Welcome to Century Casinos Q4 2021 Earnings Conference Call. This call is being recorded. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. I would now like to introduce our host for today’s call. 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 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. 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 risks factors in our SEC filings and we 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 results of the fourth quarter. And after that, there will be a question-and-answer session. Our fourth quarter results continued the streak of record breaking performances that we have shown throughout the year. Revenues exceeded the same period of the last year by 27%. Adjusted EBITDA was 36% higher. Most of the EBITDA growth came from our casinos in the US, but also from Poland. Despite our record performance, it could have been even better. Canada had a difficult quarter, because proof of vaccination was required to enter the casinos. And we were not allowed to serve liquor after 11 PM, which slowed traffic down significantly. Thankfully, these restrictions have now been lifted, and we are already seeing a nice rebound. Our…

[Operator Instructions] Your first question comes from the line of David Bain with B. Riley. Please state your question.

Great. Thank you and congratulations on the latest acquisition. I think, it's a great market. Very exciting milestone for Century. Peter, you did a good job of sort of outlining the structure. But if we can just take a second to review, so you take over 50% of PropCo next month, and you'll begin to receive about $1.9 million per quarter in rent like directly to EBITDA really flowing all the way through. And then upon Nevada approval, you know, beginning of next year, let's call it, you get the whole EBITDA trailing 12, $33 million less $7.5 million in rent. But that doesn't include certain shows, events that you outlined, that weren't in there, probably, some benefits from structural upgrades and certain cost synergies and other performance enhancers that you've executed on previous mergers. Is that kind of summarize things just so I can get it, right?

Yes, absolutely, Dave. That's the right picture.

Okay, perfect. And then it looks like there's a lot of growth and synergies that, you know, are identified revenue and cost-wise. And I know you're not quantifying it today, per se. But are you seeing, material potential increases versus that $33 million? You know, at this point or is there anything more that you can give us there?

Erwin, can you comment on that?

Yes. Yes, the short answer would be yes, we see material possibilities and upside. To give you just two examples, as Peter mentioned, already, the slot floor, we think provides a significant upside potential. The average age of machines is rather old, let me say. And we know that bringing new product will just help the revenues immensely. And the second thing that we want to do is – when you look at the EBITDA [ph] of the five large properties -- the five large resorts in Reno, there is only one which is not literally were late night and that's the night stage [ph]. And we think that the number of cars that Peter mentioned before 260,000 per car, it take – it just makes a lot of sense to invest into a very little cars with good signage and good light. That’s two examples, and of course, we could go on but just to be good as I first see it..

Right. And then my second follow-up, if I could. You know, and I know you've addressed this one in the past? And Peter, but just given the macro or geopolitical environment, are you still not seeing any pockets or rising oil costs could have a material impact, and really either direction, throughout the portfolio?

If I may take it. No, you know, oil prices have been going up and down over the years. And we have never -- when they start -- when the oil prices went up, we haven't really seen a negative impact on the business. And conversely, when they went down again, it wasn't the other way around, either. The one thing that could be shared is with regard to our facilities in Alberta, Canada, in that area, higher oil prices, obviously boost for the economy so what's even good.

Okay, very good. Thanks, guys. Appreciate it.

Thanks, Dave.

Your next question comes from the line of Chad Beynon with Macquarie. Please state your question.

Hi, good morning. Thanks for taking my question. Peter, I wanted to start with Poland. You said that the fourth quarter, obviously, was very strong. And you even said the past couple of weeks revenues have continued without any international inbound. Just wondering how we should think about this, given the current situation in Ukraine and Russia. Obviously that could have stuck the international inbound but just wanted to get a better sense of what you're seeing on the ground and what your consumers are thinking from a day-to-day standpoint? Thanks.

We -- yeah, it's in the way fortunate, but we see only positive impact so far. There's more people in Poland than before, I don't know if that has something to do with it. But the impact is positive. I mean, do we know exactly what's behind the uptake in revenues?

I think it's mainly just the pent up of demand. We had so many restrictions for such a long time and people are just so happy that they finally can go in unrestricted again, and that's why the Poland. And then maybe I would like to mention also all of our casinos outweigh Warsaw and west of Vladivostok. So we are quite far away from the border to the Ukraine.

Okay, thanks. Also on Poland, is there any additional thought in terms of how we're thinking about the more slot [ph] license, which I believe is up for renegotiation of rebidding in 2022? Is that something given the Nugget acquisition and some of the other cash needs in the United States? How are you thinking about rebidding in that market?

Chad, when we apply for new licenses in Poland, there's absolutely no investment necessary. It's all done on qualitative criteria. We will simply continue paying rent at the properties at the hotels where we have our casinos. Right Erwin, do you want to add something?

No, no, it’s okay. I was about to say the same.

Yeah, so there's no investment associated with getting a new license.

Okay, great. And then lastly, just a follow-up to David's question on the PropCo, OpCo, Nugget, calculus. Can you just explain why the 50% made sense? And how we should think about the likelihood of you taking everything in house or if the opportunity would be more for, I guess, taking that ran-off of your balance sheet? And that's all for me. Thank you very much.

Yeah. Thanks, Chad. Ultimately, it was the outcome of a negotiation and we very much like that structure, because it gives us a lot of flexibility. We control the entire resort. We can close on that option to require the remaining 50% at any time at a fixed price. But we don't have to. So, what that means for us is like in terms of CapEx, we continue to look for interesting M&A opportunities. And if you find one, we can then evaluate our cash position, the funds we have available at that time and we then decide whether we want to use the funds for the new acquisition or for acquiring the other 50%. Or theoretically, we could also sell our 50% in the Nugget and just keep the OpCo. But as of today, we like the Nugget very much and as of today, our intention is to also acquire the remaining 50%.

Okay, great. Thanks and congrats on the acquisition.

Thank you.

Your next question comes from the line of Jeff Stantial with Stifel. Please state your question.

Hey, good morning Peter, Erwin. It’s great to hear from you guys. Thanks for taking our questions. I just wanted to start the two projects in Missouri, it did look like the total project cost ticked up a bit, since the last time we spoke. You just talked to your degree of comfort that this should be where things shake out ultimately, or should be kind of expect that target to potentially continue to drift off of a bit from the earnout?

Erwin, do you have something on that?

What's the question, whether we think it's going to be more expensive?

Yes, we have -- I think since the last time we gave the numbers, they were about 5% lower. I think we added some facilities, we changed a little bit the design of the Missouri hotel tower. So, those numbers that we provided now are the most recent ones and we have high confidence in those numbers, right?

Yes, right.

Okay. So, just to be clear, this is more just a function of design plans as opposed to the kind of inflationary pressures?

Yes. We changed the design here, Jeff.

Okay, perfect. That's really helpful and then switching gears, on the margins front looked encouragingly stable here in the US quarter-on-quarter aside from just some seasonality in Colorado. Can you just frame the puts and takes here into 2022? Sounds like you highlighted some potential for lower margin but EBITDA accretive non-gaming revenues to tick back up. And it does sounds like the labor market remains tight in some of these markets that they keep call that Missouri, but just curious to get your thoughts there on how we should think about the margin profile entering this year?

Erwin?

All-in-all, we think we can keep it that -- like it was in 2021. And we can also say that while it's not been easy with the labor market, but we think the rest is over, we were fine with in most departments, except maybe in food and beverage and housekeeping, but in essence, that is not such an urgent question anymore.

Okay, great. Perfect. Very helpful and encouraging. Thanks guys.

Thank you, Jeff.

Thank you.

Your next question comes from the line of Edward Engel with ROTH Capital. Please state your question.

Hi. Thank you for taking my question. Just back to Poland, do you think the geopolitical kind of issues in that part of world could impact your timing or the ability to maybe divest some of those assets?

We don't know yet. We have two companies that are looking at that. They are seeing that the results are very strong, and they're just getting stronger day-by-day. So, as of now, we don't see that that picture changing.

Great. And then on to St. Louis, are there any benchmarks or hearings that we should kind of think about or put a radar maybe track the progress of that lawsuit?

I do not know that exactly. I can come back to you on that. What I do know is that we -- that there's two avenues that our people are going; one is that we are opposing what the city of St. Louis wants to do. And separately from that, we are also introduced with the help of the broad support of political parties, a separate team that would only deal with – with our project, like bringing – bringing the riverboat on land, because it's much safer for everybody. And that, there's been has a lot of support from all political sides, and it's moving out with the committee's. So, we will see by the end of the session in May. What kind of progress we’re making.

Great. Thanks. Again, congrats on the – on the Reno transaction.

Thank you, Ed.

At this time, there are no further questions. I would now like to turn the floor back to Mr. Hoetzinger for any additional or closing remarks.

Thank you, and thank you everyone for joining our call today. For a recording of the call, please visit the financial results section of our website at cnty.com. Stay well everyone and goodbye.

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