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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.

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“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:

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* 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

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December 31, 2023

December 31, 2022

in millions

Low
Estimate

High
Estimate

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Actuals

Net loss attributable to Century Casinos, Inc. shareholders

$

(13.6)

$

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(9.8)

$

(4.0)

Interest expense (income), net

25.5

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24.5

17.0

Income tax benefit

(5.0)

(3.0)

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0.5

Depreciation and amortization

12.0

11.0

6.8

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Net earnings attributable to non-controlling interests

3.0

2.0

0.9

Non-cash stock-based compensation

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1.0

0.8

0.7

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

0.4

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0.2

(0.7)

Loss on disposition of fixed assets

0.3

0.1

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0.1

Acquisition costs

0.4

0.2

0.4

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Adjusted EBITDAR

$

24.0

$

26.0

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$

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’.

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MGM Resorts International and Playtech Announce Strategic Partnership

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Playtech and MGM Resorts International announced a strategic partnership that will offer new and unique live casino content to operators in the iGaming industry.

Streamed directly from the gaming floors of two of MGM Resorts’ most iconic Las Vegas Strip properties, the live casino content, branded as “MGM Live,” will be available for licensing in regulated markets worldwide, outside of the US.

The live casino offering will include single and double-zero roulette and baccarat games. These games will be broadcast live from the casino floors at both MGM Grand and Bellagio Resort & Casino in Las Vegas.

As the partnership evolves, the plan is to broaden the portfolio with exclusive access to a variety of Playtech games, branded TV game shows, celebrity-hosted trivia shows, and the one-of-a-kind entertainment experiences for which Las Vegas and MGM Resorts are known.

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“The launch of this new and exciting live casino offering, in partnership with Playtech and directly from Bellagio and MGM Grand in Las Vegas, furthers our strategic vision to be the world’s premier gaming entertainment company. This collaboration amplifies our commitment to providing unparalleled experiences and expands our global reach to our customers. We believe the content, celebrity talent and sophisticated gaming experience that we will offer – all from the trusted and highly reputable brands of MGM Resorts – will be unmatched in the industry,” Bill Hornbuckle, CEO and President of MGM Resorts, said.

“We are thrilled to partner with MGM Resorts, a world-renowned gaming and entertainment brand. This alliance combines the strength of MGM Resorts’ global prestige with Playtech’s extensive international market knowledge and innovative games. As a leading technology provider in regulated markets, we are delighted that this partnership is pioneering a new live entertainment category and product offering for players in these regulated territories. Our alliance is built on a shared vision to create an innovative and unique customer experience alongside our commitment to safer gambling. Both Playtech and MGM Resorts are dedicated to maintaining the highest standards of player protection and ensuring our offerings are enjoyed responsibly,” Mor Weizer, Chief Executive Officer at Playtech, said.

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Compliance Updates

NJ Governor Murphy Establishes Task Force to Support Responsible Gaming

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New Jersey Gov. Phil Murphy has signed Executive Order No. 360, establishing a Responsible Gaming Task Force responsible for providing advice and recommendations to the Governor’s Office and to the Attorney General regarding reforms to support responsible gaming and to address problem gambling in New Jersey.

A rise in problem gambling has been observed over the past few years, according to a 2023 report from the Rutgers University Center for Gambling Studies. The Rutgers study estimated that 6% of New Jersey residents are at high risk for problem gambling, which is significantly higher than the national average of 1-2%, with the highest rates affecting Black/African American or Hispanic residents.

“New Jersey is known to be a gaming destination with historic locations like Atlantic City, amusement gaming at the Jersey Shore, notable horse racing venues, and more. This Task Force will see to it that we maintain our global leadership in gaming by ensuring that we have the tools needed to address problem gaming for our residents,” said Governor Murphy.

“I applaud Governor Murphy for his leadership in elevating responsible gaming initiatives through the establishment of a statewide task force. New Jersey has been a national leader in casino and sports wagering for many years, and we owe it to our residents to review and expand our existing efforts on problem gambling. This task force demonstrates that ‘responsible gaming’ is not merely a buzzword in New Jersey, but a critical issue that demands the attention of government entities, industry, and stakeholders. As Chair of the task force, I’m eager to get underway in examining ways to help bring attention to and support the prevention and treatment of gambling disorder,” said Attorney General Platkin.

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The responsibilities of the Responsible Gaming Task Force will be to review several areas of the problem gambling landscape, including the effects on underage and vulnerable communities; develop strategies to achieve responsible gaming; and make recommendations for policy changes to address the issue of problem gambling.

Members of the Task Force will consist of seven government representatives or their designees, including:

The Attorney General, who shall serve as Chair;

The Chair of the New Jersey Casino Control Commission;

The Director of the New Jersey Division of Consumer Affairs;

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The Director of the New Jersey Division of Gaming Enforcement;

The Director of the Division of State Lottery;

The Executive Director of the New Jersey Racing Commission; and

The Commissioner of the Department of Human Services.

The Task Force may consult with experts, representatives of regulated entities, or other knowledgeable individuals in the public or private sector with respect to any aspect of its mission.

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Interblock Gaming Installs its Award-winning Smart Pit at Boomtown Casino Biloxi

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Interblock Gaming, the developer and supplier of luxury Electronic Table Games (ETGs), has installed its award-winning Smart Pit at Boomtown Casino Biloxi, a PENN Entertainment Inc. property.

This state-of-the-art gaming setup, prominently positioned at the casino’s entrance, went live on Tuesday, June 11.

To celebrate the innovative addition, Boomtown Casino Biloxi will host a Grand Opening event on Thursday, June 27 from 3 pm to 5 pm. The event will feature delicious hors d’oeuvres, exciting giveaways, and a variety of activities for guests to enjoy. A ribbon-cutting ceremony will take place at 3:30 pm, marking the official launch of the Smart Pit.

“We are thrilled to partner with Boomtown Casino Biloxi for the launch of our Smart Pit technology. This installation marks a significant milestone in our mission to revolutionize the gaming experience, combining advanced technology with traditional gaming elements to enhance both player engagement and operational efficiency,” John Connelly, CEO of Interblock, said.

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The Smart Pit at Boomtown Casino Biloxi provides players with an unmatched gaming experience, featuring Live Craps, Dual Roulette, and two Blackjack tables. This cutting-edge setup merges the excitement of traditional table games with the advantages of sophisticated technology. The chip-less technology ensures seamless play and accurate payouts. Players can anticipate immersive gameplay with interactive dealer experiences, a variety of side bets, and the thrill of participating in multiple games simultaneously. The Smart Pit is designed to appeal to both seasoned players and newcomers, guaranteeing a captivating and enjoyable gaming experience for all.

Barry Regula, VP and GM of Boomtown Casino Biloxi, said: “We are excited to launch Boomtown’s EZ Play Zone, powered by Interblock’s Smart Pit solution. The EZ Play Zone offers our guests the convenience and flexibility of wagering electronically on Blackjack, Roulette, and Craps while still having the fun and camaraderie of interacting with a real dealer and other guests.”

Interblock’s Live Craps transforms the traditional game by allowing players to step into the shooter’s role, adding the excitement of live dice recognition for a truly immersive experience. Dual Roulette heightens the action with two synchronized, color-coded wheels, offering up to 120 spins per hour for a fast-paced and engaging game. For Blackjack enthusiasts, the Smart Pit tables include a variety of thrilling side bets, making each hand more exciting and interactive than ever before. This innovative setup allows players to enjoy more game time, quicker rounds, and smarter gameplay, redefining their casino experience.

“Once again, PENN Entertainment’s properties on the Gulf Coast are proud to be the first to offer cutting-edge gaming technology with the first regional installation of an integrated Smart Pit suite. In addition to being the first to offer linked multi-property table games baccarat progressive jackpots and the first property in Mississippi to offer cashless gaming at Hollywood Gulf Coast, we are now the first property outside of Las Vegas to offer Smart Pit blackjack, roulette, and craps,” Tosha Tousant, VP of Casino Operations at Boomtown, said.

“The launch of Smart Pit at Boomtown Casino Biloxi showcases our commitment to transforming the gaming landscape. By integrating advanced technology with classic table games, we are setting a new industry standard. This innovation is a game-changer that both players and dealers will enjoy,” Jeff Kowalchuk, SVP of Innovation at Interblock, said.

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The Smart Pit also enhances the dealer experience, making operations more intuitive and streamlined. The system’s dealer console provides clear instructions, reducing the need for extensive training and enabling a broader hiring pool. Dealers can manage multiple games simultaneously, increasing efficiency and player interaction. This user-friendly approach ensures that new dealers can quickly adapt and thrive in a dynamic casino environment.

Mandy Ladner, VP of HR at Boomtown Casino Biloxi, said: “Smart Pit opens the door to new potential team members who may have been intimidated by the handling of cash, chips, and the requirement to perform real-time calculations as a ‘live’ dealer. Now, if you are interested in a career in the fun, fast, and social environment of the casino, you don’t need months of dealer’s school and practice to break in, just a great personality and desire to entertain and delight our guests.”

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