Welcome to the Century Casinos Q3 2015 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. Peter Hoetzinger. Mr. Hoetzinger, you may begin your call.

Good morning everyone, and thank you for joining Century Casinos’ third quarter 2015 conference call. We will get to the presentation of the results momentarily, but first I will review the safe harbor disclosure. In today’s call, 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 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 from this morning and in the 10-Q filing, which is available in the Investor Section of our website at cnty.com. I will now comment on our performance in the third quarter, followed by a Q&A session together with my co-CEO and chairman of the company, Erwin Haitzmann; as well as Margaret Stapleton, our Executive Vice President of Finance. This was an exceptional quarter for our company as the positive trends that we have been seeing since the second half of last year continued to strengthen across every segment of our business. Net operating revenue increased 19% in the third quarter, marking our fourth consecutive quarter of top line growth. We also continued to improve our cost structure, by driving additional efficiencies throughout our business. The combination of revenue growth and cost efficiencies allowed us to produce very strong flow through and increased profitability. Companywide adjusted EBITDA increased 137%, our fourth consecutive quarter or…

[Operator Instructions] And your first question comes from of Robert Labick from CJS Securities. Please state your question.

Good morning.

Good morning.

In Poland you had 14% EBITDA margins, which was great. Could you just talk a little about what is left there to improve in terms of cost cutting or repositioning of any underperforming casinos, and maybe update us on your EBITDA margin target there?

Somebody – the target is still in the mid to high teens. And I think it is mostly in the revenue because the incremental revenue brings a proportional rate of it to the EBITDA line. So our main focus is on driving the revenue side. And may I ask Erwin to chip in and maybe go into a little bit more detail on that if you can.

Yes, absolutely. The major chances for increased – for further increase is in the slot machines. We have seen that upsetting, slot machines and adding slot machines has been really beneficial to gross gaming revenue, to a certain extent even with a spillover effect to the tables. So we will continue to add new slot machines and to replace older products and the [Indiscernible] we are confident that this should drive us high into the teens.

Great, thanks. And can you give us a general update on Argentina, the possible growth prospects there and perhaps your thoughts on increasing your stake and the possible timing?

As we have previously said, we will probably make a decision in the middle of next year whether to increase our stake or not. By then we should have a much better picture of the additional opportunities we have there, as well as the standing and the position of the Argentinean politics and economy vis-à-vis the rest of the world, and when we have a better picture of all those things, which we believe we should have in about the middle of next year we will make that decision.

Great. And my last question, just kind of looking at the big picture, I was hoping you could talk about your long-term strategy in cruise ships, to take advantage of scale are you going to try and double the amount of ships around, or is that not really a priority for you given opportunities elswwhere?

Increasing the number of ship casinos is something that yes, we are trying to do, and it does not take away from our ability or our resources to do larger deals for land-based casinos. So we can do both and we want to do both.

I appreciate the color, thanks.

Thanks Robert.

And your next question comes from Alex Fuhrman from Craig-Hallum.

Great. Thanks for taking my question and congratulations on another really strong quarter. Wanted to talk about Canada, I think certainly with the tumble that oil has taken, I think a lot of people have been cautious on the outlook in Alberta, it sounds like if I am understanding you correctly the tourist games are doing really well, whereas maybe some of the games that the locals gravitate towards are not quite doing so well. How does that then tend to look as we get into the winter quarters, presumably, I would imagine locals make up a bigger share of the market during the colder months of the year. So if you could kind of comment on what your outlook is in Alberta with that in mind for the Q4 and Q1? Thanks.

Thanks Alex. It is not so much tourist versus locals because almost all of our play comes from locals. But within the locals we have a segment that prefers table games, and within the table games, second we have quite a large group of Asian customers that play baccarat, and in that segment we have seen and we continue to see the strongest growth. And with that I will turn it over to Erwin.

Yes, probably nothing much to add. I would have said exactly the same. We see the growth mainly in the baccarat segment, where we bend over backwards to please our customers with the goal to further increase our market share in the market of Calgary. We think we have been successful in the past. We think [Indiscernible] should be positive. We are very excited about that growth there.

Great. That is really helpful, thanks. And then can you share with us a little bit more about the early learnings of your loyalty program for slots, I mean, is it too soon for you to be able to see, how much playing activity has increased for people who have signed into the program, and do users have the ability to use the programming across your multiple properties. I'm not sure if maybe that was part of the marketing benefit of the program. If you could share with us a little bit more about your outlook for what that program could you that would be helpful?

We have different programs. Please do, but I said in my presentation that we concluded the rollout in Poland, so I am not sure whether Alex refers to Poland only or to the – but maybe Erwin you can give an overview.

Yes, I think if you can share, how that compares to the roll out of your loyalty programs elsewhere?

I think first of all we have to say it is not realistic to see things geographically across the board. If somebody plays in Poland, it is literally the likelihood to see that person [Indiscernible]. So, it is not like the program that initiated that across the United States with [Indiscernible]. So we – I think when we say loyalty programs, we think local, each of them local. Firstly, then secondly, there are huge differences in the loyalty programs depending on the share of gross gaming revenue that we receive. Obviously in Central City and Cripple Creek in Colorado where our share is say between 90%, 97% depending on where we end up in the sizing scale of Texas, with 10% to this rounded numbers. Now 90% to us. It is one situation that the casinos in Edmonton and Calgary where we get 15% of the slot revenue on this, and 85% going to [Indiscernible]. That is of course, it doesn't allow the same generosity in the program. And then we have everything in between. Like in Poland, the gaming, the gross gaming revenue FX is 50%. So, that is the most important thing to say, I think. And so, while having said that the second factor that influences what we do, can do and will do in the loyalty programs has to do with the competition. If I take the same casinos as examples in Colorado we have heavy competition in each of the markets. And the competitors are just like us, spend heavily on marketing across – north of 20%. It is a result of [Indiscernible], whereas in Poland, for example, and also in Canada these are more, shall I say, kind of oligopolistic markets. It is different and so we again – if the competition gives away less, we give away less, both of us have less room. But one thing that is certainly true for all of them with the slight exception of Poland is that additional data permit us to market more precisely, more specifically. Poland is [Indiscernible] easy because we have very strict restrictions on what we can market and what and how we can market. But in the other markets it is wonderful. We have great data. We can do all kinds of things with those data and we do.

Terrific. That is very helpful. Thank you very much.

Thanks Alex.

And your next question comes from Jeremy Hellman from Singular Research.

Thank you. This is Debra filling in for Jeremy. We were hoping to learn a little bit more about the loyalty program just from the standpoint of how you drive those signups, is it a matter of advertising, I dig here in your remarks just now that the words marketing and advertising, or is it a matter of traffic conversion. How do you build up those names on that loyalty program list?

We try to – yes, we try to make people sign up once they are in our casino if they have not signed up yet. And we do this with all the usual tools, to say for example, [Indiscernible] somebody books into the hotel and is not a member yet, then we invite that guest to join because if they join the loyalty program then they get 10% off the hotel price. If they order food as members same thing. If we – then we have programs like bring a friend and sign him up. Thursday, bring your friends for the Thursday, and then all of those things. So, that is mainly how we do it on the floor, on property. Does that address your question?

Yes, it does. I was just going to add does that – is that the case really in each location or there are some differences between say Canada and the US, and Poland like you mentioned that there are some differences in those programs from one geography to the other?

The differences are mainly in what we can give because with a smaller portion of the [revenue] we just can’t give much there. For example, we can give cash back in Colorado, we cannot do that in Calgary because it just is not economically viable. We don't do that in Poland either. And also in Poland, we don’t have the hotels, and the restaurants that are maybe nearby are not ours. So again we don’t have the possibility there.

Okay, very good. And then the other question I wanted to ask about was the slot machines, you mentioned that you were ordering or had ordered additional slot machines, and I wondered if the orders that you have made so far they are already included in your Capex spend that you reported in the first nine months of the year, and then, of course, the other part of this question is what is the expected capital expenditures in the fourth quarter?

The numbers you see are those – go ahead Peter.

The routine maintenance Capex that we typically have is about 3% of revenues, and I think if you go with that for the fourth quarter roughly that should give you a good picture. And I believe the additional slots Erwin was talking about are not included in the Capex, is that correct Erwin?

Correct.

Okay, and so we will just see another 3% of sales approximately in the rest of the fourth quarter – the balance of the fourth quarter, and then one last final question, what were the number of machines, can you share that, just kind of give us an idea of the extent of the expansion that you were anticipating?

In the future now the new ones in Poland?

Yes, please.

Another 30 plus or minus.

Okay, thank you very much for your help. I appreciate it.

Thanks Debra.

And there are no further questions. Do you have any concluding remarks?

Thank you. Thank you everyone for your interest in Century Casinos and your participation in the call. For a recording of the call, please visit the financial results section of our website at cnty.com. Goodbye.

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