Century Casinos (CNTY) 10 Mar 232022 Q4 Earnings call transcript

Good day, everyone, and welcome to the Century Casinos Q4 2022 Earnings Call. [Operator Instructions] Please note, today's call will be recorded. [Operator Instructions]

It is now my pleasure to turn today's call over to Peter Hoetzinger. Please go ahead.

thank joining and earnings everyone, morning, you our for call. Good Chief my on Haitzmann; the our Stapleton. the me co-CEO as Officer, call as Erwin With Casinos, are and Margaret Century Chairman well Financial of

undertakes always, materially of forward-looking be forward-looking uncertainties of from these update statements. will that and future our As whether that cause actual risks company involves discussing factors statements, would new forward-looking or result provide discussion information, to filings. or remind information, a detailed in like the you the We otherwise. review no we revise encourage results we several you may filings which obligation and events as to to to risk The our differ a SEC various

refer the non-GAAP non-GAAP call, can GAAP measures, section cnty.com. EBITDA. In financial but to, in the at to our our be of Reconciliations in SEC not news of Investors our addition, measures appropriate throughout to website liquidity several releases limited and adjusted our filings measures available found and we performance including,

overview an there Q&A of will a results fourth quarter of provide and After full be I'll And session. that, the year XXXX. the

and low close required did. did QX fourth in net to to year We to water Missouri in up then was EBITDA had reopen all-time That million dangerously the act creative river cost operating in casino results impacted 'XX and Caruthersville us adjusted had quarter. We $X only. boat these an For even and levels The and quickly, severely revenues weather record X% become of restricted about record we we XX% achieved with up could XXXX. the with throughout XXXX, EBITDA November us capacity over compared though by our

Gaming temporary Missouri before moved operations we all building. of Christmas just land-based to With the a the holidays, the Commission approval

properties storms Caruthersville, we the QX We but weather, negatively and impact mid-December, it in typically as to other in to like not in had addition freezing has impacted an severe well do issues temperatures our that quite call out results. at

weather between the high demand not portfolio Caruthersville, the the and note January across that and entire performances, February. continued Year's, as but New broke, into only and However, on Christmas quarter at we with a has returns, strong and ended

gaming regional year. down, and of showing unemployment indicators solid many and wage as a underlying is remaining trends The QX growth rather see to growing customer Outside little environment. slowing sign heading such healthy weather, into this of and we demand QX of macro

our utility our all overall The us. continue Wage we expense of largely remains dealing approach a teams business, markets the stable. marketing has and normalized, On is for relatively all that remains while pretty are situation cost pressures disciplined, the It managing the envision environment very promotional elevated. exist. side structure inflationary rational but to with inflation still across of

review turned overall we and in to of ADT But year, from especially December, I'll segment In by in bit fourth year a the little each utility quarter. was detail. higher Now last year. revenues flat finished impacted EBITDA labor compared the costs with more We Colorado, The steady. this into trend down of November. visits higher share market number our QX was around continues October held it and segment. the that positive in and in

a Virginia. was West It picture similar in

trips difficult currently midweek. and holidays Our back over to But The to especially Resort casino came start the a year-over-year. business had Mountaineer down, quarter. Racetrack of was Casino, the and flat number the

and hours We hotel of experiencing in resulting availability operation limitations still to staffing Mountaineer, challenges are of rooms. at

Right weather the also prior we December, trade ADT situation already, impact Caruthersville typically low call-in Missouri, saw we continued the significant water compared Cape being trend was revenue from and of all-time are at the up that, mentioned and more across to rebounded strongly to of around I to level the current database. quarter. winter even Year's distance with QX for what record one but all X% last Eve. into business our the In properties. trips we dangerously an That groups, year. Girardeau year at at has ranges in after our property Currently, times year. age Spend is biggest Missouri daily of on had New of segments a both

in of Caruthersville Let new at gaming me growth there. significant and casino XX will of projects to have in in importantly, will hotel provide operational is according a rooms; to new be will our machines, our over year. tables XX convenient color schedule. increase customers, It of QX slot it which positions base area. We the compared old to it will more open to efficiencies. hotel the increase XXX property plan total is and Construction add more gaming progressing next The land Most development much catchment a for XX% our riverboat.

Missouri At full That of construction of transform conferences, dining, concerts, gaming, X-story the X for offering more. hotel on resort the will is time this destination development to larger room next casinos, Central of XX Girardeau, property year. Cape our around building events track Casino well and the opening a

continued week. growth news X X is Moving revenues On last Alberta proceeds top by to regulatory got now of we the from that, the to gains Effective operators good in to the in into reinvest overall front very showed the January Canada. and Gaming All their promote quarter, nice of that from enabling X% Commission by increasing operators' properties and portion in this year, gaming help facilities. slot April February.

years measure temporary quarter significant on. While in next a do from X results for we this a our increase is for expect value now,

Revenue in XX%. solid continued Our was casinos Poland up performance. their

strong, it issue as results timing to process. is time may not excited any are pressure. for wait the our us. have an consistently in license don't As We Poland another well for sales kickstart That

or is from any from to side. we team us. the Cash for in know, there It's you excellent our no investment As CapEx an is Poland there flowing quite and need have management place, opposite.

look transaction million, in keep shows A and sheet liquidity escrow and closing plus $XXX for have balance the million Market we licensing at cash totaled Sachs for quick million Goldman in which that which Nevada agreement, we escrow market. of the $XXX $XXX which million, is the debt the credit under in million once the $XXX is cash Outstanding equivalents, of complete. our OpCo $XXX includes

pending acquisitions market acquire Happy casino Board to well. X Commission recommended had Our hearing the went the resort We our yesterday. unanimously day all before operations. Gaming Gaming as Control report The approval the application are progressing Board that planned. to Nevada Nevada to our of at

today. Gaming its to at April, If acquisition XX. must approved, on first meeting X Our of weeks Nevada week application plan Commission by we still be March than the the market close in the from less approved in

plans We are upgrades, and ever investments for I'm for excited finalizing and than more about the our initial improvements. potential

largest plan and as with the areas that several the synergy floor of well And indoor and Reno a provides location The facade restaurants, potential a entertainment in well gaming rooms over raising and on attractive X,XXX exposure with slots in for destination XXX IAD operational immediate Its auto and focus Sparks departments. market. the on on in as as across that casino mentioned gives suites, hotel as be the we X one effects all will XX a new of area, full unmatched signage. full-service on taking venues, resort with advantage tables, the

we acquisition the the Rocky Rocky and take to months probably real of Maryland, assets, add or transaction, with their estate VICI July. our master close with In the the in to property. will expect couple of the market we existing Gap over will lease transaction, a VICI June after Gap Simultaneously, closing properties amend

and Rocky designed X,XXX Washington Gap feet Metro by from Jack XX-hole games, center, Nicklaus, full activities. than square over event is spa consists XX,XXX Baltimore gaming areas. machines, square hotel the course XXX F&B less XX and D.C. includes venues. Property service XXX several And of several rooms X of golf an spaces, table meeting a floor, slot resort feet hours and outdoor

With X improve from a expect will note acquisitions, over West. a U.S. after fact reaches is our will our East of also acquisitions What that generate we basis, U.S. giving that these is forma important leverage acquisitions, the to effect in we portfolio oversee the Rocky the and the to EBITDA to X Nugget ratios. On pro XX% Gap to

to total times, X.X that is Our ratio and reduce times. debt-to-EBITDA X.X will current

net Our debt-to-EBITDA net current remains flat X.X adjusted X.X million. leverage from at times. goes lease The X.X% down to

As most operators for rent about with advantageous OpCo’s the the discussion mix HoldCo’s and with of being aggressive and coverage. very

our our we estate feel basis pro across at investors coverage very to and With acquisitions. with X.Xtimes that's the already working on continue X that, comfortable, forma quite conservative portfolio. pending and support of be will we'll And real case-by-case growth. We a healthy a rent for

difficult it into persists As the XXXX, consumer to where are that further makes headed. trends economic today predict uncertainty we move

are factors behavior on the our tightly market that are to biggest correlated has which X watching that mainly believe volumes, We customers. and our economic the labor are business the of housing. and we impact core

interest in or our Slight gas shift rates that don't affect customers seem prices much. to

trends cautiously positive in markets. across we saw January are our optimistic the about We February and all

we to of EBITDA. it was $XXX back We look transformative as acquire another posted closing, In on another of signed year XXXX, revenues and million over million $XX agreements and results record for Century.

online our the organic and projects drive year as in our are potential macro we X next operation. Nugget Alberta Looking about more change growth believe help as positive risks offset ahead, acquisitions opportunities than are pressure. to is we excited Further, growth to in regulatory Gap land-based year. well some the growth coming about Rocky These this clearly should drivers there additional There still. consumer Missouri

I'd loyalty company's can the you attention. stockholders ahead, Board, your the please. of enthusiasm like guests session. for thank I for behalf team management On and continued their to our start our now and Q&A our We thank go and Operator, members,

We Instructions] Jeff will our Stantial. take from question first [Operator

was the way, if Gibb I to Jeff your hit $X quarter is This disruption Coruthers in on to fourth million is noticed could, you in EBITDA. quantify similar weather build the results. a the I quantified Jackson for you wondering that of a impact Stantial.

a for that, we? we do number don't Erwin, have

It's too to mean bit would a It's I harder. some be say. hard speculative. hesitate I to say

bit. you And margins Then weather roll once and throughout moving those margins, for a these margins. of a temporary if are what But the affected wondering it pressures little XXXX? about portfolio, the represents Caruthersville of the into impacts, rate was I reasonable business forward? how run disruption like X about came thinking kind thinking off, looks in they clearly

that may main higher utility as we that, that And And maintenance, factors higher had here, the are higher think down, the the on the at look expense we've there -- ideally a insurance. take can also maybe We and go would we cost with bit price high If future. these side, if coupled of be property operating additional predict were assessment that high But these little our increases. of up expense I -- nobody will be not salary increases. costs, peak will supplies. would the costs but

think but any And not are margin, the that any And don't we operating with able and it go hopefully, revenues. so need also we further insurance significance price on the net then to increase increases salary will of and how really more higher. well any utilities up regard we -- depends to also

Our next question comes from Chad Beynon.

open. line Your is

ask of profile wanted I also the growth how And about the scope projects. return kind of cost or the to Has of in anything fully of Erwin, view these terms Peter, changed projects? ramped? the you kind once Missouri then

with has to changed regard the cost. Nothing

the the that invested Or [Indiscernible] Kepty budget, latest have budget, the the percentage so hotel good. on return return are And Caruthersville and within on additional other hand? capital? you Peggy, looks we the on did We do

have don't in right those I of me now. front

have We'll not then the have the we'll big it We're at issues all that first-time a big said and Caruthersville return Caruthersville first I and will back. especially XX% that impact, -- expect XX% will Girardeau a These visitors, improvements gone to It's have really rooms. a both Caruthersville. at come back upgrades it's also hotel come a in have both which these has of the changer Cape a XX% to because game are believe. -- It's we in XX% time significant number and Missouri, property. for to not in and changed. We have

about progress And not there. I all point. Nugget, your the in control closing gaming the the property, to then that. take the Obviously, on talked you That's with the this we're when and guess less look Should But weather respect we'll that. will to take aware couple see terms of you of of assume some that like. of a synergies upgrades, the to well questions meaning control affecting these there a numbers you of the impact floor at when some should of property? of control kind on you Congrats as be the make there and positive changes low second benefits? once quarter impact be then kind disruption, start and for disruption you we Or some

Erwin?

disrupting I to really is the certainly slots putting not only thing -- changes layout. and disruption. don't when And that that And is we with. aspects floor and is wouldn't we're planning change see any topic we all. regards The not if the obviously such manage and there is to disrupt I floor I good. good new the -- a would of expand disruption lot even a to that don't mean most in at with the the fashion That a is of think in disruption really the But have minimum, room doesn't square it floor layout to the the in in But disruptions and operations. if think one the that integral the it floor call planning are make changes the when not of to we of to slot the of of and that we it's the disruption, QX, -- gaming any very if Nugget be I footage a and that, pay that. do do part thing the lot important we middle good when mix.

from weather opco one last standpoint paying TTM guys for are kind multiple, with still think terms an Nugget. one be some this about of of just we sub-X of the you the maybe And in what even the we When asset? will on disruption,

not by then weather negatively X. Well, were XXXX numbers, the QX. were if only also higher But we're in bit a taking we are on XXXX impacted There than the numbers a mean onetime so a impact front. XXXX that to few you on material events and more like know had in numbers, right? hand detail the controls, I impact the quite that

came was [indiscernible] [John were don't able of some then why postponing we they have cancelled. these the be And and Yes. was had next an the -- COVID. mean to home. one, thickness short Four management accident also I gentlemen cancellations at eye, X groups other shows for just all the unfortunate, in Foley] into of afraid get for they really and know other too got a the that replacement. market One year. or to

has don't year, repeat hopefully. we will One think that that been So unlucky should be itself. this really one very and

our next comes Bender. from And question Jordan

break pretty quarter Peter, you second fair Great. into assume called the outlook quarter, a on year. out a up this macro you And the of same-store Are should positive be the third maybe out? second is called basis? you that you that? to drivers year-over-year then down the factors third between it Can that and of and they

and That's Flattish what board, it much Jordan. Missouri. we right it's Up like yes. in Yes, what Virginia. across the expected. That's in now, Up in looks West Colorado. pretty

Canada. Up in Poland. in Up

in Up right, Canada. Poland. That's Up in yes.

then meaningfully has consumers the on Okay. in to Looks maybe land. maybe with up pretty Caruthersville. what this the of an position get facility Good performance Can and increased following update viewing we to And just like hear. the we year should expect that? are from gaming move that? temporary how And

was say call we course. -- talking in then the of brand lot we're really I side wonderful it very the interfacility. from has Maybe not games terms to flavor, to happy about customer takes build, little for that, about That there machine to old growth It's it's really this much to you a support will after single that and unhappy he has temporary of wonderful, not approval difficult mean very a boat we're such there it. facility able table been what I the the move from going into last of People mean, anymore. the better. the a being to one we, lot a said new, with has together are it's boat Pavilion, are facility. would circumstances nice, what and it authority. happy give some get be moved in We're seen feel manager But the both that and not possible, our good accepted, we and well you who for is slot the general he

Engel. our will We Instructions] question take [Operator next from Edward

Your line open. is

these closed focused close. acquisitions you you still As as of it shifts to? wondering of capital Does flow kind kind free M&A where some completely go of Are free does portfolio? across and of averaging? the kind that throughout Just the cash there on substantial projects then acquisitions year start these get generating Are cash application front? just how flow, this open other just the kind CapEx of

mix to back once M&A we to a may close yes, And one. certain become front. Rocky want Gap shareholders. things. the our bit active of give the acquisition to we see We the we is in want on little a Probably, again Deleveraging summertime, also

So the it combination on come a and little will M&A of all be QX how things, busy situation dependent bit those will a get QX.

And pro these once the things then helpful you're forma giving leverage net close. in

you net environment? in I non-M&A do a leverage steady-state target environment, have in you guess, wondering, Just have a mind

X.X Lease adjusted times, is comfortable. feel we around very X where times

we no time. appears [Operator at Instructions] questions this It have

today. Well, everybody our we joining appreciate call

call, Thank reach out recording have visit our of at section any please a of the you please financial cnty.com. free results website to feel For follow-up you. And the questions, us. if to

gentlemen. ladies today's Thank program. you, This concludes and

You may now disconnect.