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Century Casinos, Inc. Announces Second Quarter 2013 Results
The period over period increases relate primarily to the inclusion of operating results from Casinos Poland, Ltd. (CPL) in the second quarter of 2013. In April 2013 , the Company completed the purchase of an additional 33.3% ownership interest in CPL. The Company now owns a 66.6% ownership interest in CPL and consolidates CPL financial information as a majority-owned subsidiary for which the Company has a controlling financial interest. Prior to the acquisition of this additional interest in CPL, the Company owned 33.3% of CPL and accounted for the CPL ownership interest as an equity investment.
"We posted excellent results in the second quarter. The Casinos Poland acquisition is complete and has been immediately accretive to net operating revenue," said Erwin Haitzmann and Peter Hoetzinger, Co Chief Executive Officers of Century Casinos. "Even when excluding the one-time gain associated with the Casinos Poland acquisition, net earnings increased by 38% and earnings per share increased from 5 cents to 7 cents for the quarter. With a solid balance sheet, a book value per share of $4.98 and borrowing capacity under the credit agreement with the Bank of Montreal we are well positioned for further growth," they continued.
Net operating revenue increased by $10.5 million , or 59%, and increased by $10.9 million , or 31.0%, for the three and six months ended June 30, 2013 compared to the three and six months ended June 30, 2012 . Following is a summary of the change in net operating revenue by property or category for the three and six months ended June 30, 2013 compared to the three and six months ended June 30, 2012 :
Earnings from operations increased by $0.4 million , or 23%, and increased by $0.9 million , or 26.4%, for the three and six months ended June 30, 2013 compared to the three and six months ended June 30, 2012 . Following is a summary of the change in earnings from operations by property or category for the three and six months ended June 30, 2013 compared to the three and six months ended June 30, 2012 :
Net earnings increased by $2.5 million , or 219%, and increased by $3.0 million , or 133.2%, for the three and six months ended June 30, 2013 compared to the three and six months ended June 30, 2012 . Following is a summary of the change in net earnings by property or category for the three and six months ended June 30, 2013 compared to the three and six months ended June 30, 2012 :
Items deducted from or added to earnings from operations to arrive at net earnings include gain on business combination related to the acquisition of the additional ownership interest in CPL, interest income, interest expense, gains on foreign currency transactions, income tax expense and non-controlling interest.
For the three months ended June 30, 2013 , the Company recognized a gain of $2.1 million as a result of measuring at fair value its initial 33.3% ownership interest in CPL held prior to the acquisition date. As a result, the Corporate Other category reported net earnings of $1.7 million for the period.
The following are property and category results for net operating revenue and Adjusted EBITDA.
As of June 30, 2013 , the Company had $28.2 million in cash and cash equivalents and $16.4 million in debt obligations on its balance sheet compared to $24.7 million in cash and cash equivalents and $3.6 million in debt obligations at December 31, 2012 . On February 21, 2013 , the Company borrowed an additional $7.3 million from its Bank of Montreal credit agreement to pay for the additional 33.3% investment in CPL, which closed on April 8, 2013 . The credit agreement has a term of five years and is guaranteed by the Company. Once repaid, these amounts cannot be reborrowed. As of June 30, 2013 , the Company had approximately $14.9 million available for borrowing under the credit agreement. In addition, because of the CPL acquisition, the Company added $6.4 million in debt obligations as of June 30, 2013 .
Today the Company will post a copy of the Form 10-Q filed with the SEC for the quarter ended June 30, 2013 on its website at http://corporate.cnty.com/investor-relations/sec-filings.
Century Casinos will host its second quarter 2013 earnings conference call today at 10:00 am MDT ; 6:00 pm CET , respectively. U.S. domestic participants should dial 1-800-210-9006. For all other international participants, please use +1 719 457 0349 to dial-in. Participants may also listen to the call live or obtain a recording of the call on the Company's website until August 30, 2013 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 is a Non-GAAP financial measure. See discussion and reconciliation of Non-GAAP financial measures in Supplemental Information below.
* The Company defines as net earnings (loss) before interest, income taxes (benefit), depreciation, amortization, pre-opening expenses, non-cash stock based compensation charges, asset impairment costs, (gains) losses on disposition of fixed assets, discontinued operations, realized foreign currency (gains) losses, 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 and Adjusted EBITDA reported for each 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 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 its properties and the Company. 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. EBITDA (Earnings before interest, taxes, depreciation and amortization) 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 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.
Century Casinos, Inc. is an international casino entertainment company that 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 . The Company also operates casinos aboard twelve luxury cruise vessels (Regatta, Nautica, Marina, Riviera, Mein Schiff 1, Mein Schiff 2, Wind Surf, Wind Star, Wind Spirit, Seven Seas Voyager, Seven Seas Mariner and Seven Seas Navigator). Through its Austrian subsidiary, Century Casinos Europe GmbH, the Company holds a 66.6% ownership interest in Casinos Poland Ltd., the owner and operator of nine casinos in Poland . The Company also manages the operations of the casino at the Radisson Aruba Resort, Casino & Spa in Aruba , Caribbean . Century Casinos, Inc. continues to pursue other international projects in various stages of development.
For more information about Century Casinos, visit our website at www.centurycasinos.com. Century Casinos' common stock trades on The NASDAQ Capital Market® and the Vienna Stock Exchange under the symbol CNTY.