And pardon me, ladies and gentlemen, we apologize for the technical delay. We're now ready to begin. And welcome to the Century Casinos Q1 2021 Earnings Conference Call. This call is being 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.

Hello? It seems -

And Mr. Hoetzinger, you may begin.

Hello. 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 Chief Financial Officer, Margaret Stapleton. As always, 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. 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 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 SEC filing available in the Investor section of our website at cnty.com. I will now provide an overview of the first quarter results. And after that, there will be a Q&A session. Adjusted EBITDA for the quarter was $14.7 million, an increase of 53% over the first quarter of last year compared to EBITDA of Q1 2019. Results were driven almost exclusively by our properties in the US because our casinos in Canada were closed for the entire quarter, and in Poland, they were closed for most of the quarter. Without disclosures, we estimate our adjusted EBITDA would have been around $22 million. So yes, it was a great quarter. January and February were good. March was exceptional. And it is great to see that strength continuing into April and early May. As most other local and regional casinos, we are benefiting…

Thank you, ladies and gentlemen. At this time, we will conduct a question-and-answer session. [Operator Instructions] And our first question comes from David Bain from B. Riley. Please go ahead. Your line is open.

Great. Thank you and congratulations on the reopening performance today and clearly forward trends there. You know first I was hoping you could help us understand the current M&A environment. You know, specifically have, you know, given the strong reopening here, have you seen prices tightening? Are they in line with what you've been reviewing previously, you know, product or supply tightened? Or is it the same number of acquirers? As any kind of overall view as to what's going on out there would be really helpful.

Yeah. Thanks, David. We compared to - about a year ago, there are certainly fewer properties on the market. But surely, at least between half a dozen and dozen out there that are of interest to us and could very well fit into our portfolio. In terms of valuation and price levels, it is very difficult, if not unlikely that you get a deal done on the same terms that we have done our appeal over a year ago, where we actually paid, was it around four times or so. But how we look - we go in with our people, with our teams and do due diligence and we come up with an EBITDA number. EBITDA that we think we can do with that property. And based on that, we apply a market that works for us. Because looking at current numbers or last year's numbers, especially these days, it's just extremely difficult. So, we try to stay away from that and come up with our own estimates and apply marketable. So, the landscape is a little bit smaller than it was a year ago, but still very attractive targets out there.

Okay, awesome. And this one is going to be short, so I'm hoping I can ask a brief third as well, but I think it'll be short anyway. I know it's early days. Any antidote on the table max that lift? Any new games in Colorado under Amendment 77?

Erwin?

Yes, this is Erwin. We take a cautious approach. We have set a maximum bet at $500. And on the first half opening, we saw action going up to $500. Overall, we have the feeling that it will take a little while until that market up there higher end players not only at our base, but in general in Colorado. With the exception of a few back tables here and there, no other new games have been added anywhere or at least not yet. So like I say, it's early days and I think amounting to the exercise, we will be able to say something more definitive.

Okay, great. And this is the final one, promise. If Canada reopens, are there any different dynamics to think about versus your strong US reopening? I assume we don't know capacity restrictions out of the gate, things like that, but our drivers generally align from both the structural margin and overall reopening similar to the US or is there anything else that we should think about in Canada, if that reopens?

I think we'll see the US openings kind of mirror. We will again be cautious with the site offerings everything other than the non-gaming offerings and [indiscernible] cost and EBITDA conscious. We think that we'll definitely do really pent-up demand and we would hope that if and when we are permitted to open that we can produce interesting numbers right from the get go. Just as I had mentioned, as much of a hindrance as it basically can, if we have a limitation on slot machines, it may - we have seen in some markets that even if we had a few restrictions here or there, we could still produce fantastic numbers simply because the people were playing longer and more.

Awesome. Okay. Thanks so much, guys.

Thank you. Our next question comes from Chad Beynon from Macquarie. Please state your question.

Hi. Good afternoon, and thanks for taking my question and congrats on nice quarterly results. I know you mentioned that Poland is kind of influx here, the talks are still ongoing. You mentioned that the property is due to open actually this week. After we start to - I guess, the first question, should we expect that the demand comes back quickly? Can you remind us in terms of what restrictions would be when that opens up? And then once it's open and kind of running normally, should that propel the discussions that you're having in terms of divesting the property? Thank you.

When we issued the news release that was up until last night or around midnight or so. They told us that we that we will most likely be allowed to open tomorrow but then this morning, they changed that and postponed it for another four weeks. So it is early June now. Once we are allowed to reopen, we do expect that especially in the casinos outside of Warsaw, which are truly local and regional casinos that there will be a lot of pent-up demand and that will translate into to revenue and EBITDA right away from the get go. The casino is in Warsaw have traditionally also drawn from international business travelers, and that's about between 20% and 30% of the business there in the Warsaw casinos and that may not come back as quickly as their local business. Erwin, would you like to add?

Yeah. I would say - I mean, I agree with what you say. And with regard to the question of which restrictions we expect, it's hard to say, we really don't know, maybe there will still be an obligation to wear a mask, but we don't. If we had to guess, then we would say nothing other than that, but it's speculation, we don't know.

Great, thank you. And then just on a potential change in your online strategy, is this something that would come with a lot of additional costs? You know, whether it's technology or, you know, if you decide to pivot to this strategy, would you use third-party companies that kind of help with, you know, the sales, the marketing, the technology, all of that, limiting your expenses, but just connecting from a B2C standpoint getting those revenues. Thank you.

This is Erwin. Going in, we will definitely start with a third-party partner and model in such a fashion that we keep ourselves flexible and possibly as we become more comfortable and get wiser in that space that we might replace step-by-step various services and take them in-house. But that would clearly be revenue and EBITDA-driven.

Great. Thank you very much.

Thank you, Chad.

Thank you. And our next question comes from Jeff Stantial from Stifel. Please state your question.

Great. Thanks, morning, everyone. Thanks for taking our questions. And congrats, really nice quarter. I wanted to start on your Missouri properties, you know, results coming out on the market just continue to be truly incredible. You know, those two assets are run rating about $60 million of EBITDA which if my math is right here is over double what they were generating before you acquire them, margins, but a big role you cited close to 50%. But top line has also been impressive. So I guess my question is this. If you think about, you know, some of the short-term tailwind versus the long-term structural changes that you've made to the business, both the you know, in reaction to COVID-19, as well as you know, as you took those assets over from prior ownerships. How do you see those assets sort of, I guess, “normalizing” out over the course of the year into 2021 or 2022?

This is Erwin. We think they are pretty normal now. And we don't think that there is much more normalization going on with regard to the numbers, we're very optimistic that we can keep the numbers that we have now.

Okay. Well that's incredible. Great. Thanks. Thanks, and then, you know, for my follow-up, you talked to a number of players sign ups during the quarter, I think it's up 30% versus 2019. If memory serves, I was hoping to unpack that a bit and see if there are any overarching characteristics for these new buyers coming into the database. Do they tend to skew much younger? You know, what parts of the gaming floor and the broader casino do they gravitate to? Anything to help understand that new player base would be great.

I would say the upper 50% of the purchasing power of our visitors so the more affluent customers. Demographics pretty much the same as we have had it too for those who have it, world class sensation if that is something like an indication.

Okay, great. And then, you know, along the lines just how those fare you know, I think that was during the quarter just how does that you know, how did that progress with the quarter played out and how is that kind of pieced into April and early March just in terms of new signups still seeing you know, similar levels of strength versus 2019?

You mean April and early May, right. Yeah, still seeing strength.

Okay, perfect. That's great. Thanks for the color and congrats again, really strong quarter, guys.

Thanks, Jeff.

Thank you.

Thank you. And that concludes our questions at this time. I'll now turn the call back over for closing remarks from Peter Hoetzinger.

Excellent. Thank you. 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 you have our best wishes for good health. Thanks again and goodbye.

And this concludes today's conference call. Thank you for attending.