Century Casinos announces fourth quarter 2018 results

"This quarter we continued to see revenue growth in each of our segments and ended the year growing revenue by 10%. We are pleased with this growth, especially with the longer-than-expected casino closures in Poland due to licensing delays, which we estimate negatively impacted net operating revenue by $9.8 million," Erwin Haitzmann and Peter Hoetzinger, Co-Chief Executive Officers of Century Casinos remarked. "We are excited for the upcoming year with the opening of Century Mile Racetrack and Casino on April 1st and a Grand Opening celebration planned for April 28th, the first day of live horse racing," Messrs. Haitzmann and Hoetzinger concluded.

Century Casinos' fourth-quarter 2018 highlights were as follows:

• Net operating revenue was $45.1 million, an increase of 15% from the three months ended December 31, 2017.
• Earnings from operations were $2.0 million, an increase of 16% from the three months ended December 31, 2017.
• Net earnings attributable to Century Casinos, Inc. shareholders were $0.5 million, an increase of 110% from the three months ended December 31, 2017.
• Adjusted EBITDA was $5.8 million, an increase of 7% from the three months ended December 31, 2017.
• Basic and diluted earnings per share were $0.02, an increase of 110% from the three months ended December 31, 2017.

2018 Highlights included:

• Net operating revenue was $168.9 million, an increase of 10% from the year ended December 31, 2017
• Earnings from operations were $9.5 million, a decrease of 35% from the year ended December 31, 2017
• Net earnings attributable to Century Casinos, Inc. shareholders were $3.4 million, a decrease of 46% from the year ended December 31, 2017
• Adjusted EBITDA was $23.4 million, a decrease of 10% from the year ended December 31, 2017
• Basic earnings per share were $0.12, a decrease of 52% from the year ended December 31, 2017
• Diluted earnings per share were $0.11, a decrease of 54% from the year ended December 31, 2017
• Book value per share at December 31, 2018 was $6.00.

The Tax Cuts and Jobs 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, 2018 for a discussion of the impact of the Tax Act.

The Company's net operating revenue increased by $5.8 million, or 15%, and by $14.9 million, or 10%, for the three months and year ended December 31, 2018, compared to the three months and year ended December 31, 2017.

The Company's earnings from operations increased by $0.3 million, or 16%, and decreased by ($5.2) million, or (35%), for the three months and year ended December 31, 2018, compared to the three months and year ended December 31, 2017.

Net earnings (loss) attributable to Century Casinos, Inc. shareholders increased by $5.8 million, or 110%, and decreased by ($2.9) million, or (46%), for the three months and year ended December 31, 2018, compared to the three months and year ended December 31, 2017.

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 increased by $0.4 million, or 7%, and decreased by ($2.7) million, or (10%), for the three months and year ended December 31, 2018 compared to the three months and year ended December 31, 2017.

Balance Sheet and Liquidity

As of December 31, 2018, the Company had $45.6 million in cash and cash equivalents and $59.5 million in outstanding debt on its balance sheet compared to $74.7 million in cash and cash equivalents and $56.7 million in outstanding debt at December 31, 2017. The outstanding debt as of December 31, 2018 included $40.5 million related to the Company's credit agreement with the Bank of Montreal, $2.6 million of bank debt related to Casinos Poland, $2.4 million of bank debt related to Century Casino Bath, $0.2 million related to capital leases for Century Resorts Alberta, Century Casino Calgary, Century Casino St. Albert, Century Downs Racetrack and Casino ("CDR") and Century Mile Racetrack and Casino, and $14.3 million related to a long-term land lease for CDR, net of $0.5 million in deferred financing costs.