Peter Hoetzinger - President and Co-CEO Erwin Haitzmann - Co-CEO Margaret Stapleton - EVP and Principal Financial/Accounting Officer.

Bryan Maher - Craig-Hallum Capital Group Justin Ruiss - Sidoti & Company Arnie Ursaner - CJS Securities.

Welcome to Century Casinos’ Quarter Two 2014 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..

(Audio Gap) second quarter 2014 results. With me on the call today are Erwin Haitzmann, Co-CEO and Chairman of the company, 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 the Investors section of our website at cnty.com.

As mentioned in our last earnings call, the second quarter started out really well for us with net operating revenue up 23% in April mostly due to the strong performance of Casinos Poland. Unfortunately we couldn’t keep up the strong performance in May and June resulting in mixed results for the periods.

Overall net operating revenue was up 11% quarter-over-quarter, cash flow provided by operating activities was flat and EBITDA was down 18%. We saw continued soft business levels in Colorado and again the negative impact from the weaker Canadian dollar.

In addition we had to carry some extraordinary cost and expenses in the quarter related to things such as the successful license application in Vienna, the fight -- again the initiative to allow slots of racetracks in Colorado and the relocation and temporary closing of two casinos in Poland. Total these added up to just over $1 million.

The strongest performer yet again was the Century Casino & and Hotel at Edmonton. In local currency Edmonton shows 8% revenue growth and a strong EBITDA margin of 37%. The growth was broad based, everything from tables to slots, [indiscernible] revenue for payment S&P [ph] was up. This is our last property with 760 gaming machines and 36 gaming tables.

During the quarter we installed brand new slow chairs and introduced the new rebate program for most our loyal customers. The first half of the current third quarter continues to show strong results with mid single digit revenue and EBITDA growth.

Our second property in Canada the Century Casino Calgary also had a good quarter and grew net operating revenue about 18% in local currency. EBITDA was up 79% driven by strong table actions specially Baccarat.

During the quarter we opened an off-track betting parlor which is doing quite well and installed mix shares throughout entire slot gaming floor. We continue to focus on growing paper game revenue and continue to market [indiscernible] to third party promoters and to companies for [indiscernible] and conferences.

In Colorado, net operating revenues for the Century Casinos & Hotel in Central City and the Century Casino & Hotel in Cripple Creek were down 7% and 16%, respectively, which is similar to many other regional U.S. gaming markets.

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

This currently rather promotional environment in Colorado and we would not be surprised if some of competitors -- most of them had heavy debt on their balance sheets get into difficulties if it continues for much longer. Our two properties are basically debt free and continue to produce positive cash flow and net earnings.

The revenue generated by cruise ship casinos increased 17% and they contributed approximately $200,000 to our EBITDA in the quarter. Currently we operate 16 casinos on cruise ships with a total 560 slot machines and 65 table game. For the first half of the third quarter, revenues are up an encouraging 20% so far.

Revenues at our casinos in Poland grew significantly in the second quarter, up 12% in local currency and the revenue adjusted for the seven days in April that we didn’t last year. Most of the increase is due higher slot revenue driven by more slot machines on the gaming floors coupled with better quality of machines compared to last year.

But on the other side we also increased marketing expenses, have rental and leasing costs in connection with new locations, higher payroll costs as well as costs associated with the relocation and temporary closing of casinos.

We maintain our goal to almost double EBITDA margins within the next two or three quarters and we see a lot of signs that we are moving in the right direction. For example in April, Casinos Poland recorded its highest gaming revenue ever and the EBITDA margin was over 15%.

In May, we had the highest strong revenue ever but unfortunately table hold was really bad. In this current -- in the third quarter we will refurbish the high limit room at the casino in [indiscernible] and we will introduce the slot loyalty program at the Casino in the Marriott in Warsaw.

Following this overview of current operations, let me give you a quick update about the racetrack and casino project we’re building in Calgary. For the Century Downs racetrack and casino project we spent approximately $6.5 million so far. You can actually follow construction progress on our website at cnty.com.

Total project cost is budgeted at 25.5 million. The opening is scheduled for March 2015. Century Downs is the only horserace 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 across CrossIron Mills regional shopping mall in north of Calgary on the nature highway connecting Calgary and Edmonton. We’re ideally positioned to capture the markets of North and Northwest Calgary, both of which do not have a Casino. And it's even better.

In the same area in Mega Asian Shopping Mall with modern 500 retail stores services and restaurants will start construction later this year and open in 2016 and the existing CrossIsron Mills Mall just this morning announced a 60 million expansion to create an additional 46,000 square feet of retail space.

Both projects refer to the tremendous population growth rate as well as the high disposable income in the greater Calgary area in their announcements. I am concluding our presentation with some comments to our balance sheet.

On a consolidated basis, we continue to keep a clean and strong balance sheet which as of June 30, 2014 stood 26.5 million in cash and cash equivalents and 17.4 million in outstanding debt that’s without the long-term land lease for Century Downs.

In the second quarter, excluding construction and spending for Century Downs, we spent $2.3 million on capital projects such as new slots and various refurbishment projects in Poland, new slot chairs and the new [indiscernible] slot for Edmonton, Calgary as well as equipment for new ship [ph] Casino we opened in May.

The book value per share is $5.02. With that I thank you for your attention and open the floor to questions. Operator, go ahead please..

(Operator Instructions). We will take our first question from Bryan Maher with Craig-Hallum Capital Group. .

I think we saw on the 10-Q today something about the casino in Poland Sosnowiec closing for five months.

Can you give us a little commentary on that?.

Sure I'll refer that to Erwin..

This is Erwin. The situation is as follows. The Casino in Sosnoweic is not producing any money. It's continuing to lose money and economically it’s the better decision to close the Casino.

We can only close it for five months for license reasons and they have to open it at least in a very small -- on a very small scale until possibly we might close it again. But for all intents and purposes we’re finding a modus where we keep the license but reduce that cost to a minimum..

Now would you be exploring other Casino locations in that market? I believe when I was there in April, it’s a somewhat decent market area.

Are there better locations that you might move that license?.

No, we get up on Sosnoweic..

And then in Colorado, can you comment on the referendum in November and what you're seeing there is it relates to maybe current holding or what your thoughts are there..

If you know there have been a few referendum like that over the course of the past 10, 15 years. All of them had been rechecked it soundly by the population of Colorado. So we would hope that it will be the same this time and that the Coloradans will once again recheck in their own backyard, namely in Denver.

The industry is [indiscernible] we think we can with a lot of money to inform the population that this initiative is [indiscernible] better schools but is about running casinos to their own home yard and as I said we hope it will be refitted. We will see. .

Okay. And then just lastly actually, two quick things.

When we add back to charges in Poland in the quarter, it seemed like you actually maybe coming out with EBITDA margins kind of north of our 12.5% estimate for this quarter? Is that consistent with how you feel the trends are there with EBITDA margins now moving into the teens?.

Yes, it’s moving slowly. We would like it to move a little faster but we see that things are gradually going in the right direction and we’re trying on speeding it up..

And then lastly Peter I know that you’ve been exploring for some time now opportunities in Asia.

Is there anything there to report? Are you optimistic that you might be able to do something in that market?.

Asia and South America yes, I think would be disappointed if we would not be able to do a deal in one of those two markets before the end of the year..

(Operator Instructions) We move on to our next question from Justin Ruiss with Sidoti & Company..

I just had a question when it came to G&A, just looking at that line. I’m assuming that rise is really indicative of aiming Poland back into the mix.

Can you just talk about maybe just kind of flush it out little bit maybe just on that line?.

Justin, it is mostly from Casinos Poland and it was a significant increase from the last quarter. We realize that. It also has some of the extraordinariness in there which we launch in the quarters to come, but it’s mostly from Poland..

Perfect.

And then can you just talk about spending in the Colorado, the Colorado region? I know you’ve spoken about promotional spending from some of your competitors is that something that, are you exploring that, are you trying to win back on it, can you just give your thoughts on that?.

It’s very competitive market. You gain little bit of market share as a next one you lose. We don’t see any additional any new competition arising that maybe treat as closing of the one or the other small property in the near future.

But overall we believe it will remain a very difficult and highly competitive market and there is not very much room to maneuver with left. Margins are very tight..

(Operator Instructions) And we have a follow up question from Brian Mayor..

Yes, Brian, go ahead..

Caller please check to see that your mute function is turned off..

Yes, sorry about that. So in the Colorado market, following up on that last question, in your commentary on, you guys have very little debt.

Should we take it as you would just ride out the competition from the other properties whereby their debt loads might force them to close or do something that ultimately would benefit you? You have no interesting closing in Cripple Creek or in Century? You just ride out the competition? Is that correct to think about that way?.

It’s correct yes..

In we’re doing one of the other improvement, but like Erwin [indiscernible]..

Yes, but not much capital. We're just doing some [indiscernible] CapEx, and a little bit here, a little bit here, but not spending any significant amount of money. We added two hotel rooms for example and that's positive in time.

We think we can sell the hotel homes in good better rate but it’s not really -- it's positive but it’s not really making a huge difference..

Those properties are in good shape they don’t need much of it..

Yes, very nice..

Yes, I recall them being in a good condition when I was there. And then Century Downs, I think that you said that the current budget is 25.5. Now I thought it previously had been 24.

Is there cost creep or are you adding amenities there or in light of the positive things that you said with respect to the Asian mall and the expansion of the Cross Mills mall, are you planning on enhancing that property at all, adding amenities? What’s going on there?.

Yes, we added some amenities and also we’ve added to the budget I believe two or three months more in leasing cost before we open. So both some in additional amenities and additional two or three months that we added to the timeline increase the budget..

And United Horsemen, do they share any incremental cost creep along with you in that..

As you know, it is a loan to the company. Half of it we get back and so far this year..

And then just lastly I know that you had moved the Casino in Warsaw the one, Wawa Casino, over near the train station there.

How are trends tracking at that property in the second quarter relative to your expectations?.

It’s getting stronger every month and we are about to approach breakeven and cross the breakeven line, pretty soon we think. It’s very consistently growing. .

And suppose now that it’s been open say three months, four months, is that also meet your expectations after the move?.

You mean Wawa casino in Poland?.

In Poland yes..

The new one. Yes, it meets our expectations. Again we still [indiscernible] a little more but again it’s developing nicely. We were able to increase our market share [indiscernible] from the get go but we need some more..

And we have our next question from Arnie Ursaner with CJS Securities..

Just a quick question on the G&A expense. You obviously were trying to target Austria and walked away from that or lost the contract. Was that also included in your G&A expenses in the quarter, was there one-time for that..

Yes, it was included, not all of it. Some of it we had expensed already previously but some of it was. .

So that would be an addition what you disclosed regarding Poland, is that correct?.

Yes..

And how much was that?.

I can get back to you with an exact number. I don’t have it right now..

And then your gaming expenses, we’ve been doing some work and it came in well below what we thought.

Could you maybe expand a little bit on what is in that line and perhaps your view of how we should think about it on a go forward basis?.

Maggie, can you comment and explain what’s in that line? Gaming expenses?.

The gaming expenses are directly related to either slots or tables. It would be payroll, any of those department expenses that relate directly to gaming and marketing..

Gaming tax?.

No, gaming tax does not really go into the gaming expense line. It’s --.

Which line is it?.

Oh, sorry. Gaming tax does go into the gaming expense line. I'm sorry. So when gaming revenues go down say in Colorado, the gaming tax goes down as in relationship. .

That’s right. Because we had an increase in Poland and Poland carries the high tax rate of 50% that proportionally contributes to the increase in the gaming expense line..

(Operator Instructions). At this time, we have no further questions. I’d like to turn the call back over to Mr. Hoetzinger..

Thank you, Operator and thanks everybody 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. Thank you..

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