Monarch Casino & Resort, Inc. · NASDAQ:MCRI
Monarch Casino & Resort — JP Morgan Conference (March 2015)
51 slides from Monarch Casino & Resort's conference presentation, Mar 6, 2015
Slide 1: Investor Presentation March 2015
Investor Presentation Atlantis Casino Resort Spa in Reno, NV Monarch Casino in Black Hawk, CO March 2015
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) Appendix 3
Slide 4: Company Overview Summary
Company Overview Summary Our properties have the premier locations in both the Reno and Black Hawk markets Hands-on, results-oriented management with strong operating track record Increased Adjusted EBITDA 55% at Black Hawk in first year of ownership Best in class product Strong balance sheet: curre
Slide 5: Regional Summary
Company Overview Regional Summary Reno Atlantis has been upgraded and expanded in recent years Investment of over $95 million Minimal forward capex requirements Northern Nevada market remains challenging but there is a silver lining Reno area beginning to attract strong long-term investment Regional
Slide 6: 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: Positive Market Characteristics for Denver and Reno Markets
Company Overview Positive Market Characteristics for Denver and Reno Markets Denver “This metro area has a diverse high-tech industry that mixes in telecommunications, aerospace, manufacturing, and energy research. The city does so well partially because of its attractive business climate and friend
Slide 8: 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) Appendix 8
Slide 9: Positioned Near More Affluent South Reno Communities
Atlantis Casino Resort Spa Positioned Near More Affluent South Reno Communities Source: Wells Fargo 9
Slide 10: EDAWN jobs announced surged on Tesla's indication of interest
Atlantis Casino Resort Spa EDAWN jobs announced surged on the heels of Tesla’s indication of interest1 4,179 jobs in 2014 (includes 700 Tesla jobs) 5-year Average Source: NV Office of Economic Development 1) EDAWN assisted new jobs 10
Slide 11: New air service
Atlantis Casino Resort Spa New air service New York City, New York • JetBlue to offer daily nonstop flights between Reno and New York's JFK Airport beginning 5/28/2015 • First nonstop flight from Reno to New York City Guadalajara, Mexico • Volaris, low-cost airline of Mexico, began nonstop flights b
Slide 12: Atlantis Expansion and Upgrade
Atlantis Casino Resort Spa Atlantis Expansion and Upgrade Facility is very fresh and was recently expanded and upgraded $95 million project completed in 2009 included the addition of new amenities Awarded AAA’s “Four Diamond Rating” in August 2012 (less than 5% of 29,000 AAA rated properties achieve
Slide 13: Atlantis Casino Market Share
Atlantis Casino Resort Spa Atlantis Casino Market Share Over the last 18 years, 300% 17% Atlantis has continued to outperform the Reno-Sparks market by 250% 14.5% 15% Indexed gaming revenue (1996=0%) focusing on providing best-in-class 200% 13% MCRI market share experiences, amenities, and service f
Slide 14: 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) Appendix 14
Slide 15: 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 which re
Slide 16: 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 17: Black Hawk Gaming Market
Monarch Casino Black Hawk Black Hawk Gaming Market Slot count > 600 Z Casino 300 to 600 Sasquatch 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 Gu
Slide 18: Black Hawk Gaming Market Property Level Detail
Monarch Casino Black Hawk Black Hawk Gaming Market Property Level Detail Comprised of 18 casinos 1 Slots Tables 1 Rooms 2 Property Location 8,343 slot machines and 196 Ameristar (PNK) Isle of Capri (ISLE) Black Hawk Black Hawk 1,480 1,079 50 33 536 238 table games The Lodge (JACENT) Mardi Gras (Affi
Slide 19: Black Hawk Market Performance
Monarch Casino Black Hawk Black Hawk total gaming revenue1 Black Hawk Market Performance $700 $650 Annual revenue ($ in millions) $600 $581 $554 $24 $559 $559 $561 $551 $553 $550 $532 $22 $524 $524 $530 $20 $506 $22 $509 $21 $61 $62 $65 $70 $500 $19 $25 $44 $66 $478 $19 $557 $533 $450 $505 $503 $510
Slide 20: Black Hawk Market Share
Monarch Casino Black Hawk Monarch Black Hawk Market Share Monarch Casino Black MCRI and Black Hawk Indexed Gaming Revenue Growth Hawk market share (TTM) has increased 14% 12.0% Indexed gaming revenue (2012 Q1=0%) 11.5% since the acquisition 12% Black Hawk construction from 2013 Q4 to present 11.0% M
Slide 21: Black Hawk Market Significantly Underserved by Hotel Rooms
Monarch Casino Black Hawk Black Hawk Market Significantly Underserved by Hotel Rooms Black Hawk and Reno markets generate approximately equal amounts of gross gaming revenue Reno, with over 15,000 hotel rooms, has more than 15 times the room inventory of Black Hawk Expectation that adding quality ro
Slide 22: 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 Nearest tribal casino 350 miles away Relatively mo
Slide 23: Ameristar Black Hawk Case Study
Monarch Casino Black Hawk 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 Hotel opens $56.0 $53.0 Adj EBITDA ($ in millions) $50 $40 $35.5 $28.8 $30 $20.9 $2
Slide 24: Master Plan Budget and Timeline
Monarch Casino Black Hawk Master Plan Budget and Timeline $ in millions Left to Spend at Total Spent Through Cost December 31, Expected Completion Date December 31, 2014 2014 I. Existing Facility Riviera Black Hawk Casino (1) $76 $76 - Complete Interior Q3 2015; Existing Facility Upgrade (2)(3) $34-
Slide 25: Existing Facility Upgrade
Monarch Casino Black Hawk Existing Facility Upgrade Completed projects: Upgraded food and beverage (all-new buffet) First phase of renovation/upgrade of casino floor (new front entrance, new bar/cabaret lounge) Work left to complete: Phase two expected completion in March 2015 Phase three expected c
Slide 26: New Parking Structure
Monarch Casino Black Hawk New Parking Structure Excavation and foundation work has been completed 9-story garage with approximately 1,500 spaces Expected to open in late 2015 Upon completion, existing garage will be razed to make room for the hotel tower Remaining cost as of December 31, 2014 of app
Slide 27: Hotel Tower and Casino Expansion
Monarch Casino Black Hawk Hotel Tower and Casino Expansion Construction expected to begin in the second quarter of 2016 Project to include: 23-story tower with approximately 500 hotel rooms Nearly double the existing casino space Upscale spa and pool facility Three additional restaurants Additional
Slide 28: Existing Facility Upgrade: original cabaret stage
Monarch Casino Black Hawk Existing Facility Upgrade: original cabaret stage 28
Slide 29: Existing Facility Upgrade: new cabaret stage
Monarch Casino Black Hawk Existing Facility Upgrade: new cabaret stage opened August 2014 29
Slide 30: New Parking Structure: current facility
Monarch Casino Black Hawk New Parking Structure: current facility 30
Slide 31: New Parking Structure: construction progress
Monarch Casino Black Hawk New Parking Structure: current construction progress 31
Slide 32: Hotel Tower and Casino Expansion: current facility
Monarch Casino Black Hawk Hotel Tower and Casino Expansion: current facility 32
Slide 33: Hotel Tower and Casino Expansion: redesigned rendering
Monarch Casino Black Hawk Hotel Tower and Casino Expansion: redesigned rendering 33
Slide 34: Hotel Tower and Casino Expansion: redesigned rendering
Monarch Casino Black Hawk Hotel Tower and Casino Expansion: redesigned rendering 34
Slide 35: Hotel Tower and Casino Expansion: redesigned rendering
Monarch Casino Black Hawk Hotel Tower and Casino Expansion: redesigned rendering 35
Slide 36: Hotel Tower and Casino Expansion: redesigned rendering
Monarch Casino Black Hawk Hotel Tower and Casino Expansion: redesigned rendering 36
Slide 37: 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) Appendix 37
Slide 38: Consolidated Results Income Statement
Monarch Consolidated Results Income Statement Black Hawk acquired 04/26/12 2014 net revenues declined 0.5% and Adjusted EBITDA declined 10.3% Source: Monarch Casino & Resort analysis 1) Adjusted for stock option expense and one-time charges. 38
Slide 39: Strong Balance Sheet Position
Monarch Consolidated Results Strong Balance Sheet Position Leverage remains a low 1.1x Source: Monarch Casino & Resort analysis 39
Slide 40: 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) Appendix 40
Slide 41: Conclusion Summary
Conclusion Summary Northern Nevada market remains challenging but there is a silver lining Reno area beginning to attract strong long-term investment Led by $5 billion planned Tesla battery factory We have upgraded and expanded Atlantis by investing over $95 million over the last few years (minimal
Slide 42: 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) Appendix 42
Slide 43: 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. 43
Slide 44: Hotel occupancy and cash ADR
Appendix Hotel occupancy and cash ADR1 Total Occupancy Cash ADR 100% $120 88.4% 88.7% 90% 86.1% $102.51 $98.91 $100 80% $92.54 $86.55 $86.25 70% 65.4% 66.9% $78.74 62.9% $80 60% 50% $60 40% $40 30% 20% $20 10% - $0 2012 2013 2014 2012 2013 2014 Atlantis Reno-Sparks Atlantis Reno-Sparks Atlantis outp
Slide 45: Tesla's Gigafactory
Appendix Tesla’s Gigafactory $5bn in expected construction costs $100bn in total expected economic benefit per NV Governor’s economic development office 6,500 jobs directly tied to the factory at $25/hr 16,000 jobs indirectly linked to the factory, including 3,000 construction jobs Increase of 10% t
Slide 46: EDAWN prospect visits up
Appendix EDAWN prospect visits up1 2014 Average 10.9 2013 Average 9.8 2012 Average 7.8 2011 Average 4.2 Source: NV Office of Economic Development 1) Visits to the Reno area coordinated by EDAWN by companies interested in exploring siting their business in Reno. 46
Slide 47: Unemployment rates continue to improve
Appendix Unemployment rates continue to improve Denver has the sixth lowest unemployment rate among large metropolitan areas Denver and Reno-Sparks unemployment rate improvements are outpacing the national average Source: Bureau of Labor Statistics; unemployment rates are not seasonally adjusted. 1)
Slide 48: Reno median housing prices are at healthy levels
Appendix Reno median housing prices are at healthy levels $350,000 Housing prices in the 2006 to 2007 period were associated with $300,000 the speculative bubble in real estate $250,000 Prices now have recovered from the $200,000 recession lows and have avoided the $150,000 bubble era excesses $100,
Slide 49: Reno home prices reflect a 4.1% CAGR since 1990
Appendix Reno home prices reflect a 4.1% CAGR1 since 1990 even after the bubble Source: Reno-Sparks Association of Realtors 1) Pre-bubble CAGR from 1990 to 2002 was 4.1% and is assumed to be the normal, non-bubble growth rate for house prices in Reno. 49
Slide 50: MCRI dramatically increased Adjusted EBITDA
Appendix MCRI dramatically increased Monarch Casino Black Hawk Adjusted EBITDA TTM Adjusted EBITDA growth since acquisition from Riviera $20 60% higher than LTM EBITDA ($ in millions) $16.5 39% higher than $14.3 pre-acquisition $15 pre-acquisition $10.3 $10 $5 $0 Pre-acquisition 11 months after acqu
Slide 51: What people are saying about Monarch Black Hawk's new buffet
Appendix What people are saying about Monarch Black Hawk’s new buffet “We only gamble a few times a year and usually go to the place across the street. This buffet far outshines any I have been to recently. They have a variety of table games to play and even more slots. We had good luck so that alwa
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