Century Casinos, Inc. (CNTY) Q4 2012 Earnings Report, Transcript and Summary

Good day, and welcome to Century Casinos' Q4 and Year End 2012 Earnings Conference Call. [Operator Instructions] I would like to introduce our host for today's call, Mr. Peter Hoetzinger. Mr. Hoetzinger, you may begin.

Thank you, Clint. I'm happy to have all of you join us for this call following the release of our fourth quarter and full year 2012 earnings a couple of hours ago. We are, as usual, Erwin Haitzmann, Co-CEO and Chairman of the company; and Margaret Stapleton, Executive Vice President of Finance. Following our prepared remarks, we will then jump over the call to your questions. 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 Investor section of our website at cnty.com. During 2012, we made significant progress with the implementation of our strategy to increase shareholder value and improve our financial flexibility. We executed this strategy against the backdrop of ongoing uncertainty in the macroeconomic picture and consumer weakness in pretty much all markets we operate in. The recovery of the gaming industry has been protracted and rather difficult, but despite these challenges we've acted aggressively to improve our performance and position our company for further growth. In the fourth quarter, we've managed to increase net operating revenues by 1%…

[Operator Instructions] We'll take our first question from Chris Armbruster with B. Riley & Company.

Are you planning on filing updated pro forma financials after Casinos Poland the acquisition closes or are you going to wait until your next quarter to put all that into print?

Peggy, can you follow on that?

We will wait until next quarter to put that into print. We are not required by the SEC to file an 8-K with the financials for this year.

Okay, fair enough. And then as far as Calgary goes, what do you think is a reasonable estimate for the pace of change there? I know the casinos had its ups and downs and struggled a little bit with profitability consistently. But should fiscal '13 be the quarter that we expect -- the year that we expect the casino to kind of move back to profitability on a 4-year basis or is that further out?

Hi, this is Erwin. We expect 2013 to be the turnaround year.

Okay. And then do you have any additional updates on the Racino project in Calgary that you guys are working on?

No, there's no updates. We're still checking various things and also have to consider some issues that has to do with the applicant company, the United Horsemen of Alberta, Inc. in past liability issues and we have not started any kind of serious development or construction.

Okay. And just one more on the additional acquisitions that you guys are looking at, is the Casinos Poland integration going to take a lot of time, is it something you're going to be focused on this year or is there room to potentially announce or close another acquisition in fiscal '13?

I did not understand the last part of your sentence please.

I'm just wondering if the transaction with Casinos Poland, if that's going to be kind of the thing that you're focusing on this year or are you -- obviously its opportunity driven, but are you expecting that there's going to be another acquisition or something that happens in fiscal '13?

I see what you mean. We are right in the middle of focusing on Poland from an operation perspective already, but it's not necessarily the only thing we look at in 2013, if we're looking at various opportunities now and its opportunity driven to an extent.

[Operator Instructions] We'll go next to the site of Russ Silvestri with SKIRITAI. Russell Silvestri: My question was related to Poland and the leases in the real estate and how that's secured, and how do you pay for it? Is it all percentage of win or how was that tied up?

In most cases, we simply pay a straight rent to the property owners, so that's not percentages of revenue or profit. It's a fixed rent based on market terms. Russell Silvestri: And are the rents fixed for a certain period of time?

Yes. Russell Silvestri: Could you elaborate? Is that like a 3-year, a 5-year, 1-year period?

Typically, it's a fixed year period. Russell Silvestri: Okay. And I would assume, since you’re just starting, it would be 6 years going forward from here?

Not -- depending on when we -- the most recent amendment probably anywhere between 4 and 5 years from now going forward. Russell Silvestri: Okay, great. And then since the situation on the cruise ship that happened off the coast of United States, have you noticed much decline in the number of passengers going on ships or has it stayed relatively stable?

No, it's very stable. We are mostly on the smaller lines and they're enjoying a very good year.

We have no additional questions at this time.

Thank you everybody for your interest in Century Casinos and your participation in the call.

We did have a question queue up if you'd like? It's from the site of Corey Yeap with Wells Capital.

Were any of your properties negatively affected by weather?

This is Erwin. Just a little bit. Colorado, South, a little, and so did Calgary and Edmonton in the last weeks every now and then we had a weekend which was impacted. But I would say that within the regular weather pattern, we had something like that every year. I think totally out of the ordinary.

We have no additional questions.

Great. Thanks, again, everybody. For recording of the call, please visit the Financial Results section of our website at cnty.com. Thank you for your participation.

This concludes today's conference call. Thank you for attending. You may disconnect at any time.