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COLORADO SPRINGS, Colorado - Century Casinos, Inc. (NASDAQ Capital Market and the Vienna Stock Exchange: CNTY) today reported financial results for the third quarter and nine months ended September 30, 2007.
Third Quarter 2007
For the third quarter of 2007, net operating revenues were $24,724,000 and consolidated Adjusted EBITDA* was $5,875,000. This represents an increase over the same quarter of last year of 46% in net operating revenues ($16,978,000 in the third quarter of 2006) and an increase of 40% in consolidated Adjusted EBITDA* ($4,200,000 in the third quarter of 2006). Our new casinos in Central City (Colorado), Newcastle (South Africa) and Edmonton (Canada) contributed $7,189,000 towards the total increase of $7,746,000 in net operating revenue. The three new casinos also contributed $2,306,000 of additional Adjusted EBITDA* to the Company, offset by approximately $400,000 of corporate charges for increased payroll, travel and professional services attributed to the Company's expansion efforts.
On a US GAAP ("Generally Accepted Accounting Principles") basis, the Company reported net earnings of $1,949,000, or $0.08 per basic share. The 2007 third quarter reflects increases in depreciation charges and net interest charges, primarily related to the opening and financing of three new casino operations in 2006. In addition, stock-based compensation expenses increased $354,000 primarily due to the issuance of stock options and restricted stock in July 2007. US GAAP net earnings for the 2006 third quarter were $1,851,000, or $0.08 per basic share. The 2006 third quarter includes pre-opening expenses of $604,000 and a recovery of approximately $400,000 of previously written off loans in conjunction with the sale of our interest in a casino project located in South Africa.
Nine Months Ended September 30, 2007
For the nine months ended September 30, 2007, net operating revenues were $68,458,000 and consolidated Adjusted EBITDA* was $15,863,000. This represents an increase over the same period of last year of 79% in net operating revenues ($38,313,000 for the nine months ended September 30, 2006) and an increase of 50% in consolidated Adjusted EBITDA* ($10,562,000 for the nine months ended September 30, 2006). Our new casinos in Central City (Colorado), Newcastle (South Africa) and Edmonton (Canada) contributed $29,054,000 towards the total increase of $30,145,000 in net operating revenue. The three new casinos also contributed $7,286,000 of additional Adjusted EBITDA* to the Company, offset by approximately $1,300,000 of corporate charges primarily related to payroll, travel and professional services attributed to the Company's expansion efforts, approximately $300,000 of increased marketing charges at Womacks and $335,000 of preferred dividends paid to preference shareholders at Caledon.
On a US GAAP basis, the Company reported net earnings of $4,532,000, or $0.20 per basic share for the first nine months of 2007. The 2007 results reflect increases in depreciation charges and net interest charges, primarily related to the opening and financing of three new casino operations in 2006. US GAAP net earnings for the first nine months of 2006 were $4,872,000, or $0.21 per basic share. The 2006 results include pre-opening expenses of $2,116,000 and a recovery of approximately $400,000 of previously written off loans in conjunction with the sale of our interest in a casino project located in South Africa.
"We are pleased with the progress that we are making in both our established markets and at our newly established casinos," say co-CEO's Erwin Haitzmann and Peter Hoetzinger. "We have seen steady growth in net operating revenue as a result of our concerted marketing efforts."
Recent Developments
• Womacks Casino in Cripple Creek is undergoing an approximate $2 million renovation through which we intend to raise the standard for facilities in Cripple Creek and garner further market share. The project is expected to be completed for the Christmas season.
• The Alberta Gaming and Liquor Commission recently added 56 slot machines (54 added as of September 30, 2007) at our property in Edmonton. Management believes that this is in recognition of our accomplishments since opening in November 2006 and is also a sign that the gaming market in Edmonton is expected to grow further.
• The hotels at our two South Africa properties in Caledon and Newcastle were awarded superior 4-star ratings, which we believe will attract additional customers to these properties.
• During the second quarter of 2007, the Colorado legislature approved a bill banning smoking at Colorado casinos starting January 1, 2008. This could result in fewer customers who smoke or more customers who do not smoke visiting our properties in Colorado.
Property Results
Womacks Casino - Net operating revenue at Womacks Casino in Cripple Creek, Colorado increased 6% to $5,011,000 for the third quarter of 2007 compared to $4,730,000 reported for the same period in 2006. Womacks' Adjusted EBITDA* for the third quarter of 2007 was $1,832,000 compared to $2,067,000 in the third quarter of 2006. The decrease in Adjusted EBITDA* is primarily due to approximately $190,000 in increased marketing charges related to a special marketing promotion in the third quarter of 2007.
Womacks' net operating revenue was $13,510,000 for the first nine months of 2007 compared to $12,534,000 for the first nine months of 2006. Womacks' Adjusted EBITDA* for the first nine months of 2007 was $4,804,000 compared to $4,947,000 in the same 2006 period. The decrease in Adjusted EBITDA* is primarily due to approximately $329,000 in increased marketing charges primarily related to a special marketing promotion in the third quarter of 2007.
Century Casino and Hotel (Central City) - Gaming revenue at the Century Casino and Hotel in Central City, Colorado has grown consistently since opening, with our highest monthly revenue occurring in September 2007. Net operating revenue at the Century Casino and Hotel increased 27% to $5,954,000 for the third quarter of 2007 compared to $4,688,000 reported for the same period in 2006. Adjusted EBITDA* for the third quarter of 2007 was $1,769,000 compared to $949,000 in the third quarter of 2006. The increase in Adjusted EBITDA* is primarily due to improved revenues and a reduction in marketing expenditures. Marketing charges for the three months ended September 30, 2006 were higher than usual due to the opening of the casino in July 2006. Adjusted EBITDA* for the three months ended September 30, 2006 excludes approximately $315,000 of pre-opening expenditures.
The Century Casino and Hotel's net operating revenue was $15,529,000 for the first nine months of 2007 compared to $4,688,000 for the first nine months of 2006. The property commenced operations in July 2006. The Century Casino and Hotel's Adjusted EBITDA* for the first nine months of 2007 was $3,902,000 compared to $1,622,000 in the same 2006 period.
Adjusted EBITDA* for the nine months ended September 30, 2006 excludes approximately $1,726,000 of pre-opening expenditures.
Century Casino and Hotel (Edmonton) - We opened the casino in November 2006 with 600 slot machines and have since increased the number of machines on the floor to 654. Net operating revenue and Adjusted EBITDA* for the three months ended September 30, 2007 was $4,930,000 and $1,503,000, respectively. Net operating revenue for the nine months ended September 30, 2007 was $13,562,000 and Adjusted EBITDA* was $3,651,000.
The Caledon Hotel, Spa and Casino (Caledon, South Africa) - Net operating revenue at the Caledon increased 4% to $4,526,000 for the third quarter of 2007 compared to $4,350,000 reported for the same period in 2006. Adjusted EBITDA* for the third quarter of 2007 was $1,886,000 compared to $1,795,000 in the third quarter of 2006. The increase in Adjusted EBITDA* is primarily due to a decrease in professional fees and property taxes. Dividends of $59,000 were paid to preference shareholders during the third quarter of 2007.
The Caledon's net operating revenue was $13,324,000 for the first nine months of 2007 compared to $13,783,000 for the first nine months of 2006. The decrease was due to the weakening of the South African Rand ("Rand") versus the US Dollar on a year to date basis. Net operating revenue in Rand was ZAR 95,213,000 for the first nine months of 2007 compared to ZAR 90,503,000 for the first nine months of 2006. The Caledon's Adjusted EBITDA* for the first nine months of 2007 was $5,317,000 compared to $5,631,000 in the same 2006 period. The decrease in Adjusted EBITDA* is primarily due to the weakening of the Rand versus the US Dollar on a year to date basis and the payment of $335,000 in dividends to preference shareholders.
Century Casino and Hotel (Newcastle, South Africa) - We acquired our 60% ownership interest in Newcastle, South Africa on April 1, 2006. Net operating revenue increased 53% to $2,885,000 for the third quarter of 2007 compared to $1,891,000 reported for the same period in 2006. Newcastle's Adjusted EBITDA* for the three months ended September 30, 2007 was $693,000 compared to $607,000 for the three months ended September 30, 2006. We opened a new casino facility in December 2006. Prior to this date, casino operations were held in a temporary facility. Management believes that the increases in net operating revenues and Adjusted EBITDA* are directly related to the opening of our new facility, which management believes is superior to the old facility.
For the nine months ended September 30, 2007, Newcastle's net operating revenues were $8,595,000 compared to $3,941,000 for the nine months ended September 30, 2006. The casino provided the Company with Adjusted EBITDA* of $2,756,000 for the period ended September 30, 2007.
Other Operations - The Company's other operating segments, which include the Century Casino Millennium in Prague and the Company's ship based casinos, contributed net operating revenues of $1,375,000 and Adjusted EBITDA* of $206,000 for the three months ended September 30, 2007 compared to net operating revenues of $1,318,000 and Adjusted EBITDA* of $281,000 for the three months ended September 30, 2006. Our other operations contributed net operating revenues of $3,888,000 and $3,352,000 for the nine months ended September 30, 2007 and 2006, respectively. Our other operations contributed Adjusted EBITDA* of $479,000 and $706,000 for the nine months ended September 30, 2007 and 2006, respectively. The decline in Adjusted EBITDA* is primarily due to the reduction of the number of ship-based casinos and the write-off of costs associated with a contract that the Company decided not to pursue.
The Company will post a slide show presentation of the results of operations for the third quarter of 2007 on its web site at www.cnty.com/corporate/investor/presentations/ on Friday, November 9, 2007.
On Friday, November 9, 2007, Century Casinos will host a "Q3 2007 Earnings" conference call, at 9:00am EST; 3:00pm CET respectively. US domestic participants please dial +1-800-862-9098, all other international participants please use +1-785-424-1051 to dial-in. For a recording of the call, please visit our website at www.cnty.com/corporate/investor/financial-results/.
For the Company's condensed consolidated Statements of Earnings and Balance Sheets, please see the press release.
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