Century Casinos, Inc. (CNTY) Q2 2013 Earnings Report, Transcript and Summary

Welcome to Century Casinos second quarter 2013 earnings conference call. This call will be recorded. At this time, all participants are in a listen-only mode and later we will conduct a question-and-answer session. I would now like to introduce our host for today's call, Mr. Peter Hoetzinger. Mr. Hoetzinger, you may begin.

Thank you Lisa. Good morning, everyone, in North America and good afternoon to all our European listeners. I'm happy to have all of you join us for this call following the release of our second quarter 2013 earnings. With me on the call today are, Erwin Haitzmann, Chairman of the Company and Co-CEO; and Margaret Stapleton, Executive VP of Finance. Before we begin, I need to remind you that in our remarks today we will be discussing forward-looking information which involves a number of risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. The company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. We provide a detailed discussion of the various risk factors in our SEC filings and we encourage you to review these filings. In addition, throughout our call we may refer to several non-GAAP financial measures, including but not limited to adjusted EBITDA. Reconciliations of our non-GAAP performance and liquidity measures to the appropriate GAAP measures can be found in our news release and in the 10-K and 10-Q filings, all of which are available in our Investor Section of our website at cnty.com. We posted excellent result in the second quarter remarkably it was the 14th consecutive quarter with either revenue on that earnings growth. The Casinos Poland acquisitions already had a very positive impact and we actually continue to make good progress across the organization in enhancing operating efficiencies and maintaining a disciplined approach to marketing. Net operating revenue increased by 59% year-over year, EBITDA by 34%, and net earnings adjusted for the ramp on gain associated with the Casinos Poland acquisition by 38%. All our properties Arab and Central City increased earnings from operations significantly, Calgary…

Thank you, sir. Ladies and gentlemen, at this time, we will conduct the question-and-answer session. (Operator Instructions) And we have a question from Russ Silvestri. Please go ahead, sir.

Good morning, Peter. Two questions, one on Calgary. I may have missed it exactly, how many days was the facility closed in Calgary as a result of the floods?

It was two days. But there also around the casinos that really impacted business that they were closed for six or almost seven days.

Okay. And then just trying to understand a little more about the Austrian opportunity, you went through it there pretty fairly quickly and I was just trying to follow along. But, have you been selected to provide the gaming at the InterContinental hotel and is this InterContinental hotel already built or can you just help me maybe rehash a little bit of that real quick for me?

Okay, the hotel InterContinental has already been up and running for quite a number of years. And we have a joint venture company formed that includes the owners of that hotel, and some other investors. And we have a 26% stake in that newly formed company. And that newly formed company has submitted an application for the casino license.

And then is there a certain number of licenses that are allowed in the City of Vienna, since there is only one that seems like 2 million people it seems that there may be an opportunity there.

Yes exactly, so there were three different licenses in the greater metro area of Vienna and we’re trying for one.

So there are three total new ones that are going to be offered by the government?

Yes.

And then the three that will be offered by the government will be known in the first quarter of 2014?

Yes, that's an indication there Steven, but it's not a firm date.

And what is the political climate? Has there been much push back of people embracing it?

There is not really any doubt that they are going to issue those licenses, it’s a new gaming act. And it’s only really about the timing that we are uncertain of, and obviously there are other applications, so there is absolutely no indication or guarantee at all that we will be successful. We have a very great project but we submitted it and now it's up to the authorities.

And last question, of the three facilities, how close do you think the three would be to one another?

They have proved in the regulations that they will not be that close, there is a geographical diversification in the regulations for these three licenses and we don't think that there is enough room and the market is big enough so that each one of them can be very successful.

And we'll take our next question from Justin Ruissi. Justin Ruissi - Sidoti & Company: I just had a quick question the progression of how Poland is dealing with the removal of all the slot machines at all the locations outside of casinos. Are we looking at this on a rolling basis or will this just impact probably around that time like that 2016 marker where everybody will just kind of first push out?

It's rolling but the more heavier impact will be faced at the end of the three years, because what the existing route operators can do is, if one license expires for a machine they can actually let the license of the machine that are not well performing expire and use the license that's running a little bit longer for the machines that are better performing. So we will feel the bigger impact towards the end of the three years.

And there are no further questions. (Operator Instructions).

So no further questions and I thank everybody for your interest in Century Casinos and your participation on the call. For recording of the call, please visit the Financial Results section of our website at cnty.com. Thank you.

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