Century Casinos(CNTY) - 2025 Q2 - Quarterly Report

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) 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 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 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 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 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 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 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 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][18][19] - The company partnered with BetMGM to launch an online and mobile sports betting application in Missouri, anticipated in Q4 2025[21] - 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] - 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] 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 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][31][32][33] - 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] 3. GOODWILL AND INTANGIBLE ASSETS 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] 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] - Casino licenses in the US (Missouri, West Virginia, Nevada) and Canada (Alberta) are classified as indefinite-lived intangible assets[44] 4. LONG-TERM DEBT 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][48][50] - 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] - 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] 5. LONG-TERM FINANCING OBLIGATION 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][62][63] - 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][70] - Total long-term financing obligations amounted to $712.9 million as of June 30, 2025[70] 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 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] - 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][74] 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 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] - The company maintains full valuation allowances on certain deferred tax assets in Canada, Austria, and the US[79] 8. EQUITY 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][82] 9. FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS REPORTING 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][89] - 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][86] - As of June 30, 2025, the company held no cash equivalents, and no transfers between fair value levels occurred during the reporting period[83][86] 10. REVENUE RECOGNITION 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][92] 11. LEASES 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] 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 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][101] - Adjusted EBITDAR, a non-GAAP measure, is utilized to assess segment performance, allocate resources, and inform investment decisions[102][103][144][146] 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 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] 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 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] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 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 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][128] EXECUTIVE OVERVIEW 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] - 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] - 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] DISCUSSION OF RESULTS 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] - 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] - 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] 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 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][176] - 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] 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][195][197] 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] Non-Operating (Expense) Income 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][204] - 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] 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] LIQUIDITY AND CAPITAL RESOURCES 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] - 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] - 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] 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][224] - 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] 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 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] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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] - 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][236] Item 5. Other Information 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] Item 6. Exhibits 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] 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]