Century Casinos, Inc. Announces Second Quarter 2013 Results

COLORADO SPRINGS, Colo., Aug. 14, 2013 /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, 2013.

Second Quarter 2013 Highlights*

  • Net operating revenue was $28.3 million, a 59% increase compared to the three months ended June 30, 2012.
  • Adjusted EBITDA** was $3.9 million, a 34% increase from the three months ended June 30, 2012.
  • Net earnings were $3.7 million, a 219% increase from the three months ended June 30, 2012.
  • Earnings per share were $0.15, a 200% increase from the three months ended June 30, 2012.

The period over period increases relate primarily to the inclusion of operating results from Casinos Poland, Ltd. (CPL) in the second quarter of 2013. In April 2013, the Company completed the purchase of an additional 33.3% ownership interest in CPL. The Company now owns a 66.6% ownership interest in CPL and consolidates CPL financial information as a majority-owned subsidiary for which the Company has a controlling financial interest. Prior to the acquisition of this additional interest in CPL, the Company owned 33.3% of CPL and accounted for the CPL ownership interest as an equity investment.



For the Three Months

For the Six Months

Amounts in thousands, except per share data

Ended June 30,

Ended June 30,

Consolidated Results:

2013

2012

% Change

2013

2012

% Change

Net operating revenue

$28,348

$17,791

59%

$46,337

$35,360

31%

Earnings from operations

2,083

1,695

23%

4,129

3,267

26%

Net earnings

3,657

1,148

219%

5,319

2,281

133%








Adjusted EBITDA**

$3,863

$2,886

34%

$7,101

$5,645

26%








Earnings per share:







Basic

$0.15

$0.05

200%

$0.22

$0.10

120%

Diluted

$0.15

$0.05

200%

$0.22

$0.09

144%

Weighted average common shares: 







Basic 

24,128

23,890


24,128

23,884


Diluted

24,209

24,060


24,183

24,055


"We posted excellent results in the second quarter. The Casinos Poland acquisition is complete and has been immediately accretive to net operating revenue," said Erwin Haitzmann and Peter Hoetzinger, Co Chief Executive Officers of Century Casinos. "Even when excluding the one-time gain associated with the Casinos Poland acquisition, net earnings increased by 38% and earnings per share increased from 5 cents to 7 cents for the quarter. With a solid balance sheet, a book value per share of $4.98 and borrowing capacity under the credit agreement with the Bank of Montreal we are well positioned for further growth," they continued.

Three Months and Six Ended June 30, 2013 Results*

Net operating revenue increased by $10.5 million, or 59%, and increased by $10.9 million, or 31.0%, for the three and six months ended June 30, 2013 compared to the three and six months ended June 30, 2012. Following is a summary of the change in net operating revenue by property or category for the three and six months ended June 30, 2013 compared to the three and six months ended June 30, 2012:







Net Operating Revenue



For the Three Months

For the Six Months


 Ended June 30,

Ended June 30,


2013/2012

2013/2012

Amounts in millions

Change

% Change

Change

% Change

Century Casino & Hotel, Edmonton

$0.2

3%

$0.7

6%

Century Casino, Calgary

(0.3)

(12%)

(0.6)

(11%)

Century Casino & Hotel, Central City

(0.2)

(4%)

(0.2)

(3%)

Century Casino & Hotel, Cripple Creek

0.0

1%

0.0

(1%)

Casinos Poland

10.9

100%

10.9

100%

Cruise Ships & Other

(0.1)

(5%)

0.1

4%

Total

$10.5

59%

$10.9

31%

Earnings from operations increased by $0.4 million, or 23%, and increased by $0.9 million, or 26.4%, for the three and six months ended June 30, 2013 compared to the three and six months ended June 30, 2012. Following is a summary of the change in earnings from operations by property or category for the three and six months ended June 30, 2013 compared to the three and six months ended June 30, 2012:







Earnings from Operations



For the Three Months

For the Six Months


 Ended June 30,

Ended June 30,


2013/2012

2013/2012

Amounts in millions

Change

% Change

Change

% Change

Century Casino & Hotel, Edmonton

$0.3

16%

$0.7

22%

Century Casino, Calgary

0.2

92%

0.2

178%

Century Casino & Hotel, Central City

(0.1)

(23%)

(0.2)

(15%)

Century Casino & Hotel, Cripple Creek

0.1

26%

0.3

43%

Casinos Poland

0.6

100%

0.6

100%

Cruise Ships & Other

0.0

26%

0.1

40%

Corporate Other

(0.6)

(56%)

(0.9)

(40%)

Total

$0.4

23%

$0.9

26%

Net earnings increased by $2.5 million, or 219%, and increased by $3.0 million, or 133.2%, for the three and six months ended June 30, 2013 compared to the three and six months ended June 30, 2012. Following is a summary of the change in net earnings by property or category for the three and six months ended June 30, 2013 compared to the three and six months ended June 30, 2012:







Net Earnings



For the Three Months

For the Six Months


 Ended June 30,

Ended June 30,


2013/2012

2013/2012

Amounts in millions

Change

% Change

Change

% Change

Century Casino & Hotel, Edmonton

$0.3

32%

$0.9

40%

Century Casino, Calgary

0.1

150%

$0.3

304%

Century Casino & Hotel, Central City

(0.1)

(23%)

(0.1)

(15%)

Century Casino & Hotel, Cripple Creek

0.1

25%

0.2

43%

Casinos Poland

0.3

100%

0.3

100%

Cruise Ships & Other

0.0

19%

0.1

40%

Corporate Other

1.7

272%

1.4

113%

Total

$2.5

219%

$3.0

133%

Items deducted from or added to earnings from operations to arrive at net earnings include gain on business combination related to the acquisition of the additional ownership interest in CPL, interest income, interest expense, gains on foreign currency transactions, income tax expense and non-controlling interest.

For the three months ended June 30, 2013, the Company recognized a gain of $2.1 million as a result of measuring at fair value its initial 33.3% ownership interest in CPL held prior to the acquisition date.  As a result, the Corporate Other category reported net earnings of $1.7 million for the period.

Property and Category Results

(in thousands)

The following are property and category results for net operating revenue and Adjusted EBITDA.











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,


2013

2012

2013

2012

2013

2012

2013

2012

Century Casino & Hotel, Edmonton

$ 6,208

$ 6,006

$ 2,253

$1,969

$12,661

$11,948

$4,624

$3,860

Century Casino, Calgary

2,110

2,398

216

30

4,466

4,999

564

283

Century Casino & Hotel, Central City

4,410

4,581

826

986

8,856

9,090

1,723

1,958

Century Casino & Hotel, Cripple Creek

3,168

3,150

843

736

6,060

6,029

1,559

1,261

Casinos Poland

10,870

0

1,141

0

10,870

0

1,141

0

Cruise Ships & Other

1,582

1,656

233

220

3,424

3,294

551

457

Corporate

0

0

(1,649)

(1,055)

0

0

(3,060)

(2,174)

Consolidated

$28,348

$17,791

$ 3,863

$ 2,886

$46,337

$35,360

$7,101

$5,645

Balance Sheet and Liquidity

As of June 30, 2013, the Company had $28.2 million in cash and cash equivalents and $16.4 million in debt obligations on its balance sheet compared to $24.7 million in cash and cash equivalents and $3.6 million in debt obligations at December 31, 2012. On February 21, 2013, the Company borrowed an additional $7.3 million from its Bank of Montreal credit agreement to pay for the additional 33.3% investment in CPL, which closed on April 8, 2013. The credit agreement has a term of five years and is guaranteed by the Company. Once repaid, these amounts cannot be reborrowed. As of June 30, 2013, the Company had approximately $14.9 million available for borrowing under the credit agreement. In addition, because of the CPL acquisition, the Company added $6.4 million in debt obligations as of June 30, 2013.

Conference Call Information

Today the Company will post a copy of the Form 10-Q filed with the SEC for the quarter ended June 30, 2013 on its website at http://corporate.cnty.com/investor-relations/sec-filings.

Century Casinos will host its second quarter 2013 earnings conference call today at 10:00 am MDT; 6:00 pm CET, respectively. U.S. domestic participants should dial 1-800-210-9006. For all other international participants, please use +1 719 457 0349 to dial-in. Participants may also listen to the call live or obtain a recording of the call on the Company's website until August 30, 2013 at http://corporate.cnty.com/investor-relations/sec-filings.

*Amounts presented are rounded.  As such, rounding differences could occur in period over period changes and percentages reported.

**Adjusted EBITDA is a Non-GAAP financial measure.  See discussion and reconciliation of Non-GAAP financial measures in Supplemental Information below.



CENTURY CASINOS, INC. AND SUBSIDIARIES

FINANCIAL INFORMATION – US GAAP BASIS (Unaudited)







For the Three Months
Ended June 30,

For the Six Months Ended
June 30,

Amounts in thousands, except for per share information

2013

2012

2013

2012

Operating revenue:





  Gaming

$26,149

$15,709

$41,844

$30,968

  Hotel, bowling, food and beverage

3,162

3,135

6,413

6,456

  Other

932

1,103

1,879

2,046

           Gross revenue

30,243

19,947

50,136

39,470

Less: Promotional allowances

(1,895)

(2,156)

(3,799)

(4,110)

Net operating revenue

28,348

17,791

46,337

35,360

Operating costs and expenses:





  Gaming

13,510

7,459

20,443

14,692

  Hotel, bowling, food and beverage

2,646

2,420

5,095

4,857

  General and administrative

8,282

5,320

13,556

10,624

  Depreciation and amortization

1,795

1,180

2,986

2,358

Total operating costs and expenses

26,233

16,379

42,080

32,531

Earnings (losses) from equity investment

(32)

283

(128)

438

Earnings from operations

2,083

1,695

4,129

3,267

Non-operating income (expense):





Gain on business combination

2,074

0

2,074

0

  Interest income

5

23

11

29

  Interest expense

(264)

(395)

(344)

(543)

  Gains on foreign currency transactions and other

161

22

168

17

Non-operating income (expense), net

1,976

(350)

1,909

(497)

Earnings before income taxes and non-controlling interest

4,059

1,345

6,038

2,770

Income tax provision

236

197

553

489

Net Earnings

3,823

1,148

5,485

2,281

Less: Net earnings attributable to non-controlling interest

166

0

166

0

Net earnings attributable to Century Casinos, Inc. shareholders

$3,657

$1,148

$5,319

$2,281






Earnings per share attributable to Century Casinos, Inc. – basic and diluted:





  Basic

$0.15

$0.05

$0.22

$0.10

  Diluted

$0.15

$0.05

$0.22

$0.09



CENTURY CASINOS, INC. AND SUBSIDIARIES

FINANCIAL INFORMATION – US GAAP BASIS




Century Casinos, Inc.



Condensed Consolidated Balance Sheets (Unaudited)



(Amounts in thousands)




June 30,

December 31,


2013

2012

Assets



Current assets

$31,084

$26,535

Property and equipment, net

112,756

99,526

Other assets

21,552

11,275

Total assets

$165,392

$137,336




Liabilities and Shareholders' Equity



Current liabilities

$25,804

$13,071

Non-current liabilities

14,181

6,109

Shareholders' equity

125,407

118,156

Total liabilities and shareholders' equity

$165,392

$137,336



CENTURY CASINOS, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION


Century Casinos, Inc.

Adjusted EBITDA Margins ** by Property or Category (Unaudited)







For the Three Months

For the Six Months


Ended June 30,

Ended June 30,


2013

2012

2013

2012

Century Casino & Hotel, Edmonton

36%

33%

37%

32%

Century Casino, Calgary

10%

1%

13%

6%

Century Casino & Hotel, Central City

19%

22%

19%

22%

Century Casino & Hotel, Cripple Creek

27%

23%

26%

21%

Casinos Poland

10%

0%

10%

0%

Cruise Ships & Other

15%

13%

16%

14%

Consolidated Adjusted EBITDA Margin

14%

16%

15%

16%



Reconciliation of Adjusted EBITDA * to Net Earnings (Loss) by Property or Category

For the three months ended June 30, 2013


Amounts in thousands











Three Months Ended June 30, 2013


Edmonton

Calgary

Central
City

Cripple
Creek

Casinos
Poland

Cruise
Ships &
Other

Corporate

Total

Net earnings (loss)

$1,421

$46

$ 305

$ 376

$333

$108

$1,068

$3,657

Interest income

0

0

0

0

(1)

0

(4)

(5)

Interest expense

121

0

0

0

138

4

1

264

Income taxes (benefit)

452

(59)

188

231

(12)

20

(584)

236

Depreciation

257

230

333

236

607

101

31

1,795

Non-controlling interest

0

0

0

0

166

0

0

166

Non-cash stock based compensation

0

0

0

0

0

0

1

1

Foreign currency losses (gains)

2

(1)

0

0

(74)

0

(88)

(161)

(Gain) loss on disposition of fixed assets

0

0

0

0

(16)

0

0

(16)

Gain on business combination

0

0

0

0

0

0

(2,074)

(2,074)

Adjusted EBITDA*

$ 2,253

$ 216

$ 826

$843

$ 1,141

$ 233

$(1,649)

$3,863



CENTURY CASINOS, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION


Century Casinos, Inc.

Reconciliation of Adjusted EBITDA * to Net Earnings (Loss) by Property or Category (Unaudited)

For the three months ended June 30, 2012


Amounts in thousands










Three Months Ended June 30, 2012


Edmonton

Calgary

Central
City

Cripple
Creek

Cruise
Ships &
Other

Corporate

Total

Net earnings (loss)

$ 1,075

$ (92)

$ 396

$ 300

$ 93

$ (624)

$       1,148

Interest income

(5)

0

0

0

0

(18)

(23)

Interest expense

394

0

0

0

0

1

395

Income taxes (benefit)

280

(75)

243

183

10

(444)

197

Depreciation

244

209

347

253

98

29

1,180

Non-cash stock based compensation

0

0

0

0

0

(5)

(5)

Foreign currency losses (gains)

(19)

(12)

0

0

3

6

(22)

(Gain) loss on disposition of fixed assets

0

0

0

0

16

0

16

Adjusted EBITDA*

$  1,969

$    30

$  986

$   736

$       220

$      (1,055)

$       2,886



Reconciliation of Adjusted EBITDA * to Net Earnings (Loss) by Property or Category

For the six months ended June 30, 2013


Amounts in thousands











Six Months Ended June 30, 2013


Edmonton

Calgary

Central
City

Cripple
Creek

Casinos
Poland

Cruise
Ships &
Other

Corporate

Total

Net earnings (loss)

$ 3,019

$ 171

$ 660

$ 672

$ 333

$ 307

$ 157

$ 5,319

Interest income

0

0

0

0

(1)

0

(10)

(11)

Interest expense

211

0

0

0

138

(3)

(2)

344

Income taxes (benefit)

899

(65)

405

412

(12)

41

(1,127)

553

Depreciation

517

463

663

475

607

202

59

2,986

Non-controlling interest

0

0

0

0

166

0

0

166

Non-cash stock based compensation

0

0

0

0

0

0

3

3

Foreign currency (gains) losses

(22)

(5)

0

0

(74)

0

(67)

(168)

(Gain) loss on disposition of fixed assets

0

0

(5)

0

(16)

4

0

(17)

Gain on business combination

0

0

0

0

0

0

(2,074)

(2,074)

Adjusted EBITDA*

$ 4,624

$ 564

$ 1,723

$ 1,559

$ 1,141

$ 551

$ (3,061)

$ 7,101



Century Casinos, Inc.

Reconciliation of Adjusted EBITDA * to Net Earnings (Loss) by Property or Category

For the six months ended June 30, 2012


Amounts in thousands










Six Months Ended June 30, 2012


Edmonton

Calgary

Central
City

Cripple
Creek

Cruise
Ships &
Other

Corporate

Total

Net earnings (loss)

$ 2,153

$ (84)

$ 776

$ 469

$ 219

$ (1,252)

$ 2,281

Interest income

(8)

0

0

0

0

(21)

(29)

Interest expense

541

0

0

0

0

2

543

Income taxes (benefit)

694

(31)

475

287

24

(960)

489

Depreciation

486

413

701

505

195

58

2,358

Non-cash stock based compensation

0

0

0

0

0

(2)

(2)

Foreign currency losses (gains)

(6)

(15)

0

0

3

1

(17)

(Gain) loss on disposition of fixed assets

0

0

6

0

16

0

22

Adjusted EBITDA*

$ 3,860

$ 283

$ 1,958

$ 1,261

$ 457

$ (2,174)

$ 5,645

*  The Company defines Adjusted EBITDA as net earnings (loss) before interest, income taxes (benefit), 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, gain on business combination 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 as reported under accounting principles generally accepted in the United States of America ("US GAAP"). Adjusted EBITDA is not considered a measure of performance recognized under US GAAP. 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 within the gaming industry. Please see the reconciliation of Adjusted EBITDA to net earnings (loss) 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.

CENTURY CASINOS, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

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, Nautica, Marina, Riviera, Mein Schiff 1, Mein Schiff 2, Wind Surf, Wind Star, Wind Spirit, Seven Seas Voyager, Seven Seas Mariner and Seven Seas Navigator). Through its Austrian subsidiary, Century Casinos Europe GmbH, the Company holds a 66.6% ownership interest in Casinos Poland Ltd., the owner and operator of nine casinos in Poland. The Company also manages the operations of 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 Section 27A of the Security Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and 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, statements regarding future results of operations (including results for Casinos Poland, Ltd.), operating efficiencies, synergies and operational performance, economic improvements in 2013, debt repayment and plans for our casinos and our Company. 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 section entitled "Risk Factors" under Item 1A in our Annual Report on Form 10-K for the year ended December 30, 2012. 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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