Century Casinos Reports Financial Results for Second Quarter 2010

COLORADO SPRINGS, Colo., Aug. 9 /PRNewswire-FirstCall/ -- Century Casinos, Inc. (Nasdaq and Vienna Stock Exchange: CNTY) announced today its financial results for the three and six months ended June 30, 2010.

Three Months Ended June 30, 2010

Net operating revenue for the three months ended June 30, 2010 was $14.9 million compared to $11.9 million for the three months ended June 30, 2009. The increase in net operating revenue of $3.0 million is attributable to the following: $2.1 million of net operating revenue due to the acquisition of the Silver Dollar in the first quarter of 2010; $0.7 million due to improved business conditions at our Edmonton property resulting from the completion of road construction; an improvement in the average exchange rate between the U.S. dollar and the Canadian dollar; and $0.2 million due to improved business conditions at our Casino at Cripple Creek from better weather conditions and the impact of Amendment 50 which was effective on July 2, 2009.

For the second quarter of 2010, consolidated Adjusted EBITDA* was $2.0 million. This represents a 28.2% increase in consolidated Adjusted EBITDA* over the same quarter of last year.  All operating segments provided positive EBITDA* totaling $3.1 million which was offset by Corporate operations of $1.1 million. Management attributes the improvement in EBITDA* to improved earnings from operations between the second quarter of 2010 and the second quarter of 2009.

The increase in operating earnings from continuing operations of $0.6 million from a loss of $0.3 million for the three months ended June 30, 2009 to an income of $0.3 million for the three months ended June 30, 2010 is due to the following: Century Casino & Hotel at Edmonton improved by $0.2 million resulting from an increase in revenue in the nickel slot denomination, an increase in the number of slot units and improved business volume associated with the completion of road construction and the Century Casinos at Cripple Creek and Central City improved by $0.3 million due to better weather conditions in the second quarter of 2010 compared to the second quarter 2009 and the impact of Amendment 50 which began in July of 2009. Corporate earnings from operations improved by $0.1 million primarily due to a reduction in the amount of stock compensation recognized in the second quarter of 2010 compared to the second quarter of 2009.

Adjusted for foreign currency transaction gains and losses, the Company recognized a loss from continuing operations of $0.01 million*, for the second quarter of 2010 compared to a loss from continuing operations of $1.3 million for the second quarter of 2009.  

Including discontinued operations, in the second quarter of 2009, the Company reported net earnings attributable to Century Casinos, Inc. and subsidiaries of $18.9 million, or $0.85 per share. During the second quarter of 2009, the Company recorded a gain of $0.03 million on the sale of its Casino in Prague, Czech Republics.

Six Months Ended June 30, 2010

Net operating revenue for the six months ended June 30, 2010 was $29.1 million compared to $23.9 million for the six months ended June 30, 2009. The increase in net operating revenue of $5.2 million is attributable to the following: $3.8 million of net operating revenue due to the acquisition of the Silver Dollar in the first quarter of 2010, $1.2 million due to improved business conditions resulting from the completion of road construction and an improvement in the average exchange rate between the U.S. dollar and the Canadian dollar at our casino in Edmonton and $0.2 million from the impact of three new casinos on the cruise ships Wind Surf, Wind Star and Wind Spirit, all beginning service in April of 2010. These increases in net operating revenue were off-set by a $0.1 million decrease in net operating revenue associated with Womacks Casino at Cripple Creek.

For the six months ended June 30, 2010, consolidated Adjusted EBITDA* was $4.1 million. This represents an 11.7% increase in consolidated Adjusted EBITDA* over the same period of last year.  All operating segments provided positive EBITDA* totaling $6.2 million which was offset by Corporate operations of $2.1 million. Management attributes the improvement in EBITDA* to improved earnings from operations between the six months ended June 30, 2010 and the six months ended June 30, 2009.

The increase in earnings from continuing operations of $0.8 million from a loss of $0.1 million for the six months ended June 30, 2009 to a gain of $0.7 million for the six months ended June 30, 2010 is due to the following: a decrease in corporate expenses associated with the amount of stock compensation recognized of $0.3 million and a reduction in professional fees of $0.2 million. The increase in ship casino revenue of $0.2 million is due to the addition of three new ship casinos which began service in April of 2010. The addition of the Silver Dollar in the first quarter of 2010 contributed $0.1 million.

Adjusted for foreign currency transaction gains and losses and the insurance revenue from the Wells Nevada property, the Company recognized a loss from continuing operations of $0.2 million*, for the six months ended June 30, 2010 compared to a loss from continuing operations of $2.3 million for the six months ended June 30, 2009.

Including discontinued operations, for the six months ended June 30, 2009, the Company reported net earnings attributable to Century Casinos, Inc. and subsidiaries of $2.7 million. For the six months ended June 30, 2009, the Company recorded a gain of $0.9 million on the sale of its sale of its Casino in Prague, Czech Republics.

Purchase of Silver Dollar Casino

On January 13, 2010, the Company acquired the Silver Dollar and related land for total consideration of $11.5 million, which consisted of $10.7 million plus a net working capital of $0.8 million. The Company paid a $1.0 million deposit towards the acquisition on November 6, 2009, with the remainder paid on January 13, 2010, using cash on hand.

The Silver Dollar is a 93,000 square-foot casino facility located on approximately seven acres of land in Calgary. The casino facility includes 504 slot machines, 25 video lottery terminals, 16 table games, two restaurants, a lounge, a 5,000 square-foot showroom, an 18,000 square-foot convention center and a 30-lane bowling alley. The Silver Dollar Casino will change its name to "Century Casino" to be effective by the end of October 2010.

Three Months Ended June 30, 2010

Century Casino & Hotel (Edmonton, Alberta, Canada) – Net operating revenue at the Century Casino & Hotel in Edmonton increased by 14.6% to $5.5 million for the second quarter of 2010 compared to $4.8 million for the second quarter of 2009. This increase is primarily due to an increase in table games and slot revenue and the improved exchange rate between the U.S. dollar and Canadian dollar. Management believes that an increase in the size of player wagers was the primary reason for the increase in table games revenue and improvements to the floor by the Alberta Gaming and Liquor Commission (AGLC) with slot machine movements and conversions the reason for increase in slot revenue.  In Canadian dollars, Adjusted EBITDA* remained constant at CAD 1.8 million for the three months ended June 30 2010 and 2009.

Womacks Casino (Cripple Creek, Colorado, USA) – Net operating revenue at Womacks Casino in Cripple Creek, Colorado increased $0.2 million, or 8.3%, from $2.4 million for the second quarter of 2009 to $2.6 million for the second quarter of 2010. Management believes that Womacks has regained market share due to positive customer service, food product improvements and improved weather conditions. Adjusted EBITDA* increased 39.6% from $0.3 million for the second quarter of 2009 to $0.5 million for the second quarter of 2010 primarily due to improved earnings from operations between the second quarter of 2010 and the second quarter of 2009.

Century Casino and Hotel (Central City, Colorado, USA) – Net operating revenue at the Century Casino and Hotel in Central City remained flat at $4.2 million when comparing the second quarter of 2010 to the second quarter of 2009, primarily due to poor overall economic conditions impacting revenues.  Coin-in remained flat and the slot hold percentage is down due to a change in slot play from video to video poker, which has a lower hold percentage.  Table revenue increased by 77% due to changes implemented from Amendment 50.  Century Casino's market share for the three months ended June 30, 2010 increased compared to the three months ended June 30, 2009 to 29.1% from 28.9%.  Management believes that weekend promotions have worked to maintain business with emphasis on cash and point multiplier promotions. Adjusted EBITDA* for the Century Casino and Hotel in Central City for the second quarter of 2010 decreased by 3.4% to $0.9 million compared to $1.0 million in the second quarter of 2010. The decrease is primarily due to poor overall economic conditions.

Cruise Ships – The Company's ship-based casinos contributed net operating revenue of $0.5 million for the second quarter of 2010 compared to $0.4 million in the second quarter of 2009. Adjusted EBITDA* increased from $0.05 million for the second quarter of 2009 to $0.07 million for the second quarter of 2010. The increase in net operating revenue and adjusted EBITDA is primarily due to increases in gaming revenue from three new cruise ships, Wind Star, Wind Surf and Wind Spirit which all began service in April 2010 and a $36,000 increase in revenue from Mein Schiff.

Corporate – Corporate operations reported negative Adjusted EBITDA* of $1.1 million for the second quarter of 2010 compared to negative Adjusted EBITDA* of $1.4 million for the second quarter of 2009. The lower negative Adjusted EBITDA* is primarily due to a reduction in the amount of stock compensation recognized in the second quarter of 2010 compared to the second quarter of 2009.

Six Months Ended June 30, 2010

Century Casino & Hotel (Edmonton, Alberta, Canada) – Net operating revenue at the Century Casino & Hotel in Edmonton increased by 13.5% to $10.9 million for the six months ended June 30, 2010 compared to $9.6 million for the six months ended June 30, 2009. This increase is primarily due to an increase in table games and slot revenue and the improved exchange rate between the U.S. dollar and Canadian dollar. Management believes that an increase in the size of player wagers was the primary reason for the increase in table games revenue and improvements to the floor by the AGLC with slot machine movements and conversions the reason for increase in slot revenue.  In Canadian dollars, Adjusted EBITDA* decreased from CAD 4.0 million to CAD 3.5 for the six months ended June 30, 2010 and 2009 primarily due to a decrease in table games hold in the first quarter.

Womacks Casino (Cripple Creek, Colorado, USA) – Net operating revenue at Womacks Casino in Cripple Creek, Colorado decreased $0.1 million, or 2.0%, from $4.9 million for the six months ending June 30, 2010 compared to $5.0 million for the same period in 2009, primarily due to a decline in the gaming market. Adjusted EBITDA* decreased 12.5% from $0.8 million to $0.7 million primarily due a decrease in net operating revenue between the six months ended June 30, 2010 and the six months ended June 30, 2009.

Century Casino and Hotel (Central City, Colorado, USA) – Net operating revenue at the Century Casino and Hotel in Central City remained flat at $8.3 million when comparing the six months ending June 30, 2010 to the same period of 2009.  Management attributes the flat operating revenue to poor overall economic conditions.  Coin-in remains flat and the slot hold percentage is down due to a change in slot play from video to video poker which has a lower hold percentage.  Table revenue increased due to Amendment 50.  Management believes that weekend promotions have worked to maintain business with emphasis on cash and point multiplier promotions.  Adjusted EBITDA* for the Century Casino and Hotel in Central City for the six months ending June 30, 2010 decreased 5.0% to $1.9 million from $2.0 million for the six months ending June 30, 2009. This decrease is primarily due an increase in operating expenses between the six months ended June 30, 2010 and the six months ended June 30, 2009.

Cruise Ships – The Company's ship-based casinos contributed net operating revenue of $1.1 million for the six months ended June 30, 2010 compared to $0.9 million for the six months ended June 30, 2009 as the result of the impact of  three new cruise ships, Wind Star, Wind Surf and Wind Spirit which all beginning service in April of 2010. Adjusted EBITDA* increased $0.1 to $0.2 million for the six months ended June 30 2010 compared to $0.1 million for the six months ended June 30, 2009. The increase in adjusted EBITDA is also attributable to the impact of the three new ship casinos.  

Corporate – Corporate operations reported negative Adjusted EBITDA* of $2.1 million for six months ended June 30, 2010 compared to negative Adjusted EBITDA* of $2.7 million for the six months ended June 30, 2009. The lower negative Adjusted EBITDA* is primarily due to a decrease reduction the amount of stock compensation recognized and a reduction in professional fees for six months ended June 30, 2010 as compared to the same period of 2009.

Liquidity

Cash and cash equivalents totaled $24.5 million at June 30, 2010 and the Company had working capital (current assets minus current liabilities) of $15.7 million. During 2010, the Company paid $9.3 million for its acquisition of the Silver Dollar. In April 2010, the Company paid $2.2 million for land in Cripple Creek, Colorado. The Company expects to pay approximately $3.0 million in capital expenditures at all its casinos over the next twelve months.

The Company will post the 10-Q filed with the SEC for the second quarter of 2010 on its website at www.cnty.com/corporate/investor/sec-filings/ today.

Century Casinos will host its Q2 2010 Earnings Conference Call today at 8:00 am MDT; 4:00 pm CEST, respectively. U.S. domestic participants please dial +1-800-862-9098; 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 our website at www.cnty.com/corporate/investor/financial-results/.

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CENTURY CASINOS, INC. AND SUBSIDIARIES

FINANCIAL INFORMATION – US GAAP BASIS

CENTURY CASINOS, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

CENTURY CASINOS, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

CENTURY CASINOS, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

*  The Company defines Adjusted EBITDA as earnings (loss) from continuing operations 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. For the first quarter of 2010, the Company recognized revenue of $0.1 million for insurance proceeds received on damages to a property, in Wells Nevada, that the Company no longer owns. Intercompany transactions consisting primarily of management fees and interest, along with their related tax effects, are excluded from the presentation of net earnings and Adjusted EBITDA reported for each property. 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 among its operating segments. 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 from continuing operations below. Not all of the aforementioned items occur in each reporting period, but have been included in the definition based on historical activity.

**  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 the Womacks Casino & Hotel in Cripple Creek, Colorado, the Century Casino & Hotel in Central City, Colorado, the Century Casino & Hotel in Edmonton, Canada and the Silver Dollar Casino in Calgary, Canada. The Company also operates casinos aboard eight luxury cruise vessels (Silver Cloud, Regatta, Insignia, Nautica, Mein Schiff, Wind Surf, Wind Star, Wind Spirit) and signed contracts for casinos on six additional ships (Seven Seas Voyager, Seven Seas Mariner, Seven Seas Navigator, Marina, Riviera and TUI Mein Schiff II) that are expected to start operations soon. 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 and one slot casino in Poland. 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, expected competition, the impact of new gaming laws, plans for our casinos and the impact of the economic downturn. 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 filed on March 15, 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.