Monarch Casino & Resort, Inc. · NASDAQ:MCRI

Monarch Casino & Resort — Q4 2018 Earnings Presentation

32 slides from Monarch Casino & Resort's earnings presentation, Mar 18, 2019

1. Slide 1: Investor Presentation Fourth Quarter 2018

   Investor Presentation Fourth Quarter 2018

2. 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,” “

3. Slide 3: Company Overview

   Company Overview

4. Slide 4: Summary

   Summary  Excellent economic fundamentals in Reno and Black Hawk markets  Significant outside business investment in the Reno area (Tesla, Apple, Amazon, Google, Switch, Jet.com, Zulily, etc.)  Denver economy is one of the nation’s strongest  Monarch’s properties have the premier locations in bot

5. Slide 5: Regional Summary

   Regional Summary Reno, NV  Atlantis has been continually upgraded and expanded  Committed to outstanding restaurants; redesigned and upgraded coffee shop (2015), buffet (2016) and eatery (2017)  Added 300 new surface parking spaces  Minimal forward maintenance capex requirements Black Hawk, CO 

6. Slide 6: Historic Milestones

   Historic Milestones 1970s 1980s 1990s 2000s 2010s 1972: Golden Door Motel 1993: Initial stock offering raises Phase IV - Atlantis Black Hawk purchased by the Farahi family $17mm of expansion capital 2Q08: Most recent expansion is 2Q12: Acquired Riviera Black Hawk  142 rooms and a coffee shop comple

7. Slide 7: Positive Market Characteristics for the Reno Market

   Positive Market Characteristics for the Reno Market Bloomberg – “Boise and Reno Capitalize on the California Real Estate Exodus” “For some Californians, the state’s punishing housing costs, high taxes, and constant threat of natural disaster have all become too much. They’re making their escape to a

8. Slide 8: Positive Market Characteristics for the Denver Market

   Positive Market Characteristics for the Denver Market Colorado Real Estate Journal – “Headquarters activity in Denver remains robust ” “The future is bright for Denver’s ability to attract and retain headquarters. Ultra Petroleum, Maxar Technologies and Vertafore recently announced out-of-state head

9. Slide 9: Atlantis Casino Resort Spa

   Atlantis Casino Resort Spa

10. Slide 10: Atlantis Property Overview

    Atlantis Property Overview  Opened in 1991  Fresh, award-winning facility  USA Today Travel - #1 casino outside Las Vegas  AAA - “Four Diamond” rating  Forbes - Four-Star Award for Spa Atlantis  Only venue in Northern Nevada with this rating  TripAdvisor - Consistently rated #1 Reno resort, w

11. Slide 11: Positioned Near More Affluent South Reno Communities

    Positioned Near More Affluent South Reno Communities  Ideal location in heart of south Reno’s restaurant, shopping and convention district  ~3 miles south of downtown in more affluent area  ~3 miles from Reno-Tahoe International Airport  Close to Reno’s main north/south artery, Highway 395  ~40

12. Slide 12: Reno Market Growth Drivers

    Reno Market Growth Drivers  Reno’s diversifying to a broader base of industries including healthcare, manufacturing, distribution and technology as well as a variety of entrepreneurial startups  Tesla Motors announced the construction of a $5 billion, 10 million square foot “Gigafactory” which is

13. Slide 13: Atlantis Casino Market Share

    Atlantis Casino Market Share 300% 17%  Over the last 22 years, Atlantis has continued to outperform 250% 15% Indexed gaming revenue (1996=0%) the greater Reno-Sparks market 14.9% by focusing on providing best- 200% 13% MCRI market share in-class experiences, amenities, and service 150% 11% 100% 9%

14. Slide 14: Atlantis Hotel Occupancy and Cash ADR

    Atlantis Hotel Occupancy and Cash ADR1 Total Occupancy Cash ADR 100% $140 89% 89% 89% $127 90% $120 $117 $115 $111 80% $106 72% 70% $99 69% $100 70% 60% $80 50% $60 40% 30% $40 20% $20 10% 0% $0 2016 2017 2018 2016 2017 2018 Reno-Sparks Atlantis Reno-Sparks Atlantis Atlantis outperforms the market i

15. Slide 15: Monarch Casino Black Hawk

    Black Hawk ° & ”n © 1S) nt i=) — © < Oo =

16. Slide 16: Monarch Property Overview

    Monarch Property Overview  Acquired in April 2012  Existing facility redesigned and upgraded from June 2012 to August 2015  Broke ground on major expansion in January 2017 with substantial completion expected 3Q19 Property Amenities  32,000 square foot casino with ~748 slots and 14 tables  Buff

17. Slide 17: Property Location

    Property Location  ~35 miles west of Denver  ~35 miles southwest of Boulder  ~20 miles west of Golden  ~77 miles east of Vail Black Hawk  Strategically located at the entrance to Black Hawk  First property encountered by visitors arriving from Denver and other population centers to the east Sl

18. Slide 18: Black Hawk Gaming Market

    Black Hawk Gaming Market  15 casinos Property Level Detail  6,932 slot machines Property Location Slots1 Tables1 Rooms2 Ameristar (PENN) Black Hawk 1,191 40 536  147 table games The Lodge (JACENT) Black Hawk 970 25 50 Isle of Capri (ERI) Black Hawk 897 22 238  Only four casinos offer more Monarc

19. Slide 19: Monarch Black Hawk Market Share

    Monarch Black Hawk Market Share  Monarch Casino Black Hawk 12.9% 13.0% 70% market share has dramatically Black Hawk Indexed gaming revenue (2012 Q1=0%) construction 12.5% 60% increased since the acquisition from 2014 Q1 MCRI market share (TTM) to 2015 Q3 12.0% 50% 11.5% 40%  TTM market share has i

20. Slide 20: Rationale for Further Investment in Black Hawk

    Rationale for Further Investment in Black Hawk  Denver metro area is an attractive target market  Population of more than 3 million  Median household income of $76,643 is 30% above the national average  4.8% median household income growth in 2017 ranks second amongst large metro areas  Fourth l

21. Slide 21: Black Hawk Market Underserved by Hotel Rooms

    Black Hawk Market Underserved by Hotel Rooms 2018 Gross Gaming Revenue per Hotel Room $1,200 $1,000 $968 $800 $ in 000s $631 $600 $400 $174 $200 $121 $81 $60 $49 $44 $0 Black Hawk has the highest GGR per hotel room nationwide at $631K, and is second only to Macau GGR per hotel room worldwide Source:

22. Slide 22: Black Hawk Total Gaming Revenue

    Black Hawk Total Gaming Revenue Black Hawk Market Performance $700 $650 $621 $623 $610 Annual revenue ($ in millions) $596 $600 $581 $554 $24 $559 $561 $551 $553 $550 $532 $22 $530 $90 $524 $524 $85 $95 $22 $80 $20 $506 $21 $509 $61 $65 $500 $19 $25 $44 $62 $66 $70 $478 $19 $557 $533 $524 $531 $528

23. Slide 23: Ameristar Black Hawk Case Study

    Ameristar Black Hawk Case Study Annual Adjusted EBITDA and Capital Spend for Ameristar Black Hawk1 $70 Casino Hotel Smoking Amendment remodel construction ban 50 begins commences & $58.8 $60 $56.0 Hotel opens $53.0 $50 Adj EBITDA ($ in millions) $40 $35.5 $28.8 $30 $20.9 $21.9 $20 $10 $6.7 $1.0 $0 2

24. Slide 24: Monarch Existing Facility Upgrades

    Monarch Existing Facility Upgrades Original Cabaret Stage Phase 1 Phase 2 Phase 3 24

25. Slide 25: Hotel Tower/Casino Expansion

    Hotel Tower/Casino Expansion New Parking Structure  9-story, ~1,350 space garage now open  Increased on-site parking from ~500 spaces to ~1,500 spaces Hotel Tower/Casino Expansion  Groundbreaking held in February 2017  Project includes:  23-story tower with 516 hotel rooms  Roughly double the

26. Slide 26: Hotel Tower/Casino Expansion

    Hotel Tower/Casino Expansion Expansion Rendering South View Rendering New Parking Structure - Complete Exterior Pool Rendering 26

27. Slide 27: Hotel Tower/Casino Expansion: Current Progress

    Hotel Tower/Casino Expansion: Current Progress 27

28. Slide 28: Monarch Black Hawk Master Plan Budget and Timeline

    Monarch Black Hawk Master Plan Budget and Timeline Budget Total Spent Through Left to Estimated Cost December 31, 2018 Spend Completion Date $ in millions I. Existing Facility Monarch Casino Black Hawk (1) $76 $76 - Completed Exterior 2Q19 Existing Facility Upgrade (2)(3) $34-$36 $25 $9-$11 Interior

29. Slide 29: Monarch Consolidated Results

    Monarch Consolidated Results

30. Slide 30: Income Statement

    Income Statement $300 27% Black Hawk acquired 04/26/12 26% $250 25% $200 24% $ in millions $150 23% 22% $100 21% $50 20% $0 19% 2010 2011 2012 2013 2014 2015 2016 2017 2018 Net Revenue $136.4 $134.5 $163.3 $188.7 $187.8 $202.2 $217.0 $230.7 $240.3 Adj. EBITDA $29.5 $29.3 $36.2 $48.5 $43.5 $50.0 $55.

31. Slide 31: Strong Balance Sheet

    Strong Balance Sheet Total Debt Leverage Ratio $100 $94.5 2.5x 2.2x $90 $81.1 $80 2.0x 1.9x Total Debt/LTM Adjusted EBITDA $70 1.6x $60 1.5x $ in millions $53.8 $48.5 $50 $46.3 1.1x 1.1x $40.9 1.0x $40 1.0x 0.8x 0.8x $28.6 $30 $24.7 $26.2 $26.2 0.5x 0.5x $20 0.5x $10 $0 0.0x 2009 2010 2011 2012 2013

32. Slide 32: Summary

    Summary  Optimally positioned in two of the country’s most robust markets, with 4Q18 same store Y/Y gaming revenue growth of 4.2%  Monarch has consistently invested in and upgraded Atlantis to ensure continued market leadership  Strong Black Hawk results despite construction disruption  Market s

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