Peter Hoetzinger - President, co-CEO Erwin Haitzmann - Chairman, co-CEO Margaret Stapleton - Executive VP Finance.

Alex Fuhrman - Craig-Hallum.

Welcome to Century Casinos Fourth Quarter 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..

Thank you, operator and welcome everyone to our fourth quarter 2014 earnings conference call. Joining me on the call today are my Co-CEO and Chairman of the Company, Erwin Haitzmann; as well as 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 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-K filings, which will be available shortly in the Investor section of our Web site at cnty.com. I will now present the results. We ended 2014 on a strong note.

A more streamline cost structure and better overall macroeconomic trends resulted in healthy year-over-year increases of 6% in net operating revenues and 82% adjusted EBITDA during the fourth quarter. And it was a very busy quarter for us.

Not only did our entire management team did a great job in growing revenues and improving margins at our existing operations, we also added new projects to our portfolio. During the quarter all entities except the ship casinos generated higher EBITDA.

Our ongoing focus on enhancing operating efficiencies in maintaining a disciplined approach to marketing paid off and resulted in improved EBITDA margins especially at casinos Poland as well as at both our properties in Canada.

In October, we announced an investment in Argentina, in December we announced that we were forming a new 75% on subsidiary Century Bets! Inc. to operate the para-mutual of-track betting network in Southern Alberta, Canada. Exclusive licensing has already been awarded to us and we will begin operating this network in the second quarter of this year.

And finally construction of the Century Downs Racetrack and Casino in Calgary is in the final stages and we're getting ready to open it. Our balance sheet is clean strong and in very good shape.

As of December 31, 2014 it showed net debt of 13.6 million adjusted on one time trailing 12 months EBITDA, and this is with the debt including 16.8 million related to a long-term land lease for Century Downs. In the fourth quarter excluding construction spending for Century Downs, total CapEx was less than 1 million, only 2% of revenues.

The book value per share sits at $4.86. Our strongest performer in the fourth quarter yet again was the Century Casino and Hotel in Edmonton. In local currency Edmonton showed 11% revenue growth, 23% EBITDA growth and a strong EBITDA of 37%. The growth was broad based everything from tables to slots, VLTs, hotel and F&B was up.

This is our largest property with 762 gaming machines and 35 gaming tables. During the quarter the property set a few all time records, December 18 saw the highest ever table gains revenue. On December 26, we had the highest ever drop on the gaming tables and also December 26, the revenue from slots reached an all-time high.

We continue to market and grow the Players Club loyalty program and to market the showroom with live entertainment as well as the comedy club and our banquet and catering menus.

Our second property in Canada the Century Casino Calgary also had a great quarter and grew net operating revenue about 24% in local currency, EBITDA even increased almost five folds. The main growth drivers were the table games, especially Baccarat, but slots, F&B and bowling were up too.

Same as in Edmonton we continued to market and grow the Players Club loyalty program and to focus on growing table games revenue. We marketed the two showrooms that we have to third party promoters and to companies for dinners, functions and conferences in order to drive more traffic to the casino.

The first quarter of this year so far started out really well for both of our Canadian properties and continues to show both broad based strength and overall growth. In Colorado net operating revenue of the Century Casino and Hotel in Central City was down 7%, EBITDA was flat.

In Cripple Creek revenues were up 5% and EBITDA was up strong 54% which is the second quarter in a row with EBITDA growth for that properties. There are quite a lot of signs including the strong start into the first quarter of this year, as the Colorado market is trending up again after years of declines.

We're really encouraged by that and importantly we saw improvement in every segment of our database as well as our retail customers. We experienced growth in visitation spend per trip. The decline in gas prices in recent months also has had a positive impact, also the revenue drivers are more than just gas prices.

The Colorado gaming market remains very competitive with most property using free play, [heavy] coin market layouts, weekend cash giveaways and other specials to drive player traffic. We plan to emphasize a number of car giveaway promotions this spring and summer and we remained focused on guest service and VIP player development.

The revenue generated by the cruise ship casinos and in Aruba increased 16% year-over-year. Adjusted EBITDA was down 30% but only because of investments into slot machine upgrades which had to be booked as an operating expense. Our team is already very busy with all preparations to install casinos on three more ships in the coming months.

The [indiscernible] from Three Cruises and the Star Breeze and Star Legend from Windstar Cruises are all scheduled to start operations in the second quarter with casinos operated by us. Now turning to Poland, I know you have been waiting to see higher operating margins, and we are getting there.

Revenues at our casinos in Poland were up 21%, EBITDA more than doubled and the EBITDA margin also doubled from 6.5% in the same quarter last year to 13%. Remember with the high gaming tax rate of 50% in Poland EBITDA margins in the mid to high teens are pretty much to maximum we can shoot for.

Everything was up, table games revenue increased 8%, slot revenues increased 35%, F&B revenue increased 11%. We had more and better quality slots on the floor compared to a year ago and we also spent a little bit more on marketing especially at the locations in Warsaw and Crossland.

Player loyalty programs have been introduced at most locations with very positive feedback from our customers. Later this year we will finalize the upgrade of the VIP room at the casino at the Marriot hotel in Warsaw which is the largest and the most successful casino in Poland.

We also plan to increase slot capacity by further 5% to 10% throughout 2015. Overall the Polish casino market remains very competitive and unfortunately, lately we’re observing a rather relaxed attitude from the authorities’ vis-à-vis illegal machine operators.

Discussion amongst all licensed casino operators are ongoing on how to best address this issue with the authorities. Anyhow the first quarter of this year so far shows a continuation of the positive trend with revenues and EBITDA up by double digits.

We’re working hard on controlling costs and at the same time enhance the experience of our top tier customers. Those efforts seem to work very and we’re more excited than ever about casino Poland’s future. Following this brief preview of current existing operations, let me give you a quick update about our newest projects.

For the Century Downs Racetrack and Casino project in Calgary, we’ve spent approximately $18 million so far. The carpet has been laid, slot machines have been delivered, [indiscernible] equipment has installed, furniture is there, CD and audio systems are being installed, marketing plans are being finalized.

As you can imagine it’s a very busy and [transformative] time for the local management team. You can actually follow construction progress on our Web site at cnty.com.

Thanks to strict and efficient construction management and also thanks to the exchange rate, total project costs are expected to come in slightly below the $25 million number I mentioned in previous presentation. The casino will open in a couple of weeks from today on the April 1. The first horse racing day is currently schedule for April 25.

Century Downs maybe the only horse race track in Calgary. The racing entertainment center will include a casino with 550 slots as well as food and beverage and off-track betting facilities. The location is great. It’s 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 northwest Calgary, both of which do not have a casino. Importantly, the project will scale to and further diversify our business portfolio and grow our operating results, while expectedly generating an attractive return on invested capital for our stockholders.

Our engagement in Argentina is off to a good start. As reported we acquired 7.5% stake in a company called MCE for $1 million and we also got a three-year option to increase our stake to 50% at a price equal to 5 times EBITDA minus debt.

MCE has the exclusive long-term concession agreement to lease slot machines and provide technical services to the casinos at Mendoza, which is owned by the Province of Mendoza. Currently, MCE has placed 600 slot machines at that casino and in return receives 43% of the revenue generated by the slot machines.

We’ve also entered into a consulting services agreement with MCE which pays us a fixed monthly fee plus a percentage of MCE’s EBITDA. With our help the slot floor of the casino at Mendoza has already been redesigned and slot revenues reached new highs last month.

Our partners in MCE are affiliates of Uno Medios, one of Argentina's largest multimedia companies.

Argentina has a population of 41 million and is one of the largest Spanish-speaking gaming markets in the world, and similar to the U.S., there is no standardized set of gaming legislation at the national and the federal level, but the Provinces have the authority to regulate and control gaming activities.

Our goal with the MCE transaction is to grow in the land-based and in online gaming industry in Argentina as well as throughout Latin America.

Let me conclude the presentation by saying that we’re pleased with our overall progress, but we’re never done there is always room for further improvement, always a way to do things better and more efficiently. It is with that spirit that we look forward to an exciting and fruitful year 2015.

We expect our 2015 results to benefit from our ongoing disciplined management of our resources from continued growth and efficiencies being achieved at our existing properties from about nine months of operations of Century Downs as well as our off-track betting network in Southern Alberta and from continuing margin improvement at all our properties in Poland.

I thank you for your attention and we can now start the question-and-answer session. Operator, go ahead please..

Ladies and gentlemen, at this time we will conduct the question-and-answer session. [Operator Instructions] Our first question comes from the line of Robert [Rojek] CJS Securities. Please state your question..

In Poland, can you give us a little more color on what caused the margin jump in the quarter and what further steps your taking to reach your EBITDA margin goal?.

Yes, we’ve increased slot revenues quite substantially and obviously an increase in slot revenue has more impact on the EBITDA line compared to table revenue, so that is monetary and then overall cost management was just something that really paid off the last quarter and also going forward, we will -- we see that right here in the first quarter, we will be able to generate higher margins because of revenue growth and cost control, so it’s working on both sides..

That’s helpful and can you give us a better sense for the remaining size of the slot arcade industry operating outside of casinos in Poland and given the ban how much of that you hope to pick up this year?.

By end of this year we can expect all machines that are operating outside of the licensed casinos to disappear and we believe that this will have a significant impact from early 2016 on for all licensed casinos of which we have the major market share.

It is hard to quantify but some industry sources estimated that this street machine market is worth about $100 million per year and if all these machines fall away and the significant portion of this will be played in casino slots we have the highest market share, than you can imagine that we’re excited about that and we’re gearing up with our slot product to take advantage of that opportunity that’s going to present itself from the end of this year on..

That’s great and my last one, do you have an opening date set yet for the new racino in Calgary?.

That is April 1..

Our next question comes from the line of Alex Fuhrman, Craig-Hallum. Your line is open..

I wanted to ask specifically thinking about your operations in Canada and Poland and let me say that the U.S. dollar has been strong here even just last couple of weeks and I think you’ve mentioned in your prepared remarks that Poland has been very strong here in the first quarter something like double digit revenue growth.

I would imagine that is in local currency and would it be reasonable to think that revenue in Poland could increase this year on a dollar level or would that just too much to ask for given the strength of the dollar?.

That was actually in dollar terms, so we’re seeing a very, very strong start to the year in Poland..

That’s fantastic and then secondly just wanted to ask little bit about the Colorado market, I mean sounds like that’s really starting to turn for you and do you envision that now being a multiyear trend that you could actually grow or is it just more about kind of stopping bleeding here?.

It’s hard to predict but I think the industry estimate is that -- looking at the regional markets, we should be looking at a hopefully longer term trend..

[Operator Instructions], There are no further questions. I'll turn the call back to our host for closing remarks..

Thank you operator. And thanks 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 Web site at cnty.com. We look forward to getting together with you again for our first quarter earnings call in May. Thank you and good bye..

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