Document and Entity Information
v0.0.0.0
Document and Entity Information
 6 Months Ended
Jun. 30, 2013
Jul. 26, 2013
Document and Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Jun. 30, 2013  
Document Fiscal Year Focus 2013  
Document Fiscal Period Focus Q2  
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
Jun. 30, 2013
Dec. 31, 2012
ASSETS    
Cash and cash equivalents $ 28,170 $ 24,747
Receivables, net 1,129 700
Prepaid expenses 707 608
Inventories 494 311
Other current assets 90 86
Deferred income taxes 494 83
Total current assets 31,084 26,535
Property and equipment, net 112,756 99,526
Goodwill 12,511 4,941
Equity investment 0 3,346
Deferred income taxes 3,056 2,145
Casino license 2,296 0
Trademark 1,937 104
Notes receivable 500 0
Other assets 994 478
Restricted cash 258 261
Total assets 165,392 137,336
LIABILITIES AND SHAREHOLDERS' EQUITY    
Current portion of long-term debt 6,279 372
Accounts payable and accrued liabilities 6,629 6,379
Accrued payroll 3,928 2,806
Taxes payable 3,362 3,413
Contingent liability 5,505 0
Deferred income taxes 101 101
Total current liabilities 25,804 13,071
Long-term debt, less current portion 10,147 3,192
Taxes payable 237 237
Deferred income taxes 3,701 2,680
Other liabilities 96 0
Total liabilities 39,985 19,180
Commitments and Contingencies      
Shareholders' Equity:    
Preferred stock; $0.01 par value; 20,000,000 shares authorized; no shares issued or outstanding 0 0
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 75,391 75,388
Retained earnings 43,557 38,238
Accumulated other comprehensive earnings 1,118 4,569
Treasury stock - 115,812 shares at cost (282) (282)
Total Century Casinos shareholders' equity 120,027 118,156
Noncontrolling interest 5,380 0
Total equity 125,407 118,156
Total liabilities and shareholders' equity $ 165,392 $ 137,336

Condensed Consolidated Balance Sheets (Parenthetical)
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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Jun. 30, 2013
Dec. 31, 2012
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 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 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 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 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 noncontrolling 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 Casions, Inc. - basic and diluted:        
Basic $ 0.15 $ 0.05 $ 0.22 $ 0.10
Diluted $ 0.15 $ 0.05 $ 0.22 $ 0.09
Number of shares - basic 24,128,114 23,890,405 24,128,114 23,883,919
Number of shares - diluted 24,208,853 24,060,322 24,183,137 24,054,904

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 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Condensed Consolidated Statements of Comprehensive Earnings (Loss) [Abstract]        
Net earnings $ 3,823 $ 1,148 $ 5,485 $ 2,281
Other comprehensive (loss) earnings, net of tax:        
Foreign currency translation adjustments (2,238) (1,357) (3,451) (290)
Other comprehensive (loss) (2,238) (1,357) (3,451) (290)
Comprehensive earnings 1,585 (209) 2,034 1,991
Less: Comprehensive (loss) attributable to non-controlling interest (109) 0 (109) 0
Comprehensive earnings (loss) attributable to Century Casinos shareholders $ 1,694 $ (209) $ 2,143 $ 1,991

Condensed Consolidated Statements of Cash Flows
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Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Cash Flows from Operating Activities:    
Net earnings $ 5,319 $ 2,281
Adjustments to reconcile net earnings to net cash provided by operating activities:    
Depreciation and amortization 2,986 2,358
Gain on business combination (2,074) 0
Loss on disposition of fixed assets 15 22
Amortization of stock-based compensation 3 (2)
Amortization of deferred financing costs 42 110
Deferred taxes (1,359) 1
Net earnings attributable to noncontrolling interest 166 0
Earnings (losses) from unconsolidated subsidiary 128 (438)
Changes in Operating Assets and Liabilities:    
Receivables 178 29
Prepaid expenses and other assets 100 (43)
Accounts payable and accrued liabilities (1,087) (1,217)
Inventories (61) (60)
Other operating assets 0 (77)
Other operating liabilities (194) 0
Accrued payroll (455) 5
Taxes payable (951) (923)
Net cash provided by operating activities 2,756 2,046
Cash Flows from Investing Activities:    
Purchases of property and equipment (1,308) (1,620)
Acquisition of Casinos Poland, net of cash acquired (4,580) 0
Proceeds from disposition of assets 13 2
Funds advanced for projects (500) 0
Net cash used in investing activities (6,375) (1,618)
Cash Flows from Financing Activities:    
Proceeds from borrowings 8,301 3,626
Payment of deferred financing costs 0 (394)
Principal repayments (755) (9,092)
Proceeds from exercise of options 0 240
Net cash provided by (used in) financing activities 7,546 (5,620)
Effect of Exchange Rate Changes on Cash (504) (256)
Increase (Decrease) in Cash and Cash Equivalents 3,423 (5,448)
Cash and Cash Equivalents at Beginning of Period 24,747 25,192
Cash and Cash Equivalents at End of Period 28,170 19,744
Supplemental Disclosure of Cash Flow Information:    
Interest paid 158 486
Income taxes paid $ 1,510 $ 88

Description Of Business And Basis Of Presentation
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Description Of Business And Basis Of Presentation
 6 Months Ended
Jun. 30, 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 June 30, 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. In addition, 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, and on April 8, 2013 began consolidating CPL as a majority-owned subsidiary for which the Company has a controlling financial interest (Note 2).

 

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 June 30, 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” or “$”) unless otherwise indicated. Transactions that are denominated in a foreign currency, which include the Canadian dollar (“CAD”), Euro (“EUR”) 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:

 

 

 

 

 

 

 

 

 

 

 

June 30

 

December 31

 

June 30

Ending Rates

 

2013

 

2012

 

2012

Canadian dollar (CAD)

 
1.0512 

 
0.9949 

 
1.0191 

Euros (EUR)

 
0.7687 

 
0.7584 

 
0.7894 

Polish zloty (PLN)

 
3.3276 

 
3.0996 

 
3.3885 

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 June 30,

 

 

 

For the six months

ended June 30,

 

 

Average Rates

 

2013

 

2012

 

% Change

 

2013

 

2012

 

% Change

Canadian dollar (CAD)

 
1.0237 

 
1.0104 

 
(1.3%)

 
1.0161 

 
1.0060 

 
(1.0%)

Euros (EUR)

 
0.7658 

 
0.7796 

 
1.8% 

 
0.7616 

 
0.7712 

 
1.2% 

Polish zloty (PLN)

 
3.2156 

 
3.3181 

 
3.1% 

 
3.1800 

 
3.2724 

 
2.8% 

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)
 6 Months Ended
Jun. 30, 2013
Description Of Business And Basis Of Presentation [Abstract]  
Exchange Rates

 

 

 

 

 

 

 

 

 

June 30

 

December 31

 

June 30

Ending Rates

 

2013

 

2012

 

2012

Canadian dollar (CAD)

 
1.0512 

 
0.9949 

 
1.0191 

Euros (EUR)

 
0.7687 

 
0.7584 

 
0.7894 

Polish zloty (PLN)

 
3.3276 

 
3.0996 

 
3.3885 

Source: Pacific Exchange Rate Service

 

 

 

 

 

 

 

Average Exchange Rates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months

ended June 30,

 

 

 

For the six months

ended June 30,

 

 

Average Rates

 

2013

 

2012

 

% Change

 

2013

 

2012

 

% Change

Canadian dollar (CAD)

 
1.0237 

 
1.0104 

 
(1.3%)

 
1.0161 

 
1.0060 

 
(1.0%)

Euros (EUR)

 
0.7658 

 
0.7796 

 
1.8% 

 
0.7616 

 
0.7712 

 
1.2% 

Polish zloty (PLN)

 
3.2156 

 
3.3181 

 
3.1% 

 
3.1800 

 
3.2724 

 
2.8% 

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)
 0 Months Ended 6 Months Ended
Apr. 08, 2013
Casinos Poland Ltd [Member]
Jun. 30, 2013
Casinos Poland Ltd [Member]
Jun. 30, 2013
Subsequent Event [Member]
Jun. 30, 2013
Subsequent Event [Member]
Casinos Poland Ltd [Member]
Description Of Business And Basis Of Presentation [Line Items]        
Noncontrolling Interest, Ownership Percentage by Parent   66.60%   66.60%
Additional CPL percentage to acquire - agreement between CCE and LOT Polish Airlines 33.30%   33.30%  

Description Of Business And Basis Of Presentation (Exchange Rates) (Details)
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Description Of Business And Basis Of Presentation (Exchange Rates) (Details)
Jun. 30, 2013
Dec. 31, 2012
Jun. 30, 2012
Canadian Dollar [Member]
      
Description Of Business And Basis Of Presentation [Line Items]      
Exchange rate 1.0512 0.9949 1.0191
Euros [Member]
      
Description Of Business And Basis Of Presentation [Line Items]      
Exchange rate 0.7687 0.7584 0.7894
Polish Zloty [Member]
      
Description Of Business And Basis Of Presentation [Line Items]      
Exchange rate 3.3276 3.0996 3.3885

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 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Canadian Dollar [Member]
        
Description Of Business And Basis Of Presentation [Line Items]        
Average Rates 1.0237 1.0104 1.0161 1.0060
Average Rates % Change (1.30%)   (1.00%)  
Euros [Member]
        
Description Of Business And Basis Of Presentation [Line Items]        
Average Rates 0.7658 0.7796 0.7616 0.7712
Average Rates % Change 1.80%   1.20%  
Polish Zloty [Member]
        
Description Of Business And Basis Of Presentation [Line Items]        
Average Rates 3.2156 3.3181 3.1800 3.2724
Average Rates % Change 3.10%   2.80%  

Acquisition
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Acquisition
 6 Months Ended
Jun. 30, 2013
Acquisition [Abstract]  
Acquisition

2.          ACQUISITION

 

Casinos Poland

On April 8, 2013, the Company’s subsidiary CCE signed a final share sale agreement with LOT Polish Airlines to complete the purchase of an additional 33.3% ownership interest in CPL for cash consideration of $6.8 million. CPL is the owner and operator of nine casinos throughout Poland with a total of 317 slot machines and 77 gaming tables.  The Company paid for the purchase consideration with borrowings under its credit agreement with the Bank of Montreal (“BMO Credit Agreement”) (Note 5). There was no contingent consideration for the transaction.

 

Prior to April 8, 2013, the Company owned 33.3% of CPL and accounted for the ownership interest as an equity investment. The Company now owns a 66.6% ownership interest in CPL and on April 8, 2013 began consolidating CPL financial information as a majority-owned subsidiary for which the Company has a controlling financial interest. As a result, the Company changed its accounting for CPL from an equity method investment to a consolidated subsidiary. CPL contributed a total of $10.9 million in net operating revenue and $0.3 million in earnings from the date of acquisition through June 30, 2013. Polish Airports Company (“Polish Airports”) owns the remaining 33.3% ownership interest in CPL and the Company accounts for and reports the Polish Airports ownership interest as a non-controlling financial interest.

 

Upon consolidation, the fair value of the Company’s initial 33.3% equity investment was determined to be $5.2 million as of the acquisition date. The $5.2 million was greater than the carrying value of the equity investment, resulting in a gain of $2.1 million, net of the foreign currency translation. The Company recorded the gain in “Gain on business combination” in the second quarter 2013 consolidated statement of earnings. The fair value was determined based on the controlling interest obtained through the additional 33.3% interest acquired and on the Company’s internal valuation of CPL using the following methods, which the Company believes provide the most appropriate indicators of fair value: 

·

relief from royalty method; 

·

replacement cost method; 

·

direct market value approach and direct and indirect cost approach; and

·

sales comparison approach, income approach and cost approach.

 

 

 

 

Amounts in thousands (in USD)

Total

Investment fair value - April 8, 2013
$
5,214 

Investment value at April  8, 2013
(3,027)

Gain on business combination including foreign currency translation
2,187 

Less: foreign currency translation
(113)

Gain on business combination
$
2,074 

 

 

 

Details of the purchase in the table below are based on estimated fair values of assets and liabilities as of April 8, 2013, the date of acquisition.  The fair values set forth are subject to adjustment as the Company obtains additional information during the measurement period (a period up to one year from the date of acquisition) that would change the fair value allocation as of the acquisition date.

 

 

 

Acquisition Date

April 8, 2013

 

 

Amounts in thousands

 

Purchase consideration:

 

Cash paid
$
6,780 

Acquisition-date fair value of the previously held equity interest
5,214 

Total purchase consideration
$
11,994 

The assets and liabilities recognized as a result of the acquisition are as follows:

 

 

 

 

Cash
$
2,200 

Accounts receivable
638 

Deferred tax assets - current

201 

Prepaid expenses
222 

Inventory
155 

Other current assets
3 

Property and equipment
17,922 

Licenses
2,533 

Trademark
1,924 

Deferred tax assets, non-current
1,034 

Other long-term assets
448 

Current portion of long-term debt
(4,033)

Accounts payable and accrued liabilities
(2,236)

Contingent liability
(5,500)

Accrued payroll
(1,272)

Taxes payable
(2,073)

Long-term debt, less current portion
(1,921)

Deferred income taxes, non-current
(1,258)

Net identifiable assets acquired

8,987 

 

 

Less: Non-controlling interest
(5,214)

Add: Goodwill
8,221 

Net assets acquired
$
11,994 

 

The Company accounted for the transaction as a step acquisition, and accordingly, CPL's assets of $27.3 million (including $2.2 million in cash) and liabilities of $18.3 million were included in the Company's consolidated balance sheet at April 8, 2013. The goodwill is attributable to the expected synergies and economies of scale of incorporating CPL with the Company.  The acquisition also combines the specialties of the Company’s management expertise in the gaming industry with the brand awareness of Casinos Poland. Goodwill is not a tax deductible item for the Company.    

 

 

Non-controlling interest

The Company recognized the Polish Airports non-controlling interest in CPL at its fair value as of the acquisition. The Company estimated the fair value of the non-controlling interest by determining the value of a controlling interest in the entity. Having control over a company gives additional rights to the holder of the controlling interest as opposed to the holder of the non-controlling interest. The Company then applied a 22.5% discount or reverse control premium to determine the value of the non-controlling interest.

 

The discount for lack of control was estimated based on an analysis of the transactions in the casinos and gaming industry in the past five years. The resulting value of the non-controlling interest was PLN 16.5 million ($5.2 million).

 

Purchase Consideration – cash outflow

 

 

 

 

Outflow of cash to acquire subsidiary, net of cash acquired

 

Cash consideration
$
6,780 

Less: cash balances acquired
(2,200)

Outflow of cash - investing activities
$
4,580 

 

Acquisition-related costs

The Company has incurred acquisition costs of approximately $0.1 million and expects to incur an additional $0.1 million during the third quarter of 2013.  These costs include legal, accounting and valuation fees and have been recorded as general and administrative expenses.

 

Contingent liability

In March 2011, the Polish Internal Revenue Service (“Polish IRS”) conducted a tax audit of CPL to review the calculation and payment of personal income tax by CPL employees covering January 2011. Based on this audit, the Polish IRS concluded that CPL should calculate, collect and remit to the Polish IRS personal income tax on tips received by CPL employees from casino customers. After proceedings between CPL and the Polish IRS, the Director of the Tax Chamber in Warsaw confirmed the opinion of the Polish IRS on November 19, 2012, and on November 30, 2012 CPL paid PLN 125,269 (less than $0.1 million) to the Polish IRS resulting from the decision. CPL appealed the decision to the Regional Administrative Court in Warsaw on December 21, 2012. If the case is decided against CPL, the Company believes that the Polish IRS may seek to assess a liability for all periods from January 2007 to present. A final decision is not expected in 2013. Similar litigation involving competitors concerning the treatment of tips is ongoing.

 

Management has determined that it is reasonably possible that the litigation will be unfavorable for CPL. Accounting guidance requires pre-acquisition contingent liabilities to be recognized at fair value at the acquisition date if the liability can be determined. Based on management’s assessment using a probability weighted cash flow analysis, the fair value of the potential liability for all open periods is estimated at PLN 18.3 million ($5.5 million). As a result, PLN 18.3 million ($5.5 million) has been recorded as a contingent liability as of June 30, 2013 on the condensed consolidated balance sheets.

 

Pro Forma Results

The following table provides unaudited pro forma information of the Company as if the acquisition of CPL had occurred at the beginning of the earliest comparable period presented. This pro forma information is not necessarily indicative either of the combined results of operations that actually would have been realized had the acquisition been consummated during the periods for which the pro forma information is presented, or of future results.

 

 

 

 

 

 

 

 

 

For the six months

ended June 30,

 

For the six months

ended June 30,

 

 

2013

 

2012

Net operating revenue

 
$
59,397 

 
$
56,717 

Net earnings

 
$
5,153 

 
$
2,143 

Basic and diluted earnings per share

 
$
0.21 

 
$
0.09 

 


Acquisition (Tables)
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Acquisition (Tables)
 6 Months Ended
Jun. 30, 2013
Acquisition [Abstract]  
Gain On Business Combination

 

 

Amounts in thousands (in USD)

Total

Investment fair value - April 8, 2013
$
5,214 

Investment value at April  8, 2013
(3,027)

Gain on business combination including foreign currency translation
2,187 

Less: foreign currency translation
(113)

Gain on business combination
$
2,074 

 

Total Purchase Consideration

 

 

Acquisition Date

April 8, 2013

 

 

Amounts in thousands

 

Purchase consideration:

 

Cash paid
$
6,780 

Acquisition-date fair value of the previously held equity interest
5,214 

Total purchase consideration
$
11,994 

 

Assets And Liabilities Recognized As A Result Of The Acquisition

 

 

Cash
$
2,200 

Accounts receivable
638 

Deferred tax assets - current

201 

Prepaid expenses
222 

Inventory
155 

Other current assets
3 

Property and equipment
17,922 

Licenses
2,533 

Trademark
1,924 

Deferred tax assets, non-current
1,034 

Other long-term assets
448 

Current portion of long-term debt
(4,033)

Accounts payable and accrued liabilities
(2,236)

Contingent liability
(5,500)

Accrued payroll
(1,272)

Taxes payable
(2,073)

Long-term debt, less current portion
(1,921)

Deferred income taxes, non-current
(1,258)

Net identifiable assets acquired

8,987 

 

 

Less: Non-controlling interest
(5,214)

Add: Goodwill
8,221 

Net assets acquired
$
11,994 

 

Purchase Consideration - Cash Outflow

 

 

Outflow of cash to acquire subsidiary, net of cash acquired

 

Cash consideration
$
6,780 

Less: cash balances acquired
(2,200)

Outflow of cash - investing activities
$
4,580 

 

Pro Forma Results

 

 

 

 

 

 

 

For the six months

ended June 30,

 

For the six months

ended June 30,

 

 

2013

 

2012

Net operating revenue

 
$
59,397 

 
$
56,717 

Net earnings

 
$
5,153 

 
$
2,143 

Basic and diluted earnings per share

 
$
0.21 

 
$
0.09 

 


Acquisition (Narrative) (Details)
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Acquisition (Narrative) (Details)
 0 Months Ended 3 Months Ended 6 Months Ended 0 Months Ended 6 Months Ended 0 Months Ended 3 Months Ended 6 Months Ended
Apr. 08, 2013
USD ($)
Jun. 30, 2013
USD ($)
Jun. 30, 2012
USD ($)
Jun. 30, 2013
USD ($)
Jun. 30, 2012
USD ($)
Apr. 07, 2013
USD ($)
Dec. 31, 2012
USD ($)
Apr. 08, 2013
Polish Airports [Member]
USD ($)
Apr. 08, 2013
Polish Airports [Member]
PLN
Jun. 30, 2013
Polish Airports [Member]
Apr. 08, 2013
Casinos Poland Ltd [Member]
USD ($)
Jun. 30, 2013
Casinos Poland Ltd [Member]
USD ($)
Jun. 30, 2013
Casinos Poland Ltd [Member]
USD ($)
item
Jun. 30, 2013
Casinos Poland Ltd [Member]
PLN
item
Apr. 07, 2013
Casinos Poland Ltd [Member]
Additional ownership acquired                     33.30%        
Cash paid           $ 6,780,000         $ 6,800,000        
Number of casinos                         9 9  
Number of slot machines                         317 317  
Number of gaming tables                         77 77  
Ownership percentage prior to acquisition                             33.30%
Ownership interest in CPL                   33.30%     66.60% 66.60%  
Net operating revenue contributed by CPL                       10,900,000      
Earnings contributed by CPL                       300,000      
Remaining ownership interest in CPL   0   0     3,346,000                
Fair value of initial equity investment 5,214,000           (3,027,000)       5,200,000        
Gain on business combination 2,074,000 2,074,000 0 2,074,000 0               2,100,000    
Assets carried in balance sheet                     27,300,000        
Cash included in assets carried in balance sheet                     2,200,000        
Liabilities carried in balance sheet                     18,300,000        
Percentage of discount or reverse control premium to determine the value of the non-controlling interest               22.50% 22.50%            
Number of years of transactions analyzed                   5 years          
Resulting value of noncontrolling interest               5,200,000 16,500,000            
Acquisition costs       100,000                      
Expected future acquisition costs       100,000                      
Paid to the Polish IRS resulting from the decision                         100,000 125,269  
Contingent liability   $ 5,505,000   $ 5,505,000     $ 0             18,300,000  

Acquisition (Gain On Business Combination) (Details)
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Acquisition (Gain On Business Combination) (Details) (USD $)
In Thousands, unless otherwise specified
 0 Months Ended 3 Months Ended 6 Months Ended
Apr. 08, 2013
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Dec. 31, 2012
Acquisition [Abstract]            
Investment fair value $ 5,214         $ (3,027)
Gain on business combination including foreign currency translation 2,187          
Less: foreign currency translation (113)          
Gain on business combination $ 2,074 $ 2,074 $ 0 $ 2,074 $ 0  

Acquisition (Purchase Consideration) (Details)
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Acquisition (Purchase Consideration) (Details) (USD $)
In Thousands, unless otherwise specified
Apr. 07, 2013
Acquisition [Abstract]  
Cash paid $ 6,780
Acquisition-date fair value of the previously held equity interest 5,214
Total purchase consideration $ 11,994

Acquisition (Assets And Liabilities Recognized As A Result Of The Acquisition) (Details)
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Acquisition (Assets And Liabilities Recognized As A Result Of The Acquisition) (Details) (USD $)
In Thousands, unless otherwise specified
Apr. 07, 2013
Business Acquisition [Line Items]  
Assets recognized $ 2,200
Net identifiable assets acquired 8,987
Less: Non-controlling interest (5,214)
Add: Goodwill 8,221
Net assets acquired 11,994
Accounts Receivable [Member]
  
Business Acquisition [Line Items]  
Assets recognized 638
Deferred Tax Assets Current [Member]
  
Business Acquisition [Line Items]  
Assets recognized 201
Prepaid Expenses [Member]
  
Business Acquisition [Line Items]  
Assets recognized 222
Inventory [Member]
  
Business Acquisition [Line Items]  
Assets recognized 155
Other Current Assets [Member]
  
Business Acquisition [Line Items]  
Assets recognized 3
Property And Equipment [Member]
  
Business Acquisition [Line Items]  
Assets recognized 17,922
Licenses [Member]
  
Business Acquisition [Line Items]  
Assets recognized 2,533
Trademark [Member]
  
Business Acquisition [Line Items]  
Assets recognized 1,924
Deferred Tax Assets, Noncurrent [Member]
  
Business Acquisition [Line Items]  
Assets recognized 1,034
Other Long-Term Assets [Member]
  
Business Acquisition [Line Items]  
Assets recognized 448
Current Portion Of Long-Term Debt [Member]
  
Business Acquisition [Line Items]  
Liabilities recognized (4,033)
Accounts Payable And Accrued Liabilities [Member]
  
Business Acquisition [Line Items]  
Liabilities recognized (2,236)
Contingent Liability [Member]
  
Business Acquisition [Line Items]  
Liabilities recognized (5,500)
Accrued Payroll [Member]
  
Business Acquisition [Line Items]  
Liabilities recognized (1,272)
Taxes Payable [Member]
  
Business Acquisition [Line Items]  
Liabilities recognized (2,073)
Long-Term Debt, Less Current Portion [Member]
  
Business Acquisition [Line Items]  
Liabilities recognized (1,921)
Deferred Income Taxes, Noncurrent [Member]
  
Business Acquisition [Line Items]  
Liabilities recognized $ (1,258)

Acquisition (Purchase Consideration - Cash Outflow) (Details)
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Acquisition (Purchase Consideration - Cash Outflow) (Details) (USD $)
In Thousands, unless otherwise specified
 0 Months Ended 6 Months Ended
Apr. 07, 2013
Jun. 30, 2013
Jun. 30, 2012
Acquisition [Abstract]      
Cash consideration $ 6,780    
Less: cash balances acquired (2,200)    
Outflow of cash - investing activities $ 4,580 $ 4,580 $ 0

Acquisition (Pro Forma Information) (Details)
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Acquisition (Pro Forma Information) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Acquisition [Abstract]    
Net operating revenue $ 59,397 $ 56,717
Net earnings $ 5,153 $ 2,143
Basic and diluted earnings per share $ 0.21 $ 0.09

Goodwill
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Goodwill
 6 Months Ended
Jun. 30, 2013
Goodwill [Abstract]  
Goodwill

3.          GOODWILL AND INTANGIBLE ASSET

 

Goodwill

Changes in the carrying amount of goodwill related to the Company’s Edmonton property and CPL for the six months ended June 30, 2013 are as follows:

 

 

 

 

 

Amounts in thousands

Edmonton

Casinos Poland

Total

Balance – January 1, 2013
$
4,941 
$
0 
$
4,941 

Purchase of Casinos Poland
0 
8,221 
8,221 

Effect of foreign currency translation
(265)
(386)
(651)

Balance – June 30, 2013
$
4,676 
$
7,835 
$
12,511 

 

Goodwill related to the purchase of additional ownership in CPL was $8.2 million as of June 30, 2013 (Note 2).

 

Intangible Asset

Casinos Poland currently has nine casino licenses each with a term of six years. As of April 8, 2013, the Company began reporting the Polish casino licenses as intangible assets on the Company’s condensed consolidated balance sheets. Changes in the carrying amount of the Casinos Poland licenses from the date of acquisition to June 30, 2013 are as follows:

 

 

 

 

Amounts in thousands

 

Balance – April 8, 2013
$
2,533 

Amortization

(121)

Effect of foreign currency translation
(116)

Balance – June 30, 2013
$
2,296 

 

As of June 30, 2013, estimated amortization expense for the CPL casino licenses over the next five years is as follows:

 

 

 

 

Amounts in thousands

 

2013
$
258 

2014
$
516 

2015
$
516 

2016
$
482 

2017
$
393 

 

Such estimates do not reflect the impact of future foreign exchange rate changes or the renewal of the licenses. The weighted average period before the next renewal is 4.5 years.


Goodwill (Tables)
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Goodwill (Tables)
 6 Months Ended
Jun. 30, 2013
Goodwill [Abstract]  
Changes In The Carrying Amount Of Goodwill

 

 

 

 

Amounts in thousands

Edmonton

Casinos Poland

Total

Balance – January 1, 2013
$
4,941 
$
0 
$
4,941 

Purchase of Casinos Poland
0 
8,221 
8,221 

Effect of foreign currency translation
(265)
(386)
(651)

Balance – June 30, 2013
$
4,676 
$
7,835 
$
12,511 

 

Intangible Asset

 

 

Amounts in thousands

 

Balance – April 8, 2013
$
2,533 

Amortization

(121)

Effect of foreign currency translation
(116)

Balance – June 30, 2013
$
2,296 

 

Estimated Amortization Expense

 

 

Amounts in thousands

 

2013
$
258 

2014
$
516 

2015
$
516 

2016
$
482 

2017
$
393 

 


Goodwill (Narrative) (Details)
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Goodwill (Narrative) (Details) (Casinos Poland Ltd [Member], USD $)
In Millions, unless otherwise specified
 6 Months Ended
Jun. 30, 2013
item
Casinos Poland Ltd [Member]
  
Goodwill related to purchase of additional ownership in CPL $ 8.2
Number of casino licenses 9
Term of casino licenses, years 6 years
Weighted-average period before the next renewal of casino licenses 4 years 6 months

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
 6 Months Ended
Jun. 30, 2013
Balance $ 4,941
Purchase of Casinos Poland 8,221
Effect of foreign currency translation (651)
Balance 12,511
Edmonton [Member]
  
Balance 4,941
Purchase of Casinos Poland 0
Effect of foreign currency translation (265)
Balance 4,676
Casinos Poland Ltd [Member]
  
Balance 0
Purchase of Casinos Poland 8,221
Effect of foreign currency translation (386)
Balance $ 7,835

Goodwill (Intangible Asset) (Details)
v0.0.0.0
Goodwill (Intangible Asset) (Details) (USD $)
In Thousands, unless otherwise specified
 3 Months Ended
Jun. 30, 2013
Dec. 31, 2012
Jun. 30, 2013
Casinos Poland Ltd [Member]
Balance $ 2,296 $ 0 $ 2,533
Amortization     (121)
Effect of foreign currency translation adjustments     (116)
Balance $ 2,296 $ 0 $ 2,296

Goodwill (Estimated Amortization Expense) (Details)
v0.0.0.0
Goodwill (Estimated Amortization Expense) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Goodwill [Abstract]  
2013 $ 258
2014 516
2015 516
2016 482
2017 $ 393

Promotional Allowances
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Promotional Allowances
 6 Months Ended
Jun. 30, 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 June 30, 2013, the outstanding balance of this liability was $0.9 million.  

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months

ended June 30

 

For the six months

ended June 30

 

 

2013

 

2012

 

2013

 

2012

Amounts in thousands

 

 

 

 

 

 

 

 

Hotel, bowling, food & beverage

 
$
908 

 
$
984 

 
$
1,796 

 
$
1,898 

Coupons

 
498 

 
487 

 
1,014 

 
941 

Player points

 
489 

 
685 

 
989 

 
1,271 

Total promotional allowances

 
$
1,895 

 
$
2,156 

 
$
3,799 

 
$
4,110 

 


Promotional Allowances (Tables)
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Promotional Allowances (Tables)
 6 Months Ended
Jun. 30, 2013
Promotional Allowances [Abstract]  
Schedule Of Promotional Allowances

 

 

 

 

 

 

 

 

 

 

 

For the three months

ended June 30

 

For the six months

ended June 30

 

 

2013

 

2012

 

2013

 

2012

Amounts in thousands

 

 

 

 

 

 

 

 

Hotel, bowling, food & beverage

 
$
908 

 
$
984 

 
$
1,796 

 
$
1,898 

Coupons

 
498 

 
487 

 
1,014 

 
941 

Player points

 
489 

 
685 

 
989 

 
1,271 

Total promotional allowances

 
$
1,895 

 
$
2,156 

 
$
3,799 

 
$
4,110 

 


Promotional Allowances (Details)
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Promotional Allowances (Details) (USD $)
 3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Promotional Allowances [Line Items]        
Total Promotional Allowances $ 1,895,000 $ 2,156,000 $ 3,799,000 $ 4,110,000
Outstanding balance of promotional balance liability 900,000   900,000  
Hotel, Bowling, Food and Beverage [Member]
        
Promotional Allowances [Line Items]        
Total Promotional Allowances 908,000 984,000 1,796,000 1,898,000
Coupons [Member]
        
Promotional Allowances [Line Items]        
Total Promotional Allowances 498,000 487,000 1,014,000 941,000
Player Points [Member]
        
Promotional Allowances [Line Items]        
Total Promotional Allowances $ 489,000 $ 685,000 $ 989,000 $ 1,271,000

Long-Term Debt
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Long-Term Debt
 6 Months Ended
Jun. 30, 2013
Debt Disclosure [Abstract]  
Long-Term Debt

5.         LONG-TERM DEBT

 

Long-term debt as of June 30, 2013 and December 31, 2012 consisted of the following:

 

 

 

 

 

 

June 30,

 

December 31,

Amounts in thousands

2013

 

2012

Credit agreement – Bank of Montreal
$
9,998 

 
$
3,564 

Credit agreements - Casinos Poland
2,985 

 

 -

Credit facilities - Casinos Poland
3,204 

 

 -

Capital leases - Casinos Poland
239 

 

 -

Total long-term debt
16,426 

 
3,564 

Less current portion

(6,279)

 
(372)

Long-term portion
$
10,147 

 
$
3,192 

 

As of June 30, 2013, scheduled maturities related to long-term debt are as follows:

 

 

 

 

 

 

 

 

Amounts in thousands

Edmonton

 

Casinos Poland

2013
$
610 

 
$
4,249 

2014
1,047 

 
1,444 

2015
1,047 

 
717 

2016
1,047 

 
18 

2017 and thereafter
6,247 

 

-

Total
$
9,998 

 
$
6,428 

 

The consolidated weighted average interest rate on all Company debt was 6.7% for the six months ended June 30, 2013.

 

Credit Agreement – Bank of Montreal

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”). On May 23, 2012, the Company borrowed $3.7 million from the BMO Credit Agreement to repay the Company’s mortgage loan related to the Edmonton property (the “Edmonton Mortgage”). The Company can 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 February 21, 2013, the Company borrowed an additional $7.3 million to pay for the additional 33.3% investment in CPL (Note 2). 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 June 30, 2013. As of June 30, 2013, the amount outstanding was $10.0 million and the Company had approximately $14.9 million available under the BMO Credit Agreement. The $11.0 million the Company has borrowed cannot be re-borrowed once it is repaid.

 

Deferred financing charges related to the BMO Credit Agreement, which are reported as a component of other assets in the condensed consolidated balance sheets, are summarized as follows:

 

 

 

 

 

 

 

Credit agreement – Bank of Montreal

June 30,

 

December 31,

Amounts in thousands

2013

 

2012

Deferred financing charges - current

$
80 

 
$
85 

Deferred financing charges - long-term
232 

 
288 

Total
$
312 

 
$
373 

 

Amortization expenses relating to deferred financing charges were less than $0.1 million for the six months ended June 30, 2013 and $0.1 million for the six months ended June 30, 2012. These costs are included in interest expense in the condensed consolidated statements of earnings.

 

The Company currently pays a floating interest rate on its borrowings under the BMO Credit Agreement. As of June 30, 2013, the interest rate under the BMO Credit Agreement was 4.0%.

 

Casinos Poland

Because of the CPL acquisition, the Company acquired an additional $6.4 million in debt as of June 30, 2013. The debt includes two bank loans, two bank lines of credit and nine capital lease agreements.

 

The first bank loan is with Bank Pocztowy. CPL entered into the four-year term loan in 2011 at an interest rate of Warsaw Interbank Offered Rate (“WIBOR”) plus 3.0%. Proceeds from the loan were used to refinance the loan provided to CPL by ING Bank Slaski and finance current operations. As of June 30, 2013, the amount outstanding was $1.7 million, and CPL had no further borrowing availability under the loan. The loan matures in November 2015. The second bank loan is with BRE Bank. CPL entered into the 2-year term loan in 2012 at an interest rate of WIBOR plus 2.5%. Proceeds from the loan were used to finance current operations. As of June 30, 2013, the amount outstanding was $1.3 million, and CPL has no further borrowing availability under the loan. The BRE Bank loan matures in August 2014. The BRE Bank loan agreement contains a number of financial covenants applicable to CPL, in addition to covenants restricting incurrence of additional debt. CPL complied with all covenants of the BRE Bank agreement as of June 30, 2013

 

The two bank lines of credit are short-term facilities. CPL used both lines of credit to finance current operations. The first line of credit is with BRE Bank. It is a short-term revolving credit facility entered into in 2004 and renewed on a yearly basis, with the last appendix signed in February 2013 at an interest rate of WIBOR plus 2.0%. As of June 30, 2013, the amount outstanding was $0.6 million and CPL had approximately $0.2 million available under the agreement. The BRE Bank facility contains a number of financial covenants applicable to CPL, in addition to covenants restricting incurrence of additional debt. CPL complied with all covenants of the BRE Bank line of credit as of June 30, 2013. The second line of credit is with BPH Bank. It is also a short-term revolving credit facility entered into in 2012 at an interest rate of WIBOR plus 1.95%. As of June 30, 2013, the amount outstanding was $2.6 million and CPL has approximately $0.8 million available under the agreement. The BPH Bank facility contains a number of financial covenants applicable to CPL, in addition to covenants restricting incurrence of additional debt. CPL complied with all covenants of the BPH Bank line of credit as of June 30, 2013.

 

CPL’s remaining debt consists of nine capital lease agreements. The lease agreements are for various vehicles and television systems that are replaced on an ongoing basis. As of June 30, 2013, the amount outstanding was $0.2 million.


Long-Term Debt (Narrative) (Details)
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Long-Term Debt (Narrative) (Details)
 6 Months Ended 0 Months Ended 6 Months Ended 6 Months Ended
Jun. 30, 2013
USD ($)
loan
item
Jun. 30, 2012
USD ($)
Apr. 08, 2013
Casinos Poland Ltd [Member]
Feb. 21, 2013
BMO Credit Agreement [Member]
USD ($)
May 23, 2012
BMO Credit Agreement [Member]
USD ($)
Jun. 30, 2013
BMO Credit Agreement [Member]
USD ($)
May 23, 2012
BMO Credit Agreement [Member]
CAD ($)
Jun. 30, 2013
Loan With Bank Pocztowy [Member]
USD ($)
Jun. 30, 2013
Loan With BRE Bank [Member]
USD ($)
Jun. 30, 2013
Line Of Credit With BRE Bank [Member]
USD ($)
Jun. 30, 2013
Line Of Credit With BPH Bank [Member]
USD ($)
Jun. 30, 2013
Amortization of Deferred Financing Charges [Member]
USD ($)
Jun. 30, 2012
Amortization of Deferred Financing Charges [Member]
USD ($)
Debt Instrument [Line Items]                          
Weighted average interest rate on borrowings 6.70%                        
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                  
Additional ownership acquired     33.30% 33.30%                  
Line of credit facility amount outstanding           10,000,000       600,000 2,600,000    
Line of credit facility amount available for borrowing           14,900,000       200,000 800,000    
Line of credit facility amount that cannot be reborrowed once repaid           11,000,000              
Amortization of deferred financing costs 42,000 110,000                   100,000 100,000
Interest rate           4.00%              
Additional debt acquired during period 6,400,000                        
Number of bank loans 2                        
Number of bank lines of credit 2                        
Number of capital lease agreements 9                        
Debt instrument, term               4 years 2 years        
Interest rate percentage points above WIBOR               3.00% 2.50% 2.00% 1.95%    
Amount outstanding               1,700,000 1,300,000        
Capital lease agreements $ 200,000                        

Long-Term Debt (Schedule of Long-term Debt) (Details)
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Long-Term Debt (Schedule of Long-term Debt) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Debt Instrument [Line Items]    
Total long-term debt $ 16,426 $ 3,564
Less: current portion (6,279) (372)
Long-term portion 10,147 3,192
BMO Credit Agreement [Member]
    
Debt Instrument [Line Items]    
Total long-term debt 9,998 3,564
Credit Agreements - Casinos Poland [Member]
    
Debt Instrument [Line Items]    
Total long-term debt 2,985  
Credit Facilities - Casinos Poland [Member]
    
Debt Instrument [Line Items]    
Total long-term debt 3,204  
Capital Leases - Casinos Poland [Member]
    
Debt Instrument [Line Items]    
Total long-term debt $ 239  

Long-Term Debt (Schedule of Maturities of Long-term Debt) (Details)
v0.0.0.0
Long-Term Debt (Schedule of Maturities of Long-term Debt) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Total long-term debt $ 16,426 $ 3,564
Edmonton [Member]
    
2013 610  
2014 1,047  
2015 1,047  
2016 1,047  
2017 and thereafter 6,247  
Total long-term debt 9,998  
Casinos Poland Ltd [Member]
    
2013 4,249  
2014 1,444  
2015 717  
2016 18  
Total long-term debt $ 6,428  

Long-Term Debt (Schedule of Deferred Financing Charges) (Details)
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Long-Term Debt (Schedule of Deferred Financing Charges) (Details) (BMO Credit Agreement [Member], USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
BMO Credit Agreement [Member]
    
Debt Instrument [Line Items]    
Deferred financing charges - current $ 80 $ 85
Deferred financing charges - long-term 232 288
Total $ 312 $ 373

Financing Arrangements
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Financing Arrangements
 6 Months Ended
Jun. 30, 2013
Financing Arrangements [Abstract]  
Financing Arrangements

6.         FINANCING ARRANGEMENTS FOR PROJECT INVESTMENTS

 

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.  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 (USD 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 June 30, 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 credit agreement has an interest rate of LIBOR plus 8% and a term of three years. Interest is payable quarterly with the first payment of less than $0.1 million recorded as interest revenue received 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 has completed due diligence on the project and has decided not to move forward with the project. Repayment terms of the $0.5 million loan in connection with the project will remain the same.


Financing Arrangements (Details)
v0.0.0.0
Financing Arrangements (Details)
In Millions, unless otherwise specified
 6 Months Ended 6 Months Ended
Jun. 30, 2013
USD ($)
Jun. 30, 2013
United Horsemen Of Alberta Inc. [Member]
USD ($)
Jun. 30, 2013
Asian Company [Member]
Feb. 05, 2013
Asian Company [Member]
USD ($)
Jun. 30, 2013
Minimum [Member]
Jun. 30, 2013
Maximum [Member]
Jun. 30, 2013
Maximum [Member]
United Horsemen Of Alberta Inc. [Member]
USD ($)
Jun. 30, 2013
Maximum [Member]
United Horsemen Of Alberta Inc. [Member]
CAD ($)
Anticipated completion of Racing Entertainment Center         12 months 18 months    
Development loan       $ 0.5     $ 13.0 $ 13.0
Interest rate percentage points above LIBOR   8.00% 8.00%          
Loan maturity period   5 years 3 years          
Maximum potential ownership interest in UHA   60.00%            
Interest revenue received 0.1              
Loan included in notes receivable 0.5              
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%            

Income Taxes
v0.0.0.0
Income Taxes
 6 Months Ended
Jun. 30, 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 June 30, 2013, the Company had a valuation allowance for its U.S. deferred tax assets of $4.9 million, a $0.8 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 in the jurisdiction where the assets are present 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 in the jurisdiction where the assets are present 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 six months

ended June 30,

 

 

2013

 

2012

U.S. Federal - Current

 
$
6 

 
$
122 

U.S. Federal - Deferred

 
0 

 
0 

Provision for U.S. federal income taxes

 
6 

 
122 

 

 

 

 

 

Foreign - Current

 
$
849 

 
$
366 

Foreign - Deferred

 
(302)

 
1 

Provision for foreign income taxes

 
547 

 
367 

Total provision for income taxes

 
$
553 

 
$
489 

 

 

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

 

 

 

 

 

 

 

For the six months

 

For the six months

Amounts in thousands

 

ended June 30, 2013

 

ended June 30, 2012

   

 

Pre-tax income

 

Pre-tax income

Canada

 
$
2,773 

 
$
1,563 

United States

 
393 

 
144 

Mauritius

 
193 

 
147 

Austria

 
238 

 
539 

Poland

 
2,441 

 
377 

Total

 
$
6,038 

 
$
2,770 

 

 

 

 

 

 

 

 

 

 

The Company’s worldwide effective income tax rate is 9.2%. A substantial portion of the Company’s earnings are from Canada, which has a 25%  income tax rate.  In addition, the effective income tax rate in Poland is significantly lower than the statutory rate of 19% due to the $2.1 million gain related to the CPL acquisition, which is not taxable. Finally, the movement of exchange rates for intercompany loans denominated in U.S. dollars further impacts the Company’s effective income tax rate because foreign currency gains and losses generally are not taxed until realized. Therefore, the Company’s overall effective income tax rate can be significantly impacted by foreign currency gains or losses.


Income Taxes (Tables)
v0.0.0.0
Income Taxes (Tables)
 6 Months Ended
Jun. 30, 2013
Income Taxes [Abstract]  
Provision For Income Taxes From Operations

 

 

 

 

 

Amounts in thousands

 

For the six months

ended June 30,

 

 

2013

 

2012

U.S. Federal - Current

 
$
6 

 
$
122 

U.S. Federal - Deferred

 
0 

 
0 

Provision for U.S. federal income taxes

 
6 

 
122 

 

 

 

 

 

Foreign - Current

 
$
849 

 
$
366 

Foreign - Deferred

 
(302)

 
1 

Provision for foreign income taxes

 
547 

 
367 

Total provision for income taxes

 
$
553 

 
$
489 

 

Pre-Tax Income (Loss) By Jurisdiction

 

 

 

 

 

 

 

For the six months

 

For the six months

Amounts in thousands

 

ended June 30, 2013

 

ended June 30, 2012

   

 

Pre-tax income

 

Pre-tax income

Canada

 
$
2,773 

 
$
1,563 

United States

 
393 

 
144 

Mauritius

 
193 

 
147 

Austria

 
238 

 
539 

Poland

 
2,441 

 
377 

Total

 
$
6,038 

 
$
2,770 

 

 

 

 

 

 

 

 

 

 

 


Income Taxes (Narrative) (Details)
v0.0.0.0
Income Taxes (Narrative) (Details) (USD $)
 0 Months Ended 3 Months Ended 6 Months Ended
Apr. 08, 2013
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Income Taxes [Line Items]          
Look-back period       3 years  
Effective tax rate       9.20%  
Gain on business combination $ 2,074,000 $ 2,074,000 $ 0 $ 2,074,000 $ 0
Casinos Poland Ltd [Member]
          
Income Taxes [Line Items]          
Gain on business combination       2,100,000  
United States [Member]
          
Income Taxes [Line Items]          
Valuation allowance   4,900,000   4,900,000  
Calgary [Member]
          
Income Taxes [Line Items]          
Valuation allowance   800,000   800,000  
Century Casinos Europe GmbH [Member]
          
Income Taxes [Line Items]          
Valuation allowance   $ 900,000   $ 900,000  
Canada [Member]
          
Income Taxes [Line Items]          
Statutory tax rate       25.00%  
Poland [Member]
          
Income Taxes [Line Items]          
Effective tax rate       19.00%  

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 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Income Taxes [Abstract]        
U.S. Federal - Current     $ 6 $ 122
U.S. Federal - Deferred     0 0
Provision for U.S. federal income taxes     6 122
Foreign - Current     849 366
Foreign - Deferred     (302) 1
Provision for foreign income taxes     547 367
Total provision for income taxes $ 236 $ 197 $ 553 $ 489

Income Taxes (Pre-Tax Income (Loss) By Jurisdiction) (Details)
v0.0.0.0
Income Taxes (Pre-Tax Income (Loss) By Jurisdiction) (Details) (USD $)
In Thousands, unless otherwise specified
 3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Income Taxes [Line Items]        
Pre-tax income (loss) $ 4,059 $ 1,345 $ 6,038 $ 2,770
Canada [Member]
        
Income Taxes [Line Items]        
Pre-tax income (loss)     2,773 1,563
United States [Member]
        
Income Taxes [Line Items]        
Pre-tax income (loss)     393 144
Mauritius [Member]
        
Income Taxes [Line Items]        
Pre-tax income (loss)     193 147
Austria [Member]
        
Income Taxes [Line Items]        
Pre-tax income (loss)     238 539
Poland [Member]
        
Income Taxes [Line Items]        
Pre-tax income (loss)     $ 2,441 $ 377

Earnings Per Share
v0.0.0.0
Earnings Per Share
 6 Months Ended
Jun. 30, 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 and six months ended June 30, 2013 and 2012 were as follows:

 

 

 

 

 

 

 

 

 

 

For the three months

ended June 30

 

For the six months

ended June 30

   

2013

 

2012

 

2013

 

2012

Weighted average common shares, basic

24,128,114 

 
23,890,405 

 
24,128,114 

 
23,883,919 

Dilutive effect of stock options

80,739 

 
169,917 

 
55,023 

 
170,985 

Weighted average common shares, diluted

24,208,853 

 
24,060,322 

 
24,183,137 

 
24,054,904 

 

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

 

 

 

 

 

 

 

 

 

 

 

For the three months

ended June 30

 

For the six months

ended June 30

   

2013

 

2012

 

2013

 

2012

Stock options

37,500 

 
886,710 

 
37,500 

 
886,710 

 


Earnings Per Share (Tables)
v0.0.0.0
Earnings Per Share (Tables)
 6 Months Ended
Jun. 30, 2013
Earnings Per Share [Abstract]  
Schedule Of Weighted Average Shares Outstanding

 

 

 

 

 

 

 

 

 

For the three months

ended June 30

 

For the six months

ended June 30

   

2013

 

2012

 

2013

 

2012

Weighted average common shares, basic

24,128,114 

 
23,890,405 

 
24,128,114 

 
23,883,919 

Dilutive effect of stock options

80,739 

 
169,917 

 
55,023 

 
170,985 

Weighted average common shares, diluted

24,208,853 

 
24,060,322 

 
24,183,137 

 
24,054,904 

 

Anti-Dilutive Stock Options Not Included In The Calculation Of Weighted Average Shares Outstanding

 

 

 

 

 

 

 

 

 

For the three months

ended June 30

 

For the six months

ended June 30

   

2013

 

2012

 

2013

 

2012

Stock options

37,500 

 
886,710 

 
37,500 

 
886,710 

 


Earnings Per Share (Schedule Of Weighted Average Shares Outstanding) (Details)
v0.0.0.0
Earnings Per Share (Schedule Of Weighted Average Shares Outstanding) (Details)
 3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Earnings Per Share [Abstract]        
Weighted average common shares, basic 24,128,114 23,890,405 24,128,114 23,883,919
Dilutive effect of stock options 80,739 169,917 55,023 170,985
Weighted average common shares, diluted 24,208,853 24,060,322 24,183,137 24,054,904

Earnings Per Share (Anti-Dilutive Stock Options Not Included In The Calculation Of Weighted Average Shares Outstanding) (Details)
v0.0.0.0
Earnings Per Share (Anti-Dilutive Stock Options Not Included In The Calculation Of Weighted Average Shares Outstanding) (Details)
 3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2013
Jun. 30, 2012
Earnings Per Share [Abstract]      
Stock options 37,500 37,500 886,710

Segment Information
v0.0.0.0
Segment Information
 6 Months Ended
Jun. 30, 2013
Segment Information [Abstract]  
Segment Information

 

9.          SEGMENT INFORMATION

 

The Company has determined that its operation of casino facilities, which includes the provision of gaming, hotel accommodations, dining facilities and other amenities, can be aggregated as one reportable segment.

 

The following summary provides information regarding the Company’s principal geographic areas:

 

 

 

 

 

 

 

 

 

Long Lived Assets

 

 

At June 30,

 

At December 31,

Amounts in thousands

 

2013

 

2012

   

 

 

 

 

United States

 
$
54,888 

 
$
55,442 

International:

 

 

 

 

   Canada

 
$
46,476 

 
$
49,754 

Europe

 
31,701 

 
4,157 

   International waters

 
985 

 
1,187 

Total international

 
79,162 

 
55,098 

Total

 
$
134,050 

 
$
110,540 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

Net Operating Revenue

   

 

For the three months

ended June 30, 

 

For the six months

ended June 30, 

Amounts in thousands

 

2013

 

2012

 

2013

 

2012

United States

 
$
7,578 

 
$
7,731 

 
$
14,916 

 
$
15,119 

International:

 

 

 

 

 

 

 

 

   Canada

 
$
8,318 

 
$
8,404 

 
$
17,127 

 
$
16,947 

   Europe

 
10,870 

 
0 

 
10,870 

 
0 

   International waters

 
1,488 

 
1,578 

 
3,237 

 
3,138 

  Aruba

 
94 

 
78 

 
187 

 
156 

Total international

 
20,770 

 
10,060 

 
31,421 

 
20,241 

Total

 
$
28,348 

 
$
17,791 

 
$
46,337 

 
$
35,360 

 


Segment Information (Tables)
v0.0.0.0
Segment Information (Tables)
 6 Months Ended
Jun. 30, 2013
Segment Information [Abstract]  
Schedule of Long-Lived Assets, by Geographical Areas

 

 

 

 

 

 

 

Long Lived Assets

 

 

At June 30,

 

At December 31,

Amounts in thousands

 

2013

 

2012

   

 

 

 

 

United States

 
$
54,888 

 
$
55,442 

International:

 

 

 

 

   Canada

 
$
46,476 

 
$
49,754 

Europe

 
31,701 

 
4,157 

   International waters

 
985 

 
1,187 

Total international

 
79,162 

 
55,098 

Total

 
$
134,050 

 
$
110,540 

 

Schedule of Revenue from External Customers, by Geographical Areas

 

 

 

 

 

 

 

 

 

   

 

Net Operating Revenue

   

 

For the three months

ended June 30, 

 

For the six months

ended June 30, 

Amounts in thousands

 

2013

 

2012

 

2013

 

2012

United States

 
$
7,578 

 
$
7,731 

 
$
14,916 

 
$
15,119 

International:

 

 

 

 

 

 

 

 

   Canada

 
$
8,318 

 
$
8,404 

 
$
17,127 

 
$
16,947 

   Europe

 
10,870 

 
0 

 
10,870 

 
0 

   International waters

 
1,488 

 
1,578 

 
3,237 

 
3,138 

  Aruba

 
94 

 
78 

 
187 

 
156 

Total international

 
20,770 

 
10,060 

 
31,421 

 
20,241 

Total

 
$
28,348 

 
$
17,791 

 
$
46,337 

 
$
35,360 

 


Segment Information (Schedule of Long-Lived Assets, by Geographical Areas) (Details)
v0.0.0.0
Segment Information (Schedule of Long-Lived Assets, by Geographical Areas) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Segment Reporting Information [Line Items]    
Long Lived Assets $ 134,050 $ 110,540
United States [Member]
    
Segment Reporting Information [Line Items]    
Long Lived Assets 54,888 55,442
Canada [Member]
    
Segment Reporting Information [Line Items]    
Long Lived Assets 46,476 49,754
Europe [Member]
    
Segment Reporting Information [Line Items]    
Long Lived Assets 31,701 4,157
International Waters [Member]
    
Segment Reporting Information [Line Items]    
Long Lived Assets 985 1,187
International [Member]
    
Segment Reporting Information [Line Items]    
Long Lived Assets $ 79,162 $ 55,098

Segment Information (Schedule of Revenue from External Customers Long-Lived Assets, by Geographical Areas) (Details)
v0.0.0.0
Segment Information (Schedule of Revenue from External Customers Long-Lived Assets, by Geographical Areas) (Details) (USD $)
In Thousands, unless otherwise specified
 3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Segment Reporting Information [Line Items]        
Net Operating Revenue $ 28,348 $ 17,791 $ 46,337 $ 35,360
United States [Member]
        
Segment Reporting Information [Line Items]        
Net Operating Revenue 7,578 7,731 14,916 15,119
Canada [Member]
        
Segment Reporting Information [Line Items]        
Net Operating Revenue 8,318 8,404 17,127 16,947
Europe [Member]
        
Segment Reporting Information [Line Items]        
Net Operating Revenue 10,870 0 10,870 0
International Waters [Member]
        
Segment Reporting Information [Line Items]        
Net Operating Revenue 1,488 1,578 3,237 3,138
Aruba [Member]
        
Segment Reporting Information [Line Items]        
Net Operating Revenue 94 78 187 156
International [Member]
        
Segment Reporting Information [Line Items]        
Net Operating Revenue $ 20,770 $ 10,060 $ 31,421 $ 20,241