Good day, everyone, and welcome to today's Century Casino's Q4 2023 Earnings Call. At this time all participants are in a listen only mode. [Operator Instructions] Please note that this call is being recorded. And I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Peter Hoetzinger. Please go ahead.

Good day, everyone, and thank you for joining our earnings call. We would like to remind you that we will be discussing forward-looking information, which involves risks and uncertainties that may cause actual results to differ 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 discussion of the risk factors in our SEC filings and encourage you to review these filings. Throughout our call, we refer to several non-GAAP financial measures, including, but not limited to, adjusted EBITDA. Reconciliations of our non-GAAP measures to the appropriate GAAP measures can be found in our news releases and SEC filings available in the Investors section of our website at cnty.com. I will now provide an overview of the fourth quarter 2023 results as well as our view of how this and next year could evolve. After that, my Co-CEO, Erwin Haitzmann, and our CFO, Margaret Stapleton, will join me for a Q&A session. For the quarter, we delivered net revenue of $144 million, an increase of 39% over Q4 of last year. The increase came from the additions of the Nugget in Nevada and Rocky Gap in Maryland as well as good performances of our Canadian operations, offset by a weaker retail customer, construction disruption at a few properties and the temporary closures of three casinos in Poland. Adjusted EBITDAR was $25 million, up 17% over last year. Canada grew EBITDAR by 50%, while Poland obviously saw a substantial decline. We did, like everyone else in regional casinos, experience market softness during the back half of 2023, especially at the lower end of our customer database and in the retail segment. Coupled with higher costs and expenses across the board, margins…

[Operator Instructions] Our first question will come from Jeff Stantial with Stifel. Please go ahead.

Hey, good morning, Peter, Erwin, Margaret, thanks for taking our questions. Maybe starting off here on the US business. Peter, you talked about broad-based softening in the low-income consumer, which started midway through 2023. Can you just expand a bit more on how that's trended directionally, has the low-income consumer worsened, stayed mostly stable? And then for the more mid- to high-worth segments, have you noticed any changes in behavior here sequentially across any of your markets? Thanks.

Okay. This is Erwin. I'll take that question. We -- this is -- I think we have to look at it on -- market by market, it differs a little bit. In the East, our customers are visiting our properties as often as before. They spend slightly less per visit. Visitation declined in Rocky Gap and in Mountaineer and the unique customer count decreased accordingly. For Mountaineer, spend trip is flat and for Rocky Gap, it's up. In Missouri, our customers are healthy. They visit more often, they spend the same as last year. Colorado visitation is also the same. People spend slightly less. The middle and lower peers drive our business in Colorado. And then the market overall visitation is slightly down. Unique patron count is flat. The younger demographic under 30 years of age increased by 26%, which is interesting. And spend per trip is flat. Overall, we don't think that inflation at this point in time needs to be a major concern for us.

Okay. Great. Thanks for all the granularity, Erwin. And then for my follow-up, turning to the Canadian business, it looks like EBITDAR margins were up nearly 7% quarter-on-quarter despite -- and correct me if I'm wrong here, historically somewhat limited seasonality. Peter or Erwin, can you just expand a bit on what's driving this? Are there any onetime benefits in the quarter? Is this just sort of strong execution on the cost side of things? Just any thought that would be helpful. Thanks.

Not one time. I -- we think it's strong inclusion. We really have a fantastic management team there. And it took a while for Century Mile to catch on, but now it has caught on. We were able to also find a solid customer base there. And we have every reason to believe that this will stay the same or get better, in fact, because, again, going forward, in the Edmonton Casino in a few months, there will be no more impediments due to traffic. And then we're also working on improving both the outside and the insides for the St. Albert Casino. So these are things that will be positive, and we look optimistically into the future in Canada.

Okay. Great. Thanks for that. Erwin, if I could just squeeze one more in quickly. It looks like to me, apples-to-apples CapEx guidance for 2024 was lowered a bit versus the $46 million that was cited in the press release when you reported preliminary Q4 results. Peter or Erwin, can you just talk to this decision a bit more. Are you delaying out certain of the projects that you laid out for us in the Q3 presentation? And if so, what's the overall rationale? Thanks.

Yeah. We just -- so to speak, streamlined the investments a little bit as we -- in particular, at the Nugget, we -- obviously, that was a learning -- that was also indeed a learning process. And in that last time, we were -- we thought we would do another almost upscale restaurants, but we've delayed it a little bit now. We think we're better off focusing on upgrading the existing restaurants for now. That will take us a little time and then we'll see how that goes and then come back to the decision on what exactly we do with an additional restaurant.

Okay, great. Perfect. That's all from me. Thanks for all the color.

And our next question will come from Chad Beynon with Macquarie. Please go ahead.

Hi, guys. This is Sam on for Chad. Thank you for taking our question. We know it's still early days and there's a lot to be determined on how sports betting or iGaming legalization might occur in Alberta. And now it looks like Maryland is a possibility. I was hoping to get your high-level thoughts on your online strategy for those regions? And ultimately, if or when they legalize, if it can be a net positive for your operations in those regions?

I'll take the first part and then hand over to Peter. OSP and iGaming is already legal in Alberta. It's provided by the Alberta Gaming and Liquor Commission and the casino operators are not participating in that. Peter, would you like to comment on Maryland and our overall strategy, which we'll probably give as we have it now?

Yes. The -- Maryland, they're discussing to legalize iGaming, and we certainly look forward to that with our license. The approach will be the same as we do in Colorado and in West Virginia. And in Nevada, we're providing our license to experience large online game operators. They pay us a percentage of their revenues they generate with our license and that has a minimum annual guarantee included for us. Outside of Maryland, we also have hopes for Missouri to legalize sports betting, hopefully, this year because, as you know, we have two licenses there, and there's strong interest from the online operators. So that would provide us quite a nice boost to our EBITDAR in Missouri as well. We have no costs associated with these agreements. So everything that we receive goes to the bottom line. And we certainly feel it's a net-net positive for us at all the locations where we have that strategy in place already. In West Virginia, as you know, it's not only sports betting, but also already iGaming. And we work with two providers there, and they work well for us.

Thank you for the color. And then a follow-up. I wanted to ask about Poland and the ramp for the remainder of the year. Is it possible you guys could start run rating the double-digit EBITDA that we saw in '22 this year? And then on the M&A front, is that something discussions you guys plan on having right away or do you have to -- are you going to wait for the properties to sort of ramp up to full capacity?

I'll answer the first one and then hand over to Peter again. So re-licensing of all three casinos were successful. And we believe that at the late -- in 2025, we'll be back to what we could call normal in Casinos Poland, then that would mean two-digit EBITDA figures in USD. 2024 has started very well in spite of the fact that still [Warsaw] (ph) is closed. It's too early to say. We don't want to speculate, but it's developing in the right direction. And Peter, maybe you want to talk about our plans for telling?

Yes. As we have received only three licenses again, we have now restarted the sales process, early stages, but we think this year, second half of this year, we have -- we should have a better chance than before to get a reasonable price for our operations there.

Great. Thanks a lot for the color. Appreciate it.

Thanks, Sam.

[Operator Instructions] And our next question will come from Jordan Bender with Citizens JMP Securities. Please go ahead.

Hi, this is Eric Ross on for Jordan. Thanks for taking our questions. So knowing that Reno has traditionally been a competitive gaming market. I was wondering if you could provide some details to the environment there nearly through the first quarter. And what's the group and convention outlook for the year looking like?

Okay. So market, obviously -- Reno, obviously, is a very competitive market and I think everybody has seen pressure, partly due to the -- coming from the bad weather. As you know, part of our market is West of the Rocky Mountains. And whenever there is either an announcement of snow, possibly coming or actually, it's not coming, we and all of Reno-Sparks is impacted. Concerning the conventions and events, 2024 in fact is the -- I think, has the most exciting calendar. We have an impressive lineup of events, and we have after-events like the annual Rib Cook-off, with the new Reno festivals, Hot August Nights and the New Oktoberfest. Our 8,500-seat -- outdoor seat is a big draw and it's quite frankly a unique feature at Nugget.

That sounds great. And just a follow-up. With the capital plan discussed, can you give us an update on your thinking about the remaining real estate for the Nugget, would you ever consider going 100% outgrow there to help pay down debt? Thanks.

Could you be please again repeat the question. I think the acoustic [indiscerinble].

Yeah. So I was wondering if you would -- on the remaining real estate for the Nugget, would you ever consider going 100% outgrow there to help you pay down debt?

We don't consider that at this point in time. But we have some more time to make a fine decision.

Great. Thank you.

[Operator Instructions] And it appears we have no further questions at this time.

All right. Very good. Thanks, everybody. We appreciate you joining our call today. And we will talk again after the first quarter. Till then, thank you, and goodbye.

And this will conclude today's conference. Thank you for your participation, and you may now disconnect.