Monarch Casino & Resort, Inc. · NASDAQ:MCRI

Monarch Casino & Resort — G2E 2019

30 slides from Monarch Casino & Resort's conference presentation, Oct 14, 2019

  1. Slide 1: Investor Presentation G2E 2019

    Investor Presentation G2E 2019

  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 Wall Street Journal – “Developer Bets $1 Billion on Reno” “A billion-dollar residential-and-entertainment district planned for Reno, Nev., would be the city’s largest ever project, say local real-estate executives, and a big bet its economy can con

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

    Positive Market Characteristics for the Denver Market Area Development – “Amazon Expands Denver, Colorado, Tech Hub with Operations Center” “Amazon reported it plans to create 400 new high-tech jobs in fields including software and hardware engineering, cloud computing, and advertising at its hub in

  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 - Rated #1 Reno resort for 5 years str

  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 diversifying to broader base of industries including healthcare, manufacturing, distribution and technology as well as a variety of entrepreneurial startups  Tesla Motors’ “Gigafactory” is currently operational after having invested $6 billion in their Northern Nev

  13. Slide 13: Atlantis Casino Market Share

    Atlantis Casino Market Share 300% 17%  Atlantis has outperformed the greater Reno-Sparks market 250% 15% Indexed gaming revenue (1996=0%) 15.1% for the last 22 years by focusing on providing best-in- 200% 13% MCRI market share class experiences, amenities, and service 150% 11% 100% 9%  In recent y

  14. Slide 14: Atlantis Hotel Occupancy and Cash ADR

    Atlantis Hotel Occupancy and Cash ADR1 Total Occupancy Cash ADR 100% $160 89% 89% 88% 90% $138 $140 $127 80% $121 72% $117 $115 70% $120 70% 67% $106 $100 60% 50% $80 40% $60 30% $40 20% $20 10% 0% $0 2017 2018 2Q19 LTM 2017 2018 2Q19 LTM Reno-Sparks Atlantis Reno-Sparks Atlantis Atlantis outperform

  15. Slide 15: Monarch Casino Black Hawk

    era gl a Sa == T = Monarch Casino Black Hawk

  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 Property Amenities  32,000 square foot casino with ~749 slots and 14 tables  Buffet restaurant and snack bar  Parking stru

  17. Slide 17: Property Location

    Property Location  ~35 miles west of Denver  ~35 miles southwest of Boulder  ~20 miles west of Golden Black Hawk  ~77 miles east of Vail  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  6,987 slot machines Property Location Slots1 Tables1 Rooms2  147 table games Ameristar (PENN) Black Hawk 1,223 40 536 The Lodge (JACENT) Black Hawk 966 26 50  Only four casinos offer more than Isle of Capri (ERI) Black Hawk 934 31 238 5

  19. Slide 19: Monarch Black Hawk Market Share

    Monarch Black Hawk Market Share  Monarch Casino Black Hawk 90% 14.0% Indexed gaming revenue (2012 Q1=0%) Black Hawk market share has dramatically 80% construction 13.3% 13.0% increased since the acquisition MCRI market share (TTM) 70% from 2014 Q1 to 2015 Q3 60% 12.0% 50%  TTM market share has inc

  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 $619 Annual revenue ($ in millions) $610 $596 $600 $581 $554 $24 $559 $559 $553 $561 $90 $95 $93 $551 $85 $550 $80 $532 $22 $530 $524 $524 $509 $61 $65 $70 $20 $506 $22 $62 $66 $21 $44 $500 $478 $19 $25 $557 $19 $533 $

  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 $53.0 Adj EBITDA ($ in millions) $50 $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 Exterior Refresh – West Entrance New Parking Structure – East Entrance Full Resort Exterior Pool Rendering 26

  27. Slide 27: Monarch Consolidated Results

    Monarch Consolidated Results

  28. Slide 28: 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 2Q19 LTM Net Revenue $136.4 $134.5 $163.3 $188.7 $187.8 $202.2 $217.0 $230.7 $240.3 $245.6 Adj. EBITDA $29.5 $29.3 $36.2 $48.5

  29. Slide 29: Strong Balance Sheet

    Strong Balance Sheet Net Debt Net Leverage Ratio $120 2.0x $106.0 1.8x 1.7x 1.7x $100 Total Net Debt/LTM Adjusted EBITDA 1.6x 1.4x 1.3x $80 $62.1 $64.0 1.2x 1.1x $ in millions $60 1.0x 0.8x 0.7x $40 $34.1 $34.5 0.6x $24.7 0.6x 0.5x $19.7 0.4x 0.4x $20 $14.8 0.4x $11.1 0.2x $0 ($0.2) ($3.0) 0.0x 0.0x

  30. Slide 30: Summary

    Summary  Optimally positioned in two of the country’s most robust markets  Monarch has consistently invested in and upgraded Atlantis to ensure continued market leadership  Strong Black Hawk results despite construction disruption  Market share has consistently improved from 9.0% to 13.3% since

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