Q3 2025 Century Casinos Inc Earnings Call
Speaker #1: Good day, everyone, and welcome to today's CENTURY CASINOS Q3, 2025 earnings call. At this time, all participants are in a listen-only mode. Later, you'll have the opportunity to ask questions during the question-and-answer session.
Speaker #1: You may register to ask a question at any time by pressing the star and one on your telephone keypad. Please note this call is being recorded, and I will be standing by if you should need any assistance.
Speaker #1: It is now my pleasure to turn the conference over to Peter Hoetzinger. Please go ahead.
Speaker #1: ahead. Good morning,
In any case, however, we remain committed to divesting our Poland operations and will provide updates on the divestment process in the coming months as appropriate.
Now, over to Urban for more on our individual properties and markets.
Thank you, Peter, and good morning, everyone.
Let me start with our results for the third quarter, beginning in Misouri
Our Centric Casino and Hotel Caravan, which just celebrated its first anniversary continues to exceed expectations.
Gaming revenue grew strongly across all segments: high value up 82%, core up 29%, and retail up 22%.
In total, gaming revenue was 29% higher than last year, and EBITDA increased 35% to $6.1 million, up from $4.5 million.
Rent expense rose about $1.1 million, reflecting the V lease that funded the new property.
And operating margins. Remain high.
It is worth noting that with our new Land Based utilities. We're now reaching new markets
This is particularly evident in the significant increase in customers living over 75 miles from Kurada Swim.
For other swim has been an outstanding success, more than efficient and exceptionally well-received by our guests.
Our thanks to the entire team for a fantastic first year.
Now, to send your Casino and Hotel Cape, Chiado.
Tape delivered 6.1 million in iar only slightly below last year's record quarter.
The property continues to perform very well against competition from Illinois.
Sports betting launches in Missouri on December 1.
And in partnership with BMG, we will open a BetMGM-branded sportsbook on property at Pet MGM. We launched its online sportsbook using our skin.
We we expect sports betting to elevate, capes profile, and create new revenue streams for the property.
Now, moving to Colorado.
At Crypto Creek, EBITDA was $1.8 million, flat year-over-year.
In the quarter, our high value and call segments grew while patient retail declined.
Retail play now represents about 30% of total Gaming revenue.
We believe that Germany may capture a larger share of the retail market, driven by the novelty effect.
A Central City rated players have 6%. However, total revenue was down 4%, again, due to fewer retail players.
Came in at 1.2 million.
Up 20% on a comparable basis. As last year's Eve, the bit of $2 million included a $1 million one-time payment from typical.
At postol properties. We have replaced live table games with electronic table lounges. Which generate about the same Revenue at significantly lower cost.
That's a solid win for both operations.
Now, to the east.
At Mountaineer in West Virginia, ebar was 4.4 million flat to last year.
Performance across the board was steady and Parham Mutual handle Rose 26%.
Driven by improved scheduling and race mix.
As we expected our first team quarter, without weather disruptions since the beginning of the year.
Growth came from high value players while while other statements held steady.
Now, to the west and the N Casino Resort in Reno Sparks.
While the Nugget had a standard order, mainly due to our signature based in the West Nugget Rib Cookoff, overall, the quarter was still challenging.
We experienced a record EBITDA for August of $4.1 million.
The highest single month result in nearly 3 years.
But that was offset by week of July and September.
Throughout the quarter, we enhanced marketing programs to grow both local and destination play.
we are also building out our 2026 concert season tickets for Brooks and done in April, our already selling extremely well,
We began converting unused space into an additional 11,000 square ft of convention space.
At 10% increase in square. Footage to be completed by year end.
The additional space will first be used by major group event. That is booked for January 2026.
It's the Nugget. We're executing on a clear repositioning strategy shifting away from low ADT players who are no longer profitable and focusing on core players in in Reno Sparks and Northern California.
In sync with the enhanced marketing to play in the core segment, we're working on further, improving the f&b offerings.
It takes time.
But we are seeing we are starting to see the results already.
Now, to Canada and Europe.
In Alberta slot. Coining was up 5.8%.
Total revenue at 1.6%.
Growth was broad-based supported by disciplined cost management.
Sentry Downs in St. Albert led the way with St. Albert benefiting from this year's upgrade of the first sound.
In Poland, we're nearing the end of the challenging period marked by licensed delays and relocations.
The main headwind this quarter was the closure of our War Sell Hilton Casino, which contributed an EBITDA of $1.33 million last year versus a negative $0.5 million this quarter.
Uh, relocated what? What casino is ramping up? Well.
And the second Rat's left. The location will open in January 2026, further strengthening our position there.
All current licenses as said before are available to 2028.
So we expect stable operations going forward.
With that, back to you, Peter.
Thank you. And before we cover a few balance sheet and capital items,
let me explain what led to the filing delay of a couple of days.
As described in the 8-K, we filed with the FCC yesterday.
We discovered an error during impairment testing for a Goodwill. Atrophy Gap that required us to restate our 2024 10K. And the 10th. Use for the first 2 quarters of this year.
The estimated impacts are described in the 8K.
We are finalizing our review of the amended financial statements and anticipate fighting these with the ACC within the next 5 business days.
Right now, back to the balance sheet, our cash and cash equivalents at the end of the quarter were 78 million.
Compared to 85 million at the end of Q2.
That includes 5 million. We spent in capex and 1.5 million. We spent on the share buyback program.
We also paid the annual table games license fee of 2.5 million invested genya.
As well as about a million in closing costs in Poland.
So, all in, we were about flat in cash from operations.
All the principal amount of debt outstanding was 339 million resulting in net, debt of 261 million.
at the end of the quarter, our net debt to ebit the ratio was 6.9 times
On a lease adjusted basis. The ratio was 7.6 times.
Let me also note here, that we have no debt maturities until 2029.
and there's no need for a significant capex this year or next,
$18 million of which we have spent $15 million already.
As you look ahead.
We are very confident in our business prospects. Last year was a transitory period for us.
But now we see a clear path forward to higher i-bidder and cash flow for 2026 and beyond.
Now, it's all about harvesting what we have invested last year.
When you sort through the noise, I mentioned at the beginning of the call.
We are encouraged by the trends in our business.
I recognize the level of economic uncertainty.
We are more confident in the long-term prospects of our company than we were at any point last year.
While the fourth quarter has just started, it's worth noting that the positive customer Trends have continued in to October.
Including improved play from both core and Retail customers.
Preliminary results for October show. Epar up well over 20% compared to last year.
And as we head into next year's tax season, we believe that our core customers around the country will benefit from the tax bill passed by Congress this summer, including new deductions for tips and overtime.
And then additional structure for seniors.
As well as larger standard deductions for all taxpayers.
As you know, we are in the midst of a comprehensive strategic review process.
At this stage no decisions have been made and there can be no assurance that the review will result in any transactions or particular change.
We do not intend to make further public comments on the process unless and until the company's board of directors, approves a specific cause of action.
If you do not expect before q1 of next year,
With that, I ask for your understanding that we will not take questions on this topic in our Q&A session.
As you cannot share, any incremental information at this time?
All right, that concludes our prepared remarks. We now open the call for Q&A with the analysts. Operator, go ahead, please.
Thank you. At this time, we will open the question and answer session. If you would like to ask a question, please press star and 1 on your telephone keypad and you'll be placed into the queue in the order received. You may remove yourself from the Queue at any time by pressing pound and 1.
If we do not get to your question, please, reach out to the company using the investor relations page at cnty.com.
once again to ask a question, press star 1 now,
And our first question will come from Jeff stantial with stifle.
Good morning. This is Vaden Young on for Jeff Sel. Thanks for taking our question.
Maybe starting off on the strong results in your Canada portfolio.
You sort of expand a bit on what's driving that broad base growth. And as we can continue to evaluate the broader portfolio, do you use these as more non-core with the increasing us exposure? Or do you see real synergies with the broader portfolio?
Uh, thank you, chair. I, I think I take that question. Um, I think the other way around, we take out to your second question, um, we don't, we see a little bit of synergy, but it's, uh, it's more incremental. So, uh, it is probably to be seen as a standalone, uh, conglomerate of operations, there for the, for Canadian properties that we have.
Um, concerning the drivers. Um, we have, uh, the the, the 1 busy group driver is that, uh, this St orbit, where we redid the facade outside completely and that is a really good impact. And, uh, the and the rest of it is just, I think, uh, uh, very, very motivated management that that's really
Continuing to sharpen the pencil looks on the cost side. Looks on the revenue side, uh, and uh, we have recently been up there. We have a very motivated crew, that is really eager to perform well, it's good to see. And I think we have some more upside uh, also giving the macroeconomic uh, situation in Canada, which seems quite far. Like the impact that uh, or has been impacted and in the United States.
Great. That's helpful. Thank you for that.
Into the Nugget. Can you give us an idea of how you're thinking about timing for the group and Convention business to normalize and to sort of put some numbers around it? How many more room nights can this add?
And then, on some of the new entertainment programming, can you help us? Think about how you're underwriting that uplift and how confident you are that this will attract those visits and corresponding gaming revenues that you're underwriting. And then that's all from us. Thank you.
Okay. Uh,
As we see it, uh, the impact it will have on room nights and, uh, the impact and the, the progress of the concert, uh, correct.
Yes.
Yeah. Okay. Um, with regard to the timing, it's hard to say. But if I mentioned earlier and Peter mentioned as well, we already see in in October that number of the things that we've been uh, fine-tuning on the marketing side, is starting to take effect. Uh, and we, we are confident that uh, we should see, uh, the full impact of what we are convenient to to refine in. I mean already now, but certainly going into 2026 as well.
um,
in, uh, the the the we're looking on the 1 hand on the, on the revenue side of the casino, but, uh, combined but also independent from that. We also, uh, focusing on the retail side of the hotel business, uh, as a separate exercise because the the continued to be less the market segment that comes to the Nugget just to stay in the hotel. And they may not may or may not be a gambling at all. It's not necessarily connected. Um, and in that same, uh, context, uh, also I mentioned earlier, uh, we have, uh, we've decided that we continue to focus more and more, intensely on the FNP side, uh, possibly, uh, possibly expand the offer. Uh, but certainly also continue to work on upgrading, uh, at least 1 of
Outlet.
Um, it's hard to quantify with your Capital room nights uh but uh um it's um let, let's put it like that. We will have 3. We have 3 statements for the hotel. The 1 is the casino side which is mainly comped. And that uh is intertwined with what what we do with our uh with our overall camping program and how much we give back to our customers.
Uh, the second 1 is the convention in group business. Uh, we said earlier that uh smaller groups we can do short-term but the natural groups have a, have a quite a long lead time where we're now talking about as far as 2032 2031 with some of the natural groups. Um, we for as it looks now, we think that uh, the group business in 2026 will be either the same or better, um, than in 2025. And the third 1 is the retail business, uh, which the market also separately. And we have seen an increase in the retail segment already in 25. And we believe that more can be done in 2026.
Concerning the concerts, uh, we have learned that, uh, to give you the numbers from last year, in 2024, the concert standalone made a profit of around $850,000. Uh, this year, the concerts are making a loss of about $300,000.
So the, the reason for that is 2 folds, first of all, uh, we we just couldn't book what we wanted to book. Uh, you know, it's not so easy, it depends. Uh, when you, when you target the an act, it depends on what the root is and whether they are in that part of the United States, whether you can uh, book them at the price, that 1 would be willing to pay. But he often times, it's not even a, a price question. They're just not there. And of return. I'm not willing to travel east west without the intention planning. So we've not been very successful and, and lucky in that respect. Uh, second thing is that so so that led to the result that we didn't couldn't get as many contracts as we wanted to in 2026. We think that will be better.
And the second, uh, the second thing that we've learned is that we thought in order to, uh, reduce the risk of the, which is quite high in the concerts, um, when when you cannot send the tickets, we rather book x, uh, that that cost a little bit less than the than, for example, Rod Stewart. So, and uh, that probably was not a good decision. So, we are now turning back into trying to book. Um,
Maybe fewer eggs but uh, but very good eggs like books and done.
so,
With that. We think we can, uh, we we can fix the Concept side. And uh, we see that our goal is that the concept stand on their own, but from at least half of the, uh, of the concepts. We see a, a, a very positive overflow into the hotel, uh, casino and f&p business,
That's great. Thank you. I'll pass it on.
Thank you. Our next question will come from Jordan Bender with Citizens.
It sounds like you're seeing some pretty good success from the EtG that you've put in Colorado. Do you think this strategy? It's a strategy. You would look to implement across any of your other us assets. Just given, you know, the cost side. Um, Health margins, at the end of the day.
Uh, yes, uh, however, uh, however, not necessarily by replacing completely, replacing table games with etges. So, we we do have a disease in other casinos, were parallel to those, with still keep the Life game. Uh, but in Colorado, it was just a, a question of the uh, it was just so obvious that it's a bit of a very small operations, you know, it wasn't worth keeping the fuel tables. Um, but in the larger casinos, we do have ET on the 1 and games on the other hand and and as we see it now we keep that also
Great, thank you. Um, and if I on the follow-up, I think you, you mentioned, you bought shares back in the quarter, I just curious, you know where your balance sheet sits today, you know, where the cash balance sits you know, how do you kind of think about buying back shares here versus, you know, continuing to pay down debt as we head into 26? Thank you.
Absolutely Peggy. Why don't you take that question, please?
Um, we're we're currently analyzing, um, the stock buyback versus, um, paying back debt and and have not made any real decisions on how to proceed into 2026.
Okay, thank you very much.
We'll take our next question from Ryan sigdal with Craig Hollen group. Please go ahead.
Hey guys. Um, 21% or or greater than that, you've been to our growth and October. Um, improved play from the core and Retail players if I caught that, right, and the prepared remarks can you elaborate, I guess, on, on specifically, is that pretty broad-based across the portfolio. And then as you look to November and December, are there any weird comps or anything to be aware of on, on the
Uh, plans for this year where that's not a good assumption to kind of continue throughout the rest of the quarter.
Um, we don't see anything that, uh, anything unusual in that, uh, that would impact the one or the other way. Um, the first quarter.
Uh, but with regard to the customer, trying to say, Peter mentioned, that lead to the lead to the 20% plus in October, um, we just hope that the consumer sentiment continues to go to improve because that, uh, that has impacted us. So, negatively in the lower end of the database, um, in in anybody's case. But I think there is at least a hope that the consumer sentiment will improve during the next. Uh, hopefully, uh, the remaining months of this year. Peter would you like to add to that?
Yeah.
I think the, the the run is only, um,
Difference, we'll see. Is that last year in the first week of November, we did open the Colorado Field Land Based the new Land Based facility. Uh, so In the year-over-year comparison that 1 property from the first week of November on
Will probably not have the same growth rates that we have seen over the last 12 months, but with all other with all other properties. I also, I don't see any abnormalities.
Great then, just on the Nugget. Um,
July September, we're weaker. Um,
Curious, I guess.
I think you you know going back year to it was the the convention business was building it was going to really be inflecting. Kind of middle to late this year into 26. I guess is there a reason? Did you have any cancellations or curious? I guess the weakness in July and September as you know my view I guess could have been partially incorrect but was that the convention business was going to really start to ramp up here?
Yep. That the, the weakness in September mainly came from the fact that we mentioned earlier. So that in 24, we had 2 powerful, very good Concepts, 1 of them was chasing and in September, we didn't have any, uh, then also in September, we had what is called the Bingo blowout, the last Bingo event in September, which now, uh, which we didn't have this September. Um, and with regard to the conference business, uh, that was also less conference business in, in, in, in September of 25 as compared to 24. Uh, but that was in the, that that could be changed in the short term.
Thanks. Good luck, guys.
Thank you.
And we'll move next to Chad, bainan with McCrory Group.
Good morning. Thanks for taking my question.
Wanted to ask about uh brothersville you touched on the, the growth that you can continue to see in the operating leverage of that property. Um, are you still on track to hit the returns that you originally, uh, laid out on the construction capex and then secondarily, um, where do you expect most of the growth to to come from? Will it be that that further out, uh, customer in the, in the neighboring states or there's still opportunities? Um, in the in the closer in catchment area, thank you.
Uh, yes, we first question. Yes. Uh uh we we we we are we are on track with regard to what we expected. Uh and secondly, we think that growth will come both from the UK graphically closer. And the further away group of people with more potential in the 75 plus miles, we think that we can, uh, we can reach out even more into that segment. Uh, uh, then then then we did so far, so more growth from the more distant uh areas. But still growth from the from the closer closer areas as well.
Okay, great. And and then going back to the
the weakness that you saw in the retail customer, which it appears based on the the 20% growth in October. Um, that's abated. Do you know why this you know, is there any any evidence in terms of that that this will remain stable um anything else to point to, in terms of why it it fell off during the period? You know, was it could it have been weather related, um, comparable related. Um, you know, local CPI or Unemployment uh just any evidence, that'll that'll give us confidence that that retail could uh could improve here in Q4 and Beyond.
Yeah, it's it's it's hard to say but we believe that it has to be has to do with the uh, insecurity around terrorists and the impacts that terrorists may or may possibly have to the consumers. And that is a worry that typically is, is, is more uh, prevalent in the lower end of the database and we see that also in in places like uh, Rocky Gap. For example, where the household income of the catchment areas significantly lower than in other markets that were active in, uh, that that certainly has a strong effect. Uh, it's and, and the I'm not as good as others to speculate about the increasing, uh,
Consumer sentiment coming forward. Um, but if we had to say something we we we would think it looks there's a friendly Outlook.
But you probably could make a better judgment on that.
Okay, great and are their initiatives or or cost improvements that you could make if this customer remains volatile.
Um, these days already possibility to, to, to look for more and and, and tighten the bail further. Um, but I think if it's not, uh, I don't think that it will get any any worse than it was in the worst months of of this year and uh, with Minima through them. Well, and I think we, if necessary we could put that we could do that again. Uh, there's always, as I said, if if you keep looking and then there's always a way to save more uh the D services that you don't go too far in in what you're doing.
Great, thank you very much.
Thank you.
Our next question comes from. Connor parks with CBRE.
Hey everyone. Thanks for taking my question. Give me another Capital, allocation 1. Uh, maybe separate from the The Debt Pay down versus share, repo discussion, just in the context of of the cash on the balance sheet and
Something that our growth, you've seen this year, um, with all the capex rolling off in Missouri. I guess, you know, how are you weighing the reinvestment plan at this point, is there anything maybe outside of of nugget you mentioned that you would like to
To build or reinvest in or any low hanging fruit type projects uh in Missouri again um that you're weighing at this point in time.
Or that it was very beneficial and for for, for, for the, for the revenues, and for the business there. Um, we may spend a little bit of money within connection with food and beverage at the Nugget.
Um, and that would be, um, probably it, uh, apart from the routine, uh, upkeep, and investment into, mainly for products of our properties. Uh, Peter, can I hand over to you? Maybe you could continue on what to expect on that some more.
Yeah, sure. Um
This is Connor. Uh, we, we don't don't expect any, any significant or large moves, uh, not on the stock market front, and also not on the, um, pay down of of the debt currently, because, as you know, we are in the midst of the Strategic review process. And, um,
uh it it will depend on on on the outcome of that uh we could we could sell something and then we would have a significant uh amount of money to
Uh, to pay down the debt.
We could do some other transaction that's that that is still up in the air. Uh so until we have concluded that process um
You don't you you won't you will not see any any significant.
um,
you just stop by pixel paid on of that.
Great, thank you. And then maybe as my follow-up, you mentioned in this quarter and prior quarters the expected uplift.
Uh, potential in regional gaming around the benefits from the upcoming tax season. I guess if you've provided any barriers or, um, you know, tried to quantify any of these benefits around the customer base, spending habits, or anything of that matter, for any of the areas in which you operate in.
I, yeah, to, to make a guest here. Um, it, it’s hard to say. Peter, Peggy, would you do? Do you think you could quantify?
No, not really see it. It's it's having said before, the mostly the low, the low 80s, the lower, uh, segments of our database uh, are intact. It's uh, by that. And depending on with the pro which property uh
It's about maybe 15 to 20 25% of our customers are in that lower, lower segment. Uh, but in general we are, we are, we are making steps to to move away from that and to move towards, uh, midi and and upper tier customers in our marketing approach, and in in, in everything we're doing
So, that should lessen that impact. Uh,
But I agree with you, we don't want to quantify that, uh,
Not not enough hard facts available.
Helpful. Thank you.
Thanks Connor.
That is all the time we have. If we did not get to your question, please reach out to the company using the investor relations page at cnty.com.
I will now turn the call back to Mr. Hoetzinger for closing remarks.
Yeah, thanks operator. And thanks everybody for, really appreciate for you joining our call today and we'll talk again when we present the 2025 full year results.
Until then. Thank you. And goodbye.
This does conclude today's conference. Thank you for attending.