CNTY - Earnings call transcript Q4 2019

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Operator

Welcome to Century Casinos Q4 2019 Earnings Conference Call. This call will be recorded. [Operator Instructions]. I would like to introduce our host for today's call, Mr. Peter Hoetzinger. Mr. begin. may you Hoetzinger,

Peter Hoetzinger

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

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

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

of quarter I'll brief financial a review the fourth company's now for XXXX. provide results the

acquisition with Eldorado a track of are More and Virginia results X Following a completion West for couple The regional $XXX and QX, gaming us on the casino revenue in these of enjoying in stable and encouraging question-and-answer multiple. long was growing minutes. leading EBITDA strong record initial operations for These Missouri each and the from the markets, X.X will quality prepared X of remarks, of the solid EBITDA. million, there in assets history. be a company's a the producing position In in session. each big story Resorts largest representing transaction a

size transformational doubled which of this of acquisition, our the truly truly deal. this nature which -- the underlies we company, have With underlines

Casino's have X,XXX report give stay credit to X We of of team all properties closing teams all that local into management Century happy to all chose management through integration are for to this been brand. cannot the part first-class at you diligence cooperators. transaction become properties, big the Century great and We X initial from very senior of and way due that. thank in all the steps they during enough the A

The days story is coronavirus, these for everyone the COVID-XX. big

are entire prepared carefully situation what teams the unpredictable, the control. are situation can We our by to monitoring COVID-XX caused management Also pandemic. control is they

U.S. following hands, surfaces with washing procedures. avoiding disinfecting stepped water, recommendations as for also sneeze extra off tissue, We're cough and compliance policies strict straightforward and or our has objects employee to ensure and frequently and disease the are respiratory effort of of cleaning putting prevention, with soap include unwashed an course, and hands touched which with covering when your and and staying home control the the guest mouth and to messaging sick. realistic promoting trainings centers from touching with help such up into and you're casinos viruses actions Our prevent spread nose and eyes, everyday

are and We guest-facing back-of-house both areas. employees with procedures safety to in constant reinforce our in sanitization, communication our

impact COVID-XX markets, Proper procedures in or while We in work has public on Poland increased date, market areas are U.S. at weakening sanitizing about the an XX%. back-of-house had Canadian areas. our not high-traffic been frequency. To all has are significant by posted any

within diversified As base customer is you America. most North our of very know,

frequented facilities hour of local locations, are outside and casinos the majority our markets by customers of vast casinos an from live urban who Our with from in business tourists. suburban our within

COVID-XX visit us. on negligible of our customers, by impact of our few have if to know, continues as air tempers very any, change. and travel But meeting this and casinos business. you to all Our the convention situation business This

Bath, the that, casinos, led off more With quarter was months which up X operating quarter. should buyer. about from recently for with the weeks in to contributed fourth the We up or Talking for two in and and in about the into Bath, XX%. the U.K., revenue year. new which let's loss a Adjusted we December. by a Net to results XX% potential entire net entered agreement of move exclusivity an wrote X outcome X We boosted the now. confidentiality on investment the Okay. know EBITDA was

normal addition to Century because In generate X% strongly opened contributed because of Mile more this costs and of Canada, Casino. the in flat, Revenue just November opposite. as was is Mile. much it's late the Downs still at level of margin we put, for a too and it. EBITDA goal Racetrack mostly was the Calgary the already Edmonton was Simply getting segment at In a XX%. XX% revenue, to Century to up the revenue Mile had EBITDA the Century expansion up The again planned certainly increase, the quite showed Century year. market, EBITDA EBITDA new it only, but

flat Poland a was very excited quarter, betting The EBITDA, sports but going about X great in too. XX%. had up in up Colorado segment flat Revenue was had EBITDA revenue about we months. operations XX%, Our and live and are

Circa and more the in available entered sports X works. out have sports Sports companies into Vegas, with licenses agreements agreement with are We Las betting have of betting X X already

to get EBITDA meaningful we of of and the simply be with many Overall, the annual sure. revenue percentage investment provide the As licenses, no competitors, an for a guarantee. our Colorado will minimum a increase it

we $X.X these excited also how Virginia, revenue and in performing EBITDA weeks in the than million EBITDA acquisition EBITDA in are contributed Mountaineer months they this segment Casino, better $X.X EBITDA Not even in significantly stress that of at Resort are span. acquired the Revenue come attractive margins West we $X.X of the increase Caruthersville even the up We million confident revenue casinos newly added million million during in and a for And what and can't X $X.X Cape in we Missouri, and is and Racetrack Girardeau Eldorado of X in of the December. X-week In great, the casinos X with they first year, X.X X did. a expected. did can multiple, only over all very operations. are enough at

going floor Century in over the Mountaineer X these of we systems been replacement our have in midst marketing, and We're already at in performing of leave very properties about has integration since IT the of on things with which place. effect. shown took rebranding operational Missouri the reporting, into to database of properties well-established implemented, the the and them products Casinos, positive new as been X% the The have such gone and smoothly. reconfiguration X improvements immediate the have of brand worst of number December. machines layouts, gaming we Lots the And slot

will spend for We optimizing giving the customers further all million XXXX, ramping tracks. forma revenue Century gaming had most Europe, after have to casinos and EBITDA occurred the now sports Mile Century at we acquisition efficient which with betting tables, expenses. all Canada U.S., as the and of in costs. generated pro on X machines, forma X due going numbers $XX X Colorado, Downs, in net further at the We and effect at revenue if race operating of the pro XXX a and in focus the hotel in in $XXX any in at include forward, we X,XXX a expect losses calendar rooms most the the On a beginning not planning eliminating and total excitement These gaming and marketing promotions, EBITDA rent up around X our to drives synergy grow the million XXX it horse of to effects recent U.K. expansion and basis, do

is basis, leverage was ago. net On traditional $XX on leverage of is CapEx a a properties, or basis, X.X. forma new forma debt the pro from and million including lease million X.X, approximately down on $XX the adjusted XXXX year about a our X.X% debt in our revenues, Maintenance pro net

of XXX% requires gaming slot levels CapEx slot of revenue machine Alberta XX% and to minimal pays CapEx. the commission asset Virginia sustain West CapEx the Our well-maintained profitability. and maintenance of helps base that for machine gaming for levels pays It certainly of current commission

right. All

into X months the first here for are this Before of Q&A we session, current go the the trends revenue and encouraging year. very

and already about is Missouri is digits mentioned, Edmonton Calgary, is Virginia up is XX%. digits, digits. As down Poland Colorado up West double The well. is as up is up so double digits. mid-single segment mid-single

everything first confirmed the days March the points quarter. to good The of strength. to X start first Thus, a

ahead, Q&A please. attention, thank With we and your you Chris, that, can session. I go now start the for

Operator

[Operator Instructions].

first Bain with Our comes David Roth Capital. from question

David Bain

more there, the things hold? -- is just have does the if I acquisition will, everything to of time first are going is the that negotiate with make on does of Great. I make still is Or out on, for put this this -- you that's question open late? that actually things the guess kind it been given opportunities assuming Or in to lubricated at, does REITs are is you, you're with touch you case? deals looking respect you have them

Peter Hoetzinger

the want at at are bit the of to the virus summertime, of they us We because stock M&A other prices. low that's us will don't I some -- have consider in the properties, looking REITs so actions it And trigger rush active situation, them But that's publicly are Other out -- time not companies, -- on funding open. think, a current point there listed giving this Dave. sellers, that been And of little with front. debt from so you'll see quite when time, for not like not Yes, anything course, any time. certain. come targets we again. don't is the just looking to be

David Bain

then, cited hoping to March. And numbers way, looking of and just the the Peter, especially regard that of with the new revenue domestic to you I'm by revenue it. get portfolio, close Got EBITDA Congratulations, to look some the Okay. public at kind do at that? properties? idea the also, an Is year? flow-through. the does the that revenue we flow-through increased kind as you've at at that of refined the Or we Should expand through get the look growth? same How of and through

Peter Hoetzinger

this if and we has why and nothing improve situation, it the coming EBITDA because cost pretty in the February, revenue should for roughly structure than of same that stays as confident bit little expense more even the virus grow the Eldorado words, are growth. is done If the now in a can by margins. then other we there That's January on

David Bain

a then one, your on And comments. last just coronavirus follow-up just Okay.

Airport, given correct? they Mile, seeing Century But Edmonton base don't impact its that in So is outside offerings, of of they're Poland, portion some any of [indiscernible] there? Are have seen you flying. comes impacts a lot haven't of not movement local, sort you from to that any a the

Peter Hoetzinger

Erwin?

Erwin Haitzmann

At we see the far anything so moment, don't yet, good. so

Operator

[Operator Instructions].

next Chad is question Beynon from Macquarie. with Our

Chad Beynon

in seeing potentially point, terms that you the a in the the scare than other major any I where measures wanted to regions you all gave one you been or any of has from your this patrons just But I hype operate, aware cities? school at within, properties, feel the on the county far what could coronavirus, things ask closed is has I you like made have less so the of we're guess, of city little closures color that do very local or guess, other you more the that regions some are helpful. where and Or like coming?

Peter Hoetzinger

Erwin, that? see, you Did

Erwin Haitzmann

I that see think this point, at we change. but anything, can don't

Peter Hoetzinger

some I believe. as of has schools Colorado today, closed

Chad Beynon

peers, question then any debt aware to week Obviously, leverage documents this there is a of? And leverage within covenants. are most that that any need lower we your Okay. your be covenants we're but investors your of than or from provisions any around getting common just is debt

Peter Hoetzinger

bit We're can of into but, Peggy, go very you little covenant a light, detail?

Margaret Stapleton

-- we're point expect trigger we covenant covenant not issues would we're and time. any Agree, in this at light, just Peter, to

Chad Beynon

the last I been to of some lower-performing Okay. closing you items you've already? replacing Eldorado we as of place? one, in already start these with something comment you're revenue the help that's the that with see properties, into the respect could synergies? of quarter? of some machines. the And put the you this started some first Is quarter us mean then timing or kind just that since this on early said the done of the of as to late benefits your maybe Just second in Is something

Peter Hoetzinger

Erwin, please?

Erwin Haitzmann

is place has been That partly already. This Erwin. put in

on this a number and reconfiguration are slot of we machines took So those that up that the already floor way. we some made

in already the provided situation will see latter quarter. the we'll -- same, So stays see yes, the part we that this of

Operator

Richard next is a Investor. Our Smith, question from Private

Unidentified Analyst

price, shares buying the future? the company drop this consider share back or considerable would in at time the Considering your in

Peter Hoetzinger

question. and we stock this needs that is that because still that immediately a what nothing for X Thanks there's immediate there the have. But do cash At consideration. improve properties the we at for always we time, to CapEx But we That just finalizing else look our to price. our improve the same like look is is consideration out existing we that plans our we acquired. will are operations,

So don't to happen. anything expect immediately

Unidentified Analyst

the But cash or know, drops, months company to -- -- the the ample I to shares -- say, Okay. if don't something? have stock next couple into does within have Xs back the if buy let's of you you

Peter Hoetzinger

have about cash we $XX with on credit. Yes, hand of and lines million

agenda, CapEx our yes, that very other or buyback on have have we share the be cash. we important the So things

Operator

Steve is with RJ question Claspill & Associates [ph]. next from Our

Unidentified Analyst

quick, I kind market if reiterate to just make sheet lot at not balance strength reiterate you Just is this, just the could sense. that. obviously, of addressed wanted think you real Because understanding just of but price a and doesn't of the I the you stock this your that? kind of just

Peter Hoetzinger

word terms the at Steve. we Everything not leverage healthy. when did stock think, through balance has the situations, over years, competitors debt-to-EBITDA crises -- we've strongest have the But one or pretty where time, in have price. XX casino the the last years really I then 'XX. over in various of net is same name gone of and I XX And in company Listen, -- competitors last industry, our the we survive. roof had Thanks, the the almost all Yes. -- of is we had founded with through various X.X the in been Erwin highly small leveraged sheets we gaming many

way that's stronger others. We on many more you ever. here a than find are compared still sheet balance with And will conservative us forward almost going a continuing to

Operator

next Boyer question is with Stifel. from Our Brad

Brad Boyer

And sorry, trouble getting if on you've had already line. I answered these. the

that you. from you for Could be kind context of us on does hadn't up just noticed business. -- comment out First of give a that I of release an called thus point until, Just any some around to relate until Peter, seen the that that you outside question, virus much time? sense was yesterday, of other you in the far would helpful. say, Poland, the up impact of

Peter Hoetzinger

until in Yes, than West mentioned we Yes, Yes. in stable bit have far, closed. state yesterday, anything Brad. is up see it's couple the don't any now. in that of has see so pretty then real schools don't think It's of is weeks certain Poland like any impact I number. Canada. we That Colorado, and Virginia, in different. for Missouri measures closure again, also also and been in XX%, other But at a that Colorado, a and around

Brad Boyer

market, I little obviously, the Could mean, of in us what low for helpful. sort be the days. of been frame Albertan helped a a relative the a oil But point the perspective? bit oil relatively in in you you I Alberta to of you of of to provide mean, pool while shock to system the your segments over to believe Alberta. there's have been know is obviously, sort couple from color remind there? demand patch years, That's I you sort now. kind last could at a of us oil And the customer relative just Okay. of then, prices exposure sourcing this the Any

Peter Hoetzinger

X companies the years I have downsized. they little the last mean say a the they crisis, a ago, They worry of have oil segment. rightsized. Yes, during for chemical that's about bit

any So there's all. like or anything situation. huge no we talk at layoffs monitoring the of But are

a markets. gas side to markets, with in I weaker with On Alberta the tool a regional lot big think, possibly new know, the of is gaming it flip U.S. correlation there's, gas has low revenue. in you economy And regional gaming us U.S. of helping with in that, as regional prices strength prices our a offset the

Brad Boyer

look prior then, neighborhood Eldorado than of in headwinds helpful. to smaller $XX-or-so It's recent it's But deal. little the I Okay. I as of realize mean, a your overall doing, And business. aside, nice the the a operation Polish That's percentage business it's we EBITDA. was at today, million of the somewhere it

And you I think just it's still term? for could eventually to mean, you business a long point a out They don't Do know that is to I market. good you kind buyers relatively ignored mean, by liquidity committed North there that American a are really that I there's that that's investors. How think something where at have and opportunistic look? feel could business that you potentially elsewhere? couple some redeploy of of potentially. I unwind look owning

Peter Hoetzinger

as various believe, had And We producing that it though put around event considering X-year U.S. a of get license, it business, uncertainty, constantly of still because on if years said, the a some nice you history are only with We some and investment -- the is, negative Polish of question it's The you the options. Poland, lifetime X the some value kind in onetime can really of because investors little gaming. it I is license much of ago, effect, you is how solid was hiccup created on question even a a the the big only XX-year market. that numbers.

we'll see. So

not have We decided yet.

very out because good us. getting countries. it, to revenue and dividends happy flow are and And own So the very EBITDA the generates we we of for are it far, cash

Brad Boyer

all housekeeping a for perspective, this could then all, lastly, you just did if on you you know don't I year? commented And like CapEx at from think mention Okay. what but at look this

Peter Hoetzinger

including $XX from forma some of expect higher down because it over it bit I'll implement the in it do things was properties, go million, we XXXX, a And on $XX million at Erwin. pass these said We've we properties? a new that in XXXX. basis, new Erwin, to pro little to that

Erwin Haitzmann

situation that are the On yes; the things of in weeks necessary completed. on over or not that one things absolutely are are holding but not few next in being the we now, hand, we middle the on at other moment, hand, on where CapEx off are the

spend. node, total So go back into will normal impact depending on how we impact CapEx -- may quickly that can that the

it will little with if So aside, a and because then investment due you the things in If stay be like changing other $XX more of said, it products costs we not, on of million. than be the could to -- less Peter, the properties. new in

Operator

Our Yackow with next Jamie question is Moab. from

Jamie Yackow

but to So it, Peter, full in get thinking rate missed you of Century Erwin. Mile the run or guys property? may when I commentary provide on updated you're any outlook did have terms to

Peter Hoetzinger

squeezing Revenue we cost is not no, -- than slower working ramping No, But given we said, are the that we are the we'll and that on margin you, okay. get have more from think Any it's should numbers Erwin, get of be. to in there? we you where are we expected. when It's timing, number. as up the EBITDA side, trying terms it to

Erwin Haitzmann

No.

go, is I think, quantify And it but it not we mean, hard to up, do we to quickly time, Well, we a it positive now terms. and estimate. to we at confident how hard but we're I say. see see impact, it's will the movement, that regulation say. it's hard these get

Jamie Yackow

Got it.

And realistic just time quarter, rate uncertainties, mean, at could the guys be all you I at kind think don't -- expect, you $XX I think would million with least -- mean, I by the have term? have that do I of you the point million of you do the you the year given approaching I obviously, know, the you thought can run think you or like rate. $X second first would the run all, on longer that and guess, virus previously say, said of rate, exit this to in very is you run uncertainties?

Peter Hoetzinger

anything say to Erwin? you Can that,

Erwin Haitzmann

realistic I it's would it's XXXX. for not long term, term, -- say long a projects, realistic

Jamie Yackow

upside. Poland do Understood. to we just you the what was the about down flow-through on But How downside, on about the the -- you XX%. think And EBITDA? flow-through said what asked about someone about

Peter Hoetzinger

upside. Yes. I mean, same the with

On EBITDA higher. a the side, it's little bit

Jamie Yackow

where this would there's price generation given get guess, rather Okay. be lastly, think the at a comment, further given And is that time, the guys belief it, at making at just own acquisitions. stock buying just just stock pass but will of than where a XX% feel Are as that opportunities that? and I flow and kind exciting should your you over strongly -- plus virus, there, the good it cash is, your your looking opposed out I we yield we type think cash I free to of normalized back be I stock

Peter Hoetzinger

Thanks, Jamie.

Operator

There Hoetzinger the at any turn for are time. remarks. no further Mr. closing back this questions I'll call to

Peter Hoetzinger

thank I call. for interest in Yes, and Century would in to your for Casinos like participation the everybody your

financial of For website our a call, the section of recording the please results visit cnty.com. Goodbye. at

Operator

today's call. concludes you for This attending. conference Thank

Peter Hoetzinger	Vice Chairman, Co-CEO & President
Erwin Haitzmann	Chairman & Co-CEO
Margaret Stapleton	CFO
David Bain	Roth Capital Partners
Chad Beynon	Macquarie Research
Brad Boyer	Stifel, Nicolaus & Company
Jamie Yackow	Moab Capital Partners

Century Casinos (CNTY) 13 Mar 202019 Q4 Earnings call transcript