Peter Hoetzinger - Vice Chairman of the Board, Co-Chief Executive Officer & President Erwin Haitzmann - Chairman of the Board, Co-Chief Executive Officer.

Robert Majek - CJS Securities Mike Malouf - Craig-Hallum Capital David Bain - Aegis Capital.

Welcome to Century Casinos' First Quarter 2017 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..

Good morning, everyone, and thank you for joining our earnings call. With me on the call are my Co-CEO and the Chairman of Century Casinos, Erwin Haitzmann; as well as our Executive Vice President of Finance, Margaret Stapleton.

Before we begin, we would like to remind you that 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 filing from this morning, available in the Investor section of our website at cnty.com.

I will now provide a brief review of the company’s financial results for the first quarter of 2017 and following our prepared remarks there will be a Q&A session. In the first quarter, we generated 10% revenue and 6% adjusted EBITDA growth.

We are pleased with these results, which we have achieved despite that we had an unfavorable New Year’s Eve holiday calendar, which is very important in locals market and below our whole percentages in major markets such as Edmonton, Denver, and Poland.

Canada remains our strongest segment generating 36% of our consolidated revenue and 48% of our consolidated EBITDA. Looking at the Canadian results in more detail, we see that our largest property the Century Casino & Hotel - Edmonton had a lower table drop.

However, the total coin in all the slot machines and VLT’s actually increase slightly compared to Q1 of last year. This is important to note because whilst the net revenue figure shows minus 13%, the actual volume of play was really quite okay. On top of that, Q1 of last year was a record quarter for Edmonton making comparisons, especially tough.

In the Calgary market, we see a similar picture at Century Downs Racetrack and Casino with slots going up 3% year-over-year, but net revenue actually down 2%. The main reason for the 2% decline was the lower number of racing days during the quarter.

Having said that Century Downs was the only casino to grow quite in the Calgary market as the entire market was down 9%. At our other property in the market, the Century Casino Calgary, we terminated the Chairman and brought in a new one, as well as new shift. We are excited about the new leadership and the positive changes that will come from it.

The US operations in Colorado contributed 23% of our consolidated revenue and 18% of our consolidated EBITDA. This showed a solid performance with revenues up 6% and adjusted EBITDA up 18%.

We continue to see a positive regional economic outlook and anticipate continued growth due to strong focus on customer service, clear development, and consistent and sound promotions.

Our Casinos in Poland generated 40% of the company's total revenues and 29% of our adjusted EBITDA, another excellent quarter for Casinos Poland with revenues up 22% and adjusted EBITDA up 43%. It was a broad-based success led by table gains up 32%, slot machines up 15% and SMB revenue up 11%.

Again our flagship property at the Marriott Hotel in Warsaw was the main driver this quarter. As reported, we are excited to have won the regulatory approval to take over the new operation of the casino at the Warsaw Hilton Hotel, which previously has been our strongest competitor.

We are in the midst of preparations and expect to get that casino open before the end of this quarter. Now a quick look at our balance sheet. Total assets grew to $218 million. Net debt decreased by 11% to 14.9%. Our total debt includes $39.4 million related to our BMO credit agreement and $14.6 million related to Century Downs long term lend lease.

The total debt-to-EBITDA ratio sits at 2.1. Book value per share increased to $5.55. In the quarter, we spend $1.3 million or approximately 3.6% of revenue on CapEx, mostly for renovations at Century Casino Edmonton and at the newly acquired property in St. Albert, Canada and on property improvements and equipment in Poland.

Now finally a quick update on our newest project. In September of last year, we have been selected as a successful applicant by Horse Racing Alberta to own, build and operate a horse racing and gaming entertainment facility in South Edmonton, which we will call Century Mile.

And a few weeks ago at the end of March, we received the approval from the Alberta Gaming and Liquor Commission to go ahead with the development. Century Mile will be a one-mile horse race track and multi-level racing and entertainment center, which will include a gaming floor with a minimum of 550 slot machines, as well as F&B outlets.

The location is on Edmonton International Airport land and close to the city of Leduc, just south of Edmonton and clearly positioned off Queen Elizabeth II Highway. First class estimates call for a total project cost of approximately CAD 55 million, which equals about $40 million.

What is very important to realize is that Century Mile will not bring any additional gaming capacity to the market because it will replace the existing Northlands Park racetrack and casino, which we closed in mid-2018.

Northlands Park has been operating on city-owned land for decades, but not now the city of Edmonton has other development plans for that land.

With Northlands Park closing and Century Mile opening, we believe we reached the double check book because Northlands Park currently is the closest casino to our Century Casino and Hotel Edmonton, which is just three miles away. We will definitely benefit from and Northlands closing.

And then we will open Century Mile with the same number of gaining positions, but in the underserved area in the South of Edmonton, approximately 20 miles away from the closest casinos in the downtown area.

Looking at the success of our Century Downs in Calgary and understanding the potential of the underserved markets of South Edmonton, we are very excited about this opportunity.

Pre-clearing has started already and trading is also going on all already and the, may say very ambitious goal is to be up and running with this operation before the end of 2018.

We are also working on our projects that are not that far along yet, but will fit very well into our plan for disciplined investments to continue growing our company in a prudent and accretive way. Alright. That’s the end of our presentation. I thank you for your attention and we can now start the Q&A session. Operator, go ahead please..

[Operator Instructions] Our first question comes from Robert Majek from CJS Securities. You may begin..

Good morning..

Hi Robert..

We do you had touched on it in your prepared remarks, but can you just give us some more specific update on the Century Miles project you mentioned that you received approval, what’s holding up financing and starting construction at this point? Peter?.

[Operator Instructions] Your next question comes from the line of Mike Malouf. Please state your question..

Operator, Chris..

Yes I’m here..

Yes. We got disconnected just before Robert started his question..

Yes sir, he will be back into the queue now..

Okay..

Okay..

Alright, I guess I’ll ask a few questions. Thanks for taking them. Can we start off with Edmonton area, I know in the 10-Q you kind of called out competition and numbers are a little bit down there, can you just give us a little bit of color on what is going on in that market? Thanks..

The market is characterized at the moment by a little bit economic downturn, I think current rates are a little higher than anticipated and the overall economy is still down a little, but we see it is already, [indiscernible] are less and less, so it is getting. That would be the major economic truth.

The other thing, the other event that has potentially influenced is that in Downs town, the new branch Vienna Casino was opened last year and that will be a little bit of an impact on our casino accounting numbers..

Now that casino was opened in September, did you see a little less effect in the December quarter, because I don't remember talking about that?.

No, we didn't, we [indiscernible] in this first quarter for the first time..

Interesting. Okay. Alright. And then with regards to Century Mile, it looks like you up the cost a little bit from CAD 50 million to CAD 55 million.

So question on that and then you mentioned the Downs Racetrack and I’m just wondering do you think that the Century Mile can be at that size or may be larger, as far as revenues and EBITDA, is that what we should be comparing it to?.

With regards to the budget we are in the final stages of fine tuning it and now that we have the goal for opening at the end of 2018, this has triggered little bit pressure to the upset on the budget, so that’s why we are now more comfortable with the 55 million Canadian number and with regard to your other question, we would be disappointed if Century Mile wouldn’t do better than Century Downs..

Okay great and then, the margins in Poland were pretty strong and obviously with this new opening that’s going to help, how do you see margins in Poland progressing over the next couple of years?.

This is Erwin. If there not be in the league a tax changes and we think we are still available with the upside with regard to margin, EBITDA margin..

Okay when you mean a little bit, you're talking about 100 basis points or 200 basis points, something like that?.

Will be honored, or if we say between 100 and 300 and may be slightly more basis points..

Okay great. And then could you give us a little bit of color on how you feel St.

Alberta is doing after running it now for full quarter here or so?.

Yes, after having taken it over in the first quarter of 2016 where there was kind of, or let’s say rely on consolidation people had to get used to the new style we had to a number of things and upgrade certain standards because we are a larger company and obviously follow more stringent operating procedures. We now see that in Q1.

We have - we are doing in essence the same as the previous operator did and I think that is solid basis now for starting to get growth into that property..

Okay, so you feel confident that you are going to be able to grow that throughout the year?.

Yes..

Okay great.

And then just my final question, obviously the Century Mile Casino is going to dominate your focus for a while now, but do you see any other, because I thought that you had mentioned that you do have a couple other opportunities in your pipeline, I’m wondering do you still have those and how is that, how is that pipeline going for new opportunities?.

Yes we still have those and each of them is a little bit smaller than the century mile project, but we have very high hopes that we will be in a position to announce at least one later in 2017..

Okay great. And then if I could just squeeze one more question.

You mentioned that you postponed the Denver, I’m sorry the Colorado refurbishments, can you talk a bit about that?.

Yes the construction price is going to up the point that we didn’t feel comfortable at this point in time to do it then in the midst of the things of our company. We then just decided we will postpone it a little and focus on the natural ones right now and ask that we are doing with delivering Century Mile, we look at it again..

Okay great, thanks for taking my questions..

Our pleasure..

Your next question comes from the line of Robert Majek from CJS Securities. Please state your question..

Are you able to hear me now?.

Yes Robert, sounds okay, great..

Just following up on a previous question on the new competitor in Edmonton given the more touring there, how did they attain a license?.

They had a license already. It is a casino probably hundred meters away from where they are now, but it was a very old property and very ramped down and with the construction of the new [indiscernible] they got the opportunity to move over there to much larger, much better much more integrated premises.

But it was as existing license that was just relocated a hundred meters..

And on my initial question was on Century Miles, you’ve now received approval there, what’s holding up financing construction at this point?.

Nothing. As I said we are clearing the sides [indiscernible] and they are doing a drilling and so we - development is in progress..

Okay, thank you..

Thanks Robert..

Your next question comes from the line of David Bain from Aegis Capital. Please state your question..

Great thank you.

Just a few cleanups first, you mentioned the Century Casino Edmonton had some hold impact, I don't believe it’s quantified, where I can find it, can you quantify that?.

The table holds, this quarter was 16% and in the same quarter last year it was 18.5%..

Okay, and if I were to quantified that in absolute dollars, is there any way that you can help me with that or is it something I can work with you off-line?.

Yes, I appreciate..

Okay, and then is there some way that we can - you can help us quantify that the New Year Holiday and weather impact? For the quarter?.

Okay. No absolute numbers Dave. However, it is a meaningful in local market. A weekend or a holiday stay is just like on average three or four times more meaningful than a week day..

Okay.

And then can you try and help us understand the potential impact of moving when you are pulling license to the Hilton in Warsaw, I mean do you anticipate to perform RevPAR with your Marriott location, do you expect the Marriott location to kind of revert to pre-competitor levels, I'm just trying to understand what the net impact could look like?.

We believe, nobody knows first of all, it never exceeded at all this revenue, but we think the most likely scenario is that a little bit of the existing Marriot business will move over to the Hilton. But we now think it is too much. Overall, we are totally excited. I mean it is just fantastic.

The market would just continue to do what it did when the previous competitor had it. So that we would have the same numbers that we had when they were open, plus we will also make their numbers when they maintain that already would be, again more than fantastic. And there is no reason to believe why it should be like that..

Right.

And so the Hilton is - or your Marriot location is obviously a biggest earner, correct and so this could be something at par?.

Yes. Before they chose in the one or two years before had been pretty close to our revenue numbers..

Okay, great. Alright, thank you and congratulations on the Alberta Gaming approval..

Yes, thanks a lot..

[Operator Instructions] We have no further questions. Mr. Hoetzinger, I turn the call back over to you for closing remarks..

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. Goodbye..

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