Century Casinos, Inc. Announces Second Quarter 2016 Results

COLORADO SPRINGS, Colo., Aug. 5, 2016 /CNW/ -- Century Casinos, Inc. (NASDAQ Capital Market®: CNTY) today announced its financial results for the three and six months ended June 30, 2016.

Second Quarter 2016 Highlights*

• Net operating revenue was $35.2 million, a 7% decrease from the three months ended June 30, 2015.
• Earnings from operations were $4.5 million, a 42% decrease from the three months ended June 30, 2015.
• Net earnings attributable to Century Casinos, Inc. shareholders were $2.2 million, a 66% decrease from the three months ended June 30, 2015.
• Adjusted EBITDA** was $6.9 million, a 1% increase from the three months ended June 30, 2015.
• Earnings per share were $0.09.  
• Book value per share*** at June 30, 2016 was $5.30.

The period over period decreases in net operating revenue, earnings from operations and net earnings attributable to Century Casinos, Inc. shareholders primarily relate to $4.0 million paid to us in the second quarter of 2015 by Norwegian Cruise Line Holdings ("Norwegian") for the termination of our concession agreements with subsidiaries of Norwegian. The $4.0 million was recorded on our consolidated statement of earnings in the second quarter of 2015 under operating revenue net of $0.6 million related to assets that were sold to Norwegian as part of the termination agreement.****

In June 2016, we announced that our subsidiary Century Casinos Europe GmbH ("CCE") had entered into an agreement to acquire 100% of the issued and outstanding shares and related land of entities operating the Apex Casino ("Apex") in suburban Edmonton, Alberta, Canada. Apex is a 34,500 square foot casino facility located on approximately seven acres of land. The casino facility includes 382 slot machines, 11 live table games, a restaurant, a bar, a lounge and a banquet facility that can accommodate up to 175 guests. Closing, which is subject to, among other things, financing for the acquisition and customary closing conditions, including the receipt of necessary regulatory and governmental approvals as well as the completion of due diligence by us, is expected to occur in the fourth quarter of 2016.

In June 2016, we began operating the ship-based casinos onboard the Mein Schiff 5, a new 2,500 passenger cruise ship, and the TUI Discovery, a 2,067 passenger cruise ship. Under an agreement with Diamond Cruise International Co., Ltd., we began operating the ship-based casino onboard Glory Sea, a 1,200 passenger cruise ship, in July 2016. Glory Sea, which has 40 slot machines and 16 table games, will focus on the Chinese cruise market with four-day trips between China, South Korea and Japan. Under an amended concession agreement with TUI Cruises, we also plan to operate the ship-based casino onboard Mein Schiff 6, a new 2,500 passenger cruise ship that is expected to begin operations in the third quarter of 2017.

The consolidated results for the three and six months ended June 30, 2016 and 2015 are as follows:

"The second quarter reflected strong revenue performances from our three operating segments. In local currency, Canada was up 4%, Poland was up 10% and Colorado was up 7%. We are happy about the underlying strength and stability of our geographically diverse portfolio of casino assets," Erwin Haitzmann and Peter Hoetzinger, Co Chief Executive Officers of Century Casinos, said. "In addition, we are looking forward to closing the CAD 29.9 million Apex Casino acquisition in the fourth quarter and anticipate that it will be accretive to the Company's earnings beginning in the fourth quarter of 2016," they continued.

Consolidated Results*

The table below shows the Company's operating segments that are included in each of the Company's reportable segments:

The Company's net operating revenue decreased by ($2.7) million, or (7%), and by ($0.5) million, or (1%), for the three and six months ended June 30, 2016, compared to the three and six months ended June 30, 2015. Following is a summary of the changes in net operating revenue by segment for the three and six months ended June 30, 2016, compared to the three and six months ended June 30, 2015:

The Company's earnings from operations decreased by ($3.3) million, or (42%), and by ($2.0) million, or (20%), for the three and six months ended June 30, 2016, compared to the three and six months ended June 30, 2015.  Following is a summary of the changes in earnings from operations by segment for the three and six months ended June 30, 2016, compared to the three and six months ended June 30, 2015:

Net earnings (loss) attributable to Century Casinos, Inc. shareholders decreased by ($4.3) million, or (66%), and by ($4.3) million, or (51%), for the three and six months ended June 30, 2016, compared to the three and six months ended June 30, 2015. Following is a summary of the changes in net earnings (loss) attributable to Century Casinos, Inc. shareholders by segment for the three and six months ended June 30, 2016, compared to the three and six months ended June 30, 2015:

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.

Segment Results (in thousands)*

The following are segment results for net operating revenue, net earnings (loss) attributable to Century Casinos, Inc. shareholders and Adjusted EBITDA**.

Balance Sheet and Liquidity

As of June 30, 2016, the Company had $31.3 million in cash and cash equivalents and $36.9 million in outstanding debt on its balance sheet compared to $29.4 million in cash and cash equivalents and $36.5 million in outstanding debt at December 31, 2015. The $36.9 million in outstanding debt as of June 30, 2016 includes $20.4 million related to the Company's Bank of Montreal credit agreement, $0.3 million related to a capital lease for our property in Edmonton, $15.6 million related to a long-term land lease and capital leases of Century Downs Racetrack and Casino ("CDR") and $0.9 million related to Casinos Poland, Ltd., net of $0.2 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 June 30, 2016 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 2016 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, 2016 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, Inc. shareholders' equity divided by outstanding common shares.

**** Net operating revenue, earnings from operations and net earnings attributable to Century Casinos, Inc. shareholders without the one-time impact of the $3.4 million in revenue from the termination agreement with Norwegian in the second quarter of 2015 are presented in Supplemental Information below.