Century Casinos, Inc.

Good day, everyone, and welcome to today's Century Casinos Q1 2025 earnings call. At this time, all participants are in a listen-only mode. Later, you'll have an opportunity to ask questions during the question-and-answer session. You may register to ask a question at any time by pressing the star and 1 on your telephone keypad. Please note this call is being recorded, and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Peter Hotzinger. Please go ahead, sir.

Good morning, everyone, and thank you for joining our earnings call.

We would like to remind everyone that we will be discussing forward-looking information under the safe harbor provisions of the U.S. federal securities laws. The company undertakes no obligation to update or revise the forward-looking statements, and actual results may differ from those projected. Throughout our call, we referred to several non-GAAP financial measures, including but not limited to adjusted EBITDA. Reconciliations of our non-GAAP measures to the appropriate GAAP measures can be found in our news releases and SEC filings, available in the investor section of our website at cntui.com. After our prepared remarks, we will open the call for questions from analysts. My co-CEO, Erwin Heitzman, and our Chief Accounting Officer, Tim Wright, will join me for that. We released our first quarter results this morning. Revenues for the quarter were 130.4 million. EBITDA was 20.2 million. During the quarter, our team successfully managed a number of issues, including significantly more weather-impacted days throughout the entire North American portfolio, as well as one less operating day compared to last year, and the lack of two-thirds of the sports betting income in Colorado. Despite these headwinds, we maintained the operating margin consistent with Q1 of last year. To put the weather, leap year, and lower sports betting revenue impacts into perspective, here are the monthly results. January, we generated EBITDA of just 3 million, well below even our most conservative forecasts. February, also impacted by weather as well as the calendar, was a bit better, but still just 6.5 million. Then a rather normal month of March produced a solid 10.5 million EBITDA, up 8% over last year's March. So when you sort of, when you sort through the noise, you see the positive trend here. and we feel good about the normalized run rate with no weather or other negative impacts. Overall, we estimate the impact of EBITDA of weather, leap year, and the partial loss of sports betting revenue in Colorado to be around 2 million this quarter compared to last year Q1. Across all our U.S. properties, carded gaming revenue increased 1%, while uncarded gaming revenue decreased 2.5%. Total visitor volume was down 3%, driven by a reduction in visits from the 50-plus age group, partly offset by a 1% increase from our younger guests. The total number of trips declined by 2%, while the spend per trip increased 4%. For a closer look at each market, let's now start with Missouri. The new Coradosville property produced another set of very good results as it completed its first full quarter with the new casino hotel. Carded gaming revenue grew 12%, uncarded increased by a strong 23%, bringing total gaming revenue up 17% or $2.1 million. compared to Q1 of last year. We saw good results across nearly all demographics, with win from patrons under age 50 increasing 33%, while increasing 8% from patrons over 50. Win from higher end consumers increased 19%, while it grew 9% in the lower consumer groups. Notably, the lowest end group, which has lagged in some markets, increased 18% during the quarter. We are also very excited as we are succeeding in expanding our market with the new casino and hotel. The number of patrons living 75 plus miles from the property increased by 34%. The percentage increase from patrons living within 75 miles was 20%. Altogether, the number of visitors increased 23%. In the six months since opening, revenue in EBITDA are up 25% and 31%, respectively, which has exceeded our initial expectations. In absolute numbers, the new Caradasville has generated 5.8 million more net revenue and almost 3 million more in EBITDA in the first six months of operation. The property is much more convenient for our customers and allows for significantly more efficient operations. We are very happy with the strong and immediate uplift on the revenue side. The full impact on EBITDA will probably take another quarter or two until we have worked out the initial growing pains and figured out the most efficient staffing levels. We are running at a 43% EBITDA margin right now, But we believe further margin improvement is just a question of time. All in all, we couldn't be more pleased with the start of the new facility at Corrado Street. On to our other hotel casino in Missouri, the Century Casino and Hotel in Cape Girardeau. That property, too, saw increased visitation during the quarter. From a rated revenue perspective, the number of patrons increased 5%. The number of trips increased 2%. Theoretically, gaming wind was flat, but actual wind decreased slightly due to lower hold this quarter. The ongoing success of the new hotel continues to drive increased visitation from states and markets outside of our core demographic, which is Missouri and Illinois. We saw strong gains from visitors living 75 plus miles from the property as they increased 13%. compared to an increase of 1% from patrons living within 75 miles. We've also seen large gains in the number of trips from guests under the age of 50 with an increase of 14% compared to a small decrease of 3% from guests age 50 plus. The ADT from comp to hotel guests was a very strong $475. The hotel is also driving meaningful growth in F&B sales, which is somewhat offset by higher costs of goods sold and staff costs. The team continues to fine-tune operational expenses to further increase profitability. The EBITDA margin of that property was 36% in the quarter. For both Missouri properties, we also look forward to sports betting going live in Missouri towards the end of the year. and we are finalizing partnership agreements as we speak, which should deliver incremental high margin EBITDA to our properties. Continuing with the Midwest segment, let's review the performance of our operations in Colorado. In the year over year comparison, please note that we lost two thirds of our sports betting income, which amounts to roughly half a million for the quarter. Both Colorado properties experienced significantly different results when comparing the performance of carded revenue versus un-carded revenue. In Central City, carded revenue grew 7%, while un-carded revenue decreased 36%. And we think that the construction on I-70 impacted Central City's un-carded play significantly more than carded play. Pointing in Central City was up 15%, but a significantly lower hold resulted in stock revenue declining by 9%. Q1 was a transitional quarter for Central City, with multiple cleanup initiatives started and completed. Combined with these effects of adverse weather, EBITDA was disappointing, but we are optimistic about upcoming quarters, and we believe we will reverse negative trends going forward. EBITDA for April shows year-over-year growth already pointing in the right direction. In Cripple Creek, we saw most of the decline coming from uncarded play, and we believe that Chamonix temporarily pulls revenue from the more casual uncarded customers. Despite Chamonix, we continue to hold strong with our high-end customers with win from the upper end patrons increasing by 24%. From an age standpoint, the younger demographic outperformed the older, with revenue from patrons under 60 increasing 10%, compared to a decrease of 12% from patrons over 60. During the quarter, we eliminated table games at both properties and revamped our restaurant concepts.