Monarch Casino & Resort, Inc. · NASDAQ:MCRI
Monarch Casino & Resort — Shareholder Meeting (June 2012)
31 slides from Monarch Casino & Resort's shareholder meeting presentation, Jun 1, 2012
Slide 1: Annual Stockholder Presentation
Annual Stockholder Presentation June 1, 2012
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: Atlantis Casino Resort Spa / Riviera Black Hawk Casino
Atlantis Casino Resort Spa / Riviera Black Hawk Casino Reno, NV / Black Hawk, CO 3
Slide 4: Table of contents
Table of contents 1) Riviera Black Hawk 2) Monarch company history 3) The Reno-Sparks market 4) Atlantis financial review 5) Conclusion 6) Questions and Answers 4
Slide 5: Riviera Black Hawk transaction summary
Riviera Black Hawk Transaction summary Transaction closed April 26, 2012 Purchase price of $76.0mm cash ($73.9mm net after $2.1mm of cash) Funded by new $100mm revolving credit facility TTM Adjusted EBITDA at time of transaction announcement was $10.3mm which represents a 7.2x purchase multiple Cont
Slide 6: Local metropolitan area population
Riviera Black Hawk Local metropolitan area population Black Hawk / Central City Black Hawk is conveniently located 35 miles west of Denver (2.6 million people1), 35 miles southwest of Boulder, 20 miles west of Golden, and 77 miles east of Vail2 Source: 1) US Census Bureau (www.census.gov); Denver MS
Slide 7: Black Hawk-Central City gaming market
Riviera Black Hawk Black Hawk-Central City gaming market Commentary Property level detail 1 1 2 Property Location Slots Tables Rooms Comprised of 26 casinos Ameristar Black Hawk 1,495 44 536 The Lodge Black Hawk 985 34 50 10,485 slot machines and 239 table Isle of Capri Black Hawk 957 27 238 games R
Slide 8: Black Hawk gaming market
Riviera Black Hawk Black Hawk gaming market Slot count > 750 Bullwhackers 500 to 750 Wild Card Saloon < 500 Bull Durham Black Hawk Station Ameristar Entrance To Black Hawk Central City Market Fitzgeralds Golden Riviera Canyon Mardi Gras Grand Plateau Gilpin Red Dolly The Lodge Golden Lady Luck Gates
Slide 9: Black Hawk-Central City market performance
Riviera Black Hawk Black Hawk-Central City market performance Black Hawk-Central City total gaming revenue1 $700 $200 $661 $180 $650 $27 $629 $625 $619 $159 $604 $25 Annual revenue ($ in millions) $160 YTD revenue ($ in millions) $594 $151 $600 $577 $577 $25 $576 $66 $18 $67 $16 $21 $556 $48 $140 $2
Slide 10: Black Hawk-Central City vs Reno-Sparks market performance
Riviera Black Hawk Black Hawk-Central City vs Reno-Sparks market performance Black Hawk-Central City vs Reno-Sparks total gaming revenue The Black Hawk-Central $1,200 City market has $1,000 $ in millions increased, while Reno- $800 Sparks has decreased $600 $400 The two markets were $200 approximate
Slide 11: Black Hawk-Central City vs Reno-Sparks gaming revenue per unit
Riviera Black Hawk Black Hawk-Central City vs Reno-Sparks gaming revenue per unit Slots WPD $200 $144 $142 $143 $150 $128 $133 Slot WPD $106 $98 $94 $93 $94 $100 $50 $0 2007 2008 2009 2010 2011 Black Hawk-Central City Reno-Sparks Table games WPD (excl player banked poker) $1,000 $931 $843 $825 $829
Slide 12: Strategic considerations
Riviera Black Hawk Strategic considerations Consideration Commentary 35 miles to Denver (2.6 million people1) No tribal casino competition two tribal in southwest CO 350 to 400 miles drive time from Denver Desirable regional market Denver median household income of $56K; 12% higher than $50k nationa
Slide 13: Strategic considerations (cont'd)
Riviera Black Hawk Strategic considerations (cont’d) Consideration Commentary Among leading facilities in Single-level gaming floor seamlessly connected to six-floor parking garage Black Hawk Fourth largest casino in Black Hawk-Central City by number of slots Low tax rate structure; gaming revenue t
Slide 14: Significant EBITDA gains at Ameristar Black Hawk
Riviera Black Hawk Significant EBITDA gains at Ameristar Black Hawk Annual adjusted EBITDA and capital spend for Ameristar Black Hawk $60 Casino Hotel Smoking ban Amendment $56.0 remodel construction 50 $53.0 begins commences & $50 Hotel opens Adj EBITDA ($ in millions) $40 $35.5 $28.8 $30 $20.9 $21
Slide 15: Table of contents
Table of contents 1) Riviera Black Hawk 2) Monarch company history 3) The Reno-Sparks market 4) Atlantis financial review 5) Conclusion 6) Questions and Answers 15
Slide 16: Company history: organizational chart
Company history Organizational chart1 Monarch Casino & Resort, Inc. Golden Road Motor Inn, Inc. Monarch Growth Inc. Atlantis Casino Resort Spa Monarch Black Hawk, Inc. (owned by Golden Road) HoldCo Riviera Black Hawk Casino (owned by Monarch Black Hawk) Sub Owned property Source: Monarch Casino & Re
Slide 17: Company history: historic milestones
Company history 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 Riviera
Slide 18: Atlantis expansion and upgrade
Company history Atlantis expansion and upgrade $95 million of capital improvements from 2007 through 2009 Expansion of facilities and skywalk: $62.5 million expansion of facilities: $50.0 million skywalk to Reno Sparks Convention Center: $12.5 million Upgrade and redesign of pre-expansion facilities
Slide 19: New amenity highlights
Company history New amenity highlights Established as one of the finest restaurants in northern Nevada Atlantis Steakhouse Established as a locals favorite Manhattan Deli & Popular with local business and community leaders Restaurant 2011 write was 33% higher than 2009 (opened Q3 2008) Race & sports
Slide 20: Table of contents
Table of contents 1) Riviera Black Hawk 2) Monarch company history 3) The Reno-Sparks market 4) Atlantis financial review 5) Conclusion 6) Questions and Answers 20
Slide 21: The competitors: recent developments
The Reno-Sparks market The competitors: recent developments Heavy promotional environment in Reno-Sparks Downtown properties losing share to Atlantis, Peppermill and GSR Increased competition from central California casinos Red Hawk casino opened in December 2008 2,000 slots, 75 tables, no hotel roo
Slide 22: The competitors: recent developments (cont'd)
The Reno-Sparks market The competitors: recent developments (cont’d) Red Fox Existing Sherwood Valley Colusa Coyote Valley Robinson Pinoleville Enterprise Proposed Konocti Vista Sho-Ka-Wah (on reservation) Twin Pine Thunder Valley River Rock Cache Creek Red Hawk Proposed (off reservation) Rohnert Pa
Slide 23: Reno-Sparks gaming revenue
The Reno-Sparks market Gaming revenue Reno-Sparks vs MCRI total gaming revenue Since 1995, Atlantis has increased gaming revenue 224% while the market decreased by 25% Source: Monarch Casino & Resort analysis, NV Gaming Control Board, company filings 23
Slide 24: Atlantis market share
The Reno-Sparks market Atlantis market share MCRI and Reno-Sparks indexed gaming revenue growth Over the last 17 years, 300% Atlantis construction disruption 14.7% 15% Atlantis has continued from 2007 Q3 to 2008 Q2 to outperform the 250% 13% Reno-Sparks market by Indexed gaming revenue (1995=0%) foc
Slide 25: Table of contents
Table of contents 1) Riviera Black Hawk 2) Monarch company history 3) The Reno-Sparks market 4) Atlantis financial review 5) Conclusion 6) Questions and Answers 25
Slide 26: Recent financial performance
Atlantis financial review Recent financial performance Commentary Gaming revenue $110 $100 Q1 2012 adjusted EBITDA was 0.8% ahead Quarterly $ in millions Annual $ in millions $105 $99.8 $80 of the prior year despite the loss of a $100 $94.5 $97.4 $60 major Reno convention event for 2012 $95 $23.2 $2
Slide 27: RevPAR drivers
Atlantis financial review RevPAR drivers Occupancy1 100% 80.6% 85.4% 89.1% 81.4% 61.5% 63.2% 65.3% 54.9% 50% 0% 2009 2010 2011 2012 Q1 MCRI Reno-Sparks ADR1,2 $100 $76.71 $79.13 $71.62 $67.59 $74.13 $72.06 $70.81 $65.89 $50 $0 2009 2010 2011 2012 Q1 MCRI Reno-Sparks Occupancy has remained at above-m
Slide 28: Strong balance sheet position
Atlantis financial review Strong balance sheet position Total debt1 LTM leverage ratio1 $100 2.5x $91.3 2.3x $90 $80 2.0x 1.9x Total debt / adjusted EBITDA $70 $60 1.5x $ in millions $48.5 $50 1.0x $40 1.0x 0.8x $28.6 0.6x $30 $24.7 $19.0 0.5x $20 $10 $0 0.0x 2009 2010 2011 2012 Q1 Pro forma 2009 20
Slide 29: Table of contents
Table of contents 1) Riviera Black Hawk 2) Monarch company history 3) The Reno-Sparks market 4) Atlantis financial review 5) Conclusion 6) Questions and Answers 29
Slide 30: Conclusion
Conclusion Summary Difficult market conditions to continue in Northern Nevada due to: recessionary macroeconomic factors and continued heavy promotional environment in local market We have dramatically upgraded and expanded the Atlantis facility by investing over $95 million over the last few years
Slide 31: Questions and Answers
Table of contents 1) Riviera Black Hawk 2) Monarch company history 3) The Reno-Sparks market 4) Atlantis financial review 5) Conclusion 6) Questions and Answers 31
Monarch Casino & Resort — Shareholder Meeting (June 2012) on 6ix