Peter Hoetzinger - Vice Chairman, President and Co-CEO Erwin Haitzmann - Chairman and Co-CEO Margaret Stapleton - Executive Vice President, Finance.

Kirk Williams - Craig-Hallum Capital Group Justin Ruiss - Sidoti & Company.

Please standby, we are about to begin. Welcome to Century Casinos' Q1 2014 Earnings Conference Call. This call is being recorded. At this time, all participants are in a listen-only mode. 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, Jamie. Good morning everyone in North America and good afternoon to all our European listeners. I am happy to have all of you join us for this call following the release of our first quarter 2014 results.

With me on the call today are Erwin Haitzmann, Co-CEO and Chairman of the company, who is attending the Gaming Conference in Japan right now; and Margaret Stapleton, Executive Vice President 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 the Investors section of our website at cnty.com.

The first quarter 2014 started out really well for us with net operating revenue up 72% and adjusted EBITDA up 31% in January and February, but then came the month of March and the combination of bad weather and then unfavorable Easter holiday comparison resulted in unsatisfactory performance for the entire quarter.

The resulting period-over-period increase of 62% in net operating revenue in the quarter relates to the inclusion of operating results from Casinos Poland Limited, offset by a softer business levels in Colorado and the negative impact from a weaker Canadian dollar.

The Century Casinos Hotel in Edmonton showed in local currency 3% revenue growth and a strong EBITDA margin of 36%. Table games revenue was up and also slot coin-in actual revenue suffered from a lower slot total percentage compared to Q1 of last year. F&B revenue and ticket revenue were up 8%.

Hotel revenue was up 23% on higher occupancy and higher room prices. Edmonton is our largest property with 760 gaming machines and 35 gaming tables. During the quarter, we installed new automatic front doors at the main entrance to increase customer convenience. As of April 1 we have allowed to increase table games operating hours.

We now operate from 10 a.m. to 3 a.m. daily at both our properties in Edmonton and Calgary. Second quarter started out well with single-digit EBITDA growth in Edmonton. In Calgary, we managed to slow the revenue decline from 14% in the last two quarters to zero, meaning net operating revenue was flat quarter-over-quarter in local currency.

We continue to focus on growing table games revenue and continue to market the two showrooms to third-party promoters and to companies for dinner, lunches and conferences. On April 30, we opened an off-track betting parlor at that property and initial results are encouraging. We are seeing single-digit revenue growth for Calgary in Q2 so far.

In Colorado, net operating revenues of the Century Casinos and Hotel in Central City and the Century Casino & Hotel in Cripple Creek were down 11% and 13%, respectively, which is similar to many other regional U.S. gaming markets.

We expect to see continued weakness in the Colorado gaming market, which also remains very competitive with most properties is in free-play, heavy coin market players, weekend cash giveaways and other specials to drive player traffic.

Our team in charge of managing the cruise ship casinos at a very busy start into 2014, as we are adding four casinos to our portfolio during Q1 and Q2. In fact today, at 3 p.m.

Eastern Time, we will start operating the casino and a luxury cruise ferry connecting Portland, Maine with the Canadian Province of Nova Scotia with 70 slots as well as table games. Revenues at our casinos in Poland were flat in Q1 but we are very excited about the future prospect of our 66% owned subsidiary Casinos Poland Limited.

Casinos Poland operates nine casinos, most allocated in four and five star hotels in major cities throughout the country.

Due to operational changes and changes in local management, the properties recently opened or reopened are showing encouraging increases in attendance and revenue whereas the performance of Denver’s (indiscernible) properties remained stable.

In April, we relocated our Casino in Poznan to a better and larger location at one of the most popular hotels in town. The second quarter started out really, really well with revenues in EBITDA almost doubling.

We maintained our goal to double EBITDA margin within 12 months and recent results and trends confirm the very positive direction Casinos Poland is moving towards.

There are other -- several other opportunities to increase revenues further in Poland, including the addition of about 100 slot machines which increases our total slot capacity by nearly 25%. We will also increase the size of the casino in (indiscernible) operate in a peak gaming areas there as well as in Warsaw at the Marriott Hotel casino.

Currently about 70% of the gaming revenue in Poland comes from table games with Roulette being the most popular game. 30% comes from the slots. As the current gaming evolves, all gaming machines operating outside of casinos has to cease operation by the end of 2015.

This obviously is a great long-term opportunity for the licensed casinos and with our market share of approximately of 45%, we should be well positioned to capture substantial part of it. That concludes the review of the performance of our individual operations in the first quarter.

We continue to keep clean and strong balance sheet which as of March 31, 2014, showed $26.4 million in cash and cash equivalents and $3.8 million in outstanding debt.

The debt includes $7.5 million debt of Casinos Poland of which we own two thirds; $17.6 million related to long-term land lease for the Calgary Racetrack and Casino project that has been classified as debt and $8.7 million related to our Bank of Montreal credit agreement.

From an operational perspective, we continue to focus on refining and adjusting our product, our marketing and our amenities, sometimes the temporary lowest operating margins. But it’s all part of an effort to enable us to deliver a competitive entertainment product to our customers in the years to come.

As a result of these efforts, we’ve also improved our operational and financial flexibility allowing us to consider a greater variety of potential growth opportunities to further increase the value for our business and our investors.

Century Casinos has always been focused on domestic and international growth and increasing long-term shareholder value and that commitment will continue. The pursuit of new Greenfield development is a good example for our commitment to grow.

The Century Downs Racetrack and Casino project in Calgary is the next such promising and compelling growth opportunity. Century Downs will be the only horse race track in Calgary, including a casino with 550 slots as well as food and beverage and entertainment facilities.

The location is great, adjacent to the successful Crossiron Mills Regional Shopping Mall north of Calgary, on the major highway connecting Calgary and Edmonton. It is ideally positioned to capture the markets of North and North West Calgary, both of which do not have a casino.

We have a great team working on the project, which includes the same construction company that delivered our casino in Edmonton on time and on budget, and we hired a new senior executive whose background includes the position of Director of Racing Operations at two racetracks in Canada and U.S.

Construction is in progress and our excitement about this project grows day by day. RFP responses for horseracing, wagering equipment, racing production and surveillance equipment have already been received, selected for the property end of May or early June.

I am happy to report that we are on time and on budget for an opening in less than 12 months from now to 2015.

In addition to the Century Downs Racetrack and Casino project, we have submitted an application for casino license in Vienna, Austria and are evaluating a number of other new development and acquisition opportunities in North America as well as internationally.

We are examining the landscape in a handful of countries in South America and Asia to establish new relationships and gaining a sense as to whether these markets would be a good fit for our company and our growth strategy.

The landscape of potential acquisitions in North America seems to be a little bit more limited now than in the past, but we always keep our eyes open, looking for targets that have the potential to be immediately accretive to our earnings. Focusing on organic growth is our other top priority.

From an organic standpoint, we still see lots of opportunities to innovate, evolve and expand our businesses. In the first quarter we spent $2.6 million on capital projects, purchased the remodel of Lodz Casino in Poznan, in Poland, upgrading slots to ticket-in, ticket-out in Poland, as well as equipment for the new shipped casinos.

We did a good job in managing our G&A expenses which amounted to $9.1 million in Q3 of last year and $9.9 million in Q4 of last year. This quarter they came down to $8.7 million. With that, I thank you for your attention and open the floor to questions. Operator, go ahead please..

(Operator Instructions) Our first question comes from Kirk Williams with Craig-Hallum Capital Group..

Good morning, Peter, this is Kirk on for Bryan this morning..

Good morning..

We are wondering if you could discuss a little bit more what is pressuring the margins at your various properties..

Erwin, would you like to comment, Erwin?.

Yes, I got. I heard you. What’s pressuring the margins? The main reason for that was the bad weather. And after that, we have to start guessing quite honestly. I mean, one of the things you typically could examine is that we are in the process of building a three more hotel rooms and they will be ready by the end of May.

And the building of the hotel rooms had an impact on the gaming floor there. That is one of -- one example of bits and pieces stories, why we think run-off is wanted them. We’ve been monitoring that closely with the concerning and close contact with our GMs. We haven’t really found a reason other than to build that and the overall marketplace.

In the second quarter as Peter indicated, things look brighter. But we’ve been really disappointed about the first quarter and then in many ways, mistakes couldn’t really find an intelligent answer by closely working with them..

Okay. That is helpful.

And could you also discuss some of the timing on the additional 100 slot machines that you are looking to add in Poland during the next couple of quarters?.

It doesn’t depend on us. We have them. It depends on -- we’ve been focusing in Poland, we need to go to a slot machine by slot machine, not type by type, need to go to improvement process or licensing process and we are just waiting until you have provided the relevant departments time to time.

Our best case is -- it’s all in our hands, base case is within the next 30 to 60 days, we should have more on the floors..

Okay. That is helpful. Thank you. And then just a final question --.

Sorry, if I missed this, Poland is really looking upwards. I mean, finally after a long time, we see that the measures we are taking are also showing in the results. So, hopefully within the next months, this is will be pleasing for all of us and sorry to interrupt you..

No, no. That’s great. I appreciate that.

Just a final question on Century Downs before I hop back in the queue, do you have an opening day for that or you still just looking at 1Q of next year?.

We are looking at 1Q, as we say like that because what happened is in the short history of development, we have had one success with weather and we also caught up a little bit due to being able to reshop it. So it’s hard to say, we are in a very tight schedule. We have been -- the target has been anything between end of December and mid-February.

But we just don’t -- we have to give a better date because in next months, we could pass the one of the other phase. We will go pass the other -- one of the other extra efficiency where we just can maybe gain them if we got to..

Sure. That makes sense. I appreciate that. That is all my questions. Thank you..

When you translate Q1, you should be on the very safe side..

Okay. Thank you..

Yeah. Sure..

Our next question comes from Justin Ruiss with Sidoti & Company. Please state your question..

Good morning. I just had a question.

Do you get detail, kind of, just flesh out the competitive landscape in Calgary and what kind of market that you are really entering into once Century Downs is completed?.

The seven casinos now in Calgary and six, so to speak regular ones and one on Indian lands in the Southwest and the Century Downs will be geographically located in the Northeast of Calgary and in that area, there is no casino yet.

Distribution of the existing seven casinos is as follows -- we could say four are kind of just South of the city of Calgary, one is in the Southwest of the Indian Casino, one is in the Southeast and one is in the -- shall I say, not really northwest but south of the Calgary airport.

And our new Century Downs will be north of the airport and due to the way how the highways it can work, it will also cater to the very interesting Northwest of Calgary, where there is no casino at the moment.

So everybody thinks that the demographic are such great and we should -- when you look at demographics, we are much better positioned than in the present casino that we have..

Okay. Perfect. And then lastly, just with what’s going on in Colorado, the weather really had impacted you. I think you’ve said in the prepared remarks that you did take the prices up a little bit.

Is there anyway that you can recapture any of the loss sales there through rising prices and anything like hotel rooms or what have you?.

Yeah. But we too nicely, we are testing the process of introducing the downloadable credit which has been approved in Colorado while ago. We are not the first ones in the market doing that. And we’re in the process of introducing that now.

We see the first reactions from the customer is that at least it’s coming in second, our customers are familiar with the system. Most customers in Colorado Springs are not only sticking to one casino. They typically go to two or three.

So the introduction it tells it is easy and we hope that this downloadable will help us to regain some of the market share that we have lost over the past one of two years. And with the positioning of -- the property looks very nice. They know that we have extra hotel rooms which lead us to think as to 21. That is helpful.

Every hotel room on average per day is booked about between $50 and $60 per customers on the room but the customer. They should help a little bit. And we just have to continue to keep our position relative to the others.

The Cripple Creek market is very complicated because it’s a segment market and its -- there are some games more or less what you make, you have to take from somebody else. And so, we’re just continuing this -- in this bad luck and competitors..

Do you see population expanding at all in Colorado or is that just the…..

No, quite honestly no, we don’t really see that yet. Particularly by the Black Hawk and Century Casinos market is little bit better. But in Cripple Creek, unfortunately it’s been stagnant over the time. And the only thing we can do is try to steal it away from other. And then we try to do that just like the others try to steal from us in the past..

Okay. Perfect. Thank you very much..

Sure..

(Operator Instructions) And it appears there are no further questions. Mr. Hoetzinger, I’d like to turn the conference back over to you for any additional or closing remarks..

Thank you, Jamie and thanks everybody for your interest in Century Casinos and your participation in 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..