Monarch Casino & Resort, Inc. · NASDAQ:MCRI
Monarch Casino & Resort — Wells Fargo Gaming Conference 2013
43 slides from Monarch Casino & Resort's conference presentation, Dec 6, 2013
Slide 1: Investor Meeting Presentation – December 6, 2013
Investor Meeting Presentation – December 6, 2013 Atlantis Casino Resort Spa in Reno, Nevada Monarch Casino in Black Hawk, Colorado 1
Slide 2: Forward-looking information
Forward-looking information This presentation contains certain forward-looking information that generally can be identified by the context of the statement or the use of forward-looking terminology, such as “believes,” “estimates,” “anticipates,” “intends,” “expects,” “plans,” “is confident that,” “
Slide 3: Table of contents
Table of contents 1) Monarch company history 2) Monarch Casino Black Hawk Review 3) Atlantis Casino Resort Spa Review 4) Monarch Consolidated Results 5) Conclusion 6) Questions and Answers 3
Slide 4: Conclusion
Conclusion Summary Strong results from Monarch Casino Black Hawk during our first year of ownership Increased Adjusted EBITDA by 39% within 11 months of ownership Increased Adjusted EBITDA by 55% within 14 months of ownership Difficult market conditions expected to continue in Northern Nevada due to
Slide 5: Company history: Organizational chart
Company history Organizational chart1 Monarch Casino & Resort, Inc. Golden Road Motor Inn, Inc. Monarch Growth Inc. Atlantis Casino Resort Spa Monarch Black Hawk, Inc. HoldCo Monarch Casino Black Hawk Sub Owned property 1) Does not show non-operating subsidiaries. 5
Slide 6: Company history: Historic milestones
Company history Historic milestones 1970s 1980s 1990s 2000s 2010s 1972: Golden Door Motel 1993: Initial stock offering raises Phase IV - Atlantis Acquisition of Riviera Black Hawk purchased by the Farahi family: $17mm of expansion capital 2008 Q2: When the most recent 2012 Q2: Acquisition of Riviera
Slide 7: Table of contents
Table of contents 1) Monarch company history 2) Monarch Casino Black Hawk Review 3) Atlantis Casino Resort Spa Review 4) Monarch Consolidated Results 5) Conclusion 6) Questions and Answers 7
Slide 8: Acquisition transaction summary
Monarch Casino Black Hawk Acquisition transaction summary Transaction closed April 26, 2012 Purchase price of $76.0mm cash ($73.9mm net after $2.1mm of cash) Funded by new $100mm revolving credit facility TTM Adjusted EBITDA at time of transaction announcement was $10.3mm which represents a 7.2x pur
Slide 9: Financial Review: Income statement
Monarch Casino Black Hawk1 Financial Review Income statement Property Net Revenue Property Adjusted EBITDA2 $50 $46.3 $18 $15.9 $42.3 Annual $ in millions Annual $ in millions $45 $16 $40 $39.8 $39.3 $14 $12.9 $35 $12 $10.0 $8.9 $30 $10 $25 $8 $20 $6 $15 $4 $10 $2 2010 2011 2012 2013 Q3 2010 2011 20
Slide 10: MCRI has dramatically increased Adj. EBITDA
Monarch Casino Black Hawk Financial Review MCRI has dramatically increased Monarch Casino Black Hawk Adj. EBITDA TTM Adj. EBITDA growth since acquisition from Riviera $20 LTM EBITDA ($ in millions) 39% higher than 55% higher than $15.9 $14.3 $15 pre-acquisition pre-acquisition $10.3 $10 $5 $0 Pre-ac
Slide 11: Significant market share gains since acquisition
Monarch Casino Black Hawk Financial Review Significant market share gains since acquisition Trailing twelve month 9.0% 9.0% Riviera Monarch Monarch Casino Black ownership ownership Hawk market share has 8.8% 8.8% steadily increased since the acquisition 8.6% 8.6% Market share has 8.4% 8.4% increased
Slide 12: Local metropolitan area population
Monarch Casino Black Hawk Local metropolitan area population Black Hawk / Central City Black Hawk is located 35 miles west of the Denver metro area (2.6 million people1), 35 miles southwest of Boulder, 20 miles west of Golden, and 77 miles east of Vail2 Source: 1) US Census Bureau (www.census.gov);
Slide 13: Black Hawk-Central City gaming market
Monarch Casino Black Hawk Black Hawk-Central City gaming market Commentary Property level detail 1 1 2 Property Location Slots Tables Rooms Comprised of 26 casinos Ameristar (PNK) Black Hawk 1,476 56 536 Isle of Capri (ISLE) Black Hawk 1,080 33 238 10,405 slot machines and 240 table The Lodge (JACEN
Slide 14: Black Hawk gaming market
Monarch Casino Black Hawk Black Hawk gaming market Slot count > 700 Bullwhackers 500 to 700 Wild Card Saloon < 500 Bull Durham Black Hawk Station Ameristar Entrance To Black Hawk Central City Market Saratoga Mardi Gras Monarch Canyon Grand Plateau Gilpin Red Dolly The Lodge Golden Lady Luck Gates Go
Slide 15: Black Hawk-Central City market performance
Monarch Casino Black Hawk Black Hawk-Central City market performance Black Hawk-Central City total gaming revenue1 $700 $700 $661 $650 $27 $633 $600 $629 $625 $619 $604 $25 Annual revenue ($ in millions) YTD revenue ($ in millions) $594 $483 $600 $69 $473 $500 $577 $577 $25 $576 $66 $67 $52 $556 $48
Slide 16: Black Hawk-Central City vs. Reno-Sparks market performance
Monarch Casino Black Hawk Black Hawk-Central City vs. Reno-Sparks market performance Black Hawk-Central City vs. Reno-Sparks total gaming revenue The Black Hawk-Central $1,200 City market has $1,000 generally increased over $ in millions $800 time, while Reno-Sparks $600 has been in long-term $400 d
Slide 17: Gaming revenue per unit comparison
Monarch Casino Black Hawk Black Hawk-Central City vs. Reno-Sparks gaming revenue per unit Slots WPD $200 $142 $143 $145 $145 $150 $128 $133 $113 Slot WPD $98 $94 $93 $94 $93 $100 $50 $0 2008 2009 2010 2011 2012 2013 Sep LTM Black Hawk-Central City Reno-Sparks Table games WPD (excludes player banked
Slide 18: Market overview
Monarch Casino Black Hawk Market overview Consideration Commentary 35 miles to Denver metro area (2.6 million people1) No tribal casino competition Only tribal casinos are in far southwest CO 350 to 400 miles drive time from Denver Desirable regional market Denver metro area median household income
Slide 19: Market overview
Monarch Casino Black Hawk Market overview Consideration Commentary Single-level gaming floor seamlessly connected to six-floor parking garage Among leading facilities in Fifth largest casino in Black Hawk-Central City by number of slots Black Hawk Shortest “handle to handle” casino as defined by dis
Slide 20: Redesign and master development expansion plan
Monarch Casino Black Hawk Redesign and master development expansion plan Completed property enhancements All new 250 seat buffet All casino floor restrooms The master development plan: Redesign of entire existing facility Nearly double the existing casino space 507 room hotel tower Resort quality sp
Slide 21: Current facility
Monarch Casino Black Hawk Current facility 21
Slide 22: Redesigned rendering
Monarch Casino Black Hawk Redesigned rendering 22
Slide 23: Current facility
Monarch Casino Black Hawk Current facility 23
Slide 24: Redesigned rendering
Monarch Casino Black Hawk Redesigned rendering 24
Slide 25: Redesigned rendering
Monarch Casino Black Hawk Redesigned rendering 25
Slide 26: Redesigned rendering
Monarch Casino Black Hawk Redesigned rendering 26
Slide 27: Significant Adj. EBITDA gains at Ameristar Black Hawk
Monarch Casino Black Hawk Significant Adj. EBITDA gains at Ameristar Black Hawk Annual Adjusted EBITDA and capital spend for Ameristar Black Hawk $70 Casino Hotel Smoking Amendment remodel construction ban 50 begins commences & $58.8 $60 $56.0 Hotel opens $53.0 Adj EBITDA ($ in millions) $50 $40 $35
Slide 28: Table of contents
Table of contents 1) Monarch company history 2) Monarch Casino Black Hawk Review 3) Atlantis Casino Resort Spa Review 4) Monarch Consolidated Results 5) Conclusion 6) Questions and Answers 28
Slide 29: Atlantis expansion and upgrade
Company history Atlantis expansion and upgrade Facility is very fresh and was recently expanded and upgraded $95 million of capital improvements completed in 2009 Awarded AAA’s “Four Diamond Rating” in August 2012 (less than 5% of AAA rated properties achieve “Four Diamond”) The new amenities have b
Slide 30: New amenity highlights
Company history New amenity highlights Established as one of the finest restaurants in northern Nevada Atlantis Steakhouse Recipient of AAA Four Diamond Award Established as a locals favorite Manhattan Deli & Popular with local business and community leaders Restaurant 2012 write was 31% higher than
Slide 31: Atlantis financial review
Atlantis financial review Income statement Property Net Revenue Property Adjusted EBITDA1,2 $150 $40 $145 Annual $ in millions $35.7 Annual $ in millions $139.8 $35 $33.3 $140 $136.4 $33.5 $134.5 $133.6 $30.1 $135 $30 $130 $125 $25 $120 2010 2011 2012 2013 Q3 LTM $20 2010 2011 2012 2013 Q3 LTM LTM Q
Slide 32: Atlantis financial review: RevPAR drivers
Atlantis financial review RevPAR drivers Occupancy1 100% 84.1% 87.8% 86.2% 91.1% 62.0% 65.2% 63.7% 67.8% 50% 0% 2010 2011 2012 YTD Q3 2013 MCRI Reno-Sparks ADR1,2 $100 $80.31 $74.83 $87.44 $82.61 $75.47 $72.30 $77.01 $75.00 $50 $0 2010 2011 2012 YTD Q3 2013 MCRI Reno-Sparks Occupancy and ADR have re
Slide 33: The Reno-Sparks market: competitors
The Reno-Sparks market The competitors: recent developments Heavy promotional environment in Reno-Sparks Downtown properties losing share to Atlantis, Peppermill and GSR Increased competition from central California casinos Red Hawk casino opened in December 2008 2,000 slots, 75 tables, no hotel roo
Slide 34: The Reno-Sparks market: competitors (cont'd)
The Reno-Sparks market The competitors: recent developments (cont’d) Red Fox Existing Sherwood Valley Colusa Coyote Valley Robinson Proposed Pinoleville (on reservation) Konocti Vista Enterprise Sho-Ka-Wah Twin Pine Thunder Valley Proposed (off reservation) River Rock Cache Creek Red Hawk Under Cons
Slide 35: Atlantis casino market share
The Reno-Sparks market Atlantis casino market share MCRI and Reno-Sparks indexed gaming revenue growth Over the last 17 years, 300% 17% Atlantis construction disruption Atlantis has continued Indexed gaming revenue (1996=0%) 250% from 2007 Q3 to 2008 Q2 15% to outperform the Reno-Sparks market by 20
Slide 36: Table of contents
Table of contents 1) Monarch company history 2) Monarch Casino Black Hawk Review 3) Atlantis Casino Resort Spa Review 4) Monarch Consolidated Results 5) Conclusion 6) Questions and Answers 36
Slide 37: Consolidated results: Income statement
Monarch consolidated results Income statement Net Revenue Adjusted EBITDA1,2 Black Hawk acquired 04/26/12 $200 $186.1 $60 $163.3 $47.3 $50 Annual $ in millions Annual $ in millions $150 $136.4 $134.5 $40 $36.2 $29.5 $29.3 $100 $30 $20 $50 $10 $0 $0 2010 2011 2012 2013 Q3 LTM 2010 2011 2012 2013 Q3 L
Slide 38: Diversification of net revenue and EBITDA sources
Monarch property results (excludes corporate overhead) Diversification of net revenue and EBITDA sources 2013 Q3 LTM Net Revenue by property1 2013 Q3 LTM EBITDA by property2 $186.1mm $51.6mm $46.2mm, 25% $15.9mm, 31% $35.7mm, $139.9mm, 69% 75% Reno Black Hawk Reno Black Hawk 25% of MCRI net revenue
Slide 39: Strong balance sheet position
Atlantis financial review Strong balance sheet position Total debt LTM leverage ratio $100 2.5x $90 $81.1 2.0x $80 2.0x 1.9x $70 Total debt / adjusted EBITDA $60 $56.3 $ in millions 1.5x $48.5 $50 1.2x $40 1.0x 1.0x $28.6 0.8x $30 $24.7 $20 0.5x $10 $0 2009 2010 2011 2012 2013 Q3 0.0x 2009 2010 2011
Slide 40: Kerzner litigation settled
Monarch Events Kerzner litigation settled Kerzner filed suit in May 2006 to prohibit: MCRI’s use of “Atlantis” name for casino services outside of Reno Specific prohibition of use by MCRI of “Atlantis” in Las Vegas Total cost of the litigation was $5.3 million The settlement: MCRI has ownership of t
Slide 41: Table of contents
Table of contents 1) Monarch company history 2) Monarch Casino Black Hawk Review 3) Atlantis Casino Resort Spa Review 4) Monarch Consolidated Results 5) Conclusion 6) Questions and Answers 41
Slide 42: Conclusion
Conclusion Summary Strong results from Monarch Casino Black Hawk during our first year of ownership Increased Adjusted EBITDA by 39% within 11 months of ownership Increased Adjusted EBITDA by 55% within 14 months of ownership Difficult market conditions expected to continue in Northern Nevada due to
Slide 43: Table of contents
Table of contents 1) Monarch company history 2) Monarch Casino Black Hawk Review 3) Atlantis Casino Resort Spa Review 4) Monarch Consolidated Results 5) Conclusion 6) Questions and Answers 43
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