Canada
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 “pre-COVID” 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: “Our 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 America’s Best Small Companies.
“New 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.
“Net 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.
“Our 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 Colorado’s 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 property’s performance.
“The 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.
“At 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.
“We 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.”
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 (“F&B”), 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 Company’s 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 properties’ reopening.
Selling, general and administrative (“SG&A”) 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.
Play’n GO, the world’s leading casino entertainment provider, has today announced a partnership with Canadian operator Loto-Québec, launching the Swedish gaming giant’s games into another Canadian province.
Already active in another Canadian province , this partnership sees Play’n GO’s content available in the province of Québec exclusively with Loto-Québec, a state-owned corporation, where online players now have access to titles such as Tome of Madness.
Magnus Olsson, Chief Commercial Officer, Play’n GO said: “At Play’n GO, we have always been clear in our vision to be active in every regulated market in the world, and this partnership with Loto-Québec is the next step on that journey.
“Our past success in Canada gives us confidence that players in Québec will enjoy the best Play’n GO content, and we look forward to many years of success with Loto-Québec in the province.”
Stéphane Martel, Head of Product and Innovation at Loto-Québec added: “As the sole iGaming operator in Québec, we pride ourselves on offering titles that truly add value to our platform, lotoquebec.com. We are happy to bring Play’n GO games to our players.”
iGaming Ontario has welcomed the decision of the Ontario Superior Court, which found that iGaming Ontario’s model is consistent with the Criminal Code and that iGaming Ontario is conducting and managing igaming in the province.
“We have always been confident in our model and are pleased that the court has ruled in our favour, and that Ontarians can continue to play with confidence in our regulated igaming market,” said Martha Otton, Executive Director of iGaming Ontario.
“Ontario’s model meets the requirements and contributes to the public good by protecting players, their data and their funds, while helping to fund priority public services in Ontario, and bringing well-paid, high-tech jobs and economic development to Ontario,” Otton added.
In dismissing the application brought forward by the Mohawk Council of Kahnawà:ke (MCK), the Superior Court found that iGaming Ontario is the “operating mind” behind Ontario’s competitive igaming market in accordance with the conduct and manage requirements of the Criminal Code.
iGaming Ontario will continue to conduct and manage igaming as it has since the launch of the regulated market on April 4, 2022.
Bragg Gaming Group
Bragg Gaming Appoints Renowned iGaming Executive Neill Whyte as Chief Commercial Officer
Bragg Gaming Group, a global iGaming technology and content provider, announced that Neill Whyte has been appointed as Chief Commercial Officer (CCO), effective 1st May 2024, establishing a new global commercial structure at the Company and bolstering its leadership team.
Whyte brings over 18 years of experience in the iGaming sector, most recently in the role of Chief Commercial Officer at Digital Gaming Corporation’s (DGC), B2B iGaming Division. After joining DGC in early 2020, he was responsible for the commercially successful launch and growth of its content distribution business in the US.
Prior to joining DGC, Whyte held multiple positions in the gaming industry including as Head of Business Development at Isle of Man-based iGaming specialist Apricot Investments, as Board Member at Swedish iGaming product and Lottery content distributor Genera Networks, and in various senior roles over eleven years at leading iGaming content supplier Microgaming, including as Head of Product Channels.
In his new role with Bragg, Whyte will be tasked with leading the Company’s global commercial teams to drive growth across all of the Company’s product verticals which include proprietary online casino content from its Atomic Slot Lab, Indigo Magic and Wild Streak Gaming studios, exclusive content from content partners, HUB a leading casino content aggregation platform, Fuze player engagement, as well as its award-winning player account management (PAM) platform and turnkey solutions.
Matevž Mazij, Chief Executive Officer at Bragg, said: “I am very pleased to be announcing today the appointment of Neill Whyte as Chief Commercial Officer at Bragg. His iGaming product and market knowledge, together with his record in driving growth from developing successful and mutually beneficial commercial partnerships are exceptional.
“As we leverage our broad content and product portfolio to grow in existing and new markets, including in the United States, Canada, Latin America and Europe, Neill’s unique combination of knowledge, skills and experience in this sector are a perfect fit for our ambitions at Bragg.”
Neill Whyte, Chief Commercial Officer at Bragg, said: “It’s an honor to join Matevž and the wider teams at Bragg already in place across North America, Europe and in India. I have been impressed with the depth and quality of the content, product and technology offerings at Bragg, and its ability to rapidly adapt, certify and deploy this content and technology in newly regulated markets is a distinct advantage.
“We also have a huge opportunity to grow our footprint with our existing customers in markets in which we are already established. Our content and product roadmaps are second to none, and I’m planning to get on the road in the coming weeks and months to meet the team and our customers and to start building for the next stage of mutual growth. I can’t wait to get going.”
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