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Century Casinos Incorporated Announces Preliminary Fourth-Quarter 2023 Financial Results and Operational Updates

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Century Casinos Incorporated. (Nasdaq Capital Market: CNTY) has provided preliminary financial results for its fiscal fourth quarter ended December 31, 2023, and an update on the company’s projects.

  • Approximately $171 million in cash and cash equivalents as of December 31, 2023 (compared to $102 million at December 2022)
  • Approximately $140 million – $145 million in net operating revenues (compared to $104 million in fourth quarter 2022)
  • Approximately ($10) million – ($14) million in net loss attributable to Century Casinos Incorporated shareholders (compared to ($4) million in fourth quarter 2022)
  • Approximately $24 million – $26 million in Adjusted EBITDAR * (compared to $22 million in fourth quarter 2022)

As reported in the company’s third-quarter filings, the $30 million revolving facility with Goldman Sachs Bank USA (Goldman) that the company borrowed in July of 2023 in connection with the Rocky Gap acquisition was repaid on September 21, 2023. The full amount of the revolving facility is currently available for the company to borrow.

The company has agreed to buy back $3.5 million of its term loan with Goldman at 97% of the cost of the debt. The transaction is expected to occur in February of 2024.

In Poland, the company was granted licenses for the two casinos that it had closed in October of 2023 due to the expiration of the casino licenses. The anticipated reopening of the casinos is the end of February of 2024 for the casino in Bielsko-Biala and in mid-March of 2024 for the casino in Katowice. In November of 2023, the company closed its Wroclaw casino due to the expiration of the casino license. The company was granted a new license for Wroclaw in December of 2023 and anticipates reopening the casino in a new location in mid-2024.

In Missouri, the construction projects of the hotel in Cape Girardeau (to be called the The Riverview) and the new land-based casino and hotel in Caruthersville continue to be on time and on budget. The company anticipates opening the hotel in Cape Girardeau the first week of April of 2024 and the land-based casino and hotel in Caruthersville by the end of 2024. The Caruthersville project is being financed by VICI Properties Incorporated (VICI) inclusive of approximately $19 million of cash on hand that was previously funded by VICI but has not yet been spent on the project and is included in the company’s consolidated balance sheet as of December 31, 2023.

“We expect 2024 to be a transitional year for the company as we continue to integrate the Nugget and Rocky Gap operations into our portfolio and complete our two large construction projects in Missouri,” the Co-Chief Executive Officers for Century Casinos Incorporated, Erwin Haitzmann and Peter Hoetzinger, said. “We estimate our company-wide capital expenditures excluding the Caruthersville project that we are financing through VICI to be approximately $46 million in 2024. We look forward to 2025 when we can see everything we are working towards in 2023 and 2024 coming to fruition without the disruptions we are currently experiencing.

“We feel comfortable with our cash position and capex plan and we continue to look for every opportunity to reduce operating costs going forward to maximize earnings and cash flow. In addition, we are evaluating ways to reduce our non-operating costs going forward.”

Preliminary Results:

Our audited consolidated financial statements for the year ended December 31, 2023, are not yet available; however, certain of our estimated preliminary unaudited financial results for the three months ended December 31, 2023, are set forth above and in the reconciliations below. With respect to certain presented results, we have provided ranges rather than specific amounts because these results are preliminary estimates and subject to change. These results are based on the information available to us as of the date of this release. Our actual results may vary from the estimated preliminary results presented in this release, including due to the completion of our financial closing and other operational procedures, final adjustments and other developments that may arise between now and the time the company releases its financial results for the fourth quarter and year ended December 31, 2023, which is currently scheduled for March 14, 2024. These estimates should not be viewed as a substitute for our full interim or annual financial statements prepared in accordance with United States generally accepted accounting principles (GAAP). Further, our preliminary estimated results are not necessarily indicative of the results to be expected for any future period. Accordingly, undue reliance should not be placed on this preliminary data.

Supplemental Information:

* Adjusted EBITDAR. We define Adjusted EBITDAR as net earnings (loss) attributable to Century Casinos Incorporated shareholders before interest expense (income) (including interest expense related to the company’s triple net lease with VICI (the ‘master lease’)), net, 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. 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. 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 Incorporated shareholders and Adjusted EBITDAR reported for each segment. Not all of the aforementioned items occur in each reporting period but have been included in the definition based on historical activity. These adjustments have no effect on the consolidated results as reported under GAAP.

Adjusted EBITDAR is used outside of our financial statements solely as a valuation metric and is not considered a measure of performance recognized under GAAP. Adjusted EBITDAR is an additional metric used by analysts in valuing gaming companies subject to triple net leases such as our ‘master lease’ since it eliminates the effects of variability in leasing methods and capital structures. This metric is included as supplemental disclosure because (i) we believe Adjusted EBITDAR is used by gaming operator analysts and investors to determine the equity value of gaming operators and (ii) financial analysts refer to Adjusted EBITDAR when valuing our business. We believe Adjusted EBITDAR is useful for equity valuation purposes because (i) its calculation isolates the effects of financing real estate and (ii) using a multiple of Adjusted EBITDAR to calculate enterprise value allows for an adjustment to the balance sheet to recognize estimated liabilities arising from operating leases related to real estate.

Adjusted EBITDAR should not be construed as an alternative to net earnings (loss) attributable to Century Casinos Incorporated shareholders, the most directly comparable GAAP measure, as indicators of our performance. 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 earnings (loss) attributable to Century Casinos Incorporated shareholders because it excludes the rent expense associated with our ‘master lease’ and several other items.

A reconciliation of the estimated net loss attributable to Century Casinos Incorporated shareholders to estimated Adjusted EBITDAR is presented below.

(Unaudited) For the three months ended

December 31, 2023

December 31, 2022

in millions

Low
Estimate

High
Estimate

Actuals

Net loss attributable to Century Casinos, Inc. shareholders

$

(13.6)

$

(9.8)

$

(4.0)

Interest expense (income), net

25.5

24.5

17.0

Income tax benefit

(5.0)

(3.0)

0.5

Depreciation and amortization

12.0

11.0

6.8

Net earnings attributable to non-controlling interests

3.0

2.0

0.9

Non-cash stock-based compensation

1.0

0.8

0.7

Loss (gain) on foreign currency transactions, cost recovery income and other

0.4

0.2

(0.7)

Loss on disposition of fixed assets

0.3

0.1

0.1

Acquisition costs

0.4

0.2

0.4

Adjusted EBITDAR

$

24.0

$

26.0

$

21.7

The company estimates that approximately $15 million of interest expense for the three months ended December 31, 2023, relates to rent on the ‘master lease’.

Latest News

Leading Peruvian iGaming Operator La Tinka, Selects Optimove as CRM Marketing Solution to Accelerate Growth through Personalized Journey Orchestration

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La Tinka to leverage Optimove’s #1 CRM Marketing solution for iGaming to increase player loyalty and retention through personalized and relevant marketing campaigns.

La Tinka, the leading Peruvian iGaming operator, has chosen Optimove, the #1 CRM Marketing solution for iGaming, to enhance player engagement and retention, helping accelerate the operator’s rapid growth. With Optimove’s advanced CRM Marketing capabilities, La Tinka and their online Sportsbook and Casino brand, Te Apuesto, is set to deliver optimized player journeys with personalized experiences across a broad range of digital touchpoints, enhancing player satisfaction, engagement, retention, and lifetime value.

The strategic integration of Optimove’s Customer-Led Marketing Platform and solution bolsters La Tinka’s refined player engagement strategies, further solidifying the operator’s position as a leading player in the Latin America iGaming industry. La Tinka will leverage Optimove’s OptiMail, a native platform for email personalization and delivery, OptiText, for real-time and scheduled promotional and transactional text messages, and OptiMobile, enabling La Tinka to send personalized rich media mobile push messages directly to players’ devices at optimal engagement times.

The scientific approach embedded in Optimove’s CRM Marketing Platform will empower La Tinka to measure the incremental value of each player interaction. La Tinka will gain key capabilities via Optimove:

Advanced marketing AI capabilities: providing AI-driven insights, Creation, and Orchestration for better player understanding, streamlining or content creation, and optimizing campaign orchestration for enhanced personalized experiences across channels and player touchpoints.

Enriched customer profiles: Unifying all historical, predictive, and real-time customer data from sources such as CRM, service clouds, and data warehouses via Optimove to create a comprehensive single customer view.

Multichannel personalization and orchestration: Orchestrating hundreds of campaigns seamlessly by leveraging Optimove’s AI-mapped CRM Journeys to deliver personalized customer communications across any channel.

A continuous optimization loop: Leverage Optimove’s productized experimentation tools to measure the incremental uplift of each campaign, journey, and strategy to optimize CRM Marketing performance continuously.

“At La Tinka, our dedication to providing an outstanding player experience is unwavering,” said Maria Jose Alfaro, Digital Business Manager at La Tinka. “Optimove, as the industry leader in CRM Marketing, enables us to deliver better, more personalized, and timely player experiences that seamlessly align with the dynamic pace of player engagement with our sports content and casino gaming. Their AI-driven solutions help us determine the next best action for each player to map to every player’s journey. This collaboration reflects our commitment to exceeding our players’ expectations for meaningful experiences at every touchpoint.”

“Smart clients push us to excel, and we’re excited to join La Tinka on their rapid growth journey,” said Tomer Imber, Senior Director of Sales at Optimove. “The La Tinka team truly understands the power of experiences that delight and excite players as a growth engine for the business. As La Tinka focuses on attracting players and converting them at higher rates, we are committed to helping deepen their player engagement and cement long-term retention.”

Optimove will attend and exhibit at SBC Summit Rio, March 5-7, booth D46.

 

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Gambling in the USA

High 5 Games Honored with Two Prestigious Awards at the EKG Slot Awards

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High 5 Games, a renowned leader in the casino gaming industry, is proud to announce the receipt of two highly respected awards at the EKG Slot Awards, presented by Eilers & Krejcik Gaming. The awards, “Top Sweepstakes Casino” for High 5 Casino and “Most Innovative Online Game” for Shadow of the Panther Infinity, spotlight High 5 Games’ commitment to excellence and innovation within the digital gaming sphere.

The “Top Sweepstakes Casino” award recognizes High 5 Casino’s exceptional performance and consumer engagement, particularly noting the platform’s expansive game library that exceeds over 1000 titles, cutting-edge technology, and dedication to responsible gaming.

The title of “Most Innovative Online Game” was captured by Shadow of the Panther Infinity, a game that has seamlessly transitioned from land-based popularity to online acclaim. This title features the innovative Racking Up Riches mechanic and the Infinity respins feature, bringing novel excitement to well-established game formats.

“Receiving ‘Top Sweepstakes Casino’ and ‘Most Innovative Online Game – Shadow of the Panther Infinity’ awards is a remarkable win for us. It is the recognition of our products and the impact they have on the industry. These awards inspire us to push the boundaries even further, innovating and elevating the online gaming experience for players around the world and contributing to the development of the iGaming sector as a whole,” said Tony Singer, CEO of High 5 Games.

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Compliance Updates

Asensi Technologies Appointed as Approved Agent by Kahnawake Gaming Commission

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Asensi Technologies, a leading provider of Technical Compliance and Certification Services for online Gaming and Gambling companies, proudly announces its appointment as an Approved Agent by the Kahnawake Gaming Commission. This partnership further solidifies Asensi Technologies’ commitment to ensuring regulatory compliance and integrity throughout the gaming industry.

With a track record dating back to 2017, Asensi Technologies has been at the forefront of providing Technical Compliance and Certification Services to gaming operators and suppliers alike. Accredited as a gaming laboratory in Spain since 2017 and most recently in Peru on February 13, 2024, Asensi Technologies has continually demonstrated its expertise in facilitating compliance with regulatory requirements.

The Kahnawake Gaming Commission’s decision to designate Asensi Technologies as an Approved Agent reflects the company’s commitment to upholding the highest standards of regulatory compliance and integrity. Asensi Technologies is poised to assist the Kahnawake Gaming Commission in fulfilling its regulatory objectives effectively and efficiently, ensuring the integrity of gaming operations at every level of the industry and supporting all stakeholders in meeting regulatory standards.

“We are honored to be appointed as an Approved Agent by the Kahnawake Gaming Commission,” said Aurora Merino Salas, CEO at Asensi Technologies. “This appointment further validates our dedication to providing comprehensive technical compliance and certification services and also underscores our steadfast commitment to promoting transparency and integrity throughout the gaming industry.”

Asensi Technologies remains fully committed to leveraging its expertise and experience to assist the Kahnawake Gaming Commission in achieving its regulatory objectives. The company’s comprehensive range of services aims to facilitate seamless compliance for gaming operators and suppliers, thereby enhancing trust and confidence in the gaming sector.

“We extend our gratitude to the Kahnawake Gaming Commission for trusting in our capabilities,” added Aurora Merino Salas. “At Asensi Technologies, we are committed to continuing our efforts to uphold the highest standards of regulatory compliance and integrity within the gaming industry. Without a dedicated, committed, and specialized team like that of Asensi Technologies, all these steps forward would be impossible.”

For more information about Asensi Technologies and its suite of Technical Compliance and Certification Services, please visit Asensi website.

 

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