Form 8-K CENTURY CASINOS INC /CO/ For: Nov 06
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): November 6, 2015
CENTURY CASINOS, INC.
(Exact Name of Registrant as specified in its charter)
Delaware0-2290084-1271317
(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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On November 6, 2015, Century Casinos, Inc., a Delaware corporation (the “Company”), issued a press release reporting its financial results for the third quarter of 2015. 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 third quarter 2015 earnings conference call on Friday, November 6, 2015, 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, 2014 and the Company’s subsequent Quarterly Reports on Form 10-Q 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 November 6, 2015 |
||||
|
99.2 |
|
Century Casinos, Inc. Investor Presentation dated November 6, 2015 |
||||
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: November 6, 2015
By: /s/ Margaret Stapleton
Margaret Stapleton
Executive Vice President and Principal Financial/Accounting Officer
Exhibit Index
|
Exhibit No. |
|
Description |
||||
|
99.1 |
|
Century Casinos, Inc. Press Release dated November 6, 2015 |
||||
|
99.2 |
|
Century Casinos, Inc. Investor Presentation dated November 6, 2015 |
||||
November 6, 2015
PRESS RELEASE
Century Casinos, Inc. Announces Third Quarter 2015 Results
Colorado Springs, Colorado – November 6, 2015 – Century Casinos, Inc. (NASDAQ Capital Market®: CNTY) today announced its financial results for the three and nine months ended September 30, 2015.
Third Quarter 2015 Highlights*
|
· |
Net operating revenue was $33.5 million, a 19% increase from the three months ended September 30, 2014. |
|
· |
Adjusted EBITDA** was $6.7 million, a 133% increase from the three months ended September 30, 2014. |
|
· |
Net earnings attributable to Century Casinos, Inc. shareholders were $2.7 million, a 243% increase from the three months ended September 30, 2014. |
|
· |
Earnings per share were $0.11. |
|
· |
Book value per share*** at September 30, 2015 was $5.04. |
The period over period increases in net operating revenue, Adjusted EBITDA** and net earnings attributable to Century Casinos, Inc. shareholders relate to the operating results of Century Downs Racetrack and Casino (“CDR”) and Century Bets!, Inc. (“CBS”). CDR opened its casino on April 1, 2015 and held its first horse race on April 25, 2015. The Company owns 75% of CDR through one of its subsidiaries. CBS began operating the pari-mutuel network in southern Alberta on May 4, 2015. The Company owns 75% of CBS through one of its subsidiaries.
*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-GAAP financial measures. See discussion and reconciliation of Non-GAAP financial measures in Supplemental Information below.
*** The Company defines book value per share as total Century Casinos shareholders’ equity divided by outstanding common shares.
1/13
|
Amounts in thousands, except per share data |
For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
||||||||||||||||
|
Consolidated Results: |
2015 |
2014 |
% Change |
2015 |
2014 |
% Change |
||||||||||||
|
Net operating revenue |
$ |
33,526 |
$ |
28,123 | 19% |
$ |
101,803 |
$ |
88,790 | 15% | ||||||||
|
Earnings from operations |
4,082 | 715 | 471% | 14,021 | 2,020 | 594% | ||||||||||||
|
Net earnings attributable to Century Casinos, Inc. shareholders |
2,728 | 796 | 243% | 11,170 | 1,462 | 664% | ||||||||||||
|
Adjusted EBITDA** |
$ |
6,719 |
$ |
2,881 | 133% |
$ |
18,292 |
$ |
8,806 | 108% | ||||||||
|
Earnings per share: |
||||||||||||||||||
|
Basic |
$ |
0.11 |
$ |
0.03 | 267% |
$ |
0.46 |
$ |
0.06 | 667% | ||||||||
|
Diluted |
$ |
0.11 |
$ |
0.03 | 267% |
$ |
0.46 |
$ |
0.06 | 667% | ||||||||
|
Weighted average common shares: |
||||||||||||||||||
|
Basic |
24,399 | 24,381 | 24,389 | 24,380 | ||||||||||||||
|
Diluted |
24,440 | 24,417 | 24,430 | 24,419 | ||||||||||||||
“This is our fourth consecutive quarter with revenue and Adjusted EBITDA growth,” Erwin Haitzmann and Peter Hoetzinger, Co Chief Executive Officers of Century Casinos, said. “We are very pleased with the momentum we have in our business across all geographies and all customer demographics,” they continued.
*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-GAAP financial measures. See discussion and reconciliation of Non-GAAP financial measures in Supplemental Information below.
*** The Company defines book value per share as total Century Casinos shareholders’ equity divided by outstanding common shares.
2/13
Three and Nine Months Ended September 30, 2015 Results*
The table below shows the Company’s operating segments that are included in each of the Company’s reportable segments:
|
Reportable Segment |
Operating Segment |
|
Canada |
Century Casino & Hotel - Edmonton |
|
Canada |
Century Casino Calgary |
|
Canada |
Century Downs Racetrack and Casino |
|
Canada |
Century Bets! |
|
United States |
Century Casino & Hotel – Central City |
|
United States |
Century Casino & Hotel – Cripple Creek |
|
Poland |
Casinos Poland |
|
Corporate and Other |
Cruise Ships & Other |
|
Corporate and Other |
Corporate Other |
Net operating revenue increased by $5.4 million, or 19%, and $13.0 million, or 15%, for the three and nine months ended September 30, 2015 compared to the three and nine months ended September 30, 2014. Following is a summary of the changes in net operating revenue by segment for the three and nine months ended September 30, 2015 compared to the three and nine months ended September 30, 2014:
|
Net Operating Revenue |
||||||||||||
|
For the Three Months |
For the Nine Months |
|||||||||||
|
Ended September 30, |
Ended September 30, |
|||||||||||
|
2015/2014 |
2015/2014 |
|||||||||||
|
Amounts in millions |
Change |
% Change |
Change |
% Change |
||||||||
|
Canada |
$ |
3.9 | 48% |
$ |
8.4 | 33% | ||||||
|
United States |
0.7 | 10% | 1.5 | 7% | ||||||||
|
Poland |
2.0 | 19% | 1.8 | 5% | ||||||||
|
Corporate and Other |
(1.3) | (58%) | 1.3 | 23% | ||||||||
|
Total |
$ |
5.4 | 19% |
$ |
13.0 | 15% | ||||||
*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-GAAP financial measures. See discussion and reconciliation of Non-GAAP financial measures in Supplemental Information below.
*** The Company defines book value per share as total Century Casinos shareholders’ equity divided by outstanding common shares.
3/13
Earnings from operations increased by $3.4 million, or 471%, and $12.0 million, or 594%, for the three and nine months ended September 30, 2015 compared to the three and nine months ended September 30, 2014. Following is a summary of the changes in earnings from operations by segment for the three and nine months ended September 30, 2015 compared to the three and nine months ended September 30, 2014:
|
Earnings from Operations |
||||||||||||
|
For the Three Months |
For the Nine Months |
|||||||||||
|
Ended September 30, |
Ended September 30, |
|||||||||||
|
2015/2014 |
2015/2014 |
|||||||||||
|
Amounts in millions |
Change |
% Change |
Change |
% Change |
||||||||
|
Canada |
$ |
1.4 | 71% |
$ |
3.7 | 62% | ||||||
|
United States |
0.7 | 86% | 1.6 | 93% | ||||||||
|
Poland |
1.5 | 270% | 4.3 | 383% | ||||||||
|
Corporate and Other |
(0.2) | (14%) | 2.3 | 50% | ||||||||
|
Total |
$ |
3.4 | 471% |
$ |
12.0 | 594% | ||||||
Net earnings attributable to Century Casinos, Inc. shareholders increased by $1.9 million, or 243%, and $9.7 million, or 664%, for the three and nine months ended September 30, 2015 compared to the three and nine months ended September 30, 2014. Following is a summary of the changes in net earnings attributable to Century Casinos, Inc. shareholders by segment for the three and nine months ended September 30, 2015 compared to the three and nine months ended September 30, 2014:
|
Net Earnings Attributable to Century Casinos, Inc. Shareholders |
||||||||||||
|
For the Three Months |
For the Nine Months |
|||||||||||
|
Ended September 30, |
Ended September 30, |
|||||||||||
|
2015/2014 |
2015/2014 |
|||||||||||
|
Amounts in millions |
Change |
% Change |
Change |
% Change |
||||||||
|
Canada |
$ |
0.4 | 26% |
$ |
1.9 | 43% | ||||||
|
United States |
0.4 | 86% | 1.0 | 93% | ||||||||
|
Poland |
0.8 | 319% | 2.4 | 436% | ||||||||
|
Corporate and Other |
0.3 | 31% | 4.3 | 123% | ||||||||
|
Total |
$ |
1.9 | 243% |
$ |
9.7 | 664% | ||||||
Items deducted from or added to earnings from operations to arrive at net earnings 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-GAAP financial measures. See discussion and reconciliation of Non-GAAP financial measures in Supplemental Information below.
*** The Company defines book value per share as total Century Casinos shareholders’ equity divided by outstanding common shares.
4/13
*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-GAAP financial measures. See discussion and reconciliation of Non-GAAP financial measures in Supplemental Information below.
*** The Company defines book value per share as total Century Casinos shareholders’ equity divided by outstanding common shares.
5/13
Segment Results (in thousands)*
The following are segment results for net operating revenue and Adjusted EBITDA**.
|
Net Operating Revenue |
Adjusted EBITDA** |
Net Operating Revenue |
Adjusted EBITDA** |
|||||||||||||||||||||||||||||||||
|
For the Three Months |
For the Three Months |
For the Nine Months |
For the Nine Months |
|||||||||||||||||||||||||||||||||
|
Ended September 30, |
Ended September 30, |
Ended September 30, |
Ended September 30, |
|||||||||||||||||||||||||||||||||
|
2015 |
2014 |
% Change |
2015 |
2014 |
% Change |
2015 |
2014 |
% Change |
2015 |
2014 |
% Change |
|||||||||||||||||||||||||
|
Canada |
$ |
12,198 |
$ |
8,264 | 48% |
$ |
3,902 |
$ |
2,393 | 63% |
$ |
33,951 |
$ |
25,533 | 33% |
$ |
11,697 |
$ |
7,324 | 60% | ||||||||||||||||
|
United States |
7,958 | 7,252 | 10% | 2,140 | 1,455 | 47% | 21,960 | 20,456 | 7% | 5,330 | 3,555 | 50% | ||||||||||||||||||||||||
|
Poland |
12,449 | 10,425 | 19% | 1,771 | 260 | 581% | 38,858 | 37,087 | 5% | 5,411 | 2,014 | 169% | ||||||||||||||||||||||||
|
Corporate and Other |
921 | 2,182 | (58%) | (1,094) | (1,227) | 11% | 7,034 | 5,714 | 23% | (4,146) | (4,087) | (1%) | ||||||||||||||||||||||||
|
Consolidated |
$ |
33,526 |
$ |
28,123 | 19% |
$ |
6,719 |
$ |
2,881 | 133% |
$ |
101,803 |
$ |
88,790 | 15% |
$ |
18,292 |
$ |
8,806 | 108% | ||||||||||||||||
*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-GAAP financial measures. See discussion and reconciliation of Non-GAAP financial measures in Supplemental Information below.
*** The Company defines book value per share as total Century Casinos shareholders’ equity divided by outstanding common shares.
6/13
Balance Sheet and Liquidity
As of September 30, 2015, the Company had $29.8 million in cash and cash equivalents and $39.8 million in outstanding debt on its balance sheet compared to $24.7 million in cash and cash equivalents and $38.3 million in outstanding debt at December 31, 2014. The $39.8 million in outstanding debt as of September 30, 2015 includes $21.7 million related to the Company’s Bank of Montreal credit agreement, $3.5 million related to Casinos Poland, Ltd. and $14.6 million related to a long-term land lease by CDR.
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 September 30, 2015 on its website at http://corporate.cnty.com/investor-relations/sec-filings. The Company will also post a presentation on the third quarter results on its website at http://corporate.cnty.com/investor-relations/presentations-and-interviews.
Century Casinos will host its third quarter 2015 earnings conference call today at 8:00 am MST; 4:00 pm CET, respectively. 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 https://centurycasinos.adobeconnect.com/earningsrelease or obtain a recording of the call on the Company’s website until November 30, 2015 at http://corporate.cnty.com/investor-relations/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-GAAP financial measures. See discussion and reconciliation of Non-GAAP financial measures in Supplemental Information below.
*** The Company defines book value per share as total Century Casinos shareholders’ equity divided by outstanding common shares.
7/13
(continued)
CENTURY CASINOS, INC. AND SUBSIDIARIES
FINANCIAL INFORMATION – US GAAP BASIS
|
Century Casinos, Inc. |
|
Condensed Consolidated Statements of Earnings (Loss) |
|
For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
|||||||||||
|
Amounts in thousands, except for per share information |
2015 |
2014 |
2015 |
2014 |
||||||||
|
Operating revenue: |
||||||||||||
|
Net operating revenue |
$ |
33,526 |
$ |
28,123 |
$ |
101,803 |
$ |
88,790 | ||||
|
Operating costs and expenses: |
||||||||||||
|
Total operating costs and expenses |
29,444 | 27,408 | 87,782 | 86,770 | ||||||||
|
Earnings from operations |
4,082 | 715 | 14,021 | 2,020 | ||||||||
|
Non-operating income (expense): |
||||||||||||
|
Interest income |
6 | 11 | 21 | 72 | ||||||||
|
Interest expense |
(816) | (707) | (2,527) | (2,090) | ||||||||
|
Gain on foreign currency transactions and other |
240 | 200 | 1,142 | 375 | ||||||||
|
Non-operating (expense), net |
(570) | (496) | (1,364) | (1,643) | ||||||||
|
Earnings before income taxes |
3,512 | 219 | 12,657 | 377 | ||||||||
|
Income tax provision |
373 | 138 | 402 | 786 | ||||||||
|
Net earnings (loss) |
3,139 | 81 | 12,255 | (409) | ||||||||
|
Net (earnings) loss attributable to non-controlling interest |
(411) | 715 | (1,085) | 1871 | ||||||||
|
Net earnings attributable to Century Casinos, Inc. shareholders |
$ |
2,728 |
$ |
796 |
$ |
11,170 |
$ |
1,462 | ||||
|
Earnings per share attributable to Century Casinos, Inc.: |
||||||||||||
|
Basic |
$ |
0.11 |
$ |
0.03 |
$ |
0.46 |
$ |
0.06 | ||||
|
Diluted |
$ |
0.11 |
$ |
0.03 |
$ |
0.46 |
$ |
0.06 | ||||
8/13
CENTURY CASINOS, INC. AND SUBSIDIARIES
FINANCIAL INFORMATION – US GAAP BASIS
|
Century Casinos, Inc. |
||||||
|
Condensed Consolidated Balance Sheets |
||||||
|
(Amounts in thousands) |
||||||
|
September 30, |
December 31, |
|||||
|
2015 |
2014 |
|||||
|
Assets |
||||||
|
Current assets |
$ |
35,651 |
$ |
30,163 | ||
|
Property and equipment, net |
132,770 | 134,627 | ||||
|
Other assets |
22,020 | 22,677 | ||||
|
Total assets |
$ |
190,441 |
$ |
187,467 | ||
|
Liabilities and Equity |
||||||
|
Current liabilities |
$ |
24,865 |
$ |
28,128 | ||
|
Non-current liabilities |
37,853 | 36,913 | ||||
|
Century Casinos, Inc. shareholders' equity |
123,099 | 118,428 | ||||
|
Non-controlling interest |
4,624 | 3,998 | ||||
|
Total liabilities and equity |
$ |
190,441 |
$ |
187,467 | ||
9/13
CENTURY CASINOS, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
Century Casinos, Inc.
Adjusted EBITDA Margins ** by Segment (unaudited)
|
For the Three Months |
For the Nine Months |
|||
|
Ended September 30, |
Ended September 30, |
|||
|
2015 |
2014 |
2015 |
2014 |
|
|
Canada |
32% | 29% | 35% | 29% |
|
United States |
27% | 20% | 24% | 17% |
|
Poland |
14% | 3% | 14% | 5% |
|
Corporate and Other |
(119%) | (56%) | (59%) | (72%) |
|
Consolidated Adjusted EBITDA Margin |
20% | 10% | 18% | 10% |
Century Casinos, Inc.
Reconciliation of Adjusted EBITDA * to Net Earnings (Loss) by Segment
For the three months ended September 30, 2015
Amounts in thousands
|
For the Three Months Ended September 30, 2015 |
|||||||||||||||
|
Canada |
United States |
Poland |
Corporate and Other |
Total |
|||||||||||
|
Net earnings (loss) |
$ |
1,957 |
$ |
931 |
$ |
536 |
$ |
(696) |
$ |
2,728 | |||||
|
Interest expense (income), net |
783 | 0 | 31 | (4) | 810 | ||||||||||
|
Income taxes (benefit) |
519 | 571 | 227 | (944) | 373 | ||||||||||
|
Depreciation and amortization |
644 | 638 | 678 | 118 | 2,078 | ||||||||||
|
Non-controlling interest |
145 | 0 | 266 | 0 | 411 | ||||||||||
|
Non-cash stock-based compensation |
0 | 0 | 0 | 423 | 423 | ||||||||||
|
(Gain) loss on foreign currency transactions and other |
(148) | 0 | (98) | 6 | (240) | ||||||||||
|
Loss on disposition of fixed assets |
2 | 0 | 131 | 3 | 136 | ||||||||||
|
Other one-time (income) costs |
0 | 0 | 0 | 0 | 0 | ||||||||||
|
Adjusted EBITDA |
$ |
3,902 |
$ |
2,140 |
$ |
1,771 |
$ |
(1,094) |
$ |
6,719 | |||||
10/13
CENTURY CASINOS, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
Century Casinos, Inc.
Reconciliation of Adjusted EBITDA * to Net Earnings (Loss) by Segment
For the three months ended September 30, 2014
Amounts in thousands
|
For the Three Months Ended September 30, 2014 |
|||||||||||||||
|
Canada |
United States |
Poland |
Corporate and Other |
Total |
|||||||||||
|
Net earnings (loss) |
$ |
1,548 |
$ |
501 |
$ |
(245) |
$ |
(1,008) |
$ |
796 | |||||
|
Interest expense (income), net |
612 | 0 | 89 | (5) | 696 | ||||||||||
|
Income taxes (benefit) |
387 | 307 | (135) | (421) | 138 | ||||||||||
|
Depreciation and amortization |
487 | 647 | 725 | 191 | 2,050 | ||||||||||
|
Non-controlling interest |
(594) | 0 | (121) | 0 | (715) | ||||||||||
|
Non-cash stock-based compensation |
0 | 0 | 0 | 14 | 14 | ||||||||||
|
(Gain) loss on foreign currency transactions and other |
(47) | 0 | (155) | 2 | (200) | ||||||||||
|
Gain on disposition of fixed assets |
0 | 0 | (12) | 0 | (12) | ||||||||||
|
Other one-time (income) costs |
0 | 0 | 114 | 0 | 114 | ||||||||||
|
Adjusted EBITDA |
$ |
2,393 |
$ |
1,455 |
$ |
260 |
$ |
(1,227) |
$ |
2,881 | |||||
Century Casinos, Inc.
Reconciliation of Adjusted EBITDA * to Net Earnings (Loss) by Segment
For the nine months ended September 30, 2015
Amounts in thousands
|
For the Nine Months Ended September 30, 2015 |
|||||||||||||||
|
Canada |
United States |
Poland |
Corporate and Other |
Total |
|||||||||||
|
Net earnings |
$ |
6,355 |
$ |
2,125 |
$ |
1,884 |
$ |
806 |
$ |
11,170 | |||||
|
Interest expense (income), net |
2,406 | 0 | 110 | (10) | 2,506 | ||||||||||
|
Income taxes (benefit) |
1,479 | 1,301 | 743 | (3,121) | 402 | ||||||||||
|
Depreciation and amortization |
1,635 | 1,904 | 1,925 | 316 | 5,780 | ||||||||||
|
Non-controlling interest |
143 | 0 | 942 | 0 | 1,085 | ||||||||||
|
Non-cash stock-based compensation |
0 | 0 | 0 | 1,230 | 1,230 | ||||||||||
|
(Gain) loss on foreign currency transactions and other |
(670) | 0 | (466) | (6) | (1,142) | ||||||||||
|
Loss on disposition of fixed assets |
4 | 0 | 273 | 4 | 281 | ||||||||||
|
Preopening expenses |
345 | 0 | 0 | 0 | 345 | ||||||||||
|
Other one-time (income) costs |
0 | 0 | 0 | (3,365) | (3,365) | ||||||||||
|
Adjusted EBITDA |
$ |
11,697 |
$ |
5,330 |
$ |
5,411 |
$ |
(4,146) |
$ |
18,292 | |||||
11/13
CENTURY CASINOS, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
Century Casinos, Inc.
Reconciliation of Adjusted EBITDA * to Net Earnings (Loss) by Segment
For the nine months ended September 30, 2014
Amounts in thousands
|
For the Nine Months Ended September 30, 2014 |
|||||||||||||||
|
Canada |
United States |
Poland |
Corporate and Other |
Total |
|||||||||||
|
Net earnings (loss) |
$ |
4,458 |
$ |
1,103 |
$ |
(561) |
$ |
(3,538) |
$ |
1,462 | |||||
|
Interest expense (income), net |
1,798 | 0 | 251 | (31) | 2,018 | ||||||||||
|
Income taxes (benefit) |
1,400 | 676 | (226) | (1,064) | 786 | ||||||||||
|
Depreciation and amortization |
1,432 | 1,775 | 2,141 | 472 | 5,820 | ||||||||||
|
Non-controlling interest |
(1,592) | 0 | (279) | 0 | (1,871) | ||||||||||
|
Non-cash stock-based compensation |
0 | 0 | 0 | 57 | 57 | ||||||||||
|
(Gain) loss on foreign currency transactions and other |
(69) | 0 | (320) | 14 | (375) | ||||||||||
|
Loss on disposition of fixed assets |
0 | 1 | 784 | 3 | 788 | ||||||||||
|
Other one-time (income) costs |
(103) | 0 | 224 | 0 | 121 | ||||||||||
|
Adjusted EBITDA |
$ |
7,324 |
$ |
3,555 |
$ |
2,014 |
$ |
(4,087) |
$ |
8,806 | |||||
* The Company defines Adjusted EBITDA as net earnings (loss) before interest expense (income), net, income taxes (benefit), depreciation, amortization, non-controlling interest (earnings) losses 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 and other, gain on business combination and certain other one-time items. 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) 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 accounting principles generally accepted in the United States of America (“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) above.
12/13
CENTURY CASINOS, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
** 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.
About Century Casinos, Inc.:
Century Casinos, Inc. is an international casino entertainment company that operates worldwide. The Company owns and operates Century Casino & Hotels in Cripple Creek and Central City, Colorado, and in Edmonton, Alberta, Canada and the Century Casino in Calgary, Alberta, Canada. Through its Austrian subsidiary, Century Casinos Europe GmbH (“CCE”), the Company holds a 66.6% ownership interest in Casinos Poland Ltd., the owner and operator of nine casinos in Poland. The Company, through CCE, also holds a 75% ownership interest in both CDR, which began operations in the north metropolitan area of Calgary, Alberta, Canada in April 2015, and CBS, which began operating the pari-mutuel off-track horse betting network in Southern Alberta, Canada in May 2015. The Company operates eleven ship-based casinos onboard ships of the following cruise lines: TUI Cruises, Windstar Cruises and Nova Star Cruises, Ltd. The Company manages the operations of the casino at the Hilton Aruba Caribbean Resort and Casino. The Company, through CCE, 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 Mendoza Casino in Mendoza, Argentina. The Company continues to pursue other international projects in various stages of development.
For more information about Century Casinos, visit our website at www.cnty.com. Century Casinos’ common stock trades on The NASDAQ Capital Market® under the symbol CNTY.
13/13
CENTURY CASINOS, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
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, operating efficiencies, synergies and operational performance, the prospects for projects in development, debt repayment, investments in joint ventures, outcomes of legal proceedings 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, 2014 and in subsequent Form 10-Q filings. 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.
14/13
Financial Results Q3 2015
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. 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, 2014 and in subsequent Form 10-Q filings. 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. In this presentation the term “USD” refers to US dollars, the term “CAD” refers to Canadian dollars and the term “PLN” refers to Polish zloty. 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.
Q3 2015 Results by Segment (in USD) *Adjusted EBITDA for Corporate and Other represents only our cruise ship, Aruba and Argentina agreements. Adjusted EBITDA from Corporate Other is excluded. See Appendix A. Canada 36% United States 24% Poland 37% Corporate and Other 3% Net Operating Revenue Canada 47% United States 26% Poland 22% Corporate and Other* 5% Adjusted EBITDA
Net Operating Revenue per Quarter (in USD) $14.1$17.1$17.6$18.0$29.1$30.4$14.9$18.0$17.8$28.3$31.6$37.9$16.0$18.1$18.7$28.8$28.1$33.5$15.6$17.6$17.7$29.4$31.3$0$5$10$15$20$25$30$35$4020102011201220132014201520102011201220132014201520102011201220132014201520102011201220132014(in millions) Net Operating Revenue Q1 Q2 Q3 Q4
Income Statement and Balance Sheet (select information as of September 30, 2015) In USD mil (except EPS and BVPS) Q3 2015 Q3 2014 Change Net Operating Revenue 33.5 28.1 19% Adjusted EBITDA 6.7 2.9 133% Earnings per Share 0.11 0.03 267% Total Assets 190.4 188.5 1% Book Value per Share 5.04 4.92 2% Net Debt* 10.0 11.3 *Net Debt is calculated as total debt minus cash and cash equivalents. Debt as of September 30, 2015 includes $21.7 million related to our Bank of Montreal credit agreement, $3.5 million related to Casinos Poland, Ltd. and $14.6 million related to Century Downs Racetrack and Casino’s long-term land lease.
Constant Currency Results In USD millions Q3 2015 Q3 2014 Change Net Operating Revenue as reported (GAAP) 33.5 28.1 19% Unfavorable foreign currency impact vs. 2014 4.9 Constant Currency (non-GAAP)* 38.4 28.1 37% Adjusted EBITDA as reported 6.7 2.9 133% Unfavorable foreign currency impact vs. 2014 1.2 Constant Currency (non-GAAP)* 7.9 2.9 172% * Net Operating Revenue on a constant currency basis and Adjusted EBITDA as reported and on a constant currency basis are non-GAAP financial measures. See Appendix A.
Debt to Adjusted EBITDA (in USD) 4.5x 2.1x 1.7x 0.9x 0.3x 2.7x 3.0x 1.8x 0x1x2x3x4x5x20082009201020112012201320142015Debt/Adjusted EBITDA
Q3 Highlights – Canada (Selected Information as of September 30, 2015) In CAD mil Q3 2015 Q3 2014 Change Net Operating Revenue 16.0 9.0 77% Operating Costs and Expenses 11.7 6.9 69% Adjusted EBITDA 5.1 2.6 96% Adjusted EBITDA Margin 32% 29%
Q3 Highlights – Canada (Selected Information as of September 30, 2015) Edmonton In CAD mil Q3 2015 Q3 2014 Change Net Operating Revenue 7.2 6.7 8% Operating Costs and Expenses 4.7 4.5 4% Adjusted EBITDA 2.8 2.5 13% Adjusted EBITDA Margin 39% 37% .Gaming revenue increased CAD 0.4 million, or 8%. •Increased revenue from baccarat.
Q3 Highlights – Canada (Selected Information as of September 30, 2015) Calgary In CAD mil Q3 2015 Q3 2014 Change Net Operating Revenue 2.3 2.2 3% Operating Costs and Expenses 2.4 2.3 4% Adjusted EBITDA 0.2 0.2 (29%) Adjusted EBITDA Margin 7% 10%
Q3 Highlights – Canada (Selected Information as of September 30, 2015) Century Downs Racetrack and Casino In CAD mil Q3 2015 Q3 2014 Change Net Operating Revenue 5.0 0.1 6624% Operating Costs and Expenses 3.7 0.2 2342% Adjusted EBITDA 1.7 (0.1) 2367% Adjusted EBITDA Margin 34% (100%) .In March 2015, we increased our ownership interest in Century Downs by 60% to a total ownership interest of 75%. .Casino opened on April 1, 2015. .Racing season began on April 25, 2015.
Q3 Highlights – Canada (Selected Information as of September 30, 2015) Century Bets! In CAD mil Q3 2015 Net Operating Revenue 1.4 Operating Costs and Expenses 1.0 Adjusted EBITDA 0.5 Adjusted EBITDA Margin 32% .Century Bets! was formed in January 2015. .Century Bets! began operating the pari-mutuel off-track betting network for southern Alberta in May 2015.
Q3 Highlights – United States (Selected Information as of September 30, 2015) In USD mil Q3 2015 Q3 2014 Change Net Operating Revenue 8.0 7.3 10% Operating Costs and Expenses 6.5 6.4 0% Adjusted EBITDA 2.1 1.5 47% Adjusted EBITDA Margin 27% 20%
Q3 Highlights – United States (Selected Information as of September 30, 2015) Central City In USD mil Q3 2015 Q3 2014 Change Net Operating Revenue 4.4 4.0 9% Operating Costs and Expenses 3.8 3.8 2% Adjusted EBITDA 0.9 0.6 49% Adjusted EBITDA Margin 21% 15% .Gaming revenue increased $0.2 million, or 5%. .Central City market increased by 6%. .Our share of the Central City market was 29% for Q3 2015, remaining constant as compared to Q3 2014.
Q3 Highlights – United States (Selected Information as of September 30, 2015) Cripple Creek In USD mil Q3 2015 Q3 2014 Change Net Operating Revenue 3.5 3.2 10% Operating Costs and Expenses 2.6 2.7 (2%) Adjusted EBITDA 1.2 0.8 46% Adjusted EBITDA Margin 35% 26% .Gaming revenue increased $0.1 million, or 3%. .The Cripple Creek market increased by 5%. .Our share of the Cripple Creek market was 10% in Q3 2015, a decrease of 2% as compared to Q3 2014.
Q3 Highlights – Poland (Selected Information as of September 30, 2015) In PLN mil Q3 2015 Q3 2014 Change Net Operating Revenue 46.9 32.9 43% Operating Costs and Expenses 43.3 34.7 25% Adjusted EBITDA 6.7 0.8 709% Adjusted EBITDA Margin 14% 3% .Gaming revenue increased PLN 14.6 million, or 45%. •Added 28 new slot machines since Q3 2014. .Introduced a loyalty program to slot machine players beginning in Q3 2014.
Q3 Highlights – Corporate and Other (Selected Information as of September 30, 2015) In USD mil Q3 2015 Q3 2014 Change Net Operating Revenue 0.9 2.2 (58%) Operating Costs and Expenses 2.6 3.6 (29%) Adjusted EBITDA (1.1) (1.2) 11% Adjusted EBITDA Margin N/A N/A
Q3 Highlights – Corporate and Other (Selected Information as of September 30, 2015) Cruise Ships and Other In USD mil Q3 2015 Q3 2014 Change Net Operating Revenue 0.9 2.2 (58%) Operating Costs and Expenses 0.6 2.0 (70%) Adjusted EBITDA 0.4 0.4 13% Adjusted EBITDA Margin 45% 17% .In March 2015, we mutually agreed with Norwegian Cruise Line Holdings to terminate the concession agreements for the eight cruise ship-based casinos we operated with Oceania Cruises and Regent Seven Seas Cruises as of June 1, 2015. .In June 2015, we began a two-year consulting agreement with Norwegian Cruise Line Holdings for a total consideration of $2.0 million payable quarterly beginning July 2015. .In May 2015, we began operating the ship-based casinos onboard TUI Cruises Mein Schiff 4 and Windstar Cruises Star Breeze and Star Legend.
Q3 Highlights – Corporate and Other (Selected Information as of September 30, 2015) Corporate Other In USD mil Q3 2015 Q3 2014 Change Net Operating Revenue 0.0 0.0 0% Operating Costs and Expenses 2.0 1.7 20% Adjusted EBITDA (1.5) (1.6) 5% Adjusted EBITDA Margin N/A N/A .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.
Appendix A – Non GAAP Financial Measures X:\Century Casinos\SEC Filings\2010\10-K\EDGAR\centurylogo.jpgThe Company supplements its condensed consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“US 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 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 measures.
Appendix A – Non GAAP Financial Measures The Company defines Adjusted EBITDA as net earnings (loss) before interest expense (income), net, income taxes (benefit), depreciation, amortization, non-controlling interest (earnings) losses 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 and other, gain on business combination and certain other one-time items. 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) and Adjusted EBITDA reported for each segment and property. 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) 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. 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 and Adjusted EBITDA.
Appendix A (continued) Reconciliation of Adjusted EBITDA – Canada (in thousands) For the three months ended September 30, 2015 in CAD Edmonton Calgary Century Downs Century Bets! Total Canada Net operating revenue $ 7,188 $ 2,300 $ 5,043 $ 1,426 $ 15,957 Net earnings (loss) attributable to Century Casinos, Inc. shareholders 1,514 (130) 565 267 2,216 Interest expense (income), net 389 0 635 0 1,024 Income taxes (benefit) 491 (43) 106 119 673 Depreciation and amortization 297 224 321 0 842 Non-controlling interests 0 0 66 89 155 (Gain) loss on foreign currency transactions and other 98 105 7 (13) 197 Loss on disposition of fixed assets 2 0 0 0 2 Adjusted EBITDA $ 2,791 $ 156 $ 1,700 $ 462 $ 5,109 Adjusted EBITDA Margin 39% 7% 34% 32% 32% For the three months ended September 30, 2014 in CAD Edmonton Calgary Century Downs Century Bets! Total Canada Net operating revenue $ 6,681 $ 2,242 $ 75 $ 0 $ 8,998 Net earnings (loss) attributable to Century Casinos, Inc. shareholders 1,407 (285) 19 0 1,141 Interest expense (income), net 132 0 534 0 666 Income taxes (benefit) 471 (95) 46 0 422 Depreciation and amortization 281 249 0 0 530 Non-controlling interests 0 0 (674) 0 (674) (Gain) loss on foreign currency transactions and other 173 350 0 0 523 Adjusted EBITDA $ 2,464 $ 219 $ (75) $ 0 $ 2,608 Adjusted EBITDA Margin 37% 10% (100%) N/A 29%
Appendix A (continued) Reconciliation of Adjusted EBITDA – United States (in thousands) For the three months ended September 30, 2015 in USD Central City Cripple Creek Total United States Net operating revenue $ 4,421 $ 3,537 $ 7,958 Net earnings attributable to Century Casinos, Inc. shareholders 358 573 931 Income taxes 220 351 571 Depreciation and amortization 339 299 638 Adjusted EBITDA $ 917 $ 1,223 $ 2,140 Adjusted EBITDA Margin 21% 35% 27% For the three months ended September 30, 2014 in USD Central City Cripple Creek Total United States Net operating revenue $ 4,048 $ 3,204 $ 7,252 Net earnings attributable to Century Casinos, Inc. shareholders 170 331 501 Income taxes 105 202 307 Depreciation and amortization 340 307 647 Adjusted EBITDA $ 615 $ 840 $ 1,455 Adjusted EBITDA Margin 15% 26% 20%
Appendix A (continued) Reconciliation of Adjusted EBITDA – Poland (in thousands) For the three months ended September 30, 2015 in PLN Poland Net operating revenue $ 46,890 Net earnings attributable to Century Casinos, Inc. shareholders 1,902 Interest expense (income), net 116 Income taxes 857 Depreciation and amortization 2,555 Non-controlling interests 952 (Gain) on foreign currency transactions and other (201) Loss on disposition of fixed assets 491 Adjusted EBITDA $ 6,672 Adjusted EBITDA Margin 14% For the three months ended September 30, 2014 in PLN Poland Net operating revenue $ 32,867 Net loss attributable to Century Casinos, Inc. shareholders (980) Interest expense (income), net 281 Income benefit (434) Depreciation and amortization 2,285 Non-controlling interests (489) (Gain) on foreign currency transactions and other (170) (Gain) on disposition of fixed assets (38) Other one-time costs 371 Adjusted EBITDA $ 826 Adjusted EBITDA Margin 3%
Appendix A (continued) Reconciliation of Adjusted EBITDA – Corporate and Other (in thousands) For the three months ended September 30, 2015 in USD Cruise Ships and Other Corporate Other Total Corporate and Other Net operating revenue $ 921 $ 0 $ 921 Net earnings (loss) attributable to Century Casinos, Inc. shareholders 322 (1,018) (696) Interest expense (income), net 0 (4) (4) Income taxes (benefit) 20 (964) (944) Depreciation and amortization 72 46 118 Non-cash stock-based compensation 0 423 423 Loss on foreign currency transactions and other 0 6 6 Loss on disposition of fixed assets 3 0 3 Adjusted EBITDA $ 417 $ (1,511) $ (1,094) Adjusted EBITDA Margin 45% N/A N/A For the three months ended September 30, 2014 in USD Cruise Ships and Other Corporate Other Total Corporate and Other Net operating revenue $ 2,182 $ 0 $ 2,182 Net earnings (loss) attributable to Century Casinos, Inc. shareholders 199 (1,207) (1,008) Interest expense (income), net 0 (5) (5) Income taxes (benefit) 24 (445) (421) Depreciation and amortization 147 44 191 Non-cash stock-based compensation 0 14 14 Loss on foreign currency transactions and other 0 2 2 Adjusted EBITDA $ 370 $ (1,597) $ (1,227) Adjusted EBITDA Margin 17% N/A N/A