Monarch Casino & Resort reports 2Q net revenue of USD 50.0M

CEO John Farahi, Co-Chairman and Chief Executive Officer of Monarch, commented: "Our strong second quarter 2015 results reflect further improvement at both of our properties, particularly at Monarch Black Hawk which generated solid top-line growth.

Consolidated net revenue for the quarter increased 4.6% and drove a 7.0% rise in Adjusted EBITDA as we benefited from our ongoing diligent focus on operating expense management and margin growth.

"In Reno, our business continues to gradually improve as the overall market shows signs of growth. While the promotional environment in Reno remains elevated, we intend to maintain our disciplined approach to marketing spending that attracts profitable play to Atlantis.

"In Black Hawk, we are very excited by the upgrade of the existing facility which will be fully completed and open to the public before the end of the current quarter. Visitors to the property can also see the progress we are making in construction of the new nine story parking structure.

"Despite the nearly 20% reduction in the number of slot machines on the casino floor to accommodate the ongoing construction, Monarch Black Hawk continues to deliver strong operating results which reflect both the healthy Denver market and our efforts to optimize the player experience. Moreover, the property is benefiting from the positive guest response to the facility enhancements completed as part of the first two phases of the upgrade. Upon completion of the third and final phase of the upgrade later this quarter, we plan to increase the number of slot machines on the floor from 565 to 705 and we'll also expand our table game count from 9 to 14.

"The estimated total cost of the Monarch Black Hawk expansion, including the cost of the acquired land, new parking structure, hotel tower, expanded casino and additional restaurants remains projected at approximately $285-$295 million, of which $229-$234 million represents the expected cost to complete the hotel tower, expanded casino and additional restaurants. Through June 30, 2015, we have spent approximately $31 million on the expansion, primarily on the new parking structure, leaving remaining completion costs of approximately $254-$264 million. We expect to fund the remaining cost of the expansion from a combination of cash flow from operations and an increase in, or replacement of, our current credit facility.

"We believe that our 2015 second quarter results reflect Monarch's overall disciplined approach toward attracting profitable play while managing costs and promotional activity. In addition, our results benefited from the efforts of our Black Hawk team as they successfully managed the ongoing challenge of construction disruption, which lead to improved operating results and market share growth."

Summary of 2015 Second Quarter Operating Results For the 2015 second quarter, consolidated net revenue of $50.0 million represented an increase of 4.6% year-over-year, driven primarily by solid revenue growth at Monarch Black Hawk. Revenue from the Company's casino operations rose 6.3% on a year-over-year basis and food and beverage revenue rose 5.8% while hotel revenue declined 3.4%. Consolidated promotional allowance increased by $0.9 million or 8.4%.

The Company generated consolidated Adjusted EBITDA of $12.5 million in the second quarter of 2015, an increase of $0.8 million, or 7.0%, over the same period a year ago.

Casino operating expense as a percentage of casino revenue increased to 42.1% for the second quarter of 2015 compared to 41.7% in the second quarter of 2014. Food and beverage operating expense as a percentage of food and beverage revenue for the 2015 second quarter decreased to 39.5% from 42.0% in the 2014 second quarter. Hotel operating expense as a percentage of hotel revenue increased to 28.8% for the second quarter of 2015 compared to 28.2% for the same period in the prior year.

The increase in casino operating expense as a percentage of revenue is due primarily to an increase in complimentaries expense while the increase in hotel operating expense as a percentage of hotel revenue is due primarily to lower hotel revenue.

Selling, general and administrative ("SG&A") expenses for the 2015 second quarter were essentially flat with the 2014 second quarter.

Monarch Black Hawk Expansion Update Summarized below is an update on the Company's ongoing upgrade and expansion of Monarch Black Hawk, including the expected costs and completion dates for the project as well as the amounts spent through June 30, 2015:

During the second quarter of 2015, Monarch made further progress on the third and final phase of its existing facility upgrade, which is expected to be opened to the public in the current quarter. The Company also made further progress on construction of the facility's new parking structure.

Credit Facility The amount outstanding on the Company's credit facility at June 30, 2015 of $42.2 million remained relatively flat with the $42.0 million balance outstanding as of the end of the first quarter. Capital expenditures of $7.4 million in the second quarter of 2015 were funded from operating cash flows and primarily represent costs related to the ongoing redesign and expansion project at Monarch Black Hawk.

Interest expense, net of amounts capitalized for the 2015 second quarter decreased to $0.2 million from $0.3 million in the second quarter of 2014 due to lower outstanding borrowings in the 2015 second quarter compared to the 2014 second quarter.

Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 which are subject to change, including, but not limited to, comments relating to (i) future operating performance; (ii) economic and market conditions and outlooks; (iii) plans, objectives and expectations regarding Monarch Black Hawk; and (iv) plans, costs, financing, construction, completion and opening timelines of redesigned and expanded facilities at Monarch Black Hawk. Actual results and future events and conditions may differ materially from those described in any forward-looking statements. With respect to the Monarch Black Hawk redesign and expansion projects, important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, without limitation:

Additional information concerning potential factors that could affect all forward looking statements, including the Company's financial results is included in the Company's Securities and Exchange Commission filings, which are available on the Company's website at www.MonarchCasino.com.