Table of Contents United States Securities and Exchange Commission Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File No. 0-22088 MONARCH CASINO & RESORT, INC. (Exact name of registrant as specified in its charter) Nevada 88-0300760 (State or Other ...

Part I [Business](index=3&type=section&id=Item%201.%20Business) Monarch Casino & Resort operates two casino resorts, Atlantis in Reno and Monarch Black Hawk, focusing on maximizing revenue through service and upgrades in competitive, regulated markets - The company owns and operates two hotel and casino properties: the Atlantis in Reno, NV, and the Monarch Black Hawk in Black Hawk, CO[8](index=8&type=chunk) - The core business strategy is to maximize revenues and cash flow from casino, food and beverage, and hotel operations by focusing on exceptional guest service and cost efficiency[9](index=9&type=chunk) - The company utilizes a cross-property players' club, "Monarch Rewards," to track guest activity, build loyalty, and guide direct marketing efforts[43](index=43&type=chunk) [Properties Overview](index=3&type=section&id=1.1%20Properties%20Overview) Atlantis in Reno and Monarch Black Hawk, the company's two main properties, feature extensive gaming and lodging, showing strong hotel performance growth Atlantis Hotel Performance (2020-2022) | | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Occupancy rate (%) | 83.30% | 82.10% | 71.30% | | ADR ($) | $158.54 | $123.18 | $108.44 | | REVPAR ($) | $149.11 | $114.85 | $86.85 | Monarch Black Hawk Hotel Performance (2020-2022) | | 2022 | 2021 | 2020 (1) | | :--- | :--- | :--- | :--- | | Occupancy rate (%) | 75.10% | 67.90% | 29.60% | | ADR ($) | $201.92 | $182.78 | $177.63 | | REVPAR ($) | $164.91 | $132.75 | $52.97 | [Capital Investments and Expansion](index=8&type=section&id=1.2%20Capital%20Investments%20and%20Expansion) Monarch continuously invests in facility upgrades, with **$48.4 million** in 2022 capital expenditures for Monarch Black Hawk transformation and Atlantis upgrades, holding a **16-acre** parcel for future expansion - Capital expenditures totaled **$48.4 million** in 2022, **$37.8 million** in 2021, and **$46.4 million** in 2020, primarily for the Monarch Black Hawk transformation and Atlantis upgrades[25](index=25&type=chunk) - The company owns a **16-acre** parcel of land across from the Atlantis, zoned for a resort casino and available for future development[26](index=26&type=chunk) [Competition and Market](index=12&type=section&id=1.3%20Competition%20and%20Market) The company faces intense competition in Reno and Black Hawk markets from other casinos and potential new gaming options, including Native American facilities in California - The Reno-Sparks gaming market is intense, with approximately **15 casinos** generating over **$12.0 million** in annual gaming revenues[44](index=44&type=chunk) - Major Native American owned facilities in California have adversely impacted many hotel casinos in Reno[48](index=48&type=chunk) - The Black Hawk/Central City gaming market is geographically isolated, but additional gaming authorization in the Denver metropolitan area would adversely affect the market[52](index=52&type=chunk) [Regulation and Licensing](index=14&type=section&id=1.4%20Regulation%20and%20Licensing) Operations are subject to strict gaming regulations in Nevada and Colorado, requiring revocable licenses, with Colorado's Amendment 77 removing betting limits and the company holding a Master License for sports betting - Gaming licenses are revocable privileges, not transferable, and can be suspended or limited for reasonable cause by regulatory authorities[55](index=55&type=chunk) - In Nevada, any person acquiring more than **10%** of voting securities must apply for a finding of suitability from the Nevada Gaming Commission[62](index=62&type=chunk) - Colorado's Amendment 77, effective May 1, 2021, removed betting limits (previously **$100**) and allowed new games like baccarat and keno in Black Hawk[81](index=81&type=chunk) - Monarch Black Hawk was issued a Master License for sports betting on February 20, 2020, with sports betting going live in Colorado on May 1, 2020[95](index=95&type=chunk)[97](index=97&type=chunk) [Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including sensitivity to consumer spending, pandemic disruptions, intense market competition, high dependence on two properties, ongoing litigation, cybersecurity threats, and regulatory changes - The business is highly sensitive to economic downturns impacting discretionary consumer spending on leisure and entertainment[106](index=106&type=chunk) - The company is entirely dependent on its two resorts, Atlantis and Monarch Black Hawk, for all operating cash flow, posing greater risks than diversified competitors[111](index=111&type=chunk) - The company has numerous disagreements with its Monarch Black Hawk general contractor over costs, delays, and other matters, resulting in litigation[126](index=126&type=chunk) - The Farahi family beneficially owns approximately **32%** of the company's outstanding common stock, enabling significant influence over company affairs[113](index=113&type=chunk) [Properties](index=55&type=section&id=Item%202.%20Properties) As of December 31, 2022, the company's properties include Atlantis in Reno and Monarch Black Hawk in Colorado, with adjacent expansion land and a warehouse parcel, substantially all pledged as credit facility collateral - The Atlantis property in Reno includes an adjacent **16-acre** site zoned for casino use and available for future expansion[187](index=187&type=chunk) - The Monarch Black Hawk property includes the resort and a separate **9.0-acre** parcel with an industrial warehouse[194](index=194&type=chunk) - Substantially all of the company's real and personal property is pledged as collateral under its credit facility[192](index=192&type=chunk) [Legal Proceedings](index=55&type=section&id=Item%203.%20Legal%20Proceedings) Legal proceedings information is incorporated by reference from Note 11, primarily detailing ongoing litigation with PCL Construction Services, Inc. regarding the Monarch Black Hawk expansion - Information regarding legal proceedings is incorporated by reference from Item 8, Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements, Note 11[193](index=193&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=57&type=section&id=Item%205.%20Market%20For%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq (MCRI), with the board authorizing a **$5.00** special dividend and a recurring **$1.20** annual dividend, alongside an active stock repurchase plan - On February 7, 2023, the board authorized a one-time cash dividend of **$5.00** per share and a recurring annual cash dividend of **$1.20** per share, payable quarterly starting in Q2 2023[200](index=200&type=chunk) - As of December 31, 2022, the company has authorization to repurchase up to **2,900,000** shares under its Repurchase Plan[209](index=209&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=60&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong 2022 financial performance, with net revenue up **20.9%** to **$477.9 million** and net income up **27.7%** to **$87.5 million**, driven by Monarch Black Hawk's ramp-up, strong liquidity, and debt reduction [Results of Operations](index=68&type=section&id=7.1%20Results%20of%20Operations) For 2022, net income increased **27.7%** to **$87.5 million** and net revenues grew **20.9%** to **$477.9 million**, driven by Monarch Black Hawk's ramp-up and double-digit growth across all revenue segments Financial Highlights (2022 vs. 2021) | Metric | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Net Revenues ($) | $477.9M | $395.4M | +20.9% | | Income from Operations ($) | $111.4M | $89.9M | +24.0% | | Net Income ($) | $87.5M | $68.5M | +27.7% | | Diluted EPS ($) | $4.47 | $3.53 | +26.6% | - Casino revenue increased **16.0%**, Food and beverage revenue increased **28.6%**, and Hotel revenue increased **30.9%** in 2022 compared to 2021[234](index=234&type=chunk)[235](index=235&type=chunk)[236](index=236&type=chunk) - The company recognized **$7.3 million** in construction litigation expenses in 2022, up from **$5.1 million** in 2021[240](index=240&type=chunk) [Liquidity and Capital Resources](index=72&type=section&id=7.2%20Liquidity%20and%20Capital%20Resources) The company's liquidity is driven by strong operating cash flow, generating **$139.8 million** in 2022, enabling **$83.0 million** in debt principal payments, with a new credit facility established post-year-end - Net cash provided by operating activities totaled **$139.8 million** in 2022, a **9.1%** increase from 2021[251](index=251&type=chunk) - The company made **$83.0 million** in principal payments on its long-term debt during 2022[253](index=253&type=chunk) - On February 1, 2023, the company entered into a new Fifth Amended Credit Facility, increasing its revolving line of credit from **$70.0 million** to **$100.0 million** and extending the maturity to January 1, 2025[401](index=401&type=chunk) [Capital Spending and Development](index=72&type=section&id=7.3%20Capital%20Spending%20and%20Development) Capital expenditures totaled **$48.4 million** in 2022, decreasing as the major Monarch Black Hawk expansion completed, with spending focused on further Black Hawk transformations and significant Atlantis upgrades Capital Expenditures (in thousands) | | 2022 (in thousands) | 2021 (in thousands) | | :--- | :--- | :--- | | Atlantis | $32,058 | $16,075 | | Monarch Black Hawk | $16,353 | $21,733 | | Total | $48,411 | $37,808 | - The Monarch Black Hawk expansion was completed in February 2022 with the opening of a new specialty restaurant[247](index=247&type=chunk) [Financial Statements and Supplementary Data](index=82&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2020-2022, with an unqualified opinion, detailing key financial data, accounting policies, debt, legal contingencies, and significant subsequent events Consolidated Statement of Income Highlights (Year Ended Dec 31, 2022, in thousands) | | Amount (in thousands) | | :--- | :--- | | Net revenues | $477,870 | | Income from operations | $111,442 | | Net income | $87,479 | | Diluted Earnings Per Share ($) | $4.47 | Consolidated Balance Sheet Highlights (As of Dec 31, 2022, in thousands) | | Amount (in thousands) | | :--- | :--- | | Total current assets | $89,429 | | Total assets | $692,942 | | Total current liabilities | $117,744 | | Total liabilities | $153,988 | | Total stockholders' equity | $538,954 | - The company is in a legal dispute with PCL Construction Services, Inc. over the Monarch Black Hawk expansion, involving ongoing litigation and mechanics' liens, with **$7.3 million** in related litigation expenses incurred in 2022[389](index=389&type=chunk)[392](index=392&type=chunk)[395](index=395&type=chunk) - Subsequent to year-end, on February 7, 2023, the company declared a one-time **$5.00** per share dividend and initiated a recurring annual dividend of **$1.20** per share[404](index=404&type=chunk)[405](index=405&type=chunk) [Controls and Procedures](index=119&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2022, with no material changes in Q4, a conclusion supported by an unqualified auditor opinion - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[409](index=409&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2022, based on the COSO framework[414](index=414&type=chunk) - The independent registered public accounting firm, Ernst & Young LLP, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting[418](index=418&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=125&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) All information for this item is incorporated by reference from the company's Proxy Statement for the 2023 Annual Meeting of Stockholders - This information is incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Stockholders[429](index=429&type=chunk) [Executive Compensation](index=125&type=section&id=Item%2011.%20Executive%20Compensation) All information for this item is incorporated by reference from the company's Proxy Statement for the 2023 Annual Meeting of Stockholders - This information is incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Stockholders[430](index=430&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=125&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details the company's equity compensation plans, showing **1,589,370** securities to be issued from outstanding options at a weighted-average exercise price of **$51.12**, with **776,977** securities remaining available for future issuance Equity Compensation Plan Information | Plan Category | Securities to be issued upon exercise of outstanding options (shares) | Weighted average exercise price of outstanding options ($) | Number of securities remaining available for future issuance (shares) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 1,589,370 | $51.12 | 776,977 | [Certain Relationships and Related Transactions, and Director Independence](index=125&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) All information for this item is incorporated by reference from the company's Proxy Statement for the 2023 Annual Meeting of Stockholders - This information is incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Stockholders[434](index=434&type=chunk) [Principal Accounting Fees and Services](index=125&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) All information for this item is incorporated by reference from the company's Proxy Statement for the 2023 Annual Meeting of Stockholders - This information is incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Stockholders[435](index=435&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=127&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the Form 10-K, including the Independent Auditor's Report, consolidated financial statements, Schedule II, and a comprehensive list of various agreements and certifications - Lists all financial statements, notes, and the report of the independent registered public accounting firm as included in Part II, Item 8[438](index=438&type=chunk)[439](index=439&type=chunk)[440](index=440&type=chunk) - Includes Financial Statement Schedule II – Valuation of Qualifying Accounts, detailing the allowance for doubtful accounts for 2020, 2021, and 2022[441](index=441&type=chunk)[442](index=442&type=chunk) - Provides a detailed list of all exhibits filed with the report, such as credit agreements, lease agreements, and equity incentive plans[445](index=445&type=chunk)[446](index=446&type=chunk)[448](index=448&type=chunk)

Table of Contents United States Securities and Exchange Commission Washington, D.C. 20549 Form 10-Q OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File No. 0-22088 MONARCH CASINO & RESORT, INC. (Exact name of registrant as specified in its charter) Nevada 88-0300760 (State or Other Jurisdiction of (I.R.S. Employer ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quar ...

Table of Contents United States Securities and Exchange Commission Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File No. 0-22088 MONARCH CASINO & RESORT, INC. (Exact name of registrant as specified in its charter) Nevada 88-0300760 (State or Other ...

Table of Contents United States Securities and Exchange Commission Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File No. 0-22088 MONARCH CASINO & RESORT, INC. (Exact name of registrant as specified in its charter) Nevada 88-0300760 (State or Other ...

Table of Contents United States SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-K (MARK ONE) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______TO______ Commission File No. 0-22088 MONARCH CASINO & RESORT, INC. (Exact name of registrant as specified in its charter) Nevada 88-0300760 ...

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Table of Contents United States Securities and Exchange Commission Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR For the transition period from to . Commission File No. 0-22088 MONARCH CASINO & RESORT, INC. (Exact name of registrant as specified in its charter) Nevada 88-0300760 (State or O ...

Table of Contents United States Securities and Exchange Commission Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File No. 0-22088 MONARCH CASINO & RESORT, INC. (Exact name of registrant as specified in its charter) Nevada 88-0300760 (State or Other ...

Table of Contents United States Securities and Exchange Commission Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File No. 0-22088 MONARCH CASINO & RESORT, INC. (Exact name of registrant as specified in its charter) Nevada 88-0300760 (State or Other ...

Table of Contents United States SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-K (MARK ONE) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______TO______ Commission File No. 0-22088 MONARCH CASINO & RESORT, INC. (Exact name of registrant as specified in its charter) Nevada 88-0300760 ...