Reno-based Monarch Casinos reports record first-quarter earnings
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The company that operates Reno’s Atlantis resort reported record net income and cash flow for the quarter that ended March 31.
The company benefited from the phased opening of its Monarch Casino Resorts Spa Black Hawk in Black Hawk, Colorado, in the fourth quarter of 2020.
“We continued market share growth at both of our Reno and Black Hawk properties, achieving new records,” Monarch Co-Chairman and CEO John Farahi said in a release announcing first-quarter results.
“Our overall first quarter performance demonstrated Monarch’s success in capturing a higher share of the pent-up demand that seems evident across the gaming industry – particularly in regional gaming markets,” Farahi said. “The quality of our two casino resorts allows us to take advantage of the healthy economies in our key feeder markets and positions us to continue our growth as we recover from the pandemic and the government restrictions abate.”
For the quarter, Monarch reported net income of $8.2 million, 42 cents a share, on revenue of $75 million. That compared with net income of $2 million, 11 cents a share, on revenue of $51 million.
Few casino companies have reported being profitable during the pandemic although small rural casinos have tended to be more successful than Strip and downtown-based operations.
Nevada and Colorado continued to operate under state-imposed capacity and other restrictions, which negatively affected hotel and food and beverage performance at both properties.
“Managing labor remains a major factor for the business, particularly as we ramp up staffing in Black Hawk and look to restore amenities at both properties,” Farahi said. “A shortage of qualified applicants and wage pressure remain key challenges. Fortunately, investments in technology have allowed us to reduce the amount of labor that would have historically been required, while maintaining the expected guest service levels.”
The revenue picture is expected to improve even more beginning Saturday when Colorado’s Amendment 77, approved by voters in November, takes effect. That will enable Colorado casinos to raise dollar limits on wagers and introduce new games to players. Farahi indicated Monarch Casino in Black Hawk would introduce baccarat, keno and poker by the end of May and raise limits to levels currently used at Reno’s Atlantis property.
“As the recovery momentum builds over the course of 2021 and into 2022, we believe that our Reno and Black Hawk markets will enable us to generate strong returns,” Farahi said. “At the same time, we continue to reduce leverage and further improve our balance sheet, positioning the company to evaluate and pursue attractive acquisition opportunities that can drive long-term growth and enhance stockholder value.”
Shares of Monarch, traded on the Nasdaq exchange, were up 50 cents, 0.7 percent, in light trading Wednesday, and closed at $69.90 a share.
rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.
