Food and beverage operating expense as a percentage of food and beverage revenue for the 2013 first quarter improved to 42.3% as compared to 44.6% for the 2012 first quarter primarily due to operational efficiencies combined with menu pricing strategies in anticipation of higher commodity costs. Hotel operating expense as a percentage of hotel revenue for the 2013 first quarter improved to 26.4% from 29.6% for the comparable prior year quarter due primarily to higher hotel revenue.
SG&A Expense for the 2013 first quarter increased $2.3 million due primarily to $2.5 million from the Black Hawk operation for which the first quarter of the prior year reflects no expense. The primary drivers of the remaining $200 thousand decrease are lower Atlantis bad debt and utilities expense.
During the 2013 first quarter, the Company made net principal payments of $9.3 million reducing the outstanding credit facility to $71.8 million at March 31, 2013. Capital expenditures of $2.4 million in the first quarter of 2013 were funded out of operating cash flow and primarily represent architectural and engineering fees related to the Black Hawk master development plan and costs associated with the redesign and upgrade of the Black Hawk facility.
Interest expense for the 2013 first quarter increased to $566 thousand from $329 thousand for the first quarter of 2012 due to higher amounts of debt outstanding under the credit facility in the 2013 first quarter compared to the 2012 first quarter. The higher outstanding debt was the result of borrowing to fund the Black Hawk acquisition.
John Farahi, Monarch CEO Comment:
Monarch's CEO and Co-Chairman John Farahi commented: "We were very pleased with our first quarter results from both properties. Atlantis Adjusted EBITDA increased by $1.5 million or 19.3% by not only increasing net revenue, but by simultaneously reducing operating expense. I'm very proud of the result produced by our Atlantis team."
Referring to the Company's Black Hawk operation, Mr. Farahi added: "Our Black Hawk team continues to deliver impressive results. Our Black Hawk net revenue and Adjusted EBITDA increased by 16.0% and 53.8%, respectively, over the prior year's first quarter results under prior ownership."
Mr. Farahi continued: "We are in the process of completely redesigning and upgrading the existing Black Hawk facility, and we recently received zoning approval for our expansion plans, subject to certain conditions, from the Black Hawk City Council. The approved master plan, once completed, would nearly double the existing casino space and convert the facility into a full-scale, high end, resort through the addition of a 335 foot hotel tower with 507 guest rooms and suites, a resort quality spa and pool facility, four restaurants, additional bars, associated support facilities and a new ten story parking structure, that together with existing parking, would provide 1,551 parking spaces. Once the detailed design and construction plans are completed, we will finalize the cost estimate and timeline for the expansion project. We expect to announce that estimate and timeline in late 2013."
About Monarch Casino & Resort, Inc. (NASDAQ: MCRI):
Monarch Casino & Resort, Inc., through its subsidiaries, owns and operates the Atlantis Casino Resort Spa, a hotel/casino facility in Reno, Nevada, and the Riviera Black Hawk casino in Black Hawk, Colorado. Black Hawk is approximately 40 miles west of Denver. For additional information on Monarch, visit Monarch's website at www.MonarchCasino.com.
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