Colorado Springs, Colorado – May 9, 2023 – Century Casinos, Inc. (Nasdaq Capital Market®: CNTY) today announced its financial results for the three months ended March 31, 2023.
First Quarter 2023 Highlights*
Compared to the three months ended March 31, 2022:
- Net operating revenue was $108.5 million, an increase of 5%.
- Earnings from operations were $18.4 million, an increase of 41%.
- Net loss attributable to Century Casinos, Inc. shareholders was ($1.2) million, a decrease of (670%).
- Adjusted EBITDA** was $26.1 million, an increase of 9%.
- Loss per share was ($0.04).
- Book value per share*** at March 31, 2023 was $4.70.
NUGGET CASINO RESORT ACQUISITION
On April 3, 2023, the Company completed its previously announced acquisition of 100% of the membership interests in Nugget Sparks, LLC (“Nugget”) for $100.0 million (subject to certain adjustments) (the “OpCo Acquisition”). On April 1, 2022, the Company purchased 50% of the membership interests in Smooth Bourbon, LLC (“Smooth Bourbon”) for approximately $95.0 million (the “Smooth Bourbon Acquisition” and together with the OpCo Acquisition, the “Nugget Acquisition”). Nugget owns and operates the Nugget Casino Resort in Sparks, Nevada, and Smooth Bourbon owns the real property on which the casino is located and leases the real property to Nugget for an annual rent of $15.0 million. The Company funded the acquisition with $100.0 million from an escrow account that was established under its Credit Agreement with Goldman Sachs Bank USA (the “Goldman Credit Agreement”).
RESULTS
The consolidated results for the three months ended March 31, 2023 and 2022 are as follows:
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| For the three months |
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Amounts in thousands, except per share data | ended March 31, |
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Consolidated Results: |
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| 2023 |
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| 2022 |
| % Change |
Net Operating Revenue |
| $ | 108,508 |
| $ | 103,103 |
| 5% |
Earnings from Operations |
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| 18,400 |
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| 13,045 |
| 41% |
Net (Loss) Earnings Attributable to Century Casinos, Inc. Shareholders |
| $ | (1,243) |
| $ | 218 |
| (670%) |
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Adjusted EBITDA** |
| $ | 26,054 |
| $ | 23,824 |
| 9% |
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(Loss) Earnings Per Share Attributable to Century Casinos, Inc. Shareholders: |
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Basic and Diluted |
| $ | (0.04) |
| $ | 0.01 |
| (500%) |
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“We are pleased that each of our reportable segments had revenue growth for the first quarter of 2023 compared to the first quarter of 2022. Construction of our hotel in Cape Girardeau, Missouri and our land-based casino and hotel in Caruthersville, Missouri continues, and we are excited to see the progress made at these properties,” Erwin Haitzmann and Peter Hoetzinger, Co-Chief Executive Officers of Century Casinos remarked. “We completed our acquisition of the Nugget Casino Resort on April 3, 2023. We have begun to integrate the Nugget operations and expect to see meaningful growth from this acquisition in the future. We anticipate an immediate impact to net income because we had been paying interest on the $100 million in escrow that we borrowed in April 2022 to finance the OpCo Acquisition without net income from the Nugget to support it,” Messrs. Haitzmann and Hoetzinger concluded.
REPORTABLE SEGMENT RESULTS*
The table below shows the Company’s reporting units and operating segments that are included in each of the Company’s reportable segments as of March 31, 2023:
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Reportable Segment | Operating Segment | Reporting Unit |
United States | Colorado | Century Casino & Hotel - Central City |
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| Century Casino & Hotel - Cripple Creek |
| West Virginia | Mountaineer Casino, Racetrack & Resort |
| Missouri | Century Casino Cape Girardeau |
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| Century Casino Caruthersville (1) |
Canada | Edmonton | Century Casino & Hotel - Edmonton |
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| Century Casino St. Albert |
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| Century Mile Racetrack and Casino |
| Calgary (2) | Century Downs Racetrack and Casino ("CDR") |
Poland | Poland | Casinos Poland |
Corporate and Other | Corporate and Other | Cruise Ships & Other |
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| Corporate Other (3) |
- Includes neighboring hotel, The Farmstead.
- The Company operated Century Sports through February 10, 2022.
- The Company’s equity interest in Smooth Bourbon is included in the Corporate Other reporting unit.
The Company’s net operating revenue increased by $5.4 million, or 5%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022. Following is a summary of the changes in net operating revenue by reportable segment for the three months ended March 31, 2023, compared to the three months ended March 31, 2022:
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| Net Operating Revenue | |||||||||
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| For the three months |
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Amounts in |
| ended March 31, |
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| $ |
| % | ||||
thousands |
| 2023 |
| 2022 |
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| Change |
| Change | ||
United States |
| $ | 66,369 |
| $ | 65,248 |
| $ | 1,121 |
| 2% |
Canada |
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| 16,503 |
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| 15,999 |
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| 504 |
| 3% |
Poland |
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| 25,579 |
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| 21,824 |
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| 3,755 |
| 17% |
Corporate and Other |
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| 57 |
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| 32 |
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| 25 |
| 78% |
Consolidated |
| $ | 108,508 |
| $ | 103,103 |
| $ | 5,405 |
| 5% |
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The Company’s earnings from operations increased by $5.4 million, or 41%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022. Following is a summary of the changes in earnings (loss) from operations by reportable segment for the three months ended March 31, 2023, compared to the three months ended March 31, 2022:
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| Earnings (Loss) from Operations | |||||||||
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| For the three months |
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Amounts in |
| ended March 31, |
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| % | ||||
thousands |
| 2023 |
| 2022 |
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| Change |
| Change | ||
United States |
| $ | 14,270 |
| $ | 15,528 |
| $ | (1,258) |
| (8%) |
Canada |
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| 4,001 |
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| 600 |
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| 3,401 |
| 567% |
Poland |
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| 2,643 |
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| 1,960 |
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| 683 |
| 35% |
Corporate and Other |
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| (2,514) |
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| (5,043) |
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| 2,529 |
| 50% |
Consolidated |
| $ | 18,400 |
| $ | 13,045 |
| $ | 5,355 |
| 41% |
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Net (loss) earnings attributable to Century Casinos, Inc. shareholders decreased by ($1.5) million, or (670%), for the three months ended March 31, 2023, compared to the three months ended March 31, 2022. Following is a summary of the changes in net (loss) earnings attributable to Century Casinos, Inc. shareholders by reportable segment for the three months ended March 31, 2023, compared to the three months ended March 31, 2022:
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| Net (Loss) Earnings Attributable to Century Casinos, Inc. Shareholders | |||||||||
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| For the three months |
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Amounts in |
| ended March 31, |
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| % | ||||
thousands |
| 2023 |
| 2022 |
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| Change |
| Change | ||
United States |
| $ | 5,375 |
| $ | 8,521 |
| $ | (3,146) |
| (37%) |
Canada |
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| 1,867 |
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| (703) |
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| 2,570 |
| 366% |
Poland |
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| 1,574 |
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| 931 |
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| 643 |
| 69% |
Corporate and Other |
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| (10,059) |
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| (8,531) |
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| (1,528) |
| (18%) |
Consolidated |
| $ | (1,243) |
| $ | 218 |
| $ | (1,461) |
| (670%) |
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Items deducted from or added to earnings from operations to arrive at net (loss) earnings attributable to Century Casinos, Inc. shareholders include interest income, interest expense, gains (losses) on foreign currency transactions and other, income tax (benefit) expense and non-controlling interests. Net earnings attributable to Century Casinos, Inc. shareholders decreased for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 primarily because interest expense increased by $6.8 million as a result of an additional $176.9 million in principal debt as of March 31, 2023 under the Goldman Credit Agreement compared to the principal debt as of March 31, 2022 under a prior credit agreement. This included approximately $2.6 million of additional interest expense from interest on the $100.0 million in escrow to fund the OpCo Acquisition without the benefit of net income from the Nugget Casino.
Adjusted EBITDA** increased by $2.2 million, or 9%, for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. Following is a summary of the changes in Adjusted EBITDA** by reportable segment for the three months ended March 31, 2023 compared to the three months ended March 31, 2022:
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| Adjusted EBITDA** | |||||||||
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| For the three months |
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Amounts in |
| ended March 31, |
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thousands |
| 2023 |
| 2022 |
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| Change | ||
United States |
| $ | 19,772 |
| $ | 20,315 |
| $ | (543) |
| (3%) |
Canada |
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| 4,557 |
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| 3,994 |
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| 563 |
| 14% |
Poland |
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| 3,279 |
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| 2,644 |
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| 635 |
| 24% |
Corporate and Other |
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| (1,554) |
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| (3,129) |
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| 1,575 |
| 50% |
Consolidated |
| $ | 26,054 |
| $ | 23,824 |
| $ | 2,230 |
| 9% |
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BALANCE SHEET AND LIQUIDITY
As of March 31, 2023, the Company had $102.7 million in cash and cash equivalents compared to $101.8 million in cash and cash equivalents at December 31, 2022. Cash and cash equivalents as of March 31, 2023 do not include restricted cash, which included $100.2 million in escrow to fund the OpCo Acquisition. As of March 31, 2023, the Company had $365.2 million in outstanding debt compared to $349.6 million in outstanding debt at December 31, 2022. The outstanding debt as of March 31, 2023 included $346.5 million related to the term loan under the Goldman Credit Agreement (including $100.0 million borrowed and in escrow to fund the OpCo Acquisition), $4.3 million of bank debt related to Century Resorts Management GmbH (“CRM”), and $14.4 million related to a long-term land lease for CDR. The Company also has a $285.2 million long-term financing obligation under its triple net master lease (“Master Lease”) for its West Virginia and Missouri properties.
CONFERENCE CALL INFORMATION
Today the Company will post a copy of its quarterly report on Form 10-Q filed with the SEC for the quarter ended March 31, 2023 on its website at www.cnty.com/investor/financials/sec-filings/. The Company will also post a presentation of the first quarter 2023 results on its website at www.cnty.com/investor/presentations/.
The Company will host its first quarter 2023 earnings conference call today, Tuesday, May 9, 2023 at 11:00 am EDT / 9:00 am MDT. U.S. domestic participants should dial 800-225-9448. For all international participants, please use 203-518-9708 to dial-in. The conference ID is ‘Casinos’. Participants may listen to the call live at http://www.eventcastpro.com/webcasts/cc/events/p0VL9p.cfm or obtain a recording of the call on the Company’s website until May 31, 2023 at www.cnty.com/investor/financials/sec-filings/.
CENTURY CASINOS, INC. AND SUBSIDIARIES –
UNAUDITED FINANCIAL INFORMATION – US GAAP BASIS
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Condensed Consolidated Statements of Earnings |
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| For the three months | |||||
| ended March 31, | |||||
Amounts in thousands, except for per share information |
| 2023 |
| 2022 | ||
Operating revenue: |
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Net operating revenue |
| $ | 108,508 |
| $ | 103,103 |
Operating costs and expenses: |
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Total operating costs and expenses |
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| 91,199 |
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| 90,058 |
Earnings from equity investment |
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| 1,091 |
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| — |
Earnings from operations |
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| 18,400 |
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| 13,045 |
Non-operating (expense) income, net |
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| (13,746) |
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| (8,901) |
Earnings before income taxes |
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| 4,654 |
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| 4,144 |
Income tax provision |
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| (1,623) |
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| (1,435) |
Net earnings |
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| 3,031 |
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| 2,709 |
Net earnings attributable to non-controlling interests |
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| (4,274) |
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| (2,491) |
Net (loss) earnings attributable to Century Casinos, Inc. shareholders |
| $ | (1,243) |
| $ | 218 |
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(Loss) earnings per share attributable to Century Casinos, Inc. shareholders: | ||||||
Basic |
| $ | (0.04) |
| $ | 0.01 |
Diluted |
| $ | (0.04) |
| $ | 0.01 |
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Weighted average common shares |
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Basic |
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| 30,056 |
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| 29,661 |
Diluted |
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| 30,056 |
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| 31,335 |
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Condensed Consolidated Balance Sheets |
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| March 31, |
| December 31, | ||
Amounts in thousands |
| 2023 |
| 2022 | ||
Assets |
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Current assets |
| $ | 224,405 |
| $ | 228,019 |
Property and equipment, net |
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| 471,416 |
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| 464,650 |
Other assets |
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| 189,661 |
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| 192,298 |
Total assets |
| $ | 885,482 |
| $ | 884,967 |
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Liabilities and Equity |
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Current liabilities |
| $ | 63,168 |
| $ | 65,413 |
Non-current liabilities |
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| 668,533 |
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| 665,355 |
Century Casinos, Inc. shareholders' equity |
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| 142,697 |
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| 144,028 |
Non-controlling interests |
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| 11,084 |
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| 10,171 |
Total liabilities and equity |
| $ | 885,482 |
| $ | 884,967 |
CENTURY CASINOS, INC. AND SUBSIDIARIES
UNAUDITED SUPPLEMENTAL INFORMATION
Reconciliation of Adjusted EBITDA* to Net Earnings (Loss) Attributable to Century Casinos, Inc. Shareholders by Reportable Segment.
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| For the three months ended March 31, 2023 | ||||||||||||||
Amounts in thousands |
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| United States |
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| Canada |
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| Poland |
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| Corporate and Other |
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| Total |
Net earnings (loss) attributable to Century Casinos, Inc. shareholders |
| $ | 5,375 |
| $ | 1,867 |
| $ | 1,574 |
| $ | (10,059) |
| $ | (1,243) |
Interest expense (income), net (1) |
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| 7,119 |
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| 523 |
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| (95) |
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| 9,957 |
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| 17,504 |
Income taxes (benefit) |
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| 1,776 |
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| 1,634 |
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| 632 |
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| (2,419) |
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| 1,623 |
Depreciation and amortization |
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| 5,032 |
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| 1,127 |
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| 635 |
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| 61 |
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| 6,855 |
Net earnings attributable to non-controlling interests |
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| — |
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| 3,488 |
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| 786 |
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| — |
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| 4,274 |
Non-cash stock-based compensation |
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| — |
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| — |
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| — |
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| 736 |
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| 736 |
(Gain) loss on foreign currency transactions, cost recovery income and other (2) |
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| — |
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| (4,085) |
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| (254) |
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| 7 |
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| (4,332) |
Loss on disposition of fixed assets |
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| 470 |
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| 3 |
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| 1 |
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| 5 |
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| 479 |
Acquisition costs |
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| — |
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| — |
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| — |
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| 158 |
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| 158 |
Adjusted EBITDA |
| $ | 19,772 |
| $ | 4,557 |
| $ | 3,279 |
| $ | (1,554) |
| $ | 26,054 |
- Expense of $7.1 million related to the Master Lease is included in interest expense (income), net in the United States segment. Expense of $0.5 million related to the CDR land lease is included in interest expense (income), net in the Canada segment. Cash payments related to the Master Lease and CDR land lease were $6.9 million and $0.5 million, respectively, for the period presented.
- Includes $0.6 million related to the quarterly earn out payment from the sale of casino operations in Calgary in 2020 and cost recovery income for CDR.
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| For the three months ended March 31, 2022 | ||||||||||||||
Amounts in thousands |
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| United States |
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| Canada |
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| Poland |
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| Corporate and Other |
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| Total |
Net earnings (loss) attributable to Century Casinos, Inc. shareholders |
| $ | 8,521 |
| $ | (703) |
| $ | 931 |
| $ | (8,531) |
| $ | 218 |
Interest expense (income), net (1) |
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| 7,007 |
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| 567 |
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| (13) |
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| 3,233 |
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| 10,794 |
Income taxes |
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| — |
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| 622 |
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| 558 |
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| 255 |
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| 1,435 |
Depreciation and amortization |
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| 4,768 |
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| 1,225 |
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| 681 |
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| 121 |
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| 6,795 |
Net earnings attributable to non-controlling interests |
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| — |
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| 2,025 |
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| 466 |
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| — |
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| 2,491 |
Non-cash stock-based compensation |
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| — |
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| — |
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| — |
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| 673 |
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| 673 |
Loss (gain) on foreign currency transactions and cost recovery income (2) |
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| — |
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| 243 |
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| 18 |
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| (12) |
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| 249 |
Loss on disposition of fixed assets |
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| 19 |
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| 15 |
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| 3 |
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| — |
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| 37 |
Acquisition costs |
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| — |
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| — |
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| — |
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| 1,132 |
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| 1,132 |
Adjusted EBITDA |
| $ | 20,315 |
| $ | 3,994 |
| $ | 2,644 |
| $ | (3,129) |
| $ | 23,824 |
- Expense of $7.0 million related to the Master Lease is included in interest expense (income), net in the United States segment. Expense of $0.6 million related to the CDR land lease is included in interest expense (income), net in the Canada segment. Cash payments related to the Master Lease and CDR land lease were $4.3 million and $0.4 million, respectively, for the period presented.
- Loss of $2.2 million related to the sale of land and building in Calgary in February 2022 is included in the Canada segment.
CENTURY CASINOS, INC. AND SUBSIDIARIES
UNAUDITED SUPPLEMENTAL INFORMATION
Adjusted EBITDA Margins**
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| For the three months | |
| ended March 31, | |
| 2023 | 2022 |
United States | 30% | 31% |
Canada | 28% | 25% |
Poland | 13% | 12% |
Corporate and Other | (2726%) | (9778%) |
Consolidated | 24% | 23% |
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* The Company defines Adjusted EBITDA as net earnings (loss) attributable to Century Casinos, Inc. shareholders before interest expense (income), net, income taxes (benefit), depreciation and amortization, non-controlling interests net earnings (loss) and transactions, pre-opening expenses, acquisition costs, non-cash stock-based compensation charges, asset impairment costs, loss (gain) on disposition of fixed assets, discontinued operations, (gain) loss on foreign currency transactions, cost recovery income and other, gain on business combination and certain other one-time transactions. Expense related to the Master Lease and CDR land lease is included in the interest expense (income), net line item. Intercompany transactions consisting primarily of management and royalty fees and interest, along with their related tax effects, are excluded from the presentation of net earnings (loss) attributable to Century Casinos, Inc. shareholders and Adjusted EBITDA reported for each segment. Non-cash stock-based compensation expense is presented under Corporate and Other as the expense is not allocated to reportable segments when reviewed by the Company’s chief operating decision makers. Not all of the aforementioned items occur in each reporting period, but have been included in the definition based on historical activity. These adjustments have no effect on the consolidated results as reported under US GAAP. Adjusted EBITDA is not considered a measure of performance recognized under US GAAP. Management believes that Adjusted EBITDA is a valuable measure of the relative performance of the Company and its properties. The gaming industry commonly uses Adjusted EBITDA as a method of arriving at the economic value of a casino operation. Management uses Adjusted EBITDA to compare the relative operating performance of separate operating units by eliminating the above-mentioned items associated with the varying levels of capital expenditures for infrastructure required to generate revenue and the often high cost of acquiring existing operations. Adjusted EBITDA is used by the Company’s lending institution to gauge operating performance. The Company’s computation of Adjusted EBITDA may be different from, and therefore may not be comparable to, similar measures used by other companies within the gaming industry. Please see the reconciliation of Adjusted EBITDA to net (loss) earnings attributable to Century Casinos, Inc. shareholders above.
** The Company defines Adjusted EBITDA margin as Adjusted EBITDA divided by net operating revenue. Adjusted EBITDA margin is a non-US GAAP measure. Management uses this margin as one of several measures to evaluate the efficiency of the Company’s casino operations.
CENTURY CASINOS, INC. AND SUBSIDIARIES
UNAUDITED SUPPLEMENTAL INFORMATION
ABOUT CENTURY CASINOS, INC.:
Century Casinos, Inc. is a casino entertainment company. The Company owns and operates Century Casino & Hotels in Cripple Creek and Central City, Colorado, and in Edmonton, Alberta, Canada; the Century Casino in Cape Girardeau and Caruthersville, Missouri, and in St. Albert, Alberta, Canada; Mountaineer Casino, Racetrack & Resort in New Cumberland, West Virginia; and the Century Mile Racetrack and Casino in Edmonton, Alberta, Canada. Through its Austrian subsidiary, CRM, the Company holds a 66.6% ownership interest in Casinos Poland Ltd., the owner and operator of eight casinos throughout Poland; and a 75% ownership interest in CDR in Calgary, Alberta, Canada. Through its United States subsidiary, Century Nevada Acquisition, Inc., the Company owns Nugget and a 50% membership interest in Smooth Bourbon, which owns the land and building of Nugget in Sparks, Nevada. The Company has an agreement to purchase 100% of the operations of the Rocky Gap Casino Resort in Flintstone, Maryland. The Company continues to pursue other projects in various stages of development.
Century Casinos’ common stock trades on The Nasdaq Capital Market® under the symbol CNTY. For more information about Century Casinos, visit our website at www.cnty.com.
FORWARD-LOOKING STATEMENTS, BUSINESS ENVIRONMENT & RISK FACTORS
This release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of the management of Century Casinos based on information currently available to management. Such forward-looking statements include, but are not limited to, statements regarding completed and pending acquisitions, projects in development and other opportunities, including the expected benefits of our Nugget acquisition, closing of the acquisition of the Rocky Gap Casino Resort and completion of our Missouri construction projects, our credit agreement with Goldman Sachs Bank USA and obligations under our Master Lease and our ability to repay our debt and other obligations, outcomes of legal proceedings, changes in our tax provisions or exposure to additional income tax liabilities, and plans for our casinos and our Company. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, among others, the risks described in the section entitled “Risk Factors” under Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2022, and in subsequent periodic and current SEC filings we may make. Century Casinos disclaims any obligation to revise or update any forward-looking statement that may be made from time to time by it or on its behalf.