Monarch Casino & Resort, Inc. · NASDAQ:MCRI
Monarch Casino & Resort — Investor Presentation (November 2021)
35 slides from Monarch Casino & Resort's investor presentation, November 2021
Slide 1: Investor Presentation
Investor Presentation November 2021
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: Investment Summary
Investment Summary Prime locations and assets Results-oriented management with strong operating track record • Record LTM GGR at both properties Strong underlying economic fundamentals in both markets • Denver’s economy is one of the nation’s strongest, with healthy population growth of 16.5% from 2
Slide 4: Company History
Company History 2008 1994 1999 Phase IV – Atlantis 1991 Phase II - Atlantis Phase III - Atlantis • Property features: Phase I – Atlantis • Second high-rise tower • Third high-rise tower • 969 rooms, since • First high-rise tower opens, adding: opens, adding: reduced to 818 opens 1993 • 283 rooms • 3
Slide 5: Monarch Casino Resort Spa Black Hawk
Monarch Casino Resort Spa Black Hawk
Slide 6: Monarch Casino Resort Spa Black Hawk - Overview
Monarch Casino Resort Spa Black Hawk - Overview Acquired gaming license in April 2012 • Transaction price of $76.0 million • Acquisition multiple of 6.7x reduced to 4.9x after first year of Monarch ownership Amenities pre-expansion included (pictured): • 32,000 square foot casino with ~743 slots and
Slide 7: Resort / Casino Expansion
Resort / Casino Expansion Monarch Casino Resort Spa began phased opening of the hotel and expanded casino in 4Q20 Amenities at completed resort to include: • All new 23-story luxurious tower with 516 hotel rooms (20% suites) • ~60,000 square foot casino • ~1,200 slot machines and ~40 table games1 •
Slide 8: Black Hawk Gaming Market
Black Hawk Gaming Market Pre-COVID closure, market1 consisted of: • 21 casinos • Only five casinos offered more than 500 slot machines • 8,742 slot machines • 162 table games • 1,133 hotel rooms spread across six gaming facilities Monarch Casino Resort Spa gaming positions as of 9/30/21: • ~960 slot
Slide 9: Black Hawk Market Share
Black Hawk Market Share1 300% 23% 21% Indexed gaming revenue (2012 Q1=0%) 250% 20.4% Monarch Casino Resort Spa has consistently grown market share 19% MCRI market share (TTM) over the past seven years 200% • TTM market share was an all-time record 20.4% as of September 30, 2021 17% 150% • Represents
Slide 10: Prime Property Location
Slot count Z Casino > 600 300 to 600 Sasquatch Bull Durham < 300 Prime Property Location Saratoga Gilpin Wild Card Saloon Red Dolly Ameristar Easy access from Front Range population centers and heavily- The Lodge trafficked I-70 Mardi Gras Monarch Casino Resort Spa Golden Gates • ~35 miles west of D
Slide 11: Rationale for Black Hawk Investment
Rationale for Black Hawk Investment Denver metro area an attractive target market • Population of more than 3 million • Median household income of $85,6411 is 30% above the national average • Sixth largest source of air traffic to Las Vegas in 2019 (originating passengers only) Black Hawk underserve
Slide 12: Denver Metro Area Provides Significant Air Traffic to Las Vegas
Denver Metro Area Provides Significant Air Traffic to Las Vegas Top Las Vegas Feeder Markets (2019 Originating Passengers in Thousands) 1,800 1,600 1,565 1,521 1,400 1,200 1,000 815 800 690 671 636 600 510 502 477 444 400 200 0 Los Angeles San Francisco Chicago Seattle Dallas Denver New York Washing
Slide 13: Colorado Lifting of Betting Limit
Colorado Lifting of Betting Limit Colorado's Amendment 77 passed November 3, 2020 (effective May 1, 2021) • Industry-led initiative • Company has posted bet limits of up to $3,000 and considers requests for greater limits on a case by case basis (previously had been capped by state at $100) • Baccar
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Slide 15: Atlantis Casino Resort Spa Reno
Atlantis Casino Resort Spa Reno
Slide 16: Atlantis Overview
Atlantis Overview Award-winning facility • TripAdvisor - Rated #1 Reno resort last 7 years with 4 of the top 10 ranked restaurants in the city • USA Today Travel - #1 casino outside Las Vegas • AAA - “Four Diamond” rating • Forbes - Four-Star Award for Spa Atlantis (only four-star venue in Reno) • U
Slide 17: Atlantis Market Share
Atlantis Market Share Atlantis Casino Resort Spa has consistently outperformed the greater Reno-Sparks market for the last 24 years • Primary focus has always been providing best-in-class and best-in-market experiences, amenities, and service Property enhancements • Committed to outstanding restaura
Slide 18: Atlantis Hotel Occupancy and Cash ADR
Atlantis Hotel Occupancy and Cash ADR Total Occupancy Cash ADR 100% $160 90% 87% $138 $140 $137 $134 80% 80% $124 $122 $118 71% $120 70% 67% 62% $100 60% 53% 50% $80 40% $60 30% $40 20% $20 10% 0% $0 2019 2020 3Q21 LTM 2019 2020 3Q21 LTM Reno-Sparks Atlantis Reno-Sparks Atlantis Given hotel market s
Slide 19: Fast-Growing Reno Market
Fast-Growing Reno Market Population approaching 500,000 • Reno metro’s population has grown 15.3% from 2010 to 2020 (national average: 7.4%) Reno diversifying to broader base of industries • Expanded list of industries include manufacturing, distribution and technology Reno undertaking significant r
Slide 20: Positive Market Characteristics
Positive Market Characteristics “PayCertify is moving its headquarters to Reno partly because Tahoe Reno taxes in California are so high, CEO Chase Hammer said. It specializes in various financial technology services, including Industrial Center credit-card issuing and payment processing.” • “2 Cali
Slide 21: Atlantis' Prime Location
Silver Legacy Circus Circus Rail City Western Village Ramada Reno Atlantis’ Prime Location Eldorado Harrah’s Nugget Club Cal Neva Baldini’s Ideally located in the heart of south Reno’s restaurant, shopping Grand Sierra and convention district Boomtown Reno, Gold Dust West & • ~3 miles south of downt
Slide 22: Atlantis Enhancements
Atlantis Enhancements Enhancements completed in 4Q20 include: • Atrium Cocktail Lounge • Red Bloom, serving authentic Asian cuisine 2021 enhancements to be completed by year-end: • All-new top-tier suites • Conveyance system improvements
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Slide 24: Growth Initiatives
Growth Initiatives
Slide 25: Leverage Loyalty Program
Leverage Loyalty Program Rebranded as Monarch Rewards in June 2019 Atlantis Casino Resort Spa Reno has benefited from cross property play since the Black Hawk casino was licensed in 2012 • Trips to Atlantis from the Denver MSA grew significantly upon acquisition of the Colorado property The new Mona
Slide 26: Sports Betting
Sports Betting Monarch owns & operates its sportsbook • App content and trading done by internal Reno-based bookmaking team • Atlantis Race and Sports mobile app launched in Nevada in 2015 • BetMonarch mobile app launched in Colorado in May 2020 as one of state’s first mobile sports betting operator
Slide 27: Balance Sheet Management
Balance Sheet Management $105.8 million of debt and $33.0 million of cash as of September 30, 2021 Company and lenders entered into a restated credit agreement in September 2020 • Aggregate principal amount of facility is $270 million ($200 million term loan and $70 million revolving credit facility
Slide 28: Strong Growth Profile
Strong Growth Profile Near term organic growth: • Lifting of betting limits in Colorado • Black Hawk legacy facility transformation (25% increase in casino space, 35% increase in restaurant seating) • Strong economic tailwinds in both Reno and Denver metro areas Substantial free cash flow with compl
Slide 29: Financial Results
Financial Results
Slide 30: Historical Financial Performance
Historical Financial Performance $400 Acquired Colorado Monarch Black Hawk 35% gaming license starts phased opening April 2012 November 2020 $350 30% $300 25% $250 $ in millions 20% $200 15% $150 10% $100 5% $50 $0 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 3Q21 LTM Net Revenue $136.4
Slide 31: Historical Net Leverage Ratio
Historical Net Leverage Ratio 4.0x 3.5x 3.5x 3.0x Total Net Debt/LTM Adjusted EBITDA1 2.5x 2.2x 2.0x 1.7x 1.5x 1.3x 1.1x 1.0x 0.7x 0.6x 0.6x 0.5x 0.5x 0.4x 0.4x 0.0x 0.0x -0.1x -0.5x 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 3Q21 Source: Monarch Casino & Resort analysis 1. EBITDA i
Slide 32: Income Statement Overview
Income Statement Overview Three Months Ended September 30, Nine Months Ended September 30, $ in 000s, except EPS 2021 2020 2019 2021 2020 2019 Net revenue $111,630 $59,869 $65,585 $284,309 $126,036 $187,086 Adjusted EBITDA(1) $40,279 $20,664 $17,351 $98,279 $29,263 $47,545 Net income $22,314 $10,745
Slide 33: Balance Sheet Overview
Balance Sheet Overview $ in 000s September 30, 2021 December 31, 2020 December 31, 2019 Cash and cash equivalents $33,036 $28,310 $60,539 Net property and equipment 570,903 572,507 501,483 Other assets 68,489 71,060 48,856 Total assets $672,428 $671,877 $610,878 Long-term debt (including current $10
Slide 34: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2019 2021 2020 2019 Adjusted EBITDA $40,279 $20,664 $17,351 $98,279 $29,263 $47,545 Expenses: Stock based compensation (572) (897) (1,027) (3,099) (2,751) (2,945) Depreciation and amortization (
Slide 35: Investment Summary
Investment Summary Prime locations and assets Results-oriented management with strong operating track record • Record LTM GGR at both properties Strong underlying economic fundamentals in both markets • Denver’s economy is one of the nation’s strongest, with healthy population growth of 16.5% from 2
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