The gaming companies EBITDA of $4.9 million was 8.9% higher than the $4.5 million reported in the fourth quarter of 2008.

During the quarter Monarch launched its new EZ Comp(SM) program in the Atlantis Casino Resort Spa in Reno, Nevada, allowing patrons to redeem complimentary food, beverage and other services directly at the properties food outlets and other points of service throughout the casino.

Because of this change the gaming company had to modify its accounting of complimentary expense recognition timing, changing the expenses from being recognized when points were redeemed to being recognized at the time the points are earned.

The change in the company’s policy resulted in a onetime, non-cash charge of approximately $1.4 million to account for liability for unredeemed point balances when the program was launched.

This charge was partially offset by lower operating expenses, but drove operation income down 66.3%.

Monarch also completed the acquisition of 2.3 acres of land with a 27,508 square foot building located near the Atlantis for approximately $2 million, during the quarter.

After the impact of the real estate transaction and additional facility maintenance and remodeling, the balance outstanding on the Company’s credit facility decreased slightly from $48.7 million at September 30, 2009 to $48.5 million at December 31, 2009.

Scharer parted ways with the gaming company due to time commitments related to other interests, however the rules requires that a majority of the board of directors be independent and that the audit committee be comprised of at least three members.

The Nasdaq stock exchange granted a cure period until July 26, 2010 to Monarch to allow them time to regain compliance with the Listing Rule.

Monarch has said they have begun a search for a replacement and fully intends to comply with the Nasdaq’s requirements prior to the expiration of the cure period.

The gambling company had net income for the quarter of six cents a share, off from twelve cents last year but better than predictions of a loss of two cents a share.

Monarch also reported total gross revenue of $38.91 million, which easily beat analyst predictions of $31.81 million, although it represented a drop from last year’s $40.58 million.

Monarch owns and operates the Atlantis Casino Resort Spa outside Reno, Nevada.

Even though net revenue dropped by better than ten percent from the same quarter previous year, down to 433 million, operating costs rose as increased comps and promotions were used to draw business.

After attributing the company’s performance to the recession and its effects, Monarch CEO John Farahi
also noted “disruption from construction related to our expansion, remodel and skybridge capital projects.”

Monarch’s Atlantis Casino in Reno, Nevada has dealt most of the year with ongoing construction to both the main resort and a bridge designed to ease access and lighten traffic problems. The expansion was complete in July, and the bridge finished in November.

The final stage, Spa Atlantis, opened last month.

While much of the gaming sector has seen plummeting sales and revenues, Monarch reported total revenues of over thirty-eight million dollars, giving the casino operator profits of over $21 million.

After having seen both total income and profit decline the last two quarters, Monarch’s net income was up substantially in the most recent period.

Monarch operates the Atlantis Casino outside Reno, Nevada, a venue which is nearing completion of a major expansion and refurbishment.

Monarch was named by Forbes magazine last week to its list of the “Best Small Companies” in the US.

With the Atlantis ready to exploit its newer and bigger casino and hotel, Monarch should be able to build on its positive steps.

Forbes placed Monarch Casino as number 176 on the list, noting its twelve percent net margin and relatively high return on investment, coming in forty-first over the last five years of the companies reviewed.

Even negative growth over the last year, falling at just under a thirty percent decline, seems strong compared to much of the gaming industry. Sales over the last year were off only five percent, much better than the Las Vegas steep double-digit declines.

A five-year average of return on equity of almost twenty-five percent also has to have potential investors closely eyeing this small gambling operator.

With a resilient performance in the face of the recession, Monarch Casino rightly gains recognition as one of the best little companies in the US.