Good day, everyone, and welcome to the Century Casinos Q3 2023 Earnings Call and Webcast. To enter full screen mode, hover over the slide and click the full screen icon in the center of the viewer. To exit full screen mode, click the X in the upper right-hand corner of the screen. If you would like to ask a question, please press star one on your telephone keypad. If you require technical assistance during today's event, you can reference the help link at the top of your screen. Please note, today's call will be recorded, and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Peter Hoetzinger. Please go ahead. Good morning, everyone, and thank you for joining our earnings call. We would like to remind you that we will be discussing forward-looking information, which involves risks and uncertainties that may cause actual results to differ 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 discussion of the risk factors in our SEC filings and encourage you to review these filings. Throughout our call, we refer to several non-GAAP financial measures, including, but not limited to, adjusted EBITDA. Reconciliations of our non-GAAP measures to the appropriate GAAP measures can be found in our news release and SEC filings, available in the investor section of our website at centurycasinos.com. I will now provide an overview of the results of the third quarter, 2023. After that, Co-CEO Erwin Haitzmann and CFO Margaret Stapleton will join me for a Q&A session. We delivered a record third quarter net revenue of $161 million, an increase of 43% over Q3 of last year. The increase came from the additions of the Nugget in Nevada and Rocky Gap in Maryland, and was offset to some extent by weaker retail customer and a bit of construction disruption at both Missouri properties. We also delivered a record third quarter adjusted EBITDA of $33 million, up 19% over last year. These results reflect the value of our strategic focus on our core customers and the benefits of our recent M&A activities. In addition, our multi-channel business model with revenue streams from casinos, hotels, groups and conventions, racetracks, on and offline sports betting, as well as iGaming, provides great diversity and stability. With the Rocky Gap and Mountaineer acquisitions, we operate a U.S. casino portfolio that reaches from east to west. 82% of our EBITDA this quarter was generated in the U.S., 13% in Canada, and less than 5% in Europe. Overall, customer trends remained stable during the quarter, no dramatic moves whatsoever. We continued to see growth in core customer volumes, offset by weaker retail play. Business from retail customers and from the low end of our database has remained at lower but consistent levels since the beginning of the year. We also saw the continued return of the 60+ demographic and moderate growth in spend per visit trends, which help, helped to offset softness in the lower ADT segments. Similar to what you have heard from other operators, cost pressures impacted the margin performance in all regions during the quarter. We expect this will continue into next year at similar levels. Consistent with what we experienced last quarter, major expense categories that increased year-over-year were wages, utilities, and insurance. On top of that, we are in a particularly transitional stage with lots going on at the same time, triggering extraordinary legal, compliance, and consulting costs and expenses. Our local management teams carry burdens with the two construction projects in Missouri, as well as the integration of Nugget and Rocky Gap. So overall, while we see no signs of softening in underlying consumer demand, it's a mixed picture in terms of property margins. Relative to the second quarter, margins decelerated in Missouri and Nevada, but improved in Colorado and West Virginia. Looking at segment results, we first discussed the Midwest segment with our Colorado and Missouri operations. Revenue was flat year-over-year. EBITDA was down 4%. Not a bad result at all, considering construction going on at both Missouri properties, as well as construction on both roads, that's U.S. 6 and I-70, from Denver to Central City, Colorado. The EBITDA margin of the segment was 38%, comparing to 39% in Q3 of last year. The number of trips, as well as the spend per trip of our top tier segment, increased meaningfully during the quarter, offset by weakness in the lower segments. In Caruthersville, Missouri, construction of the new permanent land-based hotel and casino development is progressing according to budget and schedule. We plan to open in Q4 of next year. The topping out ceremony was held two weeks ago, on October 25th, when the final beam of the steel portion of the project was put in place. The new property will have a total of 74 hotel rooms, 12 gaming tables, and over 600 slot machines, which is a 20% increase in gaming positions compared to the old riverboat. Most importantly, it will provide significant operational efficiencies, it will be much more convenient for our customers, and it will increase our catchment area. We are more excited than ever about this permanent move to land-based. What we see now, as we operate in a small, temporary land-based pavilion, is very encouraging. Table drop in Q3 was up 26%, slot coin-in up 6%, F&B revenue up 31%. We can't wait until we open the new facility in less than 12 months from now. Project is fully funded by VICI at an 8% cap rate. Staying in Missouri, but moving on to Century Casino Cape Girardeau. About an hour and 15 minutes away, a new casino opened in southern Illinois in August. We saw a small decline in revenue the first two weeks, but volumes have bounced back and leveled out throughout the end of the quarter. Our hotel, hotel project in Cape Girardeau is on budget and on track for opening in April, and will transform the property into a full resort destination, offering gaming, dining, conferences, concerts, events, and more. Total project cost is $31 million, which we fund with cash on hand. As of September 30, we spent approximately $17 million. The balance will be spent between now and the second quarter of next year. Our East segment includes the Mountaineer Casino Resort in West Virginia and the newly acquired Rocky Gap Casino Resort in Maryland. Because of that new acquisition, revenue of the segment was up 45%, EBITDA was up 60%. The EBITDA margin increased by 2% points. Mountaineer is still battling with staffing challenges, leading to limitations in hours of hotel and F&B operations during the week. Table games continue to be impacted by Ohio sports betting. The majority of that decline was experienced from guests in the lowest ADT segment, and we have started to work with our sports betting partners on joint promotions to increase retail sportsbook traffic, with the goal of attracting back some of the lost table crossover play. On the positive side, slot volumes were up year-over-year, driven by more visits and higher spend per visit from the top tiers. Rocky Gap, which we started operating at the end of July, was affected in the lower tiers of the database as well, but the substantial non-gaming revenue generators showed resilience and maintained similar volumes to prior year. Just yesterday, we successfully completed the conversion of the gaming system and Players Club to Aristocrat systems. That puts us in a better position and provides much more granularity to offer flexible and higher-yielding promotions throughout the database. With a strong focus on player development and focused efforts in major feeder markets like Baltimore, Pittsburgh, and Washington, D.C., we'll be able to migrate players to higher tiers and grow the overall database in 2024. We are also planning several growth CapEx initiatives at Rocky Gap, from upgrades to restaurants, various interior renovations, to more slot machine purchases. Continuing to the West segment, which includes the Nugget Casino Resort in Nevada. Our focus has been, and still is, on driving revenue, increasing the database, and gaining market share. Since we took over on April 3 of this year, revenue has grown by 9% compared to the same period of last year, and that growth is broad-based. Gaming, F&B, and ticket revenue all increased substantially. The number of rated players increased, trips were up, and spend per trip increased as well. From an ADT standpoint, all segments were either flat year-over-year or saw increases. Looking at the age demographic, the under 30 group showed the largest increase in the number of players and trips. Renovations of the facade and signage are almost done, and it really looks great. More improvements are coming, including further gaming floor upgrades, as well as the addition of a spa and an upscale restaurant, and upgrades of two existing restaurants. In the Canada segment, our four properties in Edmonton and Calgary saw revenue grow by 4% in the quarter. EBITDA was down 8%. Access to our property in Edmonton continues to be impacted by road construction, which will continue throughout the winter season. We just opened a sports bar there, and we believe it will do great, especially during hockey season. Century Mile at the airport also continues to grow business volumes with slot revenue up by 7%. Same as in the U.S., the customer continues to be strong and stable, but inflationary pressures, higher operating costs and expenses led to an EBITDA decline. As reported, during the quarter, we closed on a real estate transaction with VICI, and our Canadian casinos have now been added to our existing master lease with annual rent of approximately $13 million. With that, let's have a quick look at our balance sheet. As of September 30, we had $189 million in cash, cash equivalents, and $348 million in outstanding debt. Net debt is down to $159 million. With funds received from VICI for the Canadian sale-leaseback transaction, we paid back $30 million of debt, which we had borrowed under our revolver to close the Rocky Gap acquisition. As a result, traditional net leverage is 2.2x, and lease-adjusted net, net leverage is now down to 4.2x. Our lease obligations to VICI total approximately $14 million per quarter. That amount already includes Rocky Gap and Canada. Once we open the new land-based facility in Caruthersville towards the end of next year, it'll go up by approximately $1 million per quarter. So as a rough run rate for 2025, total lease payments to V ICI will be around $15 million per quarter. As you know, we report these legal obligations to VICI as a financial lease, and it's included in the same line item as the interest payments on our debt, in the line item called interest expense. Interest payments on our Term Loan B currently run at around $11 million per quarter. Also, please note that we have no near-term debt maturities until 2029, and we have additional borrowing capacity of $30 million under our revolver. In the next 18-24 months, we are planning to invest a total of approximately $35 million into our properties, and that's over and above the normal maintenance and replacement CapEx of around $25 million per year. These are attractive value creation CapEx projects, with projected EBITDA returns of 20% or higher. On the other hand, we do not plan any M&A activity for the remainder of this year and for next year. We remain fully focused on our existing operations, on the integration of Nugget and Rocky Gap, and the delivery of the two Missouri construction projects. All of those will significantly improve customer experience and cash flow generation to further strengthen our balance sheet. Going into the fourth quarter, we expect the trends among both core customers and retail players will remain consistent with the last several quarters. We also expect that overall expenses should be sequentially consistent with the levels we saw in the third quarter. In other words, while some inflationary pressure appears to be moderating, we don't expect our overall expense structure to be increasing disproportionately going forward. Overall, we are pleased with the strength and resilience of our properties. The stability of our operations and the performance this quarter highlights the benefits of our geographically diverse portfolio. Looking ahead, we have positioned our company for strong growth for years to come with the new acquisitions and our two Missouri development projects, all of which we expect to drive material increases in revenue, EBITDA, and cash flow. That is a very strong pipeline of great new operations and projects that just joined our portfolio or will come online next year. We can't wait for 2025, which will be the first full year showing the full earnings potential of everything we are working on today. On behalf of the company's management and board, I'd like to thank our team members, our guests, and our stockholders for their continued loyalty and enthusiasm. I thank you for your attention, and, operator, we can now start the Q&A session. At this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may remove yourself from the queue at any time by pressing star two. Once again, that is star and one to ask a question. We will now take our first question from Chad Beynon. Chad, your line is now open. Morning. Nice results, Peter. Thanks for all the prepared remarks. Wanted to start with Nugget. It appears that the business is going really well now that you've kind of had your hands on that property for a couple quarters. Could you just talk about anything else in terms of market trends, you know, maybe bookings at the conference center? I believe you said that the high end continues to do well everywhere, but at Nugget, I think you said, you know, all segments were up or flat. So are you taking market share? Are you growing the property? Just trying to get a sense of, you know, how this continued to grow. Thanks. Chad, this is Erwin. Thanks for your questions. Concerning the market trends, I think it has to be said that Reno is very competitive and continues to be, but we can hold our ground from everything we can see, and we certainly see potential to increase our market share. Bookings for 2024 are solid and stable, and so are they for the hotel stays, and also it is for the conference center as well. With regard to shows in our outdoor venue for that total 10,500 visitors, we have booked about half of the shows that we plan to do, with the other half probably coming on during the next month. These bookings are not dependent on us alone. They very much depend on the itineraries of the various artists and how well they can fit Reno into their traveling schedule. It's great. Appreciate it. Thanks, Erwin. And then just going back to your comments on the retail or the low-end customer, I think you said it hasn't changed. It has been a little bit of a drag across the portfolio, but wanted to ask, what percentage of your business is made up of this group of customers? And, you know, do you expect for it to kind of flatten out? Is anything changing in terms of promotions towards that lower end? And do you believe at some point this can start to, you know, be flat from a year-over-year perspective based on what you're seeing in the trends? Thank you. I think in the simplified version, we are taking a two-pronged approach. The first one is that we focus on the higher end of the market, and that's really where the majority of our focus lies, and I think for good reason. And the second part, that would be to keep incentivizing the lower end of the market and testing which things we can do there, what makes sense and what doesn't make sense. So, it's obviously much more sensitive on the lower end because the headcount is much higher, and if you spend too much, you could quickly burn yourself. So, once again, the number one focus is on the higher end, and we try to maintain as much as possible on the lower end, and probably the lower end will only change when the economy trends, like inflation, go the other way. Okay, and what's rated as a percentage of the database, roughly? It depends very much on where you draw the line, you know, that's a little bit subjective, but, you mean now in number of customers or in revenue? Either or, I guess in customer base. In a customer, I would say it's probably anywhere between 30% and 50% in revenue- So sorry, I think the question was how much of our play is rated. Yes. Oh, that's a different question. Oh, that's a different question. Sorry. In the Nugget, we have 69% rated, and that compares to pre-COVID of 67%. Okay. So rated play has actually gone up. During COVID, in Q3 of 2020, rated play at Nugget was only 59%. Appreciate it. Thank you, guys. We will take our next question from Jordan Bender. Jordan, your line is now open. Great, thanks for taking my question. Just looking at the balance sheet, you guys, you know, as we sit here today, you have plenty of cash sitting here. You know, we've kind of gone through, you know, what might be the best uses of cash for the business, but with your debt now over about 11%, and it seems like you have the cash on hand to get through most of these projects that you've talked about on the call. I was wondering, you know, is it make sense to start paying down debt more rapidly here, to kind of generate that free cash flow? Certainly, as you said in the call, we have about $25 million maintenance CapEx on an annual basis, and on top of that, we intend to spend about $35 million for projects throughout our properties, including Nugget, between $10 million and $15 million. So that's already $60 million there. And then, we'll see how it goes in the next couple of quarters. But like, until the first quarter, don't expect any major debt repayment. It's, we reinvest in our properties first. Understood. And then switching to Poland, it looks like you have maybe two licenses that have expired. Just thinking back a couple of years when that happened, you know, the machines get turned off, but you continue to pay your employees. So was there any impact, at least during the third quarter, from kind of that? And maybe just any update around the process of kind of getting those licenses back online and any timeline there? Thank you. No, there was no impact from- Hmm? Go ahead, Erwin. I was about to say there was no impact out of that in Q3 because the closures only came in Q4. With regard to the process, you know, the answer we can give is we really don't know. By law, those licenses should have been awarded already. They haven't been yet. It could happen any day, any week now, but we really don't know. Yeah, the issue, you know, they had elections in Poland, and there's no new government has been formed. That's holding the process up. It's unfortunate, but it has to do with those elections and politics. Just to confirm, while those assets are closed, you still continue to have to pay those employees, correct? Yeah. Okay. The labor laws in Poland differ significantly from the labor laws in the United States or in North America, for that matter, and it's basically the only option to just keep paying them. Okay, thank you very much. We'll take our next question from Jeff Stantial. Jeff, your line is now open. Go ahead, Jeff. Okay. Seems as Jeff has disconnected, we will take our next question from C.K. Doll. C.K., your line is now open. Yes, hi. I have a strategic question. I missed the first part of your presentation. But, the strategic question in my mind is, have you taken on a lot of this new capacity and acquisition during a period when interest rates were very low, and now you are faced with a seemingly prolonged period of operating losses based on the very high level of debt that you've taken on? Is that, you know, could you possibly address that so that I could understand it better? We have, we have acquired three properties at the end of 2019, and we have taken on debt at that time. And then we made another major acquisition, which we signed in February of 2022. And at that time, when we entered into that transaction, we closed it a year later, but when we entered into the transaction, February 2022, we entered into a new loan facility with Goldman Sachs, and, and that is, that is what we are, what we are faced with now. You know, on the one hand, we were in a way fortunate to get it done at the end of February 2022, because a few weeks later, as you recall, in March, end of March, the debt markets pretty much closed for some time because of the Russians invading the Ukraine. But we could get it done, and so we could close that transaction after licensing a year later, but now we are faced with those terms. We are free to repay the term loan anytime as soon as we find something better out there. But for now, we are faced with that rate. We are paying SOFR plus 6, and it is what it is. We will now take our next question from Jeff Stantial. Jeff, your line is now open. Great, thanks. Can you, can you guys hear me this time? Yes. Okay, perfect. Apologies for the technical difficulties there. Anyways, starting off here, I just wanted to, to drill the margins a bit more, specifically focusing on the US segment. Peter or, or Erwin, can you just disclose for us what same-store margins were year-on-year for the US region in aggregate? And then kind of unpacking that decline, I was hoping you could just frame out, in your mind, whether qualitatively or, or putting some numbers behind it, how much is some of the structural inflationary pressures you called out, labor and utilities, versus how much is more kind of one-time headwinds with the new assets and the construction? Mm-hmm. So, in the United States, in Q3 of 2022, we had a margin, EBITDA margin of 30%, and in Q3 of 2023, our margin was 26.1%. And the margins differ from casino to casino. With regard to separating on the cost side, we really had integration costs for the two new properties, Nugget and Rocky Gap. We still have some kind of construction disruption, which also leads to some either lower revenues and costs. And, as you know, Cape, the Cape Girardeau Hotel will be opening in Q2 of next year, and Caruthersville in Q4 of next year, so that then, that will be gone. All of that will be digested, and then hopefully the synergies start to kick in step by step. With regard to labor costs, utilities, insurance, so the more structured ones, as Peter said earlier, we don't think that there will be any further increase in those. Okay, great. That's helpful. Thank you, Erwin. And then as a corollary to that, Peter, I wanted to kind of follow up on one of your comments towards the end of the prepared remarks. I think you noted that you think OpEx or margins will be roughly stable from Q3 moving forward. Inflationary pressures are moderating, though still impactful. So I guess is the net-net of that, that you know, inflationary pressures continue to kind of pressure margins, but conversely, some of the one-time headwinds are going to roll off, and those dynamics roughly offset each other? Am I thinking about things the right way, or can you just expand on that a bit further? Go ahead, please. I think it's, I would say, I think you're on the right track thinking like that. We see it the same way. Okay, perfect. That's helpful. Thank you, Erwin. And then if I could just squeeze in one more. I wanted to follow up on one of Chad's questions earlier. We did hear one of your peers that operates in Reno talk to some elevated promotional activity from a couple competitors in that market, some higher free play, you know, more aggressive room comps, things of that nature. Are you seeing similar to that factor in your results during the quarter? Just, you know, any thoughts on that dynamic? Yeah, we see some of that, in particular from one or two of the so-called smaller operators that don't have a hotel attached. Some of them go quite proactive, if not to say aggressive into the market. And we just have to, we're just observing that. We, we are not, we are not going that aggressive. Okay, understood. That's, that's helpful. Thank you very much. I'll pass it on. Sure. It appears we have no further questions. I will now turn the call back over to your presenters for any additional or closing remarks. All right. Thanks, everybody. We appreciate you joining our call today. We will talk again after the first quarter, but I'm sure we'll see each other at some conferences between now and then. Thank you. Goodbye. Ladies and gentlemen, this concludes today's conference call. You may now disconnect.