Monarch Casino & Resort(US:MCRI)2024-02-28 21:53Renovation and Expansion - Monarch Casino Resort Spa Black Hawk completed a master planned renovation and expansion, transforming the property into a world-class resort[221]. Market and Competition - The company expects to benefit from the elimination of betting limits and the allowance of new game types in Black Hawk, Colorado, as well as the growth of state-wide online and retail sports betting[221]. - Monarch Casino Resort Spa Black Hawk is positioned to attract high-value players from Colorado's Front Range, who previously traveled to Las Vegas for high-end casino experiences[221]. - The company is facing increased competition from California tribal gaming and a competitive promotional environment in Northern Nevada[220]. Employment and Labor - The Reno market shows broad-based employment growth, which is anticipated to support the continued strength of the business at Atlantis[220]. - Labor challenges, including wage inflation, are actively being managed due to a tight employment environment[220]. Financial Performance - For the year ended December 31, 2023, net income was $82.4 million, a decrease of 5.8% from $87.5 million in 2022, with diluted EPS dropping from $4.47 to $4.20[230]. - Net revenue increased by $23.6 million, or 4.9%, to $501.5 million in 2023 compared to $477.9 million in 2022[230]. - Casino revenue rose by 4.3% in 2023, while casino operating expenses as a percentage of revenue increased to 36.4% from 35.1% in 2022[232]. - Food and beverage revenue grew by 8.1% in 2023, with operating expenses as a percentage of revenue decreasing to 72.4% from 75.5% in 2022[233]. - Hotel revenue decreased by 0.3% in 2023, with an average daily rate (ADR) decline from $175.07 to $172.56, despite an increase in occupancy from 79.9% to 84.5%[234]. - SG&A expenses increased to $105.8 million in 2023 from $97.6 million in 2022, representing 21.1% of net revenue compared to 20.4% in 2022[236]. - Depreciation and amortization expenses rose to $47.3 million in 2023, up from $43.4 million in 2022, due to asset additions from hotel upgrades[237]. - Capital expenditures totaled $51.4 million in 2023, with significant investments in hotel room redesigns and gaming equipment acquisitions[241]. - Total revenues for 2023 reached $501.5 million, an increase of 4.3% from $477.9 million in 2022[275]. - Casino revenues increased to $282.3 million in 2023, up 4.6% from $270.8 million in 2022[275]. - Basic earnings per share decreased to $4.28 in 2023 from $4.60 in 2022[275]. Cash Flow and Liquidity - Net cash provided by operating activities increased by $33.3 million, or 23.8%, to $173.0 million in 2023[243]. - As of December 31, 2023, the company had an outstanding principal balance of $5.5 million under its Amended Credit Facility, with $93.9 million available for borrowing[251]. - Cash and cash equivalents rose to $43.4 million in 2023, compared to $38.8 million in 2022[277]. - The company has no cash or cash equivalents subject to market risk as of December 31, 2023[266]. Assets and Liabilities - The company reported total assets of $680.9 million as of December 31, 2023, down from $692.9 million in 2022[277]. - Current liabilities increased to $123.4 million in 2023 from $117.7 million in 2022[277]. - Accounts receivable as of December 31, 2023, totaled $12.088 million, an increase from $9.651 million in 2022[324]. - Accrued expenses increased to $51.812 million as of December 31, 2023, from $46.037 million in 2022[329]. Taxation - The income tax provision for 2023 was $26.079 million, up from $21.543 million in 2022, reflecting a year-over-year increase of 20.5%[341]. - The effective tax rate for 2023 was 24.03%, higher than the federal statutory rate of 21%, primarily due to state tax and permanent items[342]. Dividends - A one-time cash dividend of $5.00 per share was declared by the Board of Directors, payable on March 15, 2023[382]. - The Board of Directors approved an Annual Dividend policy of $1.20 per share, starting in Q2 2023, to be paid quarterly[383]. - In 2023, the Company paid a one-time cash dividend of $5.00 per share and three cash dividends of $0.30 each, totaling $5.90 per share[384]. - A cash dividend of $0.30 per share was announced for March 15, 2024, as part of the annual cash dividend of $1.20[385]. - The declaration of each dividend is subject to the Board's review of financial statements and cash resources, with the possibility of suspending the dividend program[386].