Century Casinos, Inc. Announces Second Quarter 2020 Results

COLORADO SPRINGS, Colo., Aug. 7, 2020 /CNW/ -- Century Casinos, Inc. (Nasdaq Capital Market®: CNTY) today announced its financial results for the three and six months ended June 30, 2020.

Second Quarter 2020 Highlights*

• Net operating revenue was $36.1 million, compared to $52.4 million for the three months ended June 30, 2019, a decrease of (31%).
• Losses from operations were ($2.1) million, compared to earnings of $2.6 million for the three months ended June 30, 2019, a decrease of (181%).
• Net loss attributable to Century Casinos, Inc. shareholders was ($12.6) million, compared to ($0.6) million for the three months ended June 30, 2019, a decrease of (2131%).
• Adjusted EBITDA** was ($1.8) million, compared to $6.7 million for the three months ended June 30, 2019, a decrease of (126%).
• Loss per share was ($0.43).  
• Book value per share*** at June 30, 2020 was $3.31.

The coronavirus (COVID-19) pandemic discussed below significantly impacted the Company's second quarter 2020 results of operations, which included an additional $1.2 million impairment of goodwill and casino licenses as discussed below. The Company's second quarter 2020 net operating revenue and Adjusted EBITDA also were significantly impacted by the acquisition of Mountaineer Casino, Racetrack & Resort, Century Casino Cape Girardeau and Century Casino Caruthersville (the "Acquired Casinos") in December 2019.

COVID-19 Update

In late 2019, an outbreak of COVID-19 was identified in China and has since spread throughout much of the world. Between March 13, 2020 and March 17, 2020, the Company closed all of its casinos, hotels and other facilities to comply with quarantines issued by governments to contain the spread of COVID-19. The Company's Polish locations reopened on May 18, 2020 and its North American operations reopened between June 1, 2020 and June 17, 2020.

The COVID-19 pandemic has had an adverse effect on the Company's first and second quarter 2020 results of operations and financial condition, and the Company expects this situation will continue to have an adverse impact on its results for the remainder of 2020. The duration and ultimate impact of the COVID-19 pandemic otherwise remains uncertain. The trends below are not the only items that could impact the Company's future performance, and the views of management are based on currently available information.

During the temporary closures of its casinos, hotels and other facilities, the Company took actions to reduce operating costs, including furloughing most of its personnel, implementing reduced work weeks for other personnel and temporarily reducing salaries to senior management on a voluntary basis. During the closures, the Company continued to pay benefits to its United States and Canadian employees, including part time employees. In Poland, all employees were paid reduced salaries based on local employment laws. The Company continues to operate with reduced spending on most advertising and marketing costs as well as implementing cost saving initiatives intended to eliminate approximately $13.7 million of non-labor operating costs in 2020. The Company intends to defer or eliminate approximately $2.2 million of discretionary capital projects for the remainder of 2020 in order to proactively address its capital spending for 2020. Additionally, the Company negotiated arrangements with some of its contractual counterparties, such as vendors and lessors, to modify the timing of certain contractual payments.

During the first and second quarters of 2020, the Company concluded that the COVID-19 pandemic and associated closure of its casinos were triggering events that could indicate possible impairment of its goodwill and indefinite-lived intangible assets. The Company performed a quantitative and qualitative impairment analysis and determined that goodwill and casino licenses related to certain reporting units were impaired. As a result, the Company recorded $1.2 million and $35.1 million to impairment – goodwill and intangible assets on its condensed consolidated statement of (loss) earnings for the three and six months ended June 30, 2020, respectively.  

As of June 30, 2020, the Company had $51.6 million in cash on hand, compared to $63.7 million at March 31, 2020 and $54.8 million at December 31, 2019.

Second Quarter 2020 Results

The consolidated results for the three and six months ended June 30, 2020 and 2019 are as follows:

The consolidated results for the month of June 2020 and 2019 are as follows:

Preliminary estimated July 2020 net operating revenue is $30.3 million and Adjusted EBITDA is $7.4 million compared to July 2019 net operating revenue of $18.1 million and Adjusted EBITDA of $2.8 million.

"We are excited by the enthusiasm our customers have shown in visiting our reopened casinos. We are pleased that our operations have been able to achieve cash positive positions so soon after reopening," Erwin Haitzmann and Peter Hoetzinger, Co-Chief Executive Officers of Century Casinos remarked. "We continue to take social distancing and our customers' health very seriously, and we continue to explore new ways to further improve customer safety. We would like to thank our customers, employees, communities and authorities for their cooperation and support both during and after our temporary closures," Haitzmann and Hoetzinger concluded.

Reportable Segment Results*
The table below shows the Company's reporting units and operating segments that are included in each of the Company's reportable segments as of June 30, 2020:

The Company's net operating revenue decreased by ($16.3) million, or (31%), and increased by $25.7 million, or 26%, for the three and six months ended June 30, 2020, compared to the three and six months ended June 30, 2019. Following is a summary of the changes in net operating revenue by reportable segment for the three and six months ended June 30, 2020, compared to the three and six months ended June 30, 2019:

The Company's earnings from operations decreased by ($4.7) million, or (181%), and by ($39.9) million, or (661%), for the three and six months ended June 30, 2020, compared to the three and six months ended June 30, 2019.  Following is a summary of the changes in earnings (loss) from operations by reportable segment for the three and six months ended June 30, 2020, compared to the three and six months ended June 30, 2019:

Net earnings attributable to Century Casinos, Inc. shareholders decreased by ($12.0) million, or (2131%), and by ($59.0) million, or (11723%), for the three and six months ended June 30, 2020, compared to the three and six months ended June 30, 2019. Following is a summary of the changes in net earnings (loss) attributable to Century Casinos, Inc. shareholders by reportable segment for the three and six months ended June 30, 2020, compared to the three and six months ended June 30, 2019:

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.

The Company's Adjusted EBITDA** decreased by ($8.5) million, or (126%), and by ($5.6) million, or (42%), for the three and six months ended June 30, 2020 compared to the three and six months ended June 30, 2019. Following is a summary of the changes in Adjusted EBITDA** by reportable segment for the three and six months ended June 30, 2020 compared to the three and six months ended June 30, 2019: