CNTY - Earnings call transcript Q1 2020

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Operator

Welcome to the Century Casinos Q1 2020 Earnings Conference call. This call will be recorded. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session.

I would like to introduce our host for today's call, Mr. Hoetzinger. Peter Mr. begin. may you Hoetzinger,

Peter Hoetzinger

pandemic. Erwin you, during of Ron. joining call thank for are in Stapleton. Century everyone my Chief and as, Financial safe Officer, challenging your Good earnings call. friends times morning Margaret of Casinos, of our Chairman the hope and and as With the well Co-CEO our these all you COVID-XX We the Thank health Haitzmann, you, me are families good on and

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

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

for the results quo of the light financial company's first current in I'll then provide status of and briefly overview now review the an quarter crisis the XXXX.

will the be question-and-answer prepared a Following remarks, session. there

issued to the we operations with March closed to between governments our March As contain quarantines and with XX COVID-XX. almost casino XX comply spread of companies, all by

exception which were permanently are December last closed. remains Bath, Casino we for closures in the the Casino. of of year, Bath temporary, negotiations In of with sale the in the All U.K.

up potential with no will be outlook, not the Due March, terminated wind the action to from best determined in and would negative more that liquidation we surprisingly, Company. resolution a impact We the to that, course and losses signed canceled of week results. voluntarily the the voluntary sale Bath our negotiations. Casino the buyer However, last Bath

conservative and off that the of impaired have was after goodwill been $XX is some addition, and the value million our of analysis, quarter. operations written In license in determined it

tried we negotiating of for and benefits budgets, of our HR coverage. issues including and senior vendors, maintaining We on to employees, through cuts them U.S. and laid for May. and little and members has the of impact bit be continuing furloughs team on During the closures, a this will off and on except benefits management, preparing inclusive the have our pay employees securing approximately We front, laws. lessors end officially our continue local salaries Canadian mitigate on properties XX% reduced committed to working provide temporarily where these The have paying furloughed paid to members manage all to remaining part-timers our impact Poland taken all staff, employment by team based we and to that have and recognize banks to reopening. cash the with on

is and operations fell variable payroll Our while costs down many away significantly are closed.

other closed. other properties. even many our insurance, Real rent of estate have for expenses occur We some cost utility like operations are our and while interest in lease expenses and taxes, continue debt, expenses to

Edmonton properties around suspended outflow for fully and time Century to number What we month, can during generating negotiate payments. the the is full and July. that The and one is Mile at for currently the deferral VICI year are for further the cash? is the convert possible That lease to Other service to and net do and are us future relief and million at discussions next rent June lower limited year. been raise master also recently helps the operations preserve for month rent with of requirements minimum cash amended rent rent We've modifications topics debt $X with Lease revenue the of that able it for XXXX or the only of land per is VICI. for CapEx interest-free. close deferrals May, including $X We've to deferral are million. We very like that partial our with master from up

as you levels, in Federal are we will evolving, these we any or relief programs, pretty due for leverage. programs existing are specific in rules not U.S. as and know, several State in there still to but Canada. this that are qualify As unfortunately place the of either stage, The certain revenue at well size,

Our and all our are we March, debt to and compliance in be balance case with second has for also of sheet as the quarter. expect full no the obligations that near-term XX maturities

monthly As our Again we rent of April $XX.X to XX, burn in $X had and cash cash. service. million, close including debts million is

million at approximately need and needs $XX cover properties. we cash short-term the reopen operations casinos, to Our

casinos on two health Talking about casinos social opened reopening, Visitation distancing Monday, requirements pose safety and Poland. didn't in ago all announced the morning. real Monday good We of was reopening on eight in and we difficulties. seem Europe, the our to any days and

after happy again able gaming Our real to months were very of entertainment closure. situation guests to understanding be the two of very and enjoy

EBITDA. closures, contributed approximately Poland of total the consolidated Before our XX%

may the with that racing Virginia, XX, resume May horse effective governor West allowed. In spectators no announced

banned in already. our facility Following this announcement, horses at Mountaineer area [indiscernible] started and training the

is The first for XX. scheduled race May

property. burn This per three pari-mutuel visitors. help at hold races betting will will on-site horse very will all be that the handle and for good without We week, lowering cash

Virginia in is Our a available. of for based available, on to floor Mountaineer we to market golf ever. information June very currently will open the gaming important terms is of allowed generation. information West X. than casinos June Missouri our our should most be us Missouri, couple be in good latest weeks reopen in at on the also two expect That In EBITDA early to news because According is busier to course able be Friday, we and open already in

reopening races That revenue approved horse action Canadian will S&P will Internet is the already and As generate horse anticipating for restaurants but Alberta, start in sometime races. week. and the currently some we Colorado, Casino the the probably on we Calgary in Canada, half only also some been our next our increase in properties and betting also at casinos has revenue, of generating And on are should second betting not of early-to-mid-June. open operations in ADW already of June. Edmonton

it's our our last the and easy limited varying with planning through of at the include various shorter these slot use of timing by will intervals, machine the reopenings official and like levels keeping opening requirements regarding will We've office and in revenues account guests of social And high-touch to restaurant by of So, of the use the things out disinfection demand. clearly, other in the to the devices slot and jurisdictions. and areas. deploy continuous and the gloves, or regulators and fever, slot face over the games levels weeks likely the for provision distancing spaces, sanitizers, employee requirements. distancing machines approaches and infrared in all we from surfaces relatively of social restaurants that been reduced and hand laid and table restaurant closed gaming, comfortable stems to check guidelines and restaurants, actually hours masks for differ feel governments of measures Most entertainment machines,

slots, greater enough we've not occupancy Our always XX% are than anyway, chosen very have for machines. us, often at to as slot

in recovery, play Our especially role markets and local the our expect early we demand. can in will achievements [ph] in a some diversity locations our where hyper stages in pent-up

where from we even gaming for minutes the Each local and at the locals financial our of XXXX resorts. customer gaming should at up the And of including in our such, play. vast our very All the time within and XX rate us coming around crisis customers operated predominantly years who have internationally our urban especially stronger years in than came casinos the our operations markets loyal industry locations hyper ramp quicker growth times, destination combat X/XX, business into a from number XX suburban being and in as a U.S. casinos are live rely over customers base. and and very the XX majority has and casino in local recovered in industry ago. on time, facilities. Moving through challenging All with back casinos

has to negligible meeting customers our and and casinos convention with reach very Our air few of by business aiming travel us. is

difficult In a experience, comparatively addition, affordable often that gaming economically times. in is we offer still one inexpensive

pensions from from people On active customers we from a that, than faster initially. considerably the of gaming. gaming fixed to be we will in and gamer are The in will are probably who more perspective least should see get the they ramp see an stimulus check not local top markets local pure reopenings at forecasting, the facilities, plus, people can from government. comes most income that with forget, amenity what industry are So, everything the don't up with destination and probably the our of limited also workforce, consultants

building. of casinos West optimistic. XX% higher And got weekend to of for XX% we Memphis saw couple are their Oklahoma South recent a you about reports to in a the Casino, I'm days weekend social reasons have ago, the any Southland all finally, indication, sure if typical reopenings Dakota, Also, in line we in be of were around opening country example, restrictions. of long spite all the Indian reports the distancing than when opened, that

here's of our QX. my brief In prepared remarks, concluding overview in a performance

of to last was XX%, Both adjusted the soon would really very Then great we adjusted acquired own the up than consensus study in on the based. we with and Canada Eldorado us the Colorado's to million been EBITDA million respectively. results and The great broad properties ended ownership. and than generate as quarter were we three year's also XX%, for really new forward up the was mid-March as revenue revenues and January forecast kinds records, EBITDA for reopening. million and higher were contrast. up XX% came and possible Our a substantial compared pace $XX last it to March ramping mid-March is and million of XXXX XX% growth February months. and of was well. EBITDA over $X.X in our approximately in exceptionally $XXX higher and results temporary for was from Combined, significantly year performed quarter closures after higher XX% months, strong quarter. first in was and Also the really up look these estimates. to first We in all-time Eldorado $XX.X in quarter EBITDA increases have started until

times difficult So for Board, thank we businesses to their guests the you these our new ahead continued your stockholders team attention members, please. as of the I'd and thank start for session. go properly on behalf and manage to normal. for like the position our management and patience now our loyalty our Company's I and reopenings the Operator, Q&A can in we during

Operator

Ladies ROTH David Bain your of and comes question-and-answer time, a session. gentlemen, this will we conduct from first [Operator question Instructions] line And the at with Capital.

David Bain

Margaret. Great, Peter, you, are thank and Hope well. you guys Erwin

are you that reopen, the as you've could speak we concepts more if better allow structural differences for to revenue some generated that identified that there you As And permanent significant can can and forward that? additional to profitably most or that changes carry target XXXX? could or and open carry so, flow-through

Peter Hoetzinger

you would that? like start Erwin, to

Erwin Haitzmann

Hi, David. right. All

David Bain

Erwin. Hi,

Erwin Haitzmann

used from which busiest -- including job. an the all to completely have any changes our casino apart was time really Poland haven't in And quite which of it. that a the done any conditioner, Poland is redoing air Casino, We we the not we fact in of needed it, that done Marriott revamp structural

some kind to equipped it if and temperatures want the anything in give to So all completely came that, might guests. structural. our redo to And of didn't But pleasant used for now experience a other than that to bring time we say, that. do you handy, we well

players. is and, itself, focus more We, we the -- our marketing on fluid things However, value probably, will And most limitations push we again, that that digitization from upper develops. others, are this savings -- have side good we, have main the that ever, it which like a these we will done it end like far. in the is Most guess, bring so cost to of again for further on will we and of casinos. players given many by definitely, other capacity thing strategies and our again ear most in the than the companies on see the will re-thought some how I all play should and likelihood have have fact once of say, of in

ready what depending on us, from We basically various basis quickly that quickly. on to so will a able are ask react the we're jurisdictions day-to-day all to adapt

David Bain

you okay. are gave it in Got the as -- costs? estimate? be sounds schedule that generate a us down if larger it, us $XX on then of some earmarked mean, in just break of that reopening Is to of as cached then be schedule should still kind prepared the on capital? that And million, million assuming pieces the remarks, you follow-up, can re-openings buckets $XX.X again. sort like of just are, you And begins helpful. what million the a as the I cash give can June Is that $XX cash flow or would the larger fair

Peter Hoetzinger

please? Margaret,

Margaret Stapleton

Yes.

some cash cached is then for that. gaming paying And, based cash million we taxes just some should and flows just operating yes, correct; cash in million, way -- $XX.X be the that things $XX $XX David, So, you're range. like million and the on mostly

David Bain

Thanks on the the and much acquisitions. great. much. with Okay, January, so results, so congrats February Thanks particularly

Peter Hoetzinger

Okay.

Operator

have Beynon Macquarie. from do Please next state The question. of the from we question. line question And Chad comes your another

Chad Beynon

that taking Good my questions. Good you're thanks to well. hear morning, for

on that properties is get rates, normalized a EBITDA, level get to a of reach kind understanding tax to these they're Thanks. there range revenues of open? need of to, to once structures breakeven cost properties different have Firstly breakeven to you what and your

Peter Hoetzinger

XX% that On level about revenues. -- COVID-XX a our pre property property basis, is of

Chad Beynon

liquidity then back And situation. on you. the just Thank perfect. Okay,

it's you you and a that at you of kind So, you're that other are Did Thank get guess, openings maybe a couple you help term? million here? little us comfortable cached the with, I you cash, or you. That the or comfortable leaves of of end in at If cushion of just of you with bit cash have are million you to more months. $XX just of can $XX exploring the cushion give near you're sources projecting timeline liquidity the flow just April.

Peter Hoetzinger

in draws, have yes, plans so -- the we say. We upper to

We on table lines. have term for sheets additional proposals, the credit

we than Canada. but that in VICI also ongoing are also many us that of are of We markets with the we are should other about to other the can help you XXX% as course, -- in capital also in are, requirement. seeing they do discussions we also CapEx things And and anything. also own we open, -- want example, free do to for clear, know, properties Colorado, And our

as if we estate do that to So we wanted could, something with real well.

Chad Beynon

makes Thanks, Best luck. Okay, of sense. Peter.

Peter Hoetzinger

Thank you.

Operator

question next from state your Please of from our Stifel. And questions. the line comes Brad Boyer

Brad Boyer

for thanks the questions, taking guys. Yes,

you First, is monthly that just to was $X OpEx just tell number pure us outflow the million. else? Could of everything much of cash around relative how

Peter Hoetzinger

Peggy? that, have you Do

Margaret Stapleton

like payments, just is that. Brad, cash and dealing and come it's flow a We're difficult the this little to OpEx up things VICI to pure bit insurance repayments with loan paying mostly in -- situation. related with

Brad Boyer

Okay.

Peter Hoetzinger

VICI on already. about Macquarie principal those Brad, loan, is and $X.X so, Yes, million the the two together and interest

Brad Boyer

is what helpful. question just you there the of some year guys that's this assume thinking then And -- remainder you point? at the how CapEx. in around Okay, we're embedding CapEx of kind are light about I roll-back incremental are for of second

Peter Hoetzinger

is Yes? Erwin. like a really to Would comment? minimum, Just you

Erwin Haitzmann

necessary. Yes, little [indiscernible] it's a

Peter Hoetzinger

the and opened our fourth expansion shape, you redone Century in an Downs. at great quarter, as in Girardeau casinos know We've just in are we've

we've and to the things are have right have necessary we so back -- really So, that now. yes, don't cut any we minimum it

Brad Boyer

you've bifurcation Any be And more thus in have any relative customer slots window. But think I you to very, a realize seen in And would far? you Okay. with around then there provide additional color very could any to regard color what behavior it's tables? Poland importantly, seen helpful. I short Thanks.

Erwin Haitzmann

Absolutely. I to the fine respond Peter, question? if it's

Peter Hoetzinger

Please.

Erwin Haitzmann

across casinos night [ph] Now, already because of in allowed we first after from guests at to to minutes and the had the all, in we we open this been opening early And Monday market XXX Sunday very there Monday unusual all. able day, eight three is the Sunday Poland, opened for the were to in of first from of being I have that's quite an us it on, to is would backdrop day the obviously, although not the time against produced results say. midnight

You in restrictions marketing know, we Poland. a have strong

word going everything really think say it's could I that And there. looks -- mouth of good. So I was but very

We is your do how are -- not we're breakeven. customers, the from days away which employees feel. away feel, far customers -- from the do not a flow already, from after two And far how cash

I think the masks the you have masks. have because used wearing to can not they And again that they everybody casinos their shields customers where the is obviously, wear if have the to not, wearing or But the mask, used employees the only masks. wear wear. now, to it's and to, gloves are or all only to by

to slot with of is shift, can a the casino regard as may because remember, machines a per law, XX of we not And have only the maximum Polish There you favors license. gaming to slot. due in too much

that So COVID the they the of little the were these playoff that of the times in has up already They're excited reduction there because having. seat really well first slower our very a and XX% have are positive. and could assessment is the business tables ramping at very days. the we about But we placed, first that of management pre- us two slots see been in of overall, we're nights

Brad Boyer

line good getting here. for on guys thanks Perfect, things on and luck all the back color,

Erwin Haitzmann

Thank you.

Peter Hoetzinger

Brad. Thanks,

Operator

do have we more questions. And

question. comes question Our Union from Please your state Gaming. next John DeCree from

John DeCree

little something and granular in to racing going questions. $X probably about Hi, million, net bit $X but little the actual is wanted month there need cash cash the the with about Canada ask outflow a I a million a bit less of being now some Two reopened little from in here Poland more Virginia, than West that One, getting back revenue everyone. we forward and and system? think should per

Peter Hoetzinger

quantify can but Peggy? you should that, We

Margaret Stapleton

early, was too if still Probably $X right? million everything [Indiscernible] closed? the

Peter Hoetzinger

Yes, yes.

Erwin Haitzmann

Yes.

John DeCree

Okay, that's helpful. And then...

Erwin Haitzmann

think we -- But okay.

John DeCree

I'm Erwin, ahead, sorry. Go

Erwin Haitzmann

Poland already months they in No, probably think I and a to how the it basically is in, say come will along. see from we wanted next [indiscernible] carrying we'll kicking just week now the

John DeCree

good. very Good,

any volatility provide impact Edmonton can in property new has Okay. drop any ramp have you oil helpful. do of business sharp your or that continued of comments reopens? And in it with would to and be expect that In prices, kind the then when you your Canada, of on on the kind

Peter Hoetzinger

In a people. from Alberta, we also have business of lot retired

not by to So don't they situation also oil everybody's affected strong lowest it pipeline recent are of very enthusiastic tax lead the provinces' of tax in that, rate the reduction decision on the corporate a top all has the the recovery. X%. there, Canada, corporate that, after Trans forget the rate, oil and and recent Mountain it about up Alberta the should now in On expansion of provinces

we signs. doing lots the we are things stimulate see -- they of to pretty a So economy encouraging actually and

ramping back Mile, terms Century Erwin, of up to please. of In

Erwin Haitzmann

a early It's to just say. too little

would You speculation. know, be it

The and going. open can is the how or in to there, have see property start We the everything's ancillaries it's once again. perfect we shape, racing fine are

not about this We ramp. speculate but I we how can are in point ready, quickly time would at

John DeCree

Mile, seen quarter kind Mile? For have at before over at COVID January and Century fourth growth of continued February margin or improvement you the Century

Erwin Haitzmann

it's really have not there have, months of two We whole weather weather and so representative year. again, cold we been those see what over pretty been impacted -- it's certainly by the but

John DeCree

everybody. enough. Fair you, Thank it. Got

Erwin Haitzmann

John. Thanks,

Operator

from And Research. Wilmart comes Centennial from your line state questions. to question. next we the of proceed do Hana Please [ph] have question The more

Unidentified Analyst

my current guys coming was taking you acquisitions environment. to if out the opportunities I wondering see for any COVID of thanks Hi, question. just make

Peter Hoetzinger

But right what's too brought focus. being -- not out us, definitely main bit of it's there; little but and are not it's so it's we aware things main whilst our -- a it see we right think now, I surely our not We see we early, now. Yes, focus some are to opportunities. are happening

Unidentified Analyst

those Is that. starting you'll opportunities? on when follow-up there more into environment sort feel look to just any and to of Okay, comfortable

Peter Hoetzinger

time are in be we believe the the very will good June; after a reopenings shape summer the we occurring we [indiscernible]. think the of be summer. After month decent as if I -- for throughout we that with will

Unidentified Analyst

the Great, thanks for much information. so

Peter Hoetzinger

Thank you.

Operator

Silverman And question. we from AWM comes another online. This of do Investment. your from line Alex the have state Please question

Alex Silverman

Hi, there.

provinces You order help are in that any gaming -- taxes talking reducing are are temporarily about the there states casinos? to or

Peter Hoetzinger

indeed, So Erwin?

Erwin Haitzmann

there it Yes, that. there discussion in discussion is conversely, is -- [indiscernible] in also Colorado about in a is and and there at also Berta about

Alex Silverman

where? and Colorado sorry, I'm

Erwin Haitzmann

In Berta, Canada.

Alex Silverman

And Alberta; it. got

Erwin Haitzmann

Yes.

Alex Silverman

Second getting corporate there assume a that's casinos to and breakeven. property XX% question; I on expense? is be revenue back level that would top you -- pre-COVID level property you breakeven the of on of then said

Peter Hoetzinger

That's correct. XX%. And I said Yes.

Alex Silverman

XX%?

Peter Hoetzinger

on a Yes. And that's property level.

Alex Silverman

then utilization your you know, -- different Got in slots requirements that question; Saturday Friday I whatever, typically what and at different social of it. you facilities? terms are do at And or kind such; distancing, last peak, your know states of night your for discussing, have

Peter Hoetzinger

Erwin?

Erwin Haitzmann

on say would XX%. it their -- will XX% circumstances I depending between and

get an -- go ahead. effect, to will As yes, it

Alex Silverman

please. No, ahead. go please No,

Erwin Haitzmann

the to would do failed customers wanted that choose and not make that it's like because one we machine to have product play that floor that we it's I always enough or policy forced just available with really has so they are to our the on say to our can not always sure to try play.

Alex Silverman

for if big guys? that only to So, people XX% in have XX%, you a separate of level operating -- XX% order of key a if to a machines requiring is stretch be you your peak that shouldn't

Erwin Haitzmann

correct, how very one. see this That's that's exactly we

Alex Silverman

that's Thank you. all Okay, I've got.

Operator

no other I'll At are are to no host. questions. back this our now time, over it turn further there -- there

Peter Hoetzinger

for your thanks you. in And interest call. the Century in and Thank your Casinos everybody participation

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

best our goodbye. wishes for health. again, Thanks good have and You

Operator

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

Century Casinos (CNTY) 20 May 202020 Q1 Earnings call transcript