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Edited Transcript of CNTY earnings conference call or presentation 20-May-20 4:00pm GMT

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Q1 2020 Century Casinos Inc Earnings Call Colorado Springs May 30, 2020 (Thomson StreetEvents) -- Edited Transcript of Century Casinos Inc earnings conference call or presentation Wednesday, May 20, 2020 at 4:00:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Erwin Haitzmann Century Casinos, Inc. - Chairman & Co-CEO * Margaret Stapleton Century Casinos, Inc. - CFO & Corporate Secretary * Peter Hoetzinger Century Casinos, Inc. - Vice Chairman, Co-CEO & President ================================================================================ Conference Call Participants ================================================================================ * Alex Silverman AWM Investment Company Inc. * Brad J. Boyer Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst * Chad C. Beynon Macquarie Research - Head of US Consumer, SVP and Senior Analyst * David Brian Bain Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst * John G. DeCree Union Gaming Securities, LLC, Research Division - Director and Head of North America Equity & High Yield Research * Hannah Wilmarth;Fantini Research:Writer ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Welcome to the Century Casinos Q1 2020 Earnings Conference Call. This call will be recorded. (Operator Instructions) I would like to introduce our host for today's call, Mr. Peter Hoetzinger. Mr. Hoetzinger, you may begin. -------------------------------------------------------------------------------- Peter Hoetzinger, Century Casinos, Inc. - Vice Chairman, Co-CEO & President [2] -------------------------------------------------------------------------------- Thank you, Ryan. 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. We hope all of you, your friends and families are safe and in good health during these challenging times of the COVID-19 pandemic. 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 risk factors in our SEC filings and encourage you to review these filings. In addition, throughout our call, we'll 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 filings, available in the investor section of our website at cnty.com. I'll now provide an overview of the company's status quo in light of the current crisis and then briefly review the financial results for the first quarter 2020. Following the prepared remarks, there will be a question-and-answer sessions. As with almost all casino companies, we closed our operations between March 14 and March 17 to comply with guarantees issued by governments to contain the spread of COVID-19. All of the closures are temporary, with the exception of the casino in Bath, U.K., which remains permanently closed. In December of last year, we were in sale negotiations for the Bath casino. However, in March, not surprisingly, the potential buyer terminated the negotiations. Due to the canceled sale and the negative outlook, we determined that the best course of action would be to voluntarily wind up the Bath casino company. We signed a voluntary liquidation resolution last week and with that, no more losses from Bath will impact our results. In addition, after a conservative analysis, it was determined that the goodwill and license value of some of our operations is impaired, and $33 million have been written off in the quarter. During the closures, we've temporarily laid off and furloughed approximately 90% of our team members except for Poland, where all employees will continue to be paid reduced salaries based on local employment laws. We recognize the impact that these furloughs have on our team members, and we have tried to mitigate a little bit of this impact by continuing to provide benefits coverage. We committed to paying benefits to all our U.S. and Canadian employees inclusive of part timers until the end of May. The remaining staff, including senior management, have taken pay cuts and are busy working on budgets, negotiating with lenders, banks and lessors to manage the cash burn, on HR issues and on securing and maintaining our properties and preparing them for reopening. Our payroll is down significantly, and many variable costs fall away while operations are closed. We have many other expenses like interest on our debt, rent and lease expenses for some of our properties, real estate taxes, insurance, utility costs and other expenses continue to occur even while operations are closed. We are currently generating only very limited revenue from our properties, and the net cash outflow during the time the operations are fully suspended is close to $8 million per month. That is including full debt service and rent payments. What can we do to lower that number further and preserve cash? We've recently been able to negotiate the deferral of rent for the land at Century Mile in Edmonton for the month of May, June and July. The deferral is up for 1 year and is interest free. We amended the master lease with VICI to raise the minimum CapEx requirements for 2020 and convert it to next year. That helps us with around $2 million now. Other possible modifications of that master lease like partial parcel rental relief or rent deferral are also topics for future discussions with VICI. As you know, there are several federal and state relief programs in place in the U.S. as well as in Canada. The specific rules are still evolving. But unfortunately, we are pretty certain that at this stage, we will not qualify for any of these programs, either due to size, revenue leverage or existing leverage. Our balance sheet has no near-term maturities, and we are in full compliance with all our debt obligations as of March 31 and also expect that to be the case for the second quarter. As of April 30, we had $50 million, 5-0, in cash. Again, our monthly cash plan is close to $8 million, including full debt and rent service. Our casinos will need approximately $19 million to reopen operations and cover short-term cash needs at the properties. Talking about reopening. Two days ago, on Monday, we announced the reopening of our casinos in Europe, in Poland. We opened all 8 casinos on Monday morning. Visitation was good, and the social distancing and health and safety requirements didn't seem to pose any real difficulties. All guests were very understanding of the situation and very happy to be able to enjoy real gaming entertainment again after 2 months of closure. Before the closures, Poland contributed approximately 10% of our total consolidated EBITDA. In West Virginia, the Governor announced that effective May 14, horseracing may resume with no spectators allowed. Following this announcement horses are back in the barn area and started training at our Mountaineer facility already. The first race is scheduled from May 31. We will hold 3 races per week, all without on-site visitors. This will be very good for pari-mutuel horse betting handle and will help lowering the cash burn at that property. Our golf course in West Virginia is also open already and is busier than ever. According to the latest information available, we expect to be able to open the gaming floor at Mountaineer on Friday, June 5. In Missouri, we should be allowed to reopen our 2 casinos in a couple of weeks in early June, based on information currently available. It will be very good news for us because Missouri is our most important market in terms of EBITDA generation. As for the reopening of our Casinos in Colorado, we are currently anticipating early to mid-June. And in Alberta, Canada, ADW Internet betting on horseraces is generating some revenue already, and we will also open the restaurants at some of our Canadian properties next week. That has already been approved and should generate not only SMB revenue, but also increase the betting action on horseraces. Casino operations in Edmonton and Calgary will probably start sometime in the second half of June. So clearly, the timing and official guidelines regarding the reopenings with (inaudible) jurisdictions and the various approaches and requirements laid out by the governments and regulators will likely include things like use of infrared devices to check employee and guests for fever; reduced levels of gaming in restaurant and entertainment spaces; social distancing in slot machines, table games and the restaurants; the provision and use of gloves, face masks and hand sanitizers; continuous disinfection of high touch surfaces at shorter intervals; limited restaurant opening hours or keeping restaurants [of outlets] closed and other measures to account for varying levels of demand. We've been through all of that in our planning over the last weeks, and we feel comfortable with these requirements. Most of our revenues stems from slot machines and it's actually relatively easy to employ social distancing in the slot machine areas. Our slot floors are not very often that greater than 50% occupancy anyway, as if all was chosen to have enough slot machines. Our geographic diversity and our locations in hyperlocal markets will play a role in our recovery, especially in the early stages where we can expect some pent-up demand. Erwin and I have been in the gaming industry for around 40 years and have operated casinos in the U.S. and internationally through a number of challenging times, including 9/11, the dot-com bust in 2000, and the financial crisis over 10 years ago. Each time, the casino industry has recovered and over time came back even stronger, especially in the hyperlocal gaming markets where we play. All our casinos predominantly rely on very local and very loyal customer base. And as such, our operations should ramp-up at a quicker rate than casinos at destination resorts. All our casinos are local's places in urban and suburban locations, with the vast majority of our business coming from customers who live within 45 minutes from our facilities. Our casino has negligible meeting and convention business, and very few of our customers is aiming to travel by air to visit us. In addition, we offset a comparatively inexpensive gaming experience, one that is often still affordable in economically difficult times. So from everything we can see and from what industry consultants are forecasting, local gaming should ramp-up considerably faster than the destination gaming. The reopenings will probably be limited from an amenity perspective, and we will probably see a more pure gamer that comes to the facility, at least initially. On top of that, don't forget, most of our customers in the local markets are people who are not in the active workforce, people with pensions, with fixed income. Plus, they also get the stimulus check from the government. And finally, if the recent reopenings of casinos are any indication, for example in South Dakota, Oklahoma or an [Indian country,] we have all reasons to be optimistic. I'm sure you all saw the report that the opening weekends were about 15% to 20% higher than a typical weekend in spite of social distancing restrictions. Also a couple of days ago, when Southland Casino West Memphis opened, we got reports of a long line around the building. In concluding my prepared remarks, here's a brief overview of our performance in Q1. The results for the first quarter of 2020 really were starking contrast. January and February were great months, really great month. Also March started very strong, and we were on pace to generate approximately $105 million in revenue and $20 million in adjusted EBITDA for the quarter. Both would have been all-time records and significantly higher than our own forecast and higher than consensus estimates. Then came temporary closures in mid-March, and we ended the quarter with $87.7 million in revenues and $9.6 million in adjusted EBITDA, increases over last year's first quarter of 92% and 44%, respectively. The growth up until mid-March was substantial, and it was broad-based. Colorado's EBITDA was up 20%, Canada was up 19% and also the 3 new properties we acquired from El Dorado performed exceptionally well. Combined, the EBITDA was 25% higher compared to last year under El Dorado ownership. We really look forward to ramping up to these kinds of results as soon as possible after reopening. So 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 patience during these difficult times as we manage to properly position our businesses for the reopenings in the new normal. I thank you for your attention, and we can now start the Q&A session. Operator, go ahead, please. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) And your first question. Comes from the line of David Bain with Roth Capital. -------------------------------------------------------------------------------- David Brian Bain, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [2] -------------------------------------------------------------------------------- Peter, Erwin and Margaret, as we reopen, are there some permanent or structural changes that you've identified that could allow for better flow-through or additional concepts that could carry more profitably generated revenue? And can that carry forward to 2021? And if so, can you speak to the most significant differences as you open and target that? -------------------------------------------------------------------------------- Peter Hoetzinger, Century Casinos, Inc. - Vice Chairman, Co-CEO & President [3] -------------------------------------------------------------------------------- Erwin, would you like to start that? -------------------------------------------------------------------------------- Erwin Haitzmann, Century Casinos, Inc. - Chairman & Co-CEO [4] -------------------------------------------------------------------------------- Right. David, we have not done any structural changes, apart from the fact that we used the time in Poland, in our -- in the Marriott Casino, which is the busiest casino of all of Poland to completely revamp it, including redoing an air condition, which really needed it. And that was quite a job. So it kind of came in handy, if we want to say so, and we used the time to completely redo that and are now well equipped for all temperatures that some might bring to give a pleasant experience to our guests. But other than that, we didn't do anything structural. However, we, like many other companies, have once again resourced our strategies and we definitely, more than ever, will focus on the value players, on the upper end of the players. And that in itself probably is a good thing given the fact that we will have capacity limitations and no likelihood in most of our casinos. We, again, like others, will further push for digitization, which should again bring some cost savings on the marketing side. And I guess these are the main things that we have done from -- so far. Most of this is fluid, and most of it we will have to play by ear and see how it develops. We're all ready to adapt quickly, basically on a day-to-day basis, depending on what the various jurisdictions will ask from us so that we're able to react quickly. -------------------------------------------------------------------------------- David Brian Bain, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [5] -------------------------------------------------------------------------------- Got it. Okay. And then as a follow-up, can you break down sort of the larger pieces the $19.8 million reopening costs? Some of that earmarked as cage capital. I mean just if you can give us what the larger buckets are, that would be helpful. And then just assuming the reopenings are on schedule -- are on the schedule that you gave us in the prepared remarks, it sounds like cash in June should still be $22 million, $23 million as cash flow begins to generate again. Is that kind of a fair estimate? -------------------------------------------------------------------------------- Peter Hoetzinger, Century Casinos, Inc. - Vice Chairman, Co-CEO & President [6] -------------------------------------------------------------------------------- Peggy, please? -------------------------------------------------------------------------------- Margaret Stapleton, Century Casinos, Inc. - CFO & Corporate Secretary [7] -------------------------------------------------------------------------------- Yes. So David, the $19.8 million is mostly cage cash and then some -- just some operating cash just based on the way cash flows for paying gaming taxes and things like that. And yes, you're correct, we should be in the $22 million, $23 million range. -------------------------------------------------------------------------------- David Brian Bain, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [8] -------------------------------------------------------------------------------- Congrats on the January and February results, particularly with the acquisitions. -------------------------------------------------------------------------------- Operator [9] -------------------------------------------------------------------------------- The next question comes from the line of Chad Beynon from Macquarie. -------------------------------------------------------------------------------- Chad C. Beynon, Macquarie Research - Head of US Consumer, SVP and Senior Analyst [10] -------------------------------------------------------------------------------- Firstly, on a normalized level of revenues to reach breakeven EBITDA, understanding that your properties have different cost structures and tax rates. Is there kind of a range of what you need to get to get these properties to breakeven once they're open? -------------------------------------------------------------------------------- Peter Hoetzinger, Century Casinos, Inc. - Vice Chairman, Co-CEO & President [11] -------------------------------------------------------------------------------- On a property-by-property basis, that level is about 35% of pre-COVID-19 revenues. -------------------------------------------------------------------------------- Chad C. Beynon, Macquarie Research - Head of US Consumer, SVP and Senior Analyst [12] -------------------------------------------------------------------------------- Okay. Perfect. And then just back on the liquidity situation. So can you just kind of help us get comfortable with the cushion that you have here? If it's $20 million of cage cash, you're at $50 million at the end of April. That just leaves you a couple of months. Did you -- or are you exploring other sources of liquidity to maybe give you a little bit more cushion? Or are you just comfortable with, I guess, the time line of openings and cash flow that you're projecting in the near term? -------------------------------------------------------------------------------- Peter Hoetzinger, Century Casinos, Inc. - Vice Chairman, Co-CEO & President [13] -------------------------------------------------------------------------------- We -- yes, we have plans in the upper drawer, so to say. We have proposals, term sheets on the table for additional credit lines. We are also in ongoing discussions with VICI about other things that they can do to help us other than the CapEx requirement that they raised. And what we are -- of course, also have seen that the capital markets are open, should we want to do anything. And we also -- as you know, we also own 100% free and clear many of our properties in Colorado, for example, also in Canada. So we could, if we wanted to do something with that real estate as well. -------------------------------------------------------------------------------- Operator [14] -------------------------------------------------------------------------------- And our next question comes from the line of Brad Boyer from Stifel. -------------------------------------------------------------------------------- Brad J. Boyer, Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst [15] -------------------------------------------------------------------------------- First one is just around the monthly cash outflow number of $8 million. Could you tell us how much of that is just pure OpEx relative to everything else? -------------------------------------------------------------------------------- Peter Hoetzinger, Century Casinos, Inc. - Vice Chairman, Co-CEO & President [16] -------------------------------------------------------------------------------- Do you have that, Peggy? -------------------------------------------------------------------------------- Margaret Stapleton, Century Casinos, Inc. - CFO & Corporate Secretary [17] -------------------------------------------------------------------------------- Brad, it's a little bit difficult to just come up with pure OpEx in this situation. We're dealing with paying -- the cash flow is mostly related to loan repayments and VICI and insurance payments, things like that. -------------------------------------------------------------------------------- Peter Hoetzinger, Century Casinos, Inc. - Vice Chairman, Co-CEO & President [18] -------------------------------------------------------------------------------- Yes. So look, Brad, VICI and the interest and principal on the Macquarie loan, those 2 together is about $3.5 million already (inaudible) -------------------------------------------------------------------------------- Brad J. Boyer, Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst [19] -------------------------------------------------------------------------------- Okay. That's helpful. And then just second question is around CapEx. I assume you guys are embedding some incremental rollback there in light of what we're experiencing. How are you thinking about kind of CapEx for the remainder of the year at this point? -------------------------------------------------------------------------------- Peter Hoetzinger, Century Casinos, Inc. - Vice Chairman, Co-CEO & President [20] -------------------------------------------------------------------------------- Just really the minimum. Erwin, yes? Would you like to comment? -------------------------------------------------------------------------------- Erwin Haitzmann, Century Casinos, Inc. - Chairman & Co-CEO [21] -------------------------------------------------------------------------------- Yes. It's lease related or -- as necessary. -------------------------------------------------------------------------------- Peter Hoetzinger, Century Casinos, Inc. - Vice Chairman, Co-CEO & President [22] -------------------------------------------------------------------------------- We've redone -- our casinos in the -- in Canada are in great shape. As you know, just in the fourth quarter, we've opened an extension at Century Downs. So yes, they have -- we've -- and we have -- so we've got it back to a minimum, and we don't have any things that are really necessary right now. -------------------------------------------------------------------------------- Brad J. Boyer, Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst [23] -------------------------------------------------------------------------------- Okay. And then I realize it's a very, very short window, but could you provide any additional color around what you've seen in Poland thus far? And I think more importantly, have you seen any bifurcation in customer behavior with regard to slots relative to tables? Any color there would be helpful. -------------------------------------------------------------------------------- Erwin Haitzmann, Century Casinos, Inc. - Chairman & Co-CEO [24] -------------------------------------------------------------------------------- Absolutely. Peter it's fine, if I respond to that question? -------------------------------------------------------------------------------- Peter Hoetzinger, Century Casinos, Inc. - Vice Chairman, Co-CEO & President [25] -------------------------------------------------------------------------------- Please. -------------------------------------------------------------------------------- Erwin Haitzmann, Century Casinos, Inc. - Chairman & Co-CEO [26] -------------------------------------------------------------------------------- Yes. Now, first of all, we opened in the night from Sunday to Monday because we -- at midnight from Sunday to Monday, we were allowed to open. And 3 minutes after opening across the 8 casinos in Poland, we had already 100 guest in there, although that's quite an unusual time of the day, I would say. And for the results for the first 2 days, obviously, this is very early on, have been produced against the backdrop of us not being able to market at all. We have strong marketing restrictions in Poland. So it's really word-of-mouth that was going there. And -- but I think I could say everything looks very good. We are not far away from after 2 days already. We're not far away from a cash flow breakeven. And from the customers -- so what is -- how do the customers feel? How do the employees feel? I think the employees are all used to wearing the mask and wearing the gloves as they have to or mask or shields that they can wear. And the customers only have to wear the masks. But again, everybody is used to that by now because it's not obviously not only the casinos where you have to wear the masks. And with regard to the tables and slots, there is not too much of a shift because as you may remember, due to the Polish gaming rule, we can only have a maximum of 70, 7-0, slot machines per casino license. So the slots that we have, have been very well placed. They were already at 60% play of pre-COVID times in the first 2 nights. And the tables are ramping up a little slower because of the seat reduction that we're having. But overall, the assessment of us and of our management there is very positive. They're really excited about the business that we could see in the first phase. -------------------------------------------------------------------------------- Operator [27] -------------------------------------------------------------------------------- Our next question comes from John DeCree from Union Gaming. -------------------------------------------------------------------------------- John G. DeCree, Union Gaming Securities, LLC, Research Division - Director and Head of North America Equity & High Yield Research [28] -------------------------------------------------------------------------------- Two questions. One, I wanted to ask a little bit more about the $8 million cash need per month and probably getting a little granular, but with Poland reopened and some racing in Canada and West Virginia, should we think about the actual cash net outflow going forward from here being something less than $8 million now that there's a little bit of revenue back in the system? -------------------------------------------------------------------------------- Peter Hoetzinger, Century Casinos, Inc. - Vice Chairman, Co-CEO & President [29] -------------------------------------------------------------------------------- We should. Can you quantify that, Peggy? Probably too early, right? -------------------------------------------------------------------------------- John G. DeCree, Union Gaming Securities, LLC, Research Division - Director and Head of North America Equity & High Yield Research [30] -------------------------------------------------------------------------------- The $8 million, if everything was still closed? -------------------------------------------------------------------------------- Erwin Haitzmann, Century Casinos, Inc. - Chairman & Co-CEO [31] -------------------------------------------------------------------------------- Yes. Yes. Yes. -------------------------------------------------------------------------------- John G. DeCree, Union Gaming Securities, LLC, Research Division - Director and Head of North America Equity & High Yield Research [32] -------------------------------------------------------------------------------- Okay. Okay. That's helpful. And then... -------------------------------------------------------------------------------- Erwin Haitzmann, Century Casinos, Inc. - Chairman & Co-CEO [33] -------------------------------------------------------------------------------- (inaudible) -------------------------------------------------------------------------------- John G. DeCree, Union Gaming Securities, LLC, Research Division - Director and Head of North America Equity & High Yield Research [34] -------------------------------------------------------------------------------- Go ahead, Erwin, I'm sorry. -------------------------------------------------------------------------------- Erwin Haitzmann, Century Casinos, Inc. - Chairman & Co-CEO [35] -------------------------------------------------------------------------------- No, I just want to say, basically, Poland, we think, is [in very essence] carrying itself already probably in a week from now. And the next months kicking in, we'll see how they will come along. -------------------------------------------------------------------------------- John G. DeCree, Union Gaming Securities, LLC, Research Division - Director and Head of North America Equity & High Yield Research [36] -------------------------------------------------------------------------------- Good. Very good. Okay. In Canada, with the volatility and kind of sharp drop in oil prices, has that or do you expect that to have any impact on your business when it reopens? And then any comments you could provide on the kind of continued ramp of your new property in Edmonton would be helpful. -------------------------------------------------------------------------------- Peter Hoetzinger, Century Casinos, Inc. - Vice Chairman, Co-CEO & President [37] -------------------------------------------------------------------------------- In Alberta, we also have a lot of business from retired people. So they are not impacted by the oil situation. And also, don't forget the recent decision on the expansion of the Trans Mountain oil pipeline that are up there, everybody is enthusiastic about it, and it should lead to a very strong recovery. On top of that, now after the recent reduction in the provinces' corporate tax rate, Alberta has the lowest corporate tax rate of all provinces in Canada, 8%. So they are doing lots of things to stimulate the economy, and we actually see pretty encouraging signs. In terms of ramping up of Century Mile, back to Erwin, please? -------------------------------------------------------------------------------- Erwin Haitzmann, Century Casinos, Inc. - Chairman & Co-CEO [38] -------------------------------------------------------------------------------- It's just a little too early to say. It would be speculation. We have to open and see how it's going. The property's in perfect shape, everything's fine, all the ancillaries there are -- once we can start the racing, again, we're all ready, but it's -- I will not speculate at this point in time about how quickly we can ramp. -------------------------------------------------------------------------------- John G. DeCree, Union Gaming Securities, LLC, Research Division - Director and Head of North America Equity & High Yield Research [39] -------------------------------------------------------------------------------- For January and February at Century Mile, have you seen kind of continued growth or margin improvement over the fourth quarter before COVID at Century Mile? -------------------------------------------------------------------------------- Erwin Haitzmann, Century Casinos, Inc. - Chairman & Co-CEO [40] -------------------------------------------------------------------------------- We have, but it's been pretty cold there. So those 2 months certainly have been weather -- impacted by weather. And again, it's not really representative of what we see over the whole year. -------------------------------------------------------------------------------- Operator [41] -------------------------------------------------------------------------------- The next question comes from the line of Hannah Wilmarth from Fantini Research. -------------------------------------------------------------------------------- Hannah Wilmarth;Fantini Research:Writer, [42] -------------------------------------------------------------------------------- I was just wondering if you guys see any opportunities to make acquisitions coming out of the current COVID environment? -------------------------------------------------------------------------------- Peter Hoetzinger, Century Casinos, Inc. - Vice Chairman, Co-CEO & President [43] -------------------------------------------------------------------------------- We see it a little bit, but it's surely not our main focus right now. Yes. It's too early. And whilst we are -- I think -- things are being brought to us. So we are aware of what's happening out there. We see some opportunities. But right now, it's definitely not our main focus. -------------------------------------------------------------------------------- Hannah Wilmarth;Fantini Research:Writer, [44] -------------------------------------------------------------------------------- Okay. And just a follow-up on that is, is there any sort of environment when you'll feel comfortable starting to look more into those opportunities? -------------------------------------------------------------------------------- Peter Hoetzinger, Century Casinos, Inc. - Vice Chairman, Co-CEO & President [45] -------------------------------------------------------------------------------- I think after the summer, we -- if we are in good shape as we believe we will be with the reopenings occurring throughout the month of June, that will be a very busy time for our M&A. -------------------------------------------------------------------------------- Operator [46] -------------------------------------------------------------------------------- This comes from the line of Alex Silverman from AWM Investments. -------------------------------------------------------------------------------- Alex Silverman, AWM Investment Company Inc. [47] -------------------------------------------------------------------------------- You are -- are there any states or provinces that are talking about temporarily reducing gaming taxes in order to help the casinos? -------------------------------------------------------------------------------- Peter Hoetzinger, Century Casinos, Inc. - Vice Chairman, Co-CEO & President [48] -------------------------------------------------------------------------------- Erwin, do you have the latest on that? -------------------------------------------------------------------------------- Erwin Haitzmann, Century Casinos, Inc. - Chairman & Co-CEO [49] -------------------------------------------------------------------------------- Yes. There is discussion about it in Colorado. And conversely, there is also in Alberta and shortly -- in Alberta there is also a discussion about that. -------------------------------------------------------------------------------- Alex Silverman, AWM Investment Company Inc. [50] -------------------------------------------------------------------------------- I'm sorry, Colorado and where? -------------------------------------------------------------------------------- Erwin Haitzmann, Century Casinos, Inc. - Chairman & Co-CEO [51] -------------------------------------------------------------------------------- Alberta, Canada. -------------------------------------------------------------------------------- Alex Silverman, AWM Investment Company Inc. [52] -------------------------------------------------------------------------------- Alberta. Got it. Second question, you said getting casinos back to 35% of pre-COVID revenue on a property level would be breakeven. I assume that's property level breakeven? And then on top of that, there's the corporate expense? -------------------------------------------------------------------------------- Peter Hoetzinger, Century Casinos, Inc. - Vice Chairman, Co-CEO & President [53] -------------------------------------------------------------------------------- That's correct. Yes. And I said 35%. -------------------------------------------------------------------------------- Alex Silverman, AWM Investment Company Inc. [54] -------------------------------------------------------------------------------- 35%? -------------------------------------------------------------------------------- Peter Hoetzinger, Century Casinos, Inc. - Vice Chairman, Co-CEO & President [55] -------------------------------------------------------------------------------- Yes. And that's on the property level. -------------------------------------------------------------------------------- Alex Silverman, AWM Investment Company Inc. [56] -------------------------------------------------------------------------------- Got it. And then last question, I know that different states are discussing requirements in terms of social distancing and such. At your peak, whatever, Friday or Saturday night, what kind of utilization do you typically have for your slots at your different facilities? -------------------------------------------------------------------------------- Peter Hoetzinger, Century Casinos, Inc. - Vice Chairman, Co-CEO & President [57] -------------------------------------------------------------------------------- Erwin? -------------------------------------------------------------------------------- Erwin Haitzmann, Century Casinos, Inc. - Chairman & Co-CEO [58] -------------------------------------------------------------------------------- I would say between -- depending on various circumstances, between 45% and 60%. As to that effect -- yes, go ahead. -------------------------------------------------------------------------------- Alex Silverman, AWM Investment Company Inc. [59] -------------------------------------------------------------------------------- No, please, go ahead. No, please. -------------------------------------------------------------------------------- Erwin Haitzmann, Century Casinos, Inc. - Chairman & Co-CEO [60] -------------------------------------------------------------------------------- I wanted to say that has to do with our policy that we always try to make sure that we have enough product available on the floor. So that our customers always can choose and are not forced to play machine just because it's free although it's not there, the one they really would like to play. -------------------------------------------------------------------------------- Alex Silverman, AWM Investment Company Inc. [61] -------------------------------------------------------------------------------- So if a peak level is 45% to 60%, requiring that you only have 50% of your machines operating in order to separate people shouldn't be that big of a stretch for you guys? -------------------------------------------------------------------------------- Erwin Haitzmann, Century Casinos, Inc. - Chairman & Co-CEO [62] -------------------------------------------------------------------------------- That's very correct. Exactly. That's how we see it. That's right. -------------------------------------------------------------------------------- Operator [63] -------------------------------------------------------------------------------- At this time, there are no other -- there are no further questions. I will now turn it back over to our host. -------------------------------------------------------------------------------- Peter Hoetzinger, Century Casinos, Inc. - Vice Chairman, Co-CEO & President [64] -------------------------------------------------------------------------------- Thank you, and 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. -------------------------------------------------------------------------------- Operator [65] -------------------------------------------------------------------------------- This concludes today's conference call. Thank you for attending.