Document and Entity Information
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Document and Entity Information
9 Months Ended
Sep. 30, 2012
Oct. 30, 2012
Document and Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Sep. 30, 2012  
Document Fiscal Year Focus 2012  
Document Fiscal Period Focus Q3  
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   24,117,362

Condensed Consolidated Balance Sheets
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Condensed Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Dec. 31, 2011
ASSETS    
Cash and cash equivalents $ 22,907 $ 25,192
Receivables, net 978 1,108
Prepaid expenses 541 510
Inventories 308 273
Other current assets 0 113
Deferred income taxes 240 90
Total Current Assets 24,974 27,286
Property and equipment, net 100,038 99,605
Goodwill 4,997 4,833
Equity investment 3,360 2,756
Deferred income taxes 2,040 2,054
Other assets 623 193
Total Assets 136,032 136,727
LIABILITIES AND SHAREHOLDERS' EQUITY    
Current portion of long-term debt 408 9,100
Accounts payable and accrued liabilities 5,949 6,666
Accrued payroll 2,509 2,373
Taxes payable 2,353 3,100
Deferred income taxes 120 120
Total Current Liabilities 11,339 21,359
Long-term debt, less current portion 3,322 0
Taxes payable 227 203
Deferred income taxes 3,146 2,625
Total Liabilities 18,034 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; 24,233,174 and 23,993,174 shares issued; 24,117,362 and 23,877,362 shares outstanding 242 240
Additional paid-in capital 75,382 75,144
Accumulated other comprehensive earnings 5,042 3,291
Retained earnings 37,614 34,147
Total shareholders' equity before treasury stock 118,280 112,822
Treasury stock - 115,812 shares at cost (282) (282)
Total Shareholders' Equity 117,998 112,540
Total Liabilities and Shareholders' Equity $ 136,032 $ 136,727

Condensed Consolidated Balance Sheets (Parenthetical)
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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Sep. 30, 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 24,233,174 23,993,174
Common stock, shares outstanding 24,117,362 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 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Operating revenue:        
Gaming $ 16,778 $ 16,236 $ 47,746 $ 46,989
Hotel, bowling, food and beverage 3,189 3,152 9,645 9,536
Other 1,041 956 3,086 2,895
Gross revenue 21,008 20,344 60,477 59,420
Less: Promotional allowances (2,285) (2,198) (6,395) (6,157)
Net operating revenue 18,723 18,146 54,082 53,263
Operating costs and expenses:        
Gaming 7,954 7,543 22,645 21,815
Hotel, bowling, food and beverage 2,534 2,565 7,391 7,629
General and administrative 5,385 5,213 16,010 16,429
Depreciation 1,178 1,526 3,535 4,832
Total operating costs and expenses 17,051 16,847 49,581 50,705
Earnings from equity investment (57) 249 381 723
Earnings from operations 1,615 1,548 4,882 3,281
Non-operating income (expense):        
Interest income 7 6 36 13
Interest expense (57) (186) (600) (629)
(Losses) gains on foreign currency transactions and other (36) (27) (19) 162
Non-operating income (expense), net (86) (207) (583) (454)
Earnings before income taxes 1,529 1,341 4,299 2,827
Income tax provision 343 (82) 832 396
Net earnings $ 1,186 $ 1,423 $ 3,467 $ 2,431
Earnings per share:        
Basic $ 0.05 $ 0.06 $ 0.14 $ 0.10
Diluted $ 0.05 $ 0.06 $ 0.14 $ 0.10

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 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Condensed Consolidated Statements of Comprehensive Earnings [Abstract]        
Net earnings $ 1,186 $ 1,423 $ 3,467 $ 2,431
Foreign currency translation adjustments 2,041 (3,733) 1,751 (2,359)
Comprehensive earnings (loss) $ 3,227 $ (2,310) $ 5,218 $ 72

Condensed Consolidated Statements of Cash Flows
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Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Cash Flows from Operating Activities:    
Net earnings $ 3,467 $ 2,431
Adjustments to reconcile net earnings to net cash provided by operating activities:    
Depreciation 3,535 4,832
Loss on disposition of fixed assets 22 55
Amortization of stock-based compensation   196
Amortization of deferred financing costs 131 51
Deferred tax expense 386 (113)
Earnings from equity investment (381) (723)
Changes in Operating Assets and Liabilities:    
Receivables 151 124
Prepaid expenses and other assets (13) (425)
Accounts payable and accrued liabilities (685) (323)
Inventories (25) 16
Other operating assets (46) (36)
Accrued payroll 131 (180)
Taxes payable (769) (252)
Net cash provided by operating activities 5,904 5,653
Cash Flows from Investing Activities:    
Purchases of property and equipment (2,578) (2,128)
Proceeds from disposition of assets 6 16
Net cash used in investing activities (2,572) (2,112)
Cash Flows from Financing Activities:    
Proceeds from borrowings 3,626 0
Payment of deferred financing costs (396) 0
Principal repayments (9,124) (3,680)
Proceeds from equity investment dividend   163
Proceeds from exercise of options 240 15
Net cash used in financing activities (5,654) (3,502)
Effect of Exchange Rate Changes on Cash 37 (194)
Decrease in Cash and Cash Equivalents (2,285) (155)
Cash and Cash Equivalents at Beginning of Period 25,192 21,461
Cash and Cash Equivalents at End of Period 22,907 21,306
Supplemental Disclosure of Cash Flow Information:    
Interest paid 535 607
Income taxes paid $ 366 $ 188

Description Of Business And Basis Of Presentation
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Description Of Business And Basis Of Presentation
9 Months Ended
Sep. 30, 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 September 30, 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 eight casinos in Poland.

 

On October 11, 2012, the Company’s subsidiary Century Casinos Europe GmbH (“CCE”), signed an agreement with LOT Polish Airlines to acquire an additional 33.3% ownership interest in CPL. The transaction is subject to approval from the Polish Minister of Finance and the co-shareholder in CPL. There is no assurance that CCE will obtain the needed approvals or as to the timing of such approvals. Upon closing of the transaction, CCE will own a 66.6% ownership interest in CPL. The purchase price is approximately $6.8 million, and the Company intends to pay for the investment with cash on hand.

 

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 and 10-K/A for the year ended December 31, 2011. The results of operations for the period ended September 30, 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:

 

 

 

 

September 30

December 31

Ending Rates

2012

2011

Canadian dollar (CAD)

0.9837 
1.0170 

Euros (€)

0.7779 
0.7709 

Polish zloty (PLN)

3.1780 
3.4174 

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

 

For the nine months

 

ended September 30,

 

ended September 30,

Average Rates

2012

2011

% Change

 

2012

2011

% Change

Canadian dollar (CAD)

0.9951 
0.9797 
(1.6%)

 

1.0023 
0.9778 
(2.5%)

Euros (€)

0.7990 
0.7077 
(12.9%)

 

0.7805 
0.7113 
(9.7%)

Polish zloty (PLN)

3.3019 
2.9369 
(12.4%)

 

3.2822 
2.8576 
(14.9%)

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)
9 Months Ended
Sep. 30, 2012
Description Of Business And Basis Of Presentation [Abstract]  
Exchange Rates

 

 

 

 

September 30

December 31

Ending Rates

2012

2011

Canadian dollar (CAD)

0.9837 
1.0170 

Euros (€)

0.7779 
0.7709 

Polish zloty (PLN)

3.1780 
3.4174 

Source: Pacific Exchange Rate Service

 

 

 

Average Exchange Rates

 

 

 

 

 

 

 

 

 

For the three months

 

For the nine months

 

ended September 30,

 

ended September 30,

Average Rates

2012

2011

% Change

 

2012

2011

% Change

Canadian dollar (CAD)

0.9951 
0.9797 
(1.6%)

 

1.0023 
0.9778 
(2.5%)

Euros (€)

0.7990 
0.7077 
(12.9%)

 

0.7805 
0.7113 
(9.7%)

Polish zloty (PLN)

3.3019 
2.9369 
(12.4%)

 

3.2822 
2.8576 
(14.9%)

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) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2012
Casinos Poland Ltd [Member]
 
Description Of Business And Basis Of Presentation [Line Items]  
Ownership percentage 33.30%
Subsequent Event [Member]
 
Description Of Business And Basis Of Presentation [Line Items]  
Additional CPL percentage to acquire - agreement between CCE and LOT Polish Airlines 33.30%
Subsequent Event [Member] | Casinos Poland Ltd [Member]
 
Description Of Business And Basis Of Presentation [Line Items]  
Ownership percentage 66.60%
Purchase price of CPL $ 6.8

Description Of Business And Basis Of Presentation (Exchange Rates) (Details)
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Description Of Business And Basis Of Presentation (Exchange Rates) (Details)
Sep. 30, 2012
Dec. 31, 2011
Canadian Dollar [Member]
   
Description Of Business And Basis Of Presentation [Line Items]    
Exchange rate 0.9837 1.0170
Euros [Member]
   
Description Of Business And Basis Of Presentation [Line Items]    
Exchange rate 0.7779 0.7709
Polish Zloty [Member]
   
Description Of Business And Basis Of Presentation [Line Items]    
Exchange rate 3.1780 3.4174

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 9 Months Ended
Sep. 30, 2012
item
Sep. 30, 2011
item
Sep. 30, 2012
item
Sep. 30, 2011
item
Canadian Dollar [Member]
       
Description Of Business And Basis Of Presentation [Line Items]        
Average exchange rate 0.9951 0.9797 1.0023 0.9778
Change in average foreign currency rate (1.60%)   (2.50%)  
Euros [Member]
       
Description Of Business And Basis Of Presentation [Line Items]        
Average exchange rate 0.7990 0.7077 0.7805 0.7113
Change in average foreign currency rate (12.90%)   (9.70%)  
Polish Zloty [Member]
       
Description Of Business And Basis Of Presentation [Line Items]        
Average exchange rate 3.3019 2.9369 3.2822 2.8576
Change in average foreign currency rate (12.40%)   (14.90%)  

Equity Investment In Unconsolidated Subsidiary
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Equity Investment In Unconsolidated Subsidiary
9 Months Ended
Sep. 30, 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 September 30, 2012 and December 31, 2011 and for the three and nine months ended September 30, 2012 and 2011:

 

 

 

 

Amounts in thousands (in USD):

September 30, 2012

December 31, 2011

Balance Sheet:

 

 

    Current assets

$
4,245 
$
4,061 

    Noncurrent assets

$
13,741 
$
9,523 

    Current liabilities

$
8,167 
$
4,393 

    Noncurrent liabilities

$
2,142 
$
3,230 

 

 

 

 

 

 

 

For the three months

For the nine months

 

ended September 30,

ended September 30,

 

2012

2011

2012

2011

Operating Results

 

 

 

 

Net operating revenue

$
9,953 
$
13,648 
$
31,310 
$
38,847 

Net earnings

($170)

$
747 
$
1,143 
$
2,169 

 

 

 

The Company’s maximum exposure to losses at September 30, 2012 was $3.4 million, the value of its equity investment in CPL.

 

Changes in the carrying amount of the investment in CPL during the nine months ended September 30, 2012 are as follows:

 

 

 

Amounts in thousands (in USD)

Total

Balance – January 1, 2012

$
2,756 

Equity earnings

381 

Effect of foreign currency translation

223 

Balance – September 30, 2012

$
3,360 

 

 

 


Equity Investment In Unconsolidated Subsidiary (Tables)
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Equity Investment In Unconsolidated Subsidiary (Tables)
9 Months Ended
Sep. 30, 2012
Equity Investment In Unconsolidated Subsidiary [Abstract]  
Summarized Financial Information

 

 

 

Amounts in thousands (in USD):

September 30, 2012

December 31, 2011

Balance Sheet:

 

 

    Current assets

$
4,245 
$
4,061 

    Noncurrent assets

$
13,741 
$
9,523 

    Current liabilities

$
8,167 
$
4,393 

    Noncurrent liabilities

$
2,142 
$
3,230 

 

Operating Results

 

 

 

 

 

 

For the three months

For the nine months

 

ended September 30,

ended September 30,

 

2012

2011

2012

2011

Operating Results

 

 

 

 

Net operating revenue

$
9,953 
$
13,648 
$
31,310 
$
38,847 

Net earnings

($170)

$
747 
$
1,143 
$
2,169 

 

Changes In Carrying Amount Of Investment

 

 

Amounts in thousands (in USD)

Total

Balance – January 1, 2012

$
2,756 

Equity earnings

381 

Effect of foreign currency translation

223 

Balance – September 30, 2012

$
3,360 

 

 

 


Equity Investment In Unconsolidated Subsidiary (Summarized Financial Information) (Details)
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Equity Investment In Unconsolidated Subsidiary (Summarized Financial Information) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Dec. 31, 2011
Equity Investment In Unconsolidated Subsidiary [Abstract]    
Current assets $ 4,245 $ 4,061
Noncurrent assets 13,741 9,523
Current liabilities 8,167 4,393
Noncurrent liabilities $ 2,142 $ 3,230

Equity Investment In Unconsolidated Subsidiary (Operating Results) (Details)
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Equity Investment In Unconsolidated Subsidiary (Operating Results) (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Equity Investment In Unconsolidated Subsidiary [Abstract]        
Net operating revenue $ 9,953,000 $ 13,648,000 $ 31,310,000 $ 38,847,000
Net earnings (170,000) 747,000 1,143,000 2,169,000
Maximum exposure $ 3,400,000   $ 3,400,000  

Equity Investment In Unconsolidated Subsidiary (Changes In Carrying Amount Of Investment) (Details)
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Equity Investment In Unconsolidated Subsidiary (Changes In Carrying Amount Of Investment) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Equity Investment In Unconsolidated Subsidiary [Abstract]        
Balance - January 1, 2012     $ 2,756  
Equity Earnings (57) 249 381 723
Effect of foreign currency translation     223  
Balance - September 30, 2012 $ 3,360   $ 3,360  

Goodwill
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Goodwill
9 Months Ended
Sep. 30, 2012
Goodwill [Abstract]  
Goodwill

3.GOODWILL

 

Changes in the carrying amount of goodwill related to the Company’s Edmonton property for the nine months ended September 30, 2012 are as follows:

 

 

 

Amounts in thousands

 

Balance – January 1, 2012

$
4,833 

Effect of foreign currency translation

164 

Balance – September 30, 2012

$
4,997 

 


Goodwill (Tables)
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Goodwill (Tables)
9 Months Ended
Sep. 30, 2012
Goodwill [Abstract]  
Changes In The Carrying Amount Of Goodwill

 

 

Amounts in thousands

 

Balance – January 1, 2012

$
4,833 

Effect of foreign currency translation

164 

Balance – September 30, 2012

$
4,997 

 


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
9 Months Ended
Sep. 30, 2012
Goodwill [Abstract]  
Balance - January 1, 2012 $ 4,833
Effect of foreign currency translation 164
Balance - September 30, 2012 $ 4,997

Long-Term Debt
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Long-Term Debt
9 Months Ended
Sep. 30, 2012
Debt Disclosure [Abstract]  
Long-Term Debt

4.LONG-TERM DEBT

 

Long-term debt at September 30, 2012 and December 31, 2011 consisted of the following:

 

 

 

 

 

September 30,

December 31,

Amounts in thousands

2012

2011

Credit agreement - Bank of Montreal

$
3,730 
$

Mortgage loan- Edmonton

9,100 

 

 

 

Total long-term debt

3,730 
9,100 

Less current portion

(408)
(9,100)

Long-term portion

$
3,322 
$

 

Credit Agreement- Bank of Montreal

 

On May 23, 2012, the Company, through its subsidiaries Century Resorts Alberta, Inc. (“CRA”) and Century Casino Calgary Inc. (“CAL”), 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”) and will also be used 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.

 

The BMO Credit Agreement consists of three credit facilities to be utilized as follows:

1.

Credit Facility A is a CAD 1.0 million revolving credit facility to be used for the costs of the BMO Credit Agreement financing, ongoing working capital requirements and operating regulatory requirements. As of September 30, 2012, there was no outstanding balance under Credit Facility A.

 

2.

Credit Facility B is a CAD 25.0 million committed, non-revolving, reducing standby facility. Up to CAD 11 million of the Credit Facility B may be used to repay all or part of the Edmonton Mortgage with the remainder available for working capital requirements and general corporate purposes. Once the principal balance of the advance under Credit Facility B has been repaid, it cannot be re-borrowed. As described below, CAD 3.6 million ($3.7 million) was drawn down under Credit Facility B and was used, with cash on hand, to repay in full the Edmonton Mortgage. As of September 30, 2012, there was $3.7 million outstanding under Credit Facility B.  

 

3.

Credit Facility C is a CAD 2.0 million treasury management risk facility as defined by the BMO Credit Agreement.  As of September 30, 2012, there was no outstanding balance under Credit Facility C.

 

As of September 30, 2012, the Company had approximately CAD 24.4 million ($24.8 million) available for borrowing under the BMO Credit Agreement. 

 

The BMO Credit Agreement bears interest based on credit facilities as follows:

 

1.

Advances under Credit Facility A may be in the form of :

i.

Advances denominated in CAD and bearing interest at the lender’s floating rate for loans made in CAD plus a margin as defined by the BMO Credit Agreement, and/or

ii.

Advances denominated in USD and bearing interest at the lender’s floating rate for loans made in USD plus a margin as defined by the BMO Credit Agreement, and/or

iii.

Issuances of a CAD Letter of Credit (maximum face value CAD 100,000), bearing interest at a floating margin rate as defined by the BMO Credit Agreement.

2.

Advances under Credit Facility B may be in the form of:

i.

Advances denominated in CAD and bearing interest at the lender’s floating rate for loans made in CAD plus a margin as defined by the BMO Credit Agreement (CAD 500,000 minimum and CAD 100,000 increments thereafter);

ii.

Advances denominated in USD and bearing interest at the lender’s floating rate for loans made in USD plus a margin as defined by the BMO Credit Agreement ($500,000 minimum and $100,000 increments thereafter);

iii.

Advances denominated in USD and bearing interest at the LIBOR rate fixed for 1-6 months ($1 million minimum and $500,000 increments thereafter); and/or

iv.

A Bankers Acceptance denominated in CAD and bearing interest at a fixed rate as defined by the BMO Credit Agreement for 1-6 months (CAD 1 million minimum and CAD 500,000 increments thereafter).

3.

Longer term fixed rates of interest, up to and including the full five year term of the BMO Credit Agreement, can be achieved through the use of interest rate swaps with a deemed risk up to the maximum amount of Credit Facility C. As of September 30, 2012, no interest rate swaps were in use by the Company.

4.

Any funds that are not drawn down under either Credit Facility A or B are classified as a CAD Standby Facility.

Mortgage - Edmonton

 

On May 23, 2012, the Company repaid the outstanding balance of approximately $6.3 million on the Edmonton Mortgage. The repayment consisted of $6.1  million in principal and interest due on the Edmonton Mortgage and $0.2 million in prepayment penalties and unamortized deferred financing charges. This loan payoff was funded with a $3.6 million borrowing under the BMO Credit Agreement and $2.7 million of cash on hand. The repayment by the Company terminated the Edmonton Mortgage.

 

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

 

 

 

 

Credit agreement - Bank of Montreal

September 30,

December 31,

Amounts in thousands

2012

2011

Deferred financing charges - current

$
83 
$

Deferred financing charges - long-term

300 

Total

$
383 
$

 

 

 

Mortgage - Edmonton

September 30,

December 31,

Amounts in thousands

2012

2011

Deferred financing charges - current

$
$
101 

Deferred financing charges - long-term

Total

$
$
101 

 

Amortization expense relating to deferred financing charges was $0.1 million for both the nine months ended September 30, 2012 and September 30, 2011, and is included in interest expense in the accompanying condensed consolidated statements of earnings.

 

As of September 30, 2012, the Company was in compliance with all covenants related to its borrowings. Covenants under the BMO Credit Agreement include the following:  

 

a)

Senior Funded Debt to EBITDA Ratio as defined by the BMO Credit Agreement may not be greater than 3.00:1.00;

b)

Fixed Charge Coverage Ratio as defined by the BMO Credit Agreement may not be less than 1.20:1.00;

c)

CRA and CAL combined shareholder’s equity may not be less than CAD 20 million; and

d)

Capital expenditures in any fiscal year may not exceed CAD 4.0 million in aggregate, without the lender’s consent.

 

The consolidated weighted average interest rate on all borrowings for the Company was 14.5%  for the nine months ended September 30, 2012. The Company currently pays a floating interest rate on its borrowings under the BMO Credit Agreement. The current interest rate is approximately 4.0%. The weighted average interest rate is higher than the 7.0% interest rate of the Edmonton Mortgage and the 4.0% interest rate under the BMO Credit Agreement because the Company wrote off $0.1 million in deferred financing costs and paid $0.2 million in prepayment penalties in May 2012 in connection with the repayment of the Edmonton Mortgage.

 

 

As of September 30, 2012, scheduled maturities of the long-term debt is as follows:

 

 

 

 

 

Amounts in thousands

CAD

USD

2012

$
123 
$
126 

2013

370 
376 

2014

370 
376 

2015

370 
376 

2016

370 
376 

Thereafter

2,066 
2,100 

Total

$
3,669 
$
3,730 

 


Long-Term Debt (Tables)
v0.0.0.0
Long-Term Debt (Tables)
9 Months Ended
Sep. 30, 2012
Debt Disclosure [Abstract]  
Schedule of Long-term Debt

 

 

 

 

September 30,

December 31,

Amounts in thousands

2012

2011

Credit agreement - Bank of Montreal

$
3,730 
$

Mortgage loan- Edmonton

9,100 

 

 

 

Total long-term debt

3,730 
9,100 

Less current portion

(408)
(9,100)

Long-term portion

$
3,322 
$

 

Schedule of Deferred Financing Charges

 

 

 

Credit agreement - Bank of Montreal

September 30,

December 31,

Amounts in thousands

2012

2011

Deferred financing charges - current

$
83 
$

Deferred financing charges - long-term

300 

Total

$
383 
$

 

 

 

Mortgage - Edmonton

September 30,

December 31,

Amounts in thousands

2012

2011

Deferred financing charges - current

$
$
101 

Deferred financing charges - long-term

Total

$
$
101 

 

Schedule of Maturities of Long-term Debt

 

 

 

Amounts in thousands

CAD

USD

2012

$
123 
$
126 

2013

370 
376 

2014

370 
376 

2015

370 
376 

2016

370 
376 

Thereafter

2,066 
2,100 

Total

$
3,669 
$
3,730 

 


Long-Term Debt (Narrative) (Details)
v0.0.0.0
Long-Term Debt (Narrative) (Details)
6 Months Ended 9 Months Ended 9 Months Ended 9 Months Ended 6 Months Ended 6 Months Ended 9 Months Ended 9 Months Ended
Jun. 30, 2012
USD ($)
Sep. 30, 2012
USD ($)
Sep. 30, 2011
USD ($)
May 23, 2012
Sep. 30, 2012
Edmonton Mortgage [Member]
USD ($)
Jun. 30, 2012
Edmonton Mortgage [Member]
USD ($)
Sep. 30, 2011
BMO Credit Agreement [Member]
CAD ($)
Sep. 30, 2012
BMO Credit Agreement [Member]
USD ($)
Sep. 30, 2012
BMO Credit Agreement [Member]
CAD ($)
Jun. 30, 2012
BMO Credit Agreement [Member]
USD ($)
May 23, 2012
BMO Credit Agreement [Member]
USD ($)
May 23, 2012
BMO Credit Agreement [Member]
CAD ($)
Sep. 30, 2011
CRA and CAL [Member]
CAD ($)
Jun. 30, 2012
Credit Facility A [Member]
Sep. 30, 2012
Credit Facility A [Member]
CAD ($)
Jun. 30, 2012
Credit Facility B [Member]
Sep. 30, 2012
Credit Facility B [Member]
USD ($)
Sep. 30, 2012
Credit Facility B [Member]
CAD ($)
Sep. 30, 2012
Credit Facility B [Member]
BMO Credit Agreement [Member]
USD ($)
Sep. 30, 2012
Credit Facility B [Member]
BMO Credit Agreement [Member]
CAD ($)
Sep. 30, 2012
Credit Facility B [Member]
Advances At LIBOR Rate Fixed For 1 To 6 Months [Member]
USD ($)
Sep. 30, 2012
Credit Facility B [Member]
Advances At LIBOR Rate Fixed For 1 To 6 Months [Member]
CAD ($)
Sep. 30, 2012
To Be Used To Repay Edmonton Mortgage [Member]
CAD ($)
Sep. 30, 2012
Credit Facility C [Member]
CAD ($)
Sep. 30, 2012
Amortization of Deferred Financing Charges [Member]
USD ($)
Sep. 30, 2011
Amortization of Deferred Financing Charges [Member]
USD ($)
Sep. 30, 2012
Maximum [Member]
Credit Facility A [Member]
BMO Credit Agreement [Member]
CAD ($)
Sep. 30, 2012
Minimum [Member]
Credit Facility B [Member]
BMO Credit Agreement [Member]
USD ($)
Sep. 30, 2012
Minimum [Member]
Credit Facility B [Member]
BMO Credit Agreement [Member]
CAD ($)
Sep. 30, 2012
Minimum [Member]
Credit Facility B [Member]
Advances At LIBOR Rate Fixed For 1 To 6 Months [Member]
USD ($)
Sep. 30, 2012
Minimum [Member]
Credit Facility B [Member]
Advances At LIBOR Rate Fixed For 1 To 6 Months [Member]
CAD ($)
Debt Instrument [Line Items]                                                              
Repayment of mortgage $ 6,300,000                                                            
Cash 2,700,000                                                            
Secured Debt                   3,600,000                                          
Principal and interest payment 6,100,000         6,100,000                                                  
Early termination penalty 200,000       200,000                                                    
Unamortized finance charges written off   100,000                                                          
Amount of credit agreement                     27,500,000 28,000,000     1,000,000     25,000,000         11,000,000 2,000,000              
Term of credit agreement       5 years                                                      
Line of credit facility amount drawn to repay Edmonton mortgage                                 3,700,000 3,600,000                          
Line of credit facility amount available for borrowing               24,800,000 24,400,000                                            
Amortization of deferred financing costs   131,000 51,000                                           100,000 100,000          
Weighted average interest rate on borrowings 14.50% 14.50%                                                          
Interest rate         7.00%     4.00% 4.00%                                            
Maximum borrowing capacity                                                     100,000 500,000 500,000 1,000,000 1,000,000
Line Of Credit Increments                                     100,000 100,000 500,000 500,000                  
Anticipated floating rate   4.00%                                                          
Senior funded debt to EBITDA ratio             3.00                                                
Minimum fixed charge coverage ratio             1.20                                                
Shareholder's equity                         20,000,000                                    
Maximum capital expenditures             $ 4,000,000                                                
Line of credit facility description Longer term fixed rates of interest, up to and including the full five year term of the BMO Credit Agreement, can be achieved through the use of interest rate swaps with a deemed risk up to the maximum amount of Credit Facility C. As of September 30, 2012, no interest rate swaps were in use by the Company.Any funds that are not drawn down under either Credit Facility A or B are classified as a CAD Standby Facility.                         Advances under Credit Facility A may be in the form of : Advances denominated in CAD and bearing interest at the lender's floating rate for loans made in CAD plus a margin as defined by the BMO Credit Agreement, and/or Advances denominated in USD and bearing interest at the lender's floating rate for loans made in USD plus a margin as defined by the BMO Credit Agreement, and/or Issuances of a CAD Letter of Credit (maximum face value CAD 100,000), bearing interest at a floating margin rate as defined by the BMO Credit Agreement.   Advances under Credit Facility B may be in the form of: Advances denominated in CAD and bearing interest at the lender's floating rate for loans made in CAD plus a margin as defined by the BMO Credit Agreement (CAD 500,000 minimum and CAD 100,000 increments thereafter); Advances denominated in USD and bearing interest at the lender's floating rate for loans made in USD plus a margin as defined by the BMO Credit Agreement ($500,000 minimum and $100,000 increments thereafter); Advances denominated in USD and bearing interest at the LIBOR rate fixed for 1-6 months ($1 million minimum and $500,000 increments thereafter); and/or A Bankers Acceptance denominated in CAD and bearing interest at a fixed rate as defined by the BMO Credit Agreement for 1-6 months (CAD 1 million minimum and CAD 500,000 increments thereafter).                              
Borrowing covenants Senior Funded Debt to EBITDA Ratio as defined by the BMO Credit Agreement may not be greater than 3.00:1.00; Fixed Charge Coverage Ratio as defined by the BMO Credit Agreement may not be less than 1.20:1.00; CRA and CAL combined shareholder's equity may not be less than CAD 20 million; and Capital expenditures in any fiscal year may not exceed CAD 4.0 million in aggregate, without the lender's consent.                                                            

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
Sep. 30, 2012
USD ($)
Sep. 30, 2012
CAD ($)
Dec. 31, 2011
USD ($)
Sep. 30, 2012
BMO Credit Agreement [Member]
USD ($)
Dec. 31, 2011
BMO Credit Agreement [Member]
USD ($)
Sep. 30, 2012
Edmonton Mortgage [Member]
USD ($)
Dec. 31, 2011
Edmonton Mortgage [Member]
USD ($)
Debt Instrument [Line Items]              
Long-term Debt, Total $ 3,730 $ 3,669 $ 9,100 $ 3,730 $ 0 $ 0 $ 9,100
Less: current maturities of long-term debt obligations (408)   (9,100)        
Long-term debt, less current portion $ 3,322   $ 0        

Long-Term Debt (Schedule of Deferred Financing Charges) (Details)
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Long-Term Debt (Schedule of Deferred Financing Charges) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Dec. 31, 2011
BMO Credit Agreement [Member]
   
Debt Instrument [Line Items]    
Deferred Finance Costs, Current, Gross $ 83 $ 0
Deferred Finance Costs, Noncurrent, Gross 300 0
Deferred Finance Costs, Gross 383 0
Edmonton Mortgage [Member]
   
Debt Instrument [Line Items]    
Deferred Finance Costs, Current, Gross 0 101
Deferred Finance Costs, Noncurrent, Gross 0 0
Deferred Finance Costs, Gross $ 0 $ 101

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)
In Thousands, unless otherwise specified
Sep. 30, 2012
USD ($)
Sep. 30, 2012
CAD ($)
Dec. 31, 2011
USD ($)
Debt Disclosure [Abstract]      
Long-term Debt, Maturities, 2012 $ 126 $ 123  
Long-term Debt, Maturities, 2013 376 370  
Long-term Debt, Maturities, 2014 376 370  
Long-term Debt, Maturities, 2015 376 370  
Long-term Debt, Maturities, 2016 376 370  
Long-term Debt, Maturities, Thereafter 2,100 2,066  
Long-term Debt, Total $ 3,730 $ 3,669 $ 9,100

Promotional Allowances
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Promotional Allowances
9 Months Ended
Sep. 30, 2012
Promotional Allowances [Abstract]  
Promotional Allowances

5.            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. As of September 30, 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

For the nine months

 

ended September 30,

ended September 30,

 

2012

2011

2012

2011

Amounts in thousands

 

 

 

 

Hotel, bowling, food and beverage

$
1,020 
$
960 
$
2,918 
$
2,701 

Coupons

602 
566 
1,543 
1,513 

Player points

663 
672 
1,934 
1,943 

Total promotional allowances

$
2,285 
$
2,198 
$
6,395 
$
6,157 

 


Promotional Allowances (Tables)
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Promotional Allowances (Tables)
9 Months Ended
Sep. 30, 2012
Promotional Allowances [Abstract]  
Schedule Of Promotional Allowances

 

 

 

 

 

 

For the three months

For the nine months

 

ended September 30,

ended September 30,

 

2012

2011

2012

2011

Amounts in thousands

 

 

 

 

Hotel, bowling, food and beverage

$
1,020 
$
960 
$
2,918 
$
2,701 

Coupons

602 
566 
1,543 
1,513 

Player points

663 
672 
1,934 
1,943 

Total promotional allowances

$
2,285 
$
2,198 
$
6,395 
$
6,157 

 


Promotional Allowances (Details)
v0.0.0.0
Promotional Allowances (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Promotional Allowances [Line Items]        
Total Promotional Allowances $ 2,285,000 $ 2,198,000 $ 6,395,000 $ 6,157,000
Outstanding Balance Of Promotional Allowance Liability 1,000,000   1,000,000  
Hotel, Bowling, Food and Beverage [Member]
       
Promotional Allowances [Line Items]        
Total Promotional Allowances 1,020,000 960,000 2,918,000 2,701,000
Coupons [Member]
       
Promotional Allowances [Line Items]        
Total Promotional Allowances 602,000 566,000 1,543,000 1,513,000
Player Points [Member]
       
Promotional Allowances [Line Items]        
Total Promotional Allowances $ 663,000 $ 672,000 $ 1,934,000 $ 1,943,000

Income Taxes
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Income Taxes
9 Months Ended
Sep. 30, 2012
Income Taxes [Abstract]  
Income Taxes

6.            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 September 30, 2012, the Company has established a valuation allowance for its U.S. deferred tax assets of $4.8 million, a valuation allowance on its Calgary property of $0.9 million and a valuation allowance on CCE deferred tax assets of $1.3 million 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 jurisdictions where the assets are located 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 in the jurisdictions where the assets are located 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:

 

 

 

 

 

 

 

 

 

For the nine months

Amounts in thousands

ended September 30,

 

2012

2011

U.S. Federal - Current

$
169 
$
72 

U.S. Federal - Deferred

Provision for U.S. federal income taxes

169 
72 

 

 

 

Foreign - Current

$
277 
$
437 

Foreign - Deferred

386 
(113)

Provision for foreign income taxes

663 
324 

Total provision for income taxes

$
832 
$
396 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

For the nine months

Amounts in thousands

ended September 30, 2012

   

Pre-tax income

Income tax

Effective tax rate

Canada

$
2,145 
$
651 
30.4% 

United States

640 
169 
26.4% 

Mauritius

322 
10 
3.0% 

Austria

902 
0.2% 

Poland*

290 

 -

0.0% 

Total

$
4,299 
$
832 
19.4% 

* Poland includes earnings from the equity investment in CPL.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the nine months

Amounts in thousands

ended September 30, 2011

   

Pre-tax income (loss)

Income tax

Effective tax rate

Canada

$
1,814 
$
273 
15.1% 

United States

(1,087)
72 

                                     (6.6%)

Mauritius

1,629 
49 
3.0% 

Austria

(132)
(1.5%)

Poland *

603 

 -

0.0% 

Total

$
2,827 
$
396 
14.0% 

* Poland includes earnings from the equity investment in CPL.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The US effective income tax rate has increased significantly for the nine months ended September 30, 2012 compared to the nine months ended September 30, 2011 due to a one-time withholding tax payment of $0.1 million related to a Canadian intercompany payable offset by the benefit associated with utilizing net operating losses that had been previously reserved.

The Canadian effective income tax rate has changed for the nine months ended September 30, 2012 compared to the nine months ended September 30, 2011 due primarily to the translation effect of foreign currency gains and losses related to the change in the foreign exchange rate.

The effective tax rates of our foreign properties are impacted by the movement of exchange rates primarily due to loans which are denominated in U.S. dollars. Therefore, foreign currency gains or losses recorded in each property’s local currency do not impact our earnings reported in U.S. dollars. Certain loans of our foreign properties are denominated in U.S. dollars. Therefore, foreign currency gains or losses can significantly impact each jurisdiction’s effective tax rate.


Income Taxes (Tables)
v0.0.0.0
Income Taxes (Tables)
9 Months Ended
Sep. 30, 2012
Income Taxes [Abstract]  
Provision For Income Taxes From Operations

 

 

 

 

 

 

 

 

 

For the nine months

Amounts in thousands

ended September 30,

 

2012

2011

U.S. Federal - Current

$
169 
$
72 

U.S. Federal - Deferred

Provision for U.S. federal income taxes

169 
72 

 

 

 

Foreign - Current

$
277 
$
437 

Foreign - Deferred

386 
(113)

Provision for foreign income taxes

663 
324 

Total provision for income taxes

$
832 
$
396 

 

 

 

 

Income Tax Expense By Jurisdiction

 

 

 

 

 

For the nine months

Amounts in thousands

ended September 30, 2012

   

Pre-tax income

Income tax

Effective tax rate

Canada

$
2,145 
$
651 
30.4% 

United States

640 
169 
26.4% 

Mauritius

322 
10 
3.0% 

Austria

902 
0.2% 

Poland*

290 

 -

0.0% 

Total

$
4,299 
$
832 
19.4% 

* Poland includes earnings from the equity investment in CPL.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the nine months

Amounts in thousands

ended September 30, 2011

   

Pre-tax income (loss)

Income tax

Effective tax rate

Canada

$
1,814 
$
273 
15.1% 

United States

(1,087)
72 

                                     (6.6%)

Mauritius

1,629 
49 
3.0% 

Austria

(132)
(1.5%)

Poland *

603 

 -

0.0% 

Total

$
2,827 
$
396 
14.0% 

* Poland includes earnings from the equity investment in CPL.

 

 

 

 

 


Income Taxes (Narrative) (Details)
v0.0.0.0
Income Taxes (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2012
Income Taxes [Line Items]  
Withholding tax payment relating to Canadian intercompany payable $ 0.1
United States [Member]
 
Income Taxes [Line Items]  
Valuation allowance 4.8
Calgary [Member]
 
Income Taxes [Line Items]  
Valuation allowance 0.9
Europe Casino [Member]
 
Income Taxes [Line Items]  
Valuation allowance $ 1.3

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 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Income Taxes [Abstract]        
U.S. Federal - Current     $ 169 $ 72
U.S. Federal - Deferred     0 0
Provision for U.S. federal income taxes     169 72
Foreign - Current     277 437
Foreign - Deferred     386 (113)
Provision for foreign income taxes     663 324
Total provision for income taxes $ 343 $ (82) $ 832 $ 396