Bally's Corporation · NYSE:BALY
Bally's — Twin River Worldwide Holdings — Q3 2019 Earnings Presentation
50 slides from Bally's's earnings presentation, Nov 14, 2019
Slide 1: Twin River Worldwide Holdings, Inc.
Third Twin River Worldwide Holdings, Inc.
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 five properties across four states – Completed merger with Dover Downs Gaming & Entertainment, Inc. on March 28, 2019; began trading on the NYSE under the ticker symbol
Slide 5: TRWH has focused on creating long-term strategic value
TRWH has focused on creating long-term strategic value Significant Transformation In 2019 • Transformed to a publicly traded Company with a refreshed Board of Directors • Management team has significant public company experience and a successful track record of delivering accretive growth through st
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 5 Properties(1) ü 3 Additional locations under contract ü ~8,450 slot machines(1) ü ~ 240 table games(1) ü ~1,200 hotel rooms(1) (1) Q3 2019 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 Casino Sq. Ft. 162,420 33,600 50,984 165,000 412,004 Slot Machines / 4,101 1,000 1,180 2,169 8,450 VLTs Table Games 113 32 52 38 235 Hotel Rooms 136 83 479 500 1,198 Sports Betting Yes Yes Yes
Slide 8: Twin River Casino Has Become a New England Locals' Destination
Twin River Casino Has Become a New England Locals’ Destination ▪ 4,101 slot machines ▪ 162,420 square foot gaming floor ▪ 113 table games and poker ▪ 29,000 square foot multipurpose room event center ▪ 48 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 ▪ 32 table games and stadium ▪ 83 guest rooms and suites, meeting gaming spaces and a fitness center ▪ Opened in Septembe
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 ▪ 1,180 slot machines ▪ 50,984 square foot gaming floor ▪ 52 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 ▪ 2,169 slot machines spa / salon, conference center, banquet hall, ballroom and ▪ 38 table games and poker concert hall fa
Slide 12: Pending Acquisition in Black Hawk, Colorado
Pending Acquisition in Black Hawk, Colorado Black Hawk (Pending Acquisition) 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 – Im
Slide 13: Pending Acquisitions in Kansas City and Vicksburg
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 (3) $534 Revenue $ in millions $97 18% $414 $421 $123 29% $125 23% 18% $123 30% 30% 29% 23% (2) $192 70% 71% $312 59% 58% $291 70% $298 71% $192 100% 2013 2016 2017 PF 2018 Legacy Twin River / Newport Grand Biloxi Dover Downs 1) Purchase price
Slide 17: We Have Executed on Key Strategic Objectives
We Have Executed on Key Strategic Objectives Objective What We Have Done Grow and Diversify • Acquired Biloxi (2014), Newport Grand (2015) and Dover Downs (2019) through Strategic and Accretive M&A • Announced acquisitions in Black Hawk, CO; Kansas City, MO; and Vicksburg, MS • Moved Newport license
Slide 18: Track Record of Strategic M&A
Track Record of Strategic M&A TRWH has focused on creating long-term strategic value Estimated Purchase Multiple / Owned Strategic Rationale Multiple / Adj. EBITDA(1) 10x / <7x Hard Rock Biloxi Diversify from Single Property $36M - $38M Transfer to Tiverton Own 2nd Rhode Island License Newport Grand
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
Slide 20: Isle of Capri Kansas City - Potential Redevelopment Rendering
Isle of Capri 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: Isle of Capri Kansas City - Example Site Master Plan
Isle of Capri 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 Regulatory Framework
TRWH Has Proven Ability to Work Collaboratively Within Regulatory Framework 22
Slide 23: 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 24: III. Investment Highlights
III. Investment Highlights
Slide 25: Gaming Taxes Pay for VLTs, So TRWH Realizes High Free Cash Flow
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 26: 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 27: IV. Key Financial Highlights / Q3 2019 Results
IV. Key Financial Highlights / Q3 2019 Results
Slide 28: Third Quarter 2019 Highlights
Third Quarter 2019 Highlights Corporate Strategy Continuing to Create Value for Shareholders • Revenue increased 17.0% to $129.3 million • Dover Downs exceeded expectations with $25.9 million of revenue, net income of $2.7 million and adjusted EBITDA of $6.1 million(1) • Gross gaming revenue increas
Slide 29: Summary of Financial Results
Summary of Financial Results (in thousands, except per share amounts and percentages) Q3 2019 Q3 2018 $ Change % Change Revenue $ 129,309 $ 110,494 $ 18,815 17.0 % Income from operations $ 21,451 $ 29,651 $ (8,200) (27.7)% Income from operations margin 16.59 % 26.83 % Net income $ 6,999 $ 16,374 $ (
Slide 30: Capital Return Program Delivering Attractive Capital Returns
Capital Return Program Delivering Attractive Capital Returns to Shareholders $83 million available for use under the program as of September 30, 2019 Share Repurchases Quarterly Dividend • Completed modified dutch auction tender offer in the third quarter of 2019 and repurchased 2.5 million shares f
Slide 31: Shares Outstanding
Active Capital Return Program Common Stock Activity 42,000,000 41,111,841 41,147,597 40,000,000 37,989,376 38,000,000 -16 Shares Outstanding % 36,000,000 34,574,587 34,000,000 32,000,000 30,000,000 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q1: • Issued 2,976,825 shares of common stock for acquisition of Dover
Slide 32: Strong Balance Sheet and Commitment to Maintaining Prudent Leverage Ratio
Strong Balance Sheet and Commitment to Maintaining Prudent Leverage Ratio Q3 2019 ($ in thousands) Face Value of Debt(1): $699,250 Cash on Hand: $232,603 Net Debt: $466,647 TTM Adjusted EBITDA(2): $163,918 Net Leverage (2)(3) 2.8x (1) Outstanding debt before unamortized original issue discount and u
Slide 33: Continued Revenue Diversification
Continued Revenue Diversification M&A Strategy Focused on Accretive Growth Q3 2019 Q3 2018 2% 2% 26% 30% 52% 68% 20% Rhode Island Delaware Biloxi Other Rhode Island Biloxi Other 33
Slide 34: Investment to Drive Future Growth Led to Increased AG&A Costs
Investment to Drive Future Growth Led to Increased AG&A Costs Better Positions TRWH for the Long Term ($ in millions) $0.9 $1.7 $0.6 $0.4 $(0.2) $1.8 $0.5 $0.1 $50.0 $4.7 $(3.7) $(0.2) $8.1 $35.3 AG&A Q3 AG&A of Share- Fees Credit Wages Professional Tiverton Increased Reduced Pension Reduction Round
Slide 35: Corporate Strategy Driving Adjusted EBITDA Diversification
Corporate Strategy Driving Adjusted EBITDA Diversification (1) Strong Early Performance in Delaware Proving M&A Strategy Q3 2019 Q3 2018 23% 25% 60% 15% 77% Rhode Island Delaware Biloxi Rhode Island Biloxi (Excludes "Other" operating segment) (1) Refer to Appendix to this presentation for a reconcil
Slide 36: Adjusted EBITDA - Q3 2018 to Q3 2019
Adjusted EBITDA(1) - Q3 2018 to Q3 2019 Impact of Competition Expected to Moderate in Future Quarters ($ in millions) $41.5 $3.1 $0.2 $35.6 $3.0 $(0.6) $(0.6) $3.4 $1.2 $0.9 $(16.5) Q3 2018 Decrease in Hotel Addition of Tiverton Comparable Dover Biloxi Investment Other Q3 2019 Adjusted Lincoln (Linc
Slide 37: Rhode Island Financial Results
Rhode Island Financial Results • New competition in the region had a negative impact on Twin River Casino Hotel in Lincoln for the third quarter of 2019 • Revenue impact appeared to moderate in September with revenue at Lincoln down 17% year-over- year compared to decreases of 22% and 24% in July an
Slide 38: Biloxi Financial Results
Biloxi Financial Results • Consistent revenue performance in Q3 2019 compared to the same period last year • Reduction in Adjusted EBITDA primarily due to increased medical insurance claims year-over-year of approximately $0.3 million (in thousands, except per share amounts and percentages) Q3 2019
Slide 39: Delaware Financial Results
Delaware Financial Results • Strong performance which continues to outperform our already high expectations • Revenue of $25.9 million for Q3 2019 • Sequential Adjusted EBITDA improvement of approximately 17% versus Q2 • Expect additional physical and operating changes to be implemented throughout i
Slide 40: Appendix
Appendix
Slide 41: Gross Gaming Revenue
Gross Gaming Revenue Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except percentages) 2019 2018 Change 2019 2018 Change Gaming revenue $ 88,315 $ 82,067 7.6 % $ 279,417 $ 243,915 14.6 % Adjustment for State of RI's share of net terminal income, table games revenue
Slide 42: Revenue & Adjusted EBITDA by Quarter
Revenue & Adjusted EBITDA by Quarter Revenue by Quarter $150,000 $143,218 $129,309 $125,000 $120,631 $110,815 $110,494 $111,422 $104,806 $99,554 ($ in thousands) $100,000 $75,000 $50,000 $25,000 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 (1) Adjusted EBITDA by Quarter $50,000 $4
Slide 43: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation TRWH and Dover 2018 Proforma (in millions) A-3
Slide 44: Q3 2019 Trailing 12 Months Adjusted EBITDA
Q3 2019 Trailing 12 Months Adjusted EBITDA Trailing Twelve Months Ended (in thousands) September 30, 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 Net income $ 63,905 $ 6,999 $ 17,180 $ 17,596 $ 22,130 Interest expense, net of interest income 33,622 10,651 9,212 7,038 6,721 Provision for income taxes 21,466
Slide 45: 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) 2019 2018 2019 2018 Revenue $ 129,309 $ 110,494 $ 393,158 $ 326,115 Net income $ 6,999 $ 16,374 $ 41,775 $ 49,308 Interest expense, net of interest income 10,651 5,364 26,9
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 Delaware Biloxi 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 interest incom
Slide 47: Reconciliation of Net Income to Adjusted EBITDA by Segment
Reconciliation of Net Income to Adjusted EBITDA by Segment Three Months Ended September 30, 2018 (in thousands) Rhode Island Biloxi Other Total Revenue $ 74,779 $ 33,201 $ 2,514 $ 110,494 Net income $ 15,165 $ 5,658 $ (4,449) 16,374 Interest expense, net of interest income 1,894 2 3,468 5,364 Provis
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 Delaware Biloxi 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 interest incom
Slide 49: Reconciliation of Net Income to Adjusted EBITDA by Segment
Reconciliation of Net Income to Adjusted EBITDA by Segment Nine Months Ended September 30, 2018 (in thousands) Rhode Island Biloxi Other Total Revenue $ 223,088 $ 95,225 $ 7,802 $ 326,115 Net income $ 54,572 $ 14,819 $ (20,083) 49,308 Interest expense, net of interest income 6,336 1 9,794 16,131 Pro
Slide 50: Historical Reconciliation of Adjusted EBITDA
Historical Reconciliation of Adjusted EBITDA Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 (in thousands) Revenue $ 99,554 $ 104,806 $ 110,815 $ 110,494 $ 111,422 $ 120,631 $ 143,218 $ 129,309 Net income $ 19,154 $ 12,634 $ 20,300 $ 16,374 $ 22,130 $ 17,596 $ 17,180 $ 6,999 Interes
Twin River Worldwide Holdings — Q3 2019 Earnings Presentation on 6ix