Bally's Corporation · NYSE:BALY
Bally's — Twin River Worldwide Holdings — Q3 2020 Earnings Presentation
53 slides from Bally's's earnings presentation, Oct 29, 2020
Slide 1: Twin River Worldwide Holdings, Inc. Third Quarter Conference Call
Third Twin River Worldwide Holdings, Inc. October 29, 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 that continues to improve its scale and geographic diversification through strategic M&A Currently owns and operates nine casinos and one racetrack across five states – Completed merger with
Slide 5: TRWH Casino COVID Impact
TRWH Casino COVID Impact Current Casino Properties Close date due to COVID 3/14/2020 3/14/2020 3/16/2020 3/16/2020 3/16/2020 3/16/2020 3/16/2020 Reopening Date 6/8/2020 (Invite-only) 6/8/2020 5/21/2020 6/1/2020 6/17/2020 6/1/2020 5/21/2020 Current Status of Operations 10am-3am Sun-Thu; 24 hours Fri–
Slide 6: TRWH has focused on creating long-term strategic value
TRWH has focused on creating long-term strategic value Key Strategic Objectives Accomplishments 1 Evolving from single property operator in 2013 to the operator of 14 casino properties across ten states(1) Grow and Diversify through Acquired Hard Rock Biloxi (2014), Newport Grand (2015), Dover Downs
Slide 7: TRWH is a diversified and multi-property gaming company with an increasingly national footprint
TRWH is a diversified and multi-property gaming company with an increasingly national footprint (1) ü 5 Jurisdictions ü 10 Properties(1) ü 5 Additional locations under contract (2) ü ~10,359 slot machines(1) ü ~ 300 table games(1) ü ~1,290 hotel rooms(1) (1) September 30, 2020 actual, excluding pend
Slide 8: TRWH Casino Portfolio Summary
TRWH Casino Portfolio Summary Casino Properties Total Black Hawk, Kansas City, Location Lincoln, RI Tiverton, RI Biloxi, MS Dover, DE CO MO Vicksburg, MS Casino Sq. Ft. 162,420 33,600 50,984 165,000 34,632 39,788 32,000 518,424 Slot Machines / 4,067 1,000 1,097 2,106 675 888 526 10,359 VLTs Table Ga
Slide 9: Twin River Casino Has Become a New England Locals' Destination
Twin River Casino Has Become a New England Locals’ Destination ▪ 4,067 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 10: 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 11: Hard Rock Biloxi Diversified TRWH's Geographic Presence
Hard Rock Biloxi Diversified TRWH’s Geographic Presence with a Prime Location in an Established Region ▪ 1,097 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 12: 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 ▪ 2,106 slot machines spa / salon, conference center, banquet hall, ballroom and ▪ 50 table games and a poker concert hall
Slide 13: Casino KC provides path to market share gain in strong gaming market
Casino KC provides path to market share gain in strong gaming market ▪ Acquired July 1, 2020 ▪ 888 slot machines, 13 table games and 39,788 square feet of gaming space ▪ Premier location to downtown within area of development ▪ TRWH intends a $40 million redevelopment of the property • Enhanced prop
Slide 14: Casino Vicksburg bolsters presence in Mississippi
Casino Vicksburg bolsters presence in Mississippi ▪ 526 slot machines ▪ 89 hotel rooms ▪ 32,000 square feel of gaming space ▪ Acquisition expected to be accretive to earnings ▪ Land surrounding property provides future expansion opportunities Competitive Landscape 14
Slide 15: 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 16: Pending Acquisitions
Pending Acquisitions Purchase Consideration Strategic Rationale • Secures position in Indiana gaming market at a value accretive multiple • Limits cash outflow and debt incurrence by developing a relationship $140 million with an industry-leading REIT purchase • Further enhances mobile / online spor
Slide 17: Pending Acquisitions (cont'd)
Pending Acquisitions (cont'd) Purchase Consideration Strategic Rationale • Accretive to earnings • Ability to optimize marketing strategy to grow revenue while maintaining current cost structure Announced April 2020 • Optimize hotel utilization and yield $155 million purchase price 4.1x EBITDA(1) •
Slide 18: Shreveport provides entrance into an attractive gaming market
Shreveport provides entrance into an attractive gaming market with immediate upside through strategic marketing ▪ 1,401 slot machines ▪ 5 on-site restaurants, bars ▪ 54 table games including a poker and lounges room ▪ 2 on-site nightclubs with live entertainment options ▪ 403 hotel rooms and suites,
Slide 19: MontBleu establishes a "destination" property for top customers
MontBleu establishes a "destination" property for top customers across the brand ▪ 418 slot machines ▪ 2 on-site bar and entertainment ▪ 17 table games venues, featuring the Opal Ultra Lounge nightclub ▪ 438 hotel rooms, a pool and ▪ 16,000 square feet of meeting fitness center, full service space i
Slide 20: Bally's offers enhanced upside through sports betting and iGaming
Bally's offers enhanced upside through sports betting and iGaming ▪ 1,800 slot machines ▪ 220,000 square feet across two ▪ 121 table games gaming floors ▪ 7 bar, lounge and nightclub facilities ▪ 1,250 guest rooms and suites, a spa and indoor ▪ 80,000 square feet of meeting space fitness facilities
Slide 21: Jumer's acquisition provides access to growing gaming markets in Illinois
Jumer's acquisition provides access to growing gaming markets in Illinois with the potential to capitalize on lucrative sports betting and iGaming opportunities ▪ 870 slot machines ▪ 5 food and beverage ▪ 25 table games (including 6 outlets poker tables) ▪ 1 night club ▪ 205 hotel rooms ▪ 1 concert
Slide 22: Evansville further enhances geographic reach
Evansville further enhances geographic reach without additional leverage or significant cash outflows ▪ 1,145 slot machines ▪ 4 food and beverage ▪ 41 table games (including 8 outlets poker tables) ▪ 2 casino bars ▪ 338 hotel rooms ▪ 1 active sportsbook ▪ 46,265 square foot gaming ▪ 47,000 square fo
Slide 23: 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 24: II. Growth Track Record
II. Growth Track Record
Slide 25: TRWH has Grown Through a Disciplined Investment Strategy
TRWH has Grown Through a Disciplined Investment Strategy Organic Growth Initiatives Strategic M&A 2018 2020 2014 2019 2020(2) Lincoln Hotel Hard Rock Biloxi Tiverton Construction Isle-KC Redevelopment Dover Downs Merger Black Hawk Acquisition Construction Acquisition & Expansion ($131 million) (~$40
Slide 26: Proven Track Record of Successful Developments – Tiverton Casino and Twin River Hotel
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 27: 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 28: 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. 28
Slide 29: Proposed New Partnership with IGT
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 30: Twin River Casino Hotel - Planned Expansion and Renovation
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 and 14,000 square foot spa in the hotel • Timing of capital ex
Slide 31: Twin River Casino Hotel - Planned Expansion and Renovation
Twin River Casino Hotel - Planned Expansion and Renovation 31
Slide 32: Two of the Nation's Top Sportsbooks Debuted May 1st in Colorado
Two of the Nation's Top Sportsbooks Debuted May 1st in Colorado DraftKings Inc. and FanDuel Group • New retail sportsbook opened at Mardi Gras with our partners at DraftKings • With the acquisition of Black Hawk, the Company also acquired the right to three sports gaming licenses in Colorado, leadin
Slide 33: New Jersey Online Sports Betting and i-Gaming Skins
New Jersey Online Sports Betting and i-Gaming Skins Represent Strong Upside to Acquisition of Bally's Atlantic City (Currently pending regulatory approval and consummation of Bally's Atlantic City) The Company will acquire 3 sports betting skins and 5 i-Gaming skins 2 exciting sports betting partner
Slide 34: III. Investment Highlights
III. Investment Highlights
Slide 35: 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 36: 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 37: IV. Key Financial Highlights / Q3 2020 Results
IV. Key Financial Highlights / Q3 2020 Results
Slide 38: Capital Return Program Delivered Attractive Capital Returns to Shareholders
Capital Return Program Delivered Attractive Capital Returns to Shareholders (1) Since inception, the Company has returned over $265 million of capital back to shareholders Share Repurchases Quarterly Dividend • Completed modified dutch auction tender offer in the third quarter of 2019 and repurchase
Slide 39: Shares Outstanding
Capital Return Program Common Stock Activity 42,000,000 41,147,597 40,000,000 Q2 201 38,000,000 9 to Q2 202 36,000,000 0 -26 34,574,587 % 34,000,000 Shares Outstanding 32,113,328 32,000,000 30,594,691 30,456,493 30,000,000 28,000,000 26,000,000 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q1 2019: Q1 202
Slide 40: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity Proforma Q3 2020 Cash on hand: $115 million Available borrowing capacity: $250 million Additional unsecured notes(1): $125 million Total liquidity: $490 million Liquidity after pending acquisitions(2): $205 million Face value of debt(3): $1,096 million No substanti
Slide 41: Continued Revenue Diversification
Continued Revenue Diversification M&A Strategy Focused on Accretive Growth Q3 2020 Q4 2019 1% 2% 16% 24% 34% 53% 31% 21% 17% Rhode Island Mid-Atlantic Southeast West Other Rhode Island Mid-Atlantic Southeast Other 41
Slide 42: Corporate Strategy Driving Adjusted EBITDA Diversification
Corporate Strategy Driving Adjusted EBITDA Diversification (1) Strong Early Performance in Delaware Proving M&A Strategy Q3 2020 Q4 2019 11% 21% 35% 12% 38% 67% 17% Rhode Island Mid-Atlantic Southeast West Rhode Island Mid-Atlantic Southeast (Excludes "Other" operating segment) (1) Refer to Appendix
Slide 43: Appendix
Appendix
Slide 44: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Revenue $ 116,624 $ 129,309 $ 254,696 $ 393,158 Net income (loss) $ 6,723 $ 6,999 $ (25,710) $ 41,775 Interest expense, net of interest income 16,908 10
Slide 45: Reconciliation of Net Income to Adjusted EBITDA by Segment
Reconciliation of Net Income to Adjusted EBITDA by Segment Three Months Ended September 30, 2020 (in thousands) Rhode Island Mid-Atlantic Southeast West Other Total Revenue $ 39,393 $ 19,672 $ 36,731 $ 19,169 $ 1,659 $ 116,624 Net income (loss) $ 7,121 $ 3,581 $ 9,630 $ 1,751 $ (15,360) $ 6,723 Inte
Slide 46: Reconciliation of Net Income to Adjusted EBITDA by Segment
Reconciliation of Net Income to Adjusted EBITDA by Segment Three Months Ended September 30, 2019 (in thousands) Rhode Island Mid-Atlantic Southeast Other Total Revenue $ 67,842 $ 25,893 $ 33,095 $ 2,479 $ 129,309 Net income $ 11,870 $ 2,683 $ 5,352 $ (12,906) $ 6,999 Interest expense, net of interes
Slide 47: Reconciliation of Net Income to Adjusted EBITDA by Segment
Reconciliation of Net Income to Adjusted EBITDA by Segment Nine Months Ended September 30, 2020 (in thousands) Rhode Island Mid-Atlantic Southeast West Other Total Revenue $ 99,626 $ 47,222 $ 79,349 $ 24,690 $ 3,809 $ 254,696 Net (loss) income $ 5,173 $ 1,429 $ 12,696 $ (4,986) $ (40,022) $ (25,710)
Slide 48: Reconciliation of Net Income to Adjusted EBITDA by Segment
Reconciliation of Net Income to Adjusted EBITDA by Segment Nine Months Ended September 30, 2019 (in thousands) Rhode Island Mid-Atlantic Southeast Other Total Revenue $ 236,823 $ 53,169 $ 96,245 $ 6,921 $ 393,158 Net income $ 54,645 $ 4,014 $ 14,100 $ (30,984) $ 41,775 Interest expense, net of inter
Slide 49: Reconciliation of Net Income to Adjusted EBITDA Hard Rock Biloxi
Reconciliation of Net Income to Adjusted EBITDA Hard Rock Biloxi Three months ended September 30, Change (in thousands) 2020 2019 ($) (%) Net income $ 8,541 $ 5,352 $ 3,189 60 % Interest expense, net of interest income (12) (11) Provision for income taxes 2,254 1,430 Depreciation and amortization 2,
Slide 50: Reconciliation of Adjusted EBITDA Margin Growth - Rhode Island and Mid-Atlantic Segments
Reconciliation of Adjusted EBITDA Margin Growth - Rhode Island and Mid-Atlantic Segments Rhode Island Mid-Atlantic Three Months Ended Three Months Ended September 30, September 30, Change Change (in thousands) 2020 2019 (bps) 2020 2019 (bps) Revenue $ 39,393 $ 67,842 $ 19,672 $ 25,893 Net income $ 7
Slide 51: Reconciliation of Same Store Adjusted EBITDA and EBITDA Margin
Reconciliation of Same Store Adjusted EBITDA and EBITDA Margin Three Months Ended Three Months Ended September 30, 2020 September 30, 2019 Less Entities (in thousands) Consolidated Acquired (1) Same Store Consolidated Change (bps) Revenue $ 116,624 $ 24,706 $ 91,918 $ 129,309 Net income $ 6,723 $ 2,
Slide 52: Historical Reconciliation of Adjusted EBITDA
Historical Reconciliation of Adjusted EBITDA Q1 2019 Q2 2019 Q3 2019 Q4 2019 Total (in thousands) Revenue $ 120,631 $ 143,218 $ 129,309 $ 130,419 Net income $ 17,596 $ 17,180 $ 6,999 $ 13,355 Interest expense, net of interest income 7,038 9,212 10,651 11,025 Provision for income taxes 5,673 6,145 3,
Slide 53: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation Three Months Ended (in millions) September 30, 2020 Cash flow from operations $ 18.1 Capital expenditures 3.1 Free cash flow $ 15.0 A-10
Twin River Worldwide Holdings — Q3 2020 Earnings Presentation on 6ix