Monarch Casino & Resort, Inc. · NASDAQ:MCRI
Monarch Casino & Resort — Q4 2021 Earnings Presentation
29 slides from Monarch Casino & Resort's earnings presentation, February 2022
Slide 1: Investor Presentation
Investor Presentation February 2022
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 • Monarch ranked 39th among the Top 100 on Forbes’ 2022 America’s Best Small Companies list Strong underlying economic fundamentals in both markets • Denve
Slide 4: Company History
Company History 2008 Phase IV – Atlantis • Expansion of the 2022 1994 1999 casino including: Atlantis 1991 Phase II - Atlantis Phase III - Atlantis • Large race and • ~61,000 square feet of Phase I – Atlantis • Second high-rise tower • Third high-rise tower sports book casino space • First high-rise
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’s Resort amenities include: • All new 23-story luxurious tower with 516 hotel rooms (20% suites) • ~60,000 square foot casino • ~1,100 slot machines and ~40 table games • All new poker room opened May 14, 2021 • Keno counter opened May 27, 2021 • C
Slide 8: Black Hawk Gaming Market
Black Hawk Gaming Market Market1 consists of: • 21 casinos • 7,983 slot machines • 163 table games • 49 poker tables • 1,651 hotel rooms spread across seven gaming facilities Monarch Casino Resort Spa gaming positions: • ~1,100 slot machines • ~40 table games • 14 poker tables Source: Monarch Casino
Slide 9: Black Hawk Market Share
Black Hawk Market Share1 Monarch Casino Resort Spa has consistently grown market share over the past seven years • 2021 market share was an all-time record at 23.1% • Represents an increase of 1,510 basis points compared to market share of 8.0% at the time of the acquisition • Market share gains beg
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 Bally’s North Monarch Casino Resort Spa Bally’s West • ~35 miles west o
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 • Lifting of betting limits • Additional variety of games including baccarat Monarch has been a significant beneficiary of the lifting of betting limits due to its supe
Slide 14: Atlantis Casino Resort Spa Reno
Atlantis Casino Resort Spa Reno
Slide 15: Atlantis Overview
Atlantis Overview Award-winning facility • TripAdvisor - Rated #1 Reno resort last 8 years with 4 of our restaurants ranked in the top 10 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 Re
Slide 16: Atlantis Market Share and Indexed Gaming Revenue
400% 17% 15.7% Atlantis Market Share 350% 15% Indexed gaming revenue (1996=0%) 300% 13% Atlantis Casino Resort Spa has consistently outperformed the 250% MCRI market share greater Reno-Sparks market for the last 25 years 200% 11% • Primary focus has always been providing best-in-class and best-in-ma
Slide 17: Atlantis Hotel Occupancy and Cash ADR
Atlantis Hotel Occupancy and Cash ADR1 Hotel market continues to rebound from the pandemic, with Atlantis focusing on occupancy to the benefit of casino revenues Source: Monarch Casino & Resort analysis and Reno-Sparks Convention & Visitors Authority 1. Cash ADR is inclusive of resort fees.
Slide 18: Fast-Growing Reno Market
Fast-Growing Reno Market Population of ~500,000 • Reno metro’s population has grown 15.3% from 2010 to 2020 (national average: 7.4%) • Gaming environment remains extremely competitive due to tribal gaming in the major feeder markets (California, Oregon and Washington) Reno diversifying to broader ba
Slide 19: Atlantis' Prime Location
Silver Legacy Circus Circus Rail City Western Village Ramada Reno Atlantis’ Prime Location Eldorado 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 downtown in mo
Slide 20: Growth Initiatives
Growth Initiatives
Slide 21: Sports Betting
Sports Betting Monarch owns & operates its sports book • 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 the state’s first mobile sports betting ope
Slide 22: Balance Sheet Management
Balance Sheet Management $90 million principal balance on our Term Loan, and $33.5 million of cash as of December 31, 2021 No borrowings outstanding under our $70 million Revolving Credit Facility Monarch owns substantially all its real estate and is not subject to any material rent payments
Slide 23: Strong Growth Profile
Strong Growth Profile Near term organic growth: • Lifting of betting limits in Colorado • Completion of 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 f
Slide 24: Financial Results
Financial Results
Slide 25: Historical Financial Performance
Historical Financial Performance $600 45% Acquired Colorado Monarch Black Hawk gaming license starts phased opening April 2012 November 2020 40% $500 35% $400 30% $ in millions 25% $300 20% $200 15% 10% $100 5% $0 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Net Revenue $136.4 $134
Slide 26: 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 0.5x 0.6x 0.5x 0.4x 0.4x 0.4x 0.0x 0.0x -0.1x -0.5x 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: Monarch Casino & Resort analysis 1. EBITDA i
Slide 27: Income Statement Overview
Income Statement Overview Three Months Ended December 31, Twelve Months Ended December 31, $ in 000s, except EPS 2021 2020 2019 2021 2020 2019 Net revenue $111,068 $58,377 $62,080 $395,377 $184,413 $249,166 Adjusted EBITDA(1) $39,015 $13,898 $14,142 $137,294 $43,161 $61,687 Net income $19,871 $15,26
Slide 28: Balance Sheet Overview
Balance Sheet Overview $ in 000s December 31, 2021 December 31, 2020 December 31, 2019 Cash and cash equivalents $33,526 $28,310 $60,539 Net property and equipment 580,807 572,507 501,483 Other assets 76,126 71,060 48,856 Total assets $690,459 $671,877 $610,878 Long-term debt (including current $88,
Slide 29: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Three Months Ended December 31, Twelve Months Ended December 31, $ in 000s 2021 2020 2019 2021 2020 2019 Adjusted EBITDA $39,015 $13,898 $14,142 $137,294 $43,161 $61,687 Expenses: Stock based compensation (961) (1,104) (1,180) (4,060) (3,855) (4,125) Depreciation and a
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