UNITED
STATES
|
||||
SECURITIES
AND EXCHANGE COMMISSION
|
||||
Washington,
D.C. 20549
|
||||
Form
10-Q
|
||||
___X___
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
||||
For
the quarterly period ended June 30, 2006
|
||||
OR
|
||||
_______
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
0-22290
|
||||
CENTURY
CASINOS, INC.
(Exact
name of registrant as specified in its charter)
|
||||
DELAWARE
(State
or other jurisdiction of incorporation or organization)
|
84-1271317
(I.R.S.
Employer Identification No.)
|
|||
1263
Lake Plaza Drive Suite A, Colorado Springs, Colorado
80906
(Address
of principal executive offices)
(Zip
Code)
|
||||
(719)
527-8300
(Registrant’s
telephone number, including area code)
|
||||
Indicate
by
check mark whether the registrant (1) has filed all reports required
to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during
the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No ___
|
||||
Indicate
by
check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of
“accelerated filer and large accelerated filer” in Rule 12b-2 of the
Exchange Act.
Large
accelerated filer __ Accelerated filer _X_ Non-accelerated filer
__
|
||||
Indicate
by
check mark whether the registrant is a shell company (as defined
in Rule
12b-2 of the Exchange Act). Yes___ No _X_
|
||||
Indicate
the
number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practical date.
|
||||
Common
stock, $0.01 par value, 22,980,567 shares outstanding as of August
9, 2006
|
Page
|
|||
PART
I
|
FINANCIAL
INFORMATION
|
Number
|
|
Item
1.
|
Condensed
Consolidated Financial Statements (unaudited)
|
||
Condensed
Consolidated Balance Sheets as of June
30, 2006 and December 31, 2005
|
3
|
||
Condensed
Consolidated Statements of Earnings for the Three and Six Months
Ended
June 30, 2006 and 2005
|
4
|
||
Condensed
Consolidated Statements of Comprehensive Earnings for the Three and
Six
Months Ended June 30, 2006 and 2005
|
5
|
||
Condensed
Consolidated Statements of Cash Flows for the Six Months Ended June
30,
2006 and 2005
|
6
|
||
Notes
to Condensed Consolidated Financial Statements
|
8
|
||
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
21
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
44
|
|
Item
4.
|
Controls
and Procedures
|
44
|
|
PART
II
|
OTHER
INFORMATION
|
||
Item
1.
|
Legal
Proceedings
|
45
|
|
Item
1A.
|
Risk
Factors
|
45
|
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
45
|
|
Item
6.
|
Exhibits
|
46
|
|
SIGNATURES
|
47
|
Amounts
in thousands, except for share information
|
June
30, 2006
|
December
31, 2005
|
|||
ASSETS
|
|||||
Current
Assets:
|
|||||
Cash
and cash equivalents
|
$
|
27,515
|
$
|
37,167
|
|
Restricted
cash
|
1,918
|
947
|
|||
Receivables,
net
|
862
|
293
|
|||
Prepaid
expenses
|
1,033
|
518
|
|||
Inventories
|
280
|
209
|
|||
Other
current assets
|
779
|
927
|
|||
Deferred
income taxes - foreign
|
122
|
72
|
|||
Total
current assets
|
|
32,509
|
|
40,133
|
|
Property
and Equipment, net
|
103,355
|
69,602
|
|||
Goodwill
|
18,731
|
8,662
|
|||
Casino
Licences
|
2,273
|
1,845
|
|||
Deferred
Income Taxes - foreign
|
470
|
380
|
|||
Note
Receivable (see Note 1)
|
4,751
|
-
|
|||
Other
Assets
|
|
2,587
|
|
2,941
|
|
Total
|
$
|
164,676
|
$
|
123,563
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|||||
Current
Liabilities:
|
|||||
Current
portion of long-term debt
|
$
|
3,601
|
$
|
1,789
|
|
Accounts
payable and accrued liabilities
|
|
10,884
|
|
5,504
|
|
Accrued
payroll
|
1,337
|
1,149
|
|||
Taxes
payable
|
1,137
|
1,189
|
|||
Other
|
8
|
8
|
|||
Total
current liabilities
|
|
16,967
|
|
9,639
|
|
Long-Term
Debt, less current portion
|
45,707
|
17,934
|
|||
Accrued Purchase Obligation - Newcastle (see Note 12) | 697 | - | |||
Deferred
Tax Liability - domestic
|
138
|
215
|
|||
Minority
Interest
|
6,248
|
4,444
|
|||
Commitments
and Contingencies
|
|||||
Shareholders’
Equity:
|
|||||
Preferred
stock; $.01 par value; 20,000,000 shares authorized; no shares
issued or
outstanding
|
-
|
-
|
|||
Common
stock; $.01 par value; 50,000,000 shares authorized; 23,168,443 and
22,568,443 shares issued,
|
|||||
respectively;
22,980,567 and 22,380,567 shares outstanding, respectively
|
232
|
226
|
|||
Additional
paid-in capital
|
|
69,588
|
|
68,571
|
|
Accumulated
other comprehensive earnings
|
2,159
|
|
2,568
|
||
Retained
earnings
|
|
23,365
|
|
20,391
|
|
95,344
|
|
91,756
|
|||
Treasury
stock - 187,876 shares at cost
|
(425)
|
(425)
|
|||
Total
shareholders’ equity
|
|
94,919
|
|
91,331
|
|
Total
|
$
|
164,676
|
$
|
123,563
|
For
The Three Months
Ended
June 30,
|
For
The Six Months
Ended
June 30,
|
|||||||
Amounts
in thousands, except for share information
|
2006
|
2005
|
2006
|
2005
|
||||
Operating
Revenue:
|
||||||||
Casino
|
$
|
11,260
|
$
|
8,736
|
$
|
20,406
|
$
|
17,788
|
Hotel,
food and beverage
|
1,272
|
941
|
2,354
|
2,169
|
||||
Other
|
321
|
156
|
470
|
371
|
||||
12,853
|
9,833
|
23,230
|
20,328
|
|||||
Less
promotional allowances
|
984
|
925
|
1,885
|
2,192
|
||||
Net
operating revenue
|
11,869
|
8,908
|
21,345
|
18,136
|
||||
Operating
Costs and Expenses:
|
||||||||
Casino
|
4,571
|
3,461
|
8,083
|
7,002
|
||||
Hotel,
food and beverage
|
786
|
588
|
1,401
|
1,355
|
||||
General
and administrative
|
4,516
|
3,033
|
7,559
|
5,475
|
||||
Property
write-downs and other write-offs, net
of recoveries
|
7
|
-
|
15
|
(30)
|
||||
Depreciation
and amortization
|
933
|
937
|
1,705
|
1,790
|
||||
Total
operating costs and expenses
|
10,813
|
8,019
|
18,763
|
15,592
|
||||
(Loss)
from unconsolidated subsidiary
|
-
|
(12)
|
-
|
(109)
|
||||
Earnings
from Operations
|
1,056
|
877
|
2,582
|
2,435
|
||||
Non-Operating
Income (Expense):
|
||||||||
Interest
income
|
319
|
106
|
597
|
154
|
||||
Interest
expense
|
(411)
|
(566)
|
(615)
|
(1,034)
|
||||
Other
income, net
|
225
|
5
|
319
|
5
|
||||
Non-operating
items from unconsolidated subsidiary
|
-
|
(3)
|
-
|
(4)
|
||||
Non-operating
income (expense), net
|
133
|
(458)
|
301
|
(879)
|
||||
Earnings
before Income Taxes and Minority Interest
|
1,189
|
419
|
2,883
|
1,556
|
||||
Provision
(benefit) for income taxes
|
105
|
(10)
|
461
|
146
|
||||
Earnings
before Minority Interest
|
1,084
|
429
|
2,422
|
1,410
|
||||
Minority
interest in subsidiary losses
|
247
|
80
|
599
|
106
|
||||
Net
Earnings
|
$
|
1,331
|
$
|
509
|
$
|
3,021
|
$
|
1,516
|
Earnings
Per Share:
|
||||||||
Basic
|
$
|
0.06
|
$
|
0.04
|
$
|
0.13
|
$
|
0.11
|
Diluted
|
$
|
0.06
|
$
|
0.03
|
$
|
0.13
|
$
|
0.09
|
For
The Three Months
Ended
June 30,
|
For
The Six Months
Ended
June 30,
|
|||||||
Amounts
in thousands
|
2006
|
2005
|
2006
|
2005
|
||||
Net
Earnings
|
$
|
1,331
|
$
|
509
|
$
|
3,021
|
$
|
1,516
|
Foreign
currency translation adjustments
|
(1,397)
|
(1,292)
|
(409)
|
(2,940)
|
||||
Change
in fair value of interest rate swaps, net of income taxes
|
-
|
33
|
-
|
33
|
||||
Comprehensive
(Loss)
Earnings
|
$
|
(66)
|
$
|
(750)
|
$
|
2,612
|
$
|
(1,391)
|
For
The Six Months Ended June 30,
|
||||
Amounts
in thousands
|
2006
|
2005
|
||
Cash
Flows from Operating Activities:
|
||||
Net
earnings
|
$
|
3,021
|
$
|
1,516
|
Adjustments
to reconcile net earnings to net cash provided by operating
activities:
|
||||
|
||||
Depreciation
and amortization
|
1,704
|
1,790
|
||
Amortization
of share-based compensation
|
201
|
-
|
||
Amortization
of deferred financing costs
|
30
|
95
|
||
Deferred
tax expense
|
(257)
|
(527)
|
||
Minority
interest in subsidiary losses
|
(599)
|
(106)
|
||
Loss
from unconsolidated subsidiary
|
-
|
113
|
||
Loss
on sale of fixed assets
|
27
|
-
|
||
Other
|
(15)
|
(43)
|
||
Changes
in operating assets and liabilities:
|
||||
Receivables
|
(400)
|
(71)
|
||
Prepaid
expenses and other assets
|
211
|
(386)
|
||
Accounts
payable and accrued liabilities
|
(2,454)
|
(238)
|
||
Accrued
payroll
|
57
|
(212)
|
||
Excess
tax benefits from stock-based payment arrangements
|
(376) | - | ||
Taxes
payable
|
(230)
|
(500)
|
||
Net
cash provided by operating activities
|
920
|
1,431
|
||
Cash
Flows from Investing Activities:
|
||||
Purchases
of property and equipment
|
(25,476)
|
(3,988)
|
||
Purchase
of minority shareholder interest in subsidiary
|
(5,135)
|
-
|
||
Note
receivable (see Note 1)
|
(4,751) | - | ||
Cash
contribution of $2.4 million towards interest in subsidiary, less
net cash acquired of $1.7 million
|
-
|
(753)
|
||
Cash
contribution of $0.7 million towards interest in Casino Millennium,
plus
net cash acquired
of
$0.4 million
|
(278)
|
-
|
||
Cash
contribution of $6.7 million towards interest in Newcastle, less
net cash
acquired of $1.6 million
|
(5,068)
|
-
|
||
Proceeds
from disposition of assets
|
86
|
43
|
||
Net
cash used in investing activities
|
(40,622)
|
(4,698)
|
For
the Six Months Ended June 30,
|
||||
Amounts
in thousands
|
2006
|
2005
|
||
Cash
Flows from Financing Activities:
|
||||
Proceeds
from borrowings
|
$
|
44,630
|
$
|
22,660
|
Principal
repayments
|
(16,049)
|
(21,300)
|
||
Excess
tax benefits from stock-based payment arrangements
|
376
|
-
|
||
Deferred
financing charges
|
(10)
|
-
|
||
Proceeds
from exercise of options
|
450
|
74
|
||
Dividend
paid to Caledon preference shareholder
|
(47)
|
-
|
||
Net
cash provided by financing activities
|
29,350
|
1,434
|
||
Effect
of exchange rate changes on cash
|
700
|
(757)
|
||
Decrease
in
Cash and Cash Equivalents
|
(9,652)
|
(2,590)
|
||
Cash
and Cash Equivalents at Beginning of Period
|
37,167
|
8,411
|
||
Cash
and Cash Equivalents at End of Period
|
$
|
27,515
|
$
|
5,821
|
Amounts
in Thousands
|
For
the Six Months Ended June 30,
|
|||
2006
|
2005
|
|||
Interest
paid
|
$
|
1,564
|
$
|
671
|
Income
taxes paid
|
$
|
84
|
$
|
709
|
June
30, 2006
|
December
31, 2005
|
June
30, 2005
|
|
South
African Rand
|
7.1704
|
6.3399
|
6.6790
|
Euros
|
0.7827
|
0.8446
|
0.8266
|
Czech
Koruna
|
22.3270
|
24.5810
|
24.8600
|
Canadian
Dollars
|
1.1150
|
1.1659
|
1.2256
|
|
Weighted-
|
|
|
Average
|
|
Exercise
|
||
Shares
|
Price
|
|
Employee
Stock Options:
|
||
Outstanding
at January 1, 2006
|
1,986,210
|
$
2.33
|
Granted
|
-
|
-
|
Exercised
|
(600,000)
|
0.75
|
Cancelled
or
forfeited
|
-
|
-
|
Outstanding
at
June 30, 2006
|
1,386,210
|
$
3.02
|
Options
exercisable at June 30, 2006
|
424,613
|
$
2.83
|
|
|
Weighted-
|
|
|
|
|
Number
|
Average
|
Number
|
|
Aggregate
|
Exercise
|
Outstanding
at
|
Remaining
|
Exercisable
at
|
|
Intrinsic
|
Price
|
June
30, 2006
|
Term
in Years
|
June
30, 2006
|
|
Value
|
$0.75
|
10,000
|
1.3
|
10,000
|
|
$
99,600
|
$1.50
|
7,500
|
0.7
|
7,500
|
|
$
69,075
|
$1.75
|
10,000
|
4.8
|
10,000
|
|
$
89,600
|
$2.93
|
1,323,710
|
7.7
|
397,113
|
|
$
10,298,464
|
$7.68
|
35,000
|
9.4
|
-
|
|
$
106,050
|
|
1,386,210
|
7.6
|
424,613
|
|
$
10,662,789
|
Amounts
in thousands, except for share information
|
For
the Three
Months
Ended
June 30, 2005 |
For
the Six
Months
Ended
June 30, 2005 |
|||
Net
earnings, as reported
|
$
|
509
|
$
|
1,516
|
|
Deduct:
Total stock-based employee compensation expense determined under
fair
value based method for all awards, net of related tax
effects
|
127
|
254
|
|||
Pro
forma net earnings
|
$
|
382
|
$
|
1,262
|
|
Earnings
per share
|
|||||
Basic
|
As
reported
|
$
|
0.04
|
$
|
0.11
|
Pro
forma
|
$
|
0.02
|
$
|
0.09
|
|
Diluted
|
As
reported
|
$
|
0.03
|
$
|
0.09
|
Pro
forma
|
$
|
0.02
|
$
|
0.08
|
For
The Three Months
Ended
June 30,
|
For
The Six Months
Ended
June 30,
|
|||||||
Amounts
in thousands, except for share information
|
2006
|
2005
|
2006
|
2005
|
||||
Net
operating revenue
|
$
|
11,869
|
$
|
10,626
|
$
|
23,406
|
$
|
21,722
|
Operating
Costs and Expenses:
|
||||||||
Operating
expenses
|
9,880
|
8,330
|
19,148
|
16,573
|
||||
Depreciation
and amortization
|
933
|
1,050
|
1,823
|
2,083
|
||||
Total
operating costs and expenses
|
10,813
|
9,380
|
20,971
|
18,656
|
||||
Earnings
from Operations
|
1,056
|
1,246
|
2,435
|
3,066
|
||||
Other
income, net
|
133
|
(569)
|
334
|
(846)
|
||||
Earnings
before Income Taxes and Minority Interest
|
1,189
|
677
|
2,769
|
2,220
|
||||
Provision
(benefit) for income taxes
|
105
|
37
|
405
|
277
|
||||
Earnings
before Minority Interest
|
1,084
|
640
|
2,364
|
1,943
|
||||
Minority
interest in subsidiary losses
|
247
|
28
|
661
|
(38)
|
||||
Net
Earnings
|
$
|
1,331
|
$
|
668
|
$
|
3,025
|
$
|
1,905
|
Earnings
Per Share:
|
||||||||
Basic
|
$
|
0.06
|
$
|
0.05
|
$
|
0.13
|
$
|
0.14
|
Diluted
|
$
|
0.06
|
$
|
0.04
|
$
|
0.13
|
$
|
0.12
|
Amounts
shown in thousands:
|
June
30,
|
December
31,
|
||
2006
|
2005
|
|||
Buildings
and improvements
|
$
|
27,654
|
$
|
28,828
|
Gaming
equipment
|
16,887
|
13,976
|
||
Furniture
and office equipment
|
6,768
|
5,075
|
||
Other
equipment
|
2,963
|
2,553
|
||
54,272
|
50,432
|
|||
Less
accumulated depreciation
|
(25,705)
|
(21,869)
|
||
28,567
|
28,563
|
|||
Land
|
24,339
|
22,432
|
||
Capital
projects in process
|
50,075
|
18,218
|
||
Non-operating
casino and land
|
374
|
389
|
||
Property
and equipment, net
|
$
|
103,355
|
$
|
69,602
|
Amounts
shown in thousands
|
Cripple
Creek, CO
|
Caledon,
South Africa |
Newcastle,
South Africa |
Edmonton,
Canada |
Casino
Millennium |
Total
|
||
Balance
as of January 1, 2006
|
$
|
7,232
|
902
|
-
|
-
|
528
|
$
|
8,662
|
Purchase
of CRA
|
-
|
-
|
-
|
4,342
|
-
|
4,342
|
||
Purchase
of Casino Millennium
|
-
|
-
|
-
|
-
|
(345)
|
(345)
|
||
Purchase
of Newcastle
|
-
|
-
|
7,226
|
-
|
-
|
7,226
|
||
Effect
of foreign currency translation
|
-
|
(104)
|
(1,090)
|
-
|
40
|
(1,154)
|
||
Balance
as of June 30, 2006
|
$
|
7,232
|
798
|
6,136
|
4,342
|
223
|
$
|
18,731
|
Amounts
shown in thousands:
|
June
30,
|
December
31,
|
||
2006
|
2005
|
|||
Revolving
Credit Facility - Cripple Creek
|
$
|
5,649
|
$
|
481
|
Construction
Term Loan - Central City
|
28,405
|
8,931
|
||
Construction
Term Loan - Edmonton
|
5,629
|
-
|
||
Term
Loan - Caledon
|
7,344
|
9,091
|
||
Notes
payable
|
2,216
|
1,135
|
||
Capital
leases and other
|
65
|
85
|
||
Total
long-term debt
|
49,308
|
19,723
|
||
Less
current portion
|
(3,601)
|
(1,789)
|
||
Long-term
portion
|
$
|
45,707
|
$
|
17,934
|
Property
and Equipment
|
Total
Assets
|
|||||||
Amounts
in thousands
|
June
30,
2006
|
December
31,
2005
|
June
30,
2006
|
December
31,
2005
|
||||
Cripple
Creek (Colorado, USA)
|
$
|
22,569
|
$
|
23,206
|
$
|
32,419
|
$
|
33,151
|
Central
City (Colorado, USA)
|
40,724
|
21,105
|
45,483
|
23,219
|
||||
Edmonton
(Alberta, Canada)
|
19,421
|
8,750
|
22,926
|
9,654
|
||||
Caledon
(South Africa)
|
13,976
|
15,205
|
17,738
|
19,584
|
||||
Newcastle
(South Africa)
|
4,538
|
-
|
13,307
|
-
|
||||
Casino
Millennium (Czech Republic)
|
598
|
-
|
2,047
|
-
|
||||
Cruise
Ships (International)
|
916
|
854
|
1,650
|
1,629
|
||||
Corporate
and other
|
613
|
482
|
29,106
|
36,326
|
||||
Total
|
$
|
103,355
|
$
|
69,602
|
$
|
164,676
|
$
|
123,563
|
Net
Operating Revenue
|
||||||||
Amounts
in thousands
|
For
the three months ended
|
For
the six months ended
|
||||||
June
30, 2006
|
June
30, 2005
|
June
30, 2006
|
June
30, 2005
|
|||||
Cripple
Creek (Colorado, USA)
|
$
|
3,968
|
$
|
4,458
|
$
|
7,804
|
$
|
8,265
|
Central
City (Colorado, USA)
|
-
|
-
|
-
|
-
|
||||
Edmonton
(Alberta, Canada)
|
1
|
-
|
2
|
-
|
||||
Caledon
(South Africa)
|
4,662
|
3,633
|
9,433
|
8,365
|
||||
Newcastle
(South Africa)
|
2,050
|
-
|
2,050
|
-
|
||||
Casino
Millennium (Czech Republic)
|
395
|
-
|
395
|
-
|
||||
Cruise
Ships (International)
|
780
|
774
|
1,639
|
1,428
|
||||
Corporate
and other
|
13
|
43
|
22
|
78
|
||||
Total
|
$
|
11,869
|
$
|
8,908
|
$
|
21,345
|
$
|
18,136
|
Net
Earnings
|
||||||||
Amounts
in thousands
|
For
the three months ended
|
For
the six months ended
|
||||||
June
30, 2006
|
June
30, 2005
|
June
30, 2006
|
June
30, 2005
|
|||||
Cripple
Creek (Colorado, USA)
|
$
|
616
|
$
|
888
|
$
|
1,169
|
$
|
1,327
|
Central
City (Colorado, USA)
|
(367)
|
-
|
(367)
|
-
|
||||
Edmonton
(Alberta, Canada)
|
(75)
|
(8)
|
(64)
|
(39)
|
||||
Caledon
(South Africa)
|
736
|
417
|
1,882
|
1,461
|
||||
Newcastle
(South Africa)
|
270
|
-
|
270
|
-
|
||||
Casino
Millennium (Czech Republic)
|
(81)
|
-
|
(81)
|
-
|
||||
Cruise
Ships (International)
|
119
|
212
|
287
|
380
|
||||
Corporate
and other
|
113
|
(1,000)
|
(75)
|
(1,613)
|
||||
Total
|
$
|
1,331
|
$
|
509
|
$
|
3,021
|
$
|
1,516
|
For the Three Months
Ended June 30,
|
For the Six Months
Ended June 30,
|
|||||||
Amounts
in thousands
|
2006
|
2005
|
2006
|
2005
|
||||
Food
& Beverage and Hotel
|
$
|
284
|
$
|
302
|
$
|
571
|
$
|
683
|
Free
Plays or Coupons
|
323
|
343
|
658
|
848
|
||||
Player
Points
|
377
|
280
|
656
|
661
|
||||
Total
Promotional Allowances
|
$
|
984
|
$
|
925
|
$
|
1,885
|
$
|
2,192
|
Amounts
in thousands,
|
For the Three Months
Ended June 30,
|
For the Six Months
Ended June 30,
|
||||||
2006
|
2005
|
2006
|
2005
|
|||||
Provision
for federal income taxes
|
$
|
(242)
|
$
|
(62)
|
$
|
(211)
|
$
|
(188)
|
Provision
for state income taxes
|
(34)
|
(9)
|
(30)
|
(27)
|
||||
Provision
for foreign income taxes
|
381
|
61
|
702
|
361
|
||||
Total
Provision for income taxes
|
$
|
105
|
$
|
(10)
|
$
|
461
|
$
|
146
|
For
the Three Months
Ended
June 30,
|
For
the Six Months
Ended
June 30,
|
|||||||
2006
|
2005
|
2006
|
2005
|
|||||
Federal
income tax statutory rate
|
34.0%
|
34.0%
|
34.0%
|
34.0%
|
||||
Foreign
income taxes
|
(57.1%)
|
(48.5%)
|
(47.5%)
|
(49.5%)
|
||||
State
income tax (net
of federal benefit)
|
0.2%
|
0.1%
|
1.3%
|
1.6%
|
||||
Losses
assigned to minority partner
|
11.5%
|
9.4%
|
9.5%
|
3.0%
|
||||
Permanent
and other items
|
20.2%
|
2.6%
|
18.7%
|
20.3%
|
||||
Total
Provision for income taxes
|
8.8%
|
(2.4%)
|
16.0%
|
9.4%
|
Amounts
in thousands,
except
for share information
|
For
the Three Months
Ended
June 30,
|
For
the Six Months
Ended
June 30,
|
||||||
2006
|
2005
|
2006
|
2005
|
|||||
Basic
Earnings Per Share:
|
||||||||
Net
earnings
|
$
|
1,331
|
$
|
509
|
$
|
3,021
|
$
|
1,516
|
Weighted
average common shares
|
22,749,798
|
13,754,900
|
22,565,182
|
13,751,456
|
||||
Basic
earnings per share
|
$
|
0.06
|
$
|
0.04
|
$
|
0.13
|
$
|
0.11
|
Diluted
Earnings Per Share:
|
||||||||
Net
earnings
|
$
|
1,331
|
$
|
509
|
$
|
3,021
|
$
|
1,516
|
Weighted
average common shares
|
22,749,798
|
13,754,900
|
22,565,182
|
13,751,456
|
||||
Effect
of dilutive securities:
|
||||||||
Stock
options and warrants
|
1,265,966
|
2,642,481
|
1,399,652
|
2,674,802
|
||||
Dilutive
potential common shares
|
24,015,764
|
16,397,381
|
23,964,834
|
16,426,258
|
||||
Diluted
earnings per share
|
$
|
0.06
|
$
|
0.03
|
$
|
0.13
|
$
|
0.09
|
Amounts
in thousands
|
||
Cash
|
$
|
402
|
Restricted
cash
|
845
|
|
Accounts
receivable
|
153
|
|
Property
and equipment, net
|
594
|
|
Goodwill
|
(345)
|
|
Other
assets, including intercompany debt assumed
|
196
|
|
Accounts
payable and accrued liabilities
|
(132)
|
|
Accrued
payroll
|
(9)
|
|
Taxes
payable
|
(343)
|
|
Long-term
debt
|
(681)
|
|
Cash
paid
|
$
|
680
|
Amounts
in thousands
|
||
Cash
|
$
|
1,584
|
Accounts
receivable
|
73
|
|
Inventory
|
77
|
|
Other
current assets
|
91
|
|
Property
and equipment, net
|
3,748
|
|
Goodwill
|
7,226
|
|
Casino
licenses
|
774
|
|
Accounts
payable and accrued liabilities
|
(494)
|
|
Accrued
payroll
|
(183)
|
|
Taxes
payable
|
(431)
|
|
Long-term
debt
|
(10)
|
|
Accrued purchase obligation | (821) | |
Amount
credited to minority partner
|
(4,982)
|
|
Cash
paid
|
$
|
6,652
|
Amounts
in thousands
|
||
Cash
|
$
|
1,679
|
Property
and equipment
|
2,631
|
|
Amount
credited to minority partner
|
(1,878)
|
|
Cash
paid
|
$
|
2,432
|
Amounts
in thousands
|
||
Fair
value of minority interest acquired
|
$
|
1,818
|
Goodwill
|
4,342
|
|
Fair
value of long-term debt issued
|
(1,025)
|
|
Cash
paid
|
$
|
5,135
|
For
the three months
ended
June 30,
|
For
the six months
ended
June 30,
|
|||||||
Amounts
in thousands
|
2006
|
2005
|
2006
|
2005
|
||||
Adjusted
EBITDA
|
||||||||
Cripple
Creek, Colorado
|
$
|
1,494
|
$
|
1,788
|
$
|
2,880
|
$
|
2,934
|
Caledon,
South Africa
|
1,665
|
1,195
|
3,808
|
3,280
|
||||
Newcastle,
South Africa
|
686
|
-
|
686
|
-
|
||||
Central
City, Colorado
|
(730)
|
(38)
|
(926)
|
(58)
|
||||
Edmonton,
Canada
|
(106)
|
(17)
|
(97)
|
(47)
|
||||
All
other operating segments
|
145
|
255
|
375
|
453
|
||||
Corporate
|
(940)
|
(1,367)
|
(2,120)
|
(2,336)
|
||||
Total
Adjusted EBITDA
|
$
|
2,214
|
$
|
1,816
|
$
|
4,606
|
$
|
4,226
|
·
|
Newcastle
contributed $2.1 million towards the total increase of $2.5 million
in
casino revenue;
|
·
|
Excluding
an increase of $0.8 million in pre-opening expenses for the Central
City,
Colorado and Edmonton, Canada projects, operating costs and expenses
only
increased by 24.6% compared to a 33.2% increase in net operating
revenues;
and
|
·
|
Interest
expense from operating activities decreased by $0.2 million due to
a
decrease in our average debt balance on our Womacks revolving credit
facility and the previous renegotiation of debt at
Caledon.
|
·
|
Newcastle
contributed $2.1 million towards the total increase of $2.6 million
in
casino revenue;
|
·
|
Excluding
an increase of $1.0 million in pre-opening expenses for the Central
City,
Colorado and Edmonton, Canada projects, operating costs and expenses
only
increased by 13.6% compared to a 17.7% increase in net operating
revenues;
and
|
·
|
An
allocation of pre-opening losses of $0.8 million to our minority
interest
partner on the Central City, Colorado
project.
|
For
the three months
ended
June 30,
|
For
the six months
ended
June 30,
|
|||||||
Amounts
in thousands
|
2006
|
2005
|
2006
|
2005
|
||||
Operating
Revenue
|
||||||||
Casino
|
$
|
4,371
|
$
|
4,789
|
$
|
8,642
|
$
|
9,261
|
Hotel,
food and beverage
|
336
|
345
|
643
|
711
|
||||
Other
(net of promotional allowances)
|
(739)
|
(676)
|
(1,481)
|
(1,707)
|
||||
Net
operating revenue
|
3,968
|
4,458
|
7,804
|
8,265
|
||||
Costs
and Expenses
|
||||||||
Casino
|
1,375
|
1,625
|
2,792
|
3,249
|
||||
Hotel,
food and beverage
|
123
|
128
|
232
|
290
|
||||
General
and administrative
|
976
|
917
|
1,900
|
1,792
|
||||
Depreciation
and amortization
|
410
|
430
|
812
|
873
|
||||
2,884
|
3,100
|
5,736
|
6,204
|
|||||
Earnings
from operations
|
1,084
|
1,358
|
2,068
|
2,061
|
||||
Interest
income
|
3
|
3
|
6
|
6
|
||||
Interest
(expense)
|
(226)
|
(377)
|
(441)
|
(716)
|
||||
Interest
expense on non-Cripple Creek debt allocated to Corporate
|
117
|
447
|
238
|
789
|
||||
Other
(expense), net
|
-
|
-
|
-
|
-
|
||||
Earnings
before income taxes
|
978
|
1,431
|
1,871
|
2,140
|
||||
Income
tax expense
|
362
|
543
|
702
|
813
|
||||
Net
Earnings
|
$
|
616
|
$
|
888
|
$
|
1,169
|
$
|
1,327
|
Reconciliation
to Adjusted EBITDA:
|
||||||||
Net
earnings
|
$
|
616
|
$
|
888
|
$
|
1,169
|
$
|
1,327
|
Minority
interest
|
-
|
-
|
-
|
-
|
||||
Interest
income
|
(3)
|
(3)
|
(6)
|
(6)
|
||||
Interest
expense (including amounts allocated to Corporate)
|
109
|
(70)
|
203
|
(73)
|
||||
Income
tax expense
|
362
|
543
|
702
|
813
|
||||
Depreciation
and amortization
|
410
|
430
|
812
|
873
|
||||
Adjusted
EBITDA
|
$
|
1,494
|
$
|
1,788
|
$
|
2,880
|
$
|
2,934
|
For
the three months
ended
June 30,
|
For
the six months
ended
June 30,
|
|||||||
2006
|
2005
|
2006
|
2005
|
|||||
Market
share of the Cripple Creek gaming revenue
|
11.3%
|
12.7%
|
11.5%
|
13.3%
|
||||
Average
number of slot machines
|
582
|
628
|
583
|
626
|
||||
Market
share of Cripple Creek gaming devices
|
12.3%
|
13.2%
|
12.3%
|
13.3%
|
||||
Average
slot machine win per day
|
$
80
|
$
83
|
$
80
|
$
80
|
||||
Cripple
Creek average slot machine win per day
|
$
85
|
$
85
|
$
85
|
$
82
|
For
the three months
ended
June 30,
|
For
the six months
ended
June 30,
|
|||||||
Amounts
in thousands
|
2006
|
2005
|
2006
|
2005
|
||||
Operating
Revenue
|
||||||||
Casino
|
$
|
3,934
|
$
|
3,223
|
$
|
8,004
|
$
|
7,201
|
Hotel,
food and beverage
|
731
|
596
|
1,506
|
1,458
|
||||
Other
(net of promotional allowances)
|
(3)
|
(186)
|
(77)
|
(294)
|
||||
Net
operating revenue
|
4,662
|
3,633
|
9,433
|
8,365
|
||||
Costs
and Expenses
|
||||||||
Casino
|
1,551
|
1,317
|
3,018
|
2,778
|
||||
Hotel,
food and beverage
|
489
|
460
|
994
|
1,065
|
||||
General
and administrative
|
921
|
661
|
1,581
|
1,242
|
||||
Depreciation
and amortization
|
306
|
451
|
603
|
832
|
||||
3,267
|
2,889
|
6,196
|
5,917
|
|||||
Earnings
from operations
|
1,395
|
744
|
3,237
|
2,448
|
||||
Interest
income
|
4
|
14
|
8
|
32
|
||||
Interest
(expense)
|
(204)
|
(124)
|
(408)
|
(310)
|
||||
Other
(expense), net
|
(36)
|
-
|
(32)
|
-
|
||||
Earnings
before income taxes
|
1,159
|
634
|
2,805
|
2,170
|
||||
Income
tax expense
|
423
|
217
|
923
|
709
|
||||
Net
Earnings
|
$
|
736
|
$
|
417
|
$
|
1,882
|
$
|
1,461
|
Reconciliation
to Adjusted EBITDA:
|
||||||||
Net
earnings
|
$
|
736
|
$
|
417
|
$
|
1,882
|
$
|
1,461
|
Minority
interest
|
-
|
-
|
-
|
-
|
||||
Interest
income
|
(4)
|
(14)
|
(8)
|
(32)
|
||||
Interest
expense
|
204
|
124
|
408
|
310
|
||||
Income
tax expense
|
423
|
217
|
923
|
709
|
||||
Depreciation
and amortization
|
306
|
451
|
603
|
832
|
||||
Adjusted
EBITDA
|
$
|
1,665
|
$
|
1,195
|
$
|
3,808
|
$
|
3,280
|
Average
exchange rate (Rand/USD)
|
6.44
|
6.42
|
6.30
|
6.16
|
For
the three months
ended
June 30,
|
For
the six months
ended
June 30,
|
|||||||
Amounts
in thousands
|
2006
|
2005
|
2006
|
2005
|
||||
Operating
Revenue
|
||||||||
Casino
|
R
|
25,167
|
R
|
20,651
|
R
|
50,268
|
R
|
44,082
|
Hotel,
food and beverage
|
4,688
|
3,826
|
9,464
|
8,917
|
||||
Other
(net of promotional allowances)
|
(487)
|
(1,199)
|
(493)
|
(1,836)
|
||||
Net
operating revenue
|
29,368
|
23,278
|
59,239
|
51,163
|
||||
Costs
and Expenses
|
||||||||
Casino
|
9,985
|
8,452
|
19,015
|
17,064
|
||||
Hotel,
food and beverage
|
3,096
|
2,953
|
6,224
|
6,519
|
||||
General
and administrative
|
5,477
|
4,248
|
9,984
|
7,682
|
||||
Depreciation
and amortization
|
1,943
|
2,916
|
3,769
|
5,164
|
||||
20,501
|
18,569
|
38,992
|
36,429
|
|||||
Earnings
from operations
|
8,867
|
4,709
|
20,247
|
14,734
|
||||
Interest
income
|
27
|
93
|
50
|
198
|
||||
Interest
(expense)
|
(1,315)
|
(794)
|
(2,574)
|
(1,892)
|
||||
Other
(expense), net
|
(228)
|
-
|
(210)
|
-
|
||||
Earnings
before income taxes
|
7,351
|
4,008
|
17,513
|
13,040
|
||||
Income
tax expense
|
2,704
|
1,382
|
5,791
|
4,283
|
||||
Net
Earnings
|
R
|
4,647
|
R
|
2,626
|
R
|
11,722
|
R
|
8,757
|
Reconciliation
to Adjusted EBITDA:
|
||||||||
Net
earnings
|
R
|
4,647
|
R
|
2,626
|
R
|
11,722
|
R
|
8,757
|
Minority
interest
|
-
|
-
|
-
|
-
|
||||
Interest
income
|
(27)
|
(93)
|
(50)
|
(198)
|
||||
Interest
expense
|
1,315
|
794
|
2,574
|
1,892
|
||||
Income
tax expense
|
2,704
|
1,382
|
5,791
|
4,283
|
||||
Depreciation
and amortization
|
1,943
|
2,916
|
3,769
|
5,164
|
||||
Adjusted
EBITDA
|
R
|
10,582
|
R
|
7,625
|
R
|
23,806
|
R
|
19,898
|
For
the three months
ended
June 30,
|
For
the six months
ended
June 30,
|
|||
2006
|
2005
|
2006
|
2005
|
|
Market
share of the Western Cape gaming revenue
|
6.0%
|
5.3%
|
6.0%
|
5.7%
|
Market
share of Western Cape gaming devices
|
12.7%
|
11.4%
|
12.7%
|
11.4%
|
Average
number of slot machines
|
349
|
300
|
350
|
300
|
Average
slot machine win per day
|
741
Rand
|
709
Rand
|
738
Rand
|
761
Rand
|
Average
number of tables
|
6
|
9
|
7
|
9
|
Average
table win per day
|
3,013
Rand
|
1,572
Rand
|
2,768
Rand
|
1,687
Rand
|
Amounts
in thousands
|
||
Operating
Revenue
|
||
Casino
|
$
|
1,860
|
Hotel,
food and beverage
|
198
|
|
Other
(net of promotional allowances)
|
(8)
|
|
Net
operating revenue
|
2,050
|
|
Costs
and Expenses
|
||
Casino
|
718
|
|
Hotel,
food and beverage
|
158
|
|
General
and administrative
|
488
|
|
Depreciation
and amortization
|
106
|
|
1,470
|
||
Earnings
from operations
|
580
|
|
Interest
income
|
-
|
|
Interest
(expense)
|
(8)
|
|
Other
(expense), net
|
-
|
|
Earnings
before income taxes and minority interest
|
572
|
|
Income
tax expense
|
173
|
|
Earnings
before minority interest
|
399
|
|
Minority
Interest
|
129
|
|
Net
Earnings
|
$
|
270
|
Reconciliation
to Adjusted EBITDA:
|
||
Net
earnings
|
$
|
270
|
Minority
interest
|
129
|
|
Interest
income
|
-
|
|
Interest
expense
|
8
|
|
Income
tax expense
|
173
|
|
Depreciation
and amortization
|
106
|
|
Adjusted
EBITDA
|
$
|
686
|
Average
exchange rate (Rand/USD)
|
6.44
|
Amounts
in thousands
|
||
Operating
Revenue
|
||
Casino
|
R
|
11,970
|
Hotel,
food and beverage
|
1,275
|
|
Other
(net of promotional allowances)
|
(57)
|
|
Net
operating revenue
|
13,188
|
|
Costs
and Expenses
|
||
Casino
|
4,621
|
|
Hotel,
food and beverage
|
1,013
|
|
General
and administrative
|
3,095
|
|
Depreciation
and amortization
|
663
|
|
9,392
|
||
Earnings
from operations
|
3,796
|
|
Interest
income
|
-
|
|
Interest
(expense)
|
(61)
|
|
Other
(expense), net
|
-
|
|
Earnings
before income taxes and minority interest
|
3,735
|
|
Income
tax expense
|
1,131
|
|
Earnings
before minority interest
|
2,604
|
|
Minority
Interest
|
840
|
|
Net
Earnings
|
R
|
1,764
|
Reconciliation
to Adjusted EBITDA:
|
||
Net
earnings
|
R
|
1,764
|
Minority
interest
|
840
|
|
Interest
income
|
-
|
|
Interest
expense
|
61
|
|
Income
tax expense
|
1,131
|
|
Depreciation
and amortization
|
663
|
|
Adjusted
EBITDA
|
R
|
4,459
|
For
the three months
ended
June 30, 2006
|
|
|
|
Market
share of the KwaZulu-Natal gaming revenue
|
2.9%
|
Market
share of KwaZulu-Natal gaming devices
|
6.3%
|
Average
number of slot machines
|
200
|
Average
slot machine win per day
|
572
Rand
|
Average
number of tables
|
7
|
Average
table win per day
|
2,434
Rand
|
For
the three months
ended
June 30,
|
For
the six months
ended
June 30,
|
|||||||
Amounts
in thousands
|
2006
|
2005
|
2006
|
2005
|
||||
Operating
Revenue
|
||||||||
Casino
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
Hotel,
food and beverage
|
-
|
-
|
-
|
-
|
||||
Other
(net of promotional allowances)
|
-
|
-
|
-
|
-
|
||||
Net
operating revenue
|
-
|
-
|
-
|
-
|
||||
Costs
and Expenses
|
||||||||
Casino
|
43
|
-
|
43
|
-
|
||||
Hotel,
food and beverage
|
-
|
-
|
-
|
-
|
||||
General
and administrative
|
687
|
44
|
883
|
64
|
||||
Depreciation
and amortization
|
-
|
-
|
-
|
-
|
||||
730
|
44
|
926
|
64
|
|||||
Loss
from operations
|
(730)
|
(44)
|
(926)
|
(64)
|
||||
Interest
income
|
-
|
-
|
-
|
-
|
||||
Interest
(expense)
|
(283)
|
(77)
|
(485)
|
(78)
|
||||
Other
income, net
|
-
|
6
|
-
|
6
|
||||
Loss
before income taxes and minority interest
|
(1,013)
|
(115)
|
(1,411)
|
(136)
|
||||
Income
tax benefit
|
(225)
|
-
|
(225)
|
-
|
||||
Loss
before minority interest
|
(788)
|
(115)
|
(1,186)
|
(136)
|
||||
Minority
Interest
|
(421)
|
(115)
|
(819)
|
(136)
|
||||
Net
Loss
|
$
|
(367)
|
$
|
-
|
$
|
(367)
|
$
|
-
|
Reconciliation
to Adjusted EBITDA:
|
||||||||
Net
loss
|
$
|
(367)
|
$
|
-
|
$
|
(367)
|
$
|
-
|
Minority
interest
|
(421)
|
(115)
|
(819)
|
(136)
|
||||
Interest
income
|
-
|
-
|
-
|
-
|
||||
Interest
expense
|
283
|
77
|
485
|
78
|
||||
Income
tax expense
|
(225)
|
-
|
(225)
|
-
|
||||
Depreciation
and amortization
|
-
|
-
|
-
|
-
|
||||
Adjusted
EBITDA
|
$
|
(730)
|
$
|
(38)
|
$
|
(926)
|
$
|
(58)
|
For
the three months
ended
June 30,
|
For
the six months
ended
June 30,
|
|||||||
Amounts
in thousands
|
2006
|
2005
|
2006
|
2005
|
||||
Operating
Revenue
|
||||||||
Other
(net of promotional allowances)
|
$
|
1
|
$
|
-
|
$
|
2
|
$
|
-
|
Net
operating revenue
|
1
|
-
|
2
|
-
|
||||
Costs
and Expenses
|
||||||||
Casino
|
1
|
-
|
1
|
-
|
||||
Hotel,
food and beverage
|
4
|
-
|
5
|
-
|
||||
General
and administrative
|
86
|
58
|
105
|
90
|
||||
Depreciation
and amortization
|
4
|
-
|
8
|
-
|
||||
95
|
58
|