Document And Entity Information
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Document And Entity Information
3 Months Ended
Mar. 31, 2012
Apr. 26, 2012
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Mar. 31, 2012  
Document Fiscal Year Focus 2012  
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   23,877,362

Condensed Consolidated Balance Sheets
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Condensed Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2012
Dec. 31, 2011
ASSETS    
Cash and cash equivalents $ 22,871 $ 25,192
Receivables, net 1,046 1,108
Prepaid expenses 686 510
Inventories 311 273
Other current assets 78 113
Deferred income taxes 242 90
Total Current Assets 25,234 27,286
Property and equipment, net 99,820 99,605
Goodwill 4,920 4,833
Equity investment 3,182 2,756
Deferred income taxes 1,875 2,054
Other assets 238 193
Total Assets 135,269 136,727
LIABILITIES AND SHAREHOLDERS' EQUITY    
Current portion of long-term debt 6,714 9,100
Accounts payable and accrued liabilities 5,560 6,666
Accrued payroll 2,326 2,373
Taxes payable 2,909 3,100
Deferred income taxes 120 120
Total Current Liabilities 17,629 21,359
Taxes payable 227 203
Deferred income taxes 2,669 2,625
Total Liabilities 20,525 24,187
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; 23,993,174 shares issued; 23,877,362 shares outstanding 240 240
Additional paid-in capital 75,148 75,144
Accumulated other comprehensive earnings 4,358 3,291
Retained earnings 35,280 34,147
Total shareholders' equity before treasury stock 115,026 112,822
Treasury stock - 115,812 shares at cost (282) (282)
Total Shareholders' Equity 114,744 112,540
Total Liabilities and Shareholders' Equity $ 135,269 $ 136,727

Condensed Consolidated Balance Sheets (Parenthetical)
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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Mar. 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 23,993,174 23,993,174
Common stock, shares outstanding 23,877,362 23,877,362
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 Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Operating revenue:    
Gaming $ 15,259 $ 14,825
Hotel, bowling, food and beverage 3,321 3,243
Other 943 935
Gross revenue 19,523 19,003
Less: Promotional allowances (1,954) (1,888)
Net operating revenue 17,569 17,115
Operating costs and expenses:    
Gaming 7,233 6,931
Hotel, bowling, food and beverage 2,437 2,511
General and administrative 5,304 5,368
Depreciation 1,178 1,641
Total operating costs and expenses 16,152 16,451
Earnings from equity investment 155 92
Earnings from operations 1,572 756
Non-operating income (expense):    
Interest income 6 2
Interest expense (148) (246)
(Losses) gains on foreign currency transactions and other (5) 75
Non-operating income (expense), net (147) (169)
Earnings before income taxes 1,425 587
Income tax provision 292 223
Net earnings $ 1,133 $ 364
Earnings per share:    
Basic $ 0.05 $ 0.02
Diluted $ 0.05 $ 0.02

Condensed Consolidated Statements Of Comprehensive Earnings
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Condensed Consolidated Statements Of Comprehensive Earnings (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Condensed Consolidated Statements Of Comprehensive Earnings [Abstract]    
Net earnings $ 1,133 $ 364
Foreign currency translation adjustments 1,067 1,294
Comprehensive earnings $ 2,200 $ 1,658

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, 2012
Mar. 31, 2011
Cash Flows from Operating Activities:    
Net earnings $ 1,133 $ 364
Adjustments to reconcile net earnings to net cash provided by operating activities:    
Depreciation 1,178 1,641
Loss on disposition of fixed assets 6 31
Amortization of stock-based compensation 4 96
Amortization of deferred financing costs 24 40
Deferred tax expense 72 144
Earnings from equity investment (155) (92)
Changes in operating assets and liabilities:    
Receivables 71 374
Prepaid expenses and other assets (162) (357)
Accounts payable and accrued liabilities (696) 619
Inventories (33) (10)
Other operating assets (42) 23
Accrued payroll (58) 262
Taxes payable (578) (792)
Net cash provided by operating activities 764 2,343
Cash Flows from Investing Activities:    
Purchases of property and equipment (644) (970)
Proceeds from disposition of assets 1 9
Net cash used in investing activities (643) (961)
Cash Flows from Financing Activities:    
Principal repayments (2,511) (2,535)
Proceeds from exercise of options   13
Net cash used in financing activities (2,511) (2,522)
Effect of Exchange Rate Changes on Cash 69 340
Decrease in Cash and Cash Equivalents (2,321) (800)
Cash and Cash Equivalents at Beginning of Period 25,192 21,461
Cash and Cash Equivalents at End of Period 22,871 20,661
Supplemental Disclosure of Cash Flow Information:    
Interest paid 137 229
Income taxes paid $ 27 $ 57

Description Of Business And Basis Of Presentation
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Description Of Business And Basis Of Presentation
3 Months Ended
Mar. 31, 2012
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, 2012, the Company owned casino operations in North America; managed cruise ship-based casinos on international waters; and owned a management contract to manage the casino in the Radisson Aruba Resort, Casino & Spa. The Company also owns a 33.3% ownership interest in Casinos Poland Ltd (“CPL”), the owner and operator of seven casinos in Poland. The Company 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 and 10-K/A for the year ended December 31, 2011. The results of operations for the period ended March 31, 2012 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

2012

2011

2011

Canadian dollar (CAD)

0.9991

1.0170

0.9718

Euros (€)

0.7500

0.7709

0.7051

Polish zloty (PLN)

3.1191

3.4174

2.8229

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

2012

2011

% Change

Canadian dollar (CAD)

1.0015

0.9859

(1.6%)

Euros (€)

0.7627

0.7314

(4.3%)

Polish zloty (PLN)

3.2268

2.8865

(11.8%)

Source: Pacific Exchange Rate Service


Equity Investment In Unconsolidated Subsidiary
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Equity Investment In Unconsolidated Subsidiary
3 Months Ended
Mar. 31, 2012
Equity Investment In Unconsolidated Subsidiary [Abstract]  
Equity Investment In Unconsolidated Subsidiary

2.         EQUITY INVESTMENT IN UNCONSOLIDATED SUBSIDIARY

 

Following is the summarized financial information of CPL as of March 31, 2012 and December 31, 2011 and for the three months ended March 31, 2012 and 2011:

 

Amounts in thousands (in USD):

March 31, 2012

December 31, 2011

Balance Sheet:

    Current assets

$3,726

$4,061

    Noncurrent assets

$12,076

$9,523

    Current liabilities

$6,425

$4,393

    Noncurrent liabilities

$2,204

$3,230

 

For the three months                                     ended March 31,

2012

2011

Operating Results

Net operating revenue

$10,445

$11,537

Net earnings

$464

$275

 

 

The Company’s maximum exposure to losses at March 31, 2012 was $3.2 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, 2012 are as follows:

 

Amounts in thousands (in USD)

Total

Balance – January 1, 2012

$2,756

Equity earnings

155

Effect of foreign currency translation

271

Balance – March 31, 2012

$3,182


Goodwill
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Goodwill
3 Months Ended
Mar. 31, 2012
Goodwill [Abstract]  
Goodwill

3.         GOODWILL

 

Changes in the carrying amount of goodwill related to our Edmonton property for the three months ended March 31, 2012 are as follows:

 

Amounts in thousands

Balance – January 1, 2012

$4,833

Effect of foreign currency translation

87

Balance – March 31, 2012

$4,920


Promotional Allowances
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Promotional Allowances
3 Months Ended
Mar. 31, 2012
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 consolidated balance sheets. The expiration of unused points results in a reduction of the liability.

 

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

For the three months                        ended March 31

2012

2011

Amounts in thousands

Hotel, bowling, food & beverage

$914

$832

Coupons

                       454

                       445

Player points

                       586

                       611

Total promotional allowances

$1,954

$1,888


Income Taxes
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Income Taxes
3 Months Ended
Mar. 31, 2012
Income Taxes [Abstract]  
Income Taxes

5.         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, 2012, the Company has established a valuation allowance for its U.S. deferred tax assets of $5.1 million, a $0.9 million valuation allowance on its Calgary property and a $1.4 million valuation allowance on the Century Casinos Europe subsidiary 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 are more likely than not, the Company will then reduce its valuation allowance as appropriate and credit income tax expense 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

·         Tax planning strategies.

 

The income tax provisions are based on estimated full-year earnings for financial reporting purposes adjusted for permanent differences. The Company’s provision for income taxes from operations consists of the following:

 

 

 

Amounts in thousands

As of March 31,

2012

2011

U.S. Federal - Current

($19)

$25

U.S. Federal - Deferred

0

0

Provision for U.S. federal income taxes

(19)

25

Foreign - Current

$239

$54

Foreign - Deferred

72

144

Provision for foreign income taxes

311

198

Total provision for income taxes

$292

$223

 

 

The Company’s income tax expense by jurisdiction is summarized in the table below:

 

For the three months

For the three months

Amounts in thousands

ended March 31, 2012

ended March 31, 2011

 

Pre-tax income

Income tax

Effective

Pre-tax income (loss)

Income tax

Effective

tax rate

tax rate

Canada

$955

$302

31.6%

$455

$192

42.2%

United States

                 5

             (19)

(380.0%)

           (498)

               25

(5.0%)

Mauritius

             103

                 9

8.7%

             484

                 5

1.0%

Austria

             246

               -  

-

             118

                 1

0.8%

Poland

             116

               -  

-

               28

               -  

-

Total

$1,425

$292

20.5%

$587

$223

380.%


Earnings Per Share
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Earnings Per Share
3 Months Ended
Mar. 31, 2012
Earnings Per Share [Abstract]  
Earnings Per Share

6.         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 and the assumed conversion of other convertible securities (using the “if converted” method) at the beginning of the year, or for the period outstanding during the year for current year issuances. Weighted average shares outstanding for the three months ended March 31, 2012 and 2011 were as follows:

 

For the three months                               

ended March 31

 

2012

2011

Weighted average common shares, basic

23,877,362

23,711,176

Dilutive effect of stock options

133,431

290,112

Weighted average common shares, diluted

24,010,793

24,001,288

 

 

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

 

For the three months                               ended March 31

 

2012

2011

Unvested restricted stock

                                   -  

                          160,000

Stock options

886,710

886,710


Segment Information
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Segment Information
3 Months Ended
Mar. 31, 2012
Segment Information [Abstract]  
Segment Information

7.         SEGMENT INFORMATION

 

The following summary provides information concerning amounts attributable to the Company’s principal geographic areas:

 

Long Lived Assets

At March 31,

At December 31,

Amounts in thousands

2012

2011

 

United States

$55,840

$56,294

International:

   Canada

$49,138

$48,423

Europe

3,659

3,228

   International waters

1,398

1,496

Total international

54,195

53,147

Total

$110,035

$109,441

 

 

 

 

 

 

Net Operating Revenue

 

For the three months                                      ended March 31,

Amounts in thousands

2012

2011

United States

$7,389

$7,239

International:

   Canada

$8,542

$8,341

   International waters

1,560

1,422

   Aruba

78

113

Total international

10,180

9,876

Total

$17,569

$17,115