Turismo
Century Casinos, Inc. Announces Fourth Quarter and Full Year 2020 Results
The Company's 2020 results 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 .
Temporary closures of the Company's facilities throughout 2020 due to the worldwide coronavirus ("COVID-19") pandemic negatively impacted results for the three months and year ended December 31, 2020 . The Company estimates that the closures during the first and second quarters of 2020 adversely impacted net operating revenue and Adjusted EBITDA by approximately $91.3 million and $34.3 million , respectively, and that the closures in Canada and Poland in December 2020 adversely impacted fourth quarter net operating revenue and Adjusted EBITDA by approximately $9.2 million and $1.7 million , respectively.
On December 1, 2020 , the Company sold the casino operations of Century Casino Calgary ("CAL"). The Company recorded a gain on sale of casino operations of $6.5 million in the fourth quarter of 2020. The Company continues to own the underlying real estate, which it leases to the casino operator, and operates Century Sports, a sports bar, bowling and entertainment facility located on the property. The Company intends to sell the real estate in 2021.
The COVID-19 pandemic had an adverse effect on the Company's 2020 results of operations and financial condition, and the Company expects this situation will continue to have an adverse impact on its results in 2021. The duration and impact of the COVID-19 pandemic otherwise remains uncertain. The table below provides a summary of the time periods in which the Company closed its casinos, hotels and other facilities to comply with quarantines issued by governments to contain the spread of COVID-19.
The Company's casinos have varied their operations based on the governmental health and safety requirements in the jurisdictions in which they are located. These include capacity and gaming floor restrictions and limited hours of operation. Such closures have had and will continue to have a material impact on the Company. The Company cannot predict whether future casino closures will be required.
The Company continues to monitor its liquidity in light of the uncertainty resulting from COVID-19. The Company plans to continue to reduce marketing and operating expenditures where possible. The Company's 2021 planned capital expenditure projects will be evaluated throughout the year and postponed to 2022 if necessary and permitted under its agreements. In March 2020 , as a proactive measure to increase its cash position and preserve financial flexibility, the Company borrowed an additional $9.95 million on its revolving credit facility (the "Revolving Facility") under its credit facility ("Macquarie Credit Agreement") with Macquarie Capital ("Macquarie") and $7.4 million on its credit agreement with UniCredit Bank Austria AG ("UniCredit"). The Revolving Facility was repaid in July 2020 except for a $50,000 letter of credit that the Company cash collateralized.
The consolidated results for the three months and year ended December 31, 2020 and 2019 are as follows:
"We are pleased with the strong Adjusted EBITDA for the fourth quarter even though our casinos in Canada and Poland were closed in December over the busy holiday season. These results were driven primarily by our properties in the US, which generated 82% of our Adjusted EBITDA in the fourth quarter," Erwin Haitzmann and Peter Hoetzinger, Co-Chief Executive Officers of Century Casinos remarked. "We have been able to achieve operating margins that we believe will continue to be attainable. We look forward to our casinos and racetracks reopening in Canada and to a busy summer season in North America if the pandemic subsides," Messrs. Haitzmann and Hoetzinger concluded.
The table below shows the Company's operating segments that are included in each of the Company's reportable segments as of December 31, 2020 :
The Company's net operating revenue increased by $17.6 million , or 26%, and by $86.0 million , or 39%, for the three months and year ended December 31, 2020 , compared to the three months and year ended December 31, 2019 . Following is a summary of the changes in net operating revenue by reportable segment for the three months and year ended December 31, 2020 , compared to the three months and year ended December 31, 2019 :
The Company's earnings (loss) from operations increased by $33.5 million , or 227%, and by $5.1 million , or 98%, for the three months and year ended December 31, 2020 , compared to the three months and year ended December 31, 2019 . Following is a summary of the changes in earnings (loss) from operations by reportable segment for the three months and year ended December 31, 2020 , compared to the three months and year ended December 31, 2019 :
Net earnings (loss) attributable to Century Casinos, Inc. shareholders increased by $26.9 million , or 133%, and decreased by ($28.8) million , or (151%), for the three months and year ended December 31, 2020 , compared to the three months and year ended December 31, 2019 . Following is a summary of the changes in net earnings (loss) attributable to Century Casinos, Inc. shareholders by reportable segment for the three months and year ended December 31, 2020 , compared to the three months and year ended December 31, 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** increased by $8.5 million , or 87%, and by $18.1 million , or 60%, for the three months and year ended December 31, 2020 compared to the three months and year ended December 31, 2019 . Following is a summary of the changes in Adjusted EBITDA** by reportable segment for the three months and year ended December 31, 2020 compared to the three months and year ended December 31, 2019 :
As of December 31, 2020 , the Company had $63 .4 million in cash and cash equivalents and $184.6 million in outstanding debt on its balance sheet compared to $54.8 million in cash and cash equivalents and $179.0 million in outstanding debt at December 31, 2019 . The outstanding debt as of December 31, 2020 included the following: $168.3 million related to the Macquarie Credit Agreement; $1.3 million of bank debt related to Casinos Poland; $8.9 million of bank debt related to Century Resorts Management GmbH ("CRM"); and $15.3 million related to a long-term land lease for Century Downs Racetrack and Casino ("CDR"), net of $9.3 million in deferred financing costs.
Today the Company will post a copy of its Annual Report on Form 10-K filed with the SEC for the year ended
December 31, 2020 on its website at www.cnty.com/investor/financials/sec-filings. The Company will also post a presentation on the year end results on its website at www.cnty.com/investor/presentations.
The Company will host its fourth quarter 2020 earnings conference call today, Friday, March 12, 2021 , at 8:00 am MST . 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 www.centurycasinos.adobeconnect.com/earningsrelease or obtain a recording of the call on the Company's website until March 31, 2021 at www.cnty.com/investor/financials/sec-filings.
* The Company defines as net (loss) earnings attributable to Century Casinos, Inc. shareholders before interest expense (income), net, income taxes (benefit), depreciation and amortization, non-controlling interests net earnings (loss) and transactions, pre-opening expenses, acquisition costs, non-cash stock-based compensation charges, asset impairment costs, loss (gain) on disposition of fixed assets, discontinued operations, (gain) loss on foreign currency transactions, cost recovery income and other, gain on business combination and certain other one-time transactions. Expense related to the Master Lease and CDR land lease is included in the interest expense (income), net line item. 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) attributable to Century Casinos, Inc. shareholders 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 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) attributable to Century Casinos, Inc. shareholders above.
** The Company defines as Adjusted EBITDA divided by net operating revenue. Adjusted EBITDA margin is a non-GAAP measure. Management uses this margin as one of several measures to evaluate the efficiency of the Company's casino operations.
Century Casinos, Inc. is a casino entertainment company. The Company owns and operates Century Casino & Hotels in Cripple Creek and Central City, Colorado , and in Edmonton, Alberta, Canada ; the Century Casino in Cape Girardeau and Caruthersville, Missouri , and in St. Albert, Alberta, Canada ; Mountaineer Casino, Racetrack & Resort in New Cumberland, West Virginia ; the Century Mile Racetrack and Casino ("CMR") in Edmonton, Alberta, Canada ; and Century Bets! Inc. ("CBS"). CBS and CMR operate the pari-mutuel off-track horse betting networks in southern and northern Alberta , respectively. The Company also operates Century Sports in Calgary, Alberta, Canada . Through its Austrian subsidiary, CRM, the Company holds a 66.6% ownership interest in Casinos Poland Ltd., the owner and operator of eight casinos throughout Poland ; and a 75% ownership interest in CDR in Calgary, Alberta, Canada . The Company operates four ship-based casinos. The Company, through CRM, also owns a 7.5% interest in, and provides consulting services to, MCE, a company that provides gaming-related services to Casino de Mendoza in Mendoza, Argentina . The Company continues to pursue other projects in various stages of development.
Century Casinos' common stock trades on The Nasdaq Capital Market® under the symbol CNTY.
For more information about Century Casinos, visit our website at www.cnty.com.
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