Document and Entity Information
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Document and Entity Information
3 Months Ended
Mar. 31, 2013
Apr. 26, 2013
Document and Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Mar. 31, 2013  
Document Fiscal Year Focus 2013  
Document Fiscal Period Focus Q1  
Entity Registrant Name CENTURY CASINOS INC /CO/  
Entity Central Index Key 0000911147  
Current Fiscal Year End Date --12-31  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   24,128,114

Condensed Consolidated Balance Sheets
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Condensed Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
ASSETS    
Cash and cash equivalents $ 32,106 $ 24,747
Receivables, net 888 700
Prepaid expenses 573 608
Inventories 292 311
Other current assets 87 86
Deferred income taxes 224 83
Total current assets 34,170 26,535
Property and equipment, net 97,785 99,526
Goodwill 4,840 4,941
Equity investment 3,092 3,346
Deferred income taxes 2,021 2,145
Notes receivable 500 0
Other assets 546 582
Restricted cash 254 261
Total assets 143,208 137,336
LIABILITIES AND SHAREHOLDERS' EQUITY    
Current portion of long-term debt 1,173 372
Accounts payable and accrued liabilities 6,596 6,379
Accrued payroll 2,273 2,806
Taxes payable 2,165 3,413
Deferred income taxes 101 101
Total current liabilities 12,308 13,071
Long-term debt, less current portion 9,446 3,192
Taxes payable 237 237
Deferred income taxes 2,610 2,680
Total liabilities 24,601 19,180
Commitments and Contingencies      
Shareholders' Equity:    
Preferred stock; $0.01 par value; 20,000,000 shares authorized; no shares issued or outstanding      
Common stock; $0.01 par value; 50,000,000 shares authorized; 24,243,926 shares issued; 24,128,114 shares outstanding 243 243
Additional paid-in capital 75,390 75,388
Accumulated other comprehensive earnings 3,356 4,569
Retained earnings 39,900 38,238
Total shareholders' equity before treasury stock 118,889 118,438
Treasury stock - 115,812 shares at cost (282) (282)
Total shareholders' equity 118,607 118,156
Total liabilities and shareholders' equity $ 143,208 $ 137,336

Condensed Consolidated Balance Sheets (Parenthetical)
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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Dec. 31, 2012
Dec. 31, 2011
Condensed Consolidated Balance Sheets [Abstract]    
Preferred stock, par value $ 0.01 $ 0.01
Preferred stock, shares authorized 20,000,000 20,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 50,000,000 50,000,000
Common stock, shares issued 24,243,926 24,243,926
Common stock, shares outstanding 24,128,114 23,128,114
Treasury stock, shares 115,812 115,812

Condensed Consolidated Statements of Earnings
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Condensed Consolidated Statements of Earnings (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Operating revenue:    
Gaming $ 15,696 $ 15,259
Hotel, bowling, food and beverage 3,252 3,321
Other 947 943
Gross revenue 19,895 19,523
Less: Promotional allowances (1,904) (1,954)
Net operating revenue 17,991 17,569
Operating costs and expenses:    
Gaming 6,932 7,233
Hotel, bowling, food and beverage 2,450 2,437
General and administrative 5,274 5,304
Depreciation 1,191 1,178
Total operating costs and expenses 15,847 16,152
Earnings from equity investment (96) 155
Earnings from operations 2,048 1,572
Non-operating income (expense):    
Interest income 6 6
Interest expense (82) (148)
Gains (losses) on foreign currency transactions and other 7 (5)
Non-operating income (expense), net (69) (147)
Earnings before income taxes 1,979 1,425
Income tax provision 317 292
Net earnings $ 1,662 $ 1,133
Earnings per share:    
Basic $ 0.07 $ 0.05
Diluted $ 0.07 $ 0.05
Number of shares - basic 24,128,114 23,877,362
Number of shares - diluted 24,153,983 24,010,793

Condensed Consolidated Statements of Comprehensive Earnings (Loss)
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Condensed Consolidated Statements of Comprehensive Earnings (Loss) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Condensed Consolidated Statements of Comprehensive Earnings (Loss) [Abstract]    
Net earnings $ 1,662 $ 1,133
Other comprehensive (loss) income, net of tax:    
Foreign currency translation adjustments (1,213) 1,067
Other comprehensive income (1,213) 1,067
Comprehensive earnings $ 449 $ 2,200

Condensed Consolidated Statements of Cash Flows
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Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Cash Flows from Operating Activities:    
Net earnings $ 1,662 $ 1,133
Adjustments to reconcile net earnings to net cash provided by operating activities:    
Depreciation 1,191 1,178
Loss on disposition of fixed assets 1 6
Amortization of stock-based compensation 2 4
Amortization of deferred financing costs 21 24
Deferred tax expense (88) 72
Earnings from equity investment 96 (155)
Changes in Operating Assets and Liabilities:    
Receivables (195) 71
Prepaid expenses and other assets 28 (162)
Accounts payable and accrued liabilities 204 (696)
Inventories 9 (33)
Other operating assets 3 (42)
Accrued payroll (518) (58)
Taxes payable (1,229) (578)
Net cash provided by operating activities 1,187 764
Cash Flows from Investing Activities:    
Purchases of property and equipment (336) (644)
Proceeds from disposition of assets 12 1
Funds advanced for projects (500) 0
Net cash used in investing activities (824) (643)
Cash Flows from Financing Activities:    
Proceeds from borrowings 7,249 0
Principal repayments (60) (2,511)
Net cash provided by (used in) financing activities 7,189 (2,511)
Effect of Exchange Rate Changes on Cash (193) 69
Increase (Decrease) in Cash and Cash Equivalents 7,359 (2,321)
Cash and Cash Equivalents at Beginning of Period 24,747 25,192
Cash and Cash Equivalents at End of Period 32,106 22,871
Supplemental Disclosure of Cash Flow Information:    
Interest paid 62 137
Income taxes paid $ 745 $ 27

Description Of Business And Basis Of Presentation
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Description Of Business And Basis Of Presentation
3 Months Ended
Mar. 31, 2013
Description Of Business And Basis Of Presentation [Abstract]  
Description Of Business And Basis Of Presentation

1.            DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

 

Century Casinos, Inc. (“CCI” or the “Company”) is an international casino entertainment company. As of March 31, 2013, the Company owned casino operations in North America, managed cruise ship-based casinos on international waters, and had a management contract to manage the casino in the Radisson Aruba Resort, Casino & Spa.

 

On April 8, 2013, the Company’s subsidiary Century Casinos Europe GmbH (“CCE”) signed the final share sale agreement with LOT Polish Airlines to complete the purchase of an additional 33.3% ownership interest in Casinos Poland Ltd (“CPL”).  The Company now owns a 66.6% ownership interest in CPL.

 

The Company also continues to pursue other projects in various stages of development.

 

The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial reporting, the rules and regulations of the Securities and Exchange Commission which apply to interim financial statements and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted. The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated.

 

In the opinion of management, all adjustments considered necessary for fair presentation of financial position, results of operations and cash flows of the Company have been included. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. The results of operations for the period ended March 31, 2013 are not necessarily indicative of the operating results for the full year.

 

Presentation of Foreign Currency Amounts

 

Dollar amounts reported in this quarterly report are in U.S. dollars (“USD”) unless otherwise indicated. Transactions that are denominated in a foreign currency, which include the Canadian dollar (“CAD”), Euro (“€”) and Polish zloty (“PLN”) are translated and recorded at the exchange rate in effect on the date of the transaction. Commitments that are denominated in a foreign currency and all balance sheet accounts other than shareholders’ equity are translated and presented based on the exchange rate between such foreign currency and the U.S. dollar at the end of the reported periods.  Current period transactions affecting the profit and loss of operations conducted in foreign currencies are valued at the average exchange rate between such foreign currency and the U.S. dollar for the period in which they are incurred.

 

The exchange rates to the U.S. dollar used to translate balances at the end of the reported periods are as follows:

 

 

 

 

 

 

 

 

 

 

 

March 31

 

December 31

 

March 31

Ending Rates

 

2013

 

2012

 

2012

Canadian dollar (CAD)

 

1.0156 

 

0.9949 

 

0.9991 

Euros (€)

 

0.7787 

 

0.7584 

 

0.7500 

Polish zloty (PLN)

 

3.2541 

 

3.0996 

 

3.1191 

Source: Pacific Exchange Rate Service

 

 

 

 

 

 

 

 

The average exchange rates to the U.S. dollar used to translate balances during each reported period are as follows:

 

 

 

 

 

 

 

 

 

 

 

For the three months

ended March 31,

 

Average Rates

 

2013

 

2012

 

% Change

Canadian dollar (CAD)

 

1.0084 

 

1.0015 

 

(0.7%)

Euros (€)

 

0.7574 

 

0.7627 

 

0.7% 

Polish zloty (PLN)

 

3.1443 

 

3.2268 

 

2.6% 

Source: Pacific Exchange Rate Service

 

 

 

 

 

 

 


Description Of Business And Basis Of Presentation (Tables)
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Description Of Business And Basis Of Presentation (Tables)
3 Months Ended
Mar. 31, 2013
Description Of Business And Basis Of Presentation [Abstract]  
Exchange Rates

 

 

 

 

 

 

 

 

 

March 31

 

December 31

 

March 31

Ending Rates

 

2013

 

2012

 

2012

Canadian dollar (CAD)

 

1.0156 

 

0.9949 

 

0.9991 

Euros (€)

 

0.7787 

 

0.7584 

 

0.7500 

Polish zloty (PLN)

 

3.2541 

 

3.0996 

 

3.1191 

Source: Pacific Exchange Rate Service

 

 

 

 

 

 

 

Average Exchange Rates

 

 

 

 

 

 

 

 

 

For the three months

ended March 31,

 

Average Rates

 

2013

 

2012

 

% Change

Canadian dollar (CAD)

 

1.0084 

 

1.0015 

 

(0.7%)

Euros (€)

 

0.7574 

 

0.7627 

 

0.7% 

Polish zloty (PLN)

 

3.1443 

 

3.2268 

 

2.6% 

Source: Pacific Exchange Rate Service

 

 

 

 

 

 

 


Description Of Business And Basis Of Presentation (Narative) (Details)
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Description Of Business And Basis Of Presentation (Narative) (Details) (Subsequent Event [Member])
3 Months Ended
Mar. 31, 2013
Description Of Business And Basis Of Presentation [Line Items]  
Additional CPL percentage to acquire - agreement between CCE and LOT Polish Airlines 33.30%
Casinos Poland Ltd [Member]
 
Description Of Business And Basis Of Presentation [Line Items]  
Ownership percentage 66.60%

Description Of Business And Basis Of Presentation (Exchange Rates) (Details)
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Description Of Business And Basis Of Presentation (Exchange Rates) (Details)
Mar. 31, 2013
Dec. 31, 2012
Mar. 31, 2012
Canadian Dollar [Member]
     
Description Of Business And Basis Of Presentation [Line Items]      
Exchange rate 1.0156 0.9949 0.9991
Euros [Member]
     
Description Of Business And Basis Of Presentation [Line Items]      
Exchange rate 0.7787 0.7584 0.7500
Polish Zloty [Member]
     
Description Of Business And Basis Of Presentation [Line Items]      
Exchange rate 3.2541 3.0996 3.1191

Description Of Business And Basis Of Presentation (Average Exchange Rates) (Details)
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Description Of Business And Basis Of Presentation (Average Exchange Rates) (Details)
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Canadian Dollar [Member]
   
Description Of Business And Basis Of Presentation [Line Items]    
Average Rates 1.0084% 1.0015%
Average Rates % Change (0.70%)  
Euros [Member]
   
Description Of Business And Basis Of Presentation [Line Items]    
Average Rates 0.7574% 0.7627%
Average Rates % Change 0.70%  
Polish Zloty [Member]
   
Description Of Business And Basis Of Presentation [Line Items]    
Average Rates 3.1443% 3.2268%
Average Rates % Change 2.60%  

Equity Investment
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Equity Investment
3 Months Ended
Mar. 31, 2013
Equity Investment [Abstract]  
Equity Investment

2.          EQUITY INVESTMENT

 

Following is the summarized financial information of CPL as of March 31, 2013 and December 31, 2012 and for the three months ended March 31, 2013 and 2012:

 

 

 

 

 

 

 

Amounts in thousands (in USD):

 

March 31, 2013

 

December 31, 2012

Balance Sheet:

 

 

 

 

    Current assets

 

$
4,202 

 

$
4,716 

    Noncurrent assets

 

$
14,480 

 

$
14,876 

    Current liabilities

 

$
9,450 

 

$
9,697 

    Noncurrent liabilities

 

$
2,147 

 

$
2,255 

 

 

 

 

 

 

 

 

 

 

For the three months

ended March 31,

 

 

2013

 

2012

Operating Results

 

 

 

 

Net operating revenue

 

$
12,168 

 

$
10,445 

Net earnings

 

($287)

 

$
464 

 

The Company’s maximum exposure to losses at March 31, 2013 was $3.1 million, the value of its equity investment in CPL.

 

Changes in the carrying amount of the investment in CPL during the three months ended March 31, 2013 are as follows:

 

 

 

 

 

Amounts in thousands (in USD)

Total

Balance – January 1, 2013

$
3,346 

Equity earnings

(96)

Effect of foreign currency translation

(158)

Balance – March 31, 2013

$
3,092 

 

On April 8, 2013, CCE signed a final share sale agreement with LOT Polish Airlines to complete the purchase of an additional 33.3% ownership interest in CPL. The Company now owns a 66.6% ownership interest in CPL. As of the second quarter of 2013, the Company will begin consolidating CPL as a majority-owned subsidiary for which the Company has a controlling financial interest rather than reporting as an equity investment. The Company will account for and report the 33.3% Polish Airports ownership interest as a non-controlling financial interest.


Equity Investment (Tables)
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Equity Investment (Tables)
3 Months Ended
Mar. 31, 2013
Equity Investment [Abstract]  
Summarized Financial Information

 

 

 

 

 

Amounts in thousands (in USD):

 

March 31, 2013

 

December 31, 2012

Balance Sheet:

 

 

 

 

    Current assets

 

$
4,202 

 

$
4,716 

    Noncurrent assets

 

$
14,480 

 

$
14,876 

    Current liabilities

 

$
9,450 

 

$
9,697 

    Noncurrent liabilities

 

$
2,147 

 

$
2,255 

 

Operating Results

 

 

 

 

 

 

 

For the three months

ended March 31,

 

 

2013

 

2012

Operating Results

 

 

 

 

Net operating revenue

 

$
12,168 

 

$
10,445 

Net earnings

 

($287)

 

$
464 

 

Changes In Carrying Amount Of Investment

 

 

Amounts in thousands (in USD)

Total

Balance – January 1, 2013

$
3,346 

Equity earnings

(96)

Effect of foreign currency translation

(158)

Balance – March 31, 2013

$
3,092 

 


Equity Investment (Summarized Financial Information) (Details)
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Equity Investment (Summarized Financial Information) (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Equity Investment [Abstract]    
Current assets $ 4,202 $ 4,716
Noncurrent assets 14,480 14,876
Current liabilities 9,450 9,697
Noncurrent liabilities $ 2,147 $ 2,255

Equity Investment (Operating Results) (Details)
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Equity Investment (Operating Results) (Details) (USD $)
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Equity Investment [Abstract]    
Net operating revenue $ 12,168,000 $ 10,445,000
Net earnings (287,000) 464,000
Maximum exposure $ 3,100,000  

Equity Investment (Changes In Carrying Amount Of Investment) (Details)
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Equity Investment (Changes In Carrying Amount Of Investment) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Dec. 31, 2012
Polish Airports [Member]
Balance - January 1, 2013 $ 3,346    
Equity earnings (96) 155  
Effect of foreign currency translation (158)    
Balance - March 31, 2013 $ 3,092    
Ownership percentage     33.30%

Goodwill
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Goodwill
3 Months Ended
Mar. 31, 2013
Goodwill [Abstract]  
Goodwill

3.          GOODWILL

 

Changes in the carrying amount of goodwill related to our Edmonton property for the three months ended March 31, 2013 are as follows:

 

 

 

Amounts in thousands

 

Balance – January 1, 2013

$
4,941 

Effect of foreign currency translation

(101)

Balance – March 31, 2013

$
4,840 

 


Goodwill (Tables)
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Goodwill (Tables)
3 Months Ended
Mar. 31, 2013
Goodwill [Abstract]  
Changes In The Carrying Amount Of Goodwill

 

 

Amounts in thousands

 

Balance – January 1, 2013

$
4,941 

Effect of foreign currency translation

(101)

Balance – March 31, 2013

$
4,840 

 


Goodwill (Changes In The Carrying Amount Of Goodwill) (Details)
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Goodwill (Changes In The Carrying Amount Of Goodwill) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Goodwill [Abstract]  
Balance - January 1, 2013 $ 4,941
Effect of foreign currency translation (101)
Balance - March 31, 2013 $ 4,840

Promotional Allowances
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Promotional Allowances
3 Months Ended
Mar. 31, 2013
Promotional Allowances [Abstract]  
Promotional Allowances

4.            PROMOTIONAL ALLOWANCES

 

Hotel accommodations, bowling and food and beverage furnished without charge to customers are included in gross revenue at a value which approximates retail and are then deducted as complimentary services to arrive at net operating revenue.

 

The Company issues coupons for the purpose of generating future revenue. The cost of the coupons redeemed is applied against the revenue generated on the day of the redemption. In addition, members of the Company’s casinos’ player clubs earn points based on, among other things, their volume of play at the Company’s casinos. Players can accumulate points over time that they may redeem at their discretion under the terms of the program. Points can be redeemed for cash and/or various amenities at the casino, such as meals, hotel stays and gift shop items. The cost of the points is offset against the revenue in the period in which the points were earned. The value of unused or unredeemed points is included in accounts payable and accrued liabilities on the Company’s condensed consolidated balance sheets. The expiration of unused points results in a reduction of the liability. As of March 31, 2013 and 2012, the outstanding balance of this liability was $1.0 million.

 

Promotional allowances presented in the condensed consolidated statements of earnings include the following:

 

 

 

 

 

 

 

 

 

For the three months

ended March 31

 

 

2013

 

2012

Amounts in thousands

 

 

 

 

Hotel, bowling, food & beverage

 

$
888 

 

$
914 

Coupons

 

517 

 

454 

Player points

 

499 

 

586 

Total promotional allowances

 

$
1,904 

 

$
1,954 

 


Promotional Allowances (Tables)
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Promotional Allowances (Tables)
3 Months Ended
Mar. 31, 2013
Promotional Allowances [Abstract]  
Schedule Of Promotional Allowances

 

 

 

 

 

 

 

For the three months

ended March 31

 

 

2013

 

2012

Amounts in thousands

 

 

 

 

Hotel, bowling, food & beverage

 

$
888 

 

$
914 

Coupons

 

517 

 

454 

Player points

 

499 

 

586 

Total promotional allowances

 

$
1,904 

 

$
1,954 

 


Promotional Allowances (Details)
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Promotional Allowances (Details) (USD $)
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Promotional Allowances [Line Items]    
Total Promotional Allowances $ 1,904,000 $ 1,954,000
Outstanding balance of promotional balance liability 1,000,000  
Hotel, Bowling, Food and Beverage [Member]
   
Promotional Allowances [Line Items]    
Total Promotional Allowances 888,000 914,000
Coupons [Member]
   
Promotional Allowances [Line Items]    
Total Promotional Allowances 517,000 454,000
Player Points [Member]
   
Promotional Allowances [Line Items]    
Total Promotional Allowances $ 499,000 $ 586,000

Long-Term Debt
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Long-Term Debt
3 Months Ended
Mar. 31, 2013
Debt Disclosure [Abstract]  
Long-Term Debt

 

 

5.         LONG-TERM DEBT

 

On May 23, 2012, the Company through its Canadian subsidiaries entered into a CAD 28.0 million ($27.5 million) credit agreement with the Bank of Montreal (the “BMO Credit Agreement”). Proceeds from the BMO Credit Agreement were used to repay the Company’s mortgage loan related to the Edmonton property (the “Edmonton Mortgage”). The company will also use the proceeds to pursue the development or acquisition of new gaming opportunities and for general corporate purposes. The BMO Credit Agreement has a term of five years and is guaranteed by the Company. On May 23, 2012, we borrowed $3.7 million to repay the Edmonton Mortgage. On February 21, 2013, we borrowed an additional $7.3 million to pay for the additional 33.3% investment in CPL. The BMO Credit Agreement contains a number of financial covenants applicable to the Canadian subsidiaries, in addition to covenants restricting their incurrence of additional debt. The Company was in compliance with all covenants of the BMO Credit Agreement as of March 31, 2013. As of March 31, 2013, the amount outstanding was $10.6 million and we had approximately $14.9 million available under the BMO Credit Agreement. The $10.6 million we have borrowed cannot be re-borrowed once it is repaid.

 

Long-term debt at March 31, 2013 and December 31, 2012 consisted of the following:

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

Amounts in thousands

2013

 

2012

Credit Agreement - Bank of Montreal

$
10,619 

 

$
3,564 

 

 

 

 

Total long-term debt

$
10,619 

 

$
3,564 

Less current portion

($1,173)

 

($372)

Long-term portion

$
9,446 

 

$
3,192 

 

Deferred financing charges, which are reported as a component of other assets, are summarized as follows:

 

 

 

 

 

 

 

Credit agreement - Bank of Montreal

March 31,

 

December 31,

Amounts in thousands

2013

 

2012

Deferred financing charges - current

$
83 

 

$
85 

Deferred financing charges - long-term

261 

 

288 

Total

$
344 

 

$
373 

 

Amortization expenses relating to deferred financing charges was less than $0.1 million for the three months ended March 31, 2013 and 2012, respectively, and are included in interest expense in the accompanying condensed consolidated statements of earnings.

 

The consolidated weighted average interest rate on all borrowings for the Company was 4.25% for the three months ended March 31, 2013. The Company currently pays a floating interest rate on its borrowings under the BMO Credit Agreement. The current interest rate is approximately 4.0%.

 

 

As of March 31, 2013, scheduled maturities of the long-term debt are as follows:

 

 

 

 

 

 

 

 

Amounts in thousands

CAD

 

USD

2013

1,192 

 

1,173 

2014

1,100 

 

1,083 

2015

1,100 

 

1,083 

2016

1,100 

 

1,083 

2017 and thereafter

6,293 

 

6,197 

Total

$
10,785 

 

$
10,619 

   


Long-Term Debt (Tables)
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Long-Term Debt (Tables)
3 Months Ended
Mar. 31, 2013
Debt Disclosure [Abstract]  
Schedule of Long-term Debt

 

 

 

 

 

March 31,

 

December 31,

Amounts in thousands

2013

 

2012

Credit Agreement - Bank of Montreal

$
10,619 

 

$
3,564 

 

 

 

 

Total long-term debt

$
10,619 

 

$
3,564 

Less current portion

($1,173)

 

($372)

Long-term portion

$
9,446 

 

$
3,192 

 

Schedule of Deferred Financing Charges

 

 

 

 

Credit agreement - Bank of Montreal

March 31,

 

December 31,

Amounts in thousands

2013

 

2012

Deferred financing charges - current

$
83 

 

$
85 

Deferred financing charges - long-term

261 

 

288 

Total

$
344 

 

$
373 

 

Schedule of Maturities of Long-term Debt

 

 

 

 

Amounts in thousands

CAD

 

USD

2013

1,192 

 

1,173 

2014

1,100 

 

1,083 

2015

1,100 

 

1,083 

2016

1,100 

 

1,083 

2017 and thereafter

6,293 

 

6,197 

Total

$
10,785 

 

$
10,619 

 


Long-Term Debt (Narrative) (Details)
v0.0.0.0
Long-Term Debt (Narrative) (Details)
3 Months Ended 0 Months Ended 3 Months Ended
Mar. 31, 2013
USD ($)
Mar. 31, 2012
USD ($)
May 23, 2012
BMO Credit Agreement [Member]
USD ($)
Feb. 21, 2012
BMO Credit Agreement [Member]
USD ($)
Mar. 31, 2013
BMO Credit Agreement [Member]
USD ($)
May 23, 2012
BMO Credit Agreement [Member]
CAD ($)
Mar. 31, 2013
Amortization of Deferred Financing Charges [Member]
USD ($)
Mar. 31, 2012
Amortization of Deferred Financing Charges [Member]
USD ($)
Debt Instrument [Line Items]                
Maximum borrowing capacity     $ 27,500,000     $ 28,000,000    
Term of credit agreement     5 years          
Line of credit facility amount drawn to repay Edmonton mortgage     3,700,000          
Line of credit facility amount drawn to pay for additional equity investment       7,300,000        
Line of credit facility amount outstanding         10,600,000      
Line of credit facility amount available for borrowing         14,900,000      
Amortization of deferred financing costs $ 21,000 $ 24,000         $ 100,000 $ 100,000
Weighted average interest rate on borrowings 4.25%              
Interest rate         4.00%      

Long-Term Debt (Schedule of Long-term Debt) (Details)
v0.0.0.0
Long-Term Debt (Schedule of Long-term Debt) (Details)
In Thousands, unless otherwise specified
Mar. 31, 2013
USD ($)
Mar. 31, 2013
CAD ($)
Dec. 31, 2012
USD ($)
Mar. 31, 2012
USD ($)
Mar. 31, 2013
BMO Credit Agreement [Member]
USD ($)
Mar. 31, 2012
BMO Credit Agreement [Member]
USD ($)
Debt Instrument [Line Items]            
Total long-term debt $ 10,619 $ 10,785   $ 3,564 $ 10,619 $ 3,564
Less: current portion (1,173)   (372) (372)    
Long-term portion $ 9,446   $ 3,192 $ 3,192    

Long-Term Debt (Schedule of Deferred Financing Charges) (Details)
v0.0.0.0
Long-Term Debt (Schedule of Deferred Financing Charges) (Details) (BMO Credit Agreement [Member], USD $)
In Thousands, unless otherwise specified
Mar. 31, 2013
Mar. 31, 2012
BMO Credit Agreement [Member]
   
Debt Instrument [Line Items]    
Deferred financing charges - current $ 83 $ 85
Deferred financing charges - long-term 261 288
Total $ 344 $ 373

Long-Term Debt (Schedule of Maturities of Long-term Debt) (Details)
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Long-Term Debt (Schedule of Maturities of Long-term Debt) (Details)
In Thousands, unless otherwise specified
Mar. 31, 2013
USD ($)
Mar. 31, 2013
CAD ($)
Mar. 31, 2012
USD ($)
Debt Disclosure [Abstract]      
2013 $ 1,173 $ 1,192  
2014 1,083 1,100  
2015 1,083 1,100  
2016 1,083 1,100  
2017 and thereafter 6,197 6,293  
Total long-term debt $ 10,619 $ 10,785 $ 3,564

Financing Arrangements
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Financing Arrangements
3 Months Ended
Mar. 31, 2013
Financing Arrangements [Abstract]  
Financing Arrangements

6.         FINANCING ARRANGEMENTS

 

Calgary

On November 30, 2012, CCE signed credit and management agreements with United Horsemen of Alberta Inc. (“UHA”) in connection with the development of a proposed Racing Entertainment Center (“REC”) in Balzac, north metropolitan area of Calgary, Alberta, Canada. We would manage the REC upon completion. Both the credit and management agreements are subject to development approvals and licensing from the Alberta Gaming and Liquor Commission (“AGLC”) as discussed below.

 

The REC project is subject to development approvals and licensing from the AGLC. UHA and CCE have submitted the relevant applications, but there is no assurance that the needed approvals will be obtained or as to the timing of such approvals. Horse Racing Alberta, the governing authority for horseracing in Alberta, has already approved the REC project and issued a license. We anticipate that the REC would be completed 12 to 18 months following completion of the approval process. There is no assurance that the needed approvals will be obtained or as to the timing of such approvals.

 

CCE has agreed to loan to UHA up to CAD 13 million ($13 million) for the exclusive use of developing the REC project. The loan has an interest rate of LIBOR plus 800 basis points and a term of five years and is convertible at CCE’s option once the project becomes operational into an ownership position in UHA of up to 60%. The loan is secured by a leasehold mortgage on the REC property and a pledge of UHA’s stock by the majority of UHA shareholders. We intend to fund the loan with borrowings under our BMO Credit Agreement. We have paid $0.1 million in deferred financing costs related to legal fees incurred for the UHA loan. In addition, we have placed $0.3 million in escrow related to the UHA loan. No amounts have been advanced as of March 31, 2013. Once the REC is developed and operational and for as long as CCE has not converted the UHA loan into a majority ownership position in UHA, CCE will receive 60% of UHA’s net profit before tax as a management fee.

 

Since the agreements between UHA and CCE were entered into, litigation was brought by another party against UHA relating to prior business arrangements between that party and UHA. CCE is not a party to the litigation and is presently considering its position and alternative strategies to address this situation.

 

Southeast Asia

On February 5, 2013, the Company signed a credit agreement and loaned $0.5 million to an Asian company in connection with a proposed casino project in Southeast Asia. The project consists of developing a casino with 30 gaming tables, 100 slot machines and other facilities. The credit agreement makes available to the borrower up to a maximum of $1.1 million on a non-revolving basis. The credit agreement has an interest rate of LIBOR plus 8% and a term of 3 years. Interest is payable quarterly with the first payment due on June 30, 2013. Principal payments are payable quarterly with the first payment due on June 30, 2014.  The $0.5 million loan is included in notes receivable on the condensed consolidated balance sheets. The Company is currently completing due diligence on the project.

 


Financing Arrangements (Details)
v0.0.0.0
Financing Arrangements (Details)
In Millions, unless otherwise specified
3 Months Ended 3 Months Ended
Mar. 31, 2013
United Horsemen Of Alberta Inc. [Member]
USD ($)
Mar. 31, 2013
Asian Company [Member]
item
Feb. 05, 2013
Asian Company [Member]
USD ($)
Mar. 31, 2013
Minimum [Member]
Mar. 31, 2013
Maximum [Member]
Mar. 31, 2013
Maximum [Member]
United Horsemen Of Alberta Inc. [Member]
USD ($)
Mar. 31, 2013
Maximum [Member]
United Horsemen Of Alberta Inc. [Member]
CAD ($)
Mar. 31, 2013
Maximum [Member]
Asian Company [Member]
USD ($)
Anticipated completion of Racing Entertainment Center       12 months 18 months      
Development loan     $ 0.5     $ 13.0 $ 13.0 $ 1.1
Interest rate basis points over LIBOR 8.00% 8.00%            
Loan maturity period 5 years 3 years            
Maximum potential ownership interest in UHA 60.00%              
Payment of deferred financing costs 0.1              
Amount placed in escrow $ 0.3              
Management fee as a percentage of net profit before tax of debtor upon completion of project 60.00%              
Number of gaming tables   30            
Number of slot machines   100            

Income Taxes
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Income Taxes
3 Months Ended
Mar. 31, 2013
Income Taxes [Abstract]  
Income Taxes

 

 

7.         INCOME TAXES

 

The Company records deferred tax assets and liabilities based on the difference between the financial statement and income tax basis of assets and liabilities using the enacted statutory tax rate in effect for the year these differences are expected to be taxable or reversed. Deferred income tax expenses or credits are based on the changes in the asset or liability from period to period. The recorded deferred tax assets are reviewed for impairment on a quarterly basis by reviewing the Company’s internal estimates for future taxable income.

 

As of March 31, 2013, the Company had a valuation allowance for its U.S. deferred tax assets of $5.0 million, a $0.9 million valuation allowance on its Calgary property and a $0.9 million valuation allowance on the CCE deferred tax assets due to the uncertainty of future taxable income. The Company assesses the continuing need for a valuation allowance that results from uncertainty regarding its ability to realize the benefits of the Company’s deferred tax assets. The ultimate realization of deferred income tax assets depends on generation of future taxable income during the periods in which those temporary differences become deductible. If the Company concludes that its prospects for the realization of its deferred tax assets changes, the Company will then adjust its valuation allowance as appropriate after considering the following factors:

 

·

The level of historical taxable income and projections for future taxable income over periods in which the deferred tax assets would be deductible; 

·

Accumulation of net income before tax utilizing a look-back period of three years, and

·

Implementation of all tax planning strategies.

The Company’s provision for income taxes from operations consists of the following:

 

 

 

 

 

 

 

Amounts in thousands

 

For the three months

ended March 31,

 

 

2013

 

2012

U.S. Federal - Current

 

$

 

($19)

U.S. Federal - Deferred

 

 

Provision for U.S. federal income taxes

 

 

(19)

 

 

 

 

 

Foreign - Current

 

$
405 

 

$
239 

Foreign - Deferred

 

(88)

 

72 

Provision for foreign income taxes

 

317 

 

311 

Total provision for income taxes

 

$
317 

 

$
292 

 

 

The Company’s pre-tax income (loss) by jurisdiction is summarized in the table below:

 

 

 

 

 

For the three months

 

For the three months

Amounts in thousands

ended March 31, 2013

 

ended March 31, 2012

   

Pre-tax income (loss)

 

Pre-tax income

Canada

$
1,520 

 

$
955 

United States

181 

 

Mauritius

136 

 

103 

Austria

278 

 

246 

Poland*

(136)

 

116 

Total

$
1,979 

 

$
1,425 

 

 

 

 

.  

 

 

 

*  Poland includes loss from the equity investment in CPL.

 

The Company’s worldwide effective tax rate is 16.0%. A substantial portion of the Company’s earnings is from Canada, which has a 25% tax rate. In addition, the movement of exchange rates for intercompany loans denominated in U.S. dollars further impacts the Company’s effective tax rate because foreign currency gains and losses generally are not taxed until realized. Therefore, the Company’s overall effective tax rate can be significantly impacted by foreign currency gains or losses.


Income Taxes (Tables)
v0.0.0.0
Income Taxes (Tables)
3 Months Ended
Mar. 31, 2013
Income Taxes [Abstract]  
Provision For Income Taxes From Operations

 

 

 

 

 

Amounts in thousands

 

For the three months

ended March 31,

 

 

2013

 

2012

U.S. Federal - Current

 

$

 

($19)

U.S. Federal - Deferred

 

 

Provision for U.S. federal income taxes

 

 

(19)

 

 

 

 

 

Foreign - Current

 

$
405 

 

$
239 

Foreign - Deferred

 

(88)

 

72 

Provision for foreign income taxes

 

317 

 

311 

Total provision for income taxes

 

$
317 

 

$
292 

 

Pre-Tax Income (Loss) By Jurisdiction

 

 

 

 

 

For the three months

 

For the three months

Amounts in thousands

ended March 31, 2013

 

ended March 31, 2012

   

Pre-tax income (loss)

 

Pre-tax income

Canada

$
1,520 

 

$
955 

United States

181 

 

Mauritius

136 

 

103 

Austria

278 

 

246 

Poland*

(136)

 

116 

Total

$
1,979 

 

$
1,425 

 

 

 

 

.  

 

 

 


Income Taxes (Narrative) (Details)
v0.0.0.0
Income Taxes (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Income Taxes [Line Items]  
Look-back period 3 years
Worldwide effective tax rate 16.00%
United States [Member]
 
Income Taxes [Line Items]  
Valuation allowance $ 5.0
Calgary [Member]
 
Income Taxes [Line Items]  
Valuation allowance 0.9
Century Casinos Europe GmbH [Member]
 
Income Taxes [Line Items]  
Valuation allowance $ 0.9
Canada [Member]
 
Income Taxes [Line Items]  
Statutory tax rate 25.00%

Income Taxes (Provision For Income Taxes From Operations) (Details)
v0.0.0.0
Income Taxes (Provision For Income Taxes From Operations) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Income Taxes [Abstract]    
U.S. Federal - Current $ 0 $ (19)
U.S. Federal - Deferred 0 0
Provision for U.S. federal income taxes 0 (19)
Foreign - Current 405 239
Foreign - Deferred (88) 72
Provision for foreign income taxes 317 311
Total provision for income taxes $ 317 $ 292

Income Taxes (Income Tax Expense By Jurisdiction) (Details)
v0.0.0.0
Income Taxes (Income Tax Expense By Jurisdiction) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Income Taxes [Line Items]    
Pre-tax income (loss) $ 1,979 $ 1,425
Canada [Member]
   
Income Taxes [Line Items]    
Pre-tax income (loss) 1,520 955
United States [Member]
   
Income Taxes [Line Items]    
Pre-tax income (loss) 181 5
Mauritius [Member]
   
Income Taxes [Line Items]    
Pre-tax income (loss) 136 103
Austria [Member]
   
Income Taxes [Line Items]    
Pre-tax income (loss) 278 246
Poland [Member]
   
Income Taxes [Line Items]    
Pre-tax income (loss) $ (136) [1] $ 116 [1]
[1] Poland includes loss from the equity investment in CPL.

Earnings Per Share
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Earnings Per Share
3 Months Ended
Mar. 31, 2013
Earnings Per Share [Abstract]  
Earnings Per Share

8.          EARNINGS PER SHARE

 

The calculation of basic earnings per share considers only weighted average outstanding common shares in the computation. The calculation of diluted earnings per share gives effect to all potentially dilutive securities. The calculation of diluted earnings per share is based upon the weighted average number of common shares outstanding during the period, plus, if dilutive, the assumed exercise of stock options using the treasury stock method. Weighted average shares outstanding for the three months ended March 31, 2013 and 2012 were as follows:

 

 

 

 

 

 

For the three months

ended March 31

   

2013

 

2012

Weighted average common shares, basic

24,128,114 

 

23,877,362 

Dilutive effect of stock options

25,869 

 

133,431 

Weighted average common shares, diluted

24,153,983 

 

24,010,793 

 

The following stock options are anti-dilutive and have not been included in the weighted average shares outstanding calculation:

 

 

 

 

 

 

 

For the three months

ended March 31

   

2013

 

2012

Stock options

37,500 

 

886,710