-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Knwq8iDWAXwjoTnxhC0omtwlO3iHt/viCOtb7+Uj8DCGt671OaXv/6TbPHgoa9Dn 3MdWwFG70HoKYoP6NQrRMg== 0000911147-01-500003.txt : 20010516 0000911147-01-500003.hdr.sgml : 20010516 ACCESSION NUMBER: 0000911147-01-500003 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY CASINOS INC /CO/ CENTRAL INDEX KEY: 0000911147 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 841271317 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-22900 FILM NUMBER: 1637461 BUSINESS ADDRESS: STREET 1: 200-220 EAST BENNETT AVE STREET 2: SUITE 755 CITY: CRIPPLE CREEK STATE: CO ZIP: 80813 BUSINESS PHONE: 7196890333 MAIL ADDRESS: STREET 1: 200-220 EAST BENNETT AVENUE STREET 2: SUITE 755 CITY: CRIPPLE CREEK STATE: CO ZIP: 80813 FORMER COMPANY: FORMER CONFORMED NAME: CENTURY CASINOS INC DATE OF NAME CHANGE: 19940802 FORMER COMPANY: FORMER CONFORMED NAME: ALPINE GAMING INC DATE OF NAME CHANGE: 19930824 10QSB 1 doc1.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB ___X___ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001. _______ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO ___________ . Commission file number 0-22290 -------- CENTURY CASINOS, INC. --------------------- (Exact name of registrant as specified in its charter) DELAWARE 84-1271317 -------- ---------- (State of incorporation) (IRS Employer ID No.) 200-220 E. Bennett Ave., Cripple Creek, Colorado 80813 ------------------------------------------------------ (Address of principal executive offices) (719) 689-9100 --------------- (Phone Number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Number of shares of common stock, $.01 par value, outstanding as of May 10,2001: 13,817,384 1
CENTURY CASINOS, INC. FORM 10-QSB INDEX Page Number PART I FINANCIAL INFORMATION Item 1. Condensed Financial Statements (unaudited) Condensed Consolidated Balance Sheet as of March 31, 2001 3 Condensed Consolidated Statements of Earnings 4 for the Three Months Ended March 31, 2001 and 2000 Condensed Consolidated Statements of Comprehensive Earnings 5 for the Three Months Ended March 31, 2001 and 2000 Condensed Consolidated Statements of Cash Flows 6 for the Three Months Ended March 31, 2001 and 2000 Notes to Condensed Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis 13 PART II. OTHER INFORMATION 17 SIGNATURES 17
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CENTURY CASINOS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Dollar amounts in thousands) - ---------------------------------------------------- March 31, 2001 ---------------- ASSETS Current Assets: Cash and cash equivalents $ 2,478 Accounts receivable 848 Prepaid expenses and other 562 ---------------- Total current assets 3,888 Property and Equipment, net 32,753 Goodwill, net 9,057 Other Assets 3,112 ---------------- Total $ 48,810 ================ LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $ 2,279 Accounts payable and accrued expenses 3,532 ---------------- Total current liabilities 5,811 Long-Term Debt, less current portion 18,666 Other Non-current Liabilities 549 Minority Interest 933 Shareholders' Equity: Preferred stock; $.01 par value; 20,000,000 shares authorized; no shares issued or outstanding Common stock; $.01 par value; 50,000,000 shares authorized; 14,485,776 shares issued; 13,853,684 shares outstanding. 145 Additional paid-in capital 21,915 Accumulated other comprehensive loss (902) Retained earnings 2,845 ---------------- 24,003 Treasury stock - 632,092 shares, at cost (1,152) ---------------- Total shareholders' equity 22,851 ---------------- Total $ 48,810 ================
See notes to condensed consolidated financial statements. 3
CENTURY CASINOS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (Dollar amounts in thousands, except for share information) - ----------------------------------------------------------- For the Three Months Ended March 31, ------------------------------------ 2001 2000 ---- ---- Operating Revenue: Casino $ 7,458 $ 5,658 Food and beverage 389 228 Hotel 156 20 Other 145 94 --------- --------- 8,148 6,000 Less promotional allowances 222 166 --------- --------- Net operating revenue 7,926 5,834 --------- --------- Operating Costs and Expenses: Casino 2,970 2,222 Food and beverage 276 99 Hotel 160 14 General and administrative 2,094 2,032 Depreciation and amortization 1,237 864 --------- --------- Total operating costs and expenses 6,737 5,231 --------- --------- Earnings from Operations 1,189 603 Other income (expense), net (512) 1,149 --------- --------- Earnings before Income Taxes and Minority Interest 677 1,752 Provision for income taxes 327 773 --------- --------- Earnings before Minority Interest 350 979 Minority interest in subsidiary losses 103 - --------- --------- Net Earnings $ 453 $ 979 ========= ========= Earnings Per Share: Basic and Diluted $ 0.03 $ 0.07 ========= ==========
See notes to consolidated financial statements. 4
CENTURY CASINOS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Unaudited) (Dollar amounts in thousands) - ----------------------------------------------------------------------------- For the Three Months Ended March 31, 2001 ----------------------------------------- 2000 2001 ---- ---- Net Earnings $ 453 $ 979 Foreign currency translation adjustments 102 (26) Cumulative effect of change in accounting principle related to interest rate swap, net of income tax benefit (175) - Change in fair value of interest rate swap (169) - ------- ------- Comprehensive Earnings $ 211 $ 953 ======= =======
See notes to condensed consolidated financial statements. 5
CENTURY CASINOS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollar amounts in thousands) - ----------------------------------------------------------------- For the Three Months Ended March 31, ------------------------------------ 2001 2000 ---- ---- Cash provided by operating activities $ 734 $ 1,274 ------- ------- Cash provided by (used in) investing activities (383) 788 ------- -------- Cash provided by (used in) financing activities (7,029) 2,967 ------- ------- Effect of exchange rate changes on cash 79 - ------- ------- Increase (decrease) in cash and cash equivalents (6,599) 5,029 Cash and cash equivalents at beginning of period 9,077 2,508 ------- ------- Cash and cash equivalents at end of period $ 2,478 $ 7,537 ======= ======= Supplemental Disclosure of Cash Flow Information: Interest paid $ 308 $ 198 Income taxes paid $ 50 -
See notes to condensed consolidated financial statements. 6 CENTURY CASINOS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED STATEMENTS (Unaudited) (Dollar amounts in thousands, except for share information) - ----------------------------------------------------------- 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Century Casinos, Inc. and subsidiaries (the "Company") is an international gaming company which owns and operates a limited-stakes gaming casino in Cripple Creek, Colorado, manages a casino within a hotel located in Prague, Czech Republic, owns 65% of, is developing, and manages the casino operations of a hotel, spa and casino resort in Caledon, South Africa, and serves as concessionaire of small casinos on luxury cruise vessels. The Company regularly pursues additional gaming opportunities internationally and in the United States. The Company's operations in Cripple Creek, Colorado began with the 1994 acquisition of Legends Casino ("Legends"), followed by the 1996 acquisition of Womack's Saloon & Gaming Parlor ("Womacks"), which is immediately adjacent to Legends. Following the acquisition of Womacks, interior renovations were undertaken on both properties to facilitate the operation and marketing of the combined properties as one casino under the name Womacks/Legends Casino. In July 1999, the Company began providing management services and leasing gaming equipment to the Casino Millennium, located in the five-star Marriott Hotel in Prague, Czech Republic. In January 2000, the Company entered into a memorandum of agreement to acquire a 50% ownership interest in Casino Millennium. The Company is in the process of negotiating a definitive purchase agreement. In April 2000, the Company's South African subsidiary acquired a 50% equity interest in Caledon Casino Bid Company (Pty) Limited ("CCBC"). CCBC owns a 92-room resort hotel and spa and approximately 600 acres of land in Caledon, South Africa and was awarded a casino license for the project. The Company has a long-term agreement to manage the operations of the casino, which began on October 11, 2000. In November 2000 the Company, through its South African subsidiary, increased its equity interest in CCBC by 15%, raising its total ownership to 65%. In May 2000, the Company entered into a five-year agreement to serve as concessionaire of small casinos providing unlimited-stakes gaming operations on four luxury cruise vessels. The Company will operate the casinos for its own account and pay concession fees based on passenger count and gross gaming revenue, as defined, in excess of an established per passenger per day amount. The agreement requires the Company to provide all necessary gaming equipment. On September 18, 2000 the Company announced the opening of the first of four casinos. In October 2000 the Company opened a second casino and, in November 2000, opened a third aboard a luxury cruise vessel. The maiden voyage of the fourth vessel is scheduled for July of 2001. The Company anticipates that it will have an approximate total of 160 gaming positions on the four combined shipboard casinos. In August 2000, the Company entered into a five-year agreement to serve as concessionaire of a small casino aboard a vessel designed to be an exclusive residential community at sea. The Company will operate the casino for its own account and pay concession fees based on gross gaming revenue, as defined, in excess of an established per passenger per day amount. The maiden voyage of the residential cruise liner is expected early in 2002. 7 CENTURY CASINOS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED STATEMENTS (Unaudited) (Dollar amounts in thousands, except for share information) - ----------------------------------------------------------- The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial reporting and the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted. In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for fair presentation of financial position, results of operations and cash flows have been included. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2000. 2. INCOME TAXES The income tax provisions are based on estimated full-year earnings for financial reporting purposes adjusted for permanent differences, which consist primarily of nondeductible goodwill amortization. 3. EARNINGS PER SHARE Basic and diluted earnings per share for the three months ended March 31, 2001 and 2000 were computed as follows:
For the Three Months Ended March 31, ------------------------------------ 2001 2000 ---- ---- Basic Earnings Per Share: Net earnings $ 453 $ 979 ============ ============ Weighted average common shares 13,935,890 14,479,906 ============ ============ Basic earnings per share $ 0.03 $ 0.07 ============ ============ Diluted Earnings Per Share: Net earnings, as reported $ 453 $ 979 Interest expense, net of income taxes, on 5 9 convertible debenture ------------ ------------ Net earnings available to common shareholders $ 458 $ 988 ============ ============ Weighted average common shares 13,935,890 14,479,906 Effect of dilutive securities: Convertible debenture 163,043 271,739 Stock options and warrants 1,042,784 356,749 ------------ ------------ Dilutive potential common shares 15,141,717 15,108,394 ============ ============ Diluted earnings per share $ 0.03 $ 0.07 ============ ============ Excluded from computation of diluted earnings per share Due to antidilutive effect: Options and warrants to purchase common shares 155,000 2,651,000 Weighted average exercise price $ 2.36 $ 1.70
8 CENTURY CASINOS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED STATEMENTS (Unaudited) (Dollar amounts in thousands, except for share information) - ----------------------------------------------------------- 4. CALEDON, SOUTH AFRICA On April 13, 2000, the Caledon Casino Bid Company (Pty) Limited ("CCBC")was awarded a gaming license for a casino at a 92-room resort hotel and spa in Caledon, province of the Western Cape, South Africa. On April 17, 2000, the Company's South African subsidiary, Century Casinos Africa (Pty) Ltd ("CCA"), acquired a 50% equity interest in CCBC. In March 2000, in anticipation of the award of the final license, the Company borrowed approximately $4,000 under its revolving credit facility and, in April 2000, the Company (through CCA) made its equity investment of approximately $1,534 in and a loan of approximately $2,302 to CCBC. In a concurrent transaction, CCBC, the Company and Caledon Overberg Investments (Proprietary) Limited ("COIL"), a minority shareholder in CCBC, entered into a note agreement as part of the purchase of CCBC. Under the terms of the agreement, CCBC, in exchange for the contribution of certain fixed assets, entered into a loan agreement with COIL in the amount of approximately $2,302. The loan bears interest at the rate of 2% over the prime/base rate established by PSG Investment Bank Limited ("PSGIB"), and is due on demand subsequent to the repayment in full of the loan, discussed below, between CCBC and PSGIB. In November 2000, the Company, through CCA, completed its acquisition of an additional 15% of CCBC - raising its ownership in CCBC to 65%. Terms of the agreement included the payment of approximately $1,800 U.S. Dollars by the Company to COIL in exchange for 15% of the total shares of common stock of CCBC (valued at approximately $1,200) and a shareholder loan to CCBC, previously held by COIL (with a value of approximately $600). The acquisition of CCBC by the Company and COIL has been recorded using the purchase method of accounting. In April 2000, CCBC entered into a loan agreement with PSGIB, which agreement provides for a principal loan of approximately $6,200 to fund development of the Caledon project and a working capital facility of approximately $2,100. CCBC is required to make principal payments beginning December 2001 and continuing over a five-year period. Outstanding borrowings bear interest at the bank's base rate plus 2.75-3.75%. The shareholders of CCBC have pledged all of the common shares held by them in CCBC to PSGIB as collateral. The loan is also collateralized by a first mortgage bond over land and buildings and a general notorial bond over all equipment. As of March 31, 2001, $5,500 has been advanced against the loan agreement. The loan agreement includes certain restrictive covenants, as defined in the agreement, the most significant of which include, i) CCBC must maintain a debt/equity ratio of 44:56 after the first twelve months of operations and a 40:60 debt/equity ratio after two years of operations, ii) CCBC must maintain an interest coverage ratio of at least 2.0 after the first twelve months of operations, iii) CCBC must maintain a debt service coverage ratio of at least 1.3 for the principal loan and 1.7 for the working capital facility after the first twelve months of operations, and iv) CCBC must maintain a loan life coverage ratio of 1.5 for the principal loan and a loan life coverage ratio of 2.5 for the working capital facility. In January 2001, CCBC cancelled the working capital facility to obtain more favorable terms. In April 2001, CCBC entered into an addendum to the loan agreement in which PSGIB provided CCBC with a standby facility in the amount of approximately $600. CCBC is required to make principal payments on the standby facility in semi-annual installments, beginning December 2001 and continuing over a five-year period. Outstanding borrowings under the standby facility bear interest at 3% over a base rate of 12.10%. As of March 31, 2001 CCBC had not drawn on the standby facility. 9 CENTURY CASINOS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED STATEMENTS (Unaudited) (Dollar amounts in thousands, except for share information) - ----------------------------------------------------------- In December 1999, the Company, through CCA, entered into a ten-year casino management agreement with CCBC, which agreement may be extended at CCA's option for multiple ten-year periods. The Company, through CCA, will earn management fees based on percentages of annual gaming revenue and earnings before interest, income taxes, depreciation, amortization and certain other costs. The casino opened on October 11, 2000 with 250 slot machines and 14 gaming tables. In addition to the casino license, hotel and spa, CCBC owns approximately 600 acres of land, which is expected to be used for future expansion of the project. 5. PRAGUE, CZECH REPUBLIC In January 2000, the Company entered into a memorandum of agreement with B.H. Centrum a.s., the Company's Czech Republic business partner in Casino Millennium, located in Prague, Czech Republic. The memorandum of agreement provides for the two parties to acquire the casino from third parties by either a joint acquisition of Casino Millennium a.s. or the formation of a new joint venture. The transaction, if completed, would result in the Company having a 50% equity interest in Casino Millennium. Any funding required by the Company to consummate this transaction would be met through a combination of existing RCF borrowings, liquidity and anticipated cash flow. The Company is in the process of negotiating a definitive purchase agreement. As of March 31, 2001, the Company's net fixed assets leased to the Casino Millennium approximated $965 and management fee income for the three months ended March 31, 2001 was approximately $58. 6. REVOLVING CREDIT FACILITY On April 26, 2000, the Company and Wells Fargo Bank (the "Bank") entered into an Amended and Restated Credit Agreement (the "Agreement") which increased the Company's aggregate borrowing commitment from the Bank to $26,000 and extended the maturity date to April 2004. The aggregate commitment available to the Company will be reduced quarterly by $722, beginning October 2000 through the maturity date. As of March 31, 2001, the aggregate commitment, net of the quarterly reduction, available to the Company was $24,556. Interest on the Agreement is variable based on the interest rate option selected by the Company, plus an applicable margin based on the Company's leverage ratio. The Agreement also requires a nonusage fee based on the Company's leverage ratio on the unused portion of the commitment. The principal balance outstanding under the loan agreement as of March 31, 2001 was $12,681. The loan agreement includes certain restrictive covenants, the most significant of which include i) WMCK Venture Corp., a wholly-owned subsidiary of the Company, must maintain a maximum leverage ratio no greater than 3.10 to 1.00, ii) WMCK Venture Corp. must maintain a minimum interest coverage ratio no less than 1.50 to 1.00, and iii) WMCK Venture Corp. must maintain a TFCC ratio ( a derivative of EBITDA, as defined in the agreement) of no less than 1.10 to 1.00. The consolidated weighted average interest rate on all borrowings was 8.56% for the first three months of 2001. 10 CENTURY CASINOS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED STATEMENTS (Unaudited) (Dollar amounts in thousands, except for share information) - ----------------------------------------------------------- 7. SHAREHOLDERS' EQUITY During the first quarter of 2001, the Company repurchased, on the open market, an additional 167,600 shares of its common stock at an average price per share of $1.99. The Company held 632,092 shares in treasury as of March 31, 2001. Subsequent to March 31, 2001, the Company purchased, on the open market, 36,300 additional shares of its common stock at an average per share price of $1.86. In connection with the granting of a gaming license to CCBC by the Western Cape Gambling and Racing Board in April 2000, CCBC issued a total of 200 preference shares, 100 shares each to two minority shareholders. The preference shares are not cumulative, nor are they redeemable. The preference shares entitle the holders of said shares to dividends of 20% of the after-tax profits directly attributable to the CCBC casino business subject to working capital and capital expenditure requirements and CCBC loan obligations and liabilities as determined by the directors of CCBC. Should the casino business be sold or otherwise dissolved, the preference shareholders are entitled to 20% of any surplus directly attributable to the CCBC casino business, net of all liabilities attributable to the CCBC casino business. As of March 31, 2001, no dividend has been declared for the preference shareholders. 8. CHANGE IN ACCOUNTING PRINCIPLES The Company adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", and SFAS No. 138, , "Accounting for Certain Derivative Instruments and Certain Hedging Activities", in the first quarter of fiscal 2001. SFAS No. 133 establishes accounting and reporting standards for derivative instruments and hedging activities. The pronouncement requires that a company designate the intent of a derivative to which it is a party, and prescribes measurement and recognition criteria based on the intent and effectiveness of the designation. SFAS No. 138 amends the accounting and reporting standards for certain derivative instruments and certain hedging activities, including amendments to normal purchases and normal sales, interest rate risk, hedging recognized foreign currency denominated assets and liabilities and intercompany derivative provisions of SFAS No. 133. The cumulative effect of adopting SFAS No. 133 related to the Company's interest rate swap agreements was to decrease shareholders' equity by $177, net of related federal and state income tax benefits of $104. The adoption of SFAS No. 138 had no effect on the Company's financial statements. 11 CENTURY CASINOS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED STATEMENTS (Unaudited) (Dollar amounts in thousands, except for share information) - ----------------------------------------------------------- 9. SEGMENT INFORMATION The Company has adopted FASB Statement No. 131 " Disclosures about Segments of an Enterprise and Related Information". The Company is managed in four segments; Cripple Creek, Colorado, South Africa, Cruise Ships, and Corporate operations. Corporate operations include the revenue and expense of certain corporate gaming projects for which the Company has secured long term management contracts. Earnings before interest, taxes, depreciation and amortization (EBITDA) is not considered a measure of performance recognized as an accounting principle generally accepted in the United States of America. Management believes that EBITDA is a valuable measure of the relative performance amongst its operating segments. Segment information as of and for the three months ended March 31, 2001 is presented below. Comparable information is not provided for 2000 because, during the first three months of 2000, the Company operated as one identifiable segment, Cripple Creek, Colorado.
Dollar amounts in thousands Cripple South Cruise Corporate Intersegment Consolidated Creek CO Africa Ships & Other Elimination Property and equipment, net of accumulated depreciation $ 19,003 $ 11,645 $ 202 $ 1,903 - $ 32,753 Total Assets $ 30,017 $ 19,380 $ 424 $ 2,234 ($3,245) $ 48,810 Net operating revenue $ 5,546 $ 2,140 $ 182 $ 58 - $ 7,926 Depreciation & amortization $ 823 $ 348 $ 11 $ 55 - $ 1,237 Interest income $ - $ 13 - $ 90 ($85) $ 18 Interest expense, including debt issuance cost $ 322 $ 224 - $ 13 ($85) $ 474 Earnings(loss) before income taxes and minority interest $ 1,128 $ (110) $ 36 $ (377) - $ 677 Income tax expense(benefit) $ 519 $ - - $ (192) - $ 327 Net earnings(loss) $ 609 $ (7) $ 36 $ (185) - $ 453 EBITDA $ 2,273 $ 552 $ 47 $ (399) - $ 2,473
12 CENTURY CASINOS, INC. AND SUBSIDIARIES Item 2. MANAGEMENT DISCUSSION AND ANALYSIS (Dollar amounts in thousands, except for share information, or as noted) - ------------------------------------------------------------------------ Forward-Looking Statements, Business Environment and Risk Factors Information contained in the following discussion of results of operations and financial condition of the Company contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by the use of words such as "may," "will," "expect," "anticipate," "estimate," or "continue," or variations thereon or comparable terminology. In addition, all statements other than statements of historical facts that address activities, events or developments that the Company expects, believes or anticipates, will or may occur in the future, and other such matters, are forward-looking statements. The following discussion should be read in conjunction with the Company's consolidated financial statements and related notes included elsewhere herein. The Company's future operating results may be affected by various trends and factors, which are beyond the Company's control. These include, among other factors, the competitive environment in which the Company operates, the Company's present dependence upon the Cripple Creek, Colorado gaming market, changes in the rates of gaming-specific taxes, shifting public attitudes toward the socioeconomic costs and benefits of gaming, actions of regulatory bodies, dependence upon key personnel, the speculative nature of gaming projects the Company may pursue, risks associated with expansion, and other uncertain business conditions that may affect the Company's business. The Company cautions the reader that a number of important factors discussed herein, and in other reports filed with the Securities and Exchange Commission, could affect the Company's actual results and cause actual results to differ materially from those discussed in forward-looking statements. Results of Operations Three Months Ended March 31, 2001 VS. 2000 - ------------------------------------------------- Net operating revenue for the first three months of 2001 was $7,926 compared with $5,834 for the same period in 2000, an increase of 35.8%. Casino revenue increased from $5,658 in 2000 to $7,458 in 2001, or 31.8%. The increase is attributable to the addition of the Caledon Casino and the cruise ship casino operations which provided $1,799 and $167, respectively. The Company's share of the Cripple Creek casino market was 17.1% through the first three months of 2001 compared with 18.1% a year earlier. Womacks/Legends Casino operated 13.7% of the slot machines in the Cripple Creek market and achieved an average daily win per machine of $105 (one hundred and five dollars) versus the Cripple Creek average of $83 (eighty three dollars). Gross margin for the Company's casino activities decreased to 60.2% from 60.7% a year earlier, due primarily to the effects of the lower margin, 53.7%, achieved by the Caledon Casino which started operation in October 2000. The gross margin for the Company's other casino operations increased to 62.2% due primarily to the continued improvement in casino operating efficiencies. Food and beverage revenue increased by 70.8% to $389 for the first three months of 2001 compared with $228 in 2000. The increase is principally due to the opening of the Caledon Casino Hotel and Spa. The cost of food and beverage promotional allowances, which is included in casino costs, decreased slightly to $195 compared with $202 in the prior year. Hotel revenue increased by 653.8% to $156 for the first three months of 2001 compared with $20 in 2000. The increase is directly attributable to the opening of the Caledon Casino Hotel and Spa. The increase in hotel costs is associated with the operation of the hotel in Caledon, South Africa. 13 CENTURY CASINOS, INC. AND SUBSIDIARIES Item 2. MANAGEMENT DISCUSSION AND ANALYSIS (Dollar amounts in thousands, except for share information, or as noted) - ------------------------------------------------------------------------ General and administrative expense as a percentage of net operating revenue was 26.4% for the first three months of 2001 compared with 34.8% in 2000. Included in first three months of the year 2000, is the write-off of a non-compete agreement with a former officer/director in March 2000 and bonuses paid to certain officers/directors relating to the final payment received in January 2000 from the previous sale of the Company's interest in its Indiana riverboat gaming license. Depreciation expense increased to $881 in the first three months of 2001 from $529 in same period of 2000, primarily due to the acquisition of fixed assets for the Caledon Casino, Hotel and Spa which opened in October 2000 and ongoing improvements to Womacks/Legends Casino. Amortization of goodwill in the first three months of 2001 increased to $356 from $335 in the same period of 2000 as a result of the goodwill recognized in the stock acquisition of CCBC in November 2000. Other income (expense), net, for the first three months of 2001 consists primarily of net interest cost of $440 plus $57 related to the write-down of the value of non-operating casino property and land which the Company owns. Other income (expense), net, for the first three months of 2000 consists of $1,380 from the final payment received in January by the Company from the sale of its interest in a riverboat gaming license in Indiana, offset by net interest costs of $197. The increase in interest expense is principally due to the increase in outstanding long-term debt associated with the stock acquisition of CCBC and continued improvements to the property in Caledon, South Africa. The income tax provisions for the three months ended March, 2001 and 2000, are based on estimated full-year earnings for financial reporting purposes adjusted for permanent book-tax differences, consisting primarily of nondeductible goodwill amortization. Liquidity and Capital Resources Cash and cash equivalents totaled $2,478 at March 31, 2001, and the Company had net deficit working capital of $1,923. Additional liquidity may be provided by the Company's revolving credit facility ("RCF") with Wells Fargo Bank, under which the Company had a total commitment of $26,000 ($24,556, net of the quarterly reduction) and unused borrowing capacity of approximately $11,875 at March 31, 2001. For the three months ended March 31, 2001, cash provided by operating activities was $734 compared with $1,274 in the prior-year period. Cash used in investing activities of $383 for the first three months of 2001, consisted of a $250 loan provided by the Company to a non-gaming retailer in Cripple Creek, Colorado and the balance was principally due to improvements to the Womacks/Legends casino in Cripple Creek, Colorado. Cash used in financing activities for the first three months of 2001 consisted of net repayments of $5,959 under the RCF with Wells Fargo, the repurchase of company's stock, on the open market, with a cost of $334, and other net payments of $736. Effective April 26, 2000, the Company and Wells Fargo Bank entered into an amended and restated credit agreement, which increased the borrowing commitment as of that date from $17,200 to $26,000 and extended the maturity date of the RCF until April 2004. The agreement provides for the availability of funds, not to exceed a total of $10,500, for the Company's South Africa and Casino Millennium investments and repurchase of the Company's common stock. 14 CENTURY CASINOS, INC. AND SUBSIDIARIES Item 2. MANAGEMENT DISCUSSION AND ANALYSIS (Dollar amounts in thousands, except for share information, or as noted) - ------------------------------------------------------------------------ On April 13, 2000, the Caledon Casino Bid Company (Pty) Limited ("CCBC") was awarded a gaming license for a casino at a 92-room resort hotel and spa in Caledon, province of the Western Cape, South Africa. On April 17, 2000, the Company's subsidiary, Century Casinos Africa (Pty) Ltd ("CCA"), acquired a 50% equity interest in CCBC by making an equity investment of approximately $1,534 in and loans totaling approximately $2,302 to CCBC with borrowings obtained under the Company's RCF. CCA has a ten-year casino management agreement with CCBC, which agreement may be extended at the Company's option for multiple ten-year periods. The Company, through CCA, will earn management fees based on percentages of annual gaming revenue and earnings before interest, income taxes, depreciation, amortization and certain other costs. The casino opened on October 11, 2000 with 250 slot machines and 14 gaming tables. In addition to the casino license, hotel and spa, CCBC owns approximately 600 acres of land, which is expected to be used for future expansion of the Caledon project. In November, 2000, the Company, through CCA, completed its acquisition of an additional 15% of CCBC - raising its ownership in CCBC to 65%. Terms of the agreement included the payment of approximately $1,800 U.S. Dollars by Century to COIL in exchange for 15% of the total shares of common stock of CCBC (valued at approximately $1,200) and a shareholder loan to CCBC previously held by COIL (with a value of approximately $600). In April 2000, CCBC entered into a loan agreement with PSG Investment Bank Limited, which agreement provides for a principal loan of approximately $6,200 to fund development of the Caledon project and a working capital facility of approximately $2,100. As of March 31, 2001, $5,500 has been advanced against the loan agreement. In January 2001, CCBC cancelled the working capital facility based on managements ability to obtain more favorable terms. In April 2001, CCBC entered into an addendum to the loan agreement in which PSGIB provided CCBC with a standby facility in the amount of approximately $600. CCBC is required to make principal payments, beginning December 2001, in semi-annual installments continuing over a five-year period. Outstanding borrowings under the standby facility bear interest at 3% over a base rate of 12.10%. As of March 31, 2001 CCBC had not drawn on the standby facility. The Company has a 20-year agreement with Casino Millennium a.s., a Czech company, to operate a casino in the five-star Marriott Hotel, in Prague, Czech Republic. The hotel and casino opened in July 1999. The Company provides casino management services in exchange for ten percent of the casino's gross revenue and leases gaming equipment, with an original cost of approximately $1,300, to the casino for 45% of the casino's net profit. In January 2000, the Company entered into a memorandum of agreement with B. H. Centrum, a Czech company which owns the hotel and casino facility, to acquire the operations of the casino by either a joint acquisition of Casino Millennium a.s. or the formation of a new joint venture. The transaction, if completed, would result in the Company having a 50% equity interest in Casino Millennium. Any funding required by the Company to consummate this transaction would be met through a combination of RCF borrowings, existing liquidity and anticipated cash flow. The Company is in the process of negotiating a definitive purchase agreement. In May 2000, the Company entered into a five-year casino concession agreement with a cruise line for casino operations aboard four cruise vessels. The Company is required to pay a fee to the owner of the vessels based on a percentage of gross gaming revenue, as defined, in excess of an established per passenger per day amount. In August 2000, the Company entered into a similar agreement to serve as concessionaire of a small casino aboard a vessel designed to be an exclusive residential community at sea. On September 18, 2000 the Company announced the opening of the first of four casinos aboard the cruise vessels. In October 2000 the Company opened a second casino and, in November 2000, opened a third aboard a luxury cruise vessel. The maiden voyage of the fourth vessel is scheduled for July of 2001. Both agreements require the Company to provide all necessary gaming equipment, $200 of which the Company incurred during the second half of 2000. The Company estimates the remaining cost at approximately $300. 15 CENTURY CASINOS, INC. AND SUBSIDIARIES Item 2. MANAGEMENT DISCUSSION AND ANALYSIS (Dollar amounts in thousands, except for share information, or as noted) - ------------------------------------------------------------------------ The Company's Board of Directors has approved a discretionary program to repurchase up to $5,000 of the Company's outstanding common stock. The Board believes that the Company's stock is undervalued in the trading market in relation to both its present operations and its future prospects. During the first three months of 2001, the Company purchased 167,600 additional shares at an average cost per share of $1.99. Beginning in 1998 and through March 31, 2001, the Company has repurchased a total of 2,017,400 shares at a total cost of approximately $2,616. In April 2001, the Company repurchased an additional 36,300 shares at a total cost of approximately $68. Management plans to retire all treasury shares on a periodic basis. Management expects to continue to review the market price of the Company's stock and repurchase shares as appropriate, with funds coming from existing liquidity or borrowings under the RCF. The Company is the contracted casino management partner with and has the right to a minority equity interest in a consortium which includes Silverstar Development Ltd. ("Silverstar"). Silverstar has submitted an application for a proposed $50,000, hotel/casino resort development in the greater Johannesburg area of South Africa. The value of the proposed development fluctuates with the USD/Rand exchange rate. The Company currently estimates the development cost at approximately 400 million Rand. In the event that Silverstar is awarded a license, the Company would be required to make an equity investment of approximately 9 million Rand or $1,200 at the current exchange rate. This funding requirement would be met through borrowings under the RCF. The Company has also projected additional development costs of up to $500 which could be incurred by the Company related to this project. At the present time, however, there can be no certainty regarding an award of this gaming license or that this license will ultimately be awarded to the consortium Silverstar is part of. Management believes that the Company's cash and working capital at March 31, 2001, together with expected cash flows from operations and borrowing capacity under the RCF, will be sufficient to fund its anticipated capital expenditures, pursue additional business growth opportunities for the foreseeable future, and satisfy its debt repayment obligations. * * * * * * * * * * * * * * * * 16 PART II OTHER INFORMATION Item 1. - Legal Proceedings The Company is not a party to, nor is it aware of, any pending or threatened litigation which, in management's opinion, could have a material adverse effect on the Company's financial position or results of operations. Item 6. - Exhibits and Reports on Form 8-K (a) Exhibits - The following exhibits are filed herewith: 11.00 April 21, 2001 Addendum to Loan Agreement, dated April 13, 2000, between PSG Investment Bank Limited and Caledon Casino Bid Company (Proprietary) Limited (b) Reports on Form 8-K: No reports on Form 8-K were filed during the quarter ended March 31, 2001. * * * * * * * SIGNATURES: Pursuant to the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CENTURY CASINOS, INC. /s/ Larry Hannappel ___________________________ Larry Hannappel Chief Accounting Officer and duly authorized officer Date: May 10, 2001 17 EX-11 2 doc2.txt ADDENDUM TO LOAN AGREEMENT 1. PARTIES 1.1 The parties to this agreement are ~ 1.1.1 PSG Investment Bank Limited; 1.1.2 Caledon Casino Bid Company (Proprietary) Limited. 1.2 The parties agree as set out below. 2 INTERPRETATION 2.1 In this agreement, unless inconsistent with or otherwise indicated by the context ~ 2.1.1 the/this "AGREEMENT" means the agreement as set out in this document; 2.1.2 "BIDCO" means Caledon Casino Bid Company (Proprietary) Limited, registration number 1996/010708/07, a private company duly incorporated in accordance with the laws of the Republic of South Africa; 2.1.3 the "LOAN AGREEMENT" means the loan agreement concluded between PSGIB and Bidco on 12 April 2000, pursuant to which PSGIB INTER ALIA made the principal loan to Bidco; 2.1.4 the "PRINCIPAL LOAN" means the principal loan as defined in the loan agreement; 1 2.1.5 "PSGIB" means PSG Investment Bank Limited, registration number 1998/17396/06, a public company duly incorporated in accordance with the laws of the Republic of South Africa; 2.1.6 save where otherwise indicated, all expressions defined in the loan agreement have the meanings assigned to them therein; 2.1.7 any reference to the singular includes the plural and VICE VERSA; 2.1.8 any reference to natural persons includes legal persons and VICE VERSA; 2.1.9 any reference to gender includes the other genders. 2.2 The clause headings in this agreement have been inserted for convenience only and shall not be taken into account in its interpretation. 2.3 Words and expressions defined in any sub-clause shall, for the purpose of the clause of which that sub-clause forms part, bear the meaning assigned to such words and expressions in that sub-clause. 2.4 If any provision in a definition is a substantive provision conferring rights or imposing obligations on any party, effect shall be given to it as if it were a substantive clause in the body of the agreement, notwithstanding that it is only contained in the interpretation clause. 2.5 If any period is referred to in this agreement by way of reference to a number of days, the days shall be reckoned, subject to 2.6 below, exclusively of the first and inclusively of the last day unless the last day falls on a day which is not a business day, in which case the day shall be the next succeeding business day. 2.6 If any period for which interest is to be calculated is referred to in this agreement by way of a reference to a number of days, the days shall be reckoned inclusively of the first and exclusively of the last day. 2 2.7 This agreement shall be governed by, construed and interpreted in accordance with the law of the Republic of South Africa. 3 RECORDAL 3.1 The parties have concluded the loan agreement. 3.2 Pursuant to the loan agreement, PSGIB made the working capital facility available to Bidco on the terms and conditions more fully envisaged in the loan agreement. 3.3 Bidco did not require the working capital facility and accordingly cancelled the working capital facility. 3.4 Bidco now requires further capital and the parties accordingly wish to amend the loan agreement in the manner set out herein. 4 AMENDMENT OF DEFINITIONS The parties hereby amend the definitions contained in the loan agreement by the addition of the following new definition ~ "2.1.48 the "NEW INTEREST BASE RATE" means 12.10% (Twelve, one zero PER CENTUM), nominal annual compounded monthly;". 5 AMENDMENT OF PARAGRAPH 7 The parties replace paragraph 7 of the loan agreement with the following paragraph ~ 7 THE STANDBY FACILITY AND THE RESERVE ACCOUNT 7.1 PSGIB hereby makes a standby facility available to Bidco on the terms and conditions set out in this agreement. The amount of the standby facility shall be R4 500 000,00 (four million five hundred thousand Rand). 3 7.2 Subject to 7.4 below Bidco shall, out of the cash available to it from time to time, and with effect from [signature date] maintain a debt service reserve which shall ~ 7.2.1 be equal to R500 000,00 (five hundred thousand Rand) by 30 April 2001; 7.2.2 be equal to R1 000 000,00 (one million Rand) in total by 31 May 2001; 7.2.3 for the period from 30 June 2001 to 31 December 2001 be increased by an amount of R1 000 000,00 (one million Rand) per month; 7.2.4 at all relevant times after 31 December 2001, be equal to at least the total of the next 1 (one) repayment to be made by it in respect of the principal loan and the next 1 (one) repayment to be made by it in respect of the standby facility. 7.3 Subject to 7.4 below, Bidco shall cause the amount of the debt service reserve which it will be obliged to maintain in terms of 7.2 above, to be deposited in an account maintained by it with a bank, registered as such in terms of the Banks Act. The aforesaid account is referred to herein as the "RESERVE ACCOUNT" and Bidco shall, forthwith after it becomes obliged to establish the reserve account and to deposit funds into it, request PSGIB to advise it whether PSGIB wishes the reserve account to be maintained with PSGIB. PSGIB shall, within 2 (two) business days after receipt of Bidco's aforesaid request, in writing advise Bidco whether it wishes the reserve account to be opened with PSGIB or not. If ~ 7.3.1 PSGIB advises Bidco that it requires Bidco to open the reserve account with PSGIB, interest shall accrue, in respect of amounts held from time to time in the reserve account, at a rate of interest equal at least to the most favourable rate of interest paid by PSGIB to any of its other customers in respect of a 6 (six) months call deposit (the "PSGIB RATE"). Should the PSGIB rate be lower than an interest rate that Bidco can obtain from another bank with a credit rating of A1, PSGIB will be afforded the opportunity to pay a rate equal to the higher rate. Should PSGIB not be prepared to pay the higher rate Bidco will have the right to place the deposit with the other bank, subject to the conditions in 7.3.2; 4 7.3.2 PSGIB advises Bidco in writing that it does not require Bidco to open the reserve account with it, Bidco shall, within 2 (two) business days after receiving PSGIB's aforesaid written advice, open the reserve account with a bank which has a credit rating of A1 (or an equivalent rating), and shall, forthwith after it has opened that account, deposit into that account the amounts which it is required to deposit. 7.4 Bidco shall be entitled to elect not to maintain the reserve account but instead to furnish to PSGIB an unconditional guarantee ~ 7.4.1 by a bank with a credit rating of A (or an equivalent rating or better); 7.4.2 for an amount equal from time to time to the reserves which Bidco is obliged to maintain in terms of 7.2 above; 7.4.3 in such a form as PSGIB may in its reasonable discretion determine. Bidco shall be entitled to exercise the election conferred on it in terms of this paragraph 7.4 at any time whilst, in terms of 7.2 and 7.3 above it is obliged to maintain the reserve account. Bidco shall not, however, be entitled either to refuse to establish the reserve account or to withdraw any amounts deposited by it into the reserve account unless and until it has caused the guarantee envisaged in this paragraph 7.4 to be delivered to PSGIB. 5 7.5 As and when Bidco wishes to draw-down any amounts against the standby facility, it shall deliver a written notice to PSGIB ("A FACILITY DRAW-DOWN NOTICE"), that notice to ~ 7.5.1 set out the amount of the draw-down which Bidco wishes to make against the standby facility; 7.5.2 specify a draw-down date which shall not be less than 3 (three) business days after receipt by PSGIB of the facility draw-down notice in question. Bidco shall not be entitled to make draw-downs against the standby facility more frequently than once in every calendar month, and shall not be entitled to make draw-downs against the standby facility at any time after 30 December 2001. 7.6 PSGIB shall advance the amount specified in any facility draw-down notice, provided that the facility draw-down notice complies with the requirements of 7.5 above, on the draw-down date stipulated in the facility draw-down notice. All advances made by PSGIB to Bidco in respect of the standby facility shall be paid by PSGIB into such a bank account as Bidco may from time to time in writing specify. 7.7 All amounts drawn-down by Bidco against the standby facility shall accrue interest from time to time at a rate equal to 3% (three PER CENTUM) above the new interest base rate, expressed as a nominal annual compounded monthly rate. All interest which accrues on the standby facility prior to the date on which Bidco has drawn-down the standby facility in full shall be capitalised. 6 7.8 Notwithstanding anything to the contrary contained in this agreement, PSGIB shall not be obliged to advance any further amounts on account of the standby facility to Bidco once all amounts previously advanced by it to Bidco in respect of the standby facility, excluding any capitalised interest in respect of those amounts, reach or exceed the maximum amount of the standby facility envisaged in 7.1 above. 7.9 If Bidco has, by 30 December 2001 ("THE EXPIRY DATE"), not made any draw-downs against the standby facility ~ 7.9.1 the standby facility shall, with effect from 31 December 2001 IPSO FACTO terminate, and Bidco shall not, thereafter, be entitled to draw-down any amounts against the standby facility; 7.9.2 no such a deemed cancellation of the standby facility shall, in any manner whatsoever, entitle Bidco to receive repayment of any commitment fee, as envisaged in 7.10 below, which it has paid to PSGIB in respect of the standby facility. 7.10 Bidco shall, with effect from [signature date] and monthly in arrears, pay a monthly commitment fee to PSGIB in respect of the undrawn portion of the standby facility. That commitment fee shall ~ 7.10.1 for so long as any portion of the standby facility remains undrawn, be calculated on the 1st (first) day of each and every calendar month; 7 7.10.2 be calculated on the amount of R4 500 000,00 (four million five hundred thousand Rand); 7.10.3 be equal to 40 (forty) basis points (nominal annual compounded annually) on the amount of the undrawn facility on the date on which the calculation is made; 7.10.4 exclude VAT. If the commitment fee envisaged in this paragraph becomes payable for a portion of a month only, the amount payable in respect of that month shall be pro-rated. 7.11 Bidco's obligation to pay the commitment fee envisaged in 7.10 above shall terminate ~ 7.11.1 with effect from the date on which Bidco has drawn-down the standby facility in full; or 7.11.2 with effect from the date on which the standby facility terminates by virtue of the provisions of 7.9.1 above". 6 AMENDMENT OF PARAGRAPH 8 The parties hereby delete paragraph 8 of the loan agreement in its entirety and hereby replace that paragraph with the following paragraph ~ 8 REPAYMENT OF CAPITAL AND INTEREST 8.1 For the purposes of this paragraph ~ 8.1.1 the "FINAL PRINCIPAL DATE" means 30 June 2001; 8.1.2 the "FINAL FACILITY DATE" means 31 December 2001; 8.1.3 "THE PRINCIPAL OUTSTANDING" means the aggregate of all amounts drawn-down, as at the final principal date, by Bidco on account of the principal loan, together with all capitalised interest, as at the final principal date, on those amounts; 8 8.1.4 "THE FACILITY OUTSTANDING" means the aggregate of all amounts drawn-down by Bidco, as at the final facility date, against the standby facility together with all capitalised interest on the amount of those draw-downs as at the final facility date. 8.2 Bidco shall repay ~ 8.2.1 the principal outstanding to PSGIB in 10 (ten) equal semi-annual payments, the first such payment to be made on the last day of the 6th (sixth) month following upon the final principal date, and subsequent payments to be made on the last day of each and every 6th (sixth) month thereafter; 8.2.2 the facility outstanding to PSGIB in 10 (ten) equal semi-annual instalments, the first payment to be made on the final facility date and the subsequent payments to be made on the last day of each and every 6th (sixth) month thereafter. 8.3 Bidco shall pay to PSGIB ~ 8.3.1 on the last day of every 6th (sixth) month after the final principal date, all interest which has accrued on the balance of the principal outstanding during the immediately preceding 6 (six) months; 8.3.2 on the final facility date the interest which has accrued on the facility outstanding up to the final facility date and each subsequent payment to be made on the last day of each 6th (sixth) month after the final facility date, such payment to be equal to the interest which has accrued on the facility outstanding during the immediately preceding 6 (six) months." 9 7 AMENDMENT OF POSITIVE UNDERTAKINGS The parties hereby amend the positive undertakings contained in paragraph 10 of the loan agreement by the addition of the following sub-paragraph ~ 10.6 Bidco shall ~ 10.6.1 ensure that it has spent the full amount of capital as required by the Board in terms of the Board guarantee by 31 May 2001; 10.6.2 apply to the Board to reduce the current Board guarantee of R2 351 955,00 (two million three hundred and fifty one thousand nine hundred and fifty five Rand) by an amount of R2 000 000,00 (two million Rand), by no later than 15 June 2001." 8 AMENDMENT OF PHRASE The parties hereby delete the reference to "THE WORKING CAPITAL FACILITY" wherever it may appear in the loan agreement and replace that reference with a reference to "THE STANDBY FACILITY" throughout the loan agreement. 9 REMAINDER Subject to the amendments contained herein, the loan agreement shall continue to be of full force and effect. 10 SIGNED at Caledon on 21, April 2001 AS WITNESS: - ------------ /s/Leon Fortes For: PSG INVESTMENT BANK LIMITED /s/Leon Fortes /s/ Gernot Gunther (Name of witness in print) Duly authorised SIGNED at Caledon on 21, April 2001 AS WITNESS: - ------------ /s/Leon Fortes For: CALEDON CASINO BID COMPANY (PROPRIETARY) LIMITED /s/Leon Fortes /s/James Forbes (Name of witness in print) Duly authorised 11 -----END PRIVACY-ENHANCED MESSAGE-----