COLORADO SPRINGS, Colorado,
Dec. 6, 2019 /PRNewswire/ -- Century
Casinos, Inc. (Nasdaq Capital Market®: CNTY) ("Century Casinos" or
"the Company"), announced today that it completed the acquisition
of the operations of Isle Casino Cape Girardeau ("Cape Girardeau"), Lady Luck Caruthersville
("Caruthersville") and Mountaineer
Casino, Racetrack and Resort ("Mountaineer") from Eldorado Resorts,
Inc. (Nasdaq Capital Market®: ERI) ("Eldorado Resorts") for
approximately $107 million (the
"Acquisition").
Simultaneous with the closing of the Acquisition, VICI
Properties Inc. (NYSE: VICI) ("VICI") acquired the real
estate assets of the three casino properties and the Company
entered into a triple net lease agreement for such real estate with
VICI. The lease has an initial annual rent of approximately
$25 million and an initial term of 15
years, with four five-year renewal options.
The Company financed the Acquisition with a new credit facility
that was issued by Macquarie Capital on the closing date. The
credit facility also refinanced the Company's existing debt.
"We are very excited to be expanding into Missouri and West
Virginia," Erwin Haitzmann and Peter Hoetzinger, Co-Chief
Executive Officers of Century Casinos, remarked. "Cape Girardeau, Caruthersville and Mountaineer are great
additions to our portfolio. We look forward to working with the
staff and communities to continue the current success at these
properties into the future," Haitzmann and Hoetzinger
concluded.
Isle Casino Cape Girardeau is located in Cape Girardeau, Missouri, approximately 120
miles south of St. Louis,
Missouri, overlooking the Mississippi river. The property
opened in 2012 and consists of a dockside casino featuring 41,500
square feet of casino space, 863 gaming machines, 20 table games,
three dining venues, a pavilion and an entertainment center. The
property also includes a wide variety of non-gaming amenities,
including an events center.
Lady Luck Caruthersville is a riverboat casino located along the
Mississippi river in Caruthersville,
Missouri. The property opened in 1995 and consists of a
dockside casino featuring 21,000 square feet of casino space, 507
slot machines, nine table games, two dining venues, a 40,000 square
foot pavilion and a 28-space RV park.
Mountaineer Casino, Racetrack and Resort is a hotel, casino,
entertainment and live thoroughbred horse racing facility located
in New Cumberland, West Virginia,
one hour from downtown Pittsburgh,
Pennsylvania. The property originally opened in 1951 with
the casino opening in 1994 and features a 357-room hotel,
approximately 1,486 slot machines, 36 table games, a poker room, a
racetrack and five dining venues.
With this transaction, the Company's portfolio* increased to 18
casinos world-wide that include over 7,185 gaming machines, 285
table games and 3,400 employees. On a pro-forma basis giving effect
to the Acquisition as if it occurred on October 1, 2018, the Company's last twelve months
("LTM") net operating revenue and Adjusted EBITDA with the acquired
properties were $414.7 million and
$56.6 million, respectively. See a
reconciliation of the LTM results in Supplemental Information
below. On a pro-forma basis using our debt as of September 30, 2019 and giving effect to the new
credit facility, the Company's long-term debt and Net Debt after
the Acquisition are $183.9 million
and $133.0 million, respectively. See
a reconciliation of the long-term debt and Net Debt in Supplemental
Information below.
Stifel acted as exclusive financial advisor and Faegre Baker
Daniels LLP acted as legal counsel to the Company in connection
with the Acquisition.
Supplemental Information:
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 interest net 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 and other,
gain on business combination and certain other one-time items, such
as acquisition and disposition costs and gain or loss. 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.
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 the generally accepted accounting
principles in the United States
("GAAP"). Adjusted EBITDA is not considered a measure of
performance recognized under 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.
*As of September 30, 2019, giving
effect to the Acquisition but, excluding properties with management
contracts.
Supplemental Information:
Pro forma net operating revenue, pro forma Adjusted EBITDA and
pro forma combined EBITDAR are non-GAAP financial measures. The
unaudited pro forma financial information is presented for
illustrative purposes only and does not indicate the financial
results of the combined company had the Acquisition occurred at the
beginning of the period presented, nor the impact of the possible
business model changes. The unaudited pro forma financial
information, while helpful in illustrating the financial
characteristics of the combined company under one set of
assumptions, does not reflect the realization of potential cost
savings, revenue synergies, changes in market conditions and asset
dispositions, among other factors, and, accordingly, does not
attempt to predict or suggest future results. The Company expects
to incur costs associated with the Acquisition and the integration
of the businesses and operations of the Company and those of
Cape Girardeau, Caruthersville and Mountaineer. However, the
unaudited pro forma financial information does not include these
estimated Acquisition and integration costs.
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.
Supplemental Information:
Reconciliation of LTM results for the Company and the acquired
properties.
|
Net Operating
Revenue
|
Amounts in
millions
|
|
|
Century
|
|
|
Acquired
Properties (1)
|
|
|
Pro Forma
Combined
(2)
|
For the three
months ended:
|
|
|
|
|
|
|
|
|
|
December 31,
2018
|
|
$
|
45.1
|
|
|
|
|
|
|
March 31,
2019
|
|
|
45.6
|
|
|
|
|
|
|
June 30,
2019
|
|
|
52.4
|
|
|
|
|
|
|
September 30,
2019
|
|
|
52.9
|
|
|
|
|
|
|
LTM
Results
|
|
$
|
196.1
|
|
$
|
218.6
|
|
$
|
414.7
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Based on the
unaudited LTM results for the period ended September 30, 2019 as
provided by Eldorado Resorts.
|
(2)
|
The unaudited pro
forma financial information is presented for illustrative purposes
only and does not indicate the financial results of the combined
company had the Acquisition occurred at the beginning of the period
presented, nor the impact of possible business model changes. The
unaudited pro forma financial information, while helpful in
illustrating the financial characteristics of the combined company
under one set of assumptions, does not reflect the realization of
potential cost savings, revenue synergies, changes in market
conditions and asset dispositions, among other factors, and,
accordingly, does not attempt to predict or suggest future results.
The Company expects to incur costs associated with the Acquisition
and the integration of the businesses and operations of the Company
and those of Cape Girardeau, Caruthersville and Mountaineer.
However, unaudited pro forma financial information does not include
these estimated Acquisition and integration costs.
|
Supplemental Information:
Reconciliation of LTM results for the Company and the acquired
properties.
|
Adjusted
EBITDA
|
Amounts in
thousands
|
|
|
Century
|
|
|
Acquired
Properties
(1)
|
|
|
Pro Forma
Combined
EBITDAR
(2)(3)
|
|
|
VICI
Lease
Payment
|
|
|
Pro Forma
Combined
Adjusted
EBITDA (2)
|
For the three
months ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2018
|
|
$
|
5.8
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2019
|
|
|
6.7
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2019
|
|
|
6.7
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2019
|
|
|
7.1
|
|
|
|
|
|
|
|
|
|
|
|
|
LTM
Results
|
|
$
|
26.3
|
|
$
|
55.3
|
|
$
|
81.6
|
|
$
|
(25.0)
|
|
$
|
56.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Based on the
unaudited LTM results for the period ended September 30, 2019 as
provided by Eldorado Resorts.
|
(2)
|
The unaudited pro
forma financial information is presented for illustrative purposes
only and does not indicate the financial results of the combined
company had the Acquisition occurred at the beginning of the period
presented, nor the impact of possible business model changes. The
unaudited pro forma financial information, while helpful in
illustrating the financial characteristics of the combined company
under one set of assumptions, does not reflect the realization of
potential cost savings, revenue synergies, changes in market
conditions and asset dispositions, among other factors, and,
accordingly, does not attempt to predict or suggest future results.
The Company expects to incur costs associated with the Acquisition
and the integration of the businesses and operations of the Company
and those of Cape Girardeau, Caruthersville and Mountaineer.
However, unaudited pro forma financial information does not include
these estimated Acquisition and integration costs.
|
(3)
|
EBITDAR is a non-GAAP
financial measure. Pro forma combined EBITDAR excludes $25.0
million of annual rental expense associated with the triple net
lease agreement with VICI for the acquired properties.
|
Supplemental Information:
Reconciliation of long-term debt and Net Debt for the Company and
the acquired properties.
|
|
|
As
Reported
|
|
|
|
|
|
Pro
Forma
|
Amounts in
thousands
|
|
|
September 30,
2019
|
|
|
Adjusted
|
|
|
September 30,
2019
|
Credit agreement -
Bank of Montreal
|
|
$
|
52,412
|
|
$
|
(52,412)
|
|
$
|
—
|
Credit agreement -
Macquarie
|
|
|
—
|
|
|
170,000
|
|
|
170,000
|
Credit agreements -
CPL
|
|
|
2,076
|
|
|
—
|
|
|
2,076
|
Credit facilities -
CPL
|
|
|
278
|
|
|
—
|
|
|
278
|
Credit agreement -
CCB
|
|
|
1,968
|
|
|
—
|
|
|
1,968
|
Financing obligation
- CDR land lease
|
|
|
14,722
|
|
|
—
|
|
|
14,722
|
Total
principal
|
|
$
|
71,456
|
|
$
|
117,588
|
|
$
|
189,044
|
Deferred financing
costs (1)
|
|
|
(387)
|
|
|
(4,713)
|
|
|
(5,100)
|
Total long-term
debt
|
|
$
|
71,069
|
|
$
|
112,875
|
|
$
|
183,944
|
|
|
|
Pro
Forma
|
Amounts in
thousands
|
|
|
September 30,
2019
|
Total long-term
debt
|
|
$
|
183,944
|
Deferred financing
costs (1)
|
|
|
5,100
|
Total
principal
|
|
$
|
189,044
|
Less: Cash and cash
equivalents (2)
|
|
$
|
56,029
|
Net Debt
|
|
$
|
133,015
|
|
|
(1)
|
Based on underwriting
and upfront fees payable to Macquarie Capital. Additional costs
will be deferred for legal and other fees related to the Company's
entry into the credit agreement with Macquarie Capital.
|
(2)
|
Based on the
Company's cash and cash equivalents at September 30, 2019 and an
estimated $12.0 million in cash from the acquired
properties.
|
About Century Casinos, Inc.:
Century Casinos, Inc. is an international casino entertainment
company that operates worldwide. The Company owns and operates
Century Casino & Hotels in Cripple
Creek and Central City,
Colorado, and in Edmonton,
Alberta, Canada; the Century Casino in Calgary and St.
Albert, Alberta, Canada and in Bath, England; the Century Mile Racetrack and
Casino ("CMR") in Edmonton, Alberta,
Canada; and Century Bets! Inc. ("CBS"). Through its Austrian
subsidiary, Century Resorts Management GmbH ("CRM"), the Company
holds a 66.6% ownership interest in Casinos Poland Ltd., the
operator of eight casinos throughout Poland; and a 75%
ownership interest in Century Downs Racetrack and Casino
in Calgary, Alberta, Canada.
CBS and CMR operate the pari-mutuel off-track horse betting
networks in southern and northern Alberta, respectively. The Company operates
five ship-based casinos under agreements with one cruise ship
owner. The Company, through CRM, also owns a 7.5% interest in, and
provides consulting services to, Mendoza Central Entretenimientos
S.A., a company that provides gaming-related services to Casino de
Mendoza in Mendoza, Argentina. As of December 6, 2019, the Company owns Cape
Girardeau, Caruthersville and
Mountaineer, each of which is described above. The Company
continues to pursue other international projects in various stages
of development.
Century Casinos' common stock trades on The Nasdaq Capital
Market® under the symbol CNTY. For more information about Century
Casinos, visit our website at www.cnty.com.
This release may contain certain "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, and the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by words such as
"expect," "anticipate," "believe," "intend," "estimate," "plan,"
"target," "goal," or similar expressions, or future or conditional
verbs such as "will," "may," "might," "should," "would," "could,"
or similar variations. These statements are based on the beliefs
and assumptions of the management of Century Casinos based on
information currently available to management. Such forward-looking
statements include, but are not limited to, certain plans,
expectations, goals, projections, and statements about the benefits
of the transaction, as well as Century Casinos' plans, objectives,
expectations, intentions, and other statements relating to cash
flow and operating results, its new credit facility and debt
repayment. 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.
While there is no assurance that any list of risks and
uncertainties or risk factors is complete, below are certain
factors which could cause actual results to differ materially from
those contained or implied in the forward-looking statements
including: risks related to the acquisition of the three assets and
the integration of the businesses and assets acquired; potential
adverse reactions or changes to business or employee relationships,
including those resulting from the completion of the transaction;
the possibility that the anticipated operating results and other
benefits of the transaction are not realized when expected or at
all; local risks including proximate competition, potential
competition, legislative risks, and local relationships; risks
associated with increased leverage from the transaction; and other
risks described in the section entitled "Risk Factors" under
Item 1A in the Company's Annual Report on Form 10-K for the year
ended December 31, 2018 and in
subsequent periodic and current SEC filings the Company may
make. Century Casinos disclaims any obligation to revise
or update any forward-looking statement that may be made from time
to time by it or on its behalf.
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