Century Casinos, Inc.

Q4 2022 Earnings Conference Call


spk_0: morning everyone and welcome to the century casinos to for twenty twenty two earnings call during today's conference you may submit questions to the presenters by pressing star one on your touchstone for at any time during the broadcast if you require technical assistance during today's you didn't you can reference to help link at the top of your screen please note to they call will be recorded and i will be standing by she keeps insisting it is now my pleasure to turn today's call over to peter singer please go ahead
spk_1: good morning everyone and thank you for joining our and score with me on the cause i'm a cozy your and the geminate century casinos fahrenheit some as well as our chief financial officer margaret's they pretty as always you would like to remind you that to be discussing forward looking for which and was set a risks and uncertainties that they can cause actual results to differ materially from are forward looking statements the company and it takes an obligation to update or revise the forward looking statements but as a result of new information shoot events or otherwise he provide a detailed discussion of the virus respect to see now i see filings and encourage you to reveal besides in addition south are called will set of seven not get financial measures including but not limited to a chastity bitter become citizens of are not get performance and repeated measures to the appropriate get measures can be found in our news release best as he filings available he did mr sections all it says at sea and to by dot com and i provide an overview of the results of the fourth squad and full year two thousand two thousand twenty two accidental the accused a session for the year two thousand and twenty two we had an all time record with net operating revenues up and of descent and adjusted ebitda of six percent over twenty twenty one the chief these record results even so our to reduce the riverboat casinos missouri she did effected by the throughout this was quota he had to close in november and then could real and whispers restricted capacity only that it that was about to meet an inhibitor could get to to for of to the one the dangerously low water levels so glad us to become great this index quickly and with it with the approval of the nursery gaming commission just before the christmas holidays business or operations to temporary land base building the typically not like to call out whether but in addition to the she's making currency severe storms freezing temperatures in mid december it has quite it he picked out at our other properties as well and negatively effected queue for research however as the vet the man returns and we ended the quote on the high note with strong performances but only it's carotid me that across the entire portfolio between christmas and new year's and that has continued into january and february the regional guinea customer besides little signs of slowing down and many metro indicators such as unemployment and wage growth pointer other heads environment outside of better this the underlying the mountains remaining solid heading into to two and two three of this year on the expense of the business or teams that editing to overcome structure by dealing with inflationary pressures that still exists wage inflation has lasted normalized but utility situation remains elevated the promotion of went across all our markets remains relatively stable it is pretty disciplined as we continue to envision a very rational marketing approach all of us not as each segment in a little bit more detail
spk_2: in colorado
spk_1: is it is to give a sled revenues into fourth quarter he did that was infected by higher labor and utility costs compared to last year
spk_3: we have the market share steady
spk_1: the over number of this it's was down in october and november but it turns around in december and that positive trend continues to cuban of this year especially from to hire eighty ti segments
spk_4: it was a similar picture this to junior
spk_1: almost to get a seen a racetrack and resort thirty six starts to the rather than bus trips to the casino was down specially sweet but business came back over the holidays and cowardly slept yoga year yes experiencing stasi said it is melting mountaineer resulting in limitations two hours of operation and availability of attendance
spk_5: in missouri
spk_1: besides let's it's and revenue from all age groups distance ranges and hp segments are trusted database to paint the trip was even surprised year and mentioned the dangerously low bottle in a situation that strategies already but the also does it does you can't winter weather you pick in december doing what is typically one of the busiest times a year right after that pieces are thousand strong me with an all time record that they to clean it all kicked her out of property on new years eve the trend has continuously to the current quarter currently the up around three percent compared to to run of last year at bolsa fam missouri properties and as the ads mechanics or growth projects there construction of the new length a satanic casino developments to out of space is progressing according to schedule you can't open to for next year the new property will have total of seventy four and rooms threads gaming tables it over six hundred self machines which is a twenty percent decrease in gaming positions compared to the over the boat most importantly it is provide significant operation efficiencies should be much more convenient for customers and eighty decrease our kitchen the area at centrica seen a picture auto the large of out to missouri casinos construction of the sixty nine room six storey hotel building is when on track for opening around this time of next year that development cents on the property to for resort destination offering gaming banning conferences concepts events and more
spk_6: moving not to canada
spk_1: also a properties shots nice games to the dakota and that continues into january and february on top of that because very good news from the regulatory from last week he said it's a few one of this year that the gaming commission is increasing the opry distortion from soft revenues by two percent to help promote overall growth in gaming proceeds an evening operators to read this deficit it is by this is a temporary measure valid for two years for now we to expect the significant increase in our results from next what on our to scenes in poland continue to sort of performance revenue was up eleven percent as a result supported are consistently strong the by wait for another license excited to kick start the site's process you don't have any time pressure is that time is not an issue passes you know with an accident management team there in place and said there's no need for an investment or kickbacks from our side quite the opposite cash flowing from poland less look it up and shoot into gdp shows that we have been added to meet any cash he pitched luminance class the hundred million to keep it as to for the close enough the nuggets of coat and said she wants them other licensing is complete outstanding debt totals to the median which includes candidate for the city million under they don't goldman sex trade agreement of which kind of meat an extra for the nuggets our to any decisions are progressing as planned we had our hearing at the nevada gaming control board day before yesterday happy to report that all went well the bullet and any mostly recommended approval to the nevada gaming commission of i'd be taken to to by the nuggets casino resort operations i put a case must be approved by the gaming commission in nevada at it's meeting on march twenty three if approved to plan to close the negative decision in the first week of april less than four weeks from today the financing are playing scientists investments and upgrades and that more excited than ever about the potential for improvements he needed focus is beyond the gaming floor as well as on raising the potential vicinity effects across all operations departments and that gives the for service or so destinations over thirteen hundreds of tendrils and sweets the casinos isn't it seeks to slots and to the on tabor's six restaurants several into an outdoor entertainment venues is that is one of the largest to mention the areas in the market
spk_7: it's location and eighty provides a match exposing the reno sparks area and detain on taking full advantage of that the person who check this society signage
spk_1: in maryland it's to close the rocky get acquisition couple of months after the nuggets and section probably to not july simultaneously with the closing of the transaction beachy properties will take over the real estate assets and to the the made i twisting masterpiece would be cheap to at the got get property okay deficit for services so less than two hours from the baltimore and washington dc metro areas eighteen hole golf course designed for jack nicklaus that doesn't square feet event center seven meeting space is responsible outdoor activities property consistent over twenty five thousand square feet of gaming floor senator the slot machines sixteen table games hundred and ninety eight hotel rooms and size as a diva use with an accident rocky get acquisitions you could always use us portfolios it reaches from east to west and it's a performer basis after the didn't effect the to it's decisions expect to generate over eighty percent of our you better in the us but it's also important to note is the fact that these two acquisitions with improve our leverage ratios our current total that even the racers four point eight times and that was reduced to three point five times archive method to a bitter goes from three point five out of see point one police adjusted net leverage remains said that four point seven tax as for discussion about the most teachers mix of photos and of course and with that operate as being very aggressive with rent coverage it will be as a quite healthy and conservative rent coverage of three point one times across our portfolio and that's already performer for the to penny positions with that we feel very comfortable and would continue working with real estate investors on a case by case basis to support our growth as we move further into twenty twenty three economic uncertainty that this is today it's difficult to predict the consumer trains are headed you're made me watching to economic sectors that we believe our to correlated that behavior our customers and that has the biggest effect on our business lawyers which are the labor market and housing like chasing gas prices are interest rates don't seem to affect our customers that much the cause of the a costly optimistic about the positive trends be so it's and were in february cross or i'm updates in closing as you look back on friday twenty two it was not attend some of this year for century he posted record results he signed agreements take why another one hundred and eighty million of revenues and it was just immediate feedback looking ahead were excited about the nuggets and rocky get acquisitions as well as the regulatory positive change in a better this year about out to missouri gross projects coming on line next year further the police dietitian opportunities to drive organic growth in all and space operation as it is some micro risk still these girls drivers to tend to more than offset potential constant pressure on behalf of the company's management and bought as like to thank our team members are guests and our stockholder sort of continued loyalty and enthusiasm
spk_0: i thank you for your attention canal started to and ss of radical had peace absolutely at this time we will open a store for question if you would like to ask question please press the starkey followed by the went on your trip still felt questions will be taken in the order in which they are we see if it any time you would like to remove yourself from the questioning you please press star to a came to ask a question please press star wars they will take our first question
spk_8: well just stage of your line is open either this is jackson gab on for just cancel
spk_9: i noticed that you quantified in the carruthers felt disruption as a two million dollars to either die was wondering if you paid in a similar way quantify the impact of weather in the fourth quarter
spk_10: two results
spk_11: into this isn't with on that amount of it a to the it's a bit harder the have to say i'm in
spk_8: i hesitate to say something it would be to too too speculative okay
spk_12: better than and thing about margins those to impacts weather and that disruption of rather so clearly affected margins by throughout the portfolio look like they they came in a little bit i was wondering if in a once these temporary pressures roll off how are you thinking about margins into twenty twenty three and and you know what kind of represents a a reasonable run rate for the business moving forward
spk_13: i'm at his i made said take a us and
spk_11: if you look at the expense say though that the main taxes on a i'm in that we head is addition expense the high utility cost higher the property insurance anti hero they're also higher salary cap salary increases and coupled with that
spk_14: maintenance
spk_12: higher cost of operating supplies oh we would think that these costs to not too often maybe that he has a little bit down
spk_15: nobody can predict if you to the dollar settlement to be that we saw will be on the peak of of these price increases and so we don't think that the we need anymore salary increases of any significance
spk_11: hopefully insurance and just to the states he said
spk_8: those are not go up and higher
spk_0: and it odds been glitter that is massively those it depends on how how wednesday the to further increase their net operating revenues
spk_16: thank you very much
spk_17: or next question comes from chad same and your line is open
spk_12: hi good morning thanks for taking my question peter irwin wanted to ask about the missouri growth projects has anything changed in terms of kind of the the caster the scope of of these projects and then also gonna how you view the the return profile one some fully wrapped thank you
spk_15: nothing has changed to who got we were able to decide to the cost to the with it will on budget within about it so that looks good
spk_18: and dig and dig it do you have the latest we did on the on the return percentage of no return and the it is invested capital
spk_3: for the kids to whole time i don't so they don't having done for i've seen on the other hand
spk_1: i don't have those right in front of me know we have we have said that the expected to sixty percent return it as gifts jurado and sixty two twenty percent corrado city missouri and suggests that has that a that has not changed
spk_19: as speech significance significant upgrades as and improvements to especially crevices it's really it's a game changer because we this number for syndrome will have oh these thoughts and partially she's gone and and a property were also first time visitors
spk_8: which has not come back this display reduces boats that is just as we know we didn't come back
spk_16: speech have begun impact
spk_11: thank you for shit it's and then with respect to the not i guess couple questions on that he got some of the progress in terms of of closing that obviously we're all well aware of of the weather impact their you know that's not affecting your numbers at this point but when you take control the property you talked about some upgrades gaming floor and and synergies and the like should there be some disruption meaning should we assume kind of a low positive impact for that so that second quarter can of when you when you take control and and will start to see the benefits or although there be less disruption as you look to make some be changes once you control the property tax
spk_15: i when i thought i don't think they see as we we don't see any to traps and certainly not in akin to to
spk_11: i mean changes to the gaming floor a name is a cousin slotnick see them cause a disruption that's it doesn't have disrupted for the news of is not religious acting their the a patients enter the the only thing that is that that was that wow what a fascinating topics amenities he said when we changed deplore layout and then
spk_12: the expanded floor
spk_16: in and and make changes to to literally out that is ingrained within the middle of planning that but isn't when we do that to obviously the most important integral part of the planning to be to do it in such a patient that the disruption at a minimum one the now the then then know the bed
spk_20: such a dog and i think it's very blood said the good thing about one of the good aspects of the naga these that there is a lot of square footage and have enough to a lot of room to play with
spk_1: okay in just one last one on the nugget when we when we think about the t t m multiple even with some of this may be whether disruption are we still kind of sub sex from afghanistan point in terms of what you guys will be paying for for the asset well it for take it we're taking that twenty twenty two numbers than we are bit higher than six
spk_12: but the twenty twenty two announces the numbers were not only negative effect it's a bye bye bye bye thank you for the well so on the on the events from of and you know that must detail quite a quite issue like time it will take it shows are on the on that that had a mature the effects would it to a twenty two numbers i'd yeah for for a for shows for actual cancelled say know and go ahead in it makes a dentist home
spk_20: the chancellor they got some a sickness in the eye and then the other two gentlemen also or groups day they were postponed the need to next year one was afraid of coffee than the other one we don't know why they i mean this is really unfortunate and all of these cancellations came as too short to to be a before the not good management to get a replacement
spk_21: so so a that's a peace treaty hopefully lot has been was very lucky year and we we don't think that this was repeated says
spk_22: presented thanks for the additional dollar
spk_23: history
spk_1: and or next question comes from jordan center linus else and great thanks peer what have you called out a pretty positive outlook into the second and third quarter this year is maybe break died down between the drivers of that are these and outgrow factors he pulled out of and then is it fair to assume that the second or third quarter you should be up year over year on it same sorbet jesus
spk_23: yes jordan that's what's that supposed to be expected that so it's it's it's looks like right now and it's sir
spk_12: pretty much across the border flattish investor junior up in missouri up in a in colorado
spk_11: at the salon in canada solon no method can of and it's i know
spk_13: it here and i'm just going up in credit still looks like jamie position is increase pretty meaningfully with in move to lads we may be getting a update on the performance of the temporary fix celery and help consumers are viewing that it maybe what should we expect this year from that
spk_23: and he needs movies to give you some plays a nice talking touch and i managed to the are the we moved from the boat to this thing for a facility in what we called pavilion
spk_0: he said he has not seen one single customer who has been unhappy about the both not being there anymore
spk_24: people really happy about it i mean he cheated two hundred for a nice little he was a wonderful insensitivity to not for to go to build of course it will be brand new and then day and respects much better that's about as possible or it be a good to a very good see me and about those date against and to self esteem and the i will excel
spk_0: didn't the really have to determine under what circumstances how difficult it was that that we took a of with the a lot of support from the local authorities the able to to get the to before they move into the city to city lucky
spk_25: great thanks op else it off
spk_23: sean
spk_1: and once again if you would like to ask a question please press star one on your touchstones phone we will take our next question edward angle your line is open hi thanks for taking the question as some of these acquisitions close throughout the year and then you just start generating substantial free cash flow where does it kind of free cash flow get focus to are are you still up with on the emanate from does it does go complete you ever gene mother other to the capital projects across provide kind of wondering how that cap allocations yes as added acquisitions close i just sinks for the questions you see we see and it makes a certain certain things
spk_23: as deliberate she is one and and yes we we wanna become a this again on the image they from probably
spk_26: once we close the rocky deposition in in in the summertime
spk_1: you may also want to give a little bit back to our to the tos shareholders which would be a combination of all those things to loop is dependent on on how how pc
spk_27: the the him as a situation would get in
spk_0: come come come to use three to four
spk_28: great helpful and then you use your help for giving that pro forma net leverage like these things close just wondering you have a target net leverage you have in mind is in a steady state environments i just not an environment
spk_1: lisa justice around four four and a half times it is so easy very comfortable

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