Monarch Casino & Resort, Inc. · NASDAQ:MCRI
Monarch Casino & Resort — Shareholder Meeting (June 2015)
54 slides from Monarch Casino & Resort's shareholder meeting presentation, June 2015
Slide 1: Annual Stockholder Meeting Presentation
Annual Stockholder Meeting Presentation Atlantis Casino Resort Spa in Reno, NV Monarch Casino in Black Hawk, CO June 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 Excellent economic fundamentals in both Reno and Black Hawk markets Significant influx of business to Reno led by Tesla’s $5 billion battery factory Denver economy continues to be among nation’s strongest Monarch’s best-in-class properties have the premier locations in both
Slide 5: Company Overview: Regional Summary
Company Overview Regional Summary Reno Atlantis has been upgraded and expanded in recent years Premier location Recent investment of over $95 million AAA four-diamond rating Minimal forward capex requirements Black Hawk Ongoing renovation of existing facility well underway Three phase project Curren
Slide 6: Positive Market Characteristics for the Reno Market
Company Overview Positive Market Characteristics for the Reno Market Reno Forbes – “Squaw Valley News: Base-To-Base Gondola Connection Approved Between Squaw Valley And Alpine Meadows” – April 14, 2015 Departures Magazine – “Reno-Vation: The Biggest Little City in the World is proving that America i
Slide 7: Positive Market Characteristics for the Denver Market
Company Overview Positive Market Characteristics for the Denver Market Denver Denver OED – “In 2014, Downtown Denver received over $1 billion of development investment, including 482 hotel rooms, 1,148 residences, 275,000 sq. ft. of office space and 170,000 sq. ft. of retail. Looking forward, 20 pro
Slide 8: 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 9: 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 9
Slide 10: Positioned Near More Affluent South Reno Communities
Atlantis Casino Resort Spa Positioned Near More Affluent South Reno Communities Source: Wells Fargo 10
Slide 11: EDAWN jobs announced surged on the heels of Tesla
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) Economic Development Authority of Western Nevada “EDAWN” assisted new jobs. 11
Slide 12: New air service
Atlantis Casino Resort Spa New air service New York City, New York • JetBlue began daily nonstop flights between Reno and New York's JFK Airport on 5/28/15 • First nonstop flight from Reno to New York City Guadalajara, Mexico • Volaris, low-cost airline of Mexico, began nonstop flights between Reno
Slide 13: Atlantis Expansion and Upgrade
Atlantis Casino Resort Spa Atlantis Expansion and Upgrade Named #1 casino outside of Las Vegas by USA Today in March 2015 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
Slide 14: Atlantis Casino Market Share
Atlantis Casino Resort Spa Atlantis Casino Market Share Over the last 18 years, 300% 17% Atlantis has continued Indexed gaming revenue (1996=0%) to outperform the 250% 14.2% 15% Reno-Sparks market by focusing on providing 200% 13% MCRI market share best-in-class experiences, amenities, 150% 11% and
Slide 15: 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 15
Slide 16: 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 17: 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 18: 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 19: 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 8,077 slot machines and 201 Ameristar (PNK) Isle of Capri (ISLE) Black Hawk Black Hawk 1,368 1,094 55 33 536 238 table games The Lodge (JACENT) Mardi Gras (Affi
Slide 20: 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 21: 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 22: 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 since the acquisition Black Hawk construction from 2014 Q1 to present • Market share (TTM) increased 120 bps, or 13%, from 9.0% in
Slide 23: 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 income in Denver MSA of $58,732 is 17% above national average Nearest tribal casino 350 miles away Relatively m
Slide 24: 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 25: Master Plan Budget and Timeline
Monarch Casino Black Hawk Master Plan Budget and Timeline $ in millions Total Spent Through Cost Left to Spend Expected Completion Date March 31, 2015 I. Existing Facility Riviera Black Hawk Casino (1) $76 $76 - Complete Interior Q3 2015; Existing Facility Upgrade (2)(3) $34-$36 $18 $16-$18 Exterior
Slide 26: Existing Facility Upgrade
Monarch Casino Black Hawk Existing Facility Upgrade Completed projects: Upgraded food and beverage (all-new buffet) First phase of upgrade (new front entrance, new bar/cabaret lounge) Second phase of upgrade (new customer service area and upgraded table game offerings) Work left to complete: Phase t
Slide 27: New Parking Structure
Monarch Casino Black Hawk New Parking Structure Excavation and foundation work has been completed 9-story garage will increase parking to 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 Marc
Slide 28: 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 29: Existing Facility Upgrade: original cabaret stage
Monarch Casino Black Hawk Existing Facility Upgrade: original cabaret stage 29
Slide 30: Existing Facility Upgrade: new cabaret stage
Monarch Casino Black Hawk Existing Facility Upgrade: new cabaret stage opened August 2014 30
Slide 31: Existing Facility Upgrade: phase
Monarch Casino Black Hawk Existing Facility Upgrade: phase 2 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: New Parking Structure: current facility
Monarch Casino Black Hawk New Parking Structure: current facility 34
Slide 35: New Parking Structure: current construction progress
Monarch Casino Black Hawk New Parking Structure: current construction progress 35
Slide 36: Hotel Tower and Casino Expansion: redesigned rendering
Monarch Casino Black Hawk Hotel Tower and Casino Expansion: redesigned rendering 36
Slide 37: Hotel Tower and Casino Expansion: redesigned rendering
Monarch Casino Black Hawk Hotel Tower and Casino Expansion: redesigned rendering 37
Slide 38: Hotel Tower and Casino Expansion: redesigned rendering
Monarch Casino Black Hawk Hotel Tower and Casino Expansion: redesigned rendering 38
Slide 39: 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 39
Slide 40: Consolidated Results: Income Statement
Monarch Consolidated Results Income Statement Black Hawk acquired 04/26/12 Q1 2015 LTM net revenue is 0.9% higher and adjusted EBITDA is 1.4% higher than 2014 Source: Monarch Casino & Resort analysis 1) Adjusted for stock option expense and one-time charges. 40
Slide 41: Strong Balance Sheet Position
Monarch Consolidated Results Strong Balance Sheet Position Leverage remains a low 1.0x Source: Monarch Casino & Resort analysis 41
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: Conclusion: Summary
Conclusion Summary 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 forward capex requirements) Strong results out of Black Hawk (increased
Slide 44: 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 44
Slide 45: 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. 45
Slide 46: Hotel occupancy and cash ADR
Appendix Hotel occupancy and cash ADR1 Atlantis outperforms the market in both occupancy and cash ADR Source: Monarch Casino & Resort analysis, RSCVA 1) Cash ADR is inclusive of resort fees collected for both Atlantis and the Reno-Sparks market; figures based on Reno-Sparks Convention and Visitors’
Slide 47: 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 48: Diversification of the Northern Nevada Economy
Appendix Diversification of the Northern Nevada Economy Newly Announced Currently Operating Tesla Arrow Electronics 6,500 jobs 600 to 699 jobs Manufacturing Technology Zulily Barnes & Noble 1,000 jobs 400 to 499 jobs Distribution Distribution Clear Capital Intuit 400 jobs 400 to 499 jobs Data Analyt
Slide 49: EDAWN prospect visits up
Appendix EDAWN prospect visits up1 16 14 12 10 2015 Q1 LTM 8 2014 Average Average 11.0 10.9 2013 Average 6 9.8 2012 Average 4 7.8 2011 Average 2 4.2 0 Source: NV Office of Economic Development 1) Visits to the Reno area coordinated by EDAWN by companies interested in exploring siting their business
Slide 50: Unemployment rates continue to improve
Appendix Unemployment rates continue to improve Denver has the tenth 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 51: Reno median housing prices are at healthy levels
Appendix Reno median housing prices are at healthy levels Housing prices in 2007 were associated with the speculative bubble in real estate Prices now have recovered from the recession lows and have avoided the bubble era excesses Per WSJ article dated May 11th, 2015, home prices in Reno-Sparks have
Slide 52: Reno home prices rebounding off of post-bubble lows
Appendix Reno home prices rebounding off of post-bubble lows 3.9% CAGR Apr 2000 - Apr 2015 22.1% CAGR growth since Apr 2012 Source: Reno-Sparks Association of Realtors 52
Slide 53: 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 54: 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
Monarch Casino & Resort — Shareholder Meeting (June 2015) on 6ix