PR Newswire
COLORADO SPRINGS, Colo., Aug. 8, 2023
COLORADO SPRINGS, Colo., Aug. 8, 2023 /PRNewswire/ -- Century Casinos, Inc. (Nasdaq Capital Market®: CNTY) today announced its financial results for the three and six months ended June 30, 2023.
Second Quarter 2023 Highlights*
Compared to the three months ended June 30, 2022:
- Net operating revenue was $136.8 million, an increase of 23%.
- Earnings from operations were $18.6 million, a decrease of 10%.
- Net loss attributable to Century Casinos, Inc. shareholders was ($2.0) million, a decrease of (122%).
- Adjusted EBITDA** was $29.3 million, a decrease of (2%).
- Loss per share was ($0.06).
- Book value per share*** at June 30, 2023 was $4.77.
ROCKY GAP CASINO RESORT ACQUISITION
On July 25, 2023, the Company completed its previously announced acquisition of the operations of Rocky Gap Casino Resort in Flintstone, Maryland, ("Rocky Gap") for $61.2 million (subject to certain adjustments) (the "Rocky Gap Acquisition"). Simultaneous with the closing of the transaction, an affiliate of VICI Properties, Inc. ("VICI") acquired a related interest in the land and building associated with Rocky Gap for approximately $203.9 million and the Company amended its triple net master lease agreement ("Master Lease") with subsidiaries of VICI to add the Rocky Gap property. The amendment to the Master Lease includes an increase in initial annualized rent of approximately $15.5 million. The Company funded the Rocky Gap Acquisition with $30.0 million borrowed from its revolving facility under its existing credit agreement with Goldman Sachs Bank USA (the "Goldman Credit Agreement") and cash on hand.
CANADA REAL ESTATE SALE
On May 16, 2023, the Company entered into definitive agreements for subsidiaries of VICI PropCo Buyer to acquire the real estate assets of Century Casino & Hotel Edmonton in Edmonton, Alberta, Century Casino St. Albert in Edmonton, Alberta, Century Mile Racetrack and Casino in Edmonton, Alberta and Century Downs Racetrack and Casino ("CDR") in Calgary, Alberta (collectively, the "Century Canadian Portfolio") for an aggregate purchase price of CAD 221.7 million ($167.3 million based on the exchange rate on June 30, 2023) in cash (the "Canada Real Estate Sale"). The purchase price includes CAD 192.3 million ($142.6 million based on the exchange rate on May 16, 2023) to be paid to subsidiaries of the Company and approximately CAD 29.4 million ($21.8 million based on the exchange rate on May 16, 2023) to acquire the fee simple real estate interest in Century Downs from the owner of such interest. The Company anticipates retaining approximately CAD 154.5 million ($114.6 million based on the exchange rate in effect on May 16, 2023) of the purchase price after giving effect to the purchase of the Century Downs land, selling expenses, Canadian and US taxes and proceeds to be paid to the minority owners of Century Downs. Simultaneous with the closing of the transaction, the Century Canadian Portfolio will be added to the Master Lease and initial annualized rent will increase by approximately CAD 17.3 million ($13.1 million based on the exchange rate on June 30, 2023). The transaction is subject to customary regulatory approvals and closing conditions and is expected to close in the third quarter of 2023.
NUGGET CASINO RESORT ACQUISITION
On April 3, 2023, the Company completed its previously announced acquisition of 100% of the membership interests in Nugget Sparks, LLC ("Nugget") for $104.7 million (subject to certain adjustments) (the "OpCo Acquisition"). On April 1, 2022, the Company purchased 50% of the membership interests in Smooth Bourbon, LLC ("Smooth Bourbon") for approximately $95.0 million (the "Smooth Bourbon Acquisition" and together with the OpCo Acquisition, the "Nugget Acquisition"). Nugget owns and operates the Nugget Casino Resort in Sparks, Nevada, and Smooth Bourbon owns the real property on which the casino is located and leases the real property to Nugget for an annual rent of $15.0 million. The Company funded the acquisition with $100.0 million from an escrow account that was established under its Goldman Credit Agreement and cash on hand.
RESULTS
The consolidated results for the three and six months ended June 30, 2023 and 2022 are as follows:
For the three months | For the six months | |||||||||||||||
Amounts in thousands, except per share data | ended June 30, | % | ended June 30, | % | ||||||||||||
Consolidated Results: | 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||
Net Operating Revenue | $ | 136,761 | $ | 111,122 | 23 % | $ | 245,268 | $ | 214,224 | 15 % | ||||||
Earnings from Operations | 18,629 | 20,802 | (10 %) | 37,028 | 33,846 | 9 % | ||||||||||
Net (Loss) Earnings Attributable to Century Casinos, Inc. Shareholders | $ | (1,959) | $ | 8,856 | (122 %) | $ | (3,202) | $ | 9,074 | (135 %) | ||||||
Adjusted EBITDA** | $ | 29,288 | $ | 29,778 | (2 %) | $ | 55,340 | $ | 53,601 | 3 % | ||||||
(Loss) Earnings Per Share Attributable to Century Casinos, Inc. Shareholders: | ||||||||||||||||
Basic | $ | (0.06) | $ | 0.30 | (120 %) | $ | (0.11) | $ | 0.30 | (137 %) | ||||||
Diluted | $ | (0.06) | $ | 0.28 | (121 %) | $ | (0.11) | $ | 0.29 | (138 %) | ||||||
"We are pleased with the results of this quarter, generating record revenue due to the addition of the Nugget Casino Resort, partially offset by construction disruption at our Missouri properties. We believe the outlook for the Nugget is positive with record group bookings at the hotel for the second half of this year and continuing into 2024," Erwin Haitzmann and Peter Hoetzinger, Co-Chief Executive Officers of Century Casinos remarked. "We are in a transitional stage taking over two properties in gaming jurisdictions new to us, and we incurred additional expenses related to the acquisitions while facing inflationary cost pressures from payroll wages and benefits, insurance and utilities. We look forward to continuing growth from the Nugget and contribution to our results from Rocky Gap, our newest acquisition in Maryland," Messrs. 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, 2023:
Reportable Segment | Operating Segment | Reporting Unit |
United States | East | Mountaineer Casino, Resort & Races |
Midwest | Century Casino & Hotel - Central City | |
Century Casino & Hotel - Cripple Creek | ||
Century Casino Cape Girardeau | ||
Century Casino Caruthersville and The Farmstead | ||
West | Nugget Casino Resort and Smooth Bourbon, LLC | |
Canada | Canada (1) | Century Casino & Hotel - Edmonton |
Century Casino St. Albert | ||
Century Mile Racetrack and Casino | ||
Century Downs Racetrack and Casino ("CDR") | ||
Poland | Poland | Casinos Poland |
Corporate and Other | Corporate and Other | Cruise Ships & Other (2) |
Corporate Other (3) |
(1) | The Company operated the Century Sports facility through February 10, 2022. |
(2) | The Company operated on ship-based casinos through April 16, 2023. |
(3) | The Company's equity interest in Smooth Bourbon was included in the Corporate Other reporting unit until April 3, 2023, when the Nugget acquisition closed and the Company began consolidating Smooth Bourbon. |
The Company's net operating revenue increased by $25.6 million, or 23%, and by $31.0 million, or 15%, for the three and six months ended June 30, 2023, compared to the three and six months ended June 30, 2022. Following is a summary of the changes in net operating revenue by reportable segment for the three and six months ended June 30, 2023, compared to the three and six months ended June 30, 2022:
Net Operating Revenue | ||||||||||||||||||||||
For the three months | For the six months | |||||||||||||||||||||
Amounts in | ended June 30, | $ | % | ended June 30, | $ | % | ||||||||||||||||
thousands | 2023 | 2022 | Change | Change | 2023 | 2022 | Change | Change | ||||||||||||||
United States | $ | 94,408 | $ | 70,313 | $ | 24,095 | 34 % | $ | 160,772 | $ | 135,556 | $ | 25,216 | 19 % | ||||||||
Canada | 18,834 | 19,037 | (203) | (1 %) | 35,342 | 35,039 | 303 | 1 % | ||||||||||||||
Poland | 23,515 | 21,707 | 1,808 | 8 % | 49,093 | 43,531 | 5,562 | 13 % | ||||||||||||||
Corporate and Other | 4 | 65 | (61) | (94 %) | 61 | 98 | (37) | (38 %) | ||||||||||||||
Consolidated | $ | 136,761 | $ | 111,122 | $ | 25,639 | 23 % | $ | 245,268 | $ | 214,224 | $ | 31,044 | 15 % | ||||||||
The Company's earnings from operations decreased by ($2.2) million, or (10%), and increased by $3.2 million, or 9%, for the three and six months ended June 30, 2023, compared to the three and six months ended June 30, 2022. Following is a summary of the changes in earnings (loss) from operations by reportable segment for the three and six months ended June 30, 2023, compared to the three and six months ended June 30, 2022:
Earnings (Loss) from Operations | ||||||||||||||||||||||
For the three months | For the six months | |||||||||||||||||||||
Amounts in | ended June 30, | $ | % | ended June 30, | $ | % | ||||||||||||||||
thousands | 2023 | 2022 | Change | Change | 2023 | 2022 | Change | Change | ||||||||||||||
United States | $ | 17,531 | $ | 17,624 | $ | (93) | (1 %) | $ | 31,801 | $ | 33,147 | $ | (1,346) | (4 %) | ||||||||
Canada | 4,645 | 4,334 | 311 | 7 % | 8,652 | 4,933 | 3,719 | 75 % | ||||||||||||||
Poland | 1,224 | 2,047 | (823) | (40 %) | 3,867 | 4,008 | (141) | (4 %) | ||||||||||||||
Corporate and Other | (4,771) | (3,203) | (1,568) | (49 %) | (7,292) | (8,242) | 950 | 12 % | ||||||||||||||
Consolidated | $ | 18,629 | $ | 20,802 | $ | (2,173) | (10 %) | $ | 37,028 | $ | 33,846 | $ | 3,182 | 9 % | ||||||||
Net earnings attributable to Century Casinos, Inc. shareholders decreased by ($10.8) million, or (122%), and by ($12.3) million, or (135%), for the three and six months ended June 30, 2023, compared to the three and six months ended June 30, 2022. Following is a summary of the changes in net (loss) earnings attributable to Century Casinos, Inc. shareholders by reportable segment for the three and six months ended June 30, 2023, compared to the three and six months ended June 30, 2022:
Net (Loss) Earnings Attributable to Century Casinos, Inc. Shareholders | ||||||||||||||||||||||
For the three months | For the six months | |||||||||||||||||||||
Amounts in | ended June 30, | $ | % | ended June 30, | $ | % | ||||||||||||||||
thousands | 2023 | 2022 | Change | Change | 2023 | 2022 | Change | Change | ||||||||||||||
United States | $ | 7,252 | $ | 10,521 | $ | (3,269) | (31 %) | $ | 12,627 | $ | 19,038 | $ | (6,411) | (34 %) | ||||||||
Canada | 2,729 | 2,875 | (146) | (5 %) | 4,602 | 2,170 | 2,432 | 112 % | ||||||||||||||
Poland | 704 | 1,322 | (618) | (47 %) | 2,277 | 2,255 | 22 | 1 % | ||||||||||||||
Corporate and Other | (12,644) | (5,862) | ||||||||||||||||||||
