Century Casinos, Inc. Announces Second Quarter 2015 Results

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07 Aug, 2015, 10:11 GMT

COLORADO SPRINGS, Colorado, Aug. 7, 2015 /PRNewswire/ -- Century Casinos, Inc. (NASDAQ Capital Market®: CNTY) today announced its financial results for the three and six months ended June 30, 2015.

Second Quarter 2015 Highlights*

Net operating revenue was $37.9 million, a 20% increase from the three months ended June 30, 2014.
Adjusted EBITDA** was $6.8 million, a 116% increase from the three months ended June 30, 2014.
Net earnings attributable to Century Casinos, Inc. shareholders were $6.6 million, a 4129% increase from the three months ended June 30, 2014.
Earnings per share were $0.27.
Book value per share*** at June 30, 2015 was $5.05.

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"). Net operating revenue and net earnings attributable to Century Casinos, Inc. shareholders also increased due to the termination of the Company's concession agreements with Oceania Cruises and Regent Seven Seas Cruises and the reduction of the Company's Austrian tax valuation allowance.

CDR opened its casino on April 1, 2015 and held its first horserace 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.

In March 2015, the Company agreed to terminate its concession agreements with Oceania Cruises and Regent Seven Seas Cruises, indirect subsidiaries of Norwegian Cruise Line Holdings Ltd., effective June 1, 2015. As consideration for early termination of the concession agreements, the Company received $4.0 million in the second quarter of 2015. The Company operated eight ship-based casinos onboard Oceania Cruises and Regent Seven Seas Cruises vessels.

In addition, the Company entered into a two-year consulting agreement, effective June 1, 2015, under which it will provide limited consulting services to Oceania Cruises and Regent Seven Seas Cruises in return for a $2.0 million consulting fee that is payable in eight quarterly installments.

In May 2015, the Company began operating the ship-based casinos onboard two new Windstar Cruises ships, Star Breeze and Star Legend, and a new TUI Cruises ship, Mein Schiff 4.

In the second quarter of 2015, based on an analysis of the likelihood of future realization of its deferred tax assets in Austria, the Company concluded that its Austrian operations had attained a sustained level of profitability sufficient to reduce its valuation allowance in that jurisdiction, resulting in a tax benefit of $1.5 million.


Amounts in thousands, except per share data	For the Three Months Ended June 30,						For the Six Months Ended June 30,
Consolidated Results:		2015		2014		% Change		2015		2014		% Change
Net operating revenue		$	37,875	$	31,555	20%		$	68,279	$	60,665	13%
Earnings from operations			7,839		322	2335%			9,940		1,305	662%
Net earnings attributable to Century Casinos, Inc. shareholders			6,597		156	4129%			8,442		667	1166%

Adjusted EBITDA**		$	6,808	$	3,154	116%		$	11,575	$	5,925	95%

Earnings per share:
Basic		$	0.27	$	0.01	2600%		$	0.35	$	0.03	1067%
Diluted		$	0.27	$	0.01	2600%		$	0.35	$	0.03	1067%
Weighted average common shares:
Basic			24,386		24,381				24,384		24,380
Diluted			24,428		24,420				24,424		24,389

"We are delighted with the results of the second quarter, posting strong growth of all financial key figures and operating numbers," Erwin Haitzmann and Peter Hoetzinger, Co Chief Executive Officers of Century Casinos, said. "Century Downs Racetrack and Casino contributed significantly in its first quarter of operations and we are excited about the potential of this property to add scale to our portfolio as well as to generate attractive returns on invested capital for our shareholders," they continued.

Three and Six Months Ended June 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 $6.3 million, or 20%, and $7.6 million, or 13%, for the three and six months ended June 30, 2015 compared to the three and six months ended June 30, 2014. Following is a summary of the changes in net operating revenue by segment for the three and six months ended June 30, 2015 compared to the three and six months ended June 30, 2014:


	Net Operating Revenue
	For the Three Months					For the Six Months
	Ended June 30,					Ended June 30,
	2015/2014					2015/2014
Amounts in millions		Change		% Change			Change		% Change
Canada		$	4.6		53%		$	4.5		26%
United States			0.5		7%			0.8		6%
Poland			(1.4)		(10%)			(0.3)		(1%)
Corporate and Other			2.6		141%			2.6		73%
Total		$	6.3		20%		$	7.6		13%

Earnings from operations increased by $7.5 million, or 2335%, and $8.6 million, or 662%, for the three and six months ended June 30, 2015 compared to the three and six months ended June 30, 2014. Following is a summary of the changes in earnings from operations by segment for the three and six months ended June 30, 2015 compared to the three and six months ended June 30, 2014:


	Earnings from Operations
	For the Three Months					For the Six Months
	Ended June 30,					Ended June 30,
	2015/2014					2015/2014
Amounts in millions		Change		% Change			Change		% Change
Canada		$	2.3		114%		$	2.4		58%
United States			0.5		73%			1.0		99%
Poland			1.7		290%			2.8		497%
Corporate and Other			3.1		182%			2.5		78%
Total		$	7.5		2335%		$	8.6		662%

Net earnings attributable to Century Casinos, Inc. shareholders increased by $6.4 million, or 4129%, and $7.8 million, or 1166%, for the three and six months ended June 30, 2015 compared to the three and six months ended June 30, 2014. Following is a summary of the changes in net earnings attributable to Century Casinos, Inc. shareholders by segment for the three and six months ended June 30, 2015 compared to the three and six months ended June 30, 2014:


	Net Earnings Attributable to Century Casinos, Inc. Shareholders
	For the Three Months					For the Six Months
	Ended June 30,					Ended June 30,
	2015/2014					2015/2014
Amounts in millions		Change		% Change			Change		% Change
Canada		$	0.8		58%		$	1.5		51%
United States			0.3		83%			0.6		99%
Poland			0.9		263%			1.7		526%
Corporate and Other			4.4		332%			4.0		160%
Total		$	6.4		4129%		$	7.8		1166%

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.

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 Six Months						For the Six Months
	Ended June 30,						Ended June 30,						Ended June 30,						Ended June 30,
	2015		2014		% Change		2015		2014		% Change		2015		2014		% Change		2015		2014		% Change
Canada	$	13,309	$	8,708		53%	$	4,782	$	2,476		93%	$	21,754	$	17,271		26%	$	7,794	$	4,928		58%
United States		7,210		6,740		7%		1,712		1,220		40%		14,003		13,201		6%		3,191		2,099		52%
Poland		12,875		14,248		(10%)		1,786		976		83%		26,409		26,661		(1%)		3,641		1,754		108%
Corporate and Other		4,481		1,859		141%		(1,472)		(1,518)		3%		6,113		3,532		73%		(3,051)		(2,856)		(7%)
Consolidated	$	37,875	$	31,555		20%	$	6,808	$	3,154		116%	$	68,279	$	60,665		13%	$	11,575	$	5,925		95%

Balance Sheet and Liquidity

As of June 30, 2015, the Company had $28.9 million in cash and cash equivalents and $44.7 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 $44.7 million in outstanding debt as of June 30, 2015 includes $5.0 million related to Casinos Poland, Ltd., $15.6 million related to a long-term land lease by CDR and $24.0 million related to the Company's Bank of Montreal credit agreement.

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 June 30, 2015 on its website at http://corporate.cnty.com/investor-relations/sec-filings. The Company will also post a presentation on the second quarter results on its website at http://corporate.cnty.com/investor-relations/presentations-and-interviews.

Century Casinos will host its second quarter 2015 earnings conference call today at 8:00 am MDT; 4:00 pm CEST, 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 August 31, 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.



CENTURY CASINOS, INC. AND SUBSIDIARIES
FINANCIAL INFORMATION – US GAAP BASIS

Century Casinos, Inc.
Condensed Consolidated Statements of Earnings (Loss)

		For the Three Months						For the Six Months
		Ended June 30,						Ended June 30,
Amounts in thousands, except for per share information		2015				2014		2015		2014
Operating revenue:
Net operating revenue		$	37,875			$	31,555	$	68,279	$	60,665
Operating costs and expenses:
Total operating costs and expenses			30,036				31,233		58,339		59,360
Earnings from operations			7,839				322		9,940		1,305
Non-operating income (expense):
Interest income			1				47		15		61
Interest expense			(1,034)				(697)		(1,712)		(1,382)
Gain on foreign currency transactions and other			407				45		902		175
Non-operating (expense), net			(626)				(605)		(795)		(1,146)
Earnings (loss) before income taxes			7,213				(283)		9,145		159
Income tax provision			(406)				433		29		648
Net earnings (loss)			7,619				(716)		9,116		(489)
Net (earnings) loss attributable to non-controlling interest			(1022)				872		(674)		1156
Net earnings attributable to Century Casinos, Inc. shareholders		$	6,597			$	156	$	8,442	$	667

Earnings per share attributable to Century Casinos, Inc.:
Basic		$	0.27			$	0.01	$	0.35	$	0.03
Diluted		$	0.27			$	0.01	$	0.35	$	0.03


CENTURY CASINOS, INC. AND SUBSIDIARIES
FINANCIAL INFORMATION – US GAAP BASIS

Century Casinos, Inc.
Condensed Consolidated Balance Sheets
(Amounts in thousands)
	June 30,			December 31,
	2015			2014
Assets
Current assets	$	34,597		$	30,163
Property and equipment, net		137,412			134,627
Other assets		22,735			22,677
Total assets	$	194,744		$	187,467

Liabilities and Equity
Current liabilities	$	25,504		$	28,128
Non-current liabilities		41,437			36,913
Century Casinos, Inc. shareholders' equity		123,304			118,428
Non-controlling interest		4,499			3,998
Total liabilities and equity	$	194,744		$	187,467



CENTURY CASINOS, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION

Century Casinos, Inc.
Adjusted EBITDA Margins** by Segment (unaudited)

			For the Three Months			For the Six Months
			Ended June 30,			Ended June 30,
			2015		2014	2015		2014
Canada			36%		28%	36%		29%
United States			24%		18%	23%		16%
Poland			14%		7%	14%		7%
Corporate and Other			(33%)		(82%)	(50%)		(81%)
Consolidated Adjusted EBITDA Margin			18%		10%	17%		10%


Century Casinos, Inc.
Reconciliation of Adjusted EBITDA* to Net Earnings (Loss) by Segment
For the three months ended June 30, 2015

Amounts in thousands

	For the Three Months Ended June 30, 2015
	Canada			United States		Poland			Corporate and Other		Total
Net earnings	$	2,258		$	718	$	568		$	3,053	$	6,597
Interest expense (income), net		992			0		43			(2)		1,033
Income taxes (benefit)		611			362		268			(1,647)		(406)
Depreciation and amortization		573			632		636			49		1,890
Non-controlling interest		738			0		284			0		1,022
Non-cash stock-based compensation		0			0		0			419		419
Gain (loss) on foreign currency transactions and other		(357)			0		(35)			(15)		(407)
Loss on disposition of fixed assets		3			0		22			0		25
Acquisition costs		(36)			0		0			36		0
Preopening expenses		0			0		0			0		0
Other one-time (income) costs		0			0		0			(3,365)		(3,365)
Adjusted EBITDA	$	4,782		$	1,712	$	1,786		$	(1,472)	$	6,808




Century Casinos, Inc.
Reconciliation of Adjusted EBITDA* to Net Earnings (Loss) by Segment
For the three months ended June 30, 2014

Amounts in thousands

	For the Three Months Ended June 30, 2014
			Canada				United States				Poland				Corporate and Other				Total
Net earnings (loss)			$		1,430		$		392		$		(348)		$		(1,318)		$		156
Interest expense (income), net					596				0				67				(13)				650
Income taxes (benefit)					632				233				(71)				(361)				433
Depreciation and amortization					490				594				723				153				1,960
Non-controlling interest					(698)				0				(174)				0				(872)
Non-cash stock-based compensation					0				0				0				21				21
Gain (loss) on foreign currency transactions and other					26				0				(68)				(3)				(45)
Loss on disposition of fixed assets					0				1				737				3				741
Acquisition costs					0				0				0				0				0
Preopening expenses					0				0				0				0				0
Other one-time (income) costs					0				0				110				0				110
Adjusted EBITDA			$		2,476		$		1,220		$		976		$		(1,518)		$		3,154


Century Casinos, Inc.
Reconciliation of Adjusted EBITDA* to Net Earnings (Loss) by Segment
For the six months ended June 30, 2015

Amounts in thousands

	For the Six Months Ended June 30, 2015
		Canada				United States				Poland				Corporate and Other				Total
Net earnings		$		4,392		$		1,194		$		1,351		$		1,505		$		8,442
Interest expense (income), net				1,625				0				78				(6)				1,697
Income taxes (benefit)				957				731				516				(2,175)				29
Depreciation and amortization				992				1,266				1,247				197				3,702
Non-controlling interest				(1)				0				675				0				674
Non-cash stock-based compensation				0				0				0				807				807
Gain (loss) on foreign currency transactions and other				(519)				0				(368)				(15)				(902)
Loss on disposition of fixed assets				3				0				142				1				146
Acquisition costs				0				0				0				0				0
Preopening expenses				345				0				0				0				345
Other one-time (income) costs				0				0				0				(3,365)				(3,365)
Adjusted EBITDA		$		7,794		$		3,191		$		3,641		$		(3,051)		$		11,575




Century Casinos, Inc.
Reconciliation of Adjusted EBITDA* to Net Earnings (Loss) by Segment
For the six months ended June 30, 2014

Amounts in thousands

	For the Six Months Ended June 30, 2014
		Canada		United States		Poland		Corporate and Other			Total
Net earnings (loss)		$	2,908	$	601	$	(317)	$	(2,525)	$	667
Interest expense (income), net			1,186		0		162		(27)		1,321
Income taxes (benefit)			1,012		369		(91)		(642)		648
Depreciation and amortization			945		1,128		1,416		281		3,770
Non-controlling interest			(998)		0		(158)		0		(1,156)
Non-cash stock-based compensation			0		0		0		43		43
Gain (loss) on foreign currency transactions and other			(22)		0		(164)		11		(175)
(Gain) loss on disposition of fixed assets			0		1		796		3		800
Acquisition costs			0		0		0		0		0
Preopening expenses			0		0		0		0		0
Other one-time (income) costs			(103)		0		110		0		7
Adjusted EBITDA		$	4,928	$	2,099	$	1,754	$	(2,856)	$	5,925

* 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.

** 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 owns 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 11 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 Radisson Aruba Resort, Casino & Spa in Aruba, Caribbean, which was sold in July 2015 and rebranded as the Hilton Aruba Caribbean Resort and Casino. The Company's management agreement did not change as a result of this sale. 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.

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 the Century Downs Racetrack and Casino project and other projects, 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.