Monarch Casino & Resort, Inc. · NASDAQ:MCRI
Monarch Casino & Resort — Investor Presentation (February 2021)
35 slides from Monarch Casino & Resort's investor presentation, February 2021
Slide 1: Investor Presentation
Investor Presentation February 2021
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: Business Recovery Ongoing
Business Recovery Ongoing Majority of Company’s revenues come from guests who live within an hour drive of Atlantis and Black Hawk • Nearly all of Monarch Black Hawk’s revenues come from drive-in guests • Approximately 80% of Atlantis revenues come from drive-in guests • Drive-to visitation could be
Slide 4: Investment Summary
Investment Summary Prime locations and assets Results-oriented management with strong operating track record • Record gaming market share at both properties Strong underlying economic fundamentals in both markets • Reno’s population growth of 8.1% from 2014 to 2019 (national average: 3.1%) is attrib
Slide 5: Company History
Company History 2008 1994 1999 Phase IV – Atlantis 1991 Phase II - Atlantis Phase III - Atlantis • Property features: Phase I – Atlantis • Second high-rise tower • Third high-rise tower • 969 rooms, since • First high-rise tower opens, adding: opens, adding: reduced to 818 opens • 283 rooms • 388 ro
Slide 6: Monarch Casino Resort Spa Black Hawk
Monarch Casino Resort Spa Black Hawk
Slide 7: Monarch Casino Resort Spa Black Hawk - Overview
Monarch Casino Resort Spa Black Hawk - Overview Acquired in 2012 • Transaction price of $76.0 million • Acquisition multiple of 6.7x reduced to 4.9x after first year of Monarch ownership Amenities pre-expansion include: • 32,000 square foot casino with ~743 slots and 14 tables • Buffet restaurant an
Slide 8: Resort / Casino Expansion
Resort / Casino Expansion Monarch Casino Resort Spa began phased opening in 4Q20 Financed through combination of cash flow from operations and Company’s existing credit facility Amenities at completed resort to include: • All new 23-story tower with 516 hotel rooms (20% suites) • ~60,000 square foot
Slide 9: Slide 9
Slide 10: Black Hawk Gaming Market
Black Hawk Gaming Market Pre-COVID closure, market1 consisted of: • 15 casinos • Only four casinos offered more than 500 slot machines • 6,837 slot machines • 149 table games • 988 hotel rooms spread across four gaming facilities • Largest is Ameristar at 536 hotel rooms Monarch Casino Resort Spa is
Slide 11: Prime Property Location
Slot count Z Casino > 600 300 to 600 Sasquatch Bull Durham < 300 Prime Property Location Saratoga Gilpin Wild Card Saloon Red Dolly Ameristar Easy access from Front Range population centers and heavily- The Lodge trafficked I-70 ski corridor Mardi Gras Monarch Casino Resort Spa Golden Gates • ~35 mi
Slide 12: Black Hawk Market Share
Black Hawk Market Share 90% Black Hawk 15.5% 16% construction 15% Indexed gaming revenue (2012 Q1=0%) 70% from 1Q14 to Monarch Casino Resort Spa has grown market share for 26 3Q15 straight quarters 14% MCRI market share (TTM) 50% • TTM market share was 15.5% as of December 31, 2020 13% 30% • Represe
Slide 13: Rationale for Black Hawk Investment
Rationale for Black Hawk Investment Denver metro area an attractive target market • Population of more than 3 million • Median household income of $85,6411 is 30% above the national average • Sixth largest source of air traffic to Las Vegas in 2019 (originating passengers only) Black Hawk underserve
Slide 14: Black Hawk Market Underserved by Hotel Rooms
Black Hawk Market Underserved by Hotel Rooms 2019 Gross Gaming Revenue per Hotel Room $1,000 $931 $900 $800 $700 $621 $600 $500 $400 $300 $230 $200 $89 $86 $100 $59 $49 $44 $0 Macau Black Hawk Atlantic City Lake Charles MS Gulf Coast Shreveport / Bossier Reno / Sparks Las Vegas Strip BlackMacau Hawk
Slide 15: Denver Metro Area Provides Significant Air Traffic to Las Vegas
Denver Metro Area Provides Significant Air Traffic to Las Vegas Top Las Vegas Feeder Markets (2019 Originating Passengers in Thousands) 1,800 1,600 1,565 1,521 1,400 1,200 1,000 815 800 690 671 636 600 510 502 477 444 400 200 0 Los Angeles San Francisco Chicago Seattle Dallas Denver New York Washing
Slide 16: Colorado Bet Limit Changes
Colorado Bet Limit Changes Amendment 77 passed statewide on November 3 • Industry led initiative • Concurrent local ballot passed authority to City Council of Black Hawk to approve changes • On December 1, 2020, City Council of Black Hawk approved changes that will go into effect on May 1, 2021 • Re
Slide 17: Atlantis Casino Resort Spa Reno
Atlantis Casino Resort Spa Reno
Slide 18: Atlantis Overview
Atlantis Overview Award-winning facility • TripAdvisor - Rated #1 Reno resort last 7 years, consistently boasting the majority of city’s top 5 restaurants • USA Today Travel - #1 casino outside Las Vegas • AAA - “Four Diamond” rating • Forbes - Four-Star Award for Spa Atlantis (only four-star venue
Slide 19: Prime Reno Location
Silver Legacy Circus Circus Rail City Western Village Ramada Reno Prime Reno Location Eldorado Harrah’s Nugget Club Cal Neva Baldini’s Ideally located in the heart of south Reno’s restaurant, shopping Grand Sierra and convention district Boomtown Reno, Gold Dust West & • ~3 miles south of downtown i
Slide 20: Fast-Growing Reno Market
Fast-Growing Reno Market Population approaching 500,000 • Reno metro’s population has grown 8.1% in the past five years (national average: 3.1%) Reno diversifying to broader base of industries • Expanded list of industries include manufacturing, distribution and technology Reno undertaking significa
Slide 21: Positive Market Characteristics
Positive Market Characteristics “Reno, NV, moves up seven spots to secure fourth place. Its job growth, wage growth, and high-tech GDP growth are among the best of the large metros. Even more impressive, Reno’s one-year job growth and short-term job growth top all large metros in our rankings.” • “B
Slide 22: Continuous Market Share Gains
300% 16.1% 17% Continuous Market Share Gains 250% 15% Indexed gaming revenue (1996=0%) 200% 13% Atlantis Casino Resort Spa has consistently outperformed the MCRI market share greater Reno-Sparks market for the last 24 years 150% 11% • Primary focus has always been providing best-in-class and best-in
Slide 23: Atlantis Enhancements
Atlantis Enhancements All-new enhancements from 4Q20 • Atrium Cocktail Lounge • Red Bloom serving authentic Asian cuisine 2021 enhancements in process • Standard room and bathroom redesign and upgrades • All-new top-tier suites • Conveyance system improvements • New retail outlet
Slide 24: Atlantis Hotel Occupancy and Cash ADR
Atlantis Hotel Occupancy and Cash ADR Total Occupancy Cash ADR(1) 100% $140 $138 89% 87% 90% $135 80% 70% 71% $130 70% 67% $127 $125 $124 60% 53% $122 50% $120 $118 40% $115 $115 30% $110 20% 10% $105 0% $100 2018 2019 2020 2018 2019 2020 Reno-Sparks Atlantis Reno-Sparks Atlantis Atlantis occupancy
Slide 25: Sports Betting
Sports Betting Monarch owns & operates its sportsbook—a unique approach • App content and lines managed internally by Reno-based bookmaking team • Atlantis Race and Sports mobile app launched in Nevada in 2015 • BetMonarch mobile app launched in Colorado in May 2020 as one of state’s first mobile sp
Slide 26: Leverage Loyalty Program
Leverage Loyalty Program Rebranded as Monarch Rewards in June 2019 Atlantis Casino Resort Spa Reno has benefited from cross property play since the Black Hawk casino was purchased in 2012 The new Monarch Casino Resort Spa Black Hawk will now benefit from the loyal Atlantis database The ‘One Card’ pl
Slide 27: Balance Sheet Management
Balance Sheet Management $179.7 million of debt1 as of December 31, 2020 Company and lenders entered into a restated credit agreement in September 2020, including: • Extended the maturity date of the Company’s Amended Credit Facility to September 2023 • Increased the aggregate principal amount of th
Slide 28: Long-term Growth Through M&A
Long-term Growth Through M&A Monarch’s priorities for use of future cash flow include: • Debt pay-down • Opportunities for growth via M&A Company continually evaluates potential M&A with a focus on: • Driving EBITDA growth by deploying Monarch’s superior service levels, industry product/marketing be
Slide 29: Financial Results
Financial Results
Slide 30: Historical Financial Performance
Historical Financial Performance $300.0 27.0% Black Hawk acquired 4/26/12 26.0% $250.0 25.0% $200.0 24.0% $ in millions $150.0 23.0% 22.0% $100.0 21.0% $50.0 20.0% $0.0 19.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Net Revenue $136.4 $134.5 $163.3 $188.7 $187.8 $202.2 $217.0 $230.7 $2
Slide 31: Historical Net Leverage Ratio
Historical Net Leverage Ratio 4.0x 3.5x 3.5x Total Net Debt / LTM Adjusted EBITDA1 3.0x 2.5x 2.2x 2.0x 1.7x 1.5x 1.3x 1.1x 1.0x 0.7x 0.6x 0.5x 0.5x 0.4x 0.4x 0.0x 0.0x -0.1x -0.5x 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Monarch Casino & Resort analysis 1. EBITDA is adjust
Slide 32: Income Statement Overview
Income Statement Overview Three Months Ended December 31, Year Ended December 31, Increase / 2020 2019 (Decrease) 2020 2019 (Decrease) Net revenue $ 58,377 $ 62,080 (6.0%) $184,413 $ 249,166 (26.0%) Adjusted EBITDA(1) 13,898 14,142 (1.7%) 43,161 61,687 (30.0%) Net income $15,260 $6,196 146.3% $ 23,6
Slide 33: Balance Sheet Overview
Balance Sheet Overview December 31, 2020 December 31, 2019 Cash and cash equivalents $ 28,310 $ 60,539 Net property and equipment 572,507 501,483 Other assets 71,060 48,856 Total assets $671,877 $610,878 Long-term debt1 (including current maturities) $179,662 $195,415 Other liabilities 124,148 74,26
Slide 34: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Three Months Ended December 31, Year Ended December 31, 2020 2019 2020 2019 Adjusted EBITDA $13,898 $14,142 $43,161 $61,687 Expenses: Stock based compensation (1,104) (1,180) (3,855) (4,125) Depreciation and amortization (5,780) (3,891) (17,324) (14,875) Interest expen
Slide 35: Investment Summary
Investment Summary Prime locations and assets Results-oriented management with strong operating track record • Record gaming market share at both properties Strong underlying economic fundamentals in both markets • Reno’s population growth of 8.1% from 2014 to 2019 (national average: 3.1%) is attrib
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