Century Casinos, Inc. Announces Second Quarter 2011 Results

COLORADO SPRINGS, Colo., Aug. 12, 2011 /PRNewswire/ -- Century Casinos, Inc. (NASDAQ Capital Market® and Vienna Stock Exchange: CNTY) today announced its financial results for the three and six months ended June 30, 2011.

Second Quarter 2011 Highlights

  • Net operating revenue was $18.0 million, a 21% increase compared to the three months ended June 30, 2010.
  • Adjusted EBITDA* was $2.8 million, a 38% increase from the three months ended June 30, 2010.
  • Net earnings per share was $0.03 compared to a net loss of $0.01 for the three months ended June 30, 2010.



For the Three Months

For the Six Months

Amounts in thousands, except share and per share 
data


Ended June 30, 2011


Ended June 30, 2011


Consolidated Results:


2011


2010

%
Change


2011


2010

%
Change

Net operating revenue

$18,002

$14,940

21%

$35,117

$29,077

21%

Earnings from operations

977

344

184%

1,733

694

150%

Net earnings (loss)

644

(259)

349%

1,008

(129)

881%








Adjusted EBITDA*

$2,760

$2,005

38%

$5,284

$3,989

33%








Earnings per share:







Basic

$0.03

($0.01)

400%

$0.04

($0.01)

500%

Diluted

$0.03

($0.01)

400%

$0.04

($0.01)

500%

Weighted-average common shares:







Basic

23,717,165

23,815,936


23,714,215

23,815,936


Dilutive

24,026,095

23,815,936


24,015,947

23,815,936





"We are very pleased with our performance for the second quarter, especially when considering that each of our operations posted increases in revenue as well as Adjusted EBITDA and overall earnings from operations almost tripled," said Erwin Haitzmann and Peter Hoetzinger, Co-Chief Executive Officers of Century Casinos. "Initial results for the first half of the third quarter indicate further improvement," they continued.

Second Quarter and Six Month 2011 Results

Net operating revenue increased by $3.1 million or 21% and $6.0 million or 21% for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010, respectively, due to increased revenue from all properties. The increase in net operating revenue at our Canadian properties is due in part to higher customer volumes and an increase in the average exchange rate between the U.S. dollar and Canadian dollar of 5.8% and 5.6% for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010, respectively.

The increase in net operating revenue at our Central City property is due in part to increased table games revenue generated from craps and player banked poker, increased customer volumes, increased revenue from slot machines that were moved from the lower level to the main level and increased video poker play. The increase in net operating revenue at our Cripple Creek property is due in part to increased slot revenue from new slot machines, additional table games revenue generated after moving the table games pit from the back of the casino to the front, improved customer service and new marketing strategies aimed at improving the gaming floor atmosphere and differentiating our casino from competitors.

The increase in net operating revenue from our ship-based casinos and other is primarily due to additional ship-based casinos placed into operation during the three and six months ended June 30, 2011 as compared to the three and six months ended June 30, 2010.

Total operating costs and expenses increased by $2.7 million or 18% and $5.1 million or 18% for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010, respectively, due to increased operating costs at all of our properties. Total operating costs and expenses at our property in Edmonton increased primarily due to the increase in the average exchange rate between the U.S. dollar and Canadian dollar of 5.8% and 5.6% for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010, respectively.

Total operating costs and expenses at our property in Calgary increased due to the addition of a player's club point redemption program and additional staffing costs incurred in order to provide improved customer service for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010. The increase is also attributable to an increase in the average exchange rate between the U.S. dollar and Canadian dollar of 5.8% and 5.6% for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010, respectively.

Total operating costs and expenses at our Colorado properties increased due to increased marketing costs from more aggressive marketing campaigns, increased gaming taxes as a result of higher gaming revenue and increased staffing costs in order to provide improved customer service for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010.

Total operating costs and expenses from our ship-based casinos increased for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010 as a result of increased concession and annual fees paid to cruise ship operators for the ability to operate ship-based casinos.

Net earnings increased by $0.9 million and $1.1 million for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010, respectively. The increase is due to increased earnings from operations at our Edmonton, Central City and Cripple Creek properties offset by losses from operations at our Calgary property. In addition, the increase in the average exchange rate between the U.S. dollar and Canadian dollar of 5.8% and 5.6% for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010, respectively, contributed to the increase in net earnings.

Property Results
(in thousands)



Net Operating
Revenue


Adjusted EBITDA*

Net Operating
Revenue


Adjusted EBITDA*


For the Three
Months

For the Three
Months


For the Six Months


For the Six Months

Ended June 30,

Ended June 30,

Ended June 30,

Ended June 30,


2011

2010

2011

2010

2011

2010

2011

2010

Century Casino &
Hotel, Edmonton

6,185

5,497

2,163

1,766

11,938

10,857

4,003

3,415

Century Casino,
Calgary

2,467

2,098

120

(26)

5,056

3,840

219

153

Century Casino &
Hotel, Central City

4,520

4,210

951

947

8,920

8,382

1,909

1,868

Century Casino &
Hotel, Cripple Creek

3,211

2,617

685

490

6,049

4,882

1,216

682

Cruise Ships and Other

1,619

518

314

79

3,154

1,116

546

236

Corporate

-

-

(1,473)

(1,251)

-

-

(2,609)

(2,365)

Consolidated

18,002

14,940

2,760

2,005

35,117

29,077

5,284

3,989




Balance Sheet and Liquidity

As of June 30, 2011, the Company had $19.8 million in cash and cash equivalents and $10.8 million in debt obligations on its balance sheet compared to $21.5 million in cash and cash equivalents and $13.5 million in debt obligations at December 31, 2010.  

Conference Call Information

Today the Company will post a copy of the Form 10-Q filed with the SEC for the second quarter of 2011 on its website at http://corporate.cnty.com/investor-relations/sec-filings/.

Century Casinos will host its second quarter 2011 earnings conference call today at 10:00 am MDT; 6:00 pm CET, respectively. U.S. domestic participants should dial 1-800-862-9098. For all other international participants please use +1-785-424-1051 to dial in. Participants may also listen to the call live or obtain a recording of the call on the Company's website at http://corporate.cnty.com/investor-relations/financial-results/.

*See discussion and reconciliation of Non-GAAP financial measures in Supplemental Information below.

CENTURY CASINOS, INC. AND SUBSIDIARIES
FINANCIAL INFORMATION – US GAAP BASIS



For the three months
ended June 30,

For the six months
ended June 30,

Amounts in thousands, except for share and per
 share information


2011


2010


2011


2010

Operating revenue:





 Gaming

$15,928

$13,239

$30,753

$25,821

 Hotel, bowling, food and beverage

3,141

2,756

6,384

5,521

 Other

1,004

770

1,939

1,349

           Gross revenue

20,073

16,765

39,076

32,691

Less: Promotional allowances

(2,071)

(1,825)

(3,959)

(3,614)

Net operating revenue

18,002

14,940

35,117

29,077

Operating costs and expenses:





 Gaming

7,341

5,854

14,272

11,287

 Hotel, bowling, food and beverage

2,553

2,228

5,064

4,338

 General and administrative

5,848

5,150

11,216

10,093

 Depreciation

1,665

1,524

3,306

3,013

Total operating costs and expenses

17,407

14,756

33,858

28,731

Earnings from equity investment

382

160

474

348

Earnings from operations

977

344

1,733

694

Non-operating income (expense):





 Interest income

5

14

7

22

 Interest expense

(197)

(281)

(443)

(572)

 Gains (losses) on foreign currency
transactions and other

114

(244)

189

(1)

Non-operating income (expense), net

(78)

(511)

(247)

(551)

Earnings (loss) before income taxes

899

(167)

1,486

143

Income tax provision

255

92

478

272

Net earnings (loss)

$644

($259)

$1,008

($129)






Earnings per share:



 Basic

$0.03

($0.01)

$0.04

($0.01)

 Diluted

$0.03

($0.01)

$0.04

($0.01)









CENTURY CASINOS, INC. AND SUBSIDIARIES
FINANCIAL INFORMATION – US GAAP BASIS


Century Casinos, Inc.
Condensed Consolidated Balance Sheets
(Amounts in thousands)




June 30,

December 31,

2011

2010

Assets



Current assets

$21,981

$23,467

Property and equipment, net

103,669

103,956

Other assets

9,908

9,303

Total assets

$135,558

$136,726




Liabilities and Shareholders' Equity



Current liabilities

$10,803

$14,057

Non-current liabilities

10,668

11,171

Shareholders' equity

114,087

111,498

Total liabilities and shareholders' equity

$135,558

$136,726




CENTURY CASINOS, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION


Century Casinos, Inc.
Adjusted EBITDA Margins ** by Property (Unaudited)



For the Three Months

For the Six Months

Ended June 30,

Ended June 30,


2011

2010

2011

2010

         Century Casino & Hotel, Edmonton

35%

32%

34%

31%

         Century Casino, Calgary

5%

(1%)

4%

4%

         Century Casino & Hotel, Central City

21%

22%

21%

22%

         Century Casino & Hotel, Cripple Creek

21%

19%

20%

14%

         Cruise Ships and Other

19%

15%

17%

21%

         Consolidated Adjusted EBITDA Margin

15%

13%

15%

14%









Century Casinos, Inc.
Reconciliation of Adjusted EBITDA * to Earnings (Loss) by Property (Unaudited)
For the Three and Six Months Ended June 30, 2011 and 2010


Amounts In thousands










Three Months Ended June 30, 2011




Edmonton



Calgary


Central
City


Cripple
Creek

Cruise
Ships &
Other



Corporate



Total


Earnings (loss)

1,182

(73)

177

268

160

(1,070)

644

Interest income

(5)

-

-

-

-

-

(5)

Interest expense                    

197

1

-

-

-

(1)

197

Income taxes

414

(2)

96

164

3

(420)

255

Depreciation

377

194

664

258

108

64

1,665

Non-cash stock based compensation

-

-

-

-

-

96

96

Foreign currency (gains)

(2)

-

-

-

-

(112)

(114)

Loss (gain) on disposition of fixed
assets

-

-

14

(5)

43

(30)

22

Adjusted EBITDA*

2,163

120

951

685

314

(1,473)

2,760












CENTURY CASINOS, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION


Century Casinos, Inc.
Reconciliation of Adjusted EBITDA * to Earnings (Loss) by Property (Unaudited)
For the Three and Six Months Ended June 30, 2011 and 2010



Three Months Ended June 30, 2010




Edmonton



Calgary


Central
City


Cripple
Creek

Cruise
Ships &
Other



Corporate



Total


Earnings (loss)

855

(62)

176

121

(3)

(1,346)

(259)

Interest income

(10)

(1)

-

-

-

(3)

(14)

Interest expense

288

-

-

-

-

(7)

281

Income taxes

280

(26)

97

74

-

(333)

92

Depreciation

353

67

674

294

82

54

1,524

Non-cash stock based compensation

-

-

-

-

-

145

145

Foreign currency (gains) losses         

(3)

(4)

-

-

-

238

231

Loss on disposition of fixed assets   

3

-

-

1

-

1

5

Adjusted EBITDA*

1,766

(26)

947

490

79

(1,251)

2,005














Six Months Ended June 30, 2011




Edmonton



Calgary


Central
City


Cripple
Creek

Cruise
Ships &
Other



Corporate



Total


Earnings (loss)

2,080

(236)

372

437

279

(1,924)

1,008

Interest income

(7)

-

-

-

-

-

(7)

Interest expense

440

1

-

-

-

2

443

Income taxes

756

32

203

268

5

(786)

478

Depreciation

741

383

1,319

516

219

128

3,306

Non-cash stock based compensation

-

-

-

-

-

192

192

Foreign currency (gains) losses         

(7)

39

-

-

-

(221)

(189)

Loss (gain) on disposition of fixed
assets

-

-

15

(5)

43

-

53

Adjusted EBITDA*

4,003

219

1,909

1,216

546

(2,609)

5,284












CENTURY CASINOS, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION


Century Casinos, Inc.
Reconciliation of Adjusted EBITDA * to Earnings (Loss) by Property (Unaudited)
For the Three and Six Months Ended June 30, 2011 and 2010



Six Months Ended June 30, 2010




Edmonton



Calgary


Central
City


Cripple
Creek

Cruise
Ships &
Other



Corporate



Total


Earnings (loss)

1,574

32

338

61

64

(2,198)

(129)

Interest income

(18)

(1)

-

-

-

(3)

(22)

Interest expense

577

-

-

-

-

(5)

572

Income taxes

561

13

183

37

2

(524)

272

Depreciation

696

108

1,346

583

170

110

3,013

Non-cash stock based compensation

-

-

-

-

-

288

288

Foreign currency losses

22

1

-

-

-

73

96

Impairments and other write-offs

-

-

-

-

-

(108)

(108)

Loss on disposition of fixed assets     

3

-

1

1

-

2

7

Adjusted EBITDA*

3,415

153

1,868

682

236

(2,365)

3,989












*  The Company defines Adjusted EBITDA as earnings (loss) before interest, income taxes, depreciation, amortization, pre-opening expenses, non-cash stock based compensation charges, asset impairment costs, gains (losses) on disposition of fixed assets, discontinued operations, realized foreign currency gains (losses) and certain other one-time items. Intercompany transactions consisting primarily of management and royalty fees and interest, along with their related tax effects, are excluded from the presentation of net earnings and Adjusted EBITDA reported for each property. Not all of the aforementioned items occur in each reporting period, but have been included in the definition based on historical activity. These adjustments have no effect on the consolidated results. Adjusted EBITDA is not considered a measure of performance recognized under accounting principles generally accepted in the United States of America. Management believes that Adjusted EBITDA is a valuable measure of the relative performance of its properties and the Company. The gaming industry commonly uses Adjusted EBITDA as a method of arriving at the economic value of a casino operation. Management uses Adjusted EBITDA to compare the relative operating performance of separate operating units by eliminating the above mentioned items associated with the varying levels of capital expenditures for infrastructure required to generate revenue, and the often high cost of acquiring existing operations. EBITDA (Earnings before interest, taxes, depreciation and amortization) is used by the Company's lending institution to gauge operating performance. The Company's computation of Adjusted EBITDA may be different from, and therefore may not be comparable to, similar measures used by other companies. Please see the reconciliation of Adjusted EBITDA to earnings (loss) from continuing operations above.

**  The Company defines Adjusted EBITDA margin as Adjusted EBITDA divided by net operating revenue. Management uses this margin as one of several measures to evaluate the efficiency of the Company's casino operations.

About Century Casinos, Inc.:

Century Casinos, Inc. is an international casino entertainment company that owns and operates Century Casino & Hotels in Cripple Creek and Central City, Colorado, and in Edmonton, Alberta, Canada and the Century Casino in Calgary, Alberta, Canada. The Company also operates casinos aboard twelve luxury cruise vessels (Regatta, Insignia, Nautica, Marina, Mein Schiff 1, Mein Schiff 2, Wind Surf, Wind Star, Wind Spirit, Seven Seas Voyager, Seven Seas Mariner and Seven Seas Navigator) and signed a contract for an additional casino on board Oceania Cruises' Riviera that is expected to start operations in 2012. Through its Austrian subsidiary, Century Casinos Europe GmbH, the Company holds a 33.3% ownership interest in Casinos Poland Ltd., the owner and operator of seven full casinos in Poland. The Company also manages the casino at the Radisson Aruba Resort, Casino & Spa in Aruba, Caribbean. Century Casinos, Inc. continues to pursue other international projects in various stages of development.

For more information about Century Casinos, visit our website at www.centurycasinos.com. Century Casinos' common stock trades on The NASDAQ Capital Market® and the Vienna Stock Exchange under the symbol CNTY.

This release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of the management of Century Casinos based on information currently available to management. Such forward-looking statements include, but are not limited to, future results of operations for the third quarter of 2011 and other periods, expected competition, the impact of new gaming laws and plans for our casinos. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, among others, the risks described in the sections entitled "Risk Factors" under Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2010. Century Casinos disclaims any obligation to revise or update any forward-looking statement that may be made from time to time by it or on its behalf.

SOURCE Century Casinos, Inc.



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