Furloughs, credit line adjustments soften coronavirus blow for Monarch Casino Resort Matthew Crowley, CDC Gaming Reports · July 23, 2020 at 7:26 am A spoonful of foresight and assistance from bankers, helped the coronavirus shutdown go down not delightfully, but not disastrously for Monarch Casino Resort. The Reno-based casino operator reported a second-quarter per-share loss, but the result and revenue topped Wall Street revenue. In a statement issued after stock markets closed Wednesday, Monarch said its net loss for the three months ended June 30 was $4.3 million, or 24 cents per diluted share, topping the 62 cents-per-share average loss forecast by analysts surveyed by Seeking Alpha. A year earlier, Monarch had a net income of $9.3 million, or 50 cents per diluted share. Adjusted earnings before interest, taxes, depreciation, and amortization, a cash flow measure that excludes one-time costs, was $490,000, down from $16.45 million. Revenue fell 75.8% to $15.2 million from $62.8 million but topped the $14.8 million forecasted by analysts. Before the markets closed, investors, evidently, were underwhelmed. Monarch Casino shares fell 47 cents, or 1.34%, to close at $34.53 on the Nasdaq. The company’s share price has slid 30 percent in 2020. “Monarch reported a much stronger than feared second quarter,” SunTrust Robinson gaming analyst Barry Jonas said in a research note following earnings. “While results point to considerable upside to our estimates, we still have concerns to sustainability of current operating and demand trends.” Monarch’s hotel-casinos, the Atlantis in Reno and the Monarch Casino Black Hawk in Black Hawk, Colorado, shut down in mid-March, as did all other casinos, to flatten the coronavirus infection curve and heed state officials’ mandates and guidance from the federal Centers for Disease Control and Prevention. Monarch co-Chairman and CEO John Farahi said the company cut expenses and worked with those bankers to land a limited default and covenant waiver and credit facility amendments from its bankers through Sept. 29. The Atlantis reopened June 4. Monarch Casino Black Hawk reopened June 17, though table games remain closed at the Colorado property. “We have been extremely diligent in our approach to minimizing risks as we reintroduce our guests to the gaming, entertainment and hospitality experiences they have come to expect from Monarch,” Farahi said in a statement. “Though visitation has not yet fully recovered to pre-COVID levels, and we continue to limit capacity in-line with the state-mandated reopening guidelines, spend per visit has been very encouraging.” Down arrows dominated the earnings breakdown. Casino revenue fell 69.8%, food and beverage revenue fell 83.9% and hotel revenue slid 83.3% from a year earlier. However, because of temporary furloughs of approximately 90% of the company’s employees the company managed to cut $8.9 million from $16.5 million a year earlier, a 46% drop. Also, progress on the company’s Casino Blackhawk makeover continued to sputter. As he has for several quarters, Farahi reported progress on a new 23-story, 500-room hotel tower, part of a $400 million-plus Black Hawk expansion. He said the company expects the tower’s podium and some hotel floors to open in the third quarter, and the rest of the hotel tower to open in the fourth quarter. The removal of a construction wall separating the new building and the existing casino symbolized progress, Farahi said. But in March, Monarch forecasted a second-quarter “soft opening” of the podium and a grand opening for the hotel-casino tower. Those dates were themselves postponements; an opening for the whole expansion had been promised for 2019. Monarch said it believes the cash in its interest-bearing money market fund and the $33.4 million available under its amended credit facility as of June 30, will fund the completion of the Monarch Casino Resort Spa Black Hawk expansion and support the company’s operations during the coronavirus shutdown’s aftermath. However, the company also listed a litany of factors that could hurt future results, including extended COVID-19 shutdowns, and construction delays on the Monarch Casino Black Hawk. The company said and the Black Hawk project’s general contractor is wrangling in court over the delays. Follow Matthew Crowley on Twitter @copyjockey.