Welcome to Century Casinos Q2 2012 earnings conference call. This call will be recorded. [Operator Instructions] I would now like to introduce our host for today’s call, Mr. Peter Hoetzinger. Go ahead, please.

Thank you, Ty. I’m happy to have all of you join us for this call, following the release of our second quarter 2012 earnings a few hours ago. With me on the call today are Erwin Haitzmann, Co-CEO and Chairman of the company, and Margaret Stapleton, Executive Vice President of Finance. Before we begin, I need to remind you that in our remarks today 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 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 we encourage you to review these filings. In addition, throughout our call we may 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 the 10-K and 10-Q filings, all of which are available in the investor section of our website at cnty.com. To start with, I am happy to report that this quarter is the 10th consecutive quarter with year-over-year net earnings growth for Century Casinos. That’s quite an achievement, and Erwin and I would like to thank all our cooperators for their support and enthusiasm. We managed to increase adjusted EBITDA by 5% year-over-year, earnings from operations by 74% and net earnings by 78% year-over-year. Earnings per share jumped from $0.03 to $0.05 for the quarter, and without an extra payment and the deferred financing costs associated with the new credit facility, EPS even [ph] has been $0.06. These are very solid results, and came despite the Waldo Canyon wildfires, which had a significant negative impact on our operations in Cripple Creek, Colorado. During the more than 15 days it took to contain the wildfires, more than 35,000 people in Colorado Springs, the metropolitan population which the casino primarily serves, had to be evacuated, and the main highway to the casino was closed for a total of eight days in what is the casino’s high season. That is also [ph] the main reason why total revenue declined slightly by 1%. Our balance sheet, which we believe is one of the healthiest in the U.S. casino industry, shows $19.7 million in cash and cash equivalents, and only $3.6 million in third-party debt, resulting in a net cash position of $16.1 million or approximately $0.67 per share. In May, we entered into a $27.5 million U.S. credit agreement with the Bank of Montreal; 3.6 [ph] million from that credit agreement were used to pay the mortgage debt related to the Edmonton property and the balance of 23.9 million can be used to pursue the development or acquisition of gaming [ph] opportunities. The interest rate on that first drawdown of 3.6 million was 3.75 all in. The BMO credit agreement has a term of 5 years, and it’s guaranteed by the company. Excluding the Polish operations, which we don’t consolidate, 47% of our revenue has been generated in Canada, and the remaining 53% by Colorado and the cruise ship casinos. On the EBITDA level, 51% came from Canada and the balance of 49% of total EBITDA from Colorado and the cruise ship casinos. I will now highlight the quarter results of each individual property in local currency. Our largest casino, with 720 slot machines included for our gaming tables, Century Casino and Hotel in Edmonton, Canada, showed only modest revenue growth because of lower hold percentages on both slots and tables. Slot coin-in actually increased 4%. The coin-in and [inaudible] increased by 30%. Food and beverage revenue was up 4%, and hotel revenue was up 12%. These are very good indicators about the continued strength of this operation, even though business has been interrupted by heavy road construction immediately in front of our casino, as well as by the installation of a new carpet on the entire gaming floor. 52 slot machine conversions have been done during the quarter, and even more importantly, we managed to get a commitment from the Alberta Gaming Commission to install an additional 30 slots in our property in the current third quarter, bringing our total slot count to 750, just in time for the strong fall and winter season. In Calgary, we only managed to grow revenues by 2%, while [ph] both EBITDA and net earnings declined on a year-over-year comparison. On the positive side, we can report a 32% increase in table drop, which is really significant. Both slot and table hold was lower than last year. Business was also interrupted by renovation of parts of the gaming floor, which will be completed next month. The renovations include the removal of washrooms, modifications of the cashiers’ cages and the combination of house table changing to one area. We’ve also decided to close the cloak room and utilize that space for functions and tournaments. In Calgary, we continue to market and grow the Player’s Club Loyalty Program and market the showroom with live entertainment, events and concerts and various catering functions, to drive traffic to the casino. The new gaming floor layout has also been designed with the goal in mind to better and more efficiently capture after-show traffic in the casino. In Colorado, our Century Casino and Hotel in Central City had a good quarter. EBITDA was up 4% and net earnings more than doubled. We managed to lower the cost of goods sold by 10%, and also depreciation and interest expense were lower as well. In the second half of this year, we plan to install a Starbucks Coffee stand [ph] and upgrade the hotel rooms in the property. The casino started well into the third quarter, mainly focusing on weekend cash and car promotions, and includes VIP player development. In Cripple Creek, Colorado, net revenues decreased slightly by 2%, while EBITDA increased by 7% and net earnings by 12%. Slot revenue was down slightly, offset almost entirely by increases in table revenue and hotel and S&P revenue. As mentioned earlier, the Waldo Canyon wildfires severely affected business at the end of the quarter. The casino’s current marketing and promotions strategy focuses strongly on casino weekend promotions, and customer volumes are higher [ph], as well as on food and hotel offerings. The 13 casinos we operate and manage on cruise ships and in Aruba saw revenues increase by 2%. EBITDA declined due to a set of costs and expenses for 2 ship board casinos. This small segment of our operations also had a good start into the third quarter, with higher revenue increases and better operating margins than in Q2. Our equity investment in Casinos Poland, of which we own 1/3, performed okay in the quarter. EBITDA was just down about 1%. And with some of the new casinos and relocated casinos still in the start-up phase, this has not come unexpected at all. Overall, the Polish casino market remains very robust, and we continue to maintain a big market share lead over our competitors. About 1 year ago, our co-shareholders in Casinos Poland informed us of their intent to sell their shares, that’s 2/3s of the total shares, to the state-owned Polish National Lottery Firm. They requested our consent to their respective condition of sale agreements, which under the shareholders’ agreement was required as a condition to affect the share transfers, but with no consensus about the future strategy and operational matters regarding Casinos Poland was received from the lottery group, we were not in a position to provide our consent. And as a result, we have been informed by our co-shareholders that that proposed sale transaction has been terminated. Turning to the corporate section, I’m very pleased with the new Bank of Montreal credit agreement that we could finalize during the quarter. The confidential CMO in Century Casinos and the attractive terms we finally agreed to. Remember, the interest rate in the sale strong [ph] less than 4%, a great endorsement of our prudent and successful system [ph] and operations management. Corporate expenses decreased again, driven by cost savings in payroll, stock compensation and professional services, partially offset by an increase in foreign currency translations. Total cash, CapEx mid-quarter was about 1 million, or approximately 5.5% of revenues, and mainly on projects such as the gaming floor renovations and new [inaudible] equipment in Calgary, gaming equipment for Cripple Creek and the new ship casinos, as well as hotel room upgrades in Central City. [Indiscernible] earnings per share as of June 30 was $4.78. With our internationally-experienced management team, we remain location-flexible to undertake projects in any well-regulated casino market worldwide. We continuously evaluate multiple opportunities on a global basis, and are currently looking at these in North America, Europe and Southeast Asia. This includes both [indiscernible] developments, as well as possible acquisitions of existing properties. That concludes our summary of the second quarter 2012, and I will now open the floor to questions. Operator, go ahead, please.

[Operator instructions] And our first question comes from Todd Eilers with Roth Capital Partners.

Just a few questions. Let’s see, I wanted to start off on Calgary. You know, EBITDA came in a bit below our expectations there. You mentioned two items that I think had a negative impact lower than expected: hold and also the casino floor renovation. Can you give us a sense for how much each of those contributed to the, I guess, the decline in EBITDA? It looked like you guys were kind of tracking at about 250,000, 300,000 kind of in EBITDA the last couple of quarters. I just wanted to kind of get a sense for how much of an impact each of those had on that number.

About 1/2 of it was lower than expected hold, which is primarily due to a game called EZ Baccarat. That game is our most important night game and we hold significant market share there, but it is very volatile. The other 1/2 was a composition of -- a combination of many small things, some expenses we had which couldn’t be capitalized.

And I guess the follow-up question is how do we, I guess, improve margins going forward? Is the strategy still to try to grow the top line or is the strategy now to try to drive costs out of the model? What’s the latest strategy at this point?

I think cost-wise we have reached a point where we should not go lower otherwise there is a danger to impact business negatively. The strategy has been to grow the top line with a new layout, which people really like and we also think that -- is very successful now. We think we have an excellent chance to further grow particularly our table games and -- but also our slot machines. And again, the numbers are a little bit tainted because of the swings we had in the table games but over time, we are confident that this will level out and we can [indiscernible] that we need [ph].

And then I wanted to ask about the Cripple Creek, obviously, the wildfires had negative impact on the quarter. I think you guys mentioned about 200,000 impact to the top line. Can you give us a sense for how much of the - how much EBITDA impact there was likely for the quarter I guess? And then also, just kind of how is that property performing in July?

We’d estimate that the EBITDA impacted around 70,000 and what we can say about July is that it all looks good, frankly.

And then in Edmonton, you mentioned some road construction there. Did that -- did that have a negative impact on the current quarter or is that an expectation for Q3? And if so, if you could maybe give us as sense for what sort of impact that is having through the month of July, if any at all?

The impact we at this time feel [ph] is for the second quarter and there will be a little bit of impact we feel also from the third quarter. The road, after it’s all said and done, finally is done, will be very beautiful, this front road development is beautiful with the only exception that it impacts us now. But we hope that after the third quarter, it won’t be - it will only be positive.

And let’s see, you mentioned with respect to the Poland operations that the proposed transaction to buy a third of that business was terminated. So I guess what happens now, if anything? A little color there would be helpful.

I'm actually in Warsaw, Poland right now, Todd, and – going through a series of meetings with our [ph]participants to get some clarity on the harmonized way [ph] forward. We probably need another few weeks to be able to say anything to that. At the moment, everything remains as is for now. [Indiscernible]

And then last question, on the tax rates, it looks like the effective tax rate has been tracking a little bit lower than what we were modeling in. What’s the expectation, I guess, for the second half of this year, what should we be modeling in for the effective tax rate?

Peggy?

I think the effective tax rates will - you can probably model them in. We had one tax true-up this quarter that impacted them.

Was that a benefit or…

It was -- it actually got written off to the evaluation allowance. It was a deferred tax asset, however, since we’re in an evaluation allowance situation, it - we took a hit on the P&L for it.

[Operator Instructions] Our next question comes from Russ Silvestri with SKIRITAI Capital. Russell Silvestri: Peter, I’ve been in the stock now I think for almost 2 years and you guys are running the thing at a $4.35 tangible book value, your stock’s $2.60, it’s a 60% discount to the book. I can’t understand why you don’t -- this is -- I’ll get to the question here in a second. I just don’t understand why you don’t invest in your own stock at this point in time as opposed to these other things that aren’t getting nearly the return that you’re getting here. You’re buying your book value at a 40% discount. None of your other investments are yielding 40% and I’m just curious why you’re hesitant and you told us back in the first quarter that you would be doing something and nothing’s been done, so whether it was an acquisition or dividend or you know, we’ve been waiting in the stock for 2 years at the same place and you guys are getting paid healthfully and me and the shareholders are sitting here, in the same exact place we was last year and it’s pretty disappointing. And I’m just wondering why you’re allowing that to happen?

Yes, thanks, Russ. We - we are working on a couple of exciting things. Sometimes they take a little bit longer than planned. And we are in this to build a company that’s on a solid foundation, on a great basis and we’ve done so over time, the company has never been in better shape balance sheet wise and we are -- we’re building a good company in the -- call it mid and long term. And this is based on by developing and investing into growth projects and into projects and properties that over the long run, in the long term can deliver a good return on investment on us. And that’s what we are - that’s what we are doing. We have been in similar situations where the stock has done a lot before and ultimately, we’ve always come through also with the stock price. Look at our history and you will see that. The things that we are doing right now, we are very convinced about will pay off in the long run and we’re in this for the long run. Russell Silvestri: But I mean, Calgary is an example. I mean, you had the -- it’s been more than 1 year now that you had the property and you know, sales are down year over year. And you know, I think last year at this time, you know, you had, I think it was - I think the coffee shop was closed and you had I don’t know what percentage of the rooms were unoccupiable and you know, you took over from an owner that had invested no money and you know, you’ve invested money and the sales are still down. So why is that?

We also have seen that with other properties, things don’t immediately catch on, they take a while. It’s competitive markets we are in and also Edmonton didn’t produce fireworks from day one. It also took some time to get to the market share. And once we - once we are there, we are very good at keeping it and defending our position [ph]. Russell Silvestri: How do you assess your -- I mean, I look at the monthly statistics out of Colorado and you know, it looks like the overall market is growing. I mean, how do you assess your market share gains or losses in Colorado?

How do we assess those? Russell Silvestri: Yeah, do you - how - do you think you’re gaining share?

We are gaining share and - but again, it’s a very competitive market. We have months into [ph] orders where we’re gaining share and then sometimes you know, it’s two steps forward and one step back. That happens. It’s just naturally happens to our competitors in the same way. With the stock price development, Russ, look at the - look at the broader casino stock indices. Russell Silvestri: I look at 1 of them -- you’ve got the best analyst on Wall Street right now, Todd Eilers is following you and he follows -- multi-media games, he’s been following it for a long time, he got it at 4 and the stock is 15, 16, he got right on values [ph]. You’ve got the best analyst on the Street following you right now and you know, he can’t even get the numbers right and that’s just - it’s disappointing.

He gets the numbers right. [indiscernible] his opinion, I mean, then he’s talking the same thing I’m talking because one of the best analysts also believes it’s a good stock and… Russell Silvestri: I’d like to keep it to question and answers. I guess those are my primary questions. I congratulate you on the new debt structure, obviously that’s saving some earnings there with the lower cost structure, so I log that good move.

[Operator Instructions] Our next question comes from Steve Cospo [ph] with RJN Associates.

I don’t want to belabor his point about the stock buyback, but I kind of feel the same way at the level of that. Not to not invest in other projects but just because the stock is so cheap. I understand you’ve got liquidity constraints, you probably couldn’t buy back a lot because of that problem, but it is awfully cheap and it would, it would look good from a shareholder’s standpoint if we saw more of that. So -- my question is on the -- on the new projects, are you primarily going to want to look at markets where the licenses are limited because that seems to be where you can obviously get the best return. Can you talk a little bit about that?

That’s absolutely our focus, yes, and that’s at the same time also, the reason sometimes it’s a little bit harder and more difficult to get into such markets, but once you’re in, it really pays off. With respect to liquidity and stock buyback, I would also like to let you know that other than the credit facility, we have net cash, as you all know. But I’d like to point out that approximately 1/2 of that net cash is used by our day-to-day operations and it’s necessary to keep in the company in the casinos so we cannot use it really for planning acquisitions and stock buybacks. So we need to consider that.

And also on the -- I was speaking more on the liquidity of the stock. It doesn’t trade a lot of shares and of course, you’re limited to how much of the percentage you can buy back, so it’s probably hard to make a big dent because of that issue.

And we have no more question in queue at this time.

Great. Thank you for your interest in Century Casinos and your participation in the call. For a recording the call, please visit the financial results section of our website at cnty.com. Thank you.

This does conclude today’s teleconference. You may disconnect at any time.