Atlantis operator in Reno posts record earnings thanks to Colorado project

A small Reno-based casino company with assets in Nevada and Colorado on Wednesday announced record earnings results for the quarter that ended June 30.

Executives with Monarch Casino and Resort Inc., which operates the Atlantis in Reno and Monarch Casino Resort Spa Black Hawk in Black Hawk, Colorado, said in a release that Reno’s hot economy and an increase in betting limits in Colorado in May contributed to the company’s success.

“Our second quarter financial results highlight continued market share gains in both Black Hawk and Reno,” John Farahi, co-chairman and CEO of Monarch, said in a release.

“The two markets are experiencing rapid population growth and healthy economic fundamentals that are propelling demand for our market leading properties,” Farahi said. “We also believe that the pent-up demand is impacting the revenue growth, along with the federal government’s recurring stimulus. Labor market constraints continue to be our major challenge at both properties.”

In a release, the company reported net income of $18.1 million, 93 cents a share, on revenue of $97.7 million for the quarter that ended June 30. By comparison, the company had a loss of $4.3 million, 24 cents a share, on revenue of $15.2 million for the same quarter a year earlier.

Monarch does not conduct earnings calls with investors.

“Black Hawk operations at our expanded casino resort continue to ramp up,” Farahi said in the release. “Guest spend has been healthy due to a combination of expanded offerings and table games revenue positively impacted by the removal of the Colorado betting limits as of May 1. On May 14, we opened our new poker room and guest response to date has exceeded our expectations.”

Farahi said the property is experiencing capacity constraints during peak demand. The transformation of the former buffet and the adjacent casino area of the legacy facility into a new specialty restaurant, sportsbook lounge and bar, and additional casino space is continuing, he said. The additions will increase casino space by 25 percent and restaurant seating by approximately 35 percent and the company anticipates opening the converted areas by year-end.

“At Atlantis, we continue to benefit from the strong Reno economy,” Farahi said.

“Customer spend continues to increase and we have seen strong demand across all segments of our business,” he said. “Reinvestment in the property continues. We are completely renovating the high-end suites which make up the top two floors of our tower. This capital investment will offer Atlantis’ premium guests more luxurious accommodations.”

Barry Jonas of Atlanta-based Truist Securities Inc., said in a note to investors that he has a buy recommendation on shares and has increased the share price targets from $80 to $84 a share.

“While second-quarter beats in regional gaming are starting to be the norm again this earnings season, Monarch continues to prove it can post high margins while having all of their traditionally lower-margin amenities operational with a new Black Hawk property ramping faster than expected,” Jonas said in a note to investors. “We see these trends continuing despite any new mask mandates.”

Monarch shares, traded on the Nasdaq exchange, closed up $3.65, 5.9 percent, to $65.78 a share Thursday in trade volume about double the daily average.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.