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What changed 10-Q

Item 1. Financial Statements

2025-05-02 compared with 2024-11-08 · 114 added, 114 removed, 291 unchanged (44% of the section changed)

5 unchanged sentences

Three months ended

Nine months ended

September 30,

September 30,

Food and beverage

17 unchanged sentences

(In thousands, except shares)

September 30, 2024

March 31, 2025

December 31, 2024

3 unchanged sentences

Income taxes receivable

Prepaid expenses

Prepaid expenses and other

Total current assets

1 unchanged sentence

Intangible assets, net

Other long-term assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Current maturities of long-term debt

Accounts payable

1 unchanged sentence

Accrued expenses

Income taxes payable

Short-term lease liability

2 unchanged sentences

Long-term lease liability

Long-term debt

Other long-term liability

3 unchanged sentences

Common stock, $ .01 par value, 30,000,000 shares authorized;

19,296,464 shares issued and 18,368,473 outstanding at September 30, 2024;

19,394,397 shares issued and 18,466,406 outstanding at March 31, 2025;

19,364,531 shares issued and 18,436,540 outstanding at December 31, 2024

Additional paid-in capital

Treasury stock, 927,991 shares at September 30, 2024;

62,534 shares at December 31, 2023

Treasury stock, 927,991 shares at March 31, 2025 and December 31, 2024

Retained earnings

9 unchanged sentences

Stock-based compensation expense

Purchase of company common stock

Dividend payment

Balance, March 31, 2025

Exercise of stock options, net

Stock-based compensation expense

Purchase of company common stock

Dividend payment

Balance, June 30, 2024

Exercise of stock options, net

Stock-based compensation expense

Purchase of company common stock

Dividend payment

Balance, September 30, 2024

Balance, January 1, 2024

1 unchanged sentence

Stock-based compensation expense

Purchase of company common stock

Dividend payment

Balance, March 31, 2024

Exercise of stock options, net

Stock-based compensation expense

Dividend payment

Balance, June 30, 2023

Exercise of stock options, net

Stock-based compensation expense

Dividend payment

Balance, September 30, 2023

The Notes to the Consolidated Financial Statements are an integral part of these statements.

3 unchanged sentences

(In thousands, Unaudited)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

4 unchanged sentences

Provision for bad debts

Loss on disposition of assets

Loss (gain) on disposition of assets

Non-cash operating lease expense

1 unchanged sentence

Income taxes receivable

Prepaid expenses

Prepaid expenses and other

Accounts payable

11 unchanged sentences

Line-of-credit payments

Principal payments on long-term debt

Payment of dividends

6 unchanged sentences

Cash paid for interest

Cash paid for income taxes

The Notes to the Consolidated Financial Statements are an integral part of these statements.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

QUARTERLY PERIOD ENDED MARCH 31, 2025

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

17 unchanged sentences

In the opinion of the management of the Company, all adjustments considered necessary for a fair presentation, consisting of normal recurring accruals, are reflected in the interim financial statements.

Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

The balance sheet at December 31, 2024, has been derived from the audited consolidated financial statements of the Company at that date, but does not include all of the information and footnotes required by U.S.

2 unchanged sentences

Segment Reporting:

The accounting guidance for disclosures about segments of an enterprise and related information requires separate financial information to be disclosed for all operating segments of a business.

The Company determined that the Company’s two operating segments, Atlantis and Monarch Black Hawk, meet the aggregation criteria stipulated by Accounting Standards Codification (“ASC”) 280-10-50-11.

The accounting guidance for disclosures about segments of an enterprise and related information requires separate financial information to be disclosed for all reporting segments of a business.

The Company determined that the Company’s two operating segments, Atlantis and Monarch Black Hawk, meet all of the aggregation criteria stipulated by ASC 280-10-50-11.

The Company views each property as an operating segment and the two operating segments have been aggregated into one reporting segment.

The Company’s Chief Operating Decision Maker (CODM) is our Chief Executive Officer.

The CODM assesses performance for our properties and decides how to allocate resources based on net income as reported on our Consolidated Statements of Income.

The measure of segment assets is reported on our Consolidated Balance Sheets as total assets.

Our operating revenues are recognized with the delivery of products or when services are performed at either of our operating segments.

Our significant segment expenses as monitored by the CODM are shown in the table below.

This breakout of expenses is used by the CODM to monitor and assess the financial performance by comparing actual results to prior years and plans (in thousands).

Three Months Ended March 31,

Operating Expenses

Labor expense

Cost of sales

Tax and license expense [a]

Other operating expense [b]

Depreciation and amortization

Other operating items, net [c]

Interest income, net

Income tax expense

Total expenses

[a] Tax and license includes gaming taxes and licenses, commerce taxes, use taxes and property taxes.

[b] Operating expenses includes expenses for casino, food and beverage, hotel, other, selling general and administrative expenses excluding payroll and payroll related, cost of sales, tax and license.

[c] Other operating items, net includes construction litigation expenses, insurance claims proceeds, net, and (gain) loss on disposition of assets.

Concentrations of Credit Risk and Credit Losses:

14 unchanged sentences

Historically, the Company has not incurred any significant credit-related losses.

As of September 30, 2024, the Company has recorded a reserve of $ 0.3 million for gaming and non-gaming receivables.

As of March 31, 2025, the Company has recorded a reserve of $ 0.2 million for gaming and non-gaming receivables.

The Company believes it is not exposed to any significant credit risk on cash and accounts receivable.

4 unchanged sentences

Property and equipment, net consists of the following (in thousands):

September 30, 2024

March 31, 2025

December 31, 2024

19 unchanged sentences

If the undiscounted cash flows do not exceed the carrying value, the impairment is measured based on fair value compared to carrying value, with fair value typically based on a discounted cash flow model or market comparable, when available.

For the nine-month periods ended September 30, 2024 and 2023, respectively, there were no impairment charges.

For the three-month periods ended March 31, 2025 and 2024, respectively, there were no impairment charges.

The Company accounts for goodwill in accordance with ASC Topic 350, Intangibles-Goodwill and Other (“ASC Topic 350”).

2 unchanged sentences

Impairment testing for goodwill is performed at the reporting unit level, and each of the Company’s casino properties is considered to be a reporting unit.

As of September 30, 2024, we had goodwill totaling $ 25.1 million related to the purchase of Monarch Black Hawk, Inc.

As of March 31, 2025, we had goodwill totaling $ 25.1 million related to the purchase of Monarch Black Hawk, Inc.

ASC Topic 350 requires that goodwill be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

18 unchanged sentences

The points estimated SSP is computed as the cash redemption value of the points expected to be redeemed, which is determined through an analysis of all redemption activity over the preceding twelve-month period.

As of September 30, 2024, the Company had estimated the obligations related to the players’ club program at $ 8.5 million, which is included in Accrued Expenses in the Liabilities and Stockholders’ Equity section in the Consolidated Balance Sheet.

Food and Beverage, Hotel and Other (retail) Revenues:

9 unchanged sentences

In addition, tips and other gratuities, excluding service charges, collected from customers on behalf of the Company’s employees are also accounted for on a net basis and are not included in revenues or operating expenses.

Outstanding chip liability:

Outstanding chip liability represents the amounts owed in exchange for gaming chips held by a customer, that can be redeemed by the customers at any time.

Customer advances and other :

Customer advances and other primarily consist of funds deposited by customers before gaming play occurs and advance payments on goods and services yet to be provided, such as advance gift cards sales and deposits on rooms and convention space or for unpaid wagers.

These liabilities are generally expected to be recognized as revenue within one year of being purchased, earned, or deposited and are recorded within “Accrued expenses” on the consolidated balance sheets.

The following table summarizes the activity related to contract and contract-related liabilities for each of the three months ending March 31, 2025 and 2024.:

Three Months Ended March 31, 2025

Three Months Ended March 31, 2024

Contractual Liability

Players Club Liability

Outstanding Chip Liability

Customer Advances and Other

Total Contractual Liability

Other Operating items, net:

Other operating items, net, in general consist of miscellaneous operating charges or proceeds.

For the three months ended September 30, 2024, Other operating items, net, was $ 0.2 million and primarily represents loss on disposal of assets.

For the three months ended September 30, 2023, Other operating items, net, was $ 3.0 million and primarily represents professional service fees relating to our construction litigation.

For the nine months ended September 30, 2024, Other operating items, net, was $ 0.9 million and consisted of $ 0.6 million professional service fees relating to our construction litigation and $ 0.3 million loss on disposal of assets.

For the nine months ended September 30, 2023, Other operating items, net, was $ 3.0 million and consisted of $ 4.1 million of professional service fees relating to our construction litigation and $ 0.1 million loss on disposal of assets, offset by $ 1.2 million net proceeds from a sale of a COVID closure related insurance claim.

For the three months ended March 31, 2025, Other operating items, net, was $ 0.5 million and primarily represents professional service fees relating to our construction litigation.

For the three months ended March 31, 2024, Other operating items, net, was $ 0.5 million and primarily represented professional service fees relating to our construction litigation.

Impact of Recently Adopted Accounting Standards:

Segment Reporting - Improvements to Reportable Segment Disclosures:

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.2023-07, Segment Reporting Topic 280.

Under ASC 280 a public entity is required to disclose a measure of segment’s profit or loss, used by the chief operating decision maker to assess segment performance and make decisions about allocation of resources.

In addition to segment’s revenue and measure for profit or loss, the standard requires enhanced disclosures of significant segment expenses.

The amendments provide new segment disclosure requirements for entities with a single reportable segment.

This guidance is effective for annual reporting periods beginning after December 15, 2023, and interim reporting periods after December 15, 2024.

Early adoption is permitted and retrospective application is required for all periods presented.

The Company is currently evaluating the impact of adopting this guidance on its Consolidated Financial Statements and disclosures included within Notes to Consolidated Financial Statements.

Income Tax—Improvements to Income Tax Disclosures:

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes Topic 740, which requires enhanced disclosures, including specific categories and disaggregation of information in the effective tax rate reconciliation, disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations.

This guidance is effective for annual reporting periods beginning after December 15, 2024.

Early adoption is permitted and should be applied on a prospective basis, however retrospective application is permitted.

The Company is currently evaluating the impact of adopting this guidance on its Consolidated Financial Statements and disclosures included within Notes to Consolidated Financial Statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires business entities to expand their annual disclosures of the effective rate reconciliation and income taxes paid.

The ASU is effective for fiscal years beginning after December 15, 2024, may be adopted on a prospective or retrospective basis, and early adoption is permitted.

The Company is currently evaluating the effect that the new guidance will have on our related disclosures.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, which requires business entities to disclose, for interim and annual reporting periods, additional information about certain income statement expense categories.

The requirements are effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027 .

Entities are permitted to apply either the prospective or retrospective transition methods.

The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements.

A variety of proposed or otherwise potential accounting standards are currently under review and study by standard-setting organizations and certain regulatory agencies.

4 unchanged sentences

As permitted by ASC 842, the Company elected not to separate non-lease components from their related lease components.

As of September 30, 2024, the Company’s right of use assets consisted of the Parking Lot Lease, the Driveway Lease (each as defined and discussed in NOTE 5.

As of March 31, 2025, the Company’s right of use assets consisted of the Parking Lot Lease, the Driveway Lease (each as defined and discussed in NOTE 5.

RELATED PARTY TRANSACTIONS) , as well as certain billboard leases.

The weighted-average incremental borrowing rate of the leases presented in the lease liability as of September 30, 2024, was 4.34 %.

There were no new leases entered into in the third quarter of 2024.

The weighted-average remaining lease term of the leases presented in the lease liability as of September 30, 2024, was 16.65 years.

Cash paid related to the operating leases presented in the lease liability for each of the nine months ended September 30, 2024 and 2023, was $ 1.1 million.

The weighted-average incremental borrowing rate of the leases presented in the lease liability as of March 31, 2025, was 4.34 %.

There were no new leases entered into in the first quarter of 2025.

The weighted-average remaining lease term of the leases presented in the lease liability as of March 31, 2025, was 16.38 years.

Cash paid related to the operating leases presented in the lease liability for each of the three months ended March 31, 2025 and 2024, was $ 0.4 million.

STOCK-BASED COMPENSATION

3 unchanged sentences

Three months ended

Nine months ended

September 30,

September 30,

Food and beverage

6 unchanged sentences

The following is a reconciliation of the number of shares (denominator) used in the basic and diluted earnings per share computations (shares in thousands):

Three months ended September 30,

Effect of dilutive stock options

Nine months ended September 30,

Three months ended March 31,

Effect of dilutive stock options

Excluded from the computation of diluted earnings per share are options where the exercise prices are greater than the weighted assumed proceeds per share as their effects would be anti-dilutive in the computation of diluted earnings per share.

For the three months ended September 30, 2024 and 2023, options for approximately 905 thousand and 749 thousand shares, respectively, were excluded from the computation.

For the nine months ended September 30, 2024 and 2023, options for approximately 910 thousand and 617 thousand shares, respectively, were excluded from the computation.

For the three months ended March 31, 2025 and 2024, options for approximately 837 thousand and 867 thousand shares, respectively, were excluded from the computation.

RELATED PARTY TRANSACTIONS

12 unchanged sentences

If the Company elects not to exercise its renewal option, the Company will be obligated to pay BLI $ 1.6 million.

For each of the three-month periods ended September 30, 2024 and 2023, the Company paid $ 187 thousand in rent, plus $ 17 thousand and $8 thousands, respectively, in operating expenses relating to this lease.

For each of the nine-month periods ended September 30, 2024 and 2023, the Company paid $ 561 thousand in rent, plus $ 26 thousand and $17 thousand, respectively, in operating expenses relating to this lease.

The right of use asset and lease liability balances as of September 30, 2024, recognized in the Consolidated Balance Sheet, was $ 9.5 million.

For each of the three-month periods ended March 31, 2025 and 2024, the Company paid $ 187 thousand in rent, plus $ 17 thousand and $ 8 thousand, respectively, in operating expenses relating to this lease.

The right of use asset and lease liability balances as of March 31, 2025, recognized in the Consolidated Balance Sheet, was $ 9.4 million.

In addition, the Atlantis shares a driveway with the Shopping Center and leases approximately 37,400 square feet from BLI (the “Driveway Lease”) for an initial lease term of 15 years , which commenced on September 30, 2004, at an original annual rent of $ 300 thousand plus common area expenses.

5 unchanged sentences

At the end of the renewal terms, the Company has the option to purchase the leased driveway section of the Shopping Center.

For each of the three-month periods ended September 30, 2024 and 2023, the Company paid $ 101 thousand in rent plus $ 16 thousand and $ 14 thousand, respectively, in operating expenses relating to this lease.

For each of the nine-month periods ended September 30, 2024 and 2023, the Company paid $ 303 thousand in rent plus $ 40 thousand and $ 35 thousand, respectively, in operating expenses relating to this lease.

The right of use asset and lease liability balances as of September 30, 2024, recognized in the Consolidated Balance Sheet , was $ 3.1 million.

The Company occasionally leases billboard advertising, storage space and parking lot space from affiliates controlled by the Farahi Family Stockholders, and paid $ 118 thousand and $ 104 thousand, respectively, for the three-month periods ended September 30, 2024 and 2023, and $ 375 thousand and $ 373 thousand, respectively, for the nine-month periods ended September 30, 2024 and 2023, for such leases.

For each of the three-month periods ended March 31, 2025 and 2024, the Company paid $ 124 thousand and $101 thousand in rent, respectively, plus $ 16 thousand and $ 13 thousand, respectively, in operating expenses relating to this lease.

The right of use asset and lease liability balances as of March 31, 2025, recognized in the Consolidated Balance Sheet , was $ 2.9 million.

The Company occasionally leases billboard advertising, storage space and parking lot space from affiliates controlled by the Farahi Family Stockholders, and paid $ 146 thousand and $ 132 thousand, respectively, for the three-month periods ended March 31, 2025 and 2024, for such leases.

LONG-TERM DEBT

On February 1, 2023, the Company entered into the Fifth Amended and Restated Credit Agreement (the “Amended Credit Facility”) with Wells Fargo Bank, N.A., as administrative agent.

The Amended Credit Facility provides for a $ 100 million line of credit which matures on January 1, 2025.

As of September 30, 2024, the Company had an outstanding principal balance of $ 7.0 million under the Amended Credit Facility.

In addition to other customary covenants for a facility of this nature, as of September 30, 2024, the Company is required to maintain a Total Leverage Ratio (as defined in the Amended Credit Facility) of no more than 2.5 :1 and Fixed Charge Coverage Ratio (as defined in the Amended Credit Facility) of at least 1.1 :1.

As of September 30, 2024, the Company’s Total Leverage Ratio and Fixed Charge Coverage Ratio were 0.04:1 and 109.52:1, respectively.

The interest rate under the Amended Credit Facility is SOFR (the Secured Overnight Financing Rate) plus a margin ranging from 1.00 % to 1.50 %, or a base rate (as defined in the Amended Credit Facility) plus a margin ranging from 0.00 % to 0.50 %.

The applicable margins vary depending on the Company’s leverage ratio.

In addition, SOFR-based loans will incur a 0.10 % credit adjustment spread due to the conversion from LIBOR to SOFR as the new benchmark rate.

As of September 30, 2024, the interest rate was approximately 6.2 %, or SOFR plus a 1.00 % margin.

The Company’s obligations under the Amended Credit Facility are secured by substantially all of the Company’s assets.

For the nine months ended September 30, 2024 and 2023, the Company’s effective tax rate was 22.3 % and 22.6 %, respectively.

On December 31, 2024, the Company entered into the Sixth Amended and Restated Credit Agreement (the “Amended Credit Facility”) with Wells Fargo Bank, N.A., as administrative agent.

The Amended Credit Facility amends and restates the Company’s $ 100.0 million credit facility, dated as of February 1, 2023 (the “Prior Facility”).

The Amended Credit Facility extends the maturity date to January 1, 2028 and removes the lien on real property under the Prior Facility.

Additionally, the interest rate under the Amended Credit Facility is either SOFR (the Secured Overnight Financing Rate) plus a margin of 1.25 % or the Base Rate (as defined in the Amended Credit Facility) plus a margin of 0.25 % .

The Commitment Fee Percentage (as defined in the Amended Credit Facility) was revised to be 0.25 % per annum .

In addition to other customary covenants for a facility of this nature, as of March 31, 2025, the Company is required to maintain a Total Leverage Ratio (as defined in the Amended Credit Facility) of no more than 1.5 :1.0 and Fixed Charge Coverage Ratio (as defined in the Amended Credit Facility) of at least 1.1 :1.0.

As of March 31, 2025, the Company’s Total Leverage Ratio and Fixed Charge Coverage Ratio were 0.0 :1.0 and 49.2 :1.0, respectively.

The interest rate under the Amended Credit Facility is either SOFR (the Secured Overnight Financing Rate) plus a margin of 1.25 % , or a base rate (as defined in the Amended Credit Facility) plus a margin of 0.25 % .

For the three months ended March 31, 2025 and 2024, the Company’s effective tax rate was 22.5 % and 23.3 %, respectively.

Deferred tax assets were evaluated by considering historical levels of income, estimates of future taxable income and the impact of tax planning strategies.

No uncertain tax positions were recorded as of September 30, 2024 and 2023.

No change in uncertain tax positions is anticipated over the next twelve months.

No uncertain tax positions were recorded as of March 31, 2025 and 2024.

STOCK REPURCHASE PLAN

3 unchanged sentences

The actual timing, number and value of shares repurchased under the repurchase program will be determined by management at its discretion and will depend on a number of factors, including the market price of the Company’s stock, general market economic conditions and applicable legal requirements.

In the third quarter of 2024, the Company purchased 131,285 shares of its common stock on the open market for an aggregate amount of $ 9.6 million under its existing Repurchase Plan.

As of September 30, 2024, we have an authorization to purchase up to 1,950,040 shares under the Repurchase Plan.

In the first quarter of 2025, the Company did not purchase any shares of its common stock on the open market.

As of March 31, 2025, we have an authorization to purchase up to 1,950,040 shares under the Repurchase Plan.

LEGAL MATTERS

1 unchanged sentence

(“PCL”) filed a complaint in District Court, City and County of Denver, Colorado, against the Company and its Colorado subsidiaries, in connection with the Company’s now completed expansion of the Monarch Casino Resort Spa Black Hawk (the “Project”).

The case is captioned PCL Construction Services, Inc.

The case is captioned

PCL Construction Services, Inc.

Monarch Growth Inc., et al.

2 unchanged sentences

On December 5, 2019, the Company filed its answer and counterclaim, which alleges, among other items, that PCL breached the construction contract, duties of good faith and fair dealing, and implied and express warranties, made fraudulent or negligent misrepresentations on which the Company and its Colorado subsidiaries relied, and included claims for monetary damages as well as equitable and declaratory relief.

On September 5, 2023, trial commenced in the First Denver Lawsuit in the District Court for the City and County of Denver, Colorado.

The bench trial concluded on November 22, 2023, after 28 total court days.

PCL and the Company each submitted proposed Findings of Fact, Conclusions of Law and Order for the Court’s consideration on February 7, 2024.

The Parties are awaiting a decision by the Court, and we remain unable to determine the probability of the outcome or reasonably estimate the loss or gain, if any, or determine when the court will resolve the claims the parties tried.

Prior to the trial of the First Denver Lawsuit, on March 26, 2021, PCL filed a mechanics’ lien foreclosure action in the District Court, County of Gilpin, Colorado, against the Company and its Colorado subsidiaries, also in connection with the Project.

On March 26, 2021, PCL filed a mechanics’ lien foreclosure action in the District Court, County of Gilpin, Colorado, against the Company and its Colorado subsidiaries, in connection with the Company’s now completed expansion of the Monarch Casino Resort Spa Black Hawk.

The case is captioned PCL Construction Services, Inc., v.

Monarch Growth Inc., et al.

Monarch Growth Inc., et al., Case No.

2021CV30006 (the “Gilpin Lawsuit”).

3 unchanged sentences

Effective May 10, 2021, PCL filed its second amended complaint, joining more such parties as defendants.

Many of the Company’s co-defendants have filed cross claims against Monarch for foreclosure of their own mechanics’ liens and related claims, including unjust enrichment.

Many of the Company’s co-defendants have filed cross claims against Monarch for foreclosure of mechanics’ liens and related claims, including unjust enrichment.

Monarch filed its answer and counterclaims to PCL’s second amended complaint in the Gilpin Lawsuit on July 15, 2021, but a trial of the matter has not been set.

3 unchanged sentences

We are currently unable to determine the probability of the outcome or reasonably estimate the loss or gain, if any.

On February 9, 2023, Monarch Growth, Inc., Monarch Casino & Resort, Inc., and Monarch Black Hawk, Inc.

filed a complaint in District Court, City and County of Denver, Colorado, against PCL, in connection with the Project.

On February 9, 2023, Monarch Growth, Inc., Monarch Casino & Resort, Inc.

and Monarch Black Hawk, Inc.

filed a complaint in District Court, City and County of Denver, Colorado, against PCL, in connection with the Company’s now completed expansion of the Monarch Casino Resort Spa Black Hawk.

The case is captioned Monarch Growth Inc., et al., v.

PCL Construction Services, Inc.

PCL Construction Services, Inc., Case No.

2023CV30458 (the “Second Denver Lawsuit”).

The complaint alleges, among other things, that PCL breached the construction contract, duties of good faith and fair dealing, and implied and express warranties based on defective and/or nonconforming construction work at the project, and includes claims for monetary damages as well as equitable and declaratory relief.

Monarch alleges that the claims asserted in the Second Denver Lawsuit were neither known nor reasonably discoverable in time to be included in the First Denver Lawsuit.

On March 26, 2024, the Court set the Second Denver Lawsuit for a seven-day bench trial to commence on April 7, 2025.

The parties are conducting discovery, and we are currently unable to determine the probability of the outcome or reasonably estimate the loss or gain, if any.

The Company recognized $ 0.6 million and $ 4.1 million in construction litigation expense relating to these lawsuits for the nine months ended September 30, 2024 and 2023, respectively, which is included in Other operating items, net on the Consolidated Statements of Income.

On April 18, 2023, at the parties’ joint request, the Court ordered the Second Denver Lawsuit stayed for ninety days from the date of the stay order until July 17, 2023.

Following the expiration of the stay and the filing of a motion to dismiss by PCL, Monarch amended its complaint in the Second Denver Lawsuit.

On January 22, 2025, the Court granted Monarch’s motion to file a second amended complaint and set the trial of the matter for a 7-day trial beginning on August 18, 2025.

On September 5, 2023, trial commenced in the First Denver Lawsuit in the District Court for the City and County of Denver, Colorado.

The bench trial concluded on November 22, 2023, after 28 total court days.

PCL and the Company each submitted proposed Findings of Fact, Conclusions of Law and Order for the Court’s consideration on February 7, 2024.

On February 14, 2025, the Court, issued its decision in the litigation between the Company and PCL.

The Court awarded damages in favor of PCL of $ 74,772,551 for its claims of breach of contract, breach of implied warranty, and breach of the duty of good faith and fair dealing and $ 144,894 to the Company for its negligence and gross negligence counterclaims against PCL.

The Court entered a single judgment in the amount of the net difference between the cross-judgment and awarded PCL a principal judgment amount of $ 74,627,657 (the “Judgment”).

On February 28, 2025, PCL filed with the court a motion to supplement the Judgment with prejudgment interest.

Monarch plans to dispute the computation and amount of interest sought by PCL and has filed an opposition to the motion.

PCL also filed a bill of costs and a motion for attorneys’ fees.

Monarch has filed an opposition, challenging PCL’s entitlement to such fees and costs, as well as the computation and amount of the fees and costs PCL seeks.

Monarch anticipates appealing the Judgment and has posted a bond to stay enforcement of the Judgment pending any such appeal.

The Company recognized $ 0.4 million and 0.5 million in construction litigation expense relating to these lawsuits for the three months ended March 31, 2025 and 2024, respectively, which is included in Other operating items, net on the Consolidated Statements of Income.

From time to time, we may be subject to other legal proceedings and claims in the ordinary course of business.

4 unchanged sentences

These dividends will be paid quarterly on the 15th day of the third month of the applicable calendar quarter (or, if such date is not a trading day, then the first trading day immediately thereafter such date) to those stockholders of record on the 1st day of the third month of the applicable calendar quarter (or, if such date is not a trading day, then the first trading day immediately thereafter such date).

On September 15, 2024 , the Company paid a cash dividend of $ 0.30 per share of its outstanding common stock, to stockholders of record on September 1, 2024 .

For the nine months ended September 30, 2024, the Company paid total of $ 0.90 per share cash dividend.

On March 15, 2025 , the Company paid a cash dividend of $ 0.30 per share of its outstanding common stock, to stockholders of record on March 1, 2025 .

For the three months ended March 31, 2025, the Company paid total of $ 0.30 per share cash dividend.

The cash dividend was part of the previously announced annual cash dividend of $ 1.20 per share payable in quarterly payments.

On October 23, 2024 , the Company announced a cash dividend of $ 0.30 per share of its outstanding common stock, payable on December 15, 2024 , to stockholders of record on December 1, 2024 .

On April 22, 2025 , the Company announced a cash dividend of $ 0.30 per share of its outstanding common stock, payable on June 15, 2025 , to stockholders of record on June 1, 2025 .

This cash dividend is part of the previously announced annual cash dividend of $ 1.20 per share payable in quarterly payments.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.