Gambling in the USA
Monarch Casino & Resort Reports Record 2021 Fourth Quarter Financial Results
Monarch Casino & Resort, Inc. reported record operating results for the fourth quarter and full year ended December 31, 2021, as summarized below:
($ in thousands, except per share data and percentages)
2020 comparison
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||
| 2021 | 2020 | Increase | 2021 | 2020 | Increase | ||||||||||||
| Net revenue | $ | 111,068 | $ | 58,377 | 90.3 | % | $ | 395,377 | $ | 184,413 | 114.4 | % | |||||
| Net income | 19,871 | 15,260 | 30.2 | % | 68,488 | 23,678 | 189.2 | % | |||||||||
| Adjusted EBITDA(1) | $ | 39,015 | $ | 13,898 | 180.7 | % | $ | 137,294 | $ | 43,161 | 218.1 | % | |||||
| Basic earnings (losses) per share | $ | 1.06 | $ | 0.83 | 27.7 | % | $ | 3.68 | $ | 1.30 | 183.1 | % | |||||
| Diluted earnings (losses) per share | $ | 1.02 | $ | 0.80 | 27.5 | % | $ | 3.53 | $ | 1.25 | 182.4 | % | |||||
2019 comparison
For the benefit of our stockholders, we also include the below comparison to 2019 to show âpre-COVIDâ information(2):
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||
| 2021 | 2019 | Increase | 2021 | 2019 | Increase | ||||||||||||
| Net revenue | $ | 111,068 | $ | 62,080 | 78.9 | % | $ | 395,377 | $ | 249,166 | 58.7 | % | |||||
| Net income | 19,871 | 6,196 | 220.7 | % | 68,488 | 31,816 | 115.3 | % | |||||||||
| Adjusted EBITDA(1) | $ | 39,015 | $ | 14,142 | 175.9 | % | $ | 137,294 | $ | 61,687 | 122.6 | % | |||||
| Basic earnings per share | $ | 1.06 | $ | 0.34 | 211.8 | % | $ | 3.68 | $ | 1.77 | 107.9 | % | |||||
| Diluted earnings per share | $ | 1.02 | $ | 0.33 | 209.1 | % | $ | 3.53 | $ | 1.70 | 107.6 | % | |||||
| (1) | Definitions, disclosures and reconciliations of non-GAAP financial information are included later in the release. | |
| (2) | In late 2020, we began to open our new hotel tower, casino expansion and additional new amenities at our Monarch Casino Resort Spa Black Hawk. | |
CEO Comment
John Farahi, Co-Chairman and Chief Executive Officer of Monarch, commented: âOur fourth quarter results capped a year of significant operational and financial accomplishments for Monarch. In 2021, we successfully transformed our Monarch Black Hawk into a full-scale casino resort spa. On May 1, 2021, we immediately took advantage of the elimination of betting limits in Black Hawk and expanded our game mix. At Atlantis in Reno, we completed the redesign and upgrade of our high-end suites on the top two floors of the concierge hotel tower. We believe that all these factors contributed to record fourth quarter and full year financial results. We are honored to have received the prestigious distinction by Forbes, ranking Monarch 39th on the list of Americaâs Best Small Companies.
âNew COVID variants continue to create labor market shortages and wage pressure, resulting in increased labor costs. In addition, supply chain constraints and price inflation continued to impact our operating costs.
âNet revenue and Adjusted EBITDA in the fourth quarter of 2021 were $111.1 million and $39.0 million, respectively, and were both fourth quarter records. Our full year net revenue and Adjusted EBITDA of $395.4 million and $137.3 million, respectively, were both all-time records. We also achieved record fourth quarter and full year Adjusted EBITDA margin of 35.1% and 34.7%, respectively.
âOur Monarch Black Hawk operations continued to ramp up in the fourth quarter. In mid-December 2021, we opened an all-new sports book, lounge and bar along with additional casino space within the legacy facility. In the coming days, we expect to debut a new specialty restaurant, which will provide our guests with an outstanding dining experience while increasing restaurant seating capacity at the property by approximately 35%. We continue to gain noticeable market share and attract high value players from across Coloradoâs Front Range, who had previously traveled to other markets, such as Las Vegas, for a high-end casino entertainment experience. We remain extremely bullish on the trajectory of the propertyâs performance.
âThe Reno economy remains robust, while gaming remains extremely competitive. Winter weather impacted certain weekends in December 2021, limiting access to Reno for our California-based guests.
âAt Atlantis, we have begun the redesign and upgrade of the hotel rooms in the first tower and expect to complete this project by mid-2022. Our consistent capital investment at Atlantis remains a key part of our ongoing strategy to deliver an exceptional guest experience.
âWe expect that 2022 will be another year of strong operating performance and financial results. We continue to evaluate acquisition opportunities where we can fully leverage our development expertise and operational excellence. We remain committed to deploying capital in a manner that will position Monarch to grow and build long-term value for our loyal stockholders.â
Summary of 2021 Fourth Quarter Operating Results
In the 2021 fourth quarter, the Company generated net revenue of $111.1 million, an increase of 90.3% from $58.4 million in the prior-year quarter. Casino, food and beverage (âF&Bâ), and hotel revenue increased 74.1%, 111.4% and 156.6% year-over-year, respectively. The increase in revenue was driven primarily by the ramp up of operations at the Companyâs hotel and expanded casino in Black Hawk. In the fourth quarter of 2020, both Atlantis and Black Hawk revenues were impacted by pandemic-related capacity and other regulatory limitations which remained in effect following the propertiesâ reopening.
Selling, general and administrative (âSG&Aâ) expenses for the fourth quarter of 2021 were $22.2 million compared to $18.5 million in the prior-year period, driven primarily by additional SG&A expenses to support the expanded Monarch Casino Resort Spa Black Hawk and by an increase in overall labor expense. As a percentage of net revenue, SG&A expense decreased to 20.0% compared to 31.6% in the prior-year period. Casino operating expense as a percentage of casino revenue increased to 34.0% during the fourth quarter of 2021 from 30.0% in the prior-year period, primarily due to increase in promotional expenses at Monarch Black Hawk. F&B operating expense as a percentage of F&B revenue decreased to 78.2% during the fourth quarter of 2021 from 88.1% in the prior-year period due to an effort to align menu prices with increased commodity prices and labor costs. Hotel operating expense as a percentage of hotel revenue decreased to 40.1% in the fourth quarter of 2021 compared to 60.6% in the same period a year ago, primarily due to the higher average daily rate (ADR) in the current period.
Income from operations for the fourth quarter of 2021 increased 395.0% compared to the same period last year. Net income increased 30.2% and diluted EPS increased 27.5%, as Net income in the fourth quarter of 2020 was positively impacted by a $10.3 million tax benefit. The Company generated consolidated Adjusted EBITDA of $39.0 million, an increase of $25.1 million, or 180.7%, over the same period a year ago. The increase in the EBITDA represents a 47.7% flow through of net revenue.
Credit Facility and Liquidity
Capital expenditures of $16.1 million in the fourth quarter of 2021 primarily included construction costs related to the ongoing renovation of a portion of the legacy Monarch Casino Resort Spa Black Hawk building and ongoing renovations at Atlantis. Capital expenditures were funded from operating cash flows. The Company expensed $0.7 million of interest in the fourth quarter of 2021 compared to $0.3 million in the fourth quarter of 2020.
During the fourth quarter of 2021, the Company made $18 million in principal payments on its Term Loan Facility. As of December 31, 2021, the Company had an outstanding principal balance of $90 million under the Term Loan and had no borrowings outstanding under its $70 million Revolving Credit Facility.
The hottest new game from Aristocrat Gaming, Phoenix Link, is now live on casino floors, with Yaamavaâ Resort & Casino being the first in North America to offer the highly-anticipated game. As the next evolution of the international hit game, Dragon Link, Phoenix Link features player-favorite mechanics from top games with all-new themes, features, and bonuses.
âWe have been humbled by the incredible global fanfare Dragon Link has received over the years but are never ones to rest on our laurels. The teams have been working tirelessly on a follow-up that brings together all the player-favorite elements in a new and exciting way with Phoenix Link as the proud result. We were thrilled to partner with Yaamavaâ to premiere Phoenix Link with flair, excitement, and celebration,â said Victor Duarte, executive vice president of product for Aristocrat Gaming.
Phoenix Link players will enjoy the gameâs additional denominations, configurations, and jackpots on each of the launch game theme titles. Gameplay features include Hold & Spin, Free Games with multiplier wilds or twin spin reels, Phoenix Mystery trigger, and more new bonus twists. Phoenix Link is available on the Neptune Single cabinet.
âYaamavaâ is thrilled to host yet another world premiere in gaming with the launch of Phoenix Link by Aristocrat Gaming. Our Club Serrano members are already raving about this captivating extension of the player-favorite Dragon Link. Itâs a great addition to the Yaamavaâ gaming floor,â said Kenji Hall, General Manager of Yaamavaâ Resort & Casino at San Manuel, said.
Gambling in the USA
NOVOMATIC shines at G2E 2024: A street smart showcase of innovation and engagement
In line with its commitment to innovation, NOVOMATIC unveiled several ground breaking product launches that left a significant impact on the gaming industry. The V.I.P. Xâ˘Â cabinet series emerged as one of the main attractions, highlighting models such as the V.I.P. X Royal⢠1.85, V.I.P. X Dream⢠3.43, and the V.I.P. X Lounge⢠2.32. The crown jewel of the presentation was the V.I.P. Galaxy⢠2.65, setting a new benchmark for luxury cabinets with its perfect blend of comfort and state-of-the-art gaming technology. Featuring high-definition screens and immersive sound systems, the fully adjustable lounge design promises an unparalleled gaming experience, leaving customers eager to introduce these innovations onto their gaming floors.
The unveiling of a new LED wall as part of the DIAMOND Xâ˘Â series, including the DIAMOND X⢠1.55J, showcased the U.S.-style designed Piggy Prizes title. The modern and interactive design sent a clear message: NOVOMATIC Americas has fully arrived, enhancing its reputation for premium entertainment experiences.
Groundbreaking Progressives and a Robust VGT Lineup
NOVOMATIC introduced a variety of THUNDER CASH⢠GOLD Progressives featuring new titles like Charming Ladyâs Boom Coinsâ˘Â and Red Amazon Explosionâ˘. The Globe Link⢠Xtension Volume 1 & 2 also attracted considerable interest, marking a significant impact with several new themes. The excitement surrounding these progressive games was palpable, bolstered by innovative math models and enticing bonus structures.
The VGT product range received special emphasis, particularly with the Street-Smart-themed area dedicated to highlight the themes and flexible assortment of cabinet styles for markets in Illinois, Pennsylvania, West Virginia, Puerto Rico, and Georgia. This dynamic showcase reinforced NOVOMATICâs commitment to providing leading solutions in performance and player appeal within the VGT sector. Featuring both NOVOLINEâ˘Â and Magic HD customer favorite themes, this area showed the new game mixes on DIAMOND X⢠2.32, BLACK EDITION II 3.27 & BLACK EDITION II 1.49J, V.I.P. X Lounge⢠2.32 and FUNMASTER 2.27. Specifically in Illinois, featuring the Magic HD game mix consisting of the Overlay Magic Play Lock & Spin feature, and the new Poker3â˘Â multi-hand video poker mix. NOVOLINEâ˘Â games were shown on the Black Edition II 1.49J cabinet with popular games like ULTRA BOOSTâ˘Â and Money Partyâ˘Â themes. Georgia Skill showed three new game titles in the Magic HD mix while more new titles lined the streets of the NOVOMATIC booth.
Advancements in Sports Betting and Casino Management
In addition to its product line, NOVOMATIC showed their cutting-edge sports betting kiosks including the ActionBook⢠Edge 1.43J, and ActionBook⢠Plus 2.27 models. With advanced graphics and rapid processing capabilities, these kiosks offer operators unmatched flexibility and performance. The premiere of the award-winning NOVOVISIONâ˘Â casino management system was another highlight, leveraging biometric technology for enhanced player recognition and streamlined operations. Already acknowledged as a âBest CMS/Software Productâ at the European Casino Awards, this system generated significant buzz regarding its potential to revolutionize the gaming landscape.
Industry Recognition for Creative and Commercial Success
The combination of NOVOMATICâs innovative product launches and captivating booth design earned widespread acclaim. The company was recognized for its Street-Smart booth, praised for creativity, interactivity, and the memorable experiences it fostered. Industry experts and attendees alike hailed NOVOMATICâs presence at G2E 2024 as one of the most impactful.
Alexander Merwald, CEO at NOVOMATIC Americas, stated, “G2E 2024 was an incredible success for NOVOMATIC. We were proud to showcase the V.I.P. X⢠cabinet series â Our ‘Street Games, Street Smart’ focus resonated strongly, as we demonstrated how our tailored solutions meet the real-world needs of both casino and VGT operators. The response from customers reaffirmed NOVOMATIC’s position as a leader in delivering innovation, performance, and market-specific strategies for North America.”
Thomas Schmalzer, VP of Global Sales, and Product Management at NOVOMATIC AG, added, “The product diversity and innovation showcased at G2E 2024 have been enthusiastically received by both operators and players. Our V.I.P. X⢠series and extensive range of progressives reflect our unwavering commitment to delivering premium solutions to the global market.”
With new partnerships established and product placements secured at G2E 2024, NOVOMATIC is primed to expand its market presence across North America. The success at this yearâs expo signifies a vital step forward in the companyâs mission to set the standard for gaming entertainment.
Gambling in the USA
Century Casinos Announces Opening Date for New Land-Based Century Casino & Hotel Caruthersville, MO
Century Casinos Inc. announced that its new land-based casino and hotel in Caruthersville, Missouri will open on November 1, 2024.
This news follows the Missouri Gaming Commissionâs approval to transfer the Century Casino & Hotel Caruthersville gaming license from a temporary pavilion to the new land-based location.
The new Century Casino & Hotel Caruthersville will have 599 slot machines and nine live table games, a 50% increase in gaming positions compared with the temporary location. The number of hotel rooms will double to 74. The construction of this new land-based casino and hotel started in December 2022 and will be finalized on time and on budget with an estimated project cost of $51.9 million, which has been funded by VICI Properties Inc. (VICI). VICI will own the real estate improvements associated with the Caruthersville project, which will become part of the Companyâs triple net master lease agreement with subsidiaries of VICI. Annual rent under the lease will increase by approximately $4.2 million.
The opening of the new land-based casino will be celebrated with a ribbon-cutting event at 11:30 a.m. Central Time on Friday, November 1, and a flurry of activities over the opening weekend.
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