Q1 2025 Century Casinos Inc Earnings Call
Um, thanks. Ted. Uh, it's real honor to be asked to take on this responsibility and and join you as co-ceo. And um and frankly, a pleasure to be able to continue working with um some of the most amazing leaders that I've ever had the pleasure of working with and, and frankly, my
Speaker Change: 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.
Speaker Change: You may register to ask a question at any time by pressing the star and one on your telephone
Speaker Change: 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 Hoetzinger. Please go ahead, sir.
Peter Hoetzinger: Good morning, everyone, and thank you for joining our early store.
Peter Hoetzinger: 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.
Peter Hoetzinger: The company undertakes no obligation to update or revise the forward-looking statements, and actual results may differ from those projected.
Peter Hoetzinger: Throughout our call, we referred to several non-GAAP financial measures, including, but not limited to, adjusted EBITDA.
Peter Hoetzinger: 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.
Peter Hoetzinger: After our prepared remarks, we will open the call for questions from analysts.
Speaker Change: 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.
Speaker Change: Revenues for the quarter were $130.4 million. EBITDA was $20.2 million.
Speaker Change: During the quarter, our team successfully managed a number of issues, including significantly more weather-impacted days throughout the entire North American portfolio,
Speaker Change: as well as one less operating day compared to last year and the lack of two-thirds of the sports betting income in Colorado.
Speaker Change: Despite these headwinds, we maintained the operating margin consistent with Q1 of last year.
Here are the monthly results.
Speaker Change: January we generated EBITDA of just 3 million, well below even our most conservative forecasts.
Speaker Change: February also impacted by weather as well as the calendar was a bit better but still just six and a half million.
Speaker Change: Then, a rather normal month of March produced a solid 10.5 million EBITDA at 8% over last year's March.
Speaker Change: So, when you sort through the noise, you see the positive trend here, and you feel good about the normalized run rate with no weather or other negative impacts.
Speaker Change: Overall, we estimate the impact of EBITDA of weather, deep year and the partial loss of sports betting revenue in Colorado to be around $2 million this quarter compared to last year Q1.
Speaker Change: Across all our US properties carded gaming revenue increased 1% while uncarded gaming revenue decreased 2.5%.
Speaker Change: Total visitor volume was down 3%, driven by a reduction in visits from the 50-plus age group.
partly offset by 1% increase from our younger guests.
while the spend per trip increased 4%.
Speaker Change: For a closer look at each market, let's now start with Missouri.
Speaker Change: The new Corrado Swim property produced another set of very good results as it completed its first full quarter with the new casino hotel.
Uncarded, increased by a strong 23%.
Speaker Change: 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%.
by increasing 8% from patrons over 50.
Speaker Change: Grain from higher-end consumers increased 19%, while it grew 9% in the lower consumer groups.
Speaker Change: Notably, the lowest-earned group, which has lagged in some markets, increased 18% during the quarter.
Speaker Change: We are also very excited as we are succeeding in expanding our market with the new casino entity.
Speaker Change: The percentage increase from Cretans living within 75 miles was 20 percent.
The sixth month is opening.
Speaker Change: Revenue and EBITDA are up 25% and 31% respectively, which has exceeded our initial expectations.
Speaker Change: In absolute numbers, the new Corrado's wheel has generated 5.8 million more net revenue and almost 3 million more in EBITDA in the first six months of operation.
Speaker Change: The property is much more convenient for our customers and allows for significantly more efficient operations.
Speaker Change: We are very happy with the strong and immediate uplift on the revenue side.
Speaker Change: The full impact on EBITDAR will probably take another quarter or two until you have worked out the initial growing pains and figured out the most efficient staffing levers.
We are running at a 43% EBITDA margin right now.
Speaker Change: 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 Springs.
Speaker Change: On to our other hotel and casino in Missouri, the Century Casino and Hotel in Cape Girardeau.
That property, too, saw increased hesitation during the quarter.
Speaker Change: From a rated revenue perspective, the number of patrons increased 5 percent.
The number of trips increased 2%.
Speaker Change: Theoretically, gaming win was flat, but actual win decreased slightly due to lower hold this quarter.
Speaker Change: 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.
Speaker Change: We saw strong gains from visitors living 75 plus miles from the property as they increased 13 percent.
Speaker Change: compared to an increase of 1% from patrons living within 75 miles.
Speaker Change: compared to a small decrease of 3% from guests age 50 plus.
The hotel is also driving meaningful growth in S&P sales.
Speaker Change: We also look forward to sports betting going life and Miss the way towards the end of the year.
Speaker Change: And we are finalizing partnership agreements as we speak it should deliver incremental high margin EBITDA to our properties.
Speaker Change: Continuing with the Midwest segment, Let's review the performance of our operations in Colorado.
Speaker Change: In the year over year comparison.
Speaker Change: Note that we lost two thirds of our sports betting income, which amounts to roughly half a million slick water.
Speaker Change: Both Colorado properties experienced significantly different results when comparing the performance of cottage revenue Roses Uncounted revenue.
Speaker Change: And central City.
Speaker Change: <unk> revenue grew 7%.
Speaker Change: But uncounted revenue decreased 36%.
Speaker Change: And do you think that the construction on I 70 impacted central cities and counties basic musical thing more than content play.
Speaker Change: <unk> in Central City was up 15%.
Speaker Change: But significantly lower hold resulted in slot revenue declining by 9%.
Speaker Change: Q1 was a transitional quarter for central city with multiple cleanup initiatives started and completed.
Speaker Change: Combined with these effects.
Speaker Change: Gross meta EBIDTA was disappointing, but we are optimistic about upcoming quarters NTP.
<unk> Nathan will reverse negative trends going forward.
It off for April both year over year growth.
Speaker Change: Already pointing in the right direction.
Speaker Change: In Cripple Creek.
Speaker Change: Most of the decline coming from oncology play.
Speaker Change: And he believes that shamble knee temporarily pulled some revenue from the more casual uncounted customers.
Speaker Change: Despite chamonix we've.
Speaker Change: We continue to hold strong with our high end customers.
Speaker Change: With wind from the ethane patrons increasing by 24%.
Speaker Change: From an age standpoint, the younger demographic outperform the older with revenue from pay downs under 60, increasing 10%.
Speaker Change: Compared to a decrease of 12% from patrons over 60.
Speaker Change: During the quarter, we eliminated table games at those properties and revamped our restaurant concepts.
Speaker Change: Expected savings net net come close to a million per year.
Speaker Change: The East segment, which includes mountaineer in West, Virginia, and Rocky gap in Maryland had a more challenging quarter.
Speaker Change: Both properties, so higher end customer significantly outperform low to mid tier customers.
Speaker Change: This gaming revenue from the upper segment, increasing by 10%.
Speaker Change: Offset by a decline in the lower segment.
Speaker Change: At Rocky gap. The main reason for the revenue decline was the lower volume on the slot floor.
The gaming tapers MTL tainted Duane and showed solid growth compared to last year.
Speaker Change: The number of trips decreased by 13%.
Speaker Change: Right that was a big factor here at this bank Patrick increased by 9%.
Speaker Change: As with most other properties to high end segment continues to significantly outperform the low to mid segments.
Speaker Change: Our player development team at the property has revamped database office at the beginning of April.
Speaker Change: So shocked at any proof medicine quite entranced already.
Speaker Change: Mountaineer had a more favorable quarter as gaming revenue increased 1%.
Speaker Change: Card revenue was up 3%.
Speaker Change: Revenue fell 3%.
Speaker Change: And again towards the high end customer producing strong results with trips, increasing 12% and revenue increasing 14%.
Speaker Change: But the load to meet your segments saw trips decrease 4% of revenue decreased 1%.
Speaker Change: Yeah.
Speaker Change: Moving on to the west of the Nugget Casino resort in stocks Reno, Nevada buy revenue was down EBITDA was turned around from a negative last year positive 700000 this quarter.
Speaker Change: After the 47% EBITDA growth in the fourth quarter of last year. This was the second significant increase in a row.
Speaker Change: Q1 is typically the most challenging quarter for the Nuggets and the entire Reno Sparks market.
Speaker Change: But the management team's cost cutting measures prove successful.
Speaker Change: Interestingly Nokia is the only property in our portfolio where in Q1, the low end customer performed better than the high end customer.
Speaker Change: The main reasons why that was the lower group and convention volume compared to previous years.
Speaker Change: The trend of increased visits and revenue from patrons and the age of 50 continued from last year.
Speaker Change: This quarter the growth was 6% that segment.
Speaker Change: Another positive trend is the business, we're getting from locris, because 6% more visits from locust and last year.
Speaker Change: Spec to see that positive trend to continue.
Speaker Change: As we launched a new winner Sone rewards program on April 1st.
Speaker Change: Now if you read about the small operations in Canada and Europe.
Speaker Change: And Canada slot quite Inc, and Teva dropped to a flat.
Speaker Change: Due to lower hold percentages total revenue decreased by 10%.
Speaker Change: FX headwinds negatively impacted results as well.
Speaker Change: Last month, we introduced a new sports bar and lounge concept with great initial feedback and results.
Speaker Change: Overall, Canada is performing all right for US and Q2 has started out flattish compared to last year.
Speaker Change: In Poland the year over year comparisons, it's really not meaningful because the number of casinos in operation that was not the same.
Speaker Change: After the Polish capital City of Warsaw, The city of what's left is the second most attractive gaming market in Poland.
Speaker Change: As you know we opened a casino there last October.
Speaker Change: And now I've been avoided a second license for that city.
Speaker Change: That's good news and we plan to open the second casino in real soft in Q4 of this year.
Speaker Change: We are still committed to divesting our Poland operations.
Speaker Change: Two newly interested parties have surfaced recently.
Speaker Change: And discussions with our minority partner also going well for potential state of 100% of the confidence.
Speaker Change: Moving on to cover a few balance sheet and capital items, the company's cash and cash equivalents at the end of the fourth quarter were $85 million.
Speaker Change: The total principal amount of debt outstanding of $340 million.
Speaker Change: Resulting in net debt of 255 billion.
Speaker Change: At the end of the quarter, our net debt to EBITDA ratio was six nine times.
Speaker Change: Seven six times on a lease adjusted basis.
Speaker Change: We expect this ratio to go down towards the end of the year to well below 6% well below seven respectively.
Speaker Change: We have no debt maturities until 2029.
Speaker Change: And we are very excited to be at the end of our capex sector.
Speaker Change: The investments into our property portfolio are evident in our properties have never looked better.
Speaker Change: No need for significant Capex. This year, you expect to spend just 4 million for growth projects and about 14 million and maintenance Capex.
Speaker Change: We also expect there at Thompson on investments together with a major reduction capex.
Speaker Change: To produce a sizable improvement in free cash flow compared to last year.
Speaker Change: As we look ahead.
We are confident in our business project prospects moving forward on the expenses labor side, we continue to focus on operational discipline and look for ways to become more efficient.
Speaker Change: Last year was a transitory period for us, but now we have a clear path forward to higher EBITDA and cash flow for 2025 and beyond.
Speaker Change: Considering the severe weather disruptions combined with one fewer operating days this year compared to last year and the last of the sports betting revenue.
Speaker Change: Our thoughts into first quarter as well initial results with April two.
To reflect upward trends.
Speaker Change: We have been seeing some improvements in consumer behavior and spending patterns since mid March.
Speaker Change: And that trend has continued through April and early may.
Speaker Change: As mentioned EBITDA in March was up 8% year over year.
Speaker Change: April looks similar.
Speaker Change: The initial estimate shows an increase in EBITDA of 5% over last year's April.
Speaker Change: We are encouraged by these trends in our business and value recognize the level of economic uncertainty.
Speaker Change: We are more confident in the long term prospects of our company than they were at any point last year.
Speaker Change: And we are not directly impacted by tariffs hardly at all we just don't see that as you know our business.
Speaker Change: It's also worth noting that we do not anticipate any significant competitive supply impacting us this year index.
Speaker Change: As we feel good about the direction of the business overall and as we have a solid cash position of around $85 million.
Speaker Change: We intend to conservatively balance or small Capex program.
Speaker Change: With returning capital to our shareholders and got to take advantage of the dislocated share price have seem to buy on an opportunistic basis.
Speaker Change: The current environment is less certain than it was maybe a call Deco forgive.
So they need to be cautious.
Speaker Change: The police Emt why is the best casino investment with the highest growth potential out there.
Speaker Change: As we plan to buy back stock in the coming weeks.
Speaker Change: Yes.
Speaker Change: All right that concludes our prepared remarks, we'll now open the call for Q&A with the analysts.
Speaker Change: Operator go ahead please.
Speaker Change: At this time, we will open the question and answer session. If you would like to ask a question. Please press star and one on your telephone keypad now and you will be placed into the queue. In the order received you may remove yourself from the queue at any time by pressing pound and one.
Speaker Change: If we if we do not get to your questions. Please reach out to the company using the Investor Relations page at C. N T Y dot com.
Speaker Change: Once again to ask a question. Please press star and one on your phone now.
Speaker Change: And our first question comes from Jeff stature from Stifel. Please go ahead, Jeff.
Speaker Change: Good morning, Zane Young's on for Jeff Central Thanks for taking our questions. So to start off have you started to notice any softness in the consumer for your Canadian assets, whether that be from uncertainty related to the trade war or else derivative impact from energy prices starting to come in.
Speaker Change: Yes. Thanks, Seth asked me a question I am not sure I understood the acoustically right.
Speaker Change: Very quiet enquiring about the cost and the behavior of our customers.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change:
Speaker Change: We think that and we don't really see any any any of the reasons that you mentioned that there's a significant.
Speaker Change: It's more.
Speaker Change: The.
Speaker Change: Lower revenue is not that significant and it's also due to weather and end to end.
Speaker Change: And what.
Speaker Change: I'm, taking this gaming right.
Speaker Change: This gaming day.
Speaker Change: So so we're not concerned.
Speaker Change: Okay.
Speaker Change: Got it thank you and the follow up can you give us an update on some of the gross unit growth initiatives at our Rocky gap sort of what strategies are currently in place or else being planned to help sort of brought him in catchment area and trucks from our higher net worth overnight guests.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Hello did you get that.
Speaker Change: Okay.
Hello, Evan theater I still connected.
Speaker Change: Yes, yes, I'm still connected.
Speaker Change: I'm sorry.
Yeah.
Speaker Change: Okay.
Speaker Change: At our Rocky gap in Maryland.
Speaker Change: Yes.
Speaker Change: Completed the renovations in the F&B area.
Speaker Change: And.
Speaker Change: We are also ready with a great beach access that that investment was finalized late last year. So we feel we have a better product for our hotel and resort guests right now.
Speaker Change: Okay.
Speaker Change: Uh huh.
Speaker Change: Alright, very good and.
Speaker Change: Started to reach into the Baltimore, and Washington D C areas with our marketing initiatives.
Speaker Change: Maybe you can add more to that.
Speaker Change: Yes.
Yeah.
Speaker Change: [laughter].
Speaker Change: I think those are and again it appears that Irwin line disconnected again.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yeah any.
Speaker Change: And then want to to rocket after he would like to know.
Speaker Change: No that's helpful I'll pass it on for now thank you.
Speaker Change: And our next question comes from Jordan Bender from citizens Bank. Please go ahead Jordan.
Jordan Bender: Hey, everyone. Good morning, Peter Thanks for all that commentary.
Jordan Bender: Your agent across your properties in the prepared remarks, I just want to touch on the outlook here you gave I guess year end leverage targets about two months ago today those targets moved up it seems like since then trends have gotten better just based off of some of the March and April commentary.
Jordan Bender: Just curious to kind of hear what your what has changed over that time, what youre seeing that maybe the year and elope just doesn't look as good as it did two months ago. Thank you.
Jordan Bender: Right.
Jordan Bender: Check.
Speaker Change: And banking again, but Peter please hold on let me correct I think that the last sentence here.
Jordan Bender: Okay.
Jordan Bender: The goal of 703.
Jordan Bender: We currently have six nine net debt and putting on a lease adjusted but that's that's not where everyone where we want to be and do a will end the year significantly.
Jordan Bender: Lower than that.
Jordan Bender: With.
Jordan Bender: If there's just a lot of them.
Jordan Bender: So they're out there and we are.
Jordan Bender: Currently see since mismatch for the last six seven weeks you see.
Jordan Bender: And the early positive trend.
Jordan Bender: It's too short a too short of a timeframe to to project that out.
Jordan Bender: To the for the remainder of 2025 and Thats why we are a little bit more cautious that's really are.
Jordan Bender: Yeah.
Jordan Bender: Okay.
Speaker Change: And then in Alberta, Theyre, taking a step forward to legalize online game and it seems like Derrek just about on the finish line. There yes. The casino cross sell opportunity is probably tracked at for some of the companies looking to enter that market. You are you looking for ways to monetize your casino database with any potential partners that might be interested in.
Jordan Bender: Thank you.
Jordan Bender: In Canada there is.
Jordan Bender: Albert.
It's better.
Speaker Change: Well the only the only thing that we potentially could.
Speaker Change: See at the moment is that with partner hospitals, better Gaming Commission that we got to sharing a database a I wouldn't see any other opportunity in that context.
Speaker Change: And in sports betting revenue.
And I think mainly in sports betting.
Speaker Change: Okay.
Speaker Change: Okay. Okay. Thank you very much.
Speaker Change: Yeah.
Speaker Change: And our next question comes from Chad Beynon from Macquarie. Please go ahead Chad.
Chad Beynon: Good morning, Thanks for taking my question.
Chad Beynon: Peter It looks like the Missouri results actually came out today for for April and you kind of talked about all the growth in <unk>.
Chad Beynon: Crothers Ville in Cape Girardeau.
Speaker Change: Initially or are we looking more for revenue growth or maintaining those kind of mid or high thirties, EBITDA levels and I guess, what I'm getting at is are you trying to.
Chad Beynon: Reach out to more of these 75 mile <unk>.
Chad Beynon: And further out customers, maybe push a little bit more on marketing and promotions at this time just to grow. The overall pie are you managing to a to a bottomline resolved in the near term. Thanks.
Chad Beynon: Yeah, Chad this is.
Chad Beynon: Definitely both we and we proactively and aggressively want to push the the revenue up and our extra cranking said.
Chad Beynon: An interesting statement. This is 75 a mile a customer base, we think we've got more opportunity there and we are using our database marketing digital marketing of course and.
Chad Beynon: It's showing very good returns and at the same time, we are cost.
Chad Beynon: Cost discipline is still a topic.
Chad Beynon: Peter also mentioned in D C. Our initial remarks, particularly in Colorado.
Chad Beynon: We'll piece the Atlanta, the other more opportunity to to rightsize the cost side.
Chad Beynon: With the new casino, but that should be or that shows aren't happening within the next final two quotas, so top and bottom line.
Chad Beynon: Okay, great. Thank you and then with with the increased interest on the on the Polish Polish assets.
Chad Beynon: Do we still think this this could come.
Chad Beynon: Come to a conclusion in 2025 whats the adjusted timeline based on.
Chad Beynon: More interest for this.
Peter Hoetzinger: Okay Peter.
Speaker Change: As we sit here today it would be nice so.
Speaker Change: But maybe I'm wrong already once.
Speaker Change: Late last year whenever it is that that we think it's going to happen in 'twenty four we had a we were already in.
Drafting drafting signed documents and then.
Speaker Change: The board of the auto side says no.
Speaker Change: So.
Speaker Change: It looks like the left in this year.
Speaker Change: Okay.
Speaker Change:
Speaker Change: Great and then just quickly lastly on the share repurchase.
Speaker Change: Opportunity I know you said, you're going to kind of dip your toe in just given the uncertainty in the market. Obviously, there's massive dislocation with your stock in a number of the other stocks in the sector at this time.
Speaker Change: So quantitatively can you help us think about how much you would be willing to or have the capacity.
Speaker Change: To buyback.
Speaker Change: Maybe on a quarterly basis. Thank you.
Speaker Change: Peter.
Speaker Change: Yeah and.
Speaker Change: We think we're gonna start between now and our next.
Speaker Change: Earnings release in early August we will start with.
Speaker Change: Single digit millions.
Speaker Change: Million dollar value.
Speaker Change: Volume.
Speaker Change: Alright.
Speaker Change: Thank you Beth.
Speaker Change: Sure sure.
Speaker Change: And our next question comes from Ryan Macdonald from Craig Hallum. Please go ahead Ryan.
Ryan Macdonald: Hey, Peter Owen I want to state just kind of on last topic stock buyback I think you had been restricted because of the Poland, where you were at in that sale process, presumably your unrestricted now but curious.
Ryan Macdonald: Portland is considering updating rules for its online casino currently state run operator, just some various kind of.
Ryan Macdonald: Governance potential changes there is that impacting either good or bad in the process.
Ryan Macdonald: In Poland.
Ryan Macdonald: The state is the it's the only entity that they send out to a to run our I gaming.
Ryan Macdonald: If a sports betting is it's open to private.
Ryan Macdonald: Companies.
Ryan Macdonald: We are with our casino brand we are currently.
Ryan Macdonald: Not offering a sports betting.
Ryan Macdonald: That's the potential.
Ryan Macdonald: For for it by year end.
Ryan Macdonald: But most of the companies that have expressed interest in our casinos there come from the from the sports betting side, so until they are interesting.
Ryan Macdonald: To see.
Ryan Macdonald: But the potential changes you are mentioning.
Ryan Macdonald: They currently have not led to any any new or additional and significant interest.
Speaker Change: Very good and then just as it relates to both your east properties is there anything from a self help standpoint, either on the cost side or you talked a little bit about the growth opportunity, but mainly on the cost side.
Speaker Change: Can help stabilize those properties before you get to a change in stabilization and then consumer.
Speaker Change: Which properties you're.
Speaker Change: Are you you're asking.
Speaker Change: The east Rocky gap and mountaineer.
Speaker Change: The east.
Speaker Change: And I'm not sure that I'm understanding the question with regard to the same thing.
Speaker Change: Yeah.
Speaker Change: Is there any optimization you can do on the cost side in either of those properties.
Yeah, Yeah definitely we are constantly working on that.
Speaker Change: And that includes the chiefs.
Speaker Change: Some some some seeing center.
Speaker Change: So there's certainly more of it as possible.
Speaker Change: Okay.
Speaker Change: Very good thanks, guys. Good luck.
Speaker Change: Okay.
Speaker Change: Thank you and at this time there are no additional questions. If you do have any additional questions for the company that may be sent through the Investor Relations page at C. N T Y dot com and now I'll turn it back over to Pete back over to Peter for closing remarks.
Okay.
Thanks, everyone. We appreciate you joining our call today.
Speaker Change: Again in early August until then thanks and goodbye.
Speaker Change: Thank you for your participation you may now disconnect.
Speaker Change: Okay.