[Part I. Financial Information](index=5&type=section&id=Part%20I.%20Financial%20Information) [Item 1. Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents Cheniere Energy's unaudited consolidated financial statements for the three and six months ended June 30, 2025, including statements of operations, balance sheets, changes in stockholders' equity, cash flows, and detailed notes [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Total revenues for the six months ended June 30, 2025, increased to **$10,085 million**, with net income attributable to Cheniere rising to **$1,979 million**, or **$8.85 per diluted share** | Financial Metric | Six Months Ended June 30, 2025 ($ million) | Six Months Ended June 30, 2024 ($ million) | | :--- | :--- | :--- | | **Total Revenues** | $10,085 | $7,504 | | **Income from Operations** | $3,491 | $2,742 | | **Net Income** | $2,565 | $2,001 | | **Net Income Attributable to Cheniere** | $1,979 | $1,382 | | **Diluted EPS** | $8.85 | $5.96 | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets reached **$44,578 million**, with total liabilities decreasing to **$33,269 million** and total stockholders' equity increasing to **$11,251 million** | Balance Sheet Item | June 30, 2025 ($ million) | December 31, 2024 ($ million) | | :--- | :--- | :--- | | **Total Current Assets** | $3,704 | $4,801 | | **Total Assets** | $44,578 | $43,858 | | **Total Current Liabilities** | $3,775 | $4,441 | | **Total Liabilities** | $33,269 | $33,798 | | **Total Stockholders' Equity** | $11,251 | $10,053 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities for H1 2025 was **$2,059 million**, with investing activities using **$1,575 million** and financing activities using **$1,653 million**, a significant decrease from the prior year | Cash Flow Activity (Six Months Ended June 30) | 2025 ($ million) | 2024 ($ million) | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $2,059 | $2,362 | | **Net Cash Used in Investing Activities** | ($1,575) | ($1,185) | | **Net Cash Used in Financing Activities** | ($1,653) | ($2,746) | | **Net Decrease in Cash** | ($1,173) | ($1,571) | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail operations, accounting policies, and financial items, including Corpus Christi LNG Terminal expansion, derivative instruments, debt, revenue recognition, and share repurchases - The company is expanding its Corpus Christi LNG Terminal with the Corpus Christi Stage 3 Project and made a positive Final Investment Decision (FID) on the Midscale Trains 8 & 9 Project in June 2025[33](index=33&type=chunk) Derivative Asset (Liability), Net | Derivative Asset (Liability), Net | June 30, 2025 ($ million) | December 31, 2024 ($ million) | | :--- | :--- | :--- | | Liquefaction Supply Derivatives | ($2) | ($742) | | LNG Trading Derivatives | $91 | $17 | | FX Derivatives | ($33) | $16 | | **Total** | **$56** | **($709)** | - As of June 30, 2025, the company had **$106.3 billion** in transaction price allocated to future performance obligations (backlog), with a weighted average recognition timing of approximately 8 years for LNG revenues[101](index=101&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting increased net income from derivative changes and LNG pricing, operational progress at Corpus Christi, and a strong liquidity position supporting growth, debt reduction, and shareholder returns - In June 2025, the Board made a positive Final Investment Decision (FID) for the CCL Midscale Trains 8 & 9 Project and issued a full notice to proceed with construction to Bechtel[150](index=150&type=chunk) - Net income attributable to Cheniere for H1 2025 increased by **$597 million** compared to H1 2024, primarily due to a **$596 million** favorable change in the fair value of derivative instruments and a **$508 million** increase in LNG revenues (net of cost of sales and excluding derivatives)[157](index=157&type=chunk) Liquidity Source | Liquidity Source | Amount (as of June 30, 2025) ($ million) | | :--- | :--- | | Cash and cash equivalents | $1,648 | | Restricted cash and cash equivalents | $369 | | Available commitments under credit facilities | $7,685 | | **Total available liquidity** | **$9,702** | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company discloses commodity price risk exposure from its derivative portfolio, with a 10% price change impacting Liquefaction Supply Derivatives by **$2,327 million** and LNG Trading Derivatives by **$59 million** Derivative Type | Derivative Type | Fair Value (June 30, 2025) ($ million) | Change in Fair Value from 10% Price Change ($ million) | | :--- | :--- | :--- | | Liquefaction Supply Derivatives | ($2) | $2,327 | | LNG Trading Derivatives | $91 | $59 | [Item 4. Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures are effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are effective as of the end of the period covered by the report[197](index=197&type=chunk) [Part II. Other Information](index=56&type=section&id=Part%20II.%20Other%20Information) [Item 1. Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) No material changes to legal proceedings have occurred since those disclosed in the company's 2024 annual report on Form 10-K - There have been no material changes to the legal proceedings disclosed in the company's annual report on Form 10-K for the fiscal year ended December 31, 2024[200](index=200&type=chunk) [Item 1A. Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the 2024 annual report and the Q1 2025 quarterly report - No material changes have occurred in the risk factors since the disclosures in the 2024 Form 10-K and the Q1 2025 Form 10-Q[201](index=201&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, Cheniere repurchased **1.41 million shares** at an average of **$217.38 per share**, with **$3.2 billion** remaining for future repurchases Share Repurchases | Period (2025) | Total Shares Purchased | Average Price Paid Per Share ($) | | :--- | :--- | :--- | | April | 1,049,473 | $212.54 | | May | 246,149 | $231.37 | | June | 112,666 | $231.92 | | **Total Q2** | **1,408,288** | N/A | [Item 5. Other Information](index=56&type=section&id=Item%205.%20Other%20Information) On August 1, 2025, the company entered a **$1.25 billion** Third Amended and Restated Revolving Credit Agreement, extending maturity to 2030, reducing costs, and incorporating sustainability-linked pricing - On August 1, 2025, Cheniere amended and restated its **$1.25 billion** revolving credit facility, extending the maturity to 2030 and reducing borrowing costs[204](index=204&type=chunk) - The amended credit facility's interest rate and commitment fees can be reduced based on the achievement of certain methane emissions management standards[206](index=206&type=chunk) [Item 6. Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including supplemental indentures, construction agreement changes, the new credit agreement, and CEO/CFO certifications

Super Group Reports Financial Results for Second Quarter of 2025 New York, NY – August 6, 2025 – Super Group (SGHC) Limited (NYSE: SGHC) ("SGHC", the "Company" or "Super Group"), the parent company of Betway, a leading online sports betting and gaming business, and Spin, the multi-brand online casino, today announced its second quarter 2025 unaudited consolidated financial results. Neal Menashe, Chief Executive Officer of Super Group, commented: "We had a Super first half of 2025, driven by a record-breakin ...

Part I. Financial Information [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Unaudited condensed consolidated financial statements for Emergent BioSolutions Inc. as of June 30, 2025, detailing financial position and performance [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$1,417.1 million** due to cash, while liabilities decreased, boosting stockholders' equity Condensed Consolidated Balance Sheet Highlights (in millions) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $267.3 | $99.5 | | Accounts receivable, net | $79.8 | $154.5 | | Inventories, net | $338.6 | $311.7 | | Total current assets | $719.5 | $598.7 | | Total assets | $1,417.1 | $1,389.7 | | **Liabilities & Equity** | | | | Total current liabilities | $127.1 | $162.4 | | Debt | $667.8 | $663.7 | | Total liabilities | $880.9 | $906.9 | | Total stockholders' equity | $536.2 | $482.8 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a significantly reduced net loss in Q2 2025 and achieved net income for H1 2025, primarily due to lower operating expenses Statement of Operations Summary (in millions) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $140.9 | $254.7 | $363.1 | $555.1 | | Income (loss) from operations | $1.6 | $(203.5) | $51.5 | $(163.7) | | Net income (loss) | $(12.0) | $(283.1) | $56.0 | $(274.1) | | Diluted EPS | $(0.22) | $(5.38) | $0.99 | $(5.23) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly improved to **$95.2 million** for H1 2025, leading to a **$165.4 million** increase in total cash Cash Flow Summary - Six Months Ended June 30 (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $95.2 | $(15.1) | | Net cash provided by (used in) investing activities | $76.7 | $(15.4) | | Net cash used in financing activities | $(6.8) | $(10.2) | | **Net change in cash, cash equivalents and restricted cash** | **$165.4** | **$(40.7)** | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes cover the company's business structure, divestitures, restructuring, debt, legal proceedings, and segment re-evaluation - The company completed the sale of its Baltimore-Bayview drug substance manufacturing facility to Syngene for **$36.5 million**, recognizing a pre-tax gain of **$7.9 million**[52](index=52&type=chunk)[53](index=53&type=chunk) - The company has undertaken **multiple organizational restructuring plans** since January 2023 to reduce operating costs, resulting in workforce reductions and facility closures[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) - Total debt as of June 30, 2025, was **$700.0 million**, consisting of a **$250.0 million** term loan and **$450.0 million** in senior unsecured notes[72](index=72&type=chunk) - The company settled a securities class action lawsuit for **$40.0 million**, of which **$30.0 million** was paid from insurance proceeds[116](index=116&type=chunk) - Effective Q1 2025, the company re-evaluated its structure and now has two reportable segments: **Commercial Products** and **MCM Products**[132](index=132&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance and condition, noting Q2 2025 revenue decline but improved net loss from reduced expenses and strengthened liquidity [Results of Operations](index=46&type=section&id=Results%20of%20Operations) Q2 2025 total revenues fell **45%**, but operating expenses decreased **70%**, leading to operating income, with H1 2025 also showing improved operating results Q2 2025 vs Q2 2024 Performance (in millions) | Metric | Q2 2025 | Q2 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $140.9 | $254.7 | $(113.8) | (45)% | | Commercial Product Sales | $67.5 | $120.0 | $(52.5) | (44)% | | MCM Product Sales | $58.4 | $63.4 | $(5.0) | (8)% | | Total Operating Expenses | $139.3 | $458.2 | $(318.9) | (70)% | | Income (loss) from operations | $1.6 | $(203.5) | $205.1 | 101% | | Net income (loss) | $(12.0) | $(283.1) | $271.1 | 96% | H1 2025 vs H1 2024 Performance (in millions) | Metric | H1 2025 | H1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $363.1 | $555.1 | $(192.0) | (35)% | | Commercial Product Sales | $112.8 | $238.5 | $(125.7) | (53)% | | MCM Product Sales | $215.0 | $218.8 | $(3.8) | (2)% | | Total Operating Expenses | $311.6 | $718.8 | $(407.2) | (57)% | | Income (loss) from operations | $51.5 | $(163.7) | $215.2 | 131% | | Net income (loss) | $56.0 | $(274.1) | $330.1 | 120% | [Reportable Segment Results](index=51&type=section&id=Reportable%20Segment%20Results) Segment results show Commercial Product revenue decline, MCM Products decrease, and 'All other revenues' fall due to a prior-year settlement - Commercial Product segment revenue decreased **44%** in Q2 2025, driven by lower sales of OTC NARCAN and an unfavorable price/volume mix[197](index=197&type=chunk)[198](index=198&type=chunk) - MCM Products segment revenue decreased **8%** in Q2 2025, with a **70%** decrease in Anthrax MCM sales partially offset by a **127%** increase in Smallpox MCM sales due to timing of government orders[200](index=200&type=chunk)[201](index=201&type=chunk)[202](index=202&type=chunk) - Services revenues (part of 'All other revenues') decreased **93%** in Q2 2025, primarily due to a one-time **$50.0 million** arbitration settlement with Janssen recognized in Q2 2024[208](index=208&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=64&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) Liquidity significantly improved with cash increasing to **$267.3 million** and working capital rising, supported by a **$50.0 million** share repurchase program Financial Condition Summary (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $267.3 | $99.5 | | Total working capital | $592.4 | $436.3 | | Debt | $667.8 | $663.7 | - The company authorized a **$50.0 million** share repurchase program in March 2025, with **$6.9 million** used to repurchase **1.1 million** shares in Q2 2025, leaving **$43.1 million** available[251](index=251&type=chunk) - The company had **$100.0 million** of unused capacity under its Revolving Loans as of June 30, 2025[262](index=262&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=69&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rates on variable-rate debt and foreign currency exchange rate fluctuations - The company's primary market risks are **interest rate risk** on its floating-rate debt and **foreign currency exchange rate risk**[265](index=265&type=chunk) - A hypothetical **1%** increase in the eurocurrency rate as of June 30, 2025, would increase annual interest expense by approximately **$2.5 million**[267](index=267&type=chunk) [Item 4. Controls and Procedures](index=69&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control - Management concluded that disclosure controls and procedures were **effective** as of June 30, 2025[269](index=269&type=chunk) - **No material changes** to internal control over financial reporting occurred during the three months ended June 30, 2025[270](index=270&type=chunk) Part II. Other Information [Item 1. Legal Proceedings](index=69&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 16 of the financial statements for details on legal proceedings - For information on legal proceedings, the report directs readers to Note 16 of the Condensed Consolidated Financial Statements[271](index=271&type=chunk) [Item 1A. Risk Factors](index=71&type=section&id=Item%201A.%20Risk%20Factors) Updates the company's risk factors, highlighting potential negative impacts from recent divestitures and the 2025 Share Repurchase Program - The company highlights **risks associated with its recent divestitures**, including retained liabilities, potential indemnification obligations, and the possibility of not realizing the full expected benefits from the sales[272](index=272&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk) - There is a **risk that the 2025 Share Repurchase Program may not be fully utilized or may not enhance long-term stockholder value**, and its suspension could negatively impact the stock price[278](index=278&type=chunk)[279](index=279&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=73&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details the company's share repurchase activity under the 2025 Share Repurchase Program, including shares repurchased and remaining funds Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2025 | 200,000 | $5.01 | | May 2025 | 478,681 | $6.25 | | June 2025 | 441,500 | $6.48 | | **Total** | **1,120,181** | | [Item 5. Other Information](index=74&type=section&id=Item%205.%20Other%20Information) Director Kathryn Zoon adopted a Rule 10b5-1 trading arrangement for the potential sale of **24,286** shares of common stock - On May 16, 2025, Director Kathryn Zoon adopted a Rule 10b5-1 trading plan for the sale of up to **24,286** shares of common stock, expiring May 15, 2026[287](index=287&type=chunk)[288](index=288&type=chunk)

PART I — FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=2&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements of JBT Marel Corporation, including statements of income, comprehensive income, balance sheets, cash flows, and changes in stockholders' equity, along with detailed notes explaining the company's business, recent Marel acquisition, debt structure, pension changes, revenue recognition, and other financial details for the periods ended June 30, 2025 and 2024 [Condensed Consolidated Statements of Income](index=2&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) JBT Marel Corporation reported a net income of $3.4 million for the three months ended June 30, 2025, a significant decrease from $30.7 million in the prior year period, and a net loss of $169.6 million for the six months ended June 30, 2025, compared to a net income of $53.5 million in 2024, primarily due to increased operating expenses, pension expense, loss on investment, and interest expense, largely due to the Marel acquisition | Metric (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | $934.8 | $402.3 | $1,788.9 | $794.6 | | Operating Income | $48.4 | $26.8 | $15.0 | $55.9 | | Net Income (Loss) | $3.4 | $30.7 | $(169.6) | $53.5 | | Basic EPS | $0.07 | $0.96 | $(3.27) | $1.67 | | Diluted EPS | $0.07 | $0.95 | $(3.27) | $1.66 | [Condensed Consolidated Statements of Comprehensive Income](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) The company's comprehensive income for the three months ended June 30, 2025, was $268.8 million, a substantial increase from $27.3 million in the prior year, primarily due to significant foreign currency translation adjustments, with the six-month period showing a similar trend | Metric (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net (Loss) Income | $3.4 | $30.7 | $(169.6) | $53.5 | | Foreign Currency Translation Adjustments | $269.1 | $(2.7) | $422.6 | $(21.0) | | Pension and Other Postretirement Benefits Adjustments | $— | $1.0 | $112.1 | $1.6 | | Derivatives Designated as Hedges | $(3.7) | $(1.7) | $(23.3) | $(2.6) | | Other Comprehensive Income | $265.4 | $(3.4) | $511.4 | $(22.0) | | Comprehensive Income | $268.8 | $27.3 | $341.8 | $31.5 | [Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, JBT Marel's total assets significantly increased to $8,252.6 million from $3,413.8 million at December 31, 2024, primarily due to the Marel acquisition, which led to substantial increases in goodwill, intangible assets, and inventories, with total liabilities also rising considerably due to acquisition-related debt | Metric (in millions, except per share data and number of shares) | June 30, 2025 | December 31, 2024 | | :------------------------------------------------ | :------------ | :---------------- | | Total Assets | $8,252.6 | $3,413.8 | | Cash and Cash Equivalents | $111.8 | $1,228.4 | | Goodwill | $3,101.8 | $769.1 | | Intangible Assets, net | $2,571.0 | $340.9 | | Total Current Liabilities | $1,643.7 | $535.5 | | Long-term Debt | $1,511.3 | $1,252.1 | | Total Stockholders' Equity | $4,374.9 | $1,544.2 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, cash provided by continuing operating activities increased to $136.6 million from $32.0 million in the prior year, while cash required by investing activities significantly increased to $1,780.1 million due to the Marel acquisition, and cash provided by financing activities also saw a substantial increase to $543.4 million, driven by new debt to fund the acquisition | Metric (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :----------------------------- | :----------------------------- | | Cash provided by continuing operating activities | $136.6 | $32.0 | | Cash required by continuing investing activities | $(1,780.1) | $(22.7) | | Cash provided (required) by continuing financing activities | $543.4 | $(16.4) | | Net decrease in cash, cash equivalents and restricted cash | $(1,098.4) | $(9.0) | | Cash, cash equivalents and restricted cash, end of period | $130.0 | $474.3 | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20STOCKHOLDERS'%20EQUITY) Total stockholders' equity increased significantly to $4,374.9 million as of June 30, 2025, from $1,544.2 million at December 31, 2024, primarily driven by the issuance of common stock related to the Marel acquisition and positive foreign currency translation adjustments, despite a net loss for the six-month period | Metric (in millions) | Balance at December 31, 2024 | Balance at June 30, 2025 | | :------------------- | :--------------------------- | :----------------------- | | Common Stock | $0.3 | $0.5 | | Additional Paid-In Capital | $234.3 | $2,731.3 | | Retained Earnings | $1,535.9 | $1,356.2 | | Accumulated Other Comprehensive Gain (Loss) | $(224.5) | $286.9 | | Total Equity | $1,544.2 | $4,374.9 | [NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=9&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) The notes provide detailed explanations for the financial statements, covering the company's business description, the strategic acquisition of Marel, changes in goodwill and intangible assets, inventory composition, pension plan termination, debt structure, accumulated other comprehensive income, revenue recognition policies, earnings per share calculations, fair value measurements, derivative instruments, lease information, commitments and contingencies, business segment reporting, restructuring activities, and related party transactions [NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION](index=9&type=section&id=NOTE%201.%20DESCRIPTION%20OF%20BUSINESS%20AND%20BASIS%20OF%20PRESENTATION) JBT Marel Corporation provides global technology solutions to the food and beverage industry, designing, producing, and servicing sophisticated products and systems, and now operates with two reportable segments, JBT and Marel, following the Marel acquisition on January 2, 2025 - JBT Marel provides global technology solutions to high-value segments of the food and beverage industry, including design, production, and service of sophisticated products and systems[19](index=19&type=chunk) - The company completed the acquisition of Marel hf. on January 2, 2025, which significantly expanded its operations[22](index=22&type=chunk) - Post-acquisition, the company has two reportable segments: JBT (legacy operations, food production value chain, automated guided vehicles) and Marel (advanced processing equipment, systems, software, and services for poultry, meat, fish, pet food, plant-based proteins, aqua feed)[23](index=23&type=chunk) [NOTE 2. ACQUISITIONS](index=11&type=section&id=NOTE%202.%20ACQUISITIONS) On January 2, 2025, JBT Marel acquired 97.5% of Marel hf. for $4,182.3 million, aiming to create a leading global food and beverage technology solutions provider with complementary portfolios, funded by JBT shares, cash, and new debt facilities, with purchase accounting being provisional - JBT Marel acquired 97.5% of Marel hf. on January 2, 2025, for **$4,182.3 million** (net of cash acquired), to become a leading global food and beverage technology solutions provider[31](index=31&type=chunk) | Consideration Component (in millions) | Amount | | :---------------------------------- | :----- | | Value of JBT shares issued | $2,436.3 | | Cash consideration | $959.3 | | Settlement of Marel debt | $867.8 | | Settlement of Marel interest rate swaps | $3.3 | | Fair value of Marel stock options | $5.6 | | **Total Purchase Consideration** | **$4,272.3** | - The acquisition resulted in **$2,039.9 million in goodwill**, driven by anticipated cost savings, revenue enhancement synergies, and acquired workforce[36](index=36&type=chunk) - On February 4, 2025, the company acquired the remaining **2.5% of Marel's equity interests** for approximately **$88.7 million**, accounted for as an equity transaction[43](index=43&type=chunk) [NOTE 3. GOODWILL AND INTANGIBLE ASSETS](index=13&type=section&id=NOTE%203.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) Goodwill significantly increased to $3,101.8 million as of June 30, 2025, from $769.1 million at December 31, 2024, primarily due to the Marel acquisition and currency translation, with intangible assets also seeing a substantial increase, amortized over estimated useful lives | Metric (in millions) | December 31, 2024 | June 30, 2025 | Change (Acquisitions + Currency) | | :------------------- | :---------------- | :------------ | :------------------------------- | | Goodwill | $769.1 | $3,101.8 | +$2,332.7 | | Customer relationship | $421.3 | $2,069.1 | +$1,647.8 | | Patents and acquired technology | $169.8 | $596.0 | +$426.2 | | Trademarks | $53.2 | $313.0 | +$259.8 | | Total Intangible Assets | $663.2 | $2,999.6 | +$2,336.4 | - Intangible asset amortization expense was **$47.5 million for Q2 2025** (vs. $11.1 million in Q2 2024) and **$86.8 million for H1 2025** (vs. $22.2 million in H1 2024)[44](index=44&type=chunk) [NOTE 4. INVENTORIES](index=13&type=section&id=NOTE%204.%20INVENTORIES) Net inventories increased significantly to $661.1 million as of June 30, 2025, from $233.1 million at December 31, 2024, primarily due to the Marel acquisition | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :---------------- | | Raw materials | $225.5 | $37.3 | | Work in process | $88.8 | $50.2 | | Finished goods | $373.6 | $164.9 | | Valuation adjustments | $(26.8) | $(19.3) | | **Net Inventories** | **$661.1** | **$233.1** | [NOTE 5. PENSION](index=14&type=section&id=NOTE%205.%20PENSION) Net periodic pension cost for the six months ended June 30, 2025, was $147.6 million, a substantial increase from $2.6 million in the prior year, primarily due to a $146.9 million pre-tax settlement charge recognized in Q1 2025 upon the termination of the U.S. qualified defined benefit pension plan | Metric (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Periodic Cost | $0.5 | $1.3 | $147.6 | $2.6 | - The company completed the termination of its U.S. qualified defined benefit pension plan on February 4, 2025, via an annuity purchase of **$178.5 million**, funded by plan assets[47](index=47&type=chunk) - A pre-tax settlement charge of **$146.9 million** was recognized in Pension expense, other than service cost, due to the plan termination[48](index=48&type=chunk) [NOTE 6. DEBT](index=14&type=section&id=NOTE%206.%20DEBT) Total debt, including the current portion, increased to $1,920.8 million as of June 30, 2025, from $1,252.1 million at December 31, 2024, primarily due to new borrowings from the Senior Secured Term Loan B and the revolving credit facility to fund the Marel acquisition, with the company subject to financial covenants | Debt Component (in millions) | Maturity Date | June 30, 2025 | December 31, 2024 | | :--------------------------- | :------------ | :------------ | :---------------- | | Revolving credit facility | Jan 2, 2030 | $638.2 | $854.0 | | Senior Secured Term Loan B | Jan 2, 2032 | $897.8 | $— | | Convertible senior notes | May 15, 2026 | $402.5 | $402.5 | | **Total Debt (net of issuance costs)** | | **$1,920.8** | **$1,252.1** | - Interest expense increased by **$27.7 million** (QoQ) and **$67.2 million** (YoY) due to higher average debt balance and interest rates from Marel acquisition funding[135](index=135&type=chunk)[151](index=151&type=chunk) - The Second A&R Credit Agreement provides for a **$1.8 billion revolving credit facility** and a **$900.0 million Senior Secured Term Loan B**, with specific leverage and interest coverage ratio covenants[32](index=32&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) [NOTE 7. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)](index=16&type=section&id=NOTE%207.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20INCOME%20(LOSS)) Accumulated other comprehensive income (AOCI) shifted from a loss of $(224.5) million at December 31, 2024, to a gain of $286.9 million at June 30, 2025, primarily driven by large positive foreign currency translation adjustments and pension and other postretirement liability adjustments, partially offset by derivatives designated as hedges | Metric (in millions) | Dec 31, 2024 | June 30, 2025 | Change | | :------------------- | :----------- | :------------ | :----- | | Pension and Other Postretirement Benefits | $(113.5) | $(1.4) | +$112.1 | | Derivatives Designated as Hedges | $2.1 | $(21.2) | $(23.3) | | Foreign Currency Translation | $(113.1) | $309.5 | +$422.6 | | **Total AOCI** | **$(224.5)** | **$286.9** | **+$511.4** | [NOTE 8. REVENUE RECOGNITION](index=18&type=section&id=NOTE%208.%20REVENUE%20RECOGNITION) The company expects to recognize $1.4 billion in future revenue from remaining performance obligations, with 60-70% in 2025, and reported total revenue for the three months ended June 30, 2025, was $934.8 million, with Marel contributing $480.2 million, disaggregated by type and geographical region - **$1.4 billion in revenue** is expected from remaining performance obligations, with **60-70% recognized in 2025**[72](index=72&type=chunk) | Revenue Type (in millions) | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | | :------------------------- | :--------------------------- | :--------------------------- | | JBT Recurring | $236.4 | $459.2 | | Marel Recurring | $248.7 | $474.8 | | JBT Non-recurring | $218.2 | $404.2 | | Marel Non-recurring | $231.5 | $450.7 | | **Total Revenue** | **$934.8** | **$1,788.9** | | Contract Balances (in millions) | June 30, 2025 | December 31, 2024 | | :------------------------------ | :------------ | :---------------- | | Contract Assets | $128.5 | $95.4 | | Contract Liabilities | $508.0 | $178.0 | [NOTE 9. EARNINGS PER SHARE](index=20&type=section&id=NOTE%209.%20EARNINGS%20PER%20SHARE) Basic and diluted EPS from continuing operations for the three months ended June 30, 2025, were $0.07, down from $0.96 and $0.95 respectively in 2024, and for the six months ended June 30, 2025, were $(3.27), a significant decrease from $1.67 and $1.66 in 2024, reflecting the net loss | Metric (in millions, except per share data) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Income (Loss) | $3.4 | $30.7 | $(169.6) | $53.5 | | Weighted Average Shares Outstanding | 52.1 | 32.0 | 51.9 | 32.0 | | Basic EPS (Continuing Operations) | $0.07 | $0.96 | $(3.27) | $1.67 | | Diluted EPS (Continuing Operations) | $0.07 | $0.95 | $(3.27) | $1.66 | [NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS](index=20&type=section&id=NOTE%2010.%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) The company categorizes financial assets and liabilities into Level 1, 2, or 3 based on valuation inputs, with total financial assets measured at fair value of $21.1 million and total financial liabilities of $136.2 million as of June 30, 2025, and the fair value of convertible senior notes (Level 2) was $400.1 million | Metric (in millions) | June 30, 2025 Total | Level 1 | Level 2 | Level 3 | December 31, 2024 Total | Level 1 | Level 2 | Level 3 | | :------------------- | :------------------ | :------ | :------ | :------ | :---------------------- | :------ | :------ | :------ | | Assets: Investments | $13.3 | $13.3 | $— | $— | $13.2 | $13.2 | $— | $— | | Assets: Derivatives | $7.8 | $— | $7.8 | $— | $6.8 | $— | $6.8 | $— | | Liabilities: Derivatives | $136.2 | $— | $136.2 | $— | $44.4 | $— | $44.4 | $— | - The fair value of the 0.25% Convertible Senior Notes due 2026 (Level 2 inputs) was **$400.1 million** as of June 30, 2025[83](index=83&type=chunk) [NOTE 11. DERIVATIVE FINANCIAL INSTRUMENTS AND RISK MANAGEMENT](index=21&type=section&id=NOTE%2011.%20DERIVATIVE%20FINANCIAL%20INSTRUMENTS%20AND%20RISK%20MANAGEMENT) JBT Marel uses derivative financial instruments, primarily forward foreign exchange contracts, cross-currency swaps, and interest rate swaps, to manage exposure to foreign currency exchange rates and interest rate volatility, designating certain cross-currency swaps as fair value and net investment hedges - The company uses forward foreign exchange contracts (notional value **$438.1 million** at June 30, 2025) to manage foreign currency exchange rate risk, not designated as hedges[86](index=86&type=chunk) - Entered into cross-currency swap agreements in June 2025 (**$578 million notional**) to synthetically swap fixed-rate debt to Euro-denominated fixed-rate debt, designated as net investment hedges[89](index=89&type=chunk) - Entered into five cross-currency swaps in January 2025 (**$698.3 million notional**) related to Term Loan B, designated as fair value hedges, to swap SOFR to EURIBOR and hedge exchange rate variability[91](index=91&type=chunk) - Interest rate swaps with a combined notional amount of **$250 million**, designated as cash flow hedges, expired during Q2 2025[94](index=94&type=chunk) [NOTE 12. LEASES](index=24&type=section&id=NOTE%2012.%20LEASES) The company reported operating lease revenue of $25.3 million for the three months ended June 30, 2025, and $50.1 million for the six months ended June 30, 2025, with sales-type lease revenue of $1.1 million and $2.1 million for the respective periods | Lease Revenue (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Operating Lease Revenue | $25.3 | $24.8 | $50.1 | $50.7 | | Sales-Type Lease Revenue | $1.1 | $0.7 | $2.1 | $1.6 | [NOTE 13. COMMITMENTS AND CONTINGENCIES](index=25&type=section&id=NOTE%2013.%20COMMITMENTS%20AND%20CONTINGENCIES) JBT Marel is subject to legal actions in the normal course of business, but management believes the outcomes will not have a material adverse effect on financial results, and the company issues standby letters of credit, performance bonds, and other guarantees totaling $79.5 million, and provides product warranties with a liability of $23.4 million as of June 30, 2025 - The company issues guarantees (standby letters of credit, performance bonds, surety bonds) totaling **$79.5 million** as of June 30, 2025[102](index=102&type=chunk) | Warranty Accrual (in millions) | June 30, 2025 | June 30, 2024 | | :----------------------------- | :------------ | :------------ | | Balance at end of period | $23.4 | $10.6 | [NOTE 14. BUSINESS SEGMENT INFORMATION](index=26&type=section&id=NOTE%2014.%20BUSINESS%20SEGMENT%20INFORMATION) Following the Marel acquisition, JBT Marel has two reportable segments: JBT and Marel, with the Chief Executive Officer using segment Adjusted EBITDA to evaluate performance and allocate resources, reporting JBT segment Adjusted EBITDA of $81.7 million (18.0% margin) and Marel segment Adjusted EBITDA of $74.5 million (15.5% margin) for the three months ended June 30, 2025 - The company operates with two reportable segments: JBT (legacy operations) and Marel (acquired entity), with the CEO using segment Adjusted EBITDA for performance evaluation[105](index=105&type=chunk)[107](index=107&type=chunk) | Segment Performance (3 Months Ended June 30, 2025, in millions) | JBT | Marel | Total | | :------------------------------------------------------------ | :---- | :---- | :------ | | Revenue | $454.6 | $480.2 | $934.8 | | Segment Adjusted EBITDA | $81.7 | $74.5 | $156.2 | | Segment Adjusted EBITDA Margin | 18.0% | 15.5% | 16.7% | | Segment Performance (6 Months Ended June 30, 2025, in millions) | JBT | Marel | Total | | :------------------------------------------------------------ | :---- | :---- | :------ | | Revenue | $863.4 | $925.5 | $1,788.9 | | Segment Adjusted EBITDA | $142.4 | $126.0 | $268.4 | | Segment Adjusted EBITDA Margin | 16.5% | 13.6% | 15.0% | [NOTE 15. RESTRUCTURING](index=27&type=section&id=NOTE%2015.%20RESTRUCTURING) The 2022/2023 restructuring plan was completed in Q1 2024, and in Q1 2025, the JBT Marel 2025 Integration restructuring plan was implemented to achieve synergy targets from the Marel acquisition, with an estimated cost of $25.0-$30.0 million, recognizing $16.7 million in charges and achieving $7.1 million in cumulative annualized savings as of June 30, 2025 - The 2022/2023 restructuring plan was completed as of March 31, 2024, with a total cost of **$17.5 million**[111](index=111&type=chunk) - The JBT Marel 2025 Integration restructuring plan was implemented in Q1 2025, with an estimated cost of **$25.0-$30.0 million**, to optimize the combined company's cost structure[112](index=112&type=chunk) | Restructuring Charges (JBT Marel 2025 Integration, in millions) | Cumulative Amount as of June 30, 2025 | | :------------------------------------------------------------ | :------------------------------------ | | Severance and related expense | $15.6 | | Inventory write-off | $0.3 | | Other | $0.8 | | **Total Restructuring Charges, net** | **$16.7** | | Restructuring Savings (JBT Marel 2025 Integration, in millions) | Cumulative Amount As of June 30, 2025 | | :------------------------------------------------------------ | :------------------------------------ | | Cost of sales | $0.8 | | Selling, general and administrative | $6.3 | | **Total Restructuring Savings** | **$7.1** | [NOTE 16. RELATED PARTY TRANSACTIONS](index=28&type=section&id=NOTE%2016.%20RELATED%20PARTY%20TRANSACTIONS) The company has operating lease agreements with entities owned by certain employees who were former owners of acquired businesses, with the related right-of-use asset and lease liability being $2.6 million and $2.7 million, respectively, as of June 30, 2025 - Operating lease right-of-use asset and lease liability related to agreements with related parties were **$2.6 million** and **$2.7 million**, respectively, as of June 30, 2025[115](index=115&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=29&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on JBT Marel's financial performance, condition, and future outlook, covering the strategic rationale for the Marel acquisition, business conditions, detailed consolidated results, reconciliation of non-GAAP measures, restructuring efforts, liquidity and capital resources, and critical accounting estimates, highlighting the significant impact of the Marel acquisition on revenue, expenses, and overall financial position [Cautionary Note Regarding Forward-Looking Statements](index=29&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section highlights that the report contains forward-looking statements based on current plans and expectations, which are subject to various risks and uncertainties, including integration challenges of JBT and Marel, economic conditions, currency fluctuations, and the ability to achieve anticipated synergies - The report contains forward-looking statements subject to risks, including the inability to successfully integrate JBT and Marel, fluctuations in financial results, changes to tariffs, and economic deterioration[116](index=116&type=chunk) [Executive Overview](index=30&type=section&id=Executive%20Overview) JBT Marel Corporation is a leading global food and beverage technology solutions provider, formed by combining JBT and Marel to transform the future of food, with a strategy focusing on strengthening solutions, enhancing service, advanced digital capabilities, innovation, and leveraging scale to expand margins, while also emphasizing ESG principles - JBT Marel is a leading global food and beverage technology solutions provider, formed by the acquisition of Marel hf. on January 2, 2025[118](index=118&type=chunk)[122](index=122&type=chunk) - The company's strategy is a five-pronged approach: strengthening solutions, enhancing service, advanced digital/software capabilities, focus on innovation, and leveraging scale to expand margins[120](index=120&type=chunk)[123](index=123&type=chunk) - The company emphasizes ESG, focusing on employee well-being, resource efficiency, waste reduction, and customer sustainability objectives[121](index=121&type=chunk) [Business Conditions and Outlook](index=31&type=section&id=Business%20Conditions%20and%20Outlook) JBT Marel's Q2 2025 financial performance exceeded expectations, driven by strong recurring revenue, favorable foreign exchange, and operating leverage, with healthy orders across diverse end markets, though the company anticipates Q2 2025 performance will be impacted by evolving tariff costs and is taking proactive measures to mitigate these impacts - Q2 2025 financial performance exceeded expectations due to better recurring revenue, foreign exchange translation, and operating leverage[124](index=124&type=chunk) - Healthy orders were observed across diverse end markets, including poultry, meat, fruit and vegetables, beverages, and ready meals[124](index=124&type=chunk) - Anticipates Q2 2025 performance will be impacted by evolving tariff costs, with proactive measures including reshoring suppliers, vendor concessions, and pricing adjustments[125](index=125&type=chunk) [CONSOLIDATED RESULTS OF OPERATIONS (Three Months Ended June 30, 2025 and 2024)](index=32&type=section&id=CONSOLIDATED%20RESULTS%20OF%20OPERATIONS%20(Three%20Months%20Ended%20June%2030,%202025%20and%202024)) For Q2 2025, total revenue increased by 132.4% to $934.8 million, largely due to the Marel acquisition, with gross profit margin slightly increasing to 35.8%, operating income rising by 80.6% to $48.4 million, but income from continuing operations decreasing by 88.9% to $3.4 million, primarily due to higher interest expense, loss on investment, and tax provision impacts, while Adjusted EBITDA increased by 145.2% to $156.2 million | Metric (in millions, except %) | 2025 | 2024 | Change | % Change | | :----------------------------- | :-------- | :-------- | :-------- | :------- | | Total Revenue | $934.8 | $402.3 | $532.5 | 132.4% | | Gross Profit Margin | 35.8% | 35.6% | 20 bps | | | Operating Income | $48.4 | $26.8 | $21.6 | 80.6% | | Income (Loss) from Continuing Operations | $3.4 | $30.7 | $(27.3) | (88.9)% | | Adjusted EBITDA from Continuing Operations | $156.2 | $63.7 | $92.5 | 145.2% | | JBT segment Adjusted EBITDA | $81.7 | $63.7 | $18.0 | 28.3% | | Marel segment Adjusted EBITDA | $74.5 | $— | $74.5 | n/a | - Revenue increase driven by Marel acquisition (**$480.2 million**) and JBT organic growth (**$43.9 million**)[128](index=128&type=chunk) - Selling, general and administrative expense increased **$140.0 million** due to Marel acquisition and integration costs, but decreased as a percentage of revenue by **60 bps to 26.8%** due to operating leverage and restructuring savings[130](index=130&type=chunk) - Interest expense increased **$27.7 million** due to higher debt from Marel acquisition[135](index=135&type=chunk) [CONSOLIDATED RESULTS OF OPERATIONS (Six Months Ended June 30, 2025 and 2024)](index=35&type=section&id=CONSOLIDATED%20RESULTS%20OF%20OPERATIONS%20(Six%20Months%20Ended%20June%2030,%202025%20and%202024)) For H1 2025, total revenue increased by 125.1% to $1,788.9 million, with Marel contributing $925.5 million, gross profit margin decreased by 70 bps to 35.0%, operating income decreased by 73.2% to $15.0 million, and the company reported a loss from continuing operations of $169.6 million, a significant decline from $53.4 million income in 2024, primarily due to higher pension expense, interest expense, and M&A related costs, while Adjusted EBITDA increased by 121.6% to $268.4 million | Metric (in millions, except %) | 2025 | 2024 | Change | % Change | | :----------------------------- | :---------- | :-------- | :---------- | :--------- | | Total Revenue | $1,788.9 | $794.6 | $994.3 | 125.1% | | Gross Profit Margin | 35.0% | 35.7% | -70 bps | | | Operating Income | $15.0 | $55.9 | $(40.9) | (73.2)% | | Income (Loss) from Continuing Operations | $(169.6) | $53.4 | $(223.0) | (417.6)% | | Adjusted EBITDA from Continuing Operations | $268.4 | $121.1 | $147.3 | 121.6% | | JBT segment Adjusted EBITDA | $142.4 | $121.1 | $21.3 | 17.6% | | Marel segment Adjusted EBITDA | $126.0 | $— | $126.0 | n/a | - Loss from continuing operations primarily due to **$146.9 million pension settlement charge**, increased interest expense, and M&A related costs[147](index=147&type=chunk)[151](index=151&type=chunk)[154](index=154&type=chunk) - Selling, general and administrative expense increased **$318.0 million** due to Marel acquisition and **$74.7 million** in M&A related costs[145](index=145&type=chunk) [Reconciliation of Non-GAAP Measures](index=38&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) The company presents non-GAAP financial measures like Adjusted EBITDA, Adjusted income from continuing operations, and Free cash flow to provide greater transparency into operating results, adjusting for items such as restructuring costs, M&A related costs, pension-related costs, and depreciation/amortization - Non-GAAP measures (Adjusted EBITDA, Adjusted income from continuing operations, Free cash flow) are used to provide transparency into operating results by adjusting for restructuring, M&A, pension, and depreciation/amortization costs[157](index=157&type=chunk)[160](index=160&type=chunk) | Reconciliation (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Income (loss) from continuing operations | $3.4 | $30.7 | $(169.6) | $53.4 | | Total Non-GAAP Adjustments | $152.8 | $33.0 | $401.4 | $68.0 | | Adjusted EBITDA from continuing operations | $156.2 | $63.7 | $268.4 | $121.1 | | Reconciliation (in millions, except per share) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Income (loss) from continuing operations | $3.4 | $30.7 | $(169.6) | $53.4 | | Adjusted income from continuing operations | $77.7 | $42.1 | $127.8 | $77.9 | | Adjusted diluted EPS from continuing operations | $1.49 | $1.31 | $2.46 | $2.42 | | Free Cash Flow (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------- | :----------------------------- | :----------------------------- | | Cash provided by continuing operating activities | $136.6 | $32.0 | | Less: capital expenditures | $38.5 | $21.0 | | Plus: proceeds from sale of fixed assets | $4.5 | $0.9 | | Plus: pension contributions | $3.2 | $1.6 | | **Free Cash Flow (FCF)** | **$105.8** | **$13.5** | [Restructuring](index=41&type=section&id=Restructuring) The JBT Marel 2025 Integration restructuring plan, initiated in Q1 2025, aims to achieve $50.0-$60.0 million in cumulative cost savings by optimizing the combined company's cost structure post-Marel acquisition, with $16.7 million in charges recognized and $7.1 million in cumulative annualized savings achieved as of June 30, 2025 - The JBT Marel 2025 Integration restructuring plan, initiated in Q1 2025, targets **$50.0-$60.0 million** in cumulative cost savings[171](index=171&type=chunk)[172](index=172&type=chunk) - As of June 30, 2025, **$16.7 million** in restructuring charges have been recognized, and **$7.1 million** in cumulative annualized savings have been achieved[171](index=171&type=chunk)[172](index=172&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) Primary liquidity sources include operating cash flows, a $1.8 billion revolving credit facility, and cash on hand, with the Marel acquisition funded by $983.7 million cash consideration, $867.8 million debt repayment, and $111.4 million transaction expenses, utilizing new debt facilities, resulting in total liquidity of $1.3 billion as of June 30, 2025, and anticipated capital expenditures of $85-$95 million and integration costs of $45-$55 million for 2025 - Primary liquidity sources are operating cash flows, a **$1.8 billion revolving credit facility**, and cash on hand[174](index=174&type=chunk) - Marel acquisition funding included **$983.7 million cash consideration**, **$867.8 million Marel debt repayment**, and **$111.4 million transaction expenses**, financed by new debt facilities[175](index=175&type=chunk) - As of June 30, 2025, total liquidity (cash + borrowing ability) was **$1.3 billion**, with **$111.8 million** in cash and cash equivalents[176](index=176&type=chunk)[179](index=179&type=chunk) - Anticipated capital expenditures for 2025 are **$85-$95 million**, and integration costs for Marel acquisition are **$45-$55 million**[177](index=177&type=chunk) | Cash Flows (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :----------------------------- | :----------------------------- | | Operating Activities | $136.6 | $32.0 | | Investing Activities | $(1,780.1) | $(22.7) | | Financing Activities | $543.4 | $(16.4) | [CRITICAL ACCOUNTING ESTIMATES](index=43&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) The company's critical accounting estimates include intangible asset valuation in business combinations, which relies on significant estimates and assumptions like forecasted revenue growth, EBITDA margins, discount rates, customer attrition, and royalty rates, where future changes could lead to impairment charges - Critical accounting estimates involve intangible asset valuation in business combinations, using methods like multi-period excess earnings and relief-from-royalty[192](index=192&type=chunk) - Key estimates include forecasted revenue growth, EBITDA margins, discount rates, customer attrition rates, and royalty rates, which are inherently uncertain and subject to change[192](index=192&type=chunk)[193](index=193&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=44&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section details JBT Marel's exposure to market risks, specifically foreign currency exchange rate risk, which the company hedges using cross-currency swaps with significant notional amounts designated as fair value and net investment hedges, where a hypothetical adverse movement in exchange rates would result in substantial losses on these derivative instruments [Foreign Currency Exchange Rate Risk](index=44&type=section&id=Foreign%20Currency%20Exchange%20Rate%20Risk) JBT Marel is exposed to foreign currency exchange rate risk and uses cross-currency swaps to hedge this exposure, with notional amounts of $698.3 million (fair value hedges) and $578 million (net investment hedges) as of June 30, 2025, both in liability positions, where a hypothetical 10% adverse movement in exchange rates would result in significant losses on these swaps - The company uses cross-currency swaps to hedge foreign currency exchange rate risk, with notional amounts of **$698.3 million** (fair value hedges) and **$578 million** (net investment hedges) as of June 30, 2025[196](index=196&type=chunk)[197](index=197&type=chunk) - A hypothetical **10% adverse movement** in exchange rates would result in a **$66.2 million loss** on fair value hedges and a **$58.6 million loss** on net investment hedges[196](index=196&type=chunk)[197](index=197&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=44&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section addresses the effectiveness of JBT Marel's disclosure controls and procedures, noting they were effective as of June 30, 2025, with the exception of the recently acquired Marel entity, and details the material weaknesses identified in Marel's internal control over financial reporting prior to the acquisition and the company's ongoing remediation efforts [Evaluation of Disclosure Controls and Procedures](index=44&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) As of June 30, 2025, the CEO and CFO concluded that disclosure controls and procedures were effective, however, Marel was excluded from this assessment due to its recent acquisition, representing approximately 17% of consolidated total assets and 52% of consolidated total revenues - Disclosure controls and procedures were deemed effective as of June 30, 2025[198](index=198&type=chunk) - Marel was excluded from the assessment of disclosure controls and procedures, representing approximately **17% of consolidated total assets** and **52% of consolidated total revenues**[199](index=199&type=chunk) [Material Weaknesses Related to Marel hf.](index=44&type=section&id=Material%20Weaknesses%20Related%20to%20Marel%20hf.) Prior to acquisition, Marel management identified two unremediated material weaknesses in its internal control over financial reporting as of June 30, 2025: ineffective information technology general controls and ineffective controls over journal entries, which, while not resulting in material misstatements, could lead to future material misstatements, and the company is actively remediating these issues - Marel had two unremediated material weaknesses in internal control over financial reporting as of June 30, 2025: ineffective IT general controls and ineffective controls over journal entries[201](index=201&type=chunk)[208](index=208&type=chunk) - These weaknesses did not result in material misstatements but could lead to future material misstatements in financial statements[201](index=201&type=chunk)[208](index=208&type=chunk) [Changes in Internal Control Over Financial Reporting](index=45&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) There were no material changes in internal control over financial reporting during the quarter ended June 30, 2025 - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[203](index=203&type=chunk) PART II — OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=46&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is not currently a party to any legal proceedings that are expected to have a material adverse effect on its business, financial condition, or results of operations - No current legal proceedings are expected to have a material adverse effect on the company's business, financial condition, or results of operations[205](index=205&type=chunk) [ITEM 1A. RISK FACTORS](index=46&type=section&id=ITEM%201A.%20RISK%20FACTORS) The primary new risk factor highlighted is the material weaknesses identified in Marel's internal control over financial reporting, where failure to timely and effectively remediate these weaknesses or maintain an effective system of internal control could adversely affect financial reporting, liquidity, access to capital, and stock price - Material weaknesses in Marel's internal control over financial reporting pose a significant risk, potentially leading to material misstatements, increased costs, and adverse impacts on financial reporting, liquidity, and stock price[207](index=207&type=chunk)[208](index=208&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=47&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No unregistered sales of equity securities or use of proceeds were reported - No unregistered sales of equity securities or use of proceeds were reported[210](index=210&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=47&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) No defaults upon senior securities were reported - No defaults upon senior securities were reported[211](index=211&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=47&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) Mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to the company[212](index=212&type=chunk) [ITEM 5. OTHER INFORMATION](index=47&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025 - No director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025[213](index=213&type=chunk) [ITEM 6. EXHIBITS](index=48&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including certifications, XBRL documents, and the interactive data file - The exhibit index includes certifications (CEO, CFO), XBRL documents, and the cover page interactive data file[214](index=214&type=chunk)

[Second Quarter 2025 Financial & Operational Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20%26%20Operational%20Highlights) Century Casinos reported a 3% increase in net operating revenue and a 10% rise in Adjusted EBITDAR for Q2 2025, while the Board initiated a strategic review to enhance shareholder value [Key Financial Results](index=1&type=section&id=Key%20Financial%20Results) Q2 2025 saw net operating revenue increase 3% to $150.8 million, earnings from operations grow 16%, and Adjusted EBITDAR rise 10% Q2 2025 Financial Highlights (vs. Q2 2024) | Metric | Q2 2025 | Change vs Q2 2024 | | :--- | :--- | :--- | | Net Operating Revenue (in millions) | $150.8 | +3% | | Earnings from Operations (in millions) | $16.6 | +16% | | Net Loss Attributable to Shareholders (in millions) | ($12.3) | 70% decrease in loss | | Basic Net Loss per Share (USD) | ($0.40) | 71% decrease in loss | | Adjusted EBITDAR (in millions) | $30.3 | +10% | [Strategic & Operational Updates](index=1&type=section&id=Strategic%20%26%20Operational%20Updates) The company launched a strategic review to maximize shareholder value, formed a BetMGM partnership for Missouri online sports betting, and saw strong results from the new Caruthersville property - The Board of Directors has initiated a strategic review to explore alternatives such as optimizing the capital structure, potential mergers, strategic partnerships, asset divestments, or the sale of the Company to enhance shareholder value[2](index=2&type=chunk)[7](index=7&type=chunk) - A partnership was formed with BetMGM for online and mobile sports betting in Missouri, which includes a revenue sharing agreement with a guaranteed minimum for the company[4](index=4&type=chunk) - The new Caruthersville, Missouri casino and hotel, opened in November 2024, has seen net operating revenue and Adjusted EBITDAR increase by **26%** and **31%**, respectively[5](index=5&type=chunk) - In Poland, the company was awarded a new casino license in Wroclaw (expected to open Q4 2025) but closed a casino in Warsaw after failing to receive a new license for that location[6](index=6&type=chunk) [Financial Results Analysis](index=2&type=section&id=Financial%20Results%20Analysis) For Q2 2025, consolidated net operating revenue grew 3% year-over-year, driven by Poland's 23% increase, while US revenue was flat and Canada rose 1% [Consolidated Performance](index=2&type=section&id=Consolidated%20Performance) Q2 2025 consolidated net operating revenue increased 3% to $150.8 million, earnings from operations rose 16% to $16.6 million, and net loss attributable to shareholders improved 70% Consolidated Financial Results (in thousands) | Metric | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Operating Revenue | $150,818 | $146,435 | 3% | $281,261 | $282,451 | 0% | | Earnings from Operations | $16,575 | $14,261 | 16% | $23,715 | $22,547 | 5% | | Net Loss Attributable to Shareholders | ($12,309) | ($41,613) | 70% | ($32,922) | ($55,157) | 40% | | Adjusted EBITDAR** | $30,304 | $27,448 | 10% | $50,459 | $48,697 | 4% | | Basic Net Loss per Share | ($0.40) | ($1.36) | 71% | ($1.08) | ($1.81) | 40% | [Performance by Reportable Segment](index=2&type=section&id=Performance%20by%20Reportable%20Segment) Poland was the main Q2 2025 growth driver, with revenue up 23% to $24.7 million and Adjusted EBITDAR up 332% to $1.9 million, while US and Canada segments saw modest changes Q2 2025 Net Operating Revenue by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | United States | $106,104 | $106,515 | 0% | | Canada | $20,005 | $19,827 | 1% | | Poland | $24,709 | $20,093 | 23% | | **Consolidated** | **$150,818** | **$146,435** | **3%** | Q2 2025 Earnings from Operations by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | United States | $14,729 | $14,102 | 4% | | Canada | $4,533 | $4,362 | 4% | | Poland | $464 | ($181) | 356% | | **Consolidated** | **$16,575** | **$14,261** | **16%** | Q2 2025 Adjusted EBITDAR by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | United States | $25,693 | $25,037 | 3% | | Canada | $5,607 | $5,451 | 3% | | Poland | $1,942 | $450 | 332% | | **Consolidated** | **$30,304** | **$27,448** | **10%** | [Balance Sheet and Liquidity](index=3&type=section&id=Balance%20Sheet%20and%20Liquidity) As of June 30, 2025, cash was $85.5 million (down from $98.8 million), primarily due to $12.5 million in capital expenditures, with total outstanding debt at $338.1 million [Cash and Debt Position](index=3&type=section&id=Cash%20and%20Debt%20Position) The company's cash stood at $85.5 million at Q2 2025 end, with total debt at $338.1 million, mainly a term loan, and a $712.9 million long-term financing obligation Key Balance Sheet Items (in millions) | Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $85.5 | $98.8 | | Outstanding Debt | $338.1 | $339.6 | - The decrease in cash from year-end 2024 was primarily driven by **$12.5 million** in purchases of property and equipment[19](index=19&type=chunk) - As of June 30, 2025, the company's Consolidated First Lien Net Leverage Ratio exceeded the 5.50 to 1.00 covenant limit; however, because there were no outstanding revolving loans, this did not constitute a breach[19](index=19&type=chunk) [Financial Statements (Unaudited)](index=5&type=section&id=Financial%20Statements%20(Unaudited)) The unaudited financial statements detail a Q2 2025 net loss attributable to shareholders of $12.3 million (improved from $41.6 million loss), with total assets of $1.21 billion and a shareholders' deficit of $41.5 million [Condensed Consolidated Statements of Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Loss) For Q2 2025, net operating revenue was $150.8 million, earnings from operations $16.6 million, resulting in a net loss of $9.6 million and a net loss attributable to shareholders of $12.3 million, or ($0.40) per share Q2 2025 Statement of Loss Summary (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Operating Revenue | $150,818 | $146,435 | | Earnings from Operations | $16,575 | $14,261 | | Loss Before Income Taxes | ($8,323) | ($9,394) | | Net Loss | ($9,573) | ($39,013) | | Net Loss Attributable to Shareholders | ($12,309) | ($41,613) | | Basic & Diluted Loss Per Share | ($0.40) | ($1.36) | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $1.208 billion (down from $1.226 billion), total liabilities increased to $1.158 billion, and shareholders' deficit grew to $41.5 million Balance Sheet Summary (in thousands) | Category | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Current Assets | $119,292 | $135,549 | | Property and Equipment, net | $916,120 | $922,146 | | **Total Assets** | **$1,208,451** | **$1,226,312** | | **Liabilities and Equity** | | | | Current Liabilities | $84,230 | $86,044 | | Non-current Liabilities | $1,074,022 | $1,058,264 | | Shareholders' Equity (Deficit) | ($41,493) | ($9,300) | | **Total Liabilities and Equity** | **$1,208,451** | **$1,226,312** | [Supplemental Information & Non-GAAP Reconciliations](index=6&type=section&id=Supplemental%20Information%20%26%20Non-GAAP%20Reconciliations) This section reconciles Adjusted EBITDAR, a key non-GAAP metric, showing Q2 2025 consolidated Adjusted EBITDAR of $30.3 million (up 10%) and an improved margin of 20% [Reconciliation of Adjusted EBITDAR](index=6&type=section&id=Reconciliation%20of%20Adjusted%20EBITDAR) Reconciliation tables detail adjustments from net loss to Adjusted EBITDAR, with Q2 2025 consolidated Adjusted EBITDAR at $30.3 million, and Caruthersville property's Adjusted EBITDAR increasing to $6.1 million - The reconciliation from Net Loss to Adjusted EBITDAR for Q2 2025 shows major add-backs including **Interest Expense ($25.9 million)**, **Depreciation & Amortization ($12.8 million)**, and **Income Tax Expense ($1.3 million)**[27](index=27&type=chunk) - The Caruthersville property's Adjusted EBITDAR increased to **$6.1 million** in Q2 2025, up from **$4.7 million** in Q2 2024, demonstrating strong performance since its redevelopment[37](index=37&type=chunk) [Key Performance Margins](index=8&type=section&id=Key%20Performance%20Margins) Consolidated Adjusted EBITDAR margin improved to 20% in Q2 2025 from 19%, with Poland showing significant expansion from 2% to 8%, while US and Canada margins remained stable Adjusted EBITDAR Margins by Segment | Segment | Q2 2025 Margin | Q2 2024 Margin | | :--- | :--- | :--- | | United States | 24% | 24% | | Canada | 28% | 28% | | Poland | 8% | 2% | | **Consolidated** | **20%** | **19%** | [Definition of Non-GAAP Measures](index=10&type=section&id=Definition%20of%20Non-GAAP%20Measures) Adjusted EBITDAR is defined as net earnings (loss) adjusted for interest, taxes, depreciation, amortization, non-controlling interests, and specific one-time items, used by analysts for valuation and comparability - Adjusted EBITDAR is defined as net earnings (loss) adjusted for interest, taxes, depreciation, amortization, non-controlling interests, stock-based compensation, and other specific items[42](index=42&type=chunk) - The company states that Adjusted EBITDAR is used by analysts and investors as a valuation metric because it isolates the effects of financing real estate and allows for better comparability among gaming operators with different capital and leasing structures[43](index=43&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From to Commission File Number 0-21886 Maryland 52-0812977 (IRS Employer Identification No.) 8100 NE Parkway Drive, Suite 200 Vancouver, Washington 98662 (Address of principal ex ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2025, or ☐ Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number 1-13374 REALTY INCOME CORPORATION (Exact name of registrant as specified in its charter) Maryland 33-0580106 (State or Other Jurisdiction of Incorporation or Org ...

Part I. Financial Information [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated condensed financial statements of Laird Superfood, Inc. for the period ended June 30, 2025, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, financial position, and operational results [Unaudited Consolidated Condensed Balance Sheets](index=4&type=section&id=Unaudited%20Consolidated%20Condensed%20Balance%20Sheets) This section presents the Company's financial position, detailing assets, liabilities, and stockholders' equity at specific reporting dates Consolidated Condensed Balance Sheet Metrics ($) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------------ | | Total Assets | $20,426,736 | $19,259,001 | | Total Liabilities | $7,052,795 | $6,062,135 | | Total Stockholders' Equity | $13,373,941 | $13,196,866 | - Current assets increased to **$19.2 million** as of June 30, 2025, from **$18.0 million** as of December 31, 2024, primarily due to a significant increase in inventory[13](index=13&type=chunk) - Current liabilities increased to **$7.0 million** as of June 30, 2025, from **$5.9 million** as of December 31, 2024, mainly driven by increases in accounts payable and accrued expenses[13](index=13&type=chunk) [Unaudited Consolidated Condensed Statements of Operations](index=5&type=section&id=Unaudited%20Consolidated%20Condensed%20Statements%20of%20Operations) This section outlines the Company's financial performance over specific periods, including net sales, gross profit, operating loss, and net loss Consolidated Condensed Statements of Operations ($) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Sales, net | $11,990,842 | $10,003,654 | $23,645,001 | $19,912,592 | | Gross profit | $4,781,003 | $4,177,281 | $9,662,543 | $8,141,382 | | Operating loss | $(399,477) | $(338,621) | $(617,496) | $(1,427,183) | | Net loss | $(362,178) | $(239,076) | $(518,360) | $(1,255,598) | | Net loss per share (Basic & Diluted) | $(0.03) | $(0.02) | $(0.05) | $(0.13) | - Net sales increased by **20%** for the three months ended June 30, 2025, and by **19%** for the six months ended June 30, 2025, compared to the prior year periods[16](index=16&type=chunk) - Net loss increased by **51%** for Q2 2025 but decreased by **59%** for YTD 2025, indicating improved performance over the longer period despite a quarterly setback[16](index=16&type=chunk) [Unaudited Consolidated Condensed Statements of Stockholders' Equity](index=6&type=section&id=Unaudited%20Consolidated%20Condensed%20Statements%20of%20Stockholders%27%20Equity) This section details changes in the Company's equity, reflecting common stock, additional paid-in capital, and accumulated deficit over time Consolidated Condensed Statements of Stockholders' Equity ($) | Metric | Balances, January 1, 2025 | Balances, June 30, 2025 | | :------------------------ | :------------------------ | :---------------------- | | Common Stock (Amount) | $10,292 | $10,644 | | Additional Paid-in Capital| $121,304,884 | $121,999,967 | | Accumulated Deficit | $(108,118,310) | $(108,636,670) | | Total Stockholders' Equity| $13,196,866 | $13,373,941 | - Stockholders' equity increased from **$13.2 million** at January 1, 2025, to **$13.4 million** at June 30, 2025, primarily due to stock-based compensation and stock option exercises, partially offset by net loss[18](index=18&type=chunk) [Unaudited Consolidated Condensed Statements of Cash Flows](index=7&type=section&id=Unaudited%20Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) This section reports the Company's cash inflows and outflows from operating, investing, and financing activities over specific periods Consolidated Condensed Statements of Cash Flows ($) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------- | :----------------------------- | :----------------------------- | | Operating activities | $(4,102,366) | $220,414 | | Investing activities | $(80,638) | $(13,462) | | Financing activities | $(146,373) | $(86,066) | | Net change in cash | $(4,329,377) | $120,886 | | Cash, end of period | $4,184,775 | $7,827,692 | - Net cash used in operating activities significantly increased to **$4.1 million** for YTD 2025, compared to net cash provided of **$0.2 million** for YTD 2024, driven by strategic investment in inventory and elevated accounts receivable[21](index=21&type=chunk)[28](index=28&type=chunk) [Notes to Unaudited Consolidated Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Condensed%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited consolidated condensed financial statements [1. Summary of Significant Accounting Policies and Estimates](index=8&type=section&id=1.%20Summary%20of%20Significant%20Accounting%20Policies%20and%20Estimates) This section outlines the basis of financial statement preparation, including consolidation of Laird Superfood, Inc. and Picky Bars, LLC, and the Company's single reportable segment. It also addresses the Company's liquidity position, recent accounting pronouncements, and subsequent events, such as the impact of new tax legislation - The Company operates as one reportable segment: **superfood**, which includes coffee creamers, hydration and beverage enhancing products, snacks, and coffee/tea/hot chocolate products[25](index=25&type=chunk)[98](index=98&type=chunk) - As of June 30, 2025, the Company had **$4.2 million cash-on-hand** and believes existing cash and anticipated cash flow will be sufficient for operations for at least the next twelve months, despite **$4.1 million cash used in operating activities** for the six months ended June 30, 2025[28](index=28&type=chunk)[29](index=29&type=chunk) - Cash used in operations was driven by a strategic investment in inventory (up to **$11.0 million** from **$6.0 million**) to meet demand, address out-of-stocks, and forward purchase due to potential tariffs, with normalization expected in late 2025/early 2026[28](index=28&type=chunk) - New accounting pronouncements, ASU 2023-09 (Income Taxes) and ASU 2024-03 (Income Statement Expenses), are being evaluated for their impact on financial statements, with effective dates in 2025 and 2026/2027, respectively[30](index=30&type=chunk)[31](index=31&type=chunk) - The One Big Beautiful Bill Act (OBBBA) signed on July 4, 2025, will impact income tax effects starting in the period it was signed into law, with the Company currently assessing its full impact[33](index=33&type=chunk) [2. Cash, Cash Equivalents, and Restricted Cash](index=10&type=section&id=2.%20Cash%2C%20Cash%20Equivalents%2C%20and%20Restricted%20Cash) This note details the composition of cash, cash equivalents, and restricted cash, including amounts held for contractual agreements and those exceeding FDIC/SIPC insurable limits Cash, Cash Equivalents, and Restricted Cash Breakdown ($) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------------ | | Cash and cash equivalents | $3,928,241 | $8,339,918 | | Restricted cash | $256,534 | $174,234 | | Total cash, cash equivalents, and restricted cash | $4,184,775 | $8,514,152 | - Restricted cash includes **$99,525** for COVID-19 relief projects and **$157,009** to collateralize credit card limits as of June 30, 2025[40](index=40&type=chunk) - Balances exceeding FDIC/SIPC limits were **$3,295,724** as of June 30, 2025, down from **$7,621,392** at December 31, 2024[38](index=38&type=chunk) [3. Inventory](index=10&type=section&id=3.%20Inventory) This section provides a breakdown of inventory components and details the inventory obsolescence and disposal costs incurred during the periods Inventory Components ($) | Inventory Component | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :------------------ | | Raw materials and packaging | $4,204,361 | $3,049,399 | | Finished goods | $6,823,254 | $2,926,277 | | Total Inventory | $11,027,615 | $5,975,676 | - Inventory obsolescence and disposal costs were **$300,223** for Q2 2025 and **$401,938** for YTD 2025, significantly higher than the prior year periods[42](index=42&type=chunk) Inventory Reserve Components ($) | Inventory Reserve Component | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------------ | | Estimated based on turnover, quantities, expiration dates | $150,153 | $132,557 | | Discontinued product | $200,306 | $293,235 | | Total inventory reserves | $350,459 | $425,792 | [4. Prepaid Expenses and Other Current Assets](index=11&type=section&id=4.%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) This note details the components of prepaid expenses and other current assets, including prepaid inventory Prepaid Expenses and Other Current Assets Breakdown ($) | Component | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :------------------ | | Prepaid expenses | $637,710 | $568,549 | | Prepaid inventory | $214,987 | $871,406 | | Deposits | $333,739 | $222,483 | | Other current assets | $66,822 | $51,451 | | Total | $1,253,258 | $1,713,889 | - Prepaid inventory decreased significantly from **$871,406** at December 31, 2024, to **$214,987** at June 30, 2025[44](index=44&type=chunk) [5. Property and Equipment](index=11&type=section&id=5.%20Property%20and%20Equipment) This section outlines the Company's property and equipment, net, and associated depreciation expenses Property and Equipment, Net Carrying Amount ($) | Category | June 30, 2025 (Net Carrying Amount) | December 31, 2024 (Net Carrying Amount) | | :------------------------ | :---------------------------------- | :------------------------------------ | | Furniture and office equipment | $81,484 | $43,648 | | Leasehold improvements | $11,749 | $14,799 | | Total | $93,233 | $58,447 | - Depreciation expense for YTD 2025 was **$45,852**, an increase from **$39,580** in YTD 2024[45](index=45&type=chunk) [6. Intangible Assets](index=12&type=section&id=6.%20Intangible%20Assets) This note details the Company's intangible assets, including trade names, recipes, and licensing agreements, along with their amortization and impairment evaluation Intangible Assets, Net Carrying Amount ($) | Intangible Asset | June 30, 2025 (Net Carrying Amount) | December 31, 2024 (Net Carrying Amount) | | :------------------------ | :---------------------------------- | :------------------------------------ | | Trade names | $623,578 | $677,029 | | Recipes | $192,500 | $209,000 | | Other intangible assets | $0 | $10,094 | | Licensing agreements | $132,100 | $132,100 | | Total intangible assets | $948,178 | $1,028,223 | - Amortization expense for YTD 2025 was **$80,045**, a decrease from **$98,999** in YTD 2024[48](index=48&type=chunk) - The Company evaluated the recoverability of the Picky Bars asset group as of March 31, 2025, due to lower sales, but no impairment was recorded as estimated undiscounted future cash flows exceeded the carrying amount[49](index=49&type=chunk) [7. Accrued Expenses](index=12&type=section&id=7.%20Accrued%20Expenses) This section provides a breakdown of the Company's accrued expenses Accrued Expense Components ($) | Accrued Expense Component | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------------ | | Accrued compensation and benefits | $1,255,139 | $1,993,008 | | Accrued accounts payable | $2,403,974 | $1,082,789 | | Other accrued expenses | $407,142 | $567,201 | | Total accrued expenses | $4,066,255 | $3,642,998 | - Accrued accounts payable significantly increased from **$1.1 million** at December 31, 2024, to **$2.4 million** at June 30, 2025[51](index=51&type=chunk) [8. Leases](index=13&type=section&id=8.%20Leases) This note details the Company's operating lease agreements for corporate office space, including lease expenses and future minimum payments, and also reports on rental income from a sublease that terminated in October 2024 Lease Expenses ($) | Lease Expense Category | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | | :----------------------------- | :------------------------------- | :----------------------------- | :------------------------------- | :----------------------------- | | Operating lease cost | $23,059 | $46,119 | $38,085 | $76,169 | | Short-term lease rent expense | $117,110 | $210,859 | $79,897 | $144,127 | | Total rent expense | $140,169 | $256,978 | $123,772 | $231,651 | - Total rent expense increased for both the three and six months ended June 30, 2025, compared to the prior year periods[53](index=53&type=chunk) Future Minimum Lease Payments ($) | Future Minimum Lease Payments | Amount | | :------------------------------------ | :----- | | 2025 (excluding six months ended June 30, 2025) | $52,983 | | 2026 | $109,145 | | 2027 | $56,210 | | Total | $218,338 | | Less imputed interest | $(16,340) | | Operating lease liabilities | $201,998 | [9. Income Taxes](index=14&type=section&id=9.%20Income%20Taxes) This note discusses the Company's income tax position, including the absence of current federal income tax due to net losses, the reconciliation of income tax expense, and the composition of deferred tax assets and net operating loss (NOL) carryforwards Income Tax Metrics ($) | Income Tax Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Income tax benefit at statutory rates | $117,815 | $229,541 | | Valuation allowance for deferred tax assets | $(328,074) | $(626,845) | | Reported income tax expense | $(20,873) | $(42,481) | | Effective tax rate | 4.2% | 3.5% | Deferred Tax Assets ($) | Deferred Tax Asset Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------------ | | Net operating loss carryforwards | $21,831,513 | $21,368,607 | | Total deferred tax assets | $26,655,261 | $26,264,674 | | Valuation allowance | $(26,655,261) | $(26,264,674) | | Total net deferred tax assets | $0 | $0 | - The Company has a full valuation allowance against its deferred tax assets due to cumulative losses since inception, resulting in **no net deferred tax assets**[55](index=55&type=chunk)[61](index=61&type=chunk) Net Operating Losses and Other Carryforwards ($) | NOLs and Other Carryforwards | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------------ | | Federal NOLs post-2018 | $84,558,192 | $82,744,578 | | State NOLs | $62,423,359 | $60,941,124 | | Total NOLs | $148,849,628 | $145,553,779 | [10. Stock Incentive Plan](index=16&type=section&id=10.%20Stock%20Incentive%20Plan) This note details the Company's 2020 Stock Incentive Plan, summarizing activity for stock options, restricted stock units (RSUs), and market-based stock units (MSUs), along with the associated stock-based compensation expense - As of June 30, 2025, **1,193,862 authorized shares** were issuable or eligible for awards under the 2020 Plan, excluding **2,168,061 shares** for outstanding options and RSUs[66](index=66&type=chunk) Stock Option Activity (Shares, $) | Stock Option Activity | Balance at Jan 1, 2025 | Granted | Exercised/Released | Balance at Jun 30, 2025 | | :-------------------------- | :--------------------- | :------ | :----------------- | :---------------------- | | Options | 1,630,428 | — | (74,000) | 1,556,428 | | Weighted Average Exercise Price | $3.47 | $— | $0.92 | $3.59 | | Aggregate Intrinsic Value | $8,770,109 | $— | $— | $6,301,890 | RSU Activity (Units, $) | RSU Activity | Balance at Jan 1, 2025 | Granted | Exercised/Released | Balance at Jun 30, 2025 | | :-------------------------- | :--------------------- | :------ | :----------------- | :---------------------- | | Number of RSUs | 1,115,498 | 114,760 | (335,209) | 895,049 | | Weighted Average Grant Date Fair Value | $3.85 | $5.88 | $4.03 | $4.09 | | Aggregate Fair Value | $4,294,241 | $— | $— | $3,657,528 | Stock-Based Compensation Expense and Unrecognized Cost ($) | Stock-Based Compensation | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | Unrecognized Compensation Cost as of June 30, 2025 | | :------------------------- | :------------------------------- | :----------------------------- | :------------------------------------------------- | | Stock options | $79,183 | $160,515 | $459,365 | | RSUs | $409,393 | $836,471 | $3,302,516 | | Total | $488,576 | $996,986 | $3,761,881 | [11. Loss per Share](index=20&type=section&id=11.%20Loss%20per%20Share) This note presents the basic and diluted net loss per share, along with the weighted-average shares outstanding and anti-dilutive securities excluded from the calculation Net Loss per Share Calculation ($, Shares) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(362,178) | $(239,076) | $(518,360) | $(1,255,598) | | Weighted average shares outstanding | 10,517,528 | 9,833,001 | 10,431,987 | 9,617,800 | | Net loss per share, basic and diluted | $(0.03) | $(0.02) | $(0.05) | $(0.13) | - Common stock options, restricted stock awards, and market-based stock awards totaling **2,451,477 shares** for YTD 2025 were excluded from diluted EPS calculation due to their anti-dilutive effect[81](index=81&type=chunk) [12. Concentrations](index=20&type=section&id=12.%20Concentrations) This note identifies significant concentrations in vendor accounts payable, customer accounts receivable, sales to specific customers, and purchases from key suppliers and geographical regions Vendor Accounts Payable Concentration (%) | Vendor Accounts Payable Concentration | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :------------------ | | Vendor B | 31% | 18% | | Total (top vendors) | 31% | 42% | Customer Accounts Receivable Concentration (%) | Customer Accounts Receivable Concentration | June 30, 2025 | December 31, 2024 | | :----------------------------------------- | :------------ | :------------------ | | Customer A | 40% | 43% | | Customer C | 28% | 14% | | Total (top customers) | 78% | 77% | Sales Concentration by Customer (Gross Sales) (%) | Sales Concentration (Gross Sales) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :-------------------------------- | :------------------------------- | :----------------------------- | | Customer A | 17% | 18% | | Customer C | 19% | 15% | | Total (top customers) | 48% | 48% | Purchase Concentration by Supplier (%) | Purchase Concentration (Suppliers) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--------------------------------- | :------------------------------- | :----------------------------- | | Supplier B | 24% | 17% | | Supplier A | 20% | 17% | | Total (top suppliers) | 44% | 34% | Purchase Concentration by Region (%) | Purchase Concentration (Regions) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------------------------- | :------------------------------- | :----------------------------- | | Country A | 25% | 23% | | Country B | * | 13% | | Total (top regions) | 25% | 36% | [13. Related Parties](index=22&type=section&id=13.%20Related%20Parties) This note discloses transactions with related parties, including license agreements with Mr. Hamilton and Ms. Reece, and marketing agreements with Ms. Reece - The Company has a License and Preservation Agreement with Mr. Hamilton and Ms. Reece, granting the Company rights to extend the term for additional ten-year periods after the initial one-hundred-year term[90](index=90&type=chunk) - Marketing services provided by Ms. Reece resulted in advertising expenses of **$77,984** for Q2 2025 and **$147,173** for YTD 2025, with **$57,947** payable to her as of June 30, 2025[91](index=91&type=chunk) [14. Revenue Recognition](index=22&type=section&id=14.%20Revenue%20Recognition) This note details the Company's revenue recognition policies, disaggregating net sales by product category and sales channel (e-commerce and wholesale), and providing information on receivables and contract liabilities Gross Sales by Product Category ($, %) | Product Category (Gross Sales) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------------------------- | :------------------------------- | :----------------------------- | | Coffee creamers | $6,770,922 (56%) | $13,483,574 (57%) | | Coffee, tea, and hot chocolate products | $3,599,037 (30%) | $6,819,928 (29%) | | Hydration and beverage enhancing products | $1,824,025 (15%) | $3,930,204 (17%) | | Snacks and other food items | $1,412,979 (12%) | $2,843,707 (12%) | Net Sales by Channel ($, %) | Sales Channel (Net Sales) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------------------ | :------------------------------- | :----------------------------- | | E-commerce | $6,237,344 (52%) | $12,450,460 (53%) | | Wholesale | $5,753,498 (48%) | $11,194,541 (47%) | | Total | $11,990,842 (100%) | $23,645,001 (100%) | - Wholesale channel sales increased to **48%** of net sales for Q2 2025 (from 39% in Q2 2024) and **47%** for YTD 2025 (from 40% in YTD 2024), indicating a strategic shift towards retail distribution[95](index=95&type=chunk)[106](index=106&type=chunk) [15. Reportable Segment](index=24&type=section&id=15.%20Reportable%20Segment) This note confirms that the Company operates as a single reportable segment, 'superfood,' and reconciles consolidated net loss to adjusted EBITDA, a non-GAAP measure used by management to assess performance - The Company's Chief Executive Officer, as the Chief Operating Decision Maker (CODM), reviews financial information for the single **'superfood' segment**, which focuses on clean, functional, and sustainability-conscious food alternatives[98](index=98&type=chunk)[99](index=99&type=chunk) Adjusted EBITDA Reconciliation ($) | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :-------------------------------- | :------------------------------- | :----------------------------- | | Net loss | $(362,178) | $(518,360) | | Depreciation and amortization | $59,376 | $125,897 | | Stock-based compensation | $488,576 | $996,986 | | Adjusted EBITDA | $148,475 | $505,387 | - Adjusted EBITDA for YTD 2025 was **$505,387**, a significant improvement from **$(790,544)** in YTD 2024, reflecting management's focus on operating performance excluding non-cash and non-recurring items[101](index=101&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Conditions%20and%20Results%20of%20Operations) This section provides an overview of Laird Superfood's business, financial highlights, strategic objectives, and a detailed analysis of its financial performance for the three and six months ended June 30, 2025, compared to the prior year. It also discusses cash flows, liquidity, capital resources, and critical accounting estimates [Overview](index=25&type=section&id=Overview) This section introduces Laird Superfood's business model, product focus, and long-term strategic objectives - Laird Superfood focuses on clean, minimally processed, functional foods with adaptogens, including coffee creamers, hydration products, snacks, and coffee/tea/hot chocolate[103](index=103&type=chunk) - The long-term goal is to build a widely recognized brand emphasizing recognizable ingredients, nutritional density, and functionality to maximize penetration in the grocery market[103](index=103&type=chunk) [Financial Highlights](index=25&type=section&id=Financial%20Highlights) This section summarizes key financial performance indicators, including sales channel contributions and growth rates - E-commerce (DTC and Amazon.com) accounted for **52%** of net sales in Q2 2025 and **53%** in YTD 2025, while wholesale (retail outlets) made up **48%** and **47%** respectively[106](index=106&type=chunk) - Wholesale net sales increased by **47%** in Q2 2025 and **41%** in YTD 2025, driven by distribution expansion and velocity growth in grocery and club stores[107](index=107&type=chunk)[108](index=108&type=chunk) - E-commerce sales grew by **2%** in Q2 2025 and **4%** in YTD 2025, primarily from subscription and repeat customer revenue, with repeat customers accounting for over **80%** of DTC sales[104](index=104&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) [Our Strategy and Key Factors Affecting our Future Performance](index=26&type=section&id=Our%20Strategy%20and%20Key%20Factors%20Affecting%20our%20Future%20Performance) This section outlines the Company's strategic priorities and critical factors influencing its future operational and financial success - Key factors for future performance include growing the customer base in e-commerce and wholesale channels at a reasonable cost, managing third-party production and logistics, driving repeat usage, expanding product lines, and optimizing gross and operating margins[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) - The Company aims to expand its retail distribution footprint, expecting the wholesale channel to eventually surpass e-commerce as a percentage of net sales[106](index=106&type=chunk) - Effective management of the global supply chain and working capital components are also critical for growth and positive cash flows[115](index=115&type=chunk)[116](index=116&type=chunk) [Components of Results of Operations](index=27&type=section&id=Components%20of%20Results%20of%20Operations) This section defines the key revenue and expense categories that constitute the Company's financial performance - Net sales are generated through wholesale (distributors, retail outlets) and e-commerce (direct websites, Amazon.com)[117](index=117&type=chunk) - Cost of goods sold includes raw materials, packaging, co-packing fees, freight, import duties, indirect labor, and overhead for storage and distribution[118](index=118&type=chunk) - Operating expenses comprise general and administrative, research and product development, and sales and marketing expenses, including non-production personnel costs[119](index=119&type=chunk) - No significant federal income tax expenses are expected due to historical and anticipated operating losses, but state and local income taxes will continue to be owed[120](index=120&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the Company's financial performance across various periods, highlighting key drivers of change [Comparison of Q2 2025 and Q2 2024](index=27&type=section&id=Comparison%20of%20Q2%202025%20and%20Q2%202024) Net sales increased by 20% to $12.0 million, driven by wholesale expansion and improved velocities, partially offset by increased promotional spend. Gross profit rose by 14%, but gross margin contracted due to channel mix and commodity inflation. Operating expenses increased, leading to a higher operating loss Q2 Financial Performance Comparison ($, %, pts) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :-------------------------- | :---------- | :---------- | :--------- | :--------- | | Sales, net | $11,990,842 | $10,003,654 | $1,987,188 | 20% | | Cost of goods sold | $(7,209,839) | $(5,826,373) | $(1,383,466) | 24% | | Gross profit | $4,781,003 | $4,177,281 | $603,722 | 14% | | Gross margin | 39.9% | 41.8% | | -1.9 pts | | Total operating expenses | $5,180,480 | $4,515,902 | $664,578 | 15% | | Operating loss | $(399,477) | $(338,621) | $(60,856) | 18% | | Net loss | $(362,178) | $(239,076) | $(123,102) | 51% | - The **20% increase in net sales** was primarily fueled by a **47% increase in wholesale channel sales**, driven by distribution expansion and improved product velocities, partially offset by higher promotional trade spend[121](index=121&type=chunk) - Gross margin contracted by **1.9 percentage points** to **39.9%** due to channel mix and commodity cost inflation[123](index=123&type=chunk) - General and administrative expenses increased by **3%** due to stock-based compensation and personnel costs, while sales and marketing expenses rose by **26%** due to increased marketing and selling costs[124](index=124&type=chunk)[125](index=125&type=chunk) [Comparison of YTD 2025 and YTD 2024](index=29&type=section&id=Comparison%20of%20YTD%202025%20and%20YTD%202024) Net sales for YTD 2025 increased by 19% to $23.6 million, driven by strong wholesale growth and e-commerce subscription revenue. Gross profit also increased by 19%, with gross margin remaining flat. Operating loss significantly decreased by 57%, and net loss improved by 59% compared to the prior year period YTD Financial Performance Comparison ($, %, pts) | Metric | YTD 2025 | YTD 2024 | Change ($) | Change (%) | | :-------------------------- | :---------- | :---------- | :--------- | :--------- | | Sales, net | $23,645,001 | $19,912,592 | $3,732,409 | 19% | | Cost of goods sold | $(13,982,458) | $(11,771,210) | $(2,211,248) | 19% | | Gross profit | $9,662,543 | $8,141,382 | $1,521,161 | 19% | | Gross margin | 40.9% | 40.9% | | 0% | | Total operating expenses | $10,280,039 | $9,568,565 | $711,474 | 7% | | Operating loss | $(617,496) | $(1,427,183) | $809,687 | (57)% | | Net loss | $(518,360) | $(1,255,598) | $737,238 | (59)% | - The **19% increase in net sales** was driven by a **40% increase in wholesale channel sales** and a **4% increase in e-commerce sales**, fueled by subscription and repeat customer revenue[128](index=128&type=chunk) - Gross margin remained **flat at 40.9%** for YTD 2025 compared to YTD 2024[130](index=130&type=chunk) - General and administrative expenses increased by **3%** due to stock-based compensation and personnel costs, while sales and marketing expenses increased by **11%** due to higher selling costs[131](index=131&type=chunk)[132](index=132&type=chunk) [Cash Flows](index=31&type=section&id=Cash%20Flows) This section analyzes the Company's cash generation and usage from operating, investing, and financing activities Cash Flow Activities Summary ($) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------- | :----------------------------- | :----------------------------- | | Operating activities | $(4,102,366) | $220,414 | | Investing activities | $(80,638) | $(13,462) | | Financing activities | $(146,373) | $(86,066) | | Net change in cash | $(4,329,377) | $120,886 | - The significant increase in cash used in operating activities for YTD 2025 was due to strategic investment in working capital, including increased inventory to meet demand and address potential tariffs, and elevated accounts receivable[134](index=134&type=chunk) - Cash used in investing activities increased due to purchases of long-lived capital assets, and cash used in financing activities was primarily for payroll taxes related to stock awards, partially offset by stock option exercises[135](index=135&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the Company's ability to meet its short-term and long-term financial obligations and fund future operations - As of June 30, 2025, the Company had an accumulated deficit of **$108.6 million** and **$4.2 million cash-on-hand**, with total net working capital of **$12.3 million**[136](index=136&type=chunk)[137](index=137&type=chunk) - The Company believes existing cash and anticipated cash flow from operations will be sufficient for the next twelve months, but may seek additional financing through debt or equity, which could result in dilution or other restrictions[140](index=140&type=chunk) - Macroeconomic trends like commodity cost inflation and potential tariffs, particularly from Southeast Asia, are being monitored, with additional inventory acquired in anticipation of future tariff implementations, impacting current cash balances but not expected to materially affect 2025 cash balances[139](index=139&type=chunk) [Segment Information](index=32&type=section&id=Segment%20Information) This section confirms the Company's single operating segment and how management evaluates its performance - The Company operates as **one operating and reportable segment**, with the CEO reviewing financial information on an aggregate basis for resource allocation and performance evaluation[141](index=141&type=chunk) [Critical Accounting Estimates](index=32&type=section&id=Critical%20Accounting%20Estimates) This section addresses the significant accounting judgments and estimates that impact the Company's financial statements - There have been **no material changes** to the Company's critical accounting estimates since the 2024 Form 10-K[142](index=142&type=chunk) [Emerging Growth Company Status](index=33&type=section&id=Emerging%20Growth%20Company%20Status) This section explains the Company's status as an emerging growth company and the associated reporting flexibilities - The Company qualifies as an **'emerging growth company'** under the JOBS Act, allowing it to take advantage of reduced reporting burdens, such as fewer years of audited financial statements and an exemption from auditor attestation on internal controls[144](index=144&type=chunk)[147](index=147&type=chunk) - The Company has elected to use the extended transition period for complying with new or revised accounting standards, delaying adoption until they apply to private companies[145](index=145&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there are no quantitative and qualitative disclosures about market risk applicable to the Company for the reported period - This section is marked as **'Not Applicable,'** indicating no material quantitative and qualitative disclosures about market risk for the period[146](index=146&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) This section discusses the limitations and effectiveness of the Company's disclosure controls and procedures, concluding that they were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Management acknowledges that controls and procedures provide only **reasonable assurance** due to inherent limitations and resource constraints[148](index=148&type=chunk) - The CEO and CFO evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, and concluded they were **effective**[149](index=149&type=chunk) - There have been **no material changes** in internal control over financial reporting during the quarter ended June 30, 2025[150](index=150&type=chunk) Part II. Other Information [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) This section states that there are no material pending legal proceedings against the Company - The Company is **not aware of any material pending legal proceedings** to which it is a party or of which its property is the subject[152](index=152&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) This section highlights risks associated with conducting business operations outside of the U.S., including compliance with international laws, tariffs, trade policies, and economic instability, which could adversely affect the Company's business and results of operations - **No material changes** to the Risk Factors disclosed in the 2024 Form 10-K, except for specific risks related to international operations[153](index=153&type=chunk) - Risks of international operations include difficulties with foreign operations, compliance with various laws, changes in foreign regulations, tariffs, export/import restrictions, currency fluctuations, and economic/political instability in regions like Southeast Asia[154](index=154&type=chunk)[158](index=158&type=chunk) - U.S. government-announced tariffs, particularly against countries in Southeast Asia, could lead to inflationary pressures and higher costs for raw materials, with the ultimate impact depending on the magnitude and duration of these policies[157](index=157&type=chunk)[159](index=159&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or use of proceeds to report - There were **no unregistered sales of equity securities** or use of proceeds during the period[161](index=161&type=chunk) [Item 3. Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section indicates that there were no defaults upon senior securities - There were **no defaults upon senior securities** during the period[162](index=162&type=chunk) [Item 4. Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the Company - This section is marked as **'Not Applicable,'** indicating no mine safety disclosures for the Company[163](index=163&type=chunk) [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) This section reports that no directors or executive officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the six months ended June 30, 2025 - No directors or executive officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the six months ended June 30, 2025[164](index=164&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including certifications from the CEO and CFO, and Inline XBRL documents - Exhibits include certifications from the Chief Executive Officer and Chief Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2) and various Inline XBRL documents (Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[167](index=167&type=chunk) [Signatures](index=38&type=section&id=Signatures) This section formally certifies the report's submission with the authorized signatures of the Company's executive officers - The report was signed by Jason Vieth, President and Chief Executive Officer, and Anya Hamill, Chief Financial Officer, on August 6, 2025[170](index=170&type=chunk)

[Risk Factor Summary](index=4&type=section&id=Risk%20Factor%20Summary) This section provides a high-level overview of the principal risks facing the company, including macroeconomic conditions, industry cyclicality, customer dependence, and supply chain reliance [Risk Factor Summary](index=4&type=section&id=Risk%20Factor%20Summary) This section provides a high-level overview of the principal risks facing the company, including macroeconomic conditions, industry cyclicality, customer dependence, and supply chain reliance - Global macroeconomic conditions and the cyclical nature of the semiconductor industry are identified as significant risks that have harmed and may continue to harm the business[8](index=8&type=chunk) - The company has historically depended on a limited number of customers for a significant portion of its revenue, and the loss of a large customer could significantly reduce revenue[8](index=8&type=chunk) - Reliance on third parties for raw materials, wafer fabrication, assembly, packaging, and testing exposes the company to supply chain risks, including potential shortages, quality issues, and price increases[8](index=8&type=chunk) - A significant portion of operations is located outside the United States, subjecting the company to additional risks such as geopolitical instability and increased management complexity[8](index=8&type=chunk) PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for the quarterly period ended June 30, 2025, including balance sheets, statements of operations, stockholders' equity, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2025, shows a significant increase in total assets to **$1.27 billion** from **$885.0 million** at the end of 2024, driven by cash and short-term investments, while total liabilities slightly decreased Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Current Assets** | | | | Cash and cash equivalents | $172,522 | $6,106 | | Short-term investments | $624,144 | $412,728 | | Total current assets | $918,901 | $544,060 | | **Total Assets** | **$1,269,136** | **$884,959** | | **Total Liabilities** | **$168,455** | **$185,240** | | **Total Stockholders' Equity** | **$1,100,681** | **$699,719** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three and six months ended June 30, 2025, the company reported significant year-over-year revenue growth, with Q2 revenue increasing to **$69.5 million**, and a narrowed net loss of **$(20.2) million** for the quarter Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $69,494 | $43,866 | $129,808 | $76,888 | | Gross Profit | $36,052 | $21,523 | $66,387 | $39,183 | | Loss from Operations | $(24,611) | $(32,320) | $(52,721) | $(67,358) | | Net Loss | $(20,179) | $(26,769) | $(44,056) | $(55,473) | | Net Loss Per Share, basic | $(0.84) | $(1.16) | $(1.85) | $(2.42) | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity substantially increased during the first six months of 2025, rising from **$699.7 million** to **$1.1 billion**, primarily due to **$387.3 million** from a follow-on public offering and **$29.7 million** from an ATM offering, partially offset by a net loss - The company raised **$387.3 million** in net proceeds from a follow-on public offering of 2,012,500 shares in June 2025[17](index=17&type=chunk)[52](index=52&type=chunk) - An additional **$29.7 million** in net proceeds was raised through an At-The-Market (ATM) offering of 150,000 shares during the second quarter of 2025[17](index=17&type=chunk)[50](index=50&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, operating activities provided **$30.4 million**, investing activities used **$247.4 million**, and financing activities provided **$383.4 million**, resulting in a net increase in cash and cash equivalents of **$166.4 million** Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $30,376 | $1,548 | | Net cash provided by (used in) investing activities | $(247,364) | $78,412 | | Net cash provided by (used in) financing activities | $383,404 | $(72,791) | | **Net increase in cash and cash equivalents** | **$166,416** | **$7,169** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed information supporting the financial statements, including the company's single operating segment, geographic revenue breakdown, equity incentive plans, and **$30.2 million** in future non-cancelable purchase commitments - The company operates in one reportable segment: the design, development, and sale of Precision Timing solutions[63](index=63&type=chunk) Revenue by Geographic Area (Six Months Ended June 30, in thousands) | Country | 2025 | 2024 | | :--- | :--- | :--- | | Hong Kong | $47,395 | $25,536 | | Taiwan | $33,255 | $21,611 | | United States | $8,951 | $7,623 | | Singapore | $7,075 | $6,468 | | Other | $33,132 | $15,650 | | **Total** | **$129,808** | **$76,888** | - As of June 30, 2025, the company had total future non-cancelable purchase commitments of **$30.2 million**[68](index=68&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial results, highlighting a **58%** year-over-year revenue increase for Q2 2025, improved gross margin to **52%**, increased operating expenses, and significantly strengthened liquidity from public offerings Q2 2025 vs Q2 2024 Performance (in thousands) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $69,494 | $43,866 | $25,628 | 58% | | Gross Profit | $36,052 | $21,523 | $14,529 | 68% | | Gross Margin | 52% | 49% | - | 2.8 p.p. | - The increase in revenue for Q2 and the first six months of 2025 was primarily due to an increase in sales volume and higher average selling prices from a change in product mix[89](index=89&type=chunk) - The company's largest end customer accounted for **17%** of revenue in Q2 2025, while the top three distributors accounted for **66%** of revenue[90](index=90&type=chunk) - Research and development expenses increased by **20%** YoY in Q2 2025, driven by higher spending on new product development, increased stock-based compensation, and higher headcount[98](index=98&type=chunk)[100](index=100&type=chunk) - The company's liquidity position was significantly enhanced by raising **$387.3 million** from a follow-on public offering and **$29.7 million** from an ATM offering during the first half of 2025[118](index=118&type=chunk)[119](index=119&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are foreign currency risk, considered minimal due to U.S. dollar denominated revenues, and interest rate risk, due to substantial holdings of cash, cash equivalents, and short-term investments totaling **$796.6 million** - Foreign currency risk is not considered material because substantially all revenue is denominated in U.S. dollars[131](index=131&type=chunk) - The company is exposed to interest rate risk with **$172.5 million** in cash and cash equivalents and **$624.1 million** in short-term investments as of June 30, 2025; a hypothetical **10%** change in interest rates would affect interest income by approximately **$0.9 million** for the six-month period[132](index=132&type=chunk)[133](index=133&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2025, the CEO and CFO concluded that the disclosure controls and procedures were effective, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[136](index=136&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[137](index=137&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings, and no liability for claims was deemed probable or reasonably estimable as of June 30, 2025 - The company did not have any amounts accrued for litigation and contingencies as of June 30, 2025, as no liability was determined to be both probable and reasonably estimable[66](index=66&type=chunk)[139](index=139&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks, including semiconductor industry cyclicality, heavy reliance on a few major customers and distributors (with Apple as the largest end customer), dependence on limited third-party suppliers (Bosch, TSMC), international trade policies, and geopolitical risks - The company is subject to the highly cyclical nature of the semiconductor industry, which can lead to significant fluctuations in product demand, inventory levels, and average selling prices[142](index=142&type=chunk) - The top three distributors accounted for **66%** of revenue in Q2 2025, and the largest end customer, Apple Inc., accounted for **17%** of revenue, highlighting significant customer concentration risk[143](index=143&type=chunk)[144](index=144&type=chunk) - The company operates a fabless model, relying on third parties like Bosch for MEMS wafers and TSMC for analog circuits, which exposes it to supply chain disruptions, capacity constraints, and quality control issues[151](index=151&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) - A significant portion of operations are outside the U.S., including R&D in Ukraine and manufacturing suppliers in Asia, creating exposure to geopolitical risks, such as tensions between China and Taiwan[165](index=165&type=chunk)[166](index=166&type=chunk) [Other Information](index=55&type=section&id=Item%205.%20Other%20Information) This section discloses that four executive officers adopted Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025, to facilitate planned sales of company stock - During the quarter ended June 30, 2025, four executive officers, including the Executive VPs of Engineering, Sales, Marketing, and Legal, adopted Rule 10b5-1 trading plans[274](index=274&type=chunk) [Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents and officer certifications required by the Sarbanes-Oxley Act - The exhibits filed with this report include key corporate governance documents and certifications from the Principal Executive Officer and Principal Financial Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act[276](index=276&type=chunk)

Part I – FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements, encompassing balance sheets, income statements, comprehensive income statements, equity changes, and cash flow statements, along with detailed notes on business, accounting policies, and financial performance [Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)](index=3&type=section&id=Item%201.%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS%20(Unaudited)) This section presents the company's unaudited condensed consolidated financial statements, encompassing balance sheets, income statements, comprehensive income statements, equity changes, and cash flow statements, along with detailed notes on business, accounting policies, and financial performance [Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20and%20December%2031%2C%202024) This section provides a comparative overview of the company's condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024 **Balance Sheet Key Data (Thousands of USD)** | Indicator | June 30, 2025 | December 31, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | **Assets** | | | | | | Cash and Cash Equivalents | 85,541 | 98,769 | (13,228) | -13.4% | | Total Current Assets | 119,292 | 135,549 | (16,257) | -12.0% | | Property and Equipment, Net | 916,120 | 922,146 | (6,026) | -0.7% | | Goodwill | 37,288 | 36,256 | 1,032 | 2.8% | | Intangible Assets, Net | 82,140 | 84,916 | (2,776) | -3.3% | | **Total Assets** | **1,208,451** | **1,226,312** | **(17,861)** | **-1.5%** | | **Liabilities** | | | | | | Total Current Liabilities | 84,230 | 86,044 | (1,814) | -2.1% | | Long-Term Debt, Net | 321,528 | 321,930 | (402) | -0.1% | | VICI Properties, Inc. Subsidiary Long-Term Financing Obligation | 712,929 | 700,970 | 11,959 | 1.7% | | **Total Liabilities** | **1,158,252** | **1,144,308** | **13,944** | **1.2%** | | **Equity** | | | | | | Equity (Deficit) Attributable to Century Casinos, Inc. Shareholders | (41,493) | (9,300) | (32,193) | -346.2% | | Non-Controlling Interests | 91,692 | 91,304 | 388 | 0.4% | | **Total Equity** | **50,199** | **82,004** | **(31,805)** | **-38.8%** | | **Total Liabilities and Equity** | **1,208,451** | **1,226,312** | **(17,861)** | **-1.5%** | [Condensed Consolidated Statements of Loss for the Three and Six Months Ended June 30, 2025 and 2024](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Loss%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section presents the company's condensed consolidated statements of loss for the three and six months ended June 30, 2025 and 2024 **Statements of Loss Key Data (Thousands of USD)** | Indicator | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | Change Rate | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Operating Revenue | 150,818 | 146,435 | 4,383 | 3.0% | 281,261 | 282,451 | (1,190) | -0.4% | | Total Operating Costs and Expenses | (134,243) | (132,174) | 2,069 | 1.6% | (257,546) | (259,904) | (2,358) | -0.9% | | Operating Income | 16,575 | 14,261 | 2,314 | 16.2% | 23,715 | 22,547 | 1,168 | 5.2% | | Non-Operating (Expense) Income, Net | (24,898) | (23,655) | (1,243) | -5.3% | (50,435) | (47,621) | (2,814) | -5.9% | | Net Loss | (9,573) | (39,013) | 29,440 | 75.5% | (28,452) | (50,707) | 22,255 | 43.9% | | Net Loss Attributable to Century Casinos, Inc. Shareholders | (12,309) | (41,613) | 29,304 | 70.4% | (32,922) | (55,157) | 22,235 | 40.3% | | Basic Loss Per Share | (0.40) | (1.36) | 0.96 | 70.6% | (1.08) | (1.81) | 0.73 | 40.3% | [Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2025 and 2024](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section details the company's condensed consolidated statements of comprehensive loss for the three and six months ended June 30, 2025 and 2024 **Comprehensive Loss Key Data (Thousands of USD)** | Indicator | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | Change Rate | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Loss | (9,573) | (39,013) | 29,440 | 75.5% | (28,452) | (50,707) | 22,255 | 43.9% | | Foreign Currency Translation Adjustment | 705 | (244) | 949 | -388.9% | 1,792 | (2,349) | 4,141 | -176.3% | | Comprehensive Loss Attributable to Century Casinos, Inc. Shareholders | (11,814) | (41,815) | 30,001 | 71.7% | (31,721) | (57,424) | 25,703 | 44.8% | | Comprehensive Loss | (8,868) | (39,257) | 30,389 | 77.4% | (26,660) | (53,056) | 26,396 | 49.8% | [Condensed Consolidated Statements of Equity for the Three and Six Months Ended June 30, 2025 and 2024](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section outlines the company's condensed consolidated statements of equity for the three and six months ended June 30, 2025 and 2024 **Equity Changes Key Data (Thousands of USD)** | Indicator | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | Change Rate | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Equity (Deficit) Attributable to Century Casinos, Inc. Shareholders, End of Period | (41,493) | 64,579 | (106,072) | -164.2% | (41,493) | 64,579 | (106,072) | -164.2% | | Non-Controlling Interests, End of Period | 91,692 | 92,434 | (742) | -0.8% | 91,692 | 92,434 | (742) | -0.8% | | Total Equity, End of Period | 50,199 | 157,013 | (106,814) | -68.0% | 50,199 | 157,013 | (106,814) | -68.0% | | Common Stock Repurchased and Retired (Shares) | (428,734) | — | (428,734) | N/A | (428,734) | — | (428,734) | N/A | [Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section presents the company's condensed consolidated statements of cash flows for the six months ended June 30, 2025 and 2024 **Cash Flow Key Data (Thousands of USD)** | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Net Cash Provided by (Used in) Operating Activities | 6,658 | (8,476) | 15,134 | -178.5% | | Net Cash Used in Investing Activities | (12,982) | (36,052) | 23,070 | 64.0% | | Net Cash Used in Financing Activities | (7,867) | (381) | (7,486) | -1964.8% | | Cash, Cash Equivalents, and Restricted Cash, End of Period | 85,807 | 123,444 | (37,637) | -30.5% | | Interest Paid | 47,344 | 41,580 | 5,764 | 13.9% | | Income Taxes Paid | 1,539 | 14,724 | (13,185) | -89.6% | | Purchase of Property and Equipment (Non-Cash) | 3,059 | 4,550 | (1,491) | -32.8% | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the condensed consolidated financial statements, offering further context and explanations for reported figures [1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION](index=8&type=section&id=1.%20DESCRIPTION%20OF%20BUSINESS%20AND%20BASIS%20OF%20PRESENTATION) The company operates casino entertainment in North America and Poland through subsidiaries, launching online sports betting in Missouri with BetMGM and opening new casinos and hotels, with financial statements prepared under US GAAP using management estimates and average exchange rates for foreign currency transactions - The company operates casino entertainment businesses in North America (Colorado, West Virginia, Missouri, Nevada, Maryland, Alberta, Canada) and Poland[16](index=16&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) - The company partnered with BetMGM to launch an online and mobile sports betting application in Missouri, anticipated in **Q4 2025**[21](index=21&type=chunk) - On November 1, 2024, the company opened a new land-based casino and a 38-room hotel in Caruthersville, Missouri, costing approximately **$51.9 million**, financed by VICI PropCo[22](index=22&type=chunk) - On April 4, 2024, the company opened the 69-room Riverview Hotel in Cape Girardeau, Missouri, costing approximately **$30.5 million**, funded by company cash[23](index=23&type=chunk) **Average Foreign Currency Exchange Rate Changes to USD** | Currency | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change Rate | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change Rate | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Canadian Dollar (CAD) | 1.3843 | 1.3683 | -1.2% | 1.4096 | 1.3579 | -3.8% | | Euro (EUR) | 0.8816 | 0.9290 | 5.1% | 0.9166 | 0.9250 | 0.9% | | Polish Zloty (PLN) | 3.7569 | 3.9965 | 6.0% | 3.8787 | 3.9932 | 2.9% | [2. SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=2.%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section outlines upcoming accounting standard updates, including ASU 2023-06, ASU 2023-09, and ASU 2024-03/2025-01, which are not expected to materially impact financial statements, and details the accounting treatment for common stock repurchases - The company is reviewing ASU 2023-06 (disclosure improvements), ASU 2023-09 (income tax disclosure improvements), and ASU 2024-03/2025-01 (expense disaggregation disclosures), with no material impact expected on financial statements[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - The company records retired common stock at cost, allocating the excess repurchase price over par value proportionally to retained earnings and additional paid-in capital[34](index=34&type=chunk) [3. GOODWILL AND INTANGIBLE ASSETS](index=11&type=section&id=3.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) The company annually tests goodwill and indefinite-lived intangible assets for impairment, with goodwill balances increasing due to foreign currency translation, while finite-lived intangibles are amortized over their estimated useful lives, noting Polish casino licenses are finite and US/Canadian licenses are indefinite - The company performs goodwill impairment tests annually on **October 1**, or more frequently if conditions indicate, using income, market, and fair value approaches[36](index=36&type=chunk) **Changes in Goodwill Carrying Value (Thousands of USD)** | Reporting Segment | Net Carrying Value as of January 1, 2025 | Currency Translation | Net Carrying Value as of June 30, 2025 | | :--- | :--- | :--- | :--- | | United States | 26,473 | — | 26,473 | | Canada | 3,557 | 180 | 3,737 | | Poland | 6,226 | 852 | 7,078 | | **Total** | **36,256** | **1,032** | **37,288** | **Intangible Assets, Net (Thousands of USD)** | Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Finite-Lived Intangible Assets, Net | 50,106 | 53,626 | | Indefinite-Lived Intangible Assets | 32,034 | 31,290 | | **Total Intangible Assets, Net** | **82,140** | **84,916** | - Polish casino licenses are finite (original term six years) and non-renewable; the company secured a second license in Wroclaw in **March 2025** but not for the Warsaw Hilton casino[43](index=43&type=chunk) - Casino licenses in the US (Missouri, West Virginia, Nevada) and Canada (Alberta) are classified as indefinite-lived intangible assets[44](index=44&type=chunk) [4. LONG-TERM DEBT](index=14&type=section&id=4.%20LONG-TERM%20DEBT) As of June 30, 2025, total long-term debt was **$328 million**, primarily comprising Goldman Sachs Term Loan, CPL Credit Facility, and UniCredit Term Loan, with the Goldman Sachs loan at **$335.1 million** and a **10.49%** weighted average interest rate, while CPL failed to comply with covenants and UniCredit matures by **December 31, 2025** **Long-Term Debt Composition (Thousands of USD)** | Debt Type | June 30, 2025 | Weighted Average Interest Rate (June 30, 2025) | December 31, 2024 | Weighted Average Interest Rate (December 31, 2024) | | :--- | :--- | :--- | :--- | :--- | | Goldman Sachs Term Loan | 335,134 | 10.49% | 336,884 | 11.45% | | CPL Credit Facility | 2,150 | 7.39% | 1,339 | 7.30% | | UniCredit Term Loan | 782 | 3.13% | 1,387 | 3.02% | | **Total Principal** | **338,066** | **10.46%** | **339,610** | **11.39%** | | Deferred Financing Costs | (10,106) | | (11,454) | | | **Total Long-Term Debt** | **327,960** | | **328,156** | | | Less: Current Portion | (6,432) | | (6,226) | | | **Long-Term Portion** | **321,528** | | **321,930** | | - The Goldman Sachs Term Loan balance is **$335.1 million**, with a weighted average interest rate of **10.49%** in H1 2025, down from **11.55%** in H1 2024, maturing on **April 1, 2029**[47](index=47&type=chunk)[48](index=48&type=chunk)[50](index=50&type=chunk) - CPL's short-term credit facility was extended to **June 25, 2026**, but as of **June 30, 2025**, CPL did not comply with all financial covenants, allowing lenders to increase the interest rate by **0.50%**[56](index=56&type=chunk) - The UniCredit Term Loan matures on **December 31, 2025**, with an outstanding balance of **€0.7 million** (approximately **$0.8 million**) as of **June 30, 2025**[59](index=59&type=chunk) [5. LONG-TERM FINANCING OBLIGATION](index=16&type=section&id=5.%20LONG-TERM%20FINANCING%20OBLIGATION) The company's lease agreement with VICI PropCo is a failed sale-leaseback financing obligation for properties in West Virginia, Missouri, Maryland, and Canada, with the master lease amended to increase annual rent by **$4.2 million** for the Caruthersville project, deferrable, totaling **$712.9 million** in long-term financing obligations as of **June 30, 2025** - The company's lease agreement with VICI PropCo is classified as a failed sale-leaseback financing obligation, covering properties in West Virginia, Missouri, Maryland, and Canada[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) - The master lease was amended, increasing initial annualized rent by approximately **$4.2 million** upon Caruthersville project completion, deferrable for **12 months** and payable over **six months** starting **December 2025**[63](index=63&type=chunk)[70](index=70&type=chunk) - Total long-term financing obligations amounted to **$712.9 million** as of **June 30, 2025**[70](index=70&type=chunk) **Master Lease Agreement Payments and Interest Expense (Thousands of USD)** | Indicator | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | Change Rate | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Payments Under Master Lease Agreement | 13,671 | 14,635 | (964) | -6.6% | 27,266 | 23,706 | 3,560 | 15.0% | | Total Payments Including CPI Increase | 14,404 | 15,195 | (791) | -5.2% | 28,731 | 24,639 | 4,092 | 16.6% | | Interest Expense | 16,494 | 15,175 | 1,319 | 8.7% | 32,896 | 30,374 | 2,522 | 8.3% | [6. COMMITMENTS, CONTINGENCIES AND OTHER MATTERS](index=18&type=section&id=6.%20COMMITMENTS%2C%20CONTINGENCIES%20AND%20OTHER%20MATTERS) The company faces various legal proceedings not expected to materially impact its financial condition, while incurring termination costs, including employee severance for unobtained Polish casino licenses in Krakow and Warsaw Hilton, with Warsaw Hilton severance anticipated by **end of 2025** - The company does not expect current legal proceedings to materially impact its financial condition, cash flows, or operating results[72](index=72&type=chunk) - Termination costs, including employee severance, arose from failing to secure casino licenses in Krakow and Warsaw Hilton, Poland, with Warsaw Hilton severance expected by **end of 2025**[73](index=73&type=chunk)[74](index=74&type=chunk) **Termination Cost Liability Rollforward (Thousands of USD)** | Indicator | Amount | | :--- | :--- | | Balance as of January 1, 2025 | 766 | | Termination Costs | 357 | | Payments | (741) | | Adjustment to Estimate | (152) | | Currency Translation | 65 | | **Balance as of June 30, 2025** | **295** | [7. INCOME TAXES](index=18&type=section&id=7.%20INCOME%20TAXES) For the six months ended June 30, 2025, the company reported **$1.7 million** in income tax expense on a **$26.7 million** pre-tax loss, resulting in a **-6.5%** effective tax rate, a significant improvement from **-102.2%** in 2024, influenced by non-deductible Polish expenses, exchange gains, and Smooth Bourbon non-controlling interest income, with full valuation allowances maintained on certain deferred tax assets in Canada, Austria, and the US **Income Tax Expense and Effective Tax Rate** | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Income Tax Expense | $1,732 thousand | $25,633 thousand | | Loss Before Income Taxes | ($26,720) thousand | ($25,074) thousand | | Effective Income Tax Rate | (6.5%) | (102.2%) | | US Federal Statutory Income Tax Rate | 21% | 21% | - The variance between the effective tax rate and the **21%** US federal statutory rate is primarily due to non-deductible Polish business expenses, exchange gains, and Smooth Bourbon non-controlling interest income[78](index=78&type=chunk) - The company maintains full valuation allowances on certain deferred tax assets in Canada, Austria, and the US[79](index=79&type=chunk) [8. EQUITY](index=19&type=section&id=8.%20EQUITY) For the three and six months ended June 30, 2025, basic and diluted loss per share were **$0.40** and **$1.08**, respectively, with the company announcing a **$3 million** common stock repurchase plan on **May 14, 2025**, under which **428,734** shares were repurchased and retired for **$0.9 million** by **June 30, 2025**, with the plan expiring on **July 31, 2025** **Loss Per Share and Weighted Average Shares (Thousands of Shares, USD)** | Indicator | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Basic Loss Per Share | (0.40) | (1.36) | (1.08) | (1.81) | | Diluted Loss Per Share | (0.40) | (1.36) | (1.08) | (1.81) | | Weighted Average Common Shares - Basic | 30,565 | 30,683 | 30,624 | 30,551 | | Weighted Average Common Shares - Diluted | 30,565 | 30,683 | 30,624 | 30,551 | | Anti-Dilutive Stock Options | 437 | 121 | 256 | 336 | - On **May 14, 2025**, the company announced a 10b5-1 trading plan to repurchase up to **$3 million** of common stock; as of **June 30, 2025**, **428,734** shares were repurchased and retired for **$0.9 million**, with **$2.1 million** remaining under the plan which expired on **July 31, 2025**[81](index=81&type=chunk)[82](index=82&type=chunk) [9. FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS REPORTING](index=20&type=section&id=9.%20FAIR%20VALUE%20MEASUREMENTS%20AND%20DERIVATIVE%20INSTRUMENTS%20REPORTING) The company adheres to fair value measurement accounting, categorizing financial instruments into three levels, with Goldman Sachs, UniCredit, and CPL debt, along with other short-term assets and liabilities, having book values approximating fair values, and no transfers between levels occurred during the reporting period - The company categorizes fair value measurements into three levels: Level 1 (quoted prices in active markets), Level 2 (quoted prices for similar assets/liabilities or observable inputs), and Level 3 (unobservable inputs)[83](index=83&type=chunk)[89](index=89&type=chunk) - The fair values of the Goldman Sachs Credit Agreement and UniCredit Term Loan are designated as Level 2 measurements, while CPL short-term credit facility, finance lease obligations, cash, receivables, and payables approximate their carrying values[85](index=85&type=chunk)[86](index=86&type=chunk) - As of **June 30, 2025**, the company held no cash equivalents, and no transfers between fair value levels occurred during the reporting period[83](index=83&type=chunk)[86](index=86&type=chunk) [10. REVENUE RECOGNITION](index=20&type=section&id=10.%20REVENUE%20RECOGNITION) The company generates revenue primarily from gaming, racing, sports betting, iGaming, hotel, food and beverage, and other services, with total revenue of **$151.8 million** for the three months ended June 30, 2025, predominantly from gaming, and manages receivables and contract liabilities related to customer contracts **Total Revenue Composition (Thousands of USD)** | Revenue Source | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue from Contracts with Customers | 150,818 | 146,435 | 281,261 | 282,451 | | Cost Recovery Revenue | 991 | 1,066 | 991 | 1,066 | | **Total Revenue** | **151,809** | **147,501** | **282,252** | **283,517** | **Net Operating Revenue by Segment (Three Months Ended June 30, 2025, Thousands of USD)** | Revenue Type | United States | Canada | Poland | Corporate and Other | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Gaming | 74,511 | 12,415 | 24,144 | — | 111,070 | | Racing, Sports Betting, and iGaming | 2,484 | 2,587 | — | — | 5,071 | | Hotel | 13,885 | 176 | — | — | 14,061 | | Food and Beverage | 10,047 | 3,215 | 243 | — | 13,505 | | Other | 5,177 | 1,612 | 322 | — | 7,111 | | **Net Operating Revenue** | **106,104** | **20,005** | **24,709** | **—** | **150,818** | - Most customer contract payments are received in advance and revenue is recognized on the day of sale, with contract liabilities primarily comprising deferred gaming revenue from US casino player points[91](index=91&type=chunk)[92](index=92&type=chunk) [11. LEASES](index=22&type=section&id=11.%20LEASES) The company treats lease and non-lease components as a single lease component, recognizing right-of-use assets and lease liabilities based on the present value of payments over the lease term, with net operating lease right-of-use assets at **$34.854 million** and total operating lease liabilities at **$38.409 million** as of **June 30, 2025**, with a weighted average remaining lease term of **11.4 years** and a weighted average discount rate of **8.4%** - The company accounts for lease and non-lease components as a single lease component, recognizing right-of-use assets and lease liabilities based on the present value of payments over the lease term[97](index=97&type=chunk) **Lease Expense Composition (Thousands of USD)** | Expense Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating Lease Expense | 1,871 | 1,595 | 3,730 | 2,934 | | Total Finance Lease Expense | 88 | 54 | 156 | 107 | | Short-Term Lease Expense | 33 | 32 | 65 | 63 | | Variable Lease Expense | 363 | 263 | 725 | 537 | **Lease Supplemental Balance Sheet Information (Thousands of USD)** | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Operating Lease Right-of-Use Assets, Net | 34,854 | 30,015 | | Total Operating Lease Liabilities | 38,409 | 33,182 | | Total Finance Lease Liabilities | 1,024 | 754 | | Weighted Average Remaining Operating Lease Term | 11.4 years | 12.5 years | | Weighted Average Operating Lease Discount Rate | 8.4% | 8.6% | [12. SEGMENT INFORMATION](index=24&type=section&id=12.%20SEGMENT%20INFORMATION) The company segments its operations geographically into US, Canada, and Poland, plus Corporate and Other, using Adjusted EBITDAR as the primary profit measure for performance and resource allocation, with US net operating revenue slightly down, Canada slightly up, and Poland significantly growing by **23.0%** for the three months ended June 30, 2025 - The company's operations are categorized into three reportable segments: US, Canada, and Poland, plus Corporate and Other, with the US segment further divided into Eastern, Midwestern, and Western operating segments[100](index=100&type=chunk)[101](index=101&type=chunk) - Adjusted EBITDAR, a non-GAAP measure, is utilized to assess segment performance, allocate resources, and inform investment decisions[102](index=102&type=chunk)[103](index=103&type=chunk)[144](index=144&type=chunk)[146](index=146&type=chunk) **Net Operating Revenue by Segment (Thousands of USD)** | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | Change Rate | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | United States | 106,104 | 106,515 | (411) | -0.4% | 199,401 | 202,543 | (3,142) | -1.6% | | Canada | 20,005 | 19,827 | 178 | 0.9% | 36,521 | 38,153 | (1,632) | -4.3% | | Poland | 24,709 | 20,093 | 4,616 | 23.0% | 45,339 | 41,742 | 3,597 | 8.6% | | Corporate and Other | — | — | — | — | — | 13 | (13) | -100.0% | | **Total** | **150,818** | **146,435** | **4,383** | **3.0%** | **281,261** | **282,451** | **(1,190)** | **-0.4%** | **Adjusted EBITDAR by Segment (Thousands of USD)** | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | Change Rate | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | United States | 25,693 | 25,037 | 656 | 2.6% | 44,092 | 44,175 | (83) | -0.2% | | Canada | 5,607 | 5,451 | 156 | 2.9% | 9,967 | 10,599 | (632) | -6.0% | | Poland | 1,942 | 450 | 1,492 | 331.6% | 2,488 | 1,208 | 1,280 | 106.0% | | Corporate and Other | (2,938) | (3,490) | 552 | 15.8% | (6,088) | (7,285) | 1,197 | 16.4% | | **Total** | **30,304** | **27,448** | **2,856** | **10.4%** | **50,459** | **48,697** | **1,762** | **3.6%** | [13. TRANSACTIONS WITH RELATED PARTIES](index=28&type=section&id=13.%20TRANSACTIONS%20WITH%20RELATED%20PARTIES) The company has general contractor and consulting service agreements with Marnell Gaming, LLC, a **50%** owner of Smooth Bourbon, paying **$3.8 million** for the six months ended June 30, 2025, primarily for Nugget lease rent and Smooth Bourbon operating costs - The company has general contractor and consulting service agreements with Marnell Gaming, LLC, a **50%** owner of Smooth Bourbon[113](index=113&type=chunk) **Payments to Marnell (Thousands of USD)** | Period | Amount | | :--- | :--- | | Three Months Ended June 30, 2025 | 1,900 | | Three Months Ended June 30, 2024 | 1,900 | | Six Months Ended June 30, 2025 | 3,800 | | Six Months Ended June 30, 2024 | 3,800 | [14. SUBSEQUENT EVENTS](index=28&type=section&id=14.%20SUBSEQUENT%20EVENTS) The company is currently assessing the financial impact of 'An Act Big and Beautiful' (OBBBA), enacted on **July 4, 2025** - The company is evaluating the impact of 'An Act Big and Beautiful' (OBBBA), enacted on **July 4, 2025**[115](index=115&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a detailed analysis of the company's financial condition and operating results, covering forward-looking statements, business environment, macroeconomic uncertainties, project updates, strategic review, and foreign currency impacts, noting a narrowed net loss and increased Adjusted EBITDAR, alongside discussions on liquidity, capital resources, and critical accounting estimates [Forward-Looking Statements, Business Environment and Risk Factors](index=29&type=section&id=Forward-Looking%20Statements%2C%20Business%20Environment%20and%20Risk%20Factors) This section addresses forward-looking statements, the business environment, and various risk factors impacting the company's future performance - This report contains forward-looking statements regarding industry trends, project investments, cost savings, casino licenses, and future expectations, subject to macroeconomic conditions, foreign exchange rates, political instability, and inflation[117](index=117&type=chunk)[128](index=128&type=chunk) [EXECUTIVE OVERVIEW](index=29&type=section&id=EXECUTIVE%20OVERVIEW) This executive overview summarizes the company's business, strategic initiatives, and the impact of foreign currency fluctuations on its operations - Since its inception in **1992**, the company has primarily developed and operated gaming establishments with associated lodging, food and beverage, and entertainment facilities, deriving revenue mainly from the net win of gaming machines and table games[120](index=120&type=chunk) - The company initiated a comprehensive strategic review to enhance shareholder value and support long-term growth, potentially involving asset value realization, capital structure optimization, mergers, strategic partnerships, or a company sale[134](index=134&type=chunk) - Revenues and expenses for Canadian and Polish operations are primarily denominated in Canadian Dollars and Polish Zloty, with exchange rate fluctuations impacting USD-denominated earnings[135](index=135&type=chunk) [DISCUSSION OF RESULTS](index=32&type=section&id=DISCUSSION%20OF%20RESULTS) This section discusses the consolidated financial performance, highlighting key metrics such as net operating revenue, net loss, and Adjusted EBITDAR, and factors influencing comparability **Consolidated Performance Overview (Thousands of USD)** | Indicator | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | Change Rate | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Operating Revenue | 150,818 | 146,435 | 4,383 | 3.0% | 281,261 | 282,451 | (1,190) | -0.4% | | Operating Income | 16,575 | 14,261 | 2,314 | 16.2% | 23,715 | 22,547 | 1,168 | 5.2% | | Net Loss Attributable to Century Casinos, Inc. Shareholders | (12,309) | (41,613) | 29,304 | 70.4% | (32,922) | (55,157) | 22,235 | 40.3% | | Adjusted EBITDAR | 30,304 | 27,448 | 2,856 | 10.4% | 50,459 | 48,697 | 1,762 | 3.6% | | Basic Loss Per Share | (0.40) | (1.36) | 0.96 | 70.6% | (1.08) | (1.81) | 0.73 | 40.3% | - A valuation allowance on US deferred tax assets in H1 2024 resulted in **$23.8 million** in tax expense, significantly impacting comparability[137](index=137&type=chunk) - The company terminated two Colorado sports betting agreements in **2024**, reducing segment revenue but receiving a **$1.1 million** termination fee, including **$0.7 million** in liquidated damages[138](index=138&type=chunk) - Adjusted EBITDAR is defined as net (loss) earnings before interest, taxes, depreciation, amortization, non-controlling interests, pre-opening expenses, termination fees, acquisition costs, non-cash share-based compensation, asset impairments, gain/loss on disposal of property and equipment, discontinued operations, foreign currency transaction gains/losses, cost recovery income, and other one-time transactions[144](index=144&type=chunk) **Net Debt (Thousands of USD)** | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total Long-Term Debt (including current portion) | 327,960 | 328,847 | | Deferred Financing Costs | 10,106 | 12,801 | | **Total Principal** | **338,066** | **341,648** | | Less: Cash and Cash Equivalents | 85,541 | 123,200 | | **Net Debt** | **252,525** | **218,448** | [REPORTABLE SEGMENTS](index=36&type=section&id=REPORTABLE%20SEGMENTS) This section provides a detailed performance analysis of the company's reportable segments: US, Canada, and Poland, highlighting revenue and Adjusted EBITDAR trends **US Segment Performance Overview (Thousands of USD)** | Indicator | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change Rate | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change Rate | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Operating Revenue | 106,104 | 106,515 | -0.4% | 199,401 | 202,543 | -1.6% | | Operating Income | 14,729 | 14,102 | 4.4% | 22,076 | 22,561 | -2.1% | | Adjusted EBITDAR | 25,693 | 25,037 | 2.6% | 44,092 | 44,175 | -0.2% | | Net Loss Attributable to Century Casinos, Inc. Shareholders | (487) | (27,593) | 98.2% | (8,030) | (29,137) | 72.4% | - Midwestern US net operating revenue increased by approximately **$3 million**, driven by gaming, hotel, and food and beverage revenue growth from the new Caruthersville casino and two new hotels, partially offset by declines in Colorado due to sports betting agreement termination and lower gaming revenue[172](index=172&type=chunk)[176](index=176&type=chunk) - The Alberta Gaming, Liquor & Cannabis (AGLC) temporarily increased the casino retention rate on slot machine net win from **15%** to **17%**, extended until **March 31, 2026**[178](index=178&type=chunk) **Canada Segment Performance Overview (Thousands of USD)** | Indicator | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change Rate | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change Rate | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Operating Revenue | 20,005 | 19,827 | 0.9% | 36,521 | 38,153 | -4.3% | | Operating Income | 4,533 | 4,362 | 3.9% | 7,894 | 8,398 | -6.0% | | Adjusted EBITDAR | 5,607 | 5,451 | 2.9% | 9,967 | 10,599 | -6.0% | | Net Income Attributable to Century Casinos, Inc. Shareholders | 599 | 1,009 | -40.6% | 533 | 2,146 | -75.2% | - Poland segment net operating revenue significantly increased, primarily due to the Wroclaw casino's reopening in **2024**, though the Warsaw Hilton casino closed in **June 2025** after failing to secure a new license[187](index=187&type=chunk)[195](index=195&type=chunk)[197](index=197&type=chunk) **Poland Segment Performance Overview (Thousands of USD)** | Indicator | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change Rate | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change Rate | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Operating Revenue | 24,709 | 20,093 | 23.0% | 45,339 | 41,742 | 8.6% | | Operating (Loss) Income | 464 | (181) | 356.4% | 355 | (202) | 275.7% | | Adjusted EBITDAR | 1,942 | 450 | 331.6% | 2,488 | 1,208 | 106.0% | | Net Income (Loss) Attributable to Century Casinos, Inc. Shareholders | 245 | (40) | 712.5% | 81 | (35) | 331.4% | **Corporate and Other Segment Performance Overview (Thousands of USD)** | Indicator | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change Rate | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change Rate | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Operating Revenue | — | — | — | — | 13 | -100.0% | | Operating Loss | (3,151) | (4,022) | 21.7% | (6,610) | (8,210) | 19.5% | | Adjusted EBITDAR | (2,938) | (3,490) | 15.8% | (6,088) | (7,285) | 16.4% | | Net Loss Attributable to Century Casinos, Inc. Shareholders | (12,666) | (14,989) | 15.5% | (25,506) | (28,131) | 9.3% | - Total operating costs and expenses, including general and administrative expenses, for the Corporate and Other segment decreased due to lower share-based compensation, legal fees, and insurance costs[200](index=200&type=chunk) [Non-Operating (Expense) Income](index=42&type=section&id=Non-Operating%20(Expense)%20Income) This section analyzes non-operating income and expenses, including interest income, interest expense, foreign currency transaction gains/losses, and cost recovery income **Non-Operating (Expense) Income Overview (Thousands of USD)** | Indicator | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change Rate | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change Rate | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Interest Income | 273 | 673 | -59.4% | 653 | 1,359 | -51.9% | | Interest Expense | (26,211) | (25,756) | -1.8% | (52,247) | (51,570) | -1.3% | | Foreign Currency Transaction Gains, Cost Recovery Income, and Other | 1,040 | 1,428 | -27.2% | 1,159 | 2,590 | -55.3% | | **Net Non-Operating (Expense) Income** | **(24,898)** | **(23,655)** | **-5.3%** | **(50,435)** | **(47,621)** | **-5.9%** | - Interest income primarily stems from interest on cash reserves, while interest expense is mainly from the Goldman Sachs Credit Agreement, UniCredit Term Loan, CPL Credit Facility, VICI PropCo financing obligation, and deferred financing costs[203](index=203&type=chunk)[204](index=204&type=chunk) - Cost recovery income, primarily related to CDR infrastructure construction, amounted to **$1.0 million** in H1 2025 and **$1.1 million** in H1 2024[205](index=205&type=chunk) [Taxes](index=43&type=section&id=Taxes) This section details the company's income tax expense and effective tax rate for the reporting period - In H1 2025, the company recognized **$1.7 million** in income tax expense on a **$26.7 million** pre-tax loss, resulting in a **-6.5%** effective tax rate, a significant improvement from **-102.2%** in H1 2024[206](index=206&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=43&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section analyzes the company's liquidity and capital resources, including cash flows, working capital, debt levels, and future capital expenditure plans **Cash Flow and Working Capital Overview (Thousands of USD)** | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash Provided by (Used in) Operating Activities | 6,658 | (8,476) | | Net Cash Used in Investing Activities | (12,982) | (36,052) | | Net Cash Used in Financing Activities | (7,867) | (381) | | **Cash, Cash Equivalents, and Restricted Cash (End of Period)** | **85,807** | **123,444** | | **Working Capital** | **35,062** | **79,331** | - Net cash used in investing activities for H1 2025 was **$13.0 million**, primarily for Polish casino licenses, US property gaming machines and related purchases, Colorado and West Virginia exterior renovations, Nevada elevator upgrades, and property renovations in Canada and Poland[210](index=210&type=chunk) - Net cash used in financing activities for H1 2025 was **$7.9 million**, including **$4.7 million** in distributions to non-controlling interests, **$1.0 million** for common stock repurchases and retirements, and **$2.2 million** in net debt repayments[213](index=213&type=chunk) - As of **June 30, 2025**, total debt (net of deferred financing costs) was **$328 million**, with net debt at **$252.5 million**, an increase from **$218.4 million** on **June 30, 2024**, primarily due to reduced cash balances[215](index=215&type=chunk) **Remaining Debt and Lease Payments for 2025 (Thousands of USD)** | Type | Amount | | :--- | :--- | | Debt Maturities (Goldman Sachs, CPL, UniCredit) | 4,682 | | Operating Lease Payments | 3,693 | | Finance Lease Payments | 227 | | Master Lease Agreement Cash Payments (including CPI and deferred rent) | 30,000 | | Nugget Lease Payments (non-controlling party) | 3,900 | - The company has **$30 million** available under its revolving credit facility, with estimated remaining capital expenditures for **2025** of approximately **$8.1 million**, primarily for maintenance[223](index=223&type=chunk)[224](index=224&type=chunk) - Of the company's **$85.5 million** in cash and cash equivalents as of **June 30, 2025**, approximately **$45.8 million** is held by foreign subsidiaries, including **$23.3 million** by Canadian subsidiaries and **$15.7 million** by Austrian subsidiaries, which are not available for US operations unless repatriated[227](index=227&type=chunk) Part II – OTHER INFORMATION This section provides additional information not covered in Part I, including legal proceedings, equity security sales, other disclosures, and exhibits [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company may face various legal proceedings in its ordinary course of business, but management does not anticipate a material adverse impact on its financial condition, cash flows, or operating results - The company may face various legal proceedings in its ordinary course of business, but does not expect a material impact on its financial condition, cash flows, or operating results[232](index=232&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Since **March 2000**, the company has had a stock repurchase program authorizing up to **$15 million** in common stock repurchases, with approximately **$13.8 million** remaining as of **June 30, 2025**, and under a 10b5-1 plan announced on **May 14, 2025**, **428,734** shares were repurchased and retired for **$0.9 million** by **June 30, 2025** - The company has had a stock repurchase program since **March 2000**, authorizing up to **$15 million** in common stock repurchases, with approximately **$13.8 million** remaining as of **June 30, 2025**[233](index=233&type=chunk) - On **May 14, 2025**, the company announced a 10b5-1 trading plan to repurchase up to **$3 million** of common stock; as of **June 30, 2025**, **428,734** shares were repurchased and retired for **$0.9 million**, with the plan expiring on **July 31, 2025**[234](index=234&type=chunk)[236](index=236&type=chunk) [Item 5. Other Information](index=46&type=section&id=Item%205.%20Other%20Information) For the fiscal quarter ended June 30, 2025, no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by the company's directors or officers - For the fiscal quarter ended **June 30, 2025**, no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by the company's directors or officers[237](index=237&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed under Regulation S-K Item 601(b)(10), including the company's articles of incorporation, amended bylaws, Smooth Bourbon, LLC operating agreement, and various certifications required by the Sarbanes-Oxley Act - Exhibits include the company's articles of incorporation, amended bylaws, Smooth Bourbon, LLC operating agreement, and various certifications required by the Sarbanes-Oxley Act[239](index=239&type=chunk) [Signatures](index=48&type=section&id=Signatures) This report was signed on **August 6, 2025**, by the duly authorized representative of the registrant, in accordance with the requirements of the Securities Exchange Act of 1934 - This report was signed by Margaret Stapleton, Chief Financial Officer, on behalf of Century Casinos, Inc. on **August 6, 2025**[241](index=241&type=chunk)