MONARCH CASINO & RESORT INC

Previous wording

For the three months ended September 30, 2025, our net income totaled $31.6 million, or $1.69 per diluted share, compared to net income of $27.6 million, or $1.47 per diluted share, for the same period in 2024, reflecting a 14.4% and 15.0% increase in net income and diluted earnings per share, respectively. Net revenues in the three months ended September 30, 2025, totaled $142.8 million, an increase of $4.9 million, or 3.6%, compared to the three months ended September 30, 2024. Income from operations for the three months ended September 30, 2025, totaled $38.2 million compared to income from operations of $35.3 million for the same period in 2024.

Current wording

For the three months ended March 31, 2026, our net income totaled $27.6 million, or $1.52 per diluted share, compared to net income of $19.9 million, or $1.05 per diluted share, for the same period in 2025, reflecting a 38.9% and 44.8% increase in net income and diluted earnings per share, respectively. Net revenues in the three months ended March 31, 2026, totaled $136.6 million, an increase of $11.2 million, or 8.9%, compared to the three months ended March 31, 2025. Income from operations for the three months ended March 31, 2026, totaled $34.9 million compared to income from operations of $25.3 million for the same period in 2025.

Previous wording

Casino revenue increased 5.0% in the third quarter of 2025 compared to the third quarter of 2024. The increase in casino revenue was driven primarily by the continued increase in market share at our properties. Casino operating expense as a percentage of casino revenue decreased to 35.8% for the three months ended September 30, 2025, compared to 36.3% for the three months ended September 30, 2024, primarily due to better labor management and operational efficiency.

Current wording

Casino revenue increased 9.4% in the first quarter of 2026 compared to the first quarter of 2025. The increase in casino revenue was driven primarily by the continued increase in market share at our properties. Casino operating expense as a percentage of casino revenue decreased to 36.0% for the three months ended March 31, 2026, compared to 37.7% for the three months ended March 31, 2025, primarily due to better labor management and operational efficiency.

Previous wording

Food and beverage revenue for the third quarter of 2025 increased 2.9% compared to the third quarter of 2024 due to 4.3% increase in food and beverage revenue per cover, partially offset by a decrease in food and beverage covers of 2.8%. Food and beverage operating expense as a percentage of food and beverage revenue in the third quarter of 2025 decreased to 69.9% compared to 72.8% in the third quarter of 2024 due primarily to a decrease in labor expense and an increase in revenue per cover.

Current wording

Food and beverage revenue for the first quarter of 2026 increased 5.6% compared to the first quarter of 2025 due to 4.5% increase in food and beverage revenue per cover, combined with an increase in food and beverage covers of 1.1%. Food and beverage operating expense as a percentage of food and beverage revenue in the first quarter of 2026 decreased to 72.7% compared to 74.3% in the first quarter of 2025 due primarily to an increase in revenue per cover.

Previous wording

Hotel revenue increased 3.9% in the third quarter of 2025 compared to the same quarter of 2024 primarily as a result of an increase in ADR of $11.39 ($192.09 in the third quarter of 2025 and $180.70 in the third quarter of 2024). Hotel occupancy percentage slightly decreased to 89.0% during the third quarter of 2025 compared to 89.7% during the third quarter of 2024. Hotel RevPAR was $183.42 and $176.47 for the three months ended September 30, 2025 and 2024, respectively. Hotel operating expense as a percentage of hotel revenue decreased to 31.4% in the third quarter of 2025 compared to 33.8% for the comparable prior year period primarily due to higher ADR.

Current wording

Hotel revenue increased 13.5% in the first quarter of 2026 compared to the same quarter of 2025 primarily as a result of an increase in available rooms. ADR decreased by $7.49 ($184.83 in the first quarter of 2026 and $192.32 in the first quarter of 2025). Hotel occupancy percentage decreased to 79.6% during the first quarter of 2026 compared to 80.9% during the first quarter of 2025. Hotel RevPAR was $158.01 and $167.67 for the three months ended March 31, 2026 and 2025, respectively. Hotel operating expense as a percentage of hotel revenue decreased to 36.0% in the first quarter of 2026 compared to 37.7% for the comparable prior year period primarily due to lower expenses per occupied room.

Previous wording

Other revenue decreased 9.8% in the third quarter of 2025 compared to the same prior year period primarily due to proceeds from finalization of Employee Retention Credit review by IRS in 2024, partially offset by increases in spa and retail revenues.

Current wording

Other revenue increased 6.6% in the first quarter of 2026 compared to the same prior year period primarily due to an increases in spa and commission revenues.

Previous wording

SG&A expense increased to $27.5 million in the third quarter of 2025 from $27.2 million in the third quarter of 2024. As a percentage of net revenue, SG&A expense decreased to 19.3% in the third quarter of 2025 compared to 19.7% in the same period in 2024.

Current wording

SG&A expense increased to $27.8 million in the first quarter of 2026 from $27.2 million in the first quarter of 2025. As a percentage of net revenue, SG&A expense decreased to 20.3% in the first quarter of 2026 compared to 21.7% in the same period in 2025.

Previous wording

Depreciation and amortization expense increased to $14.1 million for the three months ended September 30, 2025, compared to $13.1 million for the same prior year period, due to new assets placed into service with the ongoing renovation at Atlantis.

Current wording

Depreciation and amortization expense decreased to $10.5 million for the three months ended March 31, 2026, compared to $13.2 million for the same prior year period, due to assets placed into service in the fourth quarter of 2020, with the opening of the hotel tower at Monarch Black Hawk, becoming fully depreciated by the fourth quarter of 2025.

Previous wording

We recognized $0.5 million and $0.02 million for the three months ended September 30, 2025 and 2024, respectively, in professional service fees relating to our construction litigation.

Current wording

We recognized $0.3 million and $0.4 million for the three months ended March 31, 2026 and 2025, respectively, in professional service fees relating to our construction litigation. In the first quarter of 2026, we accrued $1.1 million in interest on the PCL judgment that we are disputing.

Previous wording

In the third quarter of 2025, we recognized $0.6 million of interest income, net of interest expense. In the third quarter of 2024, we recognized $0.2 million of interest expense, net of interest income. See further discussion of our Amended Credit Facility in the LIQUIDITY AND CAPITAL RESOURCES section below.

Current wording

In the first quarter of 2026 and 2025, we recognized $0.6 million and $0.3 million, respectively, of interest income, net of interest expense.

Previous wording

Cash paid for capital expenditures for the nine-month periods ended September 30, 2025 and 2024 totaled $33.8 million and $34.4 million, respectively. During each of the nine-month periods ended September 30, 2025 and 2024, our capital expenditures related primarily to the redesign and upgrade of hotel rooms in the third tower at Atlantis, and the acquisition of gaming, and other equipment to upgrade and replace existing equipment at Atlantis and Monarch Black Hawk.

Current wording

Cash paid for capital expenditures for the three-month periods ended March 31, 2026 and 2025 totaled $7.5 million and $16.0 million, respectively. During each of the three-month periods ended March 31, 2026 and 2025, our capital expenditures related primarily to the acquisition of gaming, and other equipment to upgrade and replace existing equipment at Atlantis and Monarch Black Hawk and property upgrades capital projects.

Previous wording

For the nine months ended September 30, 2025, net cash provided by operating activities totaled $126.6 million, compared to net cash provided by operating activities of $102.9 million in the same prior year period. This increase was primarily a result of an increase in net income, as well as change in working capital.

Current wording

For the three months ended March 31, 2026, net cash provided by operating activities totaled $48.5 million, compared to net cash provided by operating activities of $36.5 million in the same prior year period. This increase was primarily a result of an increase in net income, as well as change in working capital due to normal business fluctuations in Account receivable, Income tax receivable and Accrued expenses.

Previous wording

Net cash used in investing activities totaled $33.8 million and $34.4 million during each of the nine months ended September 30, 2025 and 2024, respectively. Net cash used in investing activities during each of the first nine months of 2025 and 2024 consisted primarily of cash used for the redesign and upgrade of hotel rooms in the third tower at Atlantis and the acquisition of gaming and other equipment at both properties.

Current wording

Net cash used in investing activities totaled $7.5 million and $16.0 million during each of the three months ended March 31, 2026 and 2025, respectively and consisted primarily of cash used for the acquisition of gaming and other equipment and ongoing maintenance capital expenditures at both properties.

Previous wording

Net cash used in financing activities in the first nine months of 2025 totaled $43.9 million and consisted of $31.3 million cash used for purchase of Company stock under the Repurchase Plan and $16.5 million used for payment of dividends, partially offset by $3.9 million of net proceeds from stock options exercise. Net cash used in financing activities in the first nine months of 2024 totaled $72.5 million and consisted of $60.0 million cash used for purchase of Company stock under the Repurchase Plan and $16.7 million used for payment of dividends, partially offset by $1.5 million of borrowings under the Amended Credit Facility, net of the payments to the lender under the Amended Credit Facility, and $2.7 million of net proceeds from stock options exercise.

Current wording

Net cash used in financing activities in the first three months of 2026 totaled $17.4 million and consisted of $17.7 million cash used for the repurchase of Company stock under the Repurchase Plan and $5.4 million used for payment of dividends, partially offset by $5.7 million of net proceeds from stock options exercise. Net cash used in financing activities in the first three months of 2025 totaled $4.1 million and consisted of $5.5 million used for payment of dividends, partially offset by $1.4 million of net proceeds from stock options exercise.

Previous wording

In addition to other customary covenants for a facility of this nature, as of September 30, 2025, we were required to maintain a Total Leverage Ratio (as defined in the Amended Credit Facility) of no more than 1.5:1 and Fixed Charge Coverage Ratio (as defined in the Amended Credit Facility) of at least 1.1:1.0. As of September 30, 2025, our Total Leverage Ratio and Fixed Charge Coverage Ratio were 0.0:1.0 and 112.3:1.0, respectively.

Current wording

In addition to other customary covenants for a facility of this nature, as of March 31, 2026, we were required to maintain a Total Leverage Ratio (as defined in the Amended Credit Facility) of no more than 1.5:1 and Fixed Charge Coverage Ratio (as defined in the Amended Credit Facility) of at least 1.1:1.0. As of March 31, 2026, our Total Leverage Ratio and Fixed Charge Coverage Ratio were 0.0:1.0 and 144.9:1.0, respectively.

Previous wording

A description of our critical accounting policies and estimates can be found in Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2024 Form 10-K. For a more extensive discussion of our accounting policies, see Note 1, “Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements in our 2024 Form 10-K filed with the SEC on March 3, 2025.

Current wording

A description of our critical accounting policies and estimates can be found in Part II Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2025 Form 10-K. For a more extensive discussion of our accounting policies, see Note 1, “Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements in our 2025 Form 10-K filed with the SEC on February 24, 2026.