COLORADO SPRINGS, Colo., May 12 /PRNewswire-FirstCall/ -- Century Casinos,Inc. (Nasdaq: CNTY; Vienna Stock Exchange) today reported financial resultsfor the three months ended March 31, 2008.
First Quarter 2008
For the first quarter of 2008, net operating revenue was $20,980,000 andconsolidated Adjusted EBITDA* was $4,393,000. This represents a slightdecrease in net operating revenue over the same quarter of last year($21,144,000 in the first quarter of 2007) and a 16% decrease in consolidatedAdjusted EBITDA* ($5,220,000 in the first quarter of 2007). Improvements innet operating revenue at the Company's property in Edmonton were offset by adecline in net operating revenue at our properties in Colorado, particularlyat Womacks.
The Company reported net earnings of $541,000, or $0.02 per basic sharefor the quarter ended March 31, 2008. Net earnings for the 2007 first quarterwere $1,542,000, or $0.07 per basic share. In the first quarter of 2008, theCompany incurred increases in depreciation charges of $246,000, primarilyrelated to gaming and non-gaming equipment additions during 2007. In addition,stock-based compensation expense increased by $334,000 primarily due to theissuance of stock options and restricted stock in July 2007. In April 2008,the Company received a written waiver from its lender in Central City for acovenant violation in exchange for a cash payment of $162,500. This amount wasincluded in interest expense during the first quarter of 2008. Interestexpense without the waiver fee decreased by $522,000 when comparing thequarter ended March 31, 2008 to the same quarter in 2007. Finally, generaland administrative expenses increased at the Company's North American casinosby approximately $457,000 due to additional property tax accruals and utilitycharges.
'We are pleased with the growth at our Canadian operation, but we facesignificant challenges at our Colorado operations in light of the economicdownturn and the smoking ban that became effective on January 1, 2008,' saidCo CEOs Erwin Haitzmann and Peter Hoetzinger. 'We expect to see our short termgrowth come from international markets such as Canada and Poland.'
Property Results
Century Casino & Hotel (Edmonton, Alberta, Canada) -- Net operatingrevenue at the Century Casino & Hotel in Edmonton increased 34% to $5,557,000for the first quarter of 2008 compared to $4,152,000 for the first quarter of2007. Adjusted EBITDA* was $1,928,000 for the three months ended March 31,2008 and $983,000 for the three months ended March 31, 2007. The Companyoperated the casino with 50 additional slot machines during the first quarterof 2008 as compared to the first quarter of 2007. The Company also increasedthe number of tables at the casino from 32 to 35 in March 2008 and introduced24-hour poker at the casino during the fourth quarter of 2007. The Companyopened the hotel portion of the facility in March 2007. All of these factorshave led to additional play at the casino.
Womacks Casino (Cripple Creek, Colorado, USA) -- Net operating revenue atWomacks Casino in Cripple Creek, Colorado decreased 29% to $2,882,000 for thefirst quarter of 2008 from $4,059,000 for the same period in 2007. Managementbelieves that revenue in the first quarter of 2008 at Womacks was negativelyimpacted by a variety of factors. The Cripple Creek market as a whole declined12.7%, which management attributes to a decline in consumer discretionaryincome, increased fuel prices and a smoking ban that went into effect onJanuary 1, 2008. In addition, management believes that Womacks lost asignificant amount of its customers due to a renovation that began during thefourth quarter of 2007 and continued through the first quarter of 2008. TheCompany is reviewing strategies to improve revenue at Womacks. Womacks'Adjusted EBITDA* for the first quarter of 2008 was $279,000 compared to$1,293,000 in the first quarter of 2007. The decrease in Adjusted EBITDA* isdue to the decline in revenue, which management believes was a result of theabove mentioned renovation and smoking ban and an overall market decline of12.7% in Cripple Creek.
Century Casino and Hotel (Central City, Colorado, USA) -- Net operatingrevenue at the Century Casino and Hotel decreased 2% to $4,407,000 for thefirst quarter of 2008 compared to $4,515,000 reported for the same period in2007. Adjusted EBITDA* for the first quarter of 2008 was $835,000 compared to$1,055,000 in the first quarter of 2007. The decrease in Adjusted EBITDA* isprimarily due to an increase in general and administrative expenses resultingfrom increased property tax accruals. The Central City gaming market as awhole decreased 9.3% for the first quarter of 2008 compared to the firstquarter of 2007. On December 31, 2007, the Company acquired the remaining 35%of all issued and outstanding partnership units from the minority investor inits casino in Central City, Colorado. The Company now recognizes the casino'snet income or losses at 100% going forward.
The Caledon Hotel, Spa and Casino (Caledon, South Africa) -- Net operatingrevenue at the Caledon decreased 4% to $4,218,000 for the first quarter of2008 compared to $4,384,000 reported for the same period in 2007, primarilydue to foreign currency rates. Net operating revenue in South African Rand('Rand') was ZAR 31,709,000 for the quarter ended March 31, 2008 compared toZAR 31,659,000 for the quarter ended March 31, 2007. Adjusted EBITDA* for thefirst quarter of 2008 was $1,504,000 compared to $1,516,000 in the firstquarter of 2007.
Century Casino and Hotel (Newcastle, South Africa) -- Net operatingrevenue increased 2% to $2,713,000 for the first quarter of 2008 compared to$2,653,000 reported for the same period in 2007. Net operating revenue in Randwas ZAR 20,463,000 for the quarter ended March 31, 2008 compared to ZAR19,173,000 for the quarter ended March 31, 2007. Newcastle's Adjusted EBITDA*for the first quarter of 2008 was $899,000 compared to $840,000 for the firstquarter of 2007. We opened the casino facility in December 2006.
Other Operations -- The Company's other operations, which include theCentury Casino Millennium in Prague and the Company's ship-based casinos,contributed net operating revenue of $1,201,000 and Adjusted EBITDA* of$68,000 for the quarter ended March 31, 2008 compared to net operating revenueof $1,375,000 and Adjusted EBITDA* of $258,000 for the quarter ended March 31,2007. The decline in Adjusted EBITDA* is primarily due to a decline in revenueat the Century Casino Millennium.
Corporate -- Corporate operations reported negative Adjusted EBITDA* of$1,120,000 for the quarter ended March 31, 2008 compared to negative AdjustedEBITDA* of $725,000 for the quarter ended March 31, 2007. The decrease inAdjusted EBITDA* is primarily due to a decrease in foreign currency gainsrecognized period over period of $716,000 and increased general andadministrative expense of $131,000, offset by the recognition of $460,000 ofequity earnings from our investment in Casinos Poland. We acquired a 33.3%interest in Casinos Poland in March 2007.
* See discussion and reconciliation of Adjusted EBITDA below.
The Company will post a slide show presentation of the results ofoperations for the first quarter of 2008 on its web site atwww.cnty.com/corporate/investor/presentations/ on Monday, May 12, 2008.
On Monday, May 12, 2008, Century Casinos will host a 'Q1 2008 Earnings'conference call, at 10:30am MDT; 6:30pm CET respectively. US domesticparticipants please dial +1-800-894-5910, all other international participantsplease use +1-785-424-1052 to dial-in. For a recording of the call, pleasevisit our website at www.cnty.com/corporate/investor/financial-results/.
CENTURY CASINOS, INC. AND SUBSIDIARIES FINANCIAL INFORMATION - US GAAP BASIS
Century Casinos, Inc. Condensed Consolidated Statements of Earnings (Unaudited) (Amounts in thousands, except for share information)
For the Three Months Ended March 31, 2008 2007 Operating Revenue: Gaming $ 19,404 $ 19,972 Hotel, food and beverage 3,273 2,867 Other 524 493 Gross revenue 23,201 23,332 Less promotional allowances 2,221 2,188 Net operating revenue 20,980 21,144
Operating Costs and Expenses: Gaming 8,171 8,153 Hotel, food and beverage 2,558 2,571 General and administrative 6,794 5,823 Depreciation 2,265 2,019 Total operating costs and expenses 19,788 18,566 Earnings from Equity Investment 460 - Earnings from Operations 1,652 2,578
Non-Operating Income (Expense): Interest income 69 274 Interest expense (1,573) (1,932) Other income, net 185 828 Non-operating (expense) income, net (1,319) (830) Earnings before Income Taxes, Minority Interest and Preferred Dividends 333 1,748 (Benefit) provision for income taxes (372) 324 Earnings before Minority Interest and Preferred Dividends 705 1,424 Minority interest in subsidiary losses, net (111) 337 Preferred dividends issued by subsidiary (53) (219) Net Earnings $ 541 $ 1,542
Earnings Per Share: Basic $ 0.02 $ 0.07 Diluted $ 0.02 $ 0.06
Weighted Average Shares Outstanding: Basic 23,302,562 23,027,661 Diluted 23,632,076 23,978,227
CENTURY CASINOS, INC. AND SUBSIDIARIES FINANCIAL INFORMATION - US GAAP BASIS
Century Casinos, Inc. Condensed Consolidated Balance Sheets (Unaudited) (Amounts in thousands)
March 31, December 31, 2008 2007 Assets Current Assets $ 16,275 $ 21,109 Other Assets 169,974 176,974 Total Assets $ 186,249 $ 198,083
Liabilities and Shareholders' Equity Current Liabilities $ 22,920 $ 23,903 Non-Current Liabilities 53,503 62,191 Shareholders' Equity 109,826 111,989 Total Liabilities and Shareholders' Equity $ 186,249 $ 198,083
CENTURY CASINOS, INC. AND SUBSIDIARIES SUPPLEMENTAL INFORMATION
Century Casinos, Inc. Net Operating Revenue by Property (Unaudited) (Amounts in thousands)
For the Three Months Ended March 31, 2008 2007
Century Casino & Hotel, Edmonton $ 5,557 $ 4,152 Womacks Casino & Hotel, Cripple Creek 2,882 4,059 Century Casino & Hotel, Central City 4,407 4,515 Caledon Hotel, Spa & Casino 4,218 4,384 Century Casino & Hotel, Newcastle 2,713 2,653 Century Casino Millennium & Cruise Ships 1,201 1,375 Corporate 2 6 Consolidated net operating revenue $ 20,980 $ 21,144
Century Casinos, Inc. Adjusted EBITDA Margins** by Property (Unaudited)
For the Three Months Ended March 31, 2008 2007
Century Casino & Hotel, Edmonton 35% 24% Womacks Casino & Hotel, Cripple Creek 10% 32% Century Casino & Hotel, Central City 19% 23% Caledon Hotel, Spa & Casino 36% 35% Century Casino & Hotel, Newcastle 33% 32% Century Casino Millennium & Cruise Ships 6% 19% Corporate - - Consolidated Adjusted EBITDA Margin** 21% 25%
CENTURY CASINOS, INC. AND SUBSIDIARIES SUPPLEMENTAL INFORMATION
Century Casinos, Inc. Reconciliation of Adjusted EBITDA* by Property (Unaudited) For the Three Months Ended March 31, 2008 (Amounts in thousands)
Casino Millennium Cripple Central New- & Cruise Corp- Edmonton Creek City Caledon castle Ships orate Total
Net Earnings $834 $(65) $(377) $735 $296 $(34) $(848) $541 Minority Interest - - - - 66 - 45 111 Interest Income (10) - - (19) (16) (8) (16) (69) Interest Expense 360 (28) 701 160 180 - 200 1,573 Income Taxes 389 (41) (243) 316 137 (2) (928) (372) Depreciation 355 423 754 312 236 110 75 2,265 Stock Compensation - - - - - - 348 348 (Gain) Loss on Disposition of Fixed Assets - (10) - - - 2 4 (4) Adjusted EBITDA* $1,928 $279 $835 $1,504 $899 $68 $(1,120) $4,393
Century Casinos, Inc. Reconciliation of Adjusted EBITDA* by Property (Unaudited) For the Three Months Ended March 31, 2007 (Amounts in thousands)
Casino Millennium Cripple Central New- & Cruise Corp- Edmonton Creek City Caledon castle Ships orate Total
Net Earnings $292 $554 $(126) $597 $224 $145 $(144) $1,542 Minority Interest - - (473) - 96 - 40 (337) Interest Income (38) (11) - (29) (2) (8) (186) (274) Interest Expense 333 24 1,041 186 184 19 145 1,932 Income Taxes 125 337 (77) 444 138 3 (646) 324 Depreciation 271 389 690 318 200 99 52 2,019 Stock Compensation - - - - - - 14 14 Loss on disposition of fixed assets - - - - - - - - Adjusted EBITDA* $983 $1,293 $1,055 $1,516 $840 $258 $(725) $5,220
CENTURY CASINOS, INC. AND SUBSIDIARIES SUPPLEMENTAL INFORMATION
* The Company defines Adjusted EBITDA as earnings before interest, incometaxes, depreciation, amortization, minority interest, pre-opening expenses,non-cash stock based compensation charges, asset impairment costs, gains(losses) on disposition of fixed assets, discontinued operations and certainother one-time items. Intercompany transactions consisting primarily ofmanagement fees and interest, along with their related tax effects, areexcluded from the presentation of net earnings and Adjusted EBITDA reportedfor each property. These adjustments have no effect on the consolidatedresults. Adjusted EBITDA is not considered a measure of performance recognizedunder accounting principles generally accepted in the United States ofAmerica. Management believes that Adjusted EBITDA is a valuable measure of therelative performance among its operating segments. The gaming industrycommonly uses Adjusted EBITDA as a method of arriving at the economic value ofa casino operation. Management uses Adjusted EBITDA to compare the relativeoperating performance of separate operating units by eliminating the abovementioned items associated with the varying levels of capital expenditures forinfrastructure required to generate revenue, and the often high cost ofacquiring existing operations. EBITDA (Earnings before interest, taxes,depreciation and amortization) is used by our lending institutions to gaugeoperating performance. The Company's computation of Adjusted EBITDA may bedifferent from, and therefore may not be comparable to, similar measures usedby other companies. Not all of the aforementioned benefits and costs occur ineach reporting period, but have been included in the definition based onhistoric activity.
** The Company defines Adjusted EBITDA margin as Adjusted EBITDA dividedby net operating revenue. Management uses this margin as one of severalmeasures to evaluate the efficiency of the Company's casino operations.
About Century Casinos, Inc:
Century Casinos, Inc. is an international casino entertainment companythat owns and operates the Womacks Casino and Hotel in Cripple Creek,Colorado, the Century Casino & Hotel in Central City, Colorado, the CenturyCasino & Hotel in Edmonton, Alberta, Canada, and the Century Casino Millenniumin the Marriott Hotel in Prague, Czech Republic. The Company also operatescasinos aboard the Silver Cloud, The World of ResidenSea, and the vessels ofOceania Cruises. Through its subsidiary Century Casinos Africa (Pty) Limited,it owns and operates The Caledon Hotel, Spa & Casino near Cape Town, SouthAfrica, as well as 60% of, and provides technical casino services to, CenturyCasino Newcastle, in Newcastle, South Africa. Furthermore, the Company'sAustrian subsidiary, Century Casinos Europe GmbH, holds a 33.3% ownershipinterest in Casinos Poland Ltd, the owner and operator of seven full casinosand one slot casino in Poland. The Company continues to pursue otherinternational projects in various stages of development.
For more information about Century Casinos, visit our new website atwww.centurycasinos.com. Century Casinos' common stock trades on The NASDAQCapital Market(R) and the Vienna Stock Exchange under the symbol CNTY.
This release may contain 'forward-looking statements' within the meaningof the Private Securities Litigation Reform Act of 1995. These statements arebased on the beliefs and assumptions of the management of Century Casinosbased on information currently available to management. Such forward-lookingstatements include, but are not limited to, statements regarding revenuegrowth, marketing efforts, progress at and plans for our casinos, gamingmarket growth, the impact of improvements at our properties and the impact ofthe Colorado law banning smoking in casinos. Such forward-looking statementsare subject to risks, uncertainties and other factors that could cause actualresults to differ materially from future results expressed or implied by suchforward-looking statements. Important factors that could cause actual resultsto differ materially from the forward-looking statements include, amongothers, the risks described in the sections entitled 'Risk Factors' under Item1A in our Annual Report on Form 10-K filed on March 17, 2008 and under PartII. Item 1A of our Quarterly Report on Form 10-Q filed on May 12, 2008.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.
SOURCE Century Casinos, Inc.
