EBITDA of $42.12m represents an uptick of 6.8 per cent versus the $39.46m recorded one year earlier.

Selling, general and administrative expenses for the second quarter stood at $25m compared to $23.1m in the prior-year period, due to an increase in utility, insurance and marketing and advertising expenses.

For year-to-date, revenue increased 7.5 per cent to $240.32m (2022: $223.6m), with net income rising 6.7 per cent to $40m (2021: $37.55m) and AEBITDA closing sixth month time frame at $78.6m, up 6.5 per cent from $73.8m.

“Our financial results for the 2023 second quarter reflect our strong market position in Black Hawk and a year over year improvement in the operating performance at Atlantis,” commented Farahi.

“Net revenue and adjusted EBITDA grew to all-time second quarter records of $123.7m and $42.1m, respectively, resulting in an adjusted EBITDA margin of 34.1 per cent.

“In Black Hawk, we continued to expand market share throughout the quarter, especially in the upper end of the market. We believe there are further growth opportunities as we continue to penetrate the Denver regional market.

“At Atlantis, we generated strong casino and food and beverage revenue, as guest visits and spend per visit increased year-over-year. Hotel revenue was impacted by renovation work during the quarter on the redesign and upgrade of hotel rooms in the second tower.

“Hotel performance improved in June as our full inventory of rooms became available to guests. The Reno market remains extremely competitive, we continue to prudently invest in Atlantis to maintain, what we believe is, a market-leading position.”