Bally's Corporation · NYSE:BALY
Bally's — Twin River Worldwide Holdings — Q4 2019 Earnings Presentation
50 slides from Bally's's earnings presentation, Mar 3, 2020
Slide 1: Twin River Worldwide Holdings, Inc.
Third Twin River Worldwide Holdings, Inc. March 3, 2020
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Twin River Worldwide Holdings, Inc. may be referred to in this investor presentation as "the Company", "Twin River" or "TRWH." This presentation contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of
Slide 3: I. Company Overview
I. Company Overview
Slide 4: Company Overview
Company Overview ▪ Twin River Worldwide Holdings, Inc. (“TRWH”) is a diversified, multi-property gaming company – Owns and operates seven casinos and one racetrack across four states – Completed merger with Dover Downs Gaming & Entertainment, Inc. on March 28, 2019; began trading on the NYSE under t
Slide 5: TRWH has focused on creating long-term strategic value
TRWH has focused on creating long-term strategic value Key Strategic Objectives Accomplishments 1 Acquired Biloxi (2014), Newport Grand (2015), Dover Downs (2019) and Black Hawk, CO (2020) Grow and Diversify through Strategic and Accretive M&A Announced acquisitions in Kansas City, MO and Vicksburg,
Slide 6: TRWH is a diversified and multi-property gaming company
TRWH is a diversified and multi-property gaming company ü 4 Jurisdictions (1) ü 8 Properties(1) ü 2 Additional locations under contract ü ~9,130 slot machines(1) ü ~ 267 table games(1) ü ~1,200 hotel rooms(1) (1) January 31, 2020 actual, excluding pending acquisitions. 6
Slide 7: TRWH Casino Portfolio Summary
TRWH Casino Portfolio Summary Casino Properties Total Location Lincoln, RI Tiverton,RI Biloxi, MS Dover, DE Black Hawk, CO Casino Sq. Ft. 162,420 33,600 50,984 165,000 34,632 446,636 Slot Machines / 4,108 1,000 1,183 2,173 666 9,130 VLTs Table Games 111 32 53 38 33 267 Hotel Rooms 136 83 479 500 — 1
Slide 8: Twin River Casino Has Become a New England Locals' Destination
Twin River Casino Has Become a New England Locals’ Destination ▪ 4,108 slot machines ▪ 162,420 square foot gaming floor ▪ 111 table games and poker ▪ 29,000 square foot multipurpose room event center ▪ 36 stadium gaming positions ▪ 85 acres of adjacent property ▪ 136 guest rooms and suites, which ma
Slide 9: Tiverton was an Opportunistic and Defensive Investment
Tiverton was an Opportunistic and Defensive Investment Intended to Help Solidify TRWH’s Position in the New England Region ▪ 1,000 slot machines ▪ 33,600 square foot gaming floor ▪ 50 table games and stadium ▪ 83 guest rooms and suites, meeting gaming positions spaces and a fitness center ▪ Opened i
Slide 10: Hard Rock Biloxi Diversified TRWH's Geographic Presence
Hard Rock Biloxi Diversified TRWH’s Geographic Presence with a Prime Location in an Established Region ▪ 1,183 slot machines ▪ 50,984 square foot gaming floor ▪ 53 table games and a poker ▪ 9,000 square foot theater with room ~2,000 person seating capacity ▪ 479 guest rooms and suites, ▪ 18 food and
Slide 11: Dover Downs Provided a Path to Becoming Publicly Traded
Dover Downs Provided a Path to Becoming Publicly Traded Along with Meaningful Upside and Further Diversification Casino Hotel & Conference Center ▪ 500 room hotel, full service ▪ 2,173 slot machines spa / salon, conference center, banquet hall, ballroom and ▪ 38 table games and a poker concert hall
Slide 12: Colorado Properties
Colorado Properties Black Hawk Casinos Arapahoe Park ▪ Central location in the Black Hawk market ▪ Significant option value from strategic location ▪ Upside from operational improvement and best-practices ▪ Property includes over 300 acres of available land ◦ Implementation of TRWH marketing strateg
Slide 13: Pending Acquisitions in Kansas City and Vicksburg Provide Accretive Opportunity
Pending Acquisitions in Kansas City and Vicksburg Provide Accretive Opportunity Kansas City Vicksburg ▪ Premier location to downtown ▪ Accretive to earnings within area of redevelopment ▪ Increases regional ▪ Underperforming in market presence in existing MS market ▪ Opportunity to invest and reposi
Slide 14: Experienced Management Team
Experienced Management Team TRWH’s management team has significant public company experience and a successful track record of delivering growth through public policy initiatives, development projects and strategic acquisitions Relevant Industry Company Name & Title Experience Experience Experience 2
Slide 15: II. Growth Track Record
II. Growth Track Record
Slide 16: TRWH has Grown Through a Disciplined Investment Strategy
TRWH has Grown Through a Disciplined Investment Strategy 2014 2015 2018 2019 2020 Hard Rock Biloxi Newport Grand Casino Lincoln Hotel Dover Downs All-Stock Tiverton Construction Black Hawk Acquisition Acquisition & Expansion Acquisition Construction Merger ~$96 million net purchase ~$240 million ~$2
Slide 17: Track Record of Strategic M&A
Track Record of Strategic M&A TRWH is focused on creating long-term strategic value Estimated Purchase Date Multiple / Owned Adj. EBITDA(1) Strategic Rationale Multiple Hard Rock Biloxi July 2014 10x / <7x $36M - $38M ▪ Diversify from Single Property Newport Grand / March 2015 N/A - Transferred to T
Slide 18: Proven Track Record of Successful Developments
Proven Track Record of Successful Developments – Tiverton Casino and Twin River Hotel • The Company has a track record of successful Twin River Hotel developments to drive future growth • In 2016, TRWH successfully secured approval to relocate its Newport gaming license to a more competitively valua
Slide 19: TRWH Deploys Strategic Initiatives at Newly Acquired Properties
TRWH Deploys Strategic Initiatives at Newly Acquired Properties to Drive Incremental Cash Flow Dover Downs Hotel & Casino Example Since acquiring Dover Downs on March 28, 2019, the Company has rolled out a pipeline of initiatives designed to maximize the cash flow potential of the property • Apply T
Slide 20: Kansas City - Potential Redevelopment Rendering
Kansas City - Potential Redevelopment Rendering Note: The above rendering is a preliminary, illustrative example of the type of structural enhancements the Company may make to the property. Any actual changes to the property, if made, may be different from the example above. 20
Slide 21: Kansas City - Example Site Master Plan
Kansas City - Example Site Master Plan Note: The above rendering is a preliminary, illustrative example of the type of site enhancements the Company may make to the property. Any actual changes to the property, if made, may be different from the example above. 21
Slide 22: TRWH Has Proven Ability to Work Collaboratively Within RI Regulatory Framework
TRWH Has Proven Ability to Work Collaboratively Within RI Regulatory Framework ■ Strong Growth Track Record ▪ Company achieved multiple voter approved initiatives to expand business and actively works towards positive relationships with regulators ▪ Marketing tools have provided significant growth 2
Slide 23: Proposed New Partnership with IGT to Protect and Enhance State Gaming Revenues
Proposed New Partnership with IGT to Protect and Enhance State Gaming Revenues (Currently pending legislative approval) Proposed Agreement Yields a Number of Important Benefits for Twin River ■ VLTs – Twin River would be licensed as a technology provider and would manage approximately 23% of the VLT
Slide 24: Twin River Casino Hotel - Planned Expansion and Renovation Investment of $100 million
Twin River Casino Hotel - Planned Expansion and Renovation Investment of $100 million to update Lincoln facility • 18-month renovation and expansion of Twin River Casino Hotel • 40,000 square foot addition to the first floor gaming space • 14,000 square foot spa in the hotel • Greater separation bet
Slide 25: Twin River Casino Hotel - Planned Expansion and Renovation
Twin River Casino Hotel - Planned Expansion and Renovation 25
Slide 26: Two of the Nation's Top Sportsbooks to Debut in Colorado
Two of the Nation's Top Sportsbooks to Debut in Colorado DraftKings Inc. and FanDuel Group • With the acquisition of Black Hawk, the Company also acquired the right to three sports gaming licenses in Colorado, leading to the creation of these two partnerships. • These partnerships combine our nation
Slide 27: 2020 Guidance
2020 Guidance Twin River is providing its financial outlook for the year ending December 31, 2020 The Company estimates Adjusted EBITDA for 2020 to be approximately $180 million The Company anticipates that its annualized run-rate for Adjusted EBITDA coming out of 2020 will be approximately $190 mil
Slide 28: III. Investment Highlights
III. Investment Highlights
Slide 29: In Rhode Island and Delaware, Gaming Taxes Pay for VLTs
In Rhode Island and Delaware, Gaming Taxes Pay for VLTs, So TRWH Realizes Comparatively High Free Cash Flow ▪ TRWH maintains a significant competitive advantage because its capex is low and reasonably predictable ▪ TRWH’s primary capex requirements are associated with maintenance of properties or ex
Slide 30: Strong Cash Flow Generation Helps Drive Value
Strong Cash Flow Generation Helps Drive Value The Company’s Regulatory Structure is Unique, Resulting in Higher Adjusted EBITDA to Cash Conversion(1) than the Industry Norm ▪ In Rhode Island and Delaware, the Company’s gaming equipment is funded through the top-line GGR tax (not through the more typ
Slide 31: IV. Key Financial Highlights / Q4 2019 and Full Year Results
IV. Key Financial Highlights / Q4 2019 and Full Year Results
Slide 32: Capital Return Program Delivering Attractive Capital Returns to Shareholders
Capital Return Program Delivering Attractive Capital Returns to Shareholders Over $100 million available for use under the program as of February 10, 2020* Share Repurchases Quarterly Dividend • Completed modified dutch auction tender offer in the third quarter of 2019 and repurchased 2.5 million sh
Slide 33: Shares Outstanding
Active Capital Return Program Common Stock Activity 42,000,000 41,111,841 41,147,597 40,000,000 38,000,000 37,989,376 Q2 to Q4 -2 36,000,000 2% Shares Outstanding 34,574,587 34,000,000 32,113,328 32,000,000 30,000,000 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1: • Issued 2,976,825 shares of common st
Slide 34: Strong Balance Sheet and Commitment to Maintaining Prudent Leverage Ratio
Strong Balance Sheet and Commitment to Maintaining Prudent Leverage Ratio Q4 2019 ($ in thousands) Face Value of Debt(1): $698,500 Cash on Hand: 182,581 Net Debt: 515,919 TTM Adjusted EBITDA(2): $167,150 Net Leverage (2)(3) 3.1x (1) Outstanding debt before unamortized original issue discount and una
Slide 35: Continued Revenue Diversification
Continued Revenue Diversification M&A Strategy Focused on Accretive Growth Q4 2019 Q4 2018 2% 2% 24% 27% 53% 21% 71% Rhode Island Delaware Biloxi Other Rhode Island Biloxi Other 35
Slide 36: Corporate Strategy Driving Adjusted EBITDA Diversification
Corporate Strategy Driving Adjusted EBITDA Diversification (1) Strong Early Performance in Delaware Proving M&A Strategy Q4 2019 Q4 2018 19% 21% 12% 67% 81% Rhode Island Delaware Biloxi Rhode Island Biloxi (Excludes "Other" operating segment) (1) Refer to Appendix to this presentation for a reconcil
Slide 37: Summary of Financial Results
Summary of Financial Results (in thousands, except percentages) Q4 2019 Q4 2018 $ Change % Change Revenue $ 130,419 $ 111,422 $ 18,997 17.0 % Income from operations $ 29,022 $ 34,697 $ (5,675) (16.4)% Income from operations margin 22.25 % 31.14 % Net income $ 13,355 $ 22,130 $ (8,775) (39.7)% Net in
Slide 38: Rhode Island Financial Results
Rhode Island Financial Results • Revenue at Twin River Casino Hotel in Lincoln continues to stabilize from the impacts of new competition in the market, with the year-over-year decrease moderating in the quarter • Improved marketing efficiency and reductions in our cost structure also favorably impa
Slide 39: Impact from New Regional Competition
Impact from New Regional Competition ■ TRWH’s Rhode Island properties have weathered the impact from the Monthly Gaming Volume Since January 2019 new regional competition in Boston and established a new baseline ($ in millions) from which to grow, driven in large part by TRWH’s transfer of the Newpo
Slide 40: Biloxi Financial Results
Biloxi Financial Results • Biloxi turned in a solid quarter of growth on both the top and bottom lines • Q4 2019 increases in both revenue and Adjusted EBITDA up 4.3% and 11.1%, respectively, compared to the same period last year (in thousands, except percentages) Q4 2019 Q4 2018 $ Change % Change R
Slide 41: Delaware Financial Results
Delaware Financial Results • Strong performance which continues to outperform our already high expectations • Attribute continued early success to effective marketing changes along with physical changes to the gaming floor, both of which were particularly focused on table games and the re-introducti
Slide 42: Appendix
Appendix
Slide 43: Gross Gaming Revenue
Gross Gaming Revenue Quarter Ended Year Ended December 31, December 31, (in thousands, except percentages) 2019 2018 Change 2019 2018 Change Gaming revenue $ 88,531 $ 83,825 5.6 % $ 367,948 $ 327,740 12.3 % Adjustment for State of RI's share of net terminal income, table games revenue and other gami
Slide 44: Revenue & Adjusted EBITDA by Quarter
Revenue & Adjusted EBITDA by Quarter Revenue by Quarter $150,000 $143,218 $129,309 $130,419 $125,000 $120,631 $110,815 $110,494 $111,422 $104,806 ($ in thousands) $100,000 $75,000 $50,000 $25,000 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 (1) Adjusted EBITDA by Quarter $50,000 $
Slide 45: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Quarter Ended December 31, Year Ended December 31, (in thousands) 2019 2018 2019 2018 Revenue $ 130,419 $ 111,422 $ 523,577 $ 437,537 Net income $ 13,355 $ 22,130 $ 55,130 $ 71,438 Interest expense, net of interest income 11,025 6,721 37,926 22,852 Pro
Slide 46: Reconciliation of Net Income to Adjusted EBITDA by Segment
Reconciliation of Net Income to Adjusted EBITDA by Segment Quarter Ended December 31, 2019 (in thousands) Rhode Island Delaware Biloxi Other Total Revenue $ 69,483 $ 27,637 $ 31,187 $ 2,112 $ 130,419 Net income $ 16,479 $ 2,016 $ 4,065 $ (9,205) $ 13,355 Interest expense, net of interest income — 31
Slide 47: Reconciliation of Net Income to Adjusted EBITDA by Segment
Reconciliation of Net Income to Adjusted EBITDA by Segment Quarter Ended December 31, 2018 (in thousands) Rhode Island Biloxi Other Total Revenue $ 79,564 $ 29,912 $ 1,946 $ 111,422 Net income $ 14,277 $ 3,688 $ 4,165 $ 22,130 Interest expense, net of interest income 2,211 (4) 4,514 6,721 Provision
Slide 48: Reconciliation of Net Income to Adjusted EBITDA by Segment
Reconciliation of Net Income to Adjusted EBITDA by Segment Year Ended December 31, 2019 (in thousands) Rhode Island Delaware Biloxi Other Total Revenue $ 306,306 $ 80,806 $ 127,432 $ 9,033 $ 523,577 Net income $ 71,124 $ 6,031 $ 18,165 $ (40,190) $ 55,130 Interest expense, net of interest income 3,2
Slide 49: Reconciliation of Net Income to Adjusted EBITDA by Segment
Reconciliation of Net Income to Adjusted EBITDA by Segment Year Ended December 31, 2018 (in thousands) Rhode Island Biloxi Other Total Revenue $ 302,652 $ 125,137 $ 9,748 $ 437,537 Net income $ 68,849 $ 18,506 $ (15,917) $ 71,438 Interest expense, net of interest income 8,547 (3) 14,308 22,852 Provi
Slide 50: Historical Reconciliation of Adjusted EBITDA
Historical Reconciliation of Adjusted EBITDA Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 (in thousands) Revenue $ 104,806 $ 110,815 $ 110,494 $ 111,422 $ 120,631 $ 143,218 $ 129,309 $ 130,419 Net income $ 12,634 $ 20,300 $ 16,374 $ 22,130 $ 17,596 $ 17,180 $ 6,999 $ 13,355 Intere
Twin River Worldwide Holdings — Q4 2019 Earnings Presentation on 6ix