Monarch Casino & Resort, Inc. · NASDAQ:MCRI
Monarch Casino & Resort — Investor Presentation (May 2014)
40 slides from Monarch Casino & Resort's investor presentation, May 2014
Slide 1: Investor Presentation May 2014
Investor Presentation Atlantis Casino Resort Spa in Reno, NV Monarch Casino in Black Hawk, CO May 2014
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) Company Overview 2) Atlantis Casino Resort Spa 3) Monarch Casino Black Hawk 4) Monarch Consolidated Results 5) Conclusion 6) Q&A 3
Slide 4: Company Overview: Summary
Company Overview Summary Our properties have the premier locations of the Reno and Black Hawk markets Competent, hands-on, results oriented management with strong operating track record Best of class product Strong balance sheet – leverage of 1.0x Financial overview: TTM Q1 2014 Revenue
Slide 5: Company Overview: Summary (Reno and Black Hawk)
Company Overview Summary Reno Difficult market conditions continue in northern Nevada: Difficult economy Continued heavy promotional environment The Atlantis facility has been recently upgraded and expanded: Investment of over $95 million to expand and upgrade over the last few years min
Slide 6: Company Overview: Historic Milestones
Company Overview 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 Rivier
Slide 7: Table of Contents
Table of Contents 1) Company Overview 2) Atlantis Casino Resort Spa 3) Monarch Casino Black Hawk 4) Monarch Consolidated Results 5) Conclusion 6) Q&A 7
Slide 8: Positioned Near More Affluent South Reno Communities
Atlantis Casino Resort Spa Positioned Near More Affluent South Reno Communities Source: Wells Fargo 8
Slide 9: Atlantis Expansion and Upgrade
Atlantis Casino Resort Spa Atlantis Expansion and Upgrade Facility is very fresh and was recently expanded and upgraded $95 million expansion and upgrade completed in 2009; new amenities added Awarded AAA’s “Four Diamond Rating” in August 2012 (less than 5% of 29,000 AAA rated properties achie
Slide 10: New Amenity Highlights
Atlantis Casino Resort Spa New Amenity Highlights Established as one of the finest restaurants in northern Nevada Atlantis Steakhouse Recipient of AAA Four Diamond Award Manhattan Deli & Established as a locals favorite Restaurant Popular with local business and community leaders Race & Spor
Slide 11: Tribal Competitors
Atlantis Casino Resort Spa Tribal Competitors 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 Construction Rohnert Park J
Slide 12: Atlantis Casino Market Share
Atlantis Casino Resort Spa Atlantis Casino Market Share Over the last 18 years, MCRI and Reno-Sparks Indexed Gaming Revenue Growth Atlantis has continued 300% 17% to outperform the Atlantis construction Reno-Sparks market disruption from by focusing on 250% 14.4% 15% Indexed gaming revenue (1996=0
Slide 13: Table of Contents
Table of Contents 1) Company Overview 2) Atlantis Casino Resort Spa 3) Monarch Casino Black Hawk 4) Monarch Consolidated Results 5) Conclusion 6) Q&A 13
Slide 14: Acquisition Transaction Summary
Monarch Casino Black Hawk Acquisition Transaction Summary Transaction closed April 26, 2012 Purchase price of $76.0mm cash ($69.2mm net after $2.1mm of cash and $4.7mm of NOLs) Funded by new $100mm revolving credit facility TTM Adjusted EBITDA at time of transaction announcement was $10.3mm
Slide 15: Local Metropolitan Area Population
Monarch Casino Black Hawk Local Metropolitan Area Population Black Hawk Black Hawk is located 35 miles west of the Denver metro area (3.0 million people1), 35 miles southwest of Boulder, 20 miles west of Golden, and 77 miles east of Vail2 Source: 1) Denver area projected 2014 population per Denver E
Slide 16: Black Hawk Gaming Market
Monarch Casino Black Hawk Black Hawk Gaming Market Slot count > 600 Bullwhackers 300 to 600 Wild Card Saloon < 300 Bull Durham Black Hawk Station Ameristar Entrance To Black Hawk Market Saratoga Mardi Gras Monarch Canyon Grand Plateau Gilpin Red Dolly The Lodge Golden Lady Luck Gates Golden Gulch Is
Slide 17: Black Hawk Gaming Market: Property Level Detail
Monarch Casino Black Hawk Black Hawk Gaming Market Property Level Detail Property Location Slots1 Tables1 Rooms2 Comprised of 18 casinos Ameristar (PNK) Isle of Capri (ISLE) Black Hawk Black Hawk 1,479 1,080 50 33 536 238 8,241 slot machines and 196 The Lodge (JACENT) Mardi Gras (Affinity) Black
Slide 18: Black Hawk Market Performance
Monarch Casino Black Hawk Black Hawk total gaming revenue1 Black Hawk Market Performance Although impacted by the 2008 smoking ban and the recession, Black Hawk revenues have proven resilient Source: Monarch Casino & Resort analysis, Colorado Department of Revenue 1) Gaming revenue available through
Slide 19: Significant Market Share Gains Since Acquisition
Monarch Casino Black Hawk Significant Market Share Gains (Gaming Revenue) Since Acquisition Trailing twelve Riviera Monarch month Monarch ownership ownership Casino Black Hawk market share has steadily increased since the acquisition Market share increased 101 bps, or 12%, from 8.95% in April 20
Slide 20: Sound Basis for Further Investment in Black Hawk
Monarch Casino Black Hawk Sound Basis for Further Investment in Black Hawk Denver metro population of 3.0 million Top one-fifth of personal income growth among all MSAs in nation Household incomes in Denver MSA of $58,732; 17% above national average Mar 2014 Denver MSA unemployment of 6.4% w
Slide 21: 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 Redesign and upgrade of second floor including restrooms Addition of temporary casino floor next to buffet The master development pl
Slide 22: Current Facility
Monarch Casino Black Hawk Current Facility 22
Slide 23: Redesigned Rendering
Monarch Casino Black Hawk Redesigned Rendering 23
Slide 24: Current Facility
Monarch Casino Black Hawk Current Facility 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: Redesigned Rendering
Monarch Casino Black Hawk Redesigned Rendering 27
Slide 28: 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 Hawk1 Casino Hotel Smoking Amendment remodel construction ban 50 begins commences & Hotel opens Ameristar has grown Adjusted EBITDA from $7mm to $59mm EBITDA d
Slide 29: Table of Contents
Table of Contents 1) Company Overview 2) Atlantis Casino Resort Spa 3) Monarch Casino Black Hawk 4) Monarch Consolidated Results 5) Conclusion 6) Q&A 29
Slide 30: Consolidated Results: Income Statement
Monarch Consolidated Results Income Statement Black Hawk acquired 04/26/12 2013 net revenues rose 16% and Adjusted EBITDA increased 34% Source: Monarch Casino & Resort analysis 1) Adjusted for stock option expense and one-time charges. 30
Slide 31: Strong Balance Sheet Position
Monarch Consolidated Results Strong Balance Sheet Position Post acquisition leverage remains a low 1.0x Source: Monarch Casino & Resort analysis 31
Slide 32: Table of Contents
Table of Contents 1) Company Overview 2) Atlantis Casino Resort Spa 3) Monarch Casino Black Hawk 4) Monarch Consolidated Results 5) Conclusion 6) Q&A 32
Slide 33: Company Overview: Summary
Company Overview Summary Difficult market conditions to continue in Northern Nevada due to: recessionary macroeconomic factors and continued heavy promotional environment in local market We have upgraded and expanded the Atlantis facility by investing over $95 million over the last few years
Slide 34: Table of Contents
Table of Contents 1) Company Overview 2) Atlantis Casino Resort Spa 3) Monarch Casino Black Hawk 4) Monarch Consolidated Results 5) Conclusion 6) Q&A 34
Slide 35: Organizational Chart
Appendix 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. 35
Slide 36: The Competitors: Recent Developments
Appendix 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 rooms
Slide 37: Market Overview
Appendix Market Overview Consideration Commentary 35 miles to Denver metro area (3.0 million people1) No tribal casino competition Only tribal casinos are in far southwest CO Desirable regional market 350 to 400 miles drive time from Denver 2013 Denver metro area median household income of
Slide 38: Market Overview
Appendix Market Overview Consideration Commentary Gaming floor seamlessly connected to six-floor parking garage Among Leading Facilities Fifth largest casino in Black Hawk-Central City by number of slots in Black Hawk Shortest “handle to handle” casino as defined by distance from car door hand
Slide 39: Kerzner Litigation Settled
Appendix 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 The Company won the lawsuit in July 2013 at a total cost of $5.3 million The sett
Slide 40: Hotel occupancy and cash ADR
Appendix Hotel occupancy and cash ADR1 Total occupancy Cash ADR 100% $100 89.5% 89.1% $90.63 90% 87.2% $90 $87.69 $83.66 $83.04 $81.69 80% $80 $76.31 70% $70 66.6% 66.8% 60% 63.7% $60 50% $50 40% $40 30% $30 20% $20 10% $10 0% $0 2012 2013 LTM Q1 2014 2012 2013 LTM Q1 2014 Atlantis Reno-Sparks Atlan
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