Monarch Casino & Resort released its third-quarter financial results. For the period ended September 30, the company reported a slight decrease in both net revenue and net income compared to the same period last year.
During Q3, the operator posted net revenue of $133 million, a 0.6% decrease from 2022, while net income was $24.16 million, a 12.1% decrease. The company reaffirmed its M&A stance despite the lukewarm results, noting it continues “to evaluate potential acquisition opportunities.”
Furthermore, Diluted EPS decreased 12.8% compared to the same period last year. The company also generated consolidated Adjusted EBITDA of $49.2 million, a 4.8% decline compared to the same period in 2022. Despite these drops, management expressed optimism about the company’s trajectory, highlighting the performance of Monarch Casino Resort in Black Hawk, Colorado.
John Farahi, Co-Chairman and Chief Executive Officer of Monarch, commented: “Our 2023 third-quarter results were strong as we continued to grow revenue and EBITDA in Black Hawk, and companywide, employed operational efficiencies and expense management. During the third quarter, our operating results were negatively impacted by competitive pressure in Reno and the current macroeconomic environment.”
“At Monarch Black Hawk, we are working to further expand market share among mid-to-upper tier players. We remain confident that our market-leading casino resort amenities position Monarch Black Hawk for further growth and market share gains,” he added.
John Farahi, Co-Chairman and CEO of Monarch
As for Atlantis Casino & Resort in Reno, Nevada, third-quarter results were impacted by “an irrational promotional environment” driven by competitors, according to the CEO. The company’s primary focus “remains the ongoing enhancement of the property and we expect to begin a redesign and upgrade of the third Atlantis hotel tower in early 2024,” he noted.
On the positive side, the report indicated a 5.3% increase in the food and beverage sector. In contrast, the casino segment experienced a 4% decrease and the hotel segment saw a 0.9% decrease. These revenue declines were aligned to increased competitive pressures in Reno, as well as a softening in the overall economic environment.
Selling, general, and administrative expenses for the third quarter stood at $27.1 million compared to $25.7 million in the prior-year period, driven by higher labor, utility, and promotional expenses.
Atlantis Casino Resort Spa in Reno, Nevada
Year-to-date update
Year-to-date, revenue is 4.5% ahead year-over-year, closing at $373.29 million in 2023 compared to $357.33 million in 2022. Net income dropped 1.2% to close at $64.24 million, down from $65 million in 2022. Meanwhile, Adjusted EBITDA finished the nine-month period at $127.82 million, up 1.9% from $125.49 million.
As of September 30, 2023, the company had cash and cash equivalents of $33.9 million and an outstanding principal balance of $8.0 million under its credit facility.
“We remain committed to returning capital to our stockholders. Our strong balance sheet and free cash flow position us to invest in our existing properties, pay cash dividends, and consider potential share repurchases under our existing share repurchase authorization. We continue to evaluate potential acquisition opportunities where we can employ our development and operating expertise in a financially prudent manner,” Farahi concluded.
