UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
OR
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ___________
Commission file number
(Exact name of registrant as specified in its charter)
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incorporation or organization) |
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(Address of principal executive offices, including zip code)
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| Large Accelerated Filer ¨ |
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| Non-accelerated Filer ¨ |
| Smaller Reporting Company |
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| Emerging Growth Company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
INDEX
PART I – FINANCIAL INFORMATION
Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
CENTURY CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
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| March 31, |
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| December 31, | |
Amounts in thousands, except for share and per share information |
| 2024 |
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| 2023 | |
ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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Receivables, net |
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Prepaid expenses |
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Inventories |
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Other current assets |
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Total Current Assets |
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Property and equipment, net |
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Leased right-of-use assets, net |
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Goodwill |
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Intangible assets, net |
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Deferred income taxes |
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Note receivable, net of current portion and unamortized discount |
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Deposits and other |
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Total Assets |
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LIABILITIES AND EQUITY |
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Current Liabilities: |
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Current portion of long-term debt |
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Current portion of operating lease liabilities |
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Current portion of finance lease liabilities |
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Accounts payable |
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Accrued liabilities |
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Accrued payroll |
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Taxes payable |
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Total Current Liabilities |
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Long-term debt, net of current portion and deferred financing costs (Note 5) |
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Long-term financing obligation to VICI Properties, Inc. subsidiaries (Note 6) |
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Operating lease liabilities, net of current portion |
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Finance lease liabilities, net of current portion |
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Taxes payable and other |
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Deferred income taxes |
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Total Liabilities |
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Commitments and Contingencies (Note 7) |
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Equity: |
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Preferred stock; $ |
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Common stock; $ |
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Additional paid-in capital |
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Retained (loss) earnings |
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Accumulated other comprehensive loss |
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Total Century Casinos, Inc. Shareholders' Equity |
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Non-controlling interests |
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Total Equity |
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Total Liabilities and Equity |
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See notes to unaudited condensed consolidated financial statements.
CENTURY CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF LOSS (Unaudited)
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Amounts in thousands, except for per share information |
| 2024 |
| 2023 | ||
Operating revenue: |
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Gaming |
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Pari-mutuel, sports betting and iGaming |
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Hotel |
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Food and beverage |
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Other |
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Net operating revenue |
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Operating costs and expenses: |
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Gaming |
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Pari-mutuel, sports betting and iGaming |
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Hotel |
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Food and beverage |
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Other |
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General and administrative |
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Depreciation and amortization |
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(Gain) on sale of casino operations (Note 1) |
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Total operating costs and expenses |
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Earnings from equity investment |
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Earnings from operations |
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Non-operating (expense) income: |
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Interest income |
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Interest expense |
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Gain on foreign currency transactions, cost recovery income and other (Note 1) |
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Non-operating (expense) income, net |
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(Loss) earnings before income taxes |
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Income tax benefit (expense) |
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Net (loss) earnings |
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Net earnings attributable to non-controlling interests |
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Net loss attributable to Century Casinos, Inc. shareholders |
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Loss per share attributable to Century Casinos, Inc. shareholders: |
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Basic |
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Diluted |
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Weighted average shares outstanding - basic |
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Weighted average shares outstanding - diluted |
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See notes to unaudited condensed consolidated financial statements.
CENTURY CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)
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Amounts in thousands |
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Net (loss) earnings |
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Other comprehensive (loss) income |
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Foreign currency translation adjustments |
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Other comprehensive income |
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Comprehensive (loss) income |
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Comprehensive loss attributable to non-controlling interests |
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Net earnings attributable to non-controlling interests |
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Foreign currency translation adjustments |
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Comprehensive loss attributable to Century Casinos, Inc. shareholders |
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See notes to unaudited condensed consolidated financial statements.
CENTURY CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)
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Amounts in thousands, except for share information |
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| 2023 | ||
Common Stock |
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Balance, beginning of period |
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Performance stock unit issuance |
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Balance, end of period |
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Additional Paid-in Capital |
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Balance, beginning of period |
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Amortization of stock-based compensation |
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Performance stock unit issuance |
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Balance, end of period |
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Accumulated Other Comprehensive Loss |
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Balance, beginning of period |
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Foreign currency translation adjustment |
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Balance, end of period |
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Retained (Loss) Earnings |
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Balance, beginning of period |
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Net loss |
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Balance, end of period |
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Total Century Casinos, Inc. Shareholders' Equity |
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Non-controlling Interests |
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Balance, beginning of period |
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Net earnings |
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Foreign currency translation adjustment |
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Distributions to non-controlling interests |
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Balance, end of period |
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Total Equity |
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Common shares issued |
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See notes to unaudited condensed consolidated financial statements.
CENTURY CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
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Amounts in thousands |
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Cash Flows (used in) provided by Operating Activities: |
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Net (loss) earnings |
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Adjustments to reconcile net earnings to net cash (used in) provided by operating activities: |
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Depreciation and amortization |
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Lease amortization |
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Loss on disposition of fixed assets |
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Income from equity investment |
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Amortization of stock-based compensation expense |
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Amortization of deferred financing costs |
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Gain on debt repurchase (Note 5) |
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Gain on sale of operations (Note 1) |
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Deferred taxes |
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Changes in Operating Assets and Liabilities: |
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Receivables, net |
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Prepaid expenses and other assets |
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Accounts payable |
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Other current and long-term liabilities |
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Inventories |
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Accrued payroll |
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Taxes payable |
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Net cash (used in) provided by operating activities |
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Cash Flows (used in) provided by Investing Activities: |
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Purchases of property and equipment |
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Smooth Bourbon dividends (Note 3) |
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Purchase of intangible assets - casino license |
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Proceeds from disposition of assets |
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Century Casino Calgary sale earn out |
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Net cash used in investing activities |
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Cash Flows (used in) provided by Financing Activities: |
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Proceeds from borrowings |
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Principal payments |
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Distributions to non-controlling interests |
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Repurchase of shares to satisfy tax withholding |
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Net cash used in financing activities |
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Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash |
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(Decrease) Increase in Cash, Cash Equivalents and Restricted Cash |
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Cash, Cash Equivalents and Restricted Cash at Beginning of Period |
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Cash, Cash Equivalents and Restricted Cash at End of Period |
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Supplemental Disclosure of Cash Flow Information: |
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Interest paid |
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Income taxes paid |
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Non-Cash Investing Activities: |
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Purchase of property and equipment on account |
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See notes to unaudited condensed consolidated financial statements.
CENTURY CASINOS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
The Company owns, operates and manages the following casinos through wholly-owned subsidiaries in North America:
The Century Casino & Hotel in Central City, Colorado (“Central City” or “CTL”)
The Century Casino & Hotel in Cripple Creek, Colorado (“Cripple Creek” or “CRC”)
Mountaineer Casino, Resort & Races in New Cumberland, West Virginia (“Mountaineer” or “MTR”) (1)
The Century Casino & Hotel in Cape Girardeau, Missouri (“Cape Girardeau” or “CCG”) (1)
The Century Casino Caruthersville, Missouri (“Caruthersville” or “CCV”) (1)
Nugget Casino Resort in Reno-Sparks, Nevada (“Nugget” or “NUG”) (2)
Rocky Gap Casino, Resort & Golf in Flintstone, Maryland (“Rocky Gap” or “ROK”) (1)
The Century Casino & Hotel in Edmonton, Alberta, Canada (“Century Resorts Alberta” or “CRA”) (1)
The Century Casino St. Albert in Edmonton, Alberta, Canada (“St. Albert” or “CSA”) (1); and
Century Mile Racetrack and Casino in Edmonton, Alberta, Canada (“Century Mile” or “CMR”) (1)
(1)Subsidiaries of VICI Properties Inc. (“VICI”), an unaffiliated third party, own the real estate assets underlying these properties, and subsidiaries of the Company lease these properties under a master lease with VICI.
(2)Smooth Bourbon, LLC (“Smooth Bourbon”), a
The Company’s Colorado, West Virginia and Nevada subsidiaries have partnered with sports betting and iGaming operators to offer sports wagering and online betting through mobile apps.
The Company has a controlling financial interest through its wholly-owned subsidiary Century Resorts Management GmbH (“CRM”) in the following majority-owned subsidiaries:
The Company owns
The Company owns
Through its wholly owned subsidiary Century Nevada Acquisition, Inc., the Company has a
The Company previously operated several ship-based casinos. The Company’s last concession agreement to operate a ship-based casino ended on April 16, 2023.
Other Projects and Developments
Nugget Casino Resort in Reno-Sparks, Nevada
In February 2022, the Company entered into a definitive agreement with Marnell, pursuant to which a newly formed subsidiary of the Company agreed to purchase from Marnell (i)
The Company purchased
Rocky Gap Casino, Resort & Golf in Flintstone, Maryland
In August 2022, the Company entered into a definitive agreement with Golden Entertainment Inc. (“Golden”), Lakes Maryland Development, LLC, a subsidiary of Golden (“Lakes Maryland”), and VICI Properties, L.P., an affiliate of VICI (“VICI PropCo”), pursuant to which the Company agreed to acquire the operations of Rocky Gap Casino, Resort & Golf (“Rocky Gap” and, such transaction, the “Rocky Gap Acquisition”). Pursuant to a real estate purchase agreement, dated August 24, 2022, by and between Evitts Resort, LLC, a subsidiary of Golden (“Evitts”), and an affiliate of VICI PropCo (“VICI PropCo Buyer”), VICI PropCo Buyer agreed to acquire a related interest in the land and building associated with Rocky Gap from Evitts.
On July 25, 2023, the Company purchased the operations of Rocky Gap for approximately $
Canada Real Estate Sale
On May 16, 2023, the Company entered into definitive agreements for subsidiaries of VICI 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 in Calgary, Alberta (collectively, the “Century Canadian Portfolio”). The transaction closed on September 6, 2023, for an aggregate purchase price of CAD
Caruthersville Land-Based Casino and Hotel
The Company is building a new land-based casino with a
Cape Girardeau Hotel
The Company opened its
Terminated Projects
Century Sports
In December 2020, the Company sold its Century Casino Calgary casino operations. The definitive agreement to sell the casino operations provided for a
of CAD
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 (“US GAAP”) for interim financial reporting, the rules and regulations of the Securities and Exchange Commission which apply to interim financial statements and the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted. The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated.
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Amounts in thousands |
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| 2023 | ||
Cash and cash equivalents |
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Restricted cash |
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Restricted cash included in deposits and other |
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Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows |
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The exchange rates to the US dollar used to translate balances at the end of the reported periods are as follows:
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Ending Rates |
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Canadian dollar (CAD) |
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Euros (EUR) |
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Polish zloty (PLN) |
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The average exchange rates to the US dollar used to translate balances during each reported period are as follows:
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Average Rates |
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Canadian dollar (CAD) |
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Euros (EUR) |
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Polish zloty (PLN) |
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Source: Xe Currency Converter | ||||||
In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06, Disclosure Improvements – Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative (“ASU 2023-06”). The objective of ASU 2023-06 is to update and simplify disclosure requirements and is intended to align US GAAP and SEC requirements. Early adoption of ASU 2023-06 is not permitted. The guidance relates to various topics and is effective on the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective. The Company is reviewing the updates provided by this standard. The Company does not expect the adoption of the standard to have a material impact on the Company’s financial statements.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280); Improvements to Reportable Segment Disclosures (“ASU 2023-07”). The objective of ASU 2023-07 is to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, as well enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss and other disclosure requirements. Early adoption of ASU 2023-07 is permitted. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company is reviewing the updates provided by this standard.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740); Improvements to Income Tax Disclosures (“ASU 2023-09”). The objective of ASU 2023-09 is to improve income tax disclosure requirements. Under ASU 2023-09, entities must annually (1) disclose specific categories in the income tax rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. Early adoption of ASU 2023-07 is permitted. The guidance is effective for annual periods beginning after December 15, 2024. The Company is reviewing the updates provided by this standard.
The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements or notes thereto.
Acquisition – Nugget
On the Second Closing on April 3, 2023, the Company completed its previously announced Nugget Acquisition of
capital of Nugget at closing. The Company made an additional working capital adjustment payment of $
As of April 3, 2023, the Company began consolidating Nugget as a wholly-owned subsidiary. Nugget contributed $
The Company accounted for the transaction as a business combination, and accordingly, the acquired assets of $
The fair value of the assets acquired and liabilities assumed (excluding cash received) was determined to be $
•multi-period excess earnings method;
•cost method;
•capitalized cash flow method;
•relief from royalty method;
•discounted cash flow method; and
•direct market value approach.
Both the income and market approach valuation methodologies used for the identifiable net assets acquired in the Nugget Acquisition make use of Level 3 inputs and are provisional pending development of a final valuation.
Trade receivables and payables, inventory and other current and noncurrent assets and liabilities were valued at the existing carrying values as they represented a reasonable approximation of the fair value of those items at the Nugget Acquisition date, based on management’s judgment and estimates.
The personal property components of the fixed assets were primarily valued utilizing the market and cost approaches. Certain personal property with an active and identifiable secondary market value were valued using the market approach. This property included, but was not limited to, certain gaming/slot equipment, information and technology equipment and vehicles. The cost approach was utilized to value all other personal property. The cost approach estimates fair value as the current cost of replacing or reproducing the utility of an asset, or group of assets and adjusting it for any depreciation resulting from one or more of the following: physical deterioration, functional obsolescence, and/or economic obsolescence.
The real estate assets that are owned by Smooth Bourbon were adjusted to fair value concurrently with the Nugget Acquisition. The fair value was determined utilizing the direct capitalization method of the income approach. The fair value of the acquired real estate assets was determined to be $
The fair value of the customer relationships from the player’s club list was valued using the incremental cash flow method under the income approach. The incremental cash flow method is used to estimate the fair value of an intangible asset based on a residual cash flow notion. This method measures the benefits (e.g., cash flows) derived from ownership of an acquired intangible asset as if it were in place, as compared to the acquirer’s expected cash flows as if the intangible asset were not in place (i.e., with-and-without). The present value difference in the two cash flow streams is ascribable to the intangible asset. The Company has assigned a
The fair value of the Nugget trademark was valued using the relief from royalty method. The relief from royalty method presumes that, without ownership of the asset, the Company would have to make a stream of payments to a brand or franchise owner in return for the right to use their name. By virtue of this asset, the Company avoids any such payments and records the related intangible value of the trademark. The primary assumptions in the valuation included projected revenue, a pre-tax royalty rate, the trademark’s useful life, and tax expense. The Company has assigned the Nugget trademark a
The Company has finalized the allocation of the purchase price of the Nugget Acquisition. Details of the purchase price allocation for the Nugget Acquisition in the table below are based on fair values of assets and liabilities as of April 3, 2023. The Nugget Acquisition was accounted for using the acquisition method of accounting. Assets acquired and liabilities assumed in connection with the Nugget Acquisition have been recorded at their fair values.
|
|
|
|
Amounts in thousands |
|
| |
Cash |
| $ | |
Receivables |
|
| |
Prepaid expenses |
|
| |
Inventories |
|
| |
Property and equipment |
|
| |
Intangible assets |
|
| |
Accounts payable |
|
| ( |
Accrued liabilities |
|
| ( |
Accrued payroll |
|
| ( |
Taxes payable |
|
| ( |
Finance lease liabilities |
|
| ( |
Net identifiable assets acquired |
|
| |
Add: Goodwill |
|
| |
Net assets acquired |
| $ | |
The following table details the purchase consideration net cash outflow.
|
|
|
|
Amounts in thousands |
|
|
|
Outflow of cash to acquire subsidiaries, net of cash acquired |
|
|
|
Cash consideration |
| $ | |
Working capital adjustments |
|
| |
Less: Cash balances acquired |
|
| ( |
Net cash used in investing activities |
| $ | |
Acquisition-related costs
The Company incurred acquisition costs of less than $
Ancillary Agreements
In connection with the Nugget Acquisition, the Company and the sellers entered into a consulting agreement dated December 19, 2022, whereby the sellers agreed to provide the Company with certain consulting services following the Nugget Acquisition. The agreement compensates the sellers for services following the Nugget Acquisition as performed by employees at a monthly rate. There were
Acquisition-Related Contingencies
Nugget is party to various legal and administrative proceedings, which have arisen in the normal course of business and relate to underlying events that occurred on or before April 3, 2023. Estimated losses have been accrued as of the Nugget Acquisition date for these proceedings in accordance with Accounting Standards Codification Topic 450 “Contingencies” (“ASC Topic 450”), which requires that an amount be accrued if the loss is probable and can be estimated. The current liability for the estimated losses associated with these proceedings is not material to the Company’s consolidated financial condition and those estimated losses are not expected to have a material impact on its results of operations. The Company estimated the range of these contingencies to be between $
Acquisition – Rocky Gap
On July 25, 2023, the Company completed its previously announced Rocky Gap Acquisition of
adjustment based on the estimated working capital of Rocky Gap at closing. The Company paid an additional $
As of July 25, 2023, the Company began consolidating Rocky Gap as a wholly-owned subsidiary. Rocky Gap contributed $
The Company accounted for the transaction as a business combination, and accordingly, the acquired assets of $
The fair value of the assets acquired and liabilities assumed (excluding cash received) was determined to be $
•multi-period excess earnings method;
•cost method;
•capitalized cash flow method;
•relief from royalty method;
•discounted cash flow method; and
•direct market value approach.
Both the income and market approach valuation methodologies used for the identifiable net assets acquired in the Rocky Gap Acquisition make use of Level 3 inputs and are provisional pending development of a final valuation.
Trade receivables and payables, inventory and other current and noncurrent assets and liabilities were valued at the existing carrying values as they represented a reasonable approximation of the fair value of those items at the Rocky Gap Acquisition date, based on management’s judgment and estimates.
The personal property components of the fixed assets were primarily valued utilizing the market and cost approaches. Certain personal property with an active and identifiable secondary market value were valued using the market approach. This property included, but was not limited to, certain gaming/slot equipment, information and technology equipment and vehicles. The cost approach was utilized to value all other personal property. The cost approach estimates fair value as the current cost of replacing or reproducing the utility of an asset, or group of assets, and adjusting it for any depreciation resulting from one or more of the following: physical deterioration, functional obsolescence, and/or economic obsolescence.
The real estate assets that were sold to VICI and leased back to the Company were adjusted to fair value concurrently with the Rocky Gap Acquisition. The fair value was determined utilizing the direct capitalization method of the income approach. The fair value of the acquired real estate assets was determined to be $
The fair value of the customer relationships from the player’s club list was valued using the incremental cash flow method under the income approach. The incremental cash flow method is used to estimate the fair value of an intangible asset based on a residual cash flow notion. This method measures the benefits (e.g., cash flows) derived from ownership of an acquired intangible asset as if it were in place, as compared to the acquirer’s expected cash flows as if the intangible asset were not in place (i.e., with-and-without). The present value difference in the two cash flow streams is ascribable to the intangible asset. The Company has assigned a
The fair value of the Rocky Gap trademark was valued using the relief from royalty method. The relief from royalty method presumes that, without ownership of the asset, the Company would have to make a stream of payments to a brand or franchise owner in return for the right to use their name. By virtue of this asset, the Company avoids any such payments and records the related intangible value of the trademark. The primary assumptions in the valuation included projected revenue, a pre-tax royalty rate, the trademark’s useful life, and tax expense. The Company has assigned the Rocky Gap trademark a
Details of the Rocky Gap Acquisition in the table below are based on estimated fair values of assets and liabilities as of July 25, 2023. The Rocky Gap Acquisition was accounted for using the acquisition method of accounting. Assets acquired and liabilities assumed in connection with the Rocky Gap Acquisition have been recorded at their preliminary fair values. Certain estimated values for the Rocky Gap Acquisition for accrued liabilities, property and equipment, intangible assets, and deferred income taxes are not yet finalized pending the final purchase price allocations and the receipt of additional information from Rocky Gap. As a result, the Company’s estimates and assumptions are subject to change within the measurement period as valuations are finalized. The Company expects to finalize the allocation of the purchase price within one year of the Rocky Gap Acquisition date.
|
|
|
|
Amounts in thousands |
|
| |
Cash |
| $ | |
Receivables |
|
| |
Prepaid expenses |
|
| |
Inventories |
|
| |
Other current assets |
|
| |
Property and equipment |
|
| |
Leased right-of-use assets |
|
| |
Intangible assets |
|
| |
Deposits and other |
|
| |
Accounts payable |
|
| ( |
Accrued liabilities |
|
| ( |
Accrued payroll |
|
| ( |
Taxes payable |
|
| ( |
Operating lease liabilities |
|
| ( |
Finance lease liabilities |
|
| ( |
Net identifiable assets acquired |
|
| |
Add: Goodwill |
|
| |
Net assets acquired |
| $ | |
The following table details the purchase consideration net cash outflow.
|
|
|
|
Amounts in thousands |
|
|
|
Outflow of cash to acquire subsidiaries, net of cash acquired |
|
|
|
Cash consideration |
| $ | |
Working capital adjustments |
|
| |
Less: Cash balances acquired |
|
| ( |
Net cash used in investing activities |
| $ | |
Acquisition-related costs
The Company incurred acquisition costs of approximately $
Ancillary Agreements
In connection with the Rocky Gap Acquisition, the Company and the sellers entered into a consulting agreement dated July 25, 2023, whereby the sellers agreed to provide the Company with certain transitional services following the Rocky Gap Acquisition. The agreement compensates the sellers for services following the Rocky Gap Acquisition as performed by employees at a monthly rate. The agreement ended on October 8, 2023. There were
Acquisition-Related Contingencies
Rocky Gap is party to various legal and administrative proceedings, which have arisen in the normal course of business and relate to underlying events that occurred on or before the July 25, 2023 closing of the Rocky Gap Acquisition. Estimated losses have been accrued as of the Rocky Gap Acquisition date for these proceedings in accordance with ASC Topic 450, which requires that an amount be accrued if the loss is probable and can be estimated. The current liability for the estimated losses associated with these proceedings is not material to the Company’s consolidated financial condition and those estimated losses are not expected to have a material impact on its results of operations. The Company estimated the range of these contingencies to be between $
Pro forma results (Unaudited)
The following table provides unaudited pro forma information of the Company as if the Nugget Acquisition and Rocky Gap Acquisition had occurred at the beginning of the earliest comparable period presented. The unaudited pro forma financial results include adjustments for transaction-related costs that are directly attributable to the Nugget Acquisition and Rocky Gap Acquisition for the three months ended March 31, 2023 including (i) pro forma adjustments to record interest expense related to the Goldman Credit Agreement, borrowing of the Revolving Facility under the Goldman Credit Agreement, and interest on the VICI financing obligation, (ii) pro forma adjustments to record depreciation and amortization for assets acquired in the Nugget Acquisition and Rocky Gap Acquisition, (iii) an estimated tax impact, and (iv) pro forma adjustments to record Smooth Bourbon as a consolidated subsidiary as of January 1, 2023. This pro forma information is not necessarily indicative either of the combined results of operations that actually would have been realized had the acquisitions been consummated during the periods for which the pro forma information is presented, or of future results.
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|
|
| For the three months ended | ||||
|
| March 31, | ||||
Amounts in thousands, except for per share information |
| 2024 |
| 2023 | ||
Net operating revenue |
| $ | |
| $ | |
Net loss attributable to Century Casinos, Inc. shareholders |
| $ | ( |
| $ | ( |
Equity Investment – Smooth Bourbon
The Company purchased membership interests in Smooth Bourbon on April 1, 2022. The Company began consolidating Smooth Bourbon on April 3, 2023 after the Nugget Acquisition and therefore no longer reports its interest in Smooth Bourbon as an equity investment. Following is summarized financial information regarding Smooth Bourbon for the three months ended March 31, 2023:
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|
|
Amounts in thousands |
| For the three months ended | |
Operating Results |
|
|
|
Net operating revenue |
| $ | |
Earnings from continuing operations |
| $ | |
Net earnings |
| $ | |
Net earnings attributable to Century Casinos, Inc. |
| $ | |
Goodwill
Goodwill represents the future economic benefits of a business combination to the extent that the purchase price exceeds the fair value of the net identified tangible and intangible assets acquired and liabilities assumed. The Company determines the estimated fair value of the net identified tangible and intangible assets acquired and liabilities assumed after review and consideration of relevant information including discounted cash flows, quoted market prices, and estimates made by management.
The Company tests goodwill for impairment as of October 1 each year, or more frequently as circumstances indicate it is necessary. Testing compares the estimated fair values of our reporting units to the reporting units’ carrying values. The reportable segments with goodwill balances as of March 31, 2024 included the United States, Canada and Poland. For the quantitative goodwill impairment test, the current fair value of each reporting unit with goodwill balances is estimated using a combination of (i) the income approach using the discounted cash flow method for projected revenue, EBITDAR and working capital, (ii) the market approach observing the price at which comparable companies or shares of comparable companies are bought or sold, and (iii) fair value measurements using either quoted market price or an estimate of fair value using a present value technique. The cost approach, estimating the cost of reproduction or replacement of an asset, was considered but not used because it does not adequately capture an operating company’s intangible value. If the carrying value of a reporting unit exceeds its estimated fair value, the Company will recognize an impairment for the amount by which the carrying value exceeds the reporting unit’s fair value. The impairment analysis requires management to make estimates about future operating results, valuation multiples and discount rates and assumptions based on historical data and consideration of future market conditions. Changes in the assumptions can materially affect these estimates. Given the uncertainty inherent in any projection, actual results may differ from the estimates and assumptions used, or conditions may change, which could result in additional impairment charges in the future. Such impairments could be material.
Changes in the carrying amount of goodwill related to the United States, Canada and Poland segments are as follows:
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|
Amounts in thousands |
| United States |
| Canada |
| Poland |
| Total | ||||
Gross carrying value January 1, 2024 |
| $ |
| $ |
| $ |
| $ | ||||
Currency translation |
|
| — |
|
| ( |
|
| ( |
|
| ( |
Gross carrying value March 31, 2024 |
|
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|
|
| ||||
|
|
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|
|
|
|
|
|
|
|
|
|
Accumulated impairment losses January 1, 2024 |
|
| ( |
|
| ( |
|
|
|
| ( | |
Accumulated impairment losses March 31, 2024 |
|
| ( |
|
| ( |
|
|
|
| ( | |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net carrying value at January 1, 2024 |
| $ |
| $ |
| $ |
| $ | ||||
Net carrying value at March 31, 2024 |
| $ |
| $ |
| $ |
| $ | ||||
Intangible Assets
The Company tests its indefinite-lived intangible assets as of October 1 each year, or more frequently as circumstances indicate it is necessary. The fair value is determined primarily using the multi-period excess earnings methodology and the relief from royalty method under the income approach.
Intangible assets at March 31, 2024 and December 31, 2023 consisted of the following:
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|
| March 31, |
|
| December 31, |
Amounts in thousands |
| 2024 |
| 2023 | ||
Finite-lived |
|
|
|
|
|
|
Casino licenses |
| $ | |
| $ | |
Less: accumulated amortization |
|
| ( |
|
| ( |
|
|
| |
|
| |
Trademarks |
|
| |
|
| |
Less: accumulated amortization |
|
| ( |
|
| ( |
|
|
| |
|
| |
Players club lists |
|
| |
|
| |
Less: accumulated amortization |
|
| ( |
|
| ( |
|
|
| |
|
| |
Total finite-lived intangible assets, net |
|
| |
|
| |
Indefinite-lived |
|
|
|
|
|
|
Casino licenses |
|
| |
|
| |
Trademarks |
|
| |
|
| |
Total indefinite-lived intangible assets |
|
| |
|
| |
Total intangible assets, net |
| $ | |
| $ | |
Trademarks
The Company currently owns
Trademarks: Finite-Lived
The Company has determined that the Mountaineer, Nugget and Rocky Gap trademarks, all reported in the United States segment, have useful lives of
Changes in the carrying amount of the United States trademarks are as follows:
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|
Amounts in thousands |
|
| Balance at |
|
| Amortization |
|
| Balance at |
United States |
| $ |
| $ | ( |
| $ | ||
|
|
|
|
|
|
|
|
|
|
As of March 31, 2024, estimated amortization expense of the United States trademarks over the next five years was as follows:
|
|
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|
Amounts in thousands |
|
|
|
2024 |
| $ | |
2025 |
|
| |
2026 |
|
| |
2027 |
|
| |
2028 |
|
| |
Thereafter |
|
| |
|
| $ | |
The weighted-average amortization period of the United States trademarks is
Trademarks: Indefinite-Lived
The Company has determined that the Casinos Poland trademark, reported in the Poland segment, and the Century Casinos trademark, reported in the Corporate and Other segment, have indefinite useful lives and therefore the Company does not amortize these trademarks. Costs incurred to renew trademarks that are indefinite-lived are expensed over the renewal period as general and administrative expenses on the Company’s condensed consolidated statements of loss.
Changes in the carrying amount of the indefinite-lived trademarks are as follows:
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|
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|
|
Amounts in thousands |
|
| Balance at January 1, 2024 |
|
| Currency translation |
|
| Balance at |
Poland |
| $ |
| $ | ( |
| $ | ||
Corporate and Other |
|
|
|
|
|
| |||
|
| $ |
| $ | ( |
| $ | ||
|
|
|
|
|
|
|
|
|
|
Casino Licenses: Finite-Lived
As of March 31, 2024, Casinos Poland had
Changes in the carrying amount of the Casinos Poland licenses are as follows:
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|
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|
|
|
Amounts in thousands |
|
| Balance at January 1, 2024 |
|
| New Casino License |
|
| Amortization |
|
| Currency translation |
|
| Balance at |
Poland |
| $ |
| $ |
| $ | ( |
| $ | ( |
| $ | |||
|
|
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|
|
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|
As of March 31, 2024, estimated amortization expense for the CPL casino licenses over the next five years was as follows:
|
|
|
|
Amounts in thousands |
|
|
|
2024 |
| $ | |
2025 |
|
| |
2026 |
|
| |
2027 |
|
| |
2028 |
|
| |
Thereafter |
|
| |
|
| $ |
These estimates do not reflect the impact of future foreign exchange rate changes or the continuation of the licenses following their expiration. The weighted average period before the next license expiration is
Casino Licenses: Indefinite-Lived
The Company has determined that the casino licenses held in the United States segment from the Missouri Gaming Commission, the West Virginia Lottery Commission and the Nevada Gaming Commission (held by Smooth Bourbon) and those held in the Canada segment from the Alberta Gaming, Liquor and Cannabis Commission and Horse Racing Alberta are indefinite-lived. Costs incurred to renew licenses that are indefinite-lived are expensed over the renewal period to general and administrative expenses on the Company’s condensed consolidated statements of loss. Changes in the carrying amount of the licenses are as follows:
|
|
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|
|
|
|
|
|
|
Amounts in thousands |
|
| Balance at |
|
| Currency translation |
|
| Balance at |
United States |
| $ |
| $ |
| $ | |||
Canada |
|
|
|
| ( |
|
| ||
|
| $ |
| $ | ( |
| $ | ||
|
|
|
|
|
|
|
|
|
|
Player’s Club Lists
The Company has determined that the player’s club lists, reported in the United States segment, have useful lives of to
|
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|
|
Amounts in thousands |
|
| Balance at |
|
| Amortization |
|
| Balance at |
United States |
| $ |
| $ | ( |
| $ | ||
|
|
|
|
|
|
|
|
|
|
As of March 31, 2024, estimated amortization expense for the player’s club lists over the next five years was as follows:
|
|
|
|
Amounts in thousands |
|
|
|
2024 |
| $ | |
2025 |
|
| |
2026 |
|
| |
2027 |
|
| |
2028 |
|
| |
Thereafter |
|
| |
|
| $ |
Long-term debt and the weighted average interest rates as of March 31, 2024 and December 31, 2023 consisted of the following:
|
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Amounts in thousands |
| March 31, 2024 |
| December 31, 2023 | ||||||||
Goldman term loan |
| $ |
|
|
| $ |
|
| ||||
UniCredit term loan |
|
|
|
|
|
|
|
| ||||
Total principal |
| $ | |
|
|
| $ | |
|
| ||
Deferred financing costs |
|
| ( |
|
|
|
|
| ( |
|
|
|
Total long-term debt |
| $ | |
|
|
|
| $ | |
|
|
|
Less current portion |
|
| ( |
|
|
|
|
| ( |
|
|
|
Long-term portion |
| $ | |
|
|
|
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Goldman Credit Agreement
On April 1, 2022, the Company entered into the Goldman Credit Agreement by and among the Company, as borrower, the subsidiary guarantors party thereto, Goldman Sachs Bank USA, as administrative agent and collateral agent, Goldman Sachs Bank USA and BOFA Securities, Inc., as joint lead arrangers and joint bookrunners, and the Lenders and L/C Lenders party thereto. The Goldman Credit Agreement replaced the Macquarie Credit Agreement. The Goldman Credit Agreement provides for the $
The Goldman Term Loan matures on
Borrowings under the Goldman Credit Agreement bear interest at a rate equal to, at the Company’s option, either (a) the Adjusted Term SOFR (as defined in the Goldman Credit Agreement), plus an applicable margin (each loan, being a “SOFR Loan”) or (b) the ABR (as defined in the Goldman Credit Agreement), plus an applicable margin (each loan, being a “ABR Loan”). The applicable margin for the Goldman Term Loan is
In addition, on a quarterly basis, the Company is required to pay each lender under the Revolving Facility a commitment fee in respect of any unused commitments under the Revolving Facility at a per annum rate of
The Goldman Credit Agreement requires the Company to prepay the Term Loan, subject to certain exceptions, with:
•
•
The Goldman Credit Agreement provides that the Term Loan may be prepaid without a premium or penalties.
The borrowings under the Goldman Credit Agreement are guaranteed by the material subsidiaries of the Company, subject to certain exceptions (including the exclusion of the Company’s non-domestic subsidiaries), and are secured by a pledge (and, with respect to real property, mortgage) of substantially all of the existing and future property and assets of the Company and the guarantors, subject to certain exceptions.
The Goldman Credit Agreement contains customary representations and warranties, affirmative, negative and financial covenants, and events of default. All future borrowings under the Goldman Credit Agreement are subject to the satisfaction of customary conditions, including the absence of a default and the accuracy of representations and warranties. The Company was in compliance with all applicable financial covenants under the Goldman Credit Agreement as of March 31, 2024.
Deferred financing costs consist of the Company’s costs related to financings. Amortization expenses relating to the Goldman Credit Agreement were $
Casinos Poland
As of March 31, 2024, CPL had a short-term line of credit with mBank S.A. (“mBank”) used to finance current operations. The line of credit bears an interest rate of overnight WIBOR plus
Under Polish gaming law, CPL is required to maintain PLN
Century Resorts Management
CRM previously had a GBP
As of March 31, 2024, CRM had a credit agreement with UniCredit originally entered into in August 2018 as a $
As of March 31, 2024, scheduled repayments related to long-term debt were as follows:
|
|
|
|
|
|
|
|
|
|
Amounts in thousands |
| Goldman Term Loan |
| UniCredit Term Loan |
| Total | |||
2024 |
| $ |
| $ |
| $ | |||
2025 |
|
|
|
|
|
| |||
2026 |
|
|
|
|
|
| |||
2027 |
|
|
|
|
|
| |||
2028 |
|
|
|
|
|
| |||
Thereafter |
|
|
|
|
|
| |||
Total |
| $ |
| $ |
| $ | |||
|
|
|
|
|
|
|
|
|
|
In December 2019, certain subsidiaries of the Company (collectively, the “Tenant”) and certain subsidiaries of VICI PropCo (collectively, the “Landlord”) entered into a sale and leaseback transaction in connection with the acquisition of the Company’s West Virginia and Missouri properties and entered into the Master Lease to lease the real estate assets. See Note 1 for a list of the Company’s subsidiaries and properties under the Master Lease.
The Master Lease has been modified as follows:
On December 1, 2022, an amendment provided for (i) modifications with respect to certain project work to be done by the Company related to Century Casino Caruthersville, (ii) modifications to rent under the Master Lease to provide for an increase in initial annualized rent by approximately $
On July 25, 2023, an amendment (i) added Rocky Gap to the Master Lease, (ii) increased initial annualized rent by approximately $
On September 6, 2023, an amendment (i) added the Century Canadian Portfolio to the Master Lease, (ii) increased initial annualized rent by approximately CAD
The Master Lease does not transfer control of the properties under the Master Lease to VICI PropCo subsidiaries. The Company accounts for the transaction as a failed sale-leaseback financing obligation. When cash proceeds are exchanged, a failed sale-leaseback financing obligation is equal to the proceeds received for the assets that are sold and then leased back. The value of the failed sale-leaseback financing obligations recognized in this transaction was determined to be the fair value of the leased real estate assets. In subsequent periods, a portion of the periodic payment under the Master Lease will be recognized as interest expense with the remainder of the payment reducing the failed sale-leaseback financing obligation using the effective interest method. The failed sale-leaseback obligations will not be reduced to less than the net book value of the leased real estate assets as of the end of the lease term.
The fair values of the real estate assets and the related failed sale-leaseback financing obligation were estimated based on the present value of the estimated future payments over the term plus renewal options of
The Master Lease provides for the lease of land, buildings, structures and other improvements on the land, easements and similar appurtenances to the land and improvements relating to the operations of the leased properties. The Master Lease has a term of
The Master Lease has a triple-net structure, which requires the Tenant to pay substantially all costs associated with the Company’s properties that are subject to the Master Lease, including real estate taxes, insurance, utilities, maintenance and operating costs. The Master Lease contains certain covenants, including minimum capital improvement expenditures. The Company has provided a guarantee of the Tenant’s obligations under the Master Lease.
The rent under the Master Lease currently escalates at the greater of either
The estimated future payments in the table below include payments and adjustments to reflect estimated payments as described in the Master Lease, including an annual escalator of up to
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Amounts in thousands |
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2024 |
| $ | |
2025 |
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2026 |
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2027 |
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2028 |
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Thereafter |
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| |
Total payments |
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| |
Residual value |
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Less imputed interest |
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| ( |
Total |
| $ | |
Total payments and interest expense related to the Master Lease for the three months ended March 31, 2024 and 2023 were as follows:
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| For the three months ended | ||||
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| March 31, | ||||
Amounts in thousands |
| 2024 |
| 2023 | ||
Payments made per Master Lease |
| $ | |
| $ | |
CPI increase |
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Total payments made including CPI increase |
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Cash paid for principal 1 |
| $ | — |
| $ | — |
Cash paid for interest |
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Interest expense |
| $ | |
| $ | |
Litigation – From time to time, the Company is subject to various legal proceedings arising from normal business operations. Based on management’s knowledge, the Company does not expect the outcome of such currently pending or threatened proceedings, either individually or in the aggregate, to have a material effect on its financial position, cash flows or results of operations.
Income tax expense or benefits are recorded relative to the jurisdictions that recognize book earnings. For the three months ended March 31, 2024, the Company recognized an income tax benefit of
For the three months ended March 31, 2024, the Company computed an annual effective tax rate using forecasted information. Based on current forecasts, the Company’s effective tax rate is expected to be highly sensitive to changes in earnings. The Company concluded that computing its effective tax rate using forecasted information would be appropriate in estimating tax expense for the three months ended March 31, 2024.
A number of items caused the effective income tax rate for the three months ended March 31, 2024 to differ from the US federal statutory income tax rate of
subsidiaries. As of March 31, 2024, the Company continues to maintain a full valuation allowance on deferred tax assets for CMR, CRM and Century Resorts International Ltd.
The Company has unrecognized income tax benefits of $
The calculation of basic loss per share considers only weighted average outstanding common shares in the computation. The calculation of diluted earnings per share gives effect to all potentially dilutive stock options. The calculation of diluted earnings per share is based upon the weighted average number of common shares outstanding during the period, plus, if dilutive, the assumed exercise of stock options using the treasury stock method. Weighted average shares outstanding for the three months ended March 31, 2024 and 2023 were as follows:
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| For the three months | ||||
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| ended March 31, | ||||
Amounts in thousands |
| 2024 |
| 2023 | ||
Weighted average common shares, basic |
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Dilutive effect of stock options |
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| — |
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| — |
Weighted average common shares, diluted |
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The following stock options are anti-dilutive and have not been included in the weighted average shares outstanding calculation:
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| For the three months | ||||
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| ended March 31, | ||||
Amounts in thousands |
| 2024 |
| 2023 | ||
Stock options |
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Fair Value Measurements
The Company follows fair value measurement authoritative accounting guidance for all assets and liabilities measured at fair value. That authoritative accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. Market or observable inputs are the preferred sources of values, followed by assumptions based on hypothetical transactions in the absence of market inputs. The fair value hierarchy for grouping these assets and liabilities is based on the significance level of the following inputs:
Level 1 – quoted prices in active markets for identical assets or liabilities
Level 2 – quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations whose inputs are observable or whose significant value drivers are observable
Level 3 – significant inputs to the valuation model are unobservable
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company reflects transfers between the three levels at the beginning of the reporting period in which the availability of observable inputs no longer justifies classification in the original level. There were
Non-Recurring Fair Value Measurements
The Company applies the provisions of the fair value measurement standard to its non-recurring, non-financial assets and liabilities measured at fair value. The Company applied the acquisition method of accounting for the Nugget Acquisition and Rocky Gap Acquisition. Identifiable assets and liabilities assumed were recognized and measured at fair value as of the acquisition dates. See
Note 3 for more information about and accounting for the Nugget Acquisition and Rocky Gap Acquisition. There were
Debt – The carrying value of the Goldman Credit Agreement, the UniCredit Term Loan and CPL’s short-term line of credit approximate fair value based on the variable interest paid on the obligations. The estimated fair values of the outstanding balances under the Goldman Credit Agreement and UniCredit Term Loan are designated as Level 2 measurements in the fair value hierarchy based on quoted prices in active markets for similar liabilities. The carrying values of the Company’s finance lease obligations approximate fair value based on the similar terms and conditions currently available to the Company in the marketplace for similar financings.
Other Estimated Fair Value Measurements – The estimated fair value of the Company’s other assets and liabilities, such as cash and cash equivalents, accounts receivable and accounts payable, have been determined to approximate carrying value based on the short-term nature of those financial instruments. As of March 31, 2024 and December 31, 2023, the Company had
The Company derives revenue and other income from contracts with customers and financial instruments. A breakout of the Company’s derived revenue and other income is presented in the table below.
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| For the three months | ||||
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| ended March 31, | ||||
Amounts in thousands |
| 2024 |
| 2023 | ||
Revenue from contracts with customers |
| $ |
| $ | ||
Cost recovery income |
|
| — |
|
| |
Century Casino Calgary sale earn out revenue |
|
| — |
|
| |
Total revenue |
| $ |
| $ | ||
The Company operates gaming establishments as well as related lodging, restaurant, horse racing (including off-track betting), sports betting, iGaming, and entertainment facilities around the world. The Company generates revenue at its properties by providing the following types of products and services: gaming, pari-mutuel and sports betting, iGaming, hotel, food and beverage, and other.
Disaggregation of the Company’s revenue from contracts with customers by type of revenue and reportable segment is presented in the tables below.
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| For the three months ended March 31, 2024 | |||||||||||||
Amounts in thousands |
| United States |
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| Canada |
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| Poland |
|
| Corporate and Other |
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| Total |
Gaming | $ |
| $ |
| $ |
| $ | — |
| $ | ||||
Pari-mutuel, sports betting and iGaming |
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| — |
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| — |
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Hotel |
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| — |
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| — |
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Food and beverage |
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| — |
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Other |
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Net operating revenue | $ |
| $ |
| $ |
| $ |
| $ | |||||
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| For the three months ended March 31, 2023 | |||||||||||||
Amounts in thousands |
| United States |
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| Canada |
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| Poland |
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| Corporate and Other |
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| Total |
Gaming | $ |
| $ |
| $ |
| $ |
| $ | |||||
Pari-mutuel, sports betting and iGaming |
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| — |
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| — |
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Hotel |
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| — |
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| — |
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Food and beverage |
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| — |
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Other |
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| — |
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Net operating revenue | $ |
| $ |
| $ |
| $ |
| $ | |||||
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For the majority of the Company’s contracts with customers, payment is made in advance of the services and contracts are settled on the same day the sale occurs with revenue recognized on the date of the sale. For contracts that are not settled, a contract liability is created.
The amount of revenue recognized that was included in the opening contract liability balance was $
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| For the three months ended |
| For the three months ended | ||||||||
|
| March 31, 2024 |
| March 31, 2023 | ||||||||
Amounts in thousands |
| Receivables |
| Contract Liabilities |
| Receivables |
| Contract Liabilities | ||||
Opening |
| $ |
| $ |
| $ |
| $ | ||||
Closing |
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(Decrease)/Increase |
| $ | ( |
| $ |
| $ | ( |
| $ | ( | |
Receivables are included in accounts receivable and contract liabilities are included in accrued liabilities on the Company’s condensed consolidated balance sheets.
The Company determines if an arrangement is a lease at inception. The right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate in each of the jurisdictions in which its subsidiaries operate to calculate the present value of lease payments. Lease terms may include options to extend or terminate the lease. These options are included in the lease term when it is reasonably certain that the Company will exercise those options. Operating lease expense is recorded on a straight-line basis over the lease term.
The Company accounts for lease agreements with lease and non-lease components as a single lease component for all asset classes. The Company does not establish ROU assets or lease liabilities for operating leases with terms of 12 months or less.
The Company’s operating and finance leases include land, casino space, corporate offices, and gaming and other equipment. The leases have remaining lease terms of
The components of lease expense were as follows:
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| For the three months ended | ||||
|
| March 31, | ||||
Amounts in thousands |
| 2024 |
| 2023 | ||
Operating lease expense |
| $ | |
| $ | |
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Finance lease expense: |
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Amortization of right-of-use assets |
| $ | |
| $ | |
Interest on lease liabilities |
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| |
|
| |
Total finance lease expense |
| $ | |
| $ | |
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Variable lease expense |
| $ | |
| $ | |
Variable lease expense relates primarily to rates based on changes in indexes that are excluded from the lease liability and fluctuations in foreign currency related to leases in Poland.
Supplemental cash flow information related to leases was as follows:
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| For the three months ended | ||||
|
| March 31, | ||||
Amounts in thousands |
| 2024 |
| 2023 | ||
Cash paid for amounts included in the measurement of lease liabilities: |
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Operating cash flows from finance leases |
| $ | |
| $ | |
Operating cash flows from operating leases |
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Financing cash flows from finance leases |
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Right-of-use assets obtained in exchange for operating lease liabilities |
| $ | |
| $ | |
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Supplemental balance sheet information related to leases was as follows:
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| As of |
| As of | ||
Amounts in thousands |
| March 31, 2024 |
| December 31, 2023 | ||
Operating leases |
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Leased right-of-use assets, net |
| $ | |
| $ | |
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Current portion of operating lease liabilities |
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Operating lease liabilities, net of current portion |
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Total operating lease liabilities |
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Finance leases |
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Finance lease right-of-use assets, gross |
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Accumulated depreciation |
|
| ( |
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| ( |
Property and equipment, net |
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Current portion of finance lease liabilities |
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Finance lease liabilities, net of current portion |
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Total finance lease liabilities |
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Weighted-average remaining lease term |
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Operating leases |
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Finance leases |
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Weighted-average discount rate |
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Operating leases |
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Finance leases |
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Maturities of lease liabilities as of March 31, 2024 were as follows:
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Amounts in thousands |
|
| Operating Leases |
| Finance Leases | |
2024 |
| $ | |
| $ | |
2025 |
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| |
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| |
2026 |
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| |
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| |
2027 |
|
| |
|
| |
2028 |
|
| |
|
| |
Thereafter |
|
| |
|
|
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Total lease payments |
|
| |
|
| |
Less imputed interest |
|
| ( |
|
| ( |
Total |
| $ | |
| $ | |
The Company reports its financial performance in
The table below provides information about the aggregation of the Company’s reporting units and operating segments into reportable segments:
|
|
|
Reportable Segment | Operating Segment | Reporting Unit |
United States | East | Mountaineer Casino, Resort & Races (1) |
|
| Rocky Gap Casino, Resort & Golf (1) |
| Midwest | Century Casino & Hotel — Central City |
|
| Century Casino & Hotel — Cripple Creek |
|
| Century Casino & Hotel — Cape Girardeau (1) |
|
| Century Casino Caruthersville and The Farmstead (1) |
| West | Nugget Casino Resort and Smooth Bourbon, LLC |
Canada | Canada | Century Casino & Hotel — Edmonton (1) |
|
| Century Casino St. Albert (1) |
|
| Century Mile Racetrack and Casino (1) |
|
| Century Downs Racetrack and Casino (1) |
Poland | Poland | Casinos Poland |
Corporate and Other | Corporate and Other | Cruise Ships & Other (2) |
|
| Corporate Other (3) |
(1)The real estate assets, except The Riverview hotel in Cape Girardeau and The Farmstead hotel in Caruthersville, are owned by VICI PropCo.
(2)The Company operated on ship-based casinos through April 16, 2023. See Part I, Item 1 Note 1.
(3)Prior to the Nugget Acquisition, the Company’s equity investment in Smooth Bourbon was included in the Corporate Other reporting unit.
The Company’s chief operating decision maker is a management function comprised of
Adjusted EBITDAR
Adjusted EBITDAR is a non-US GAAP measure defined as net earnings (loss) attributable to Century Casinos, Inc. shareholders before interest expense (income), net, income taxes (benefit), depreciation, amortization, non-controlling interest earnings (loss) and transactions, pre-opening expenses, acquisition costs, non-cash stock-based compensation charges, asset impairment costs, (gain) loss 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 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 EBITDAR reported for each segment. Non-cash stock-based compensation expense is presented under Corporate and Other in the tables below as the expense is not allocated to reportable segments when reviewed by the Company’s chief operating decision makers. 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 EBITDAR is not considered a measure of performance recognized under US GAAP.
The following tables provide information regarding the Company’s reportable segments:
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| For the three months ended March 31, 2024 | ||||||||||||||
Amounts in thousands |
|
| United States |
|
| Canada |
|
| Poland |
|
| Corporate and Other |
|
| Total |
Net operating revenue |
| $ |
| $ |
| $ |
| $ |
| $ | |||||
(Loss) earnings before income taxes |
|
| ( |
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| ( |
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| ( | ||
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Net (loss) earnings attributable to Century Casinos, Inc. shareholders |
| $ | ( |
| $ |
| $ |
| $ | ( |
| $ | ( | ||
Interest expense (income), net (1) |
|
|
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|
|
| ( |
|
|
|
| ||||
Income tax (benefit) expense |
|
| ( |
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|
| ( |
|
| ( | ||
Depreciation and amortization |
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|
| |||||
Net earnings attributable to non-controlling interests |
|
|
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|
|
| — |
|
| ||||
Non-cash stock-based compensation |
|
| — |
|
| — |
|
| — |
|
|
|
| ||
Gain on foreign currency transactions, cost recovery income and other |
|
| — |
|
| ( |
|
| ( |
|
| ( |
|
| ( |
Loss (gain) on disposition of fixed assets |
|
|
|
| ( |
|
|
|
| — |
|
| |||
Acquisition costs |
|
| — |
|
| — |
|
| — |
|
| ( |
|
| ( |
Adjusted EBITDAR |
| $ |
| $ |
| $ |
| $ | ( |
| $ | ||||
|
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(1)Interest expense in the United States and Canada segments primarily relates to the Master Lease.
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|
| For the three months ended March 31, 2023 | ||||||||||||||
Amounts in thousands |
|
| United States |
|
| Canada |
|
| Poland |
|
| Corporate and Other |
|
| Total |
Net operating revenue (1) |
| $ |
| $ |
| $ |
| $ |
| $ | |||||
Earnings from equity investment |
|
| — |
|
| — |
|
| — |
|
|
|
| ||
Earnings (loss) before income taxes |
|
|
|
|
|
|
|
| ( |
|
| ||||
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|
|
Net earnings (loss) attributable to Century Casinos, Inc. shareholders |
| $ |
| $ |
| $ |
| $ | ( |
| $ | ( | |||
Interest expense (income), net (2) |
|
|
|
|
|
| ( |
|
|
|
| ||||
Income tax expense (benefit) |
|
|
|
|
|
|
|
| ( |
|
| ||||
Depreciation and amortization |
|
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|
| |||||
Net earnings attributable to non-controlling interests |
|
| — |
|
|
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| — |
|
| |||
Non-cash stock-based compensation |
|
| — |
|
| — |
|
| — |
|
|
|
| ||
(Gain) loss on foreign currency transactions and cost recovery income (3) |
|
| — |
|
| ( |
|
| ( |
|
|
|
| ( | |
Loss on disposition of fixed assets |
|
|
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|
|
|
|
|
| |||||
Acquisition costs |
|
| — |
|
| — |
|
| — |
|
|
|
| ||
Adjusted EBITDAR |
| $ |
| $ |
| $ |
| $ | ( |
| $ | ||||
(1)Net operating revenue for Corporate and Other primarily related to the Company’s cruise ship operations, which ceased in April 2023.
(2)Interest expense in the United States and Canada segments primarily relates to the Master Lease. Expense related to the CDR land lease was recorded as interest expense in the Canada segment. The CDR land lease ended on September 6, 2023 in conjunction with the Canada Real Estate Sale.
(3)Includes $
The Company has entered into an agreement with Marnell, which along with the Company owns
The Company evaluated subsequent events and accounting and disclosure requirements related to material subsequent events in its condensed consolidated financial statements and related notes.
The Company opened its
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking Statements, Business Environment and Risk Factors
This quarterly report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. In addition, Century Casinos, Inc. (together with its subsidiaries, the “Company”) may make other written and oral communications from time to time that contain such statements. Forward-looking statements include statements as to industry trends and future expectations of the Company and other matters that do not relate strictly to historical facts and are based on certain assumptions by management at the time such statements are made. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. These statements are based on the beliefs and assumptions of the management of the Company based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, among others, the risks described in the section entitled “Risk Factors” under Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2023. We caution the reader to carefully consider such factors. Furthermore, such forward-looking statements speak only as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.
References in this item to “we,” “our,” or “us” are to the Company and its subsidiaries on a consolidated basis unless the context otherwise requires. The term “USD” refers to US dollars, the term “CAD” refers to Canadian dollars, and the term “PLN” refers to Polish zloty. Certain terms used in this Item 2 without definition are defined in Item 1.
Amounts presented in this Item 2 are rounded. As such, rounding differences could occur in period over period changes and percentages reported throughout this Item 2.
EXECUTIVE OVERVIEW
Overview
Since our inception in 1992, we have been primarily engaged in developing and operating gaming establishments and related lodging, restaurant and entertainment facilities. Our primary source of revenue is from the net proceeds of our gaming machines and tables, with ancillary revenue generated from hotel, restaurant, horse racing (including off-track betting), sports betting, iGaming and entertainment facilities that are in most instances a part of the casinos.
We view each region in which we operate as a separate operating segment and each casino or other operation within those markets as a reporting unit. We aggregate all operating segments into three reportable segments based on the geographical locations in which our casinos operate: United States, Canada and Poland. We have additional business activities including certain other corporate and management operations that we report as Corporate and Other.
The reporting units, except for Century Downs Racetrack and Casino and Casinos Poland, are owned, operated and managed through wholly-owned subsidiaries. Our ownership and operation of Century Downs Racetrack and Casino and Casinos Poland are discussed below.
The table below provides information about the aggregation of our operating segments and reporting units into reportable segments.
|
|
|
Reportable Segment | Operating Segment | Reporting Unit |
United States | East | Mountaineer Casino, Resort & Races (1) |
|
| Rocky Gap Casino, Resort & Golf (1) |
| Midwest | Century Casino & Hotel — Central City |
|
| Century Casino & Hotel — Cripple Creek |
|
| Century Casino & Hotel — Cape Girardeau (1) |
|
| Century Casino Caruthersville and The Farmstead (1) |
| West | Nugget Casino Resort and Smooth Bourbon, LLC |
Canada | Canada | Century Casino & Hotel — Edmonton (1) |
|
| Century Casino St. Albert (1) |
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| Century Mile Racetrack and Casino (1) |
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| Century Downs Racetrack and Casino (1) |
Poland | Poland | Casinos Poland |
Corporate and Other | Corporate and Other | Cruise Ships & Other (2) |
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| Corporate Other (3) |
(1)The real estate assets, except The Riverview hotel in Cape Girardeau and The Farmstead hotel in Caruthersville, are owned by VICI PropCo.
(2)We operated ship-based casinos through April 16, 2023.
(3)Prior to the Nugget Acquisition, our equity investment in Smooth Bourbon was included in the Corporate Other reporting unit.
We have controlling financial interests through our subsidiary CRM in the following reporting units:
We have a 66.6% ownership interest in CPL and we consolidate CPL as a majority-owned subsidiary for which we have a controlling financial interest. Polish Airports owns the remaining 33.3% of CPL. We account for and report the 33.3% Polish Airports ownership interest as a non-controlling financial interest. CPL has been in operation since 1989. As of March 31, 2024, CPL had casino licenses for eight casinos and operated seven casinos throughout Poland. The following table summarizes information about CPL’s casinos as of March 31, 2024.
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City | Location | License Expiration | Number of Slots | Number of Tables |
Warsaw | Marriott Hotel | September 2028 | 70 | 37 |
Warsaw | Hilton Hotel | June 2025 | 70 | 24 |
Warsaw | LIM Center | July 2024 | 67 | 4 |
Bielsko-Biala(1) | Hotel President | February 2030 | 52 | 5 |
Katowice(1) | Park Inn by Radisson | February 2030 | 16 | 4 |
Wroclaw(2) | Double Tree Hilton Hotel | December 2029 | — | — |
Krakow | Dwor Kosciuszko Hotel | May 2024 | 70 | 5 |
Lodz(3) | Manufaktura Entertainment Complex | March 2030 | 70 | 9 |
(1)We closed the casinos in Katowice and Bielsko-Biala in October 2023 due to the expiration of the gaming licenses. We were awarded both licenses in February 2024. The Bielsko-Biala casino reopened in February 2024, and the Katowice casino reopened in March 2024 with a reduced gaming floor. We anticipate reopening the full gaming floor at the Katowice casino in the second quarter of 2024.
(2)We closed the Wroclaw casino in November 2023 due to the expiration of the gaming license. We were awarded the license in December 2023; however, we have not reopened the casino because we are relocating it to a new location. The Wroclaw casino is expected to reopen in the third quarter of 2024.
(3)We were awarded a new license for the Lodz casino in March 2024.
We have a 75% ownership interest in CDR, and we consolidate CDR as a majority-owned subsidiary for which we have a controlling financial interest. We account for and report the remaining 25% ownership interest in CDR as a non-controlling financial interest. CDR operates Century Downs Racetrack and Casino, a REC in Balzac, a north metropolitan area of Calgary, Alberta, Canada. CDR is the only horse racetrack in the Calgary area and is located less than one-mile north of the city limits of Calgary and 4.5 miles from the Calgary International Airport.
Through our wholly owned subsidiary Century Nevada Acquisition, Inc., we have a 50% equity interest in Smooth Bourbon. Prior to the Nugget Acquisition, we reported this interest as an equity investment in the Corporate Other reportable segment. On April
3, 2023, as a result of closing the Nugget Acquisition, we began consolidating Smooth Bourbon as a subsidiary for which we have a controlling financial interest. The remaining 50% of Smooth Bourbon is owned by Marnell and is reported as a non-controlling financial interest.
The Company previously operated several ship-based casinos. The Company’s last concession agreement to operate a ship-based casino ended on April 16, 2023. See “Corporate and Other” below.
Recent Developments Related to Economic Uncertainty
Current macroeconomic conditions remain very dynamic, including impacts from rising inflation and interest rates, volatile changes in foreign currency exchange rates, political unrest and armed conflicts, and other factors. Any worsening in economic conditions in the regions we operate or globally, or the perception that conditions may worsen, could reduce consumer discretionary spending or increase our costs and erode our net income and cash flows.
Other Projects and Developments
Nugget Casino Resort in Reno-Sparks, Nevada
In February 2022, we entered into a definitive agreement with Marnell, pursuant to which we agreed to purchase from Marnell (i) 50% of the membership interests in Smooth Bourbon, and (ii) 100% of the membership interests in Nugget. Nugget owns and operates the Nugget Casino Resort in Reno-Sparks, Nevada, and Smooth Bourbon owns the real property on which the casino is located.
We purchased 50% of the membership interests in Smooth Bourbon for approximately $95.0 million at the First Closing on April 1, 2022. We purchased 100% of the membership interests in Nugget for approximately $104.7 million (subject to certain adjustments) at the Second Closing on April 3, 2023. Following the Second Closing, we own the Nugget Casino Resort and 50% of the membership interests in Smooth Bourbon. We also have a five-year option through April 1, 2027 to acquire the remaining 50% of the membership interests in Smooth Bourbon for $105.0 million plus 2% per annum. At the First Closing, Smooth Bourbon entered into a lease with Nugget for an annual rent of $15.0 million plus an annual escalator.
Rocky Gap Casino, Resort & Golf in Flintstone, Maryland
In August 2022, we entered into a definitive agreement with Golden, Lakes Maryland, a subsidiary of Golden, and VICI PropCo, pursuant to which we agreed to acquire the operations of Rocky Gap. Pursuant to a real estate purchase agreement, dated August 24, 2022, by and between Evitts and VICI PropCo Buyer, VICI PropCo Buyer agreed to acquire a related interest in the land and building associated with Rocky Gap.
On July 25, 2023, we completed the Rocky Gap Acquisition. We paid approximately $59.1 million (subject to certain adjustments), and VICI PropCo Buyer purchased a related interest in the land and building associated with Rocky Gap for approximately $203.9 million. In connection with the closing of this transaction, one of our subsidiaries and a subsidiary of VICI PropCo entered into an amendment to the Master Lease. See Part I, Item 1. Note 6, “Long-Term Financing Obligation” for a discussion of the Master Lease as amended to date.
Canada Real Estate Sale
In May 2023, we entered into definitive agreements for subsidiaries of VICI to acquire the real estate assets of the Century Canadian Portfolio. The sale was completed on September 6, 2023 for an aggregate purchase price of CAD 221.7 million ($162.6 million based on the exchange rate on September 6, 2023). The CDR land lease ended on September 6, 2023 in conjunction with the Canada Real Estate Sale. Simultaneous with the closing of the transaction, our existing Master Lease was amended. See Part I, Item 1. Note 6 “Long-Term Financing Obligation” for a discussion of the Master Lease as amended to date.
Caruthersville Land-Based Casino
We are building a new land-based casino with a 38 room hotel adjacent to and connected with the existing casino pavilion building. We estimate the project will cost $51.9 million. Construction started in December 2022 with completion expected in the fourth quarter of 2024. We are funding this project with financing provided by VICI PropCo. Following completion, VICI PropCo will own the real estate improvements associated with the Caruthersville project. See Part I, Item 1. Note 6 “Long-Term Financing Obligation” for a discussion of the Master Lease as amended to date. As of March 31, 2024, we had received $46.0 million from VICI PropCo and have spent approximately $27.4 million of those funds on this project.
Cape Girardeau Hotel
We opened our 69 room hotel at our Cape Girardeau location called The Riverview on April 4, 2024. The Riverview is a six story building with 68,000 square feet that is adjacent to and connected with the existing casino building. Construction on the project began in September 2022, and was completed in April 2024. The project cost approximately $30.5 million. We financed the project with cash on hand. As of March 31, 2024, we have spent approximately $28.9 million on this project.
Additional Gaming Projects
We currently are exploring additional potential gaming projects and acquisition opportunities. Along with the capital needs of potential projects, there are various other risks which, if they materialize, could affect our ability to complete a proposed project or acquisition or could eliminate its feasibility altogether.
Presentation of Foreign Currency Amounts
The average exchange rates to the US dollar used to translate balances during each reported period are as follows:
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| For the three months |
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| ended March 31, |
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Average Rates |
| 2024 |
| 2023 |
| % Change |
Canadian dollar (CAD) |
| 1.3476 |
| 1.3523 |
| 0.3% |
Euros (EUR) |
| 0.9209 |
| 0.9324 |
| 1.2% |
Polish zloty (PLN) |
| 3.9899 |
| 4.3913 |
| 9.1% |
Source: Xe Currency Converter | ||||||
We recognize in our condensed consolidated statements of loss foreign currency transaction gains or losses resulting from the translation of casino operations and other transactions that are denominated in a currency other than US dollars. Our casinos in Canada and Poland represent a significant portion of our business, and the revenue generated and expenses incurred by these operations are generally denominated in Canadian dollars and Polish zloty. A decrease in the value of these currencies in relation to the value of the US dollar would decrease the earnings from our foreign operations when translated into US dollars. An increase in the value of these currencies in relation to the value of the US dollar would increase the earnings from our foreign operations when translated into US dollars.
DISCUSSION OF RESULTS
Century Casinos, Inc. and Subsidiaries
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| For the three months |
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|
| ended March 31, |
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| % | |||||
Amounts in thousands |
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| 2024 |
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| 2023 |
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| Change |
| Change |
Gaming Revenue |
| $ | 105,418 |
| $ | 94,297 |
| $ | 11,121 |
| 11.8% |
Pari-mutuel, Sports Betting and iGaming Revenue |
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| 3,389 |
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| 3,385 |
|
| 4 |
| 0.1% |
Hotel Revenue |
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| 9,302 |
|
| 2,522 |
|
| 6,780 |
| 268.8% |
Food and Beverage Revenue |
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| 12,745 |
|
| 5,767 |
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| 6,978 |
| 121.0% |
Other Revenue |
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| 5,163 |
|
| 2,537 |
|
| 2,626 |
| 103.5% |
Net Operating Revenue |
|
| 136,017 |
|
| 108,508 |
|
| 27,509 |
| 25.4% |
Gaming Expenses |
|
| (55,905) |
|
| (48,062) |
|
| 7,843 |
| 16.3% |
Pari-mutuel, Sports Betting and iGaming Expenses |
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| (3,751) |
|
| (3,712) |
|
| 39 |
| 1.1% |
Hotel Expenses |
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| (4,414) |
|
| (797) |
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| 3,617 |
| 453.8% |
Food and Beverage Expenses |
|
| (12,231) |
|
| (5,645) |
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| 6,586 |
| 116.7% |
Other Expenses |
|
| (1,474) |
|
| (223) |
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| 1,251 |
| 561.0% |
General and Administrative Expenses |
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| (37,924) |
|
| (26,479) |
|
| 11,445 |
| 43.2% |
Depreciation and Amortization |
|
| (12,031) |
|
| (6,855) |
|
| 5,176 |
| 75.5% |
Gain on Sale of Casino Operations |
|
| — |
|
| 574 |
|
| 574 |
| 100.0% |
Total Operating Costs and Expenses |
|
| (127,730) |
|
| (91,199) |
|
| 36,531 |
| 40.1% |
Earnings from Equity Investment |
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| — |
|
| 1,091 |
|
| (1,091) |
| (100.0%) |
Earnings from Operations |
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| 8,287 |
|
| 18,400 |
|
| (10,113) |
| (55.0%) |
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Income Tax Benefit (Expense) |
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| 3,986 |
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| (1,623) |
|
| 5,609 |
| 345.6% |
Net Earnings Attributable to Non-Controlling Interests |
|
| (1,850) |
|
| (4,274) |
|
| 2,424 |
| 56.7% |
Net Loss Attributable to Century Casinos, Inc. Shareholders |
|
| (13,544) |
|
| (1,243) |
|
| (12,301) |
| (989.6%) |
Adjusted EBITDAR (1) |
| $ | 21,250 |
| $ | 26,054 |
| $ | (4,804) |
| (18.4%) |
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Net Loss Per Share Attributable to Century Casinos, Inc. Shareholders | |||||||||||
Basic |
| $ | (0.45) |
| $ | (0.04) |
| $ | (0.41) |
| (1025.0%) |
Diluted |
| $ | (0.45) |
| $ | (0.04) |
| $ | (0.41) |
| (1025.0%) |
(1)For a discussion of Adjusted EBITDAR and reconciliation of Adjusted EBITDAR to net earnings attributable to Century Casinos, Inc. shareholders, see “Non-US GAAP Measures – Adjusted EBITDAR” below.
Comparability Impacts
Items impacting comparability of the results include the following:
United States (Nugget) – We acquired the operations of the Nugget on April 3, 2023. The Nugget is reported in the United States reportable segment and contributed $18.4 million in net operating revenue and ($3.0) million in net loss attributable to Century Casinos, Inc. shareholders for the three months ended March 31, 2024. The Nugget is in a gaming jurisdiction that is new to us, and we incurred additional general and administrative expenses related to the acquisition in 2023.
United States (Rocky Gap) – We acquired the operations of Rocky Gap on July 25, 2023. Rocky Gap is reported in the United States reportable segment and contributed $14.9 million in net operating revenue and ($2.9) million in net loss attributable to Century Casinos, Inc. shareholders for the three months ended March 31, 2024. Rocky Gap is in a gaming jurisdiction that is new to us, and we incurred additional general and administrative expenses related to the acquisition in 2023.
Increased Interest Expense – Increased interest expense negatively impacted net loss attributable to Century Casinos, Inc. shareholders in 2023 and 2024. Interest expense increased $8.2 million in the three months ended March 31, 2024 compared to the three months ended March 31, 2023 due to additional properties added to the Master Lease and increased interest rates under the Goldman Credit Agreement.
Canada (Calgary) – In March 2023, we received an earn out payment of CAD 0.8 million ($0.6 million based on the exchange rate on March 31, 2023) related to the 2020 sale of our Calgary casino operations. The earn out period ended in August 2023, and we did not receive any earn out payments during the three months ended March 31, 2024.
Inflation and Staffing – We have seen material increases in our operating expenses at our properties, including payroll wages and benefits, insurance and utilities, maintenance costs and food and beverage costs. We have also experienced difficulties attracting and retaining staff at some locations in the US and Canada. As a result, we have had to adjust hours of some food and beverage outlets, the number of table games open and the number of rooms available at some of our hotels. We have been able to make adjustments during non-peak times to mitigate some of the impact to our operating results.
Weather – Inclement weather in the United States impacted revenue for the three months ended March 31, 2024 compared to March 31, 2023 for our Colorado and West Virginia properties.
Summary of Changes by Reportable Segment
Net operating revenue increased by $27.5 million, or 25.4%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Following is a breakout of net operating revenue by segment for the three months ended March 31, 2024 compared to the three months ended March 31, 2023:
United States increased by $29.7 million, or 44.7%.
Canada increased by $1.8 million, or 11.0%.
Poland decreased by ($3.9) million, or (15.4%).
Corporate and Other remained constant.
Operating costs and expenses increased by $36.5 million, or 40.1%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Following is a breakout of operating costs and expenses by segment for the three months ended March 31, 2024 compared to the three months ended March 31, 2023:
United States increased by $35.5 million, or 68.1%.
Canada increased by $1.8 million, or 14.3%.
Poland decreased by ($1.3) million, or (5.5%).
Corporate and Other increased by $0.5 million, or 14.7%.
Earnings from operations decreased by ($10.1) million, or (55.0%), for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Following is a breakout of earnings from operations by segment for the three months ended March 31, 2024 compared to the three months ended March 31, 2023:
United States decreased by ($5.8) million, or (40.7%).
Canada remained constant.
Poland decreased by ($2.7) million, or (100.8%).
Corporate and Other decreased by ($1.7) million, or (66.6%).
Net earnings attributable to Century Casinos, Inc. shareholders decreased by ($12.3) million, or (989.6%), for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Items deducted from or added to earnings from operations to arrive at net earnings attributable to Century Casinos, Inc. shareholders include interest income, interest expense, gains (losses) on foreign currency transactions and other, income tax expense (benefit) and non-controlling interests. Items that impacted the comparability of the results are discussed above. For a discussion of these items, see “Non-Operating Income (Expense)” and “Taxes” below in this Item 2.
Other
Pari-Mutuel
Pari-mutuel revenue includes live racing, export, advanced deposit wagering and off-track betting. Pari-mutuel expenses relate to pari-mutuel revenue and the operation of our racetracks.
Other
Other revenue and other expenses include gift shops, entertainment, golf and spa. Other revenue also includes revenue from ATM and credit card commissions.
Non-GAAP Measures Definitions and Calculations
Adjusted EBITDAR
Adjusted EBITDAR is used outside of our financial statements as a valuation metric. We define Adjusted EBITDAR as net (loss) earnings attributable to Century Casinos, Inc. shareholders before interest expense (income), net, including interest expense related to the Master Lease as discussed below, income taxes (benefit), depreciation, amortization, non-controlling interests net earnings (losses) 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. 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 EBITDAR reported for each reportable 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 generally accepted accounting principles (“US GAAP”).
The Master Lease is accounted for as a financing obligation. As such, a portion of the periodic payment under the Master Lease is recognized as interest expense with the remainder of the payment impacting the financing obligation using the effective interest method.
Adjusted EBITDAR information is a non-GAAP measure that is a valuation metric, should not be used as an operating metric, and is presented solely as a supplemental disclosure to reported US GAAP measures because we believe this measure is widely used by analysts, lenders, financial institutions, and investors as a principal basis for the valuation of gaming companies. Management believes that presenting Adjusted EBITDAR to investors provides them with information used by management for financial and operational decision-making in order to understand the Company’s operating performance and evaluate the methodology used by management to evaluate and measure such performance.
Adjusted EBITDAR should not be viewed as a measure of overall operating performance as an indicator of our performance, considered in isolation, or construed as an alternative to operating income or net income, the most directly comparable GAAP measure, or as an alternative to cash flows from operating activities, as a measure of liquidity, or as an alternative to any other measure determined in accordance with generally accepted accounting principles because this measure is not presented on a US GAAP basis and excludes certain expenses, including the rent expense related to our Master Lease, and is provided for the limited purposes discussed herein. In addition, Adjusted EBITDAR as used by us may not be defined in the same manner as other companies in our industry, and, as a result, may not be comparable to similarly titled non-GAAP financial measures of other companies. Consolidated Adjusted EBITDAR should not be viewed as a measure of overall operating performance or considered in isolation or as an alternative to net income, because it excludes the rent expense associated with our Master Lease and certain other items.
The reconciliation of Adjusted EBITDAR to net (loss) earnings attributable to Century Casinos, Inc. shareholders is presented below.
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| For the three months ended March 31, 2024 | ||||||||||||||
Amounts in thousands |
|
| United States |
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| Canada |
|
| Poland |
|
| Corporate and Other |
|
| Total |
Net (loss) earnings attributable to Century Casinos, Inc. shareholders |
| $ | (2,782) |
| $ | 1,132 |
| $ | 3 |
| $ | (11,897) |
| $ | (13,544) |
Interest expense (income), net (1) |
|
| 11,746 |
|
| 2,907 |
|
| (35) |
|
| 10,511 |
|
| 25,129 |
Income tax (benefit) expense |
|
| (2,273) |
|
| 728 |
|
| 151 |
|
| (2,592) |
|
| (3,986) |
Depreciation and amortization |
|
| 10,288 |
|
| 1,149 |
|
| 538 |
|
| 56 |
|
| 12,031 |
Net earnings attributable to non-controlling interests |
|
| 1,777 |
|
| 71 |
|
| 2 |
|
| — |
|
| 1,850 |
Non-cash stock-based compensation |
|
| — |
|
| — |
|
| — |
|
| 503 |
|
| 503 |
Gain on foreign currency transactions, cost recovery income and other |
|
| — |
|
| (809) |
|
| (143) |
|
| (356) |
|
| (1,308) |
Loss (gain) on disposition of fixed assets |
|
| 390 |
|
| (37) |
|
| 241 |
|
| — |
|
| 594 |
Acquisition costs |
|
| — |
|
| — |
|
| — |
|
| (19) |
|
| (19) |
Adjusted EBITDAR |
| $ | 19,146 |
| $ | 5,141 |
| $ | 757 |
| $ | (3,794) |
| $ | 21,250 |
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(1)See “Non-Operating Income (Expense) – Interest” below for a breakdown of interest expense (income), net and “Liquidity and Capital Resources” below for more information on the rent payments related to the Master Lease.
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| For the three months ended March 31, 2023 | ||||||||||||||
Amounts in thousands |
|
| United States |
|
| Canada |
|
| Poland |
|
| Corporate and Other |
|
| Total |
Net earnings (loss) attributable to Century Casinos, Inc. shareholders |
| $ | 5,375 |
| $ | 1,867 |
| $ | 1,574 |
| $ | (10,059) |
| $ | (1,243) |
Interest expense (income), net (1) |
|
| 7,119 |
|
| 523 |
|
| (95) |
|
| 9,957 |
|
| 17,504 |
Income tax expense (benefit) |
|
| 1,776 |
|
| 1,634 |
|
| 632 |
|
| (2,419) |
|
| 1,623 |
Depreciation and amortization |
|
| 5,032 |
|
| 1,127 |
|
| 635 |
|
| 61 |
|
| 6,855 |
Net earnings attributable to non-controlling interests |
|
| — |
|
| 3,488 |
|
| 786 |
|
| — |
|
| 4,274 |
Non-cash stock-based compensation |
|
| — |
|
| — |
|
| — |
|
| 736 |
|
| 736 |
(Gain) loss on foreign currency transactions and cost recovery income (2) |
|
| — |
|
| (4,085) |
|
| (254) |
|
| 7 |
|
| (4,332) |
Loss on disposition of fixed assets |
|
| 470 |
|
| 3 |
|
| 1 |
|
| 5 |
|
| 479 |
Acquisition costs |
|
| — |
|
| — |
|
| — |
|
| 158 |
|
| 158 |
Adjusted EBITDAR |
| $ | 19,772 |
| $ | 4,557 |
| $ | 3,279 |
| $ | (1,554) |
| $ | 26,054 |
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(1)See “Non-Operating Income (Expense) – Interest” below for a breakdown of interest expense (income), net and “Liquidity and Capital Resources” below for more information on the rent payments related to the Master Lease.
(2)Includes $3.5 million cost recovery income for CDR and $0.6 million related to the earn out payment from the sale of casino operations in Calgary in 2020.
Net Debt
We define Net Debt as total long-term debt (including current portion) plus deferred financing costs minus cash and cash equivalents. Net Debt is not considered a liquidity measure recognized under US GAAP. Management believes that Net Debt is a valuable measure of our overall financial situation. Net Debt provides investors with an indication of our ability to pay off all of our long-term debt if it became due simultaneously. The reconciliation of Net Debt is presented below.
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Amounts in thousands |
| March 31, 2024 |
| March 31, 2023 | ||
Total long-term debt, including current portion |
| $ | 328,548 |
| $ | 349,005 |
Deferred financing costs |
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| 13,475 |
|
| 16,170 |
Total principal |
| $ | 342,023 |
| $ | 365,175 |
Less: Cash and cash equivalents |
| $ | 136,543 |
| $ | 102,707 |
Net Debt |
| $ | 205,480 |
| $ | 262,468 |
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Reportable Segments
The following discussion provides further detail of consolidated results by reportable segment.
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United States |
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| For the three months |
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|
| ended March 31, |
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| % | |||||
Amounts in thousands |
|
| 2024 |
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| 2023 |
|
| Change |
| Change |
Gaming Revenue |
| $ | 72,307 |
| $ | 58,393 |
| $ | 13,914 |
| 23.8% |
Pari-mutuel, Sports Betting and iGaming Revenue |
|
| 1,297 |
|
| 1,282 |
|
| 15 |
| 1.2% |
Hotel Revenue |
|
| 9,177 |
|
| 2,403 |
|
| 6,774 |
| 281.9% |
Food and Beverage Revenue |
|
| 9,822 |
|
| 3,110 |
|
| 6,712 |
| 215.8% |
Other Revenue |
|
| 3,431 |
|
| 1,181 |
|
| 2,250 |
| 190.5% |
Net Operating Revenue |
|
| 96,034 |
|
| 66,369 |
|
| 29,665 |
| 44.7% |
Gaming Expenses |
|
| (39,474) |
|
| (29,662) |
|
| 9,812 |
| 33.1% |
Pari-mutuel, Sports Betting and iGaming Expenses |
|
| (483) |
|
| (631) |
|
| (148) |
| (23.5%) |
Hotel Expenses |
|
| (4,349) |
|
| (733) |
|
| 3,616 |
| 493.3% |
Food and Beverage Expenses |
|
| (8,825) |
|
| (2,542) |
|
| 6,283 |
| 247.2% |
Other Expenses |
|
| (1,447) |
|
| (198) |
|
| 1,249 |
| 630.8% |
General and Administrative Expenses |
|
| (22,700) |
|
| (13,301) |
|
| 9,399 |
| 70.7% |
Depreciation and Amortization |
|
| (10,288) |
|
| (5,032) |
|
| 5,256 |
| 104.5% |
Total Operating Costs and Expenses |
|
| (87,566) |
|
| (52,099) |
|
| 35,467 |
| 68.1% |
Earnings from Operations |
|
| 8,468 |
|
| 14,270 |
|
| (5,802) |
| (40.7%) |
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Benefit (Expense) |
|
| 2,273 |
|
| (1,776) |
|
| 4,049 |
| 228.0% |
Net Earnings Attributable to Non-Controlling Interests |
|
| (1,777) |
|
| — |
|
| (1,777) |
| (100.0%) |
Net (Loss) Earnings Attributable to Century Casinos, Inc. Shareholders |
|
| (2,782) |
|
| 5,375 |
|
| (8,157) |
| (151.8%) |
Adjusted EBITDAR |
| $ | 19,146 |
| $ | 19,772 |
| $ | (626) |
| (3.2%) |
|
|
|
|
|
|
|
|
|
|
|
|
We opened The Riverview on April 4, 2024. The Riverview is a 69 room, six-story building with 68,000 square feet that is adjacent to and connected with Century Casino Cape Girardeau. We estimate that the hotel will incrementally increase our annual net revenue by $10.0 million to $12.0 million, net of an estimated impact from the Walker’s Bluff Casino in Illinois, which opened in August 2023. The Walker’s Bluff Casino has increased competition for our Missouri casinos, primarily our Cape Girardeau casino. However, we believe that our marketing efforts have been effective in offsetting this competition to date.
We began consolidating Nugget and Smooth Bourbon in the United States segment on April 3, 2023 following the Second Closing of the Nugget Acquisition, and we began consolidating Rocky Gap on July 25, 2023 following the closing of the Rocky Gap Acquisition.
We partner with sports betting operators that conduct sports wagering at our Colorado, West Virginia and Nevada locations. Each agreement with the sports betting operators provides for a share of net gaming revenue and the Colorado agreements also provide for a minimum revenue guarantee each year. In addition, we operate internet and mobile interactive gaming applications in West Virginia with two iGaming partners. The agreements provide for a share of net iGaming revenue. A petition campaign in Missouri to allow voters to determine whether to amend the state constitution to allow sports wagering in the state has gained sufficient signatures to go to a vote as soon as November 2024. If approved, sports betting could be legalized in Missouri by mid-2025. We have partnered with sports betting operators to conduct sports betting at our Missouri casinos if legalized.
In Cripple Creek, a competitor across the street from our casino completed an expansion in late December 2023. The increased availability of hotel rooms in Cripple Creek increased the overall Cripple Creek market, and revenue at our Cripple Creek property increased for the first quarter of 2024 compared to the first quarter of 2023. We believe that we will continue to benefit from any increases in the overall market from nearby expanded hotels or otherwise; however, future periods also could be negatively impacted by this new competitor, either through decreased market share or revenue or increased costs of promotional offers by us in order to compete.
In Central City, two potential competing casinos may open in late 2024. An increase in competitors in that market could lead to a decrease in visitors at our casino and have a negative impact on our results of operations in Central City.
The table below provides results by operating segment within the United States reportable segment.
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the three months |
|
|
|
| |||||
|
| ended March 31, |
|
|
| % | |||||
Amounts in millions |
|
| 2024 |
|
| 2023 |
|
| Change |
| Change |
Net Operating Revenue |
|
|
|
|
|
|
|
|
|
|
|
East |
| $ | 38.5 |
| $ | 26.7 |
| $ | 11.8 |
| 44.5% |
Midwest |
|
| 39.2 |
|
| 39.7 |
|
| (0.5) |
| (1.4%) |
West |
|
| 18.4 |
|
| — |
|
| 18.4 |
| 100.0% |
Total United States |
|
| 96.1 |
|
| 66.4 |
|
| 29.7 |
| 44.7% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and Expenses (1) |
|
|
|
|
|
|
|
|
|
|
|
East |
| $ | 34.0 |
| $ | 22.7 |
| $ | 11.3 |
| 49.8% |
Midwest |
|
| 24.8 |
|
| 24.3 |
|
| 0.5 |
| 2.1% |
West |
|
| 18.4 |
|
| — |
|
| 18.4 |
| 100.0% |
Total United States |
|
| 77.2 |
|
| 47.0 |
|
| 30.2 |
| 64.3% |
|
|
|
|
|
|
|
|
|
|
|
|
(1)Operating costs and expenses are calculated as total operating costs and expenses less depreciation and amortization.
Three Months Ended March 31, 2024 and 2023
The following discussion highlights results for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
East – Increased net operating revenue and operating costs and expenses were due to the acquisition of Rocky Gap. Net operating revenue from our West Virginia operations decreased due to decreased gaming, hotel and food and beverage revenue. In Maryland and West Virginia, snow and inclement weather negatively impacted revenue over three weekends, which are generally our busier days of the week. Moreover, revenue in West Virginia has not rebounded to the levels we saw prior to the legalization of sports betting in Ohio in January 2023. Operating expenses in West Virginia decreased primarily due to gaming-related expenses.
Midwest – Net operating revenue decreased primarily due to decreased gaming revenue at our Cape Girardeau location. Revenue at our Central City property was negatively impacted by inclement weather in the first quarter of 2024. Despite the casino closing for two days due to inclement weather, revenue at our Cripple Creek property increased during the first quarter of 2024 compared to the first quarter of 2023 due to the increase in the Cripple Creek market size from our competitor’s casino and hotel expansion as well as events in the city. Operating expenses in the Midwest operating segment increased due to increased payroll costs.
West – As a new operating segment, all increases are due to the acquisition of the Nugget on April 3, 2023. Inclement weather over holiday weekends negatively impacted revenue during the first quarter of 2024. Beginning in the second quarter of 2024 we have implemented cost saving measures at the Nugget. These measures include marketing improvements, staffing changes and a change to our housekeeping program in the hotels.
A reconciliation of net (loss) earnings attributable to Century Casinos, Inc. shareholders to Adjusted EBITDAR can be found in the “Non-US GAAP Measures – Adjusted EBITDAR” discussion above.
|
|
|
|
|
|
|
|
|
|
|
|
Canada |
|
|
|
|
|
|
|
|
|
|
|
|
| For the three months |
|
|
|
| |||||
|
| ended March 31, |
|
|
| % | |||||
Amounts in thousands |
|
| 2024 |
|
| 2023 |
|
| Change |
| Change |
Gaming Revenue |
| $ | 12,015 |
| $ | 10,598 |
| $ | 1,417 |
| 13.4% |
Pari-mutuel, Sports Betting and iGaming Revenue |
|
| 2,092 |
|
| 2,103 |
|
| (11) |
| (0.5%) |
Hotel Revenue |
|
| 125 |
|
| 119 |
|
| 6 |
| 5.0% |
Food and Beverage Revenue |
|
| 2,727 |
|
| 2,426 |
|
| 301 |
| 12.4% |
Other Revenue |
|
| 1,362 |
|
| 1,257 |
|
| 105 |
| 8.4% |
Net Operating Revenue |
|
| 18,321 |
|
| 16,503 |
|
| 1,818 |
| 11.0% |
Gaming Expenses |
|
| (2,398) |
|
| (2,257) |
|
| 141 |
| 6.2% |
Pari-mutuel, Sports Betting and iGaming Expenses |
|
| (3,268) |
|
| (3,081) |
|
| 187 |
| 6.1% |
Hotel Expenses |
|
| (65) |
|
| (64) |
|
| 1 |
| 1.6% |
Food and Beverage Expenses |
|
| (2,535) |
|
| (2,182) |
|
| 353 |
| 16.2% |
Other Expenses |
|
| (27) |
|
| (25) |
|
| 2 |
| 8.0% |
General and Administrative Expenses |
|
| (4,850) |
|
| (4,340) |
|
| 510 |
| 11.8% |
Depreciation and Amortization |
|
| (1,149) |
|
| (1,127) |
|
| 22 |
| 2.0% |
Gain on Sale of Casino Operations |
|
| — |
|
| 574 |
|
| 574 |
| 100.0% |
Total Operating Costs and Expenses |
|
| (14,292) |
|
| (12,502) |
|
| 1,790 |
| 14.3% |
Earnings from Operations |
|
| 4,029 |
|
| 4,001 |
|
| 28 |
| 0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense |
|
| (728) |
|
| (1,634) |
|
| (906) |
| (55.4%) |
Net Earnings Attributable to Non-Controlling Interests |
|
| (71) |
|
| (3,488) |
|
| 3,417 |
| 98.0% |
Net Earnings Attributable to Century Casinos, Inc. Shareholders |
|
| 1,132 |
|
| 1,867 |
|
| (735) |
| (39.4%) |
Adjusted EBITDAR |
| $ | 5,141 |
| $ | 4,557 |
| $ | 584 |
| 12.8% |
In March 2023, we received an earn out payment of CAD 0.8 million ($0.6 million based on the exchange rate on March 31, 2023) from the sale of the Calgary casino operations in 2020 that is recorded to gain on sale of casino operations in our condensed consolidated statement of loss for the three months ended March 31, 2023.
In February 2023, the AGLC, Alberta’s gaming regulatory agency, approved a temporary increase from 15% of slot machine net sales retained by casinos to 17% effective from April 1, 2023 through March 31, 2025. The increase in the slot machine net sales retention percentage has had a positive impact on net operating revenue and results of operations at our Canadian properties. Effective August 1, 2023, the AGLC extended the operating hours for slot machines by 30 minutes on weekdays and 90 minutes on weekends.
In September 2023, we completed the Canada Real Estate Sale. Interest expense increased $2.9 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 due to the addition of the Canadian properties to the Master Lease.
Results in US dollars were impacted by a 0.3% increase in the average exchange rate between the US dollar and Canadian dollar for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
The tables below provide results for the Canada reportable segment.
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the three months |
|
|
|
| |||||
|
| ended March 31, |
|
|
| % | |||||
Amounts in CAD, in millions |
|
| 2024 |
|
| 2023 |
|
| Change |
| Change |
Net Operating Revenue |
|
|
|
|
|
|
|
|
|
|
|
Canada |
|
| 24.7 |
|
| 22.4 |
|
| 2.3 |
| 10.6% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and Expenses (1) |
|
|
|
|
|
|
|
|
|
|
|
Canada |
|
| 17.7 |
|
| 15.4 |
|
| 2.3 |
| 14.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the three months |
|
|
|
| |||||
|
| ended March 31, |
|
|
| % | |||||
Amounts in USD, in millions |
|
| 2024 |
|
| 2023 |
|
| Change |
| Change |
Net Operating Revenue |
|
|
|
|
|
|
|
|
|
|
|
Canada |
| $ | 18.3 |
| $ | 16.5 |
| $ | 1.8 |
| 11.0% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and Expenses (1) |
|
|
|
|
|
|
|
|
|
|
|
Canada |
| $ | 13.1 |
| $ | 11.9 |
| $ | 1.2 |
| 10.1% |
(1)Operating costs and expenses are calculated as total operating costs and expenses less depreciation and amortization and gain on sale of casino operations.
Three Months Ended March 31, 2024 and 2023
The following discussion highlights results for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Explanations below are provided based on CAD results.
Gaming and food and beverage revenue increased at all of our Canada locations. The increase in gaming revenue was due primarily to the additional 2% slot machine net sales retained starting April 1, 2023. Operating costs and expenses increased due to increased payroll, cost of goods sold and utility costs.
A reconciliation of net earnings attributable to Century Casinos, Inc. shareholders to Adjusted EBITDAR can be found in the “Non-US GAAP Measures – Adjusted EBITDAR” discussion above.
|
|
|
|
|
|
|
|
|
|
|
|
Poland |
|
|
|
|
|
|
|
|
|
|
|
|
| For the three months |
|
|
|
| |||||
|
| ended March 31, |
|
|
| % | |||||
Amounts in thousands |
|
| 2024 |
|
| 2023 |
|
| Change |
| Change |
Gaming Revenue |
| $ | 21,096 |
| $ | 25,249 |
| $ | (4,153) |
| (16.4%) |
Food and Beverage Revenue |
|
| 196 |
|
| 231 |
|
| (35) |
| (15.2%) |
Other Revenue |
|
| 357 |
|
| 99 |
|
| 258 |
| 260.6% |
Net Operating Revenue |
|
| 21,649 |
|
| 25,579 |
|
| (3,930) |
| (15.4%) |
Gaming Expenses |
|
| (14,033) |
|
| (16,101) |
|
| (2,068) |
| (12.8%) |
Food and Beverage Expenses |
|
| (871) |
|
| (921) |
|
| (50) |
| (5.4%) |
General and Administrative Expenses |
|
| (6,229) |
|
| (5,279) |
|
| 950 |
| 18.0% |
Depreciation and Amortization |
|
| (538) |
|
| (635) |
|
| (97) |
| (15.3%) |
Total Operating Costs and Expenses |
|
| (21,671) |
|
| (22,936) |
|
| (1,265) |
| (5.5%) |
(Loss) Earnings from Operations |
|
| (22) |
|
| 2,643 |
|
| (2,665) |
| (100.8%) |
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense |
|
| (151) |
|
| (632) |
|
| 481 |
| 76.1% |
Net Earnings Attributable to Non-Controlling Interests |
|
| (2) |
|
| (786) |
|
| 784 |
| 99.7% |
Net Earnings Attributable to Century Casinos, Inc. Shareholders |
|
| 3 |
|
| 1,574 |
|
| (1,571) |
| (99.8%) |
Adjusted EBITDAR |
| $ | 757 |
| $ | 3,279 |
| $ | (2,522) |
| (76.9%) |
In Poland, casino gaming licenses are granted for a term of six years. These licenses are not renewable. Before a gaming license expires for a particular city, there is a public notification of the available license and any gaming company can apply for a new license for that city. We closed our Wroclaw casino in November 2023 due to the expiration of the gaming license. We were awarded a license for the Wroclaw casino in December 2023 and anticipate reopening the casino in a new location in the third quarter of 2024. We closed the casinos in Bielsko-Biala and Katowice in October 2023 due to the expiration of the gaming licenses. New licenses were awarded in February 2024 for each, and the casinos were reopened in February 2024 and March 2024, respectively. The next license expiration for a CPL casino occurs in May 2024 in Krakow. CPL has applied for a casino license in Krakow ahead of that license’s expiration, but the license has not yet been awarded. There can be no assurance that such license will be received.
Results in US dollars were impacted by a 9.1% increase in the average exchange rate between the US dollar and Polish zloty for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
The tables below provide results for the Poland reportable segment.
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the three months |
|
|
|
| |||||
|
| ended March 31, |
|
|
| % | |||||
Amounts in PLN, in millions |
|
| 2024 |
|
| 2023 |
|
| Change |
| Change |
Net Operating Revenue |
|
|
|
|
|
|
|
|
|
|
|
Poland |
|
| 86.4 |
|
| 112.3 |
|
| (25.9) |
| (23.1%) |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and Expenses (1) |
|
|
|
|
|
|
|
|
|
|
|
Poland |
|
| 84.3 |
|
| 97.9 |
|
| (13.6) |
| (13.9%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the three months |
|
|
|
| |||||
|
| ended March 31, |
|
|
| % | |||||
Amounts in USD, in millions |
|
| 2024 |
|
| 2023 |
|
| Change |
| Change |
Net Operating Revenue |
|
|
|
|
|
|
|
|
|
|
|
Poland |
| $ | 21.6 |
| $ | 25.6 |
| $ | (4.0) |
| (15.4%) |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and Expenses (1) |
|
|
|
|
|
|
|
|
|
|
|
Poland |
| $ | 21.1 |
| $ | 22.3 |
| $ | (1.2) |
| (5.4%) |
(1)Operating costs and expenses are calculated as total operating costs and expenses less depreciation and amortization.
Three Months Ended March 31, 2024 and 2023
The following discussion highlights results for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Explanations below are provided based on PLN results.
Net operating revenue decreased primarily due to licensing-related closures at our Bielsko-Biala, Krakow and Wroclaw locations during the first quarter of 2024. Operating costs and expenses decreased due to decreased gaming-related expenses.
A reconciliation of net earnings attributable to Century Casinos, Inc. shareholders to Adjusted EBITDAR can be found in the “Non-US GAAP Measures – Adjusted EBITDAR” discussion above.
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Other |
|
|
|
|
|
|
|
|
|
|
|
|
| For the three months |
|
|
|
| |||||
|
| ended March 31, |
|
|
| % | |||||
Amounts in thousands |
|
| 2024 |
|
| 2023 |
|
| Change |
| Change |
Gaming Revenue |
| $ | — |
| $ | 57 |
| $ | (57) |
| (100.0%) |
Other Revenue |
|
| 13 |
|
| — |
|
| 13 |
| 100.0% |
Net Operating Revenue |
|
| 13 |
|
| 57 |
|
| (44) |
| (77.2%) |
Gaming Expenses |
|
| — |
|
| (42) |
|
| (42) |
| (100.0%) |
General and Administrative Expenses |
|
| (4,145) |
|
| (3,559) |
|
| 586 |
| 16.5% |
Depreciation and Amortization |
|
| (56) |
|
| (61) |
|
| (5) |
| (8.2%) |
Total Operating Costs and Expenses |
|
| (4,201) |
|
| (3,662) |
|
| 539 |
| 14.7% |
Earnings from Equity Investment |
|
| — |
|
| 1,091 |
|
| (1,091) |
| (100.0%) |
Loss from Operations |
|
| (4,188) |
|
| (2,514) |
|
| (1,674) |
| (66.6%) |
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Benefit |
|
| 2,592 |
|
| 2,419 |
|
| 173 |
| 7.2% |
Net Loss Attributable to Century Casinos, Inc. Shareholders |
|
| (11,897) |
|
| (10,059) |
|
| (1,838) |
| (18.3%) |
Adjusted EBITDAR |
| $ | (3,794) |
| $ | (1,554) |
| $ | (2,240) |
| (144.1%) |
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2023, we had a concession agreement with TUI Cruises for one ship-based casino. The agreement ended on April 16, 2023.
Three Months Ended March 31, 2024 and 2023
The following discussion highlights results for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
Net operating revenue decreased because the remaining ship-based casino contract ended in April 2023. Total operating costs and expenses, including general and administrative expenses, increased due to increased professional services expenses. Earnings from equity investment relates to income from our 50% membership interest in Smooth Bourbon prior to its consolidation in the United States reportable segment on April 3, 2023.
A reconciliation of net loss attributable to Century Casinos, Inc. shareholders to Adjusted EBITDAR can be found in the “Non-US GAAP Measures – Adjusted EBITDAR” discussion above.
Non-Operating Income (Expense)
Non-operating income (expense) was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the three months |
|
|
|
|
| ||||
|
| ended March 31, |
|
|
|
| % | ||||
Amounts in thousands |
| 2024 |
| 2023 |
| $ Change |
| Change | |||
Interest Income |
| $ | 686 |
| $ | 145 |
| $ | 541 |
| 373.1% |
Interest Expense |
|
| (25,815) |
|
| (17,649) |
|
| (8,166) |
| (46.3%) |
Gain on Foreign Currency Transactions, Cost Recovery Income and Other |
|
| 1,162 |
|
| 3,758 |
|
| (2,596) |
| (69.1%) |
Non-Operating (Expense) Income |
| $ | (23,967) |
| $ | (13,746) |
| $ | (10,221) |
| (74.4%) |
|
|
|
|
|
|
|
|
|
|
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Interest income
Interest income is primarily related to interest earned on our cash reserves and, for the three months ended March 31, 2023, interest from the Acquisition Escrow. We earned approximately $0.6 million in interest income in Canada from the funds from the Canada Real Estate Sale for the three months ended March 31, 2024. The Acquisition Escrow was used to fund the Nugget Acquisition on April 3, 2023.
Interest expense
Interest expense is directly related to interest owed on our borrowings under our Goldman Credit Agreement, our financing obligation with VICI PropCo, our CPL and CRM borrowings, our capital lease agreements and, prior to the Canada Real Estate Sale, interest expense related to the CDR land lease. Increases in interest expense were primarily due to increased interest related to the addition of Rocky Gap and the Century Canadian Portfolio to the financing obligation under the Master Lease with VICI.
A breakdown of interest expense is below.
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|
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|
|
|
|
| For the three months | ||||
|
| ended March 31, | ||||
Amounts in thousands |
| 2024 |
| 2023 | ||
Interest Expense |
| $ | 43 |
| $ | 86 |
Interest Expense - Credit Agreements |
|
| 9,899 |
|
| 9,256 |
Interest Expense - VICI Financing Obligation |
|
| 15,199 |
|
| 7,120 |
Interest Expense - CDR Land Lease |
|
| — |
|
| 513 |
Interest Expense - Deferred Financing Costs |
|
| 674 |
|
| 674 |
Total Interest Expense |
| $ | 25,815 |
| $ | 17,649 |
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|
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|
|
Gain on foreign currency transactions, cost recovery income and other
CDR receives cost recovery income related to infrastructure built during the development of the Century Downs REC project. The distribution to CDR’s non-controlling shareholders through non-controlling interest is part of an agreement between CRM and CDR. There was no cost recovery income received by CDR for the three months ended March 31, 2024. Cost recovery income of $3.5 million was received by CDR for the three months ended March 31, 2023.
Taxes
Income tax expense is recorded relative to the jurisdictions that recognize book earnings. During the three months ended March 31, 2024, we recognized an income tax benefit of $4.0 million on pre-tax loss of ($15.7) million, representing an effective income tax rate of 25.4% compared to an income tax expense of $1.6 million on pre-tax income of $4.7 million, representing an effective income tax rate of 34.9% for the same period in 2023. For further discussion of our effective income tax rates and an analysis of our effective income tax rate compared to the US federal statutory income tax rate, see Note 8, “Income Taxes,” to our condensed consolidated financial statements included in Part I, Item 1 of this report.
LIQUIDITY AND CAPITAL RESOURCES
Our business is capital intensive, and we rely heavily on the ability of our casinos to generate operating cash flow. We use the cash flows that we generate to maintain operations, fund reinvestment in existing properties for both refurbishment and expansion projects, repay third party debt, and pursue additional growth via new development and acquisition opportunities. When necessary and available, we supplement the cash flows generated by our operations with either cash on hand or funds provided by bank borrowings, other debt or equity financing activities or funding arrangements with third-party partners, such as VICI.
Cash Flows – Summary
Our cash flows; cash, cash equivalents and restricted cash; and working capital consisted of the following:
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|
| For the three months | ||||
|
| ended March 31, | ||||
Amounts in thousands |
| 2024 |
| 2023 | ||
Net cash (used in) provided by operating activities |
| $ | (11,479) |
| $ | 12,280 |
Net cash used in investing activities |
|
| (19,528) |
|
| (10,791) |
Net cash used in financing activities |
|
| (924) |
|
| (337) |
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|
|
|
| As of March 31, | ||||
Amounts in thousands |
| 2024 |
| 2023 | ||
Cash, cash equivalents and restricted cash (1) |
| $ | 136,805 |
| $ | 203,104 |
Working capital (2) |
| $ | 90,785 |
| $ | 161,237 |
(1)Cash, cash equivalents and restricted cash as of March 31, 2024 includes $19.9 million of cash previously funded by VICI PropCo but has not yet been spent on our Caruthersville project, and as of March 31, 2023 included $100.2 million related to the Acquisition Escrow.
(2)Working capital is defined as current assets minus current liabilities and included the $100.2 million related to the Acquisition Escrow as of March 31, 2023.
Operating Activities
Our cash flows from operations have historically been positive and sufficient to fund ordinary operations. Cash flows from operations decreased during the three months ended March 31, 2024, primarily due to $12.2 million in income tax payments related to the Canada Real Estate Sale and increased interest expense. Trends in our operating cash flows tend to follow trends in earnings from operations, excluding non-cash charges. Please refer to the condensed consolidated statements of cash flows in Part I, Item 1 of this Form 10-Q and to management’s discussion of the results of operations above in this Item 2 for a discussion of earnings from operations.
Investing Activities
Net cash used in investing activities for the three months ended March 31, 2024 consisted of $1.2 million for casino licenses in Poland, $0.4 million for various hotel renovations and $0.1 million in restaurant renovations to the Mountaineer property in West Virginia, $0.8 million in slot machine purchases in Maryland, $6.1 million for our hotel project in Cape Girardeau, $6.7 million for our casino project in Caruthersville, $0.2 million for slot machine purchases at our Missouri properties, $0.6 million for slot machine purchases and $0.1 million in various renovations in Nevada, $0.2 million for slot machine purchases, $0.1 million in gaming-related purchases and $0.2 million in hotel renovations at our Colorado properties, $0.4 million related to racing related updates at Century Downs in Canada and $2.5 million in other fixed asset additions at our properties, offset by less than $0.1 million in proceeds from the disposal of assets.
Net cash used in investing activities for the three months ended March 31, 2023 consisted of $0.9 million for slot machine purchases and $0.2 million in gaming-related purchases in West Virginia, $4.3 million for our hotel project in Cape Girardeau, $3.2 million for our casino project in Caruthersville, $0.2 million for our stand-alone hotel project in Caruthersville, $0.3 million for slot machine purchases and $0.4 million for surveillance equipment at our Missouri properties, $0.1 million for slot machine purchases, $0.2 million in gaming-related purchases and $0.1 million in camera upgrades at our Colorado properties, $3.1 million in slot machine purchases in Poland, $0.4 million related to adding sportsbooks at our Canada properties and $0.3 million in other fixed asset additions at our properties, offset by $0.6 million in proceeds from the earn out related to the sale of casino operations in Calgary in 2020 and $2.3 million in dividends from Smooth Bourbon.
Financing Activities
Net cash used in financing activities for the three months ended March 31, 2024 consisted of $2.0 million in distributions to non-controlling interests and $0.2 million to repurchase shares to satisfy tax withholding related to our performance stock unit awards, offset by $1.3 million in proceeds from borrowings net of principal payments.
Net cash used in financing activities for the three months ended March 31, 2023 consisted of $1.3 million to repurchase shares to satisfy tax withholding related to our performance stock unit awards and $3.5 million in distributions to non-controlling interests in CDR offset by $4.5 million in proceeds from borrowings net of principal payments.
Borrowings and Repayments of Long-Term Debt and Lease Agreements
As of March 31, 2024, our total debt under bank borrowings and other agreements, net of $13.5 million related to deferred financing costs, was $328.5 million, of which $323.6 million was long-term debt and $4.9 million was the current portion of long-term debt. The current portion relates to payments due within one year under our Goldman Credit Agreement and the UniCredit Term Loan.
Our Goldman Credit Agreement provides for a $350.0 million Term Loan, drawn in April 2022, and a $30.0 million Revolving Facility. No amounts are currently outstanding under the Revolving Facility. For a description of our debt agreements, see Note 5, “Long-Term Debt” to our condensed consolidated financial statements included in Part I, Item 1 of this report. Net Debt was $205.5 million as of March 31, 2024 compared to $262.5 million as of March 31, 2023. The decrease in net debt is due to increased cash from the Canada Real Estate Sale, decreased debt due to the purchase of the land that was subject to the land lease at CDR in conjunction with the Canada Real Estate Sale and approximately $3.5 million under our Goldman Term Loan that we repurchased for 97% of its value in February 2024. The CDR land lease was treated as a financing obligation. For the definition and reconciliation of Net Debt to the most directly comparable US GAAP measure, see “Non-US GAAP Measures – Net Debt” above.
The following table lists the amount of 2024 maturities of our debt as of March 31, 2024:
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Amounts in thousands |
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| |
Goldman Term Loan (1) |
| UniCredit Term Loan |
| Total | |||
$ | 2,625 |
| $ | 1,078 |
| $ | 3,703 |
(1)The Goldman Term Loan requires scheduled quarterly payments of $875,000, equal to 0.25% of the original aggregate principal amount of the Goldman Term Loan, with the balance due at maturity.
The following table lists the amount of remaining 2024 payments due under our operating and finance lease agreements:
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Amounts in thousands |
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| |
Operating Leases |
| Finance Leases | ||
$ | 3,787 |
| $ | 177 |
As of March 31, 2024, estimated cash payments due under the Master Lease for the remainder of 2024 are $42.5 million, which includes a CPI increase but does not include $4.2 million in annual increased rent related to the Caruthersville project. Cash payments to the non-controlling partners under the lease between Smooth Bourbon and Nugget (the “Nugget Lease”) for the remainder of 2024 are $5.7 million.
The following table details cash payments under the Master Lease, CDR Land Lease, which ended in September 2023, and 50% of the cash payments under the Nugget Lease for the three months ended March 31, 2024 and three months ended March 31, 2023.
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| For the three months | |||||
| ended March 31, | |||||
Amounts in thousands |
|
| 2024 |
|
| 2023 |
Master Lease |
| $ | 9,444 |
| $ | 6,866 |
CDR land lease |
|
| — |
|
| 486 |
Nugget Lease (1) |
|
| 1,263 |
|
| — |
(1)Represents payments with respect to the 50% interest in the Nugget Lease owned by Marnell through Smooth Bourbon. Smooth Bourbon is a 50% owned subsidiary of the Company that owns the real estate assets underlying the Nugget Casino Resort.
Rent expense related to the Master Lease and CDR Land Lease is included in interest expense on our condensed consolidated statements of loss. The Nugget Lease is considered an intercompany lease, and income and expense related to the lease are eliminated in consolidation. The 50% interest in the Nugget Lease owned by Marnell through Smooth Bourbon is recorded as noncontrolling interest on our condensed consolidated statements of loss.
Common Stock Repurchase Program
Since March 2000, we have had a discretionary program to repurchase our outstanding common stock. The total amount remaining under the repurchase program was $14.7 million as of March 31, 2024. We did not repurchase any common stock during the three months ended March 31, 2024. The repurchase program has no set expiration or termination date.
Potential Sources and Uses of Liquidity and Short-Term Liquidity
Historically, our primary source of liquidity and capital resources has been cash flow from operations. As of March 31, 2024, we had $136.5 million in cash and cash equivalents compared to $171.3 million in cash and cash equivalents at December 31, 2023. Cash and cash equivalents decreased primarily due to tax payments related to the Canada Real Estate Sale of $12.2 million and purchases of property and equipment of $18.4 million as discussed in “Investing Activities” above. When necessary and available, we supplement the cash flows generated by our operations with funds provided by bank borrowings or other debt or equity financing activities. As of March 31, 2024, we had $30.0 million available on our Revolving Facility.
Planned Projects
Planned capital expenditures for the remainder of 2024 include approximately $22.3 million in gaming equipment and renovations to various properties. We are constructing a new land-based casino with a small hotel adjacent to and connected with the existing pavilion building at Century Casino Caruthersville. Construction began in December 2022 with completion expected in the fourth quarter of 2024. We estimate this project will cost $51.9 million. The project is being financed with financing provided by VICI PropCo. As of March 31, 2024, we have received $46.0 million from VICI PropCo and have spent approximately $27.4 million of those funds on this project. As of March 31,2024, we had approximately $19.9 million of cash included in our consolidated balance sheet that was previously funded by VICI PropCo but has not yet been spent on the project. We estimate that we will spend approximately $24.5 million on this project in the remainder of 2024. We completed construction on The Riverview, a hotel at our Cape Girardeau location, in March 2024. We estimate this project cost approximately $30.5 million. We funded the project with cash on hand. As of March 31, 2024, we have spent approximately $28.9 million on this project. We estimate that we will spend approximately $1.6 million on this project in the second quarter of 2024.
We may be required to raise additional capital to address our liquidity and capital needs. We have a shelf registration statement with the SEC that became effective in June 2023 under which we may issue, from time to time, up to $100 million of common stock, preferred stock, debt securities and other securities.
If necessary, we may seek to obtain further term loans, mortgages or lines of credit with commercial banks or other debt or equity financings to supplement our working capital and investing requirements. Our access to and cost of financing will depend on, among other things, global economic conditions, conditions in the financing markets, the availability of sufficient amounts of financing, our prospects and our credit ratings. A financing transaction may not be available on terms acceptable to us, or at all, and a financing transaction may be dilutive to our current stockholders. The failure to raise the funds necessary to fund our debt service and rent obligations and finance our operations and other capital requirements could have a material and adverse effect on our business, financial condition and liquidity.
We estimate that approximately $80.8 million of our total $136.5 million in cash and cash equivalents at March 31, 2024 is held by our foreign subsidiaries and is not available to fund US operations unless repatriated. We intend to repatriate current year earnings in Canada in the form of a cash dividend, which would generally be exempt from taxation except for withholding taxes. Management does not currently anticipate a need or intend to repatriate earnings from other foreign jurisdictions.
Critical Accounting Estimates
As of the filing date of this report, there were no significant changes in our critical accounting estimates from those discussed in our Annual Report on Form 10-K for the year ended December 31, 2023. See Note 2 to our Unaudited Condensed Consolidated Financial Statements for accounting pronouncements issued but not yet adopted that may impact the Company’s consolidated financial position, earnings, cash flows or disclosures.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
We had no material changes in our exposure to market risks from that previously reported in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2023.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures – Our management, with the participation of our principal executive officers and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, for the period covered by this report. Based on such evaluation, our principal executive officers and principal financial officer have concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective.
Changes in Internal Control Over Financial Reporting – We have completed our review and implementation of financial internal controls for the Nugget and Rocky Gap, which were acquired in April 2023 and July 2023, respectively.
Other than the foregoing, there have not been any changes in our internal control over financial reporting during the three months ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may become subject to various legal proceedings arising from normal business operations. See Note 7 to our Unaudited Condensed Consolidated Financial Statements for additional information regarding legal actions and proceedings.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Repurchases
In March 2000, our board of directors approved a discretionary program to repurchase up to $5.0 million of our outstanding common stock. In November 2009, our board of directors approved an increase of the amount available to be repurchased under the program to $15.0 million. The repurchase program has no set expiration or termination date and had approximately $14.7 million remaining as of March 31, 2024. There were no repurchases of common stock during the three months ended March 31, 2024.
Item 5. Other Information
None of our directors or executive officers
Item 6. Exhibits
|
|
Exhibit No. | Document |
3.1P | Certificate of Incorporation of Century Casinos, Inc. is hereby incorporated by reference to the Company’s Proxy Statement for the 1994 Annual Meeting of Stockholders. |
3.2 | |
31.1* | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Co-Chief Executive Officer. |
31.2* | |
31.3* | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Chief Financial Officer. |
32.1** | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Co-Chief Executive Officer. |
32.2** | |
32.3** | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Chief Financial Officer. |
101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH | Inline XBRL Taxonomy Extension Schema Document |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 | Cover Page Interactive Data File, formatted in Inline XBRL and contained in Exhibit 101 |
* Filed herewith.
** Furnished herewith.
P Filed on Paper
SIGNATURES
Pursuant to the requirements of 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/ Margaret Stapleton
Margaret Stapleton
Chief Financial Officer
Date: May 8, 2024