Century Casinos releases balance sheet for Q4 2017

2017 Highlights*

• Net operating revenue was $154.1 million, an increase of 11% from the year ended December 31, 2016.
• Earnings from operations were $14.6 million, a decrease of 10% from the year ended December 31, 2016.
• Net earnings attributable to Century Casinos, Inc. shareholders were $6.3 million, a decrease of 32% from the year ended December 31, 2016.
• Adjusted EBITDA** was $26.1 million, an increase of 1% from the year ended December 31, 2016.
• Earnings per share were $0.25.
• Book value per share*** at December 31, 2017 was $6.13.

Fourth Quarter 2017 Highlights*

• Net operating revenue was $39.3 million, an increase of 8% from the three months ended December 31, 2016.
• Earnings from operations were $1.7 million, a decrease of 54% from the three months ended December 31, 2016.
• Net loss attributable to Century Casinos, Inc. shareholders was ($5.3) million, a decrease of 291% from the three months ended December 31, 2016.
• Adjusted EBITDA** was $5.4 million, a decrease of 15% from the three months ended December 31, 2016.
• Loss per share was ($0.20).

The Tax Cuts and Jobs Act (the "Tax Act"), enacted on December 22, 2017, increased the Company's income tax expense by $5.4 million during the fourth quarter of 2017 due to the tax law changes that were effective for the 2017 tax year. The increased income tax expense increased net loss attributable to Century Casinos, Inc. shareholders for the fourth quarter of 2017 and decreased net earnings attributable to Century Casinos, Inc. shareholders for the year ended December 31, 2017. See Note 11 to the Company's Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data", of the Company's Annual Report on Form 10-K for the year ended December 31, 2017 for a discussion of the impact of the Tax Act.

"2017 was a good year for Century Casinos. We generated record net operating revenue and Adjusted EBITDA," Erwin Haitzmann and Peter Hoetzinger, Co-Chief Executive Officers of Century Casinos, said. "Our largest and most significant project to date, the Century Mile racetrack and casino development in Edmonton, Canada, is on budget and on track for an early 2019 opening," they continued.

The consolidated results for the three months and year ended December 31, 2017 and 2016 are as follows:

Consolidated Results*

The table below shows the Company's operating segments that are included in each of the Company's reportable segments as of December 31, 2017:

The Company's net operating revenue increased by $3.0 million, or 8%, and by $14.8 million, or 11%, for the three months and year ended December 31, 2017, compared to the three months and year ended December 31, 2016. Following is a summary of the changes in net operating revenue by segment for the three months and year ended December 31, 2017, compared to the three months and year ended December 31, 2016:

The Company's earnings from operations decreased by ($2.0) million, or (54%), and by ($1.6) million, or (10%), for the three months and year ended December 31, 2017, compared to the three months and year ended December 31, 2016.  Following is a summary of the changes in earnings (loss) from operations by segment for the three months and year ended December 31, 2017, compared to the three months and year ended December 31, 2016:

Net earnings (loss) attributable to Century Casinos, Inc. shareholders decreased by ($8.1) million, or (291%), and by ($3.0) million, or (32%), for the three months and year ended December 31, 2017, compared to the three months and year ended December 31, 2016. Following is a summary of the changes in net earnings (loss) attributable to Century Casinos, Inc. shareholders by segment for the three months and year ended December 31, 2017, compared to the three months and year ended December 31, 2016:

Items deducted from or added to earnings from operations to arrive at net earnings (loss) attributable to Century Casinos, Inc. shareholders include interest income, interest expense, gains (losses) on foreign currency transactions and other, income tax expense and non-controlling interests.

The Company's Adjusted EBITDA** decreased by ($0.9) million, or (15%), and increased by $0.3 million, or 1%, for the three months and year ended December 31, 2017 compared to the three months and year ended December 31, 2016. Following is a summary of the changes in Adjusted EBITDA** by reportable segment for the three months and year ended December 31, 2017 compared to the three months and year ended December 31, 2016.

Balance Sheet and Liquidity

As of December 31, 2017, the Company had $74.7 million in cash and cash equivalents and $56.7 million in outstanding debt on its balance sheet compared to $38.8 million in cash and cash equivalents and $55.6 million in outstanding debt at December 31, 2016. The increased cash and cash equivalents balance was primarily due to $34.3 million in net proceeds from the Company's public offering of common stock in November 2017. The $56.7 million in outstanding debt as of December 31, 2017 includes $38.2 million related to the Company's Bank of Montreal credit agreement, $0.5 million related to capital leases for the Company's Canadian subsidiaries, $15.5 million related to a long-term land lease for Century Downs Racetrack and Casino and $2.7 million related to Saw Close Casino Ltd., net of $0.3 million in deferred financing costs.

Gains and losses on foreign currency transactions are added back to net earnings in the Company's Adjusted EBITDA** calculations. As such, there is no foreign currency impact to Adjusted EBITDA** when calculating Constant Currency* results.

 Adjusted EBITDA Margins *** (unaudited)

CENTURY CASINOS, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION

* The impact of foreign exchange rates is highly variable and difficult to predict. The Company uses a Constant Currency basis to show the impact from foreign exchange rates on current period revenue compared to prior period revenue using the prior period's foreign exchange rates. In order to properly understand the underlying business trends and performance of the Company's ongoing operations, management believes that investors may find it useful to consider the impact of excluding changes in foreign exchange rates from the Company's net operating revenue, earnings from operations, net earnings (loss) attributable to Century Casinos, Inc. shareholders and Adjusted EBITDA. Constant currency results are calculated by dividing the current quarter or year to date local currency segment results by the prior year's average exchange rates for the quarter or year and comparing them to actual U.S. dollar results for the prior quarter or year. The prior year's average exchange rates are reported in Note 2 to the Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of the Company's Annual Report on Form 10-K. The average exchange rates for the three months ended December 31, 2017 and 2016 are presented below.

** The Company defines Adjusted EBITDA as net earnings (loss) attributable to Century Casinos, Inc. shareholders before interest expense (income), net, income taxes (benefit), depreciation, amortization, non-controlling interests (earnings) losses 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 and other, gain on business combination and certain other one-time items. 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) and Adjusted EBITDA reported for each segment. Not all of the aforementioned items occur in each reporting period, but are included in the definition based on historical activity. These adjustments have no effect on the consolidated results as reported under accounting principles generally accepted in the United States of America ("US GAAP"). Adjusted EBITDA is not considered a measure of performance recognized under US GAAP. Management believes that Adjusted EBITDA is a valuable measure of the relative performance of the Company and its properties. The gaming industry commonly uses Adjusted EBITDA as a method of arriving at the economic value of a casino operation. Management uses Adjusted EBITDA to compare the relative operating performance of separate operating units by eliminating the above mentioned items associated with the varying levels of capital expenditures for infrastructure required to generate revenue and the often high cost of acquiring existing operations. Adjusted EBITDA is used by the Company's lending institution to gauge operating performance. The Company's computation of Adjusted EBITDA may be different from, and therefore may not be comparable to, similar measures used by other companies within the gaming industry. Please see the reconciliation of Adjusted EBITDA to net earnings (loss) attributable to Century Casinos, Inc. shareholders above.

*** The Company defines Adjusted EBITDA margin as Adjusted EBITDA divided by net operating revenue. Adjusted EBITDA margin is a non-GAAP measure. Management uses this margin as one of several measures to evaluate the efficiency of the Company's casino operations.