cnty-20200520x8k
false000091114700009111472020-05-202020-05-20

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 20, 2020

CENTURY CASINOS, INC.

(Exact Name of Registrant as specified in its charter)

Delaware

0-22900

84-1271317

(State or other jurisdiction

(Commission

(I.R.S. Employer

of incorporation)

File Number)

Identification Number)

455 E. Pikes Peak Ave., Suite 210, Colorado Springs, Colorado

80903

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code:

719-527-8300

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 Per Share Par Value

CNTY

Nasdaq Capital Market, Inc.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨



Item 2.02 Results of Operations and Financial Condition.

On May 20, 2020, Century Casinos, Inc., a Delaware corporation (the “Company”), issued a press release reporting its financial results for the first quarter of 2020. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report.

Item 7.01 Regulation FD Disclosure.

The Company is furnishing as Exhibit 99.2 a presentation to be used in connection with the Company’s first quarter of 2020 earnings conference call on Wednesday, May 20, 2020, and for future meetings with investors, stockholders and analysts.

The information in this report and Exhibits 99.1 and 99.2 attached hereto (i) is being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and (ii) shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

This report (including Exhibits 99.1 and 99.2) may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Factors that could cause the Company’s actual results to differ materially from those described in the forward-looking statements can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and the Company’s Current Report on Form 8-K filed on May 8, 2020 that have been filed with the Securities and Exchange Commission. The Company does not undertake to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.

Description

99.1

Century Casinos, Inc. Press Release dated May 20, 2020

99.2

Century Casinos, Inc. Investor Presentation dated May 20, 2020

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Century Casinos, Inc.

Date: May 20, 2020

By: /s/ Margaret Stapleton

Margaret Stapleton

Chief Financial Officer

Exhibit 991 Earnings Release Q1 2020



May 20, 2020

PRESS RELEASE



Century Casinos, Inc. Announces First Quarter 2020 Results



Colorado Springs, Colorado  –May 20, 2020 – Century Casinos, Inc. (Nasdaq Capital Market®: CNTY) today announced its financial results for the three months ended March 31, 2020.  



First Quarter 2020 Highlights*

·

Net operating revenue was $87.7 million, compared to $45.6 million for the three months ended March 31, 2019, an increase of 92%. 

·

Loss from operations was ($31.8) million, compared to earnings of $3.4 million for the three months ended March 31, 2019, a decrease of (1022%).

·

Net loss attributable to Century Casinos, Inc. shareholders was ($45.9) million, compared to net earnings attributable to Century Casinos, Inc. shareholders of $1.1 million for the three months ended March 31, 2019, a decrease of (4394%). 

·

Adjusted EBITDA** was $9.6 million, compared to $6.7 million for the three months ended March 31, 2019, an increase of 44%. 

·

Loss per share was ($1.55).  

·

Book value per share*** at March 31, 2020 was $3.54.



The Company’s first quarter 2020 net operating revenue and Adjusted EBITDA were significantly impacted by the acquisition of Mountaineer Casino, Racetrack & Resort, Century Casino Cape Girardeau and Century Casino Caruthersville (the “Acquired Casinos”) in December 2019. The coronavirus (COVID-19) pandemic discussed below significantly impacted the Company’s first quarter 2020 results of operations, which included a $33.0 million impairment of goodwill and casino licenses.



COVID-19 Update



In late 2019, an outbreak of COVID-19 was identified in China and has since spread throughout much of the world. The COVID-19 pandemic has had an adverse effect on the Company’s first quarter 2020 results of operations and financial condition, and we expect this situation will have an adverse impact on our second quarter 2020 results. The trends below are not the only items that could impact the Company’s future performance, and the views of management are preliminary based on currently available information. Between March 14, 2020 and March 17, 2020, the Company closed all of its casinos, hotels and other facilities to comply with quarantines issued by governments to contain the spread of COVID-19. The Company anticipates a phased approach to reopening will be recommended by government officials in the jurisdictions where it operates, which could include reduced levels of gaming space, social distancing at slot machines and table games or reduced capacity within the casino, limited restaurant operating hours or continued closure of restaurants, requirements to wear face masks, including the potential to require guests to wear face masks, increased frequency of disinfecting surfaces and other measures to account for varying levels of demand. The Company’s casinos rely on a local customer base and, as such, the Company anticipates that its operations could resume at a quicker rate than those of casinos at destination resorts. The timing for reopening the Company’s closed locations will depend on determinations by governments in

* Amounts presented are rounded. As such, rounding differences could occur in period over period changes and percentages reported.

** Adjusted EBITDA and Adjusted EBITDA margin are Non-US GAAP financial measures. See discussion and reconciliation of Non-US GAAP financial measures in Supplemental Information below.

*** The Company defines book value per share as total Century Casinos, Inc. shareholders’ equity divided by outstanding common shares.

 

 


 

each jurisdiction. The Company reopened its Poland casinos on May 18, 2020. Based on information currently available, the Company is anticipating reopening most of its other locations beginning in June 2020 and no later than August 2020. However, the Company cannot predict how quickly customers will return to its casinos. The Company permanently closed Century Casino Bath in March 2020 and four of the ship-based casinos that the Company operated prior to their closures in March 2020 will not reopen due to expiration of the Company’s concession agreements for those casinos.



Due to the temporary closures of its casinos, hotels and other facilities, the Company has taken actions to reduce operating costs, including furloughing most of its personnel and implementing reduced work weeks for other personnel. During the closures, the Company will continue to pay benefits to its United States and Canadian employees, inclusive of part time employees, through May 2020. In Poland, all employees were paid reduced salaries based on local employment laws. In March 2020, as a proactive measure to increase its cash position and preserve financial flexibility in light of the uncertainty resulting from the COVID-19 pandemic, the Company borrowed an additional $17.4 million on its revolving credit facility with Macquarie Capital (“Macquarie”) and its credit agreement with UniCredit Bank Austria AG (“UniCredit”). The Company has no remaining availability under these credit facilities. As of April 30, 2020, the Company had $50.0 million in cash on hand. The Company currently is not generating any revenue from its properties, and estimates that the net cash outflow during the time the operations continue to be fully suspended will be, on average, approximately $8.0 million per month. Management estimates that the Company will need approximately $19.8 million to reopen operations and cover short-term cash needs at the casinos. 



During the first quarter of 2020, the Company concluded that the COVID-19 pandemic and associated closure of its casinos were triggering events that could indicate possible impairment of its goodwill and indefinite-lived intangible assets. The Company performed a quantitative and qualitative impairment analysis and determined that goodwill and casino licenses related to certain reporting units were impaired. As a result, the Company recorded $33.0 million to impairment – goodwill and intangible assets on its condensed consolidated statement of (loss) earnings for the three months ended March 31, 2020.  



 

* Amounts presented are rounded. As such, rounding differences could occur in period over period changes and percentages reported.

** Adjusted EBITDA and Adjusted EBITDA margin are Non-US GAAP financial measures. See discussion and reconciliation of Non-US GAAP financial measures in Supplemental Information below.

 

2/11

 


 

The consolidated results for the three months ended March 31, 2020 and 2019 are as follows:



 

 

 

 

 

 

 

 

 



For the three months

 

 

Amounts in thousands, except per share data

ended March 31,

 

 

Consolidated Results:

 

 

2020

 

 

2019

 

% Change

Net Operating Revenue

 

$

87,656 

 

$

45,613 

 

92% 

(Loss) earnings from Operations

 

 

(31,772)

 

 

3,446 

 

(1022%)

Net (Loss) Earnings Attributable to Century Casinos, Inc. Shareholders

 

$

(45,856)

 

$

1,068 

 

(4394%)



 

 

 

 

 

 

 

 

Adjusted EBITDA**

 

$

9,644 

 

$

6,703 

 

44% 

  

 

 

 

 

 

 

 

 

(Loss) Earnings Per Share Attributable to Century Casinos, Inc. Shareholders:

Basic

 

$

(1.55)

 

$

0.04 

 

(3975%)

Diluted

 

$

(1.55)

 

$

0.04 

 

(3975%)



During these unprecedented times, our primary focus is the health, safety and well-being of our team members, guests and communities,” Erwin Haitzmann and Peter Hoetzinger, Co-Chief Executive Officers of Century Casinos remarked.  Through the end of February, we were encouraged by the strength of our operations and the significant growth in net operating revenue and Adjusted EBITDA driven in part by our recent acquisition of properties in Missouri and West Virginia. We look forward to reopening our properties, and we plan to meet or exceed all safety requirements set forth by health officials,” Haitzmann and Hoetzinger concluded. 



 

 

* Amounts presented are rounded. As such, rounding differences could occur in period over period changes and percentages reported.

** Adjusted EBITDA and Adjusted EBITDA margin are Non-US GAAP financial measures. See discussion and reconciliation of Non-US GAAP financial measures in Supplemental Information below.

 

3/11

 


 

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, 2020:







 

 

Reportable Segment

Operating Segment

Reporting Unit

United States

Colorado

Century Casino & Hotel - Central City



 

Century Casino & Hotel - Cripple Creek



West Virginia

Mountaineer Casino, Racetrack & Resort



Missouri

Century Casino Cape Girardeau



 

Century Casino Caruthersville

Canada

Edmonton

Century Casino & Hotel - Edmonton



 

Century Casino St. Albert



 

Century Mile Racetrack and Casino



Calgary

Century Casino Calgary



 

Century Downs Racetrack and Casino



 

Century Bets! Inc.

Poland

Poland

Casinos Poland

Corporate and Other

Corporate and Other

Cruise Ships & Other



 

Century Casino Bath



 

Corporate Other



The Company’s net operating revenue increased by $42.0 million, or 92%, for the three months ended March 31, 2020,  compared to the three months ended March 31, 2019.  Following is a summary of the changes in net operating revenue by reportable segment for the three months ended March 31, 2020,  compared to the three months ended March 31, 2019:





 

 

 

 

 

 

 

 

 

 

 



 

Net Operating Revenue



 

For the three months

 

 

 

 

 



 

ended March 31,

 

 

 

 

 

Amounts in thousands

 

2020

 

2019

 

$ Change

 

% Change

United States

 

$

53,427 

 

$

8,068 

 

$

45,359 

 

562% 

Canada

 

 

16,187 

 

 

16,297 

 

 

(110)

 

(1%)

Poland

 

 

17,062 

 

 

19,752 

 

 

(2,690)

 

(14%)

Corporate and Other

 

 

980 

 

 

1,496 

 

 

(516)

 

(35%)

Consolidated

 

$

87,656 

 

$

45,613 

 

$

42,043 

 

92% 



 

* Amounts presented are rounded. As such, rounding differences could occur in period over period changes and percentages reported.

** Adjusted EBITDA and Adjusted EBITDA margin are Non-US GAAP financial measures. See discussion and reconciliation of Non-US GAAP financial measures in Supplemental Information below.

4/11

 


 

The Company’s earnings from operations decreased by ($35.2) million, or (1022%), for the three months ended March 31, 2020,  compared to the three months ended March 31, 2019.   Following is a summary of the changes in earnings (loss) from operations by reportable segment for the three months ended March 31, 2020,  compared to the three months ended March 31, 2019:  







 

 

 

 

 

 

 

 

 

 

 



 

Earnings (Loss) from Operations



 

For the three months

 

 

 

 

 



 

ended March 31,

 

 

 

 

 

Amounts in thousands

 

2020

 

2019

 

$ Change

 

% Change

United States

 

$

(25,091)

 

$

1,339 

 

$

(26,430)

 

(1974%)

Canada

 

 

(1,678)

 

 

3,700 

 

 

(5,378)

 

(145%)

Poland

 

 

294 

 

 

1,675 

 

 

(1,381)

 

(82%)

Corporate and Other

 

 

(5,297)

 

 

(3,268)

 

 

(2,029)

 

(62%)

Consolidated

 

$

(31,772)

 

$

3,446 

 

$

(35,218)

 

(1022%)



Net earnings (loss) attributable to Century Casinos, Inc. shareholders decreased by ($46.9) million, or (4394%), for the three months ended March 31, 2020,  compared to the three months ended March 31, 2019.  Following is a summary of the changes in net earnings (loss) attributable to Century Casinos, Inc. shareholders by reportable segment for the three months ended March 31, 2020,  compared to the three months ended March 31, 2019:  



 

 

 

 

 

 

 

 

 

 

 

 



 

Net Earnings (Loss) Attributable to Century Casinos, Inc. Shareholders



 

For the three months

 

 

 

 

 



 

ended March 31,

 

 

 

 

 

Amounts in thousands

 

2020

 

2019

 

$ Change

 

% Change

United States

 

$

(34,219)

 

$

983 

 

$

(35,202)

 

(3581%)

Canada

 

 

(4,408)

 

 

1,547 

 

 

(5,955)

 

(385%)

Poland

 

 

31 

 

 

913 

 

 

(882)

 

(97%)

Corporate and Other

 

 

(7,260)

 

 

(2,375)

 

 

(4,885)

 

(206%)

Consolidated

 

$

(45,856)

 

$

1,068 

 

$

(46,924)

 

(4394%)



Items deducted from or added to earnings from operations to arrive at net earnings (loss) attributable to Century Casinos, Inc. shareholders include interest income, interest expense, gains (losses) on foreign currency transactions and other, income tax expense and non-controlling interests.

 

* Amounts presented are rounded. As such, rounding differences could occur in period over period changes and percentages reported.

** Adjusted EBITDA and Adjusted EBITDA margin are Non-US GAAP financial measures. See discussion and reconciliation of Non-US GAAP financial measures in Supplemental Information below.

5/11

 


 

The Company’s Adjusted EBITDA** increased by $2.9 million, or 44%, for the three months ended March 31, 2020 compared to the three months ended March 31, 2019.  Following is a summary of the changes in Adjusted EBITDA** by reportable segment for the three months ended March 31, 2020 compared to the three months ended March 31, 2019:







 

 

 

 

 

 

 

 

 

 

 



 

Adjusted EBITDA**



 

For the three months

 

 

 

 

 



 

ended March 31,

 

 

 

 

 

Amounts in thousands

 

2020

 

2019

 

$ Change

 

% Change

United States

 

$

8,757 

 

$

1,915 

 

$

6,842 

 

357% 

Canada

 

 

3,034 

 

 

5,030 

 

 

(1,996)

 

(40%)

Poland

 

 

1,059 

 

 

2,450 

 

 

(1,391)

 

(57%)

Corporate and Other

 

 

(3,206)

 

 

(2,692)

 

 

(514)

 

(19%)

Consolidated

 

$

9,644 

 

$

6,703 

 

$

2,941 

 

44% 



Balance Sheet and Liquidity

As of March 31, 2020, the Company had $63.7 million in cash and cash equivalents and  $194.0 million in outstanding debt on its balance sheet compared to $54.8 million in cash and cash equivalents and $179.0 million in outstanding debt at December 31, 2019.  The outstanding debt as of March 31, 2020 included $179.5 million related to the Company’s credit agreement with Macquarie,  $1.6 million of bank debt related to Casinos Poland, $9.3 million of bank debt related to Century Resorts Management GmbH (“CRM”), and $13.7 million related to a long-term land lease for Century Downs Racetrack and Casino (“CDR”), net of $10.1 million in deferred financing costs. 



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, 2020 on its website at www.cnty.com/investor/financials/sec-filings/. The Company will also post a presentation of the first quarter results on its website at www.cnty.com/investor/presentations/.



The Company will host its first quarter 2020 earnings conference call today,  Wednesday,  May 20, at 10:00 am MDT. U.S. domestic participants should dial 1-844-244-9160. For all international participants, please use 330-931-4670 to dial-in. Participants may listen to the call live at centurycasinos.adobeconnect.com/earningsrelease or obtain a recording of the call on the Company’s website until May 31, 2020 at www.cnty.com/investor/financials/sec-filings/.



 

 

* Amounts presented are rounded. As such, rounding differences could occur in period over period changes and percentages reported.

** Adjusted EBITDA and Adjusted EBITDA margin are Non-US GAAP financial measures. See discussion and reconciliation of Non-US GAAP financial measures in Supplemental Information below.

6/11

 


 

(continued)

CENTURY CASINOS, INC. AND SUBSIDIARIES

FINANCIAL INFORMATION – US GAAP BASIS 



Condensed Consolidated Statements of (Loss) Earnings 









 

 

 

 

 

 

   

For the three months



ended March 31,

Amounts in thousands, except for per share information

 

2020

 

2019

Operating revenue:

 

 

 

 

 

 

Net operating revenue

 

$

87,656 

 

$

45,613 

Operating costs and expenses:

 

 

 

 

 

 

Total operating costs and expenses

 

 

119,428 

 

 

42,153 

Loss from equity investment

 

 

 —

 

 

(14)

Earnings from operations

 

 

(31,772)

 

 

3,446 

Non-operating income (expense), net

 

 

(11,365)

 

 

(1,007)

(Loss) earnings before income taxes

 

 

(43,137)

 

 

2,439 

Income tax provision

 

 

(2,524)

 

 

(716)

Net (loss) earnings

 

 

(45,661)

 

 

1,723 

Net earnings attributable to non-controlling interests

 

 

(195)

 

 

(655)

Net (loss) earnings attributable to Century Casinos, Inc. shareholders

 

$

(45,856)

 

$

1,068 



 

 

 

 

 

 

(Loss) earnings per share attributable to Century Casinos, Inc. shareholders:

 Basic

 

$

(1.55)

 

$

0.04 

 Diluted

 

$

(1.55)

 

$

0.04 



 

 

 

 

 

 

Weighted average common shares

 

 

 

 

 

 

 Basic

 

 

29,507 

 

 

29,439 

 Diluted

 

 

29,507 

 

 

30,052 





 

 

 

 

 

 

Condensed Consolidated Balance Sheets

 

 

 

 

 

 



 

March 31,

 

December 31,

Amounts in thousands

 

2020

 

2019

Assets

 

 

 

 

 

 

Current assets

 

$

78,693 

 

$

79,366 

Property and equipment, net

 

 

490,307 

 

 

503,933 

Other assets

 

 

101,122 

 

 

143,601 

Total assets

 

$

670,122 

 

$

726,900 



 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

Current liabilities

 

$

53,480 

 

$

56,570 

Non-current liabilities

 

 

503,968 

 

 

498,255 

Century Casinos, Inc. shareholders' equity

 

 

104,599 

 

 

163,306 

Non-controlling interests

 

 

8,075 

 

 

8,769 

Total liabilities and equity

 

$

670,122 

 

$

726,900 



 

7/11

 


 

CENTURY CASINOS, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

Constant Currency* Results (unaudited)







 

 

 

 

 

 

 

 



 

For the three months

 

 



 

ended March 31,

 

 

Amounts in thousands

 

 

2020

 

 

2019

 

% Change

Net operating revenue as reported (US GAAP)

 

$

87,656 

 

$

45,613 

 

92% 

Foreign currency impact vs. 2019

 

 

579 

 

 

 

 

 

Net operating revenue constant currency (non-US GAAP)*

 

$

88,235 

 

$

45,613 

 

93% 



 

 

 

 

 

 

 

 

(Loss) earnings from operations (US GAAP)

 

$

(31,772)

 

$

3,446 

 

(1022%)

Foreign currency impact vs. 2019

 

 

(264)

 

 

 

 

 

(Loss) earnings from operations constant currency (non-US GAAP)*

 

$

(32,036)

 

$

3,446 

 

(1030%)



 

 

 

 

 

 

 

 

Net (loss) earnings attributable to Century Casinos, Inc. shareholders as reported (US GAAP)

 

$

(45,856)

 

$

1,068 

 

(4394%)

Foreign currency impact vs. 2019

 

 

(473)

 

 

 

 

 

Net (loss) earnings attributable to Century Casinos, Inc. shareholders constant currency (non-US GAAP)*

 

$

(46,329)

 

$

1,068 

 

(4438%)



Gains and losses on foreign currency transactions are added back to net earnings in the Company’s Adjusted EBITDA** calculations. As such, there is no foreign currency impact to Adjusted EBITDA** when calculating Constant Currency* results.



Adjusted EBITDA Margins *** (unaudited)











 

 



For the three months



ended March 31,



2020

2019

United States

16%  24% 

Canada

19%  31% 

Poland

6%  12% 

Corporate and Other

(327%) (180%)

Consolidated Adjusted EBITDA Margin

11%  15% 



 

8/11

 


 

CENTURY CASINOS, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

Reconciliation of Adjusted EBITDA** to Net Earnings (Loss) Attributable to Century Casinos, Inc. Shareholders by Reportable Segment.  





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



For the three months ended March 31, 2020

Amounts in thousands

 

United States

 

Canada

 

Poland

 

Corporate and Other

 

Total

Net (loss) earnings attributable to Century Casinos, Inc. shareholders

 

$

(34,219)

 

$

(4,408)

 

$

31 

 

$

(7,260)

 

$

(45,856)

Interest expense (income), net (1)

 

 

7,281 

 

 

543 

 

 

31 

 

 

3,511 

 

 

11,366 

Income taxes (benefit)

 

 

1,847 

 

 

2,071 

 

 

45 

 

 

(1,439)

 

 

2,524 

Depreciation and amortization

 

 

4,259 

 

 

1,337 

 

 

763 

 

 

136 

 

 

6,495 

Net earnings attributable to non-controlling interests

 

 

 

 

180 

 

 

15 

 

 

 

 

195 

Non-cash stock-based compensation

 

 

 

 

 

 

 

 

(14)

 

 

(14)

Loss on foreign currency transactions, cost recovery income and other

 

 

29,589 

 

 

3,311 

 

 

172 

 

 

1,645 

 

 

34,717 

Loss on disposition of fixed assets

 

 

 

 

 

 

 

 

 

 

Acquisition costs

 

 

 

 

 

 

 

 

213 

 

 

213 

Adjusted EBITDA

 

$

8,757 

 

$

3,034 

 

$

1,059 

 

$

(3,206)

 

$

9,644 



(1)

Expense of $7.3 million related to the triple net master lease for the three Acquired Casino properties (“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 $6.2 million and $0.5 million, respectively, for the period presented.







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



For the three months ended March 31, 2019

Amounts in thousands

 

United States

 

Canada

 

Poland

 

Corporate and Other

 

Total

Net earnings (loss) attributable to Century Casinos, Inc. shareholders

 

$

983 

 

$

1,547 

 

$

913 

 

$

(2,375)

 

$

1,068 

Interest expense (income), net (1)

 

 

 

 

1,192 

 

 

46 

 

 

16 

 

 

1,254 

Income taxes (benefit)

 

 

356 

 

 

766 

 

 

461 

 

 

(867)

 

 

716 

Depreciation and amortization

 

 

560 

 

 

797 

 

 

770 

 

 

298 

 

 

2,425 

Net earnings (loss) attributable to non-controlling interests

 

 

 

 

240 

 

 

457 

 

 

(42)

 

 

655 

Non-cash stock-based compensation

 

 

 

 

 

 

 

 

261 

 

 

261 

Gain on foreign currency transactions and cost recovery income

 

 

 

 

(45)

 

 

(202)

 

 

(11)

 

 

(258)

Loss (gain) on disposition of fixed assets

 

 

16 

 

 

(5)

 

 

 

 

28 

 

 

44 

Pre-opening expenses

 

 

 

 

538 

 

 

 

 

 

 

538 

Adjusted EBITDA

 

$

1,915 

 

$

5,030 

 

$

2,450 

 

$

(2,692)

 

$

6,703 



(1)

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 CDR land lease were $0.5 million for the period presented.

 

9/11

 


 

CENTURY CASINOS, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

*  The impact of foreign exchange rates is highly variable and difficult to predict.  The Company uses a Constant Currency basis to show the impact from foreign exchange rates on current period revenue compared to prior period revenue using the prior period’s foreign exchange rates. In order to properly understand the underlying business trends and performance of the Company’s ongoing operations, management believes that investors may find it useful to consider the impact of excluding changes in foreign exchange rates from the Company’s net operating revenue,  earnings from operations and net earnings (loss) attributable to Century Casinos, Inc. shareholders. Constant currency results are calculated by dividing the current quarter or year to date local currency segment results, excluding the local currency impact of foreign currency gains and losses, by the prior year’s average exchange rate for the quarter or year to date and comparing them to actual U.S. dollar results for the prior quarter or year to date. The average exchange rates for the current quarter and the prior year first quarter are reported in Item 1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. Constant currency information is not a measure of financial performance under generally accepted accounting principles in the United States of America (US GAAP) and should not be considered a substitute for net operating revenue, earnings from operations or net earnings (loss) attributable to Century Casinos, Inc. shareholders as determined in accordance with US GAAP.





**    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, (gain) loss 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. 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 earnings (loss) 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.



 

10/11

 


 

CENTURY CASINOS, INC. AND SUBSIDIARIES

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, in Calgary and St. Albert, Alberta, Canada; Mountaineer Casino, Racetrack & Resort in New Cumberland, West Virginia; the Century Mile Racetrack and Casino (“CMR”) in Edmonton, Alberta, Canada; and Century Bets! Inc. (“CBS”). CBS and CMR operate the pari-mutuel off-track horse betting networks in southern and northern Alberta, respectively. 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 Century Downs Racetrack and Casino in Calgary, Alberta, Canada. The Company operates one ship-based casino. The Company, through CRM, also owns a 7.5% interest in, and provides consulting services to, Mendoza Central Entretenimientos S.A., a company that provides gaming-related services to Casino de Mendoza in Mendoza, Argentina. 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.  



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 future results of operations, including the impact of the acquisition of the Acquired Casinos on the Company’s results, the impact of the current coronavirus (COVID-19) pandemic and the timing for reopening our casinos, the adequacy of cash flows from operations and available cash to meet our future liquidity needs, particularly during the extended periods of time in which we cannot open or operate our casinos, operating efficiencies, synergies and operational performance, the integration of the Acquired Casinos into our business, the prospects for and timing and costs of new projects, projects in development and other opportunities, our credit agreement with Macquarie, debt repayment, investments in joint ventures, 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, 2019, in Item 8.01 of our Form 8-K filed with the SEC on May 8, 2020, 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.



 

11/11

 


Exhibit 992 Earnings Release Q1 2020

Exhibit 99.2

 

CE

NTURY CASINOS Financial Results Q1 2020 Century Casinos 1 


 



Forward-Looking Statements, Business Environment and Risk Factors This presentation 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 (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. In addition, Century Casinos, Inc. (together with its subsidiaries, the “Company”) may make other written and oral communications from time to time that contain such statements. Forward-looking statements include statements as to industry trends and future expectations of the Company and other matters that do not relate strictly to historical facts and are based on certain assumptions by management at the time such statements are made. Forward-looking statements in this presentation include statements regarding future results of operations, including the impact of the acquisition of Mountaineer Casino, Racetrack & Resort, Century Casino Cape Girardeau and Century Casino Caruthersville (the “Acquired Casinos”) on the Company’s results, the impact of the current coronavirus (COVID-19) pandemic and timing for reopening our casinos, the adequacy of cash flows from operations and available cash to meet our future liquidity needs, particularly during extended periods of time in which we cannot open or operate our casinos, operating efficiencies, synergies and operational performance, the integration of the Acquired Casinos into the Company’s business, the prospects for and timing and costs of new projects, projects in development and other opportunities, the credit agreement with Macquarie (as defined herein), debt repayment, investments in joint ventures, outcomes of legal proceedings, changes in our tax provisions or exposure to additional income tax liabilities, and plans for our casinos and our Company. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. These statements are based on the beliefs and assumptions of the management of the Company based on information currently available to management. 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, 2019 (the “2019 Annual Report”), in Item 8.01 of our Form 8-K filed with the SEC on May 8, 2020, and our subsequent periodic and current reports filed with the SEC. We caution the reader to carefully consider such factors. Furthermore, such forward-looking statements speak only as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. Century Casinos 2 


 



Notes on Presentation In this presentation the term “USD” refers to US dollars, the term “CAD” refers to Canadian dollars, the term “PLN” refers to Polish zloty and the term “GBP” refers to the British pound. Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See Appendix A for the definition and reconciliation of Adjusted EBITDA and Adjusted EBITDA margin. Amounts presented are rounded. As such, rounding differences could occur in period-over-period changes and percentages reported throughout this presentation. The names of the Company’s subsidiaries and certain operating segments are abbreviated on certain of the following slides. See Appendix A for a list of the subsidiaries and their abbreviations. Century Casinos 3 


 



COVID-19 In late 2019, an outbreak of COVID-19 was identified in China and has since spread throughout much of the world. The COVID-19 pandemic has had an adverse effect on the Company’s first quarter 2020 results of operations and financial condition, and we expect this situation will have an adverse impact on our second quarter 2020 results. The trends below are not the only items that could impact the Company’s future performance, and the views of management are preliminary based on currently available information. Between March 14, 2020 and March 17, 2020, the Company closed all of its casinos, hotels and other facilities to comply with quarantines issued by governments to contain the spread of COVID-19. The Company anticipates a phased approach to reopening will be recommended by government officials in the jurisdictions where it operates, which could include reduced levels of gaming space, social distancing at slot machines and table games or reduced capacity within the casino, limited restaurant operating hours or continued closure of restaurants, requirements to wear face masks, including the potential to require guests to wear face masks, increased frequency of disinfecting surfaces and other measures to account for varying levels of demand. The Company’s casinos rely on a local customer base and, as such, the Company anticipates that its operations could resume at a quicker rate than those of casinos at destination resorts. The timing for reopening the Company’s closed locations will depend on determinations by governments in each jurisdiction. The Company reopened its Poland casinos on May 18, 2020. Based on information currently available, the Company is anticipating reopening most of its other locations beginning in June 2020 and no later than August 2020. However, the Company cannot predict how quickly customers will return to its casinos. The Company permanently closed Century Casino Bath in March 2020 and four of the ship-based casinos that the Company operated prior to their closures in March 2020 will not reopen due to expiration of the Company’s concession agreements for those casinos. Due to the temporary closures of its casinos, hotels and other facilities, the Company has taken actions to reduce operating costs, including furloughing most of its personnel and implementing reduced work weeks for other personnel. During the closures, the Company will continue to pay benefits to its United States and Canadian employees, inclusive of part time employees, through May 2020. In Poland, all employees were paid reduced salaries based on local employment laws. In March 2020, as a proactive measure to increase its cash position and preserve financial flexibility in light of the uncertainty resulting from the COVID-19 pandemic, the Company borrowed an additional $17.4 million on its revolving credit facility with Macquarie Capital (“Macquarie”) and its credit agreement with UniCredit Bank Austria AG (“UniCredit”). The Company has no remaining availability under these credit facilities. As of April 30, 2020, the Company had $50.0 million in cash on hand. The Company currently is not generating any revenue from its properties, and estimates that the net cash outflow during the time the operations continue to be fully suspended will be, on average, approximately $8.0 million per month. Management estimates that the Company will need approximately $19.8 million to reopen operations and cover short-term cash needs at the casinos. During the first quarter of 2020, the Company concluded that the COVID-19 pandemic and associated closure of its casinos were triggering events that could indicate possible impairment of its goodwill and indefinite-lived intangible assets. The Company performed a quantitative and qualitative impairment analysis and determined that goodwill and casino licenses related to certain reporting units were impaired. As a result, the Company recorded $33.0 million to impairment – goodwill and intangible assets on its condensed consolidated statement of (loss) earnings for the three months ended March 31, 2020. Century Casinos 4 


 

Q1 2020 Net Operating Revenue by Reportable Segment and Operating Segment (in USD) Excluding Corporate Other Operating Segment United States 62% Poland 19% CCB, Ships & Other 1% Canada 18% Missouri 25% Poland 19% CCB, Ships & Other 1% Edmonton 11% Calgary 7% Colorado 8% West Virginia 29% Century Casinos 5 


 



Q1 2020 (Loss) Earnings from Operations by Reportable Segment and Operating Segment (in USD) Excluding Corporate Other Operating Segment Poland 1% CCB, Ships & Other -3% Canada -6% United States -92% Missouri -93% Poland 1% CCB, Ships & Other -3% Edmonton -11% Calgary 5% Colorado 1% West Virginia 0% Century Casinos 6 


 



Q1 2020 Net (Loss) Earnings Attributable to Century Casinos, Inc. Shareholders by Reportable Segment and Operating Segment (in USD) Excluding Corporate Other Operating Segment United States -87% Poland 0% CCB, Ships & Other -2% Canada -11% Missouri -79% Poland 0% CCB, Ships & Other -2% Edmonton -13% Calgary 2% Colorado -1% West Virginia -7% Century Casinos 7 


 

Q1 2020 Adjusted EBITDA* by Reportable Segment and Operating Segment (in USD) Excluding Corporate Other Operating Segment United States 73% Poland 9% CCB, Ships & Other -7% Canada 25% Missouri 51% Poland 9% CCB, Ships & Other -7% Edmonton 9% Calgary 16% Colorado 7% West Virginia 15% *Adjusted EBITDA is a non-GAAP financial measure. See Appendix A for the definition and reconciliation of Adjusted EBITDA. Century Casinos 8 


 



Net Operating Revenue per Quarter (in USD) 0 10 20 30 40 50 60 70 80 90 100 Q1 33.2 36.4 40.6 45.6 87.7 Q2 35.2 37.3 39.6 52.4 Q3 34.5 41.0 43.6 52.9 Q4 36.3 39.3 45.1 67.2 2016 2017 2018 2019 2020 Century Casinos 9 


 

Balance Sheet (Selected Information in USD) In millions (except BVPS) March 31, 2020 December 31,2019 Change Total Assets 670.1 726.9 (8%) Total Debt 194.0 179.0 8% Book Value per Share* 3.54 5.54 (36%) Net Debt** 140.4 134.2 *Book Value per Share is defined as total Century Casinos, Inc. shareholders’ equity divided by outstanding common shares. **Net Debt is calculated as total long-term debt (including current portion) plus deferred financing costs minus cash and cash equivalents. Net Debt is a non-GAAP financial measure. See Appendix A. Debt as of March 31, 2020 included $179.5 million related to our Macquarie credit agreement, $1.6 million related to CPL, $9.3 million related to CRM and $13.7 million related to CDR’s long-term land lease. Century Casinos 10 


 



Income Statement (Selected Information in USD) In millions (except EPS) Q1 2020 Q1 2019 Change Net Operating Revenue 87.7 45.6 92% (Loss) Earnings from Operations (31.8) 3.4 (1022%) Net (Loss) Earnings Attributable to Century Casinos, Inc. Shareholders (45.9) 1.1 (4394%) Adjusted EBITDA* 9.6 6.7 44% Basic (Loss) Earnings per Share (1.55) 0.04 (3975%) Diluted (Loss) Earnings per Share (1.55) 0.04 (3975%) Net (loss) earnings attributable to Century Casinos, Inc. shareholders for the three months ended March 31, 2020 was impacted by casino closures related to COVID-19 and impairment of goodwill and other intangible assets at certain reporting units. *Adjusted EBITDA is a non-GAAP financial measure. See Appendix A for the definition and reconciliation of Adjusted EBITDA. Century Casinos 11 


 

Constant Currency Results (in USD) In millions Q1 2020 Q12019 Change Net Operating Revenue as reported (GAAP) 87.7 45.6 92% Foreign currency impact vs. 2019 0.6 Net Operating Revenue constant currency (non-GAAP)* 88.2 45.6 93% (Loss) Earnings from Operations as reported (GAAP) (31.8) 3.4 (1022%) Foreign currency impact vs. 2019 (0.3) (Loss) Earnings from Operations constant currency (non-GAAP)* (32.1) 3.4 (1030%) *Net Operating Revenue and Earnings from Operations on a constant currency basis are non-GAAP financial measures. See Appendix A. Century Casinos 12 


 



Constant Currency Results (in USD) In millions Q1 2020 Q1 2019 Change Net (Loss) Earnings Attributable to Century Casinos, Inc. Shareholders as reported (GAAP) (45.9) 1.1 (4394%) Foreign currency impact vs. 2019 (0.5) Net (Loss) Earnings Attributable to Century Casinos, Inc. Shareholders constant currency (non-GAAP)* (46.4) 1.1 (4438%) *Net (Loss) Earnings Attributable to Century Casinos, Inc. Shareholders on a constant currency basis is a non-GAAP financial measure.  Gains and losses on foreign currency transactions are added back to net earnings in the Company’s Adjusted EBITDA calculation. As such, there is no foreign currency impact to Adjusted EBITDA when calculating Constant Currency results. See Appendix A. Century Casinos 13 


 

Debt and Net Debt to Adjusted EBITDA* (in USD) As of March 31, 2020 and for the years ended December 31, 2012-2019 -3x -2x -1x 0x 1x 2x 3x 4x 5x 6x 7x 2012 0.3x -2.0x 2013 0.5x 2.7x 2014 1.1x 3.0x 2015 0.3x 1.6x 2016 2.2x 0.7x 2017 2.2x -0.7x 2018 2.5x 0.6x 2019 5.9x 4.4x 2020 5.8x 4.2x Debt to Adjusted EBITDA Net Debt to Adjusted EBITDA *Debt to Adjusted EBITDA is calculated by dividing the Company’s trailing twelve-month Adjusted EBITDA by the principal amount of outstanding debt. Net Debt to Adjusted EBITDA is calculated by dividing the Company’s trailing twelve-month Adjusted EBITDA by Net Debt. Adjusted EBITDA and Net Debt are non-GAAP financial measures. See Appendix A for the definition and reconciliation of Adjusted EBITDA and Net Debt. Century Casinos 14 


 



Q1 2020 Highlights – UNITED STATES (Selected Information in USD) In millions Q12020 Q12019 Change Net Operating Revenue 53.4 8.1 562% Impairment - Intangible Assets 29.6  100% Operating Costs and Expenses 78.5 6.7 1067% (Loss) Earnings from Operations (25.1) 1.3 (1974%) Net (Loss) Earnings Attributable to Century Casinos, Shareholders (34.2) 1.0 (3581%) Adjusted EBITDA* 8.8 1.9 357% Adjusted EBITDA Margin* 16% 24% Highlights from operating segments within the Company’s United States segment are presented below. *Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See Appendix A for the definition and reconciliation of Adjusted EBITDA and Adjusted EBITDA margin. Century Casinos 15 


 

Q1 2020 Highlights – UNITED STATES (Selected Information in USD) COLORADO In millions Q1 2020 Q1 2019 Change Net Operating Revenue 6.7 8.1 (17%) Operating Costs and Expenses .4 6.7 (5%) Earnings from Operations 0.3 1.3 (76%) Net (Loss) Earnings Attributable to Century Casinos, Inc. Shareholders (0.5) 1.0 (151%) Adjusted EBITDA* 0.8 1.9 (58%) Adjusted EBITDA Margin* 12% 24% As of March 31, 2020, our facilities in Colorado had 894 slot machines and 13 table games. *Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See Appendix A for the definition and reconciliation of Adjusted EBITDA and Adjusted EBITDA margin. Century Casinos 16 


 



Q1 2020 Highlights – UNITED STATES (Selected Information in USD) WEST VIRGINIA In millions Ql 2020 Net Operating Revenue 25.1 Impairment - Intangible Assets 0.4 Operating Costs and Expenses 25.2 Loss from Operations (0.1) Net Loss Attributable to Century Casinos, Inc. Shareholders (2.6) Adjusted EBITDA* 1.8 Adjusted EBITDA Margin* 7% As of March 31, 2020, our facility in West Virginia had 1,100 slot machines and 42 table games. *Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See Appendix A for the definition and reconciliation of Adjusted EBITDA and Adjusted EBITDA margin. Century Casinos 17 


 

Q1 2020 Highlights – UNITED STATES (Selected Information in USD) MISSOURI In millions Q1 2020 Net Operating Revenue 21.6 Impairment - Intangible Assets 29.2 Operating Costs and Expenses 46.9 Loss from Operations (25.3) Net Loss Attributable to Century Casinos, Inc. Shareholders (31.1) Adjusted EBITDA* 6.1 Adjusted EBITDA Margin* 28% As of March 31, 2020, our facilities in Missouri had 1,358 slot machines and 33 table games. *Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See Appendix A for the definition and reconciliation of Adjusted EBITDA and Adjusted EBITDA margin. Century Casinos 18 


 



Q1 2020 Highlights – CANADA (Selected Information in CAD) In millions Q12020 Q12019 Change Net Operating Revenue 21.6 21.7 (0%) Impairment - Intangible Assets 4.7  100% Operating Costs and Expenses 24.1 16.8 44% (Loss) Earnings from Operations (2.6) 4.9 (152%) Net (Loss) Earnings Attributable to Century Casinos, Shareholders (16.3) 2.8 (687%) Adjusted EBITDA* 3.9 6.7 (41%) Adjusted EBITDA Margin* 18% 31%    Highlights from operating segments within the Company’s Canada segment are presented below. *Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See Appendix A for the definition and reconciliation of Adjusted EBITDA and Adjusted EBITDA margin. Century Casinos 19 


 



Q1 2020 Highlights – CANADA (Selected Information in CAD) EDMONTON In millions Q1 2020 Q12019 Change Net Operating Revenue 13.1 11.8 11% Impairment - Intangible Assets 4.7 – 100% Operating Costs and Expenses 17.5 10.1 74% (Loss) Earnings from Operations (4.4) 1.7 (358%) Net (Loss) Earnings Attributable to Century Casinos, Inc. Shareholders (17.1) 1.2 (1545%) Adjusted EBITDA* 1.4 2.9 (50%) Adjusted EBITDA Margin* 11% 24% As of March 31, 2020, our facilities in Edmonton had 1,796 slot machines, 46 table games and 68 video lottery terminals (“VLTs”). *Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See Appendix A for the definition and reconciliation of Adjusted EBITDA and Adjusted EBITDA margin. Century Casinos 20 


 

Q1 2020 Highlights – CANADA (Selected Information in CAD) CALGARY In millions Q1 2020 Q12019 Change Net Operating Revenue 8.5 9.9 (14%) Operating Costs and Expenses 6.7 6.7 (0%) Earnings from Operations 1.9 3.2 (42%) Net Earnings Attributable to Century Casinos, Inc. Shareholders 0.8 1.6 (51%) Adjusted EBITDA* 2.5 3.8 (35%) Adjusted EBITDA Margin* 30% 39% As of March 31, 2020, our facilities in Calgary had 1,167 slot machines, 16 table games and 30 VLTs. *Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See Appendix A for the definition and reconciliation of Adjusted EBITDA and Adjusted EBITDA margin. Century Casinos 21 


 



Q1 2020 Highlights – POLAND (Selected Information in PLN) In millions Q12020 Q12019 Change Net Operating Revenue 66.6 74.8 (11%) Operating Costs and Expenses 65.5 68.5 (4%) Earnings from Operations 1.1 6.3 (83%) Net Earnings Attributable to Century Casinos, Inc. Shareholders 0.7 3.2 (77%) Adjusted EBITDA* 4.1 9.3 (56%) Adjusted EBITDA Margin* 6% 12% As of March 31, 2020, Casinos Poland had 526 slot machines and 119 table games at eight locations. *Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See Appendix A for the definition and reconciliation of Adjusted EBITDA and Adjusted EBITDA margin. Century Casinos 22 


 

Q1 2020 Highlights – CORPORATE AND OTHER (Selected Information in USD) In millions Q1 2020 Q12019 Change Net Operating Revenue 1.0 1.5 (35%) Impairment - Intangible Assets 1.0  100% Operating Costs and Expenses 6.3 4.8 32% Loss from Operations 5.3) (3.3) (62%) Net Loss Attributable to Century Casinos, Inc. Shareholders (7.3) (2.4) (206%) Adjusted EBITDA*(3.2) (2.7) (19%) Adjusted EBITDA Margin* N/A N/A The Corporate and Other reportable segment includes Cruise Ships & Other, Century Casino Bath and Corporate Other reporting units. As of March 31, 2020, the properties in this segment had 88 slot machines and 5 table games. We permanently closed Century Casino Bath on March 17, 2020 and our concession agreement to operate four ship-based casinos ended on May 12, 2020. Expenses incurred by Corporate Other consist primarily of legal and accounting fees, corporate travel expenses, corporate payroll, amortization of stock-based compensation and other expenses not directly related to any of our individual properties. *Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See Appendix A for the definition and reconciliation of Adjusted EBITDA and Adjusted EBITDA margin. Century Casinos 23 


 



Q1 2020 Highlights – ADDITIONAL PROJECTS UNDER DEVELOPMENT Bermuda In August 2017, the Company announced that, together with Hamilton Properties Limited, it had submitted a casino license application to the Bermudan government for a casino at the Hamilton Princess Hotel & Beach Club in Hamilton, Bermuda. The Company’s subsidiary, CRM, entered into a long-term management agreement with Hamilton Properties Limited pursuant to which the Company will assist with the license application and manage the operations of the casino for which it will receive a management fee, should the license be awarded. In September 2017, the Bermuda Casino Gaming Commission granted a provisional casino gaming license, which is subject to certain conditions and approvals including the adoption of certain rules and regulations by the Bermudan government. The Parliament of Bermuda has not taken action on this project, and we do not currently expect the project to go forward. Century Casinos 24 


 



Appendix A – ABBREVIATIONS OF CENTURY CASINOS, INC. SUBSIDIARIES AND CERTAIN OPERATING SEGMENTS Subsidiary Abbreviation Century Casino & Hotel – Central City CTL Century Casino & Hotel – Cripple Creek CRC Mountaineer Casino, Racetrack & Resort MTR Century Casino Cape Girardeau CCG Century Casino Caruthersville CCV Century Casino & Hotel - Edmonton CRA Century Casino St. Albert CSA Century Casino Calgary CAL Century Downs Racetrack and Casino CDR Century Bets! CBS Century Mile Racetrack and Casino CMR Casinos Poland CPL Century Casino Bath CCB Century Resorts Management GmbH CRM Operating Segment Abbreviation Cruise Ships & Other Ships & Other Corporate Other N/A Century Casinos 25 


 

Appendix A – NON-GAAP FINANCIAL MEASURES The Company supplements its consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) by using the following non-GAAP financial measures, which management believes are useful in properly understanding the Company’s short-term and long-term financial trends. Management uses these non-GAAP financial measures to forecast and evaluate the operational performance of the Company as well as to compare results of current periods to prior periods on a consolidated basis. Adjusted EBITDA Adjusted EBITDA margin Constant currency results Net Debt Management believes presenting the non-GAAP financial measures used in this presentation provides investors greater transparency to the information used by management for financial and operational decision-making and allows investors to see the Company’s results “through the eyes” of management. Management also believes providing this information better enables our investors to understand the Company’s operating performance and evaluate the methodology used by management to evaluate and measure such performance. The adjustments made to GAAP financial measures result from facts and circumstances that vary in frequency and impact on the Company’s results of operations. The following is an explanation of each of the adjustments that management excludes in calculating its non-GAAP financial measures. Century Casinos 26 


 



Appendix A – NON-GAAP FINANCIAL MEASURES 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, (gain) loss 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 triple net master lease for the three Acquired Casino properties (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. 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 GAAP. Adjusted EBITDA is not considered a measure of performance recognized under 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 earnings (loss) attributable to Century Casinos, Inc. shareholders below. The Company defines Adjusted EBITDA margin as Adjusted EBITDA divided by net operating revenue. Management uses this margin as one of several measures to evaluate the efficiency of the Company’s casino operations. Century Casinos 27 


 

Appendix A – NON-GAAP FINANCIAL MEASURES The impact of foreign exchange rates is highly variable and difficult to predict. The Company uses a Constant Currency basis to show the impact from foreign exchange rates on current period financial information compared to prior period financial information using the prior period’s foreign exchange rates. In order to properly understand the underlying business trends and performance of the Company’s ongoing operations, management believes that investors may find it useful to consider the impact of excluding changes in foreign exchange rates from the Company’s net operating revenue, earnings from operations and net earnings (loss) attributable to Century Casinos, Inc. shareholders. Constant currency results are calculated by dividing the current year to date local currency segment results excluding the local currency impact of foreign currency gains and losses, by the prior year’s average exchange rate for the year to date and comparing them to actual U.S. dollar results for the prior year to date. The average exchange rates for the current quarter and prior year first quarter are reported in Item 1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. Constant currency information is not a measure of financial performance under GAAP and should not be considered a substitute for net operating revenue, earnings from operations or net earnings (loss) attributable to Century Casinos, Inc. shareholders as determined in accordance with GAAP. The Company defines Net Debt as total long-term debt (including current portion) plus deferred financing costs minus cash and cash equivalents. Net Debt is not considered a liquidity measure recognized under GAAP. Management believes that Net Debt is a valuable measure of our overall financial situation. Net Debt provides investors with an indication of our ability to pay off all of our long-term debt if it became due simultaneously. Century Casinos 28 


 



Appendix A – NON-GAAP FINANCIAL MEASURES Reconciliation of Adjusted EBITDA (in thousands) – UNITED STATES For the three months ended March 31, 2020 in USD Colorado West Virginia Missouri Total United States Net Operating Revenue $ 6,695 $ 25,110 $ 21,622 $ 53,427 Net loss attributable to Century Casinos, Inc. shareholders (499) (2,581) (31,139) (34,219) Interest expense (income), net  2,151 5,130 7,281 Income taxes (benefit) 816 342 689 1,847 Depreciation and amortization 496 1,483 2,280 4,259 Loss on foreign currency transactions and other  437 29,152 29,589 Adjusted EBITDA $ 813 $ 1,832 $ 6,112 $ 8,757 Adjusted EBITDA Margin 12% 7% 28% 16% For the three months ended March 31, 2019 in USD Colorado West Virginia Total United Missouri States Net Operating Revenue $ 8,068 — - $ 8,068 Net earnings attributable to Century Casinos, Inc.    shareholders 983   983 Income taxes (benefit) 356   356 Depreciation and amortization 560   560 Loss on disposition of fixed assets 16 —  16 Adjusted EBITDA $ 1,915  - $ 1,915 24% N/A N/A 24% Adjusted EBITDA Margin Century Casinos 29 


 

Appendix A – NON-GAAP FINANCIAL MEASURES Reconciliation of Adjusted EBITDA (in thousands) – CANADA in CAD Net Operating Revenue Net (loss) earnings attributable to Century Casinos, Inc. shareholders Interest expense (income), net Income taxes (benefit) Depreciation and amortization Non-controlling interests Loss on foreign currency transactions, cost recovery income and other Adjusted EBITDA Adjusted EBITDA Margin For the three months ended March 31, 2020 Edmonton Calgary Total Canada $ 13,078 $ 8,509 $ 21,587 (17,081) 788 (16,293) 55 672 727 2,794 121 2,915 1,146 649 1,795  242 242 14,524 35 14,559 $ 1,438 $ 2,507 $ 3,945 11% 30% 18% Century Casinos 30 


 



Appendix A – NON-GAAP FINANCIAL MEASURES Reconciliation of Adjusted EBITDA (in thousands) – CANADA continued in CAD Net Operating Revenue Net earnings attributable to Century Casinos, Inc. shareholders Interest expense (income), net Income taxes (benefit) Depreciation and amortization Non-controlling interests Gain on foreign currency transactions, cost recovery income and other Gain on disposition of fixed assets Preopening expenses Adjusted EBITDA Adjusted EBITDA Margin For the three months ended March 31, 2019 Edmonton Calgary Total Canada $ 11,790 $ 9,885 $ 21,675 1,182 1,591 2,773 846 739 1,585 438 578 1,016 435 625 1,060  316 316 (754) (18) (772) (4) (3) (7) 713  713 $ 2,856 $ 3,828 $ 6,684 24% 39% 31% Century Casinos 31 


 

Appendix A – NON-GAAP FINANCIAL MEASURES Reconciliation of Adjusted EBITDA (in thousands) – POLAND in PLN Net Operating Revenue Net earnings attributable to Century Casinos, Inc. shareholders Interest expense (income), net Income taxes (benefit) Depreciation and amortization Non-controlling interests Gain on foreign currency transactions and other Loss on disposition of fixed assets Other one-time (income) costs Adjusted EBITDA Adjusted EBITDA Margin For the three months ended March 31, 2020 2019 PLN 66,582 PLN 74,833 740 3,170 124 173 152 1,746 2,994 2,917 370 1,586 (295) (326) 9 18 6  PLN 4,100 PLN 9,284 6% 12% Century Casinos 32 


 



Appendix A – NON-GAAP FINANCIAL MEASURES Reconciliation of Adjusted EBITDA (in thousands) – CORPORATE AND OTHER For the three months ended March 31, in USD 2020 2019 Net Operating Revenue $ 980 $ 1,496 Net loss attributable to Century Casinos, Inc. shareholders (7,260) (2,375) Interest expense (income), net 3,511 16 Income taxes (benefit) (1,439) (867) Depreciation and amortization 136 298 Non-control ling interests  (42) Non-cash stock-based compensation (14) 261 Loss (gain) on foreign currency transactions and other 1,645 (11) Loss on disposition of fixed assets 2 28 Acquisition costs 213  Adjusted EBITDA $ (3,206) $ (2,692) Century Casinos 33 


 

Appendix A – NON-GAAP FINANCIAL MEASURES Reconciliation of Net Debt (in thousands) Amounts in thousands Total long-term debt, including current portion Deferred financing costs Total principal Less: Cash and cash equivalents Net Debt March 31, 2020 $ 194.029 10.090 $ 204.119 $ 63,676 $ 140.443 March 31, 2019 $ 67,772 411 $ 68,249 $ 49,533 $ 18.716 Century Casinos 34


v3.20.1
Document and Entity Information
May 20, 2020
Document and Entity Information [Abstract]  
Document Type 8-K
Document Period End Date May 20, 2020
Entity Registrant Name CENTURY CASINOS, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 0-22900
Entity Tax Identification Number 84-1271317
Entity Address, Address Line One 455 E. Pikes Peak Ave.
Entity Address, Address Line Two Suite 210
Entity Address, City or Town Colorado Springs
Entity Address, State or Province CO
Entity Address, Postal Zip Code 80903
City Area Code 719
Local Phone Number 527-8300
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.01 Per Share Par Value
Trading Symbol CNTY
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0000911147
Amendment Flag false