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 September 30, 2007
|
||||
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 per share, 23,657,067 shares outstanding as
of
November 8, 2007.
|
Page
|
|||
PART
I
|
FINANCIAL
INFORMATION
|
Number
|
|
Item
1.
|
Condensed
Consolidated Financial Statements (unaudited)
|
||
Condensed
Consolidated Balance Sheets as of
September
30, 2007 and December 31, 2006
|
3
|
||
Condensed
Consolidated Statements of Earnings for the Three and Nine Months
Ended
September 30, 2007 and 2006
|
4
|
||
Condensed
Consolidated Statements of Comprehensive Earnings for the Three and
Nine
Months Ended September 30, 2007 and 2006
|
5
|
||
Condensed
Consolidated Statements of Cash Flows for the Nine Months Ended September
30, 2007 and 2006
|
6
|
||
Notes
to Condensed Consolidated Financial Statements
|
9
|
||
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
17
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
43
|
|
Item
4.
|
Controls
and Procedures
|
43
|
|
PART
II
|
OTHER
INFORMATION
|
||
Item
6.
|
Exhibits
|
44
|
|
SIGNATURES
|
45
|
Amounts
in thousands, except for share information
|
September
30, 2007
|
December
31, 2006
|
||||||
ASSETS
|
||||||||
Current
Assets:
|
||||||||
Cash
and cash equivalents
|
$ |
18,184
|
$ |
34,969
|
||||
Restricted
cash
|
2,297
|
2,352
|
||||||
Receivables,
net
|
1,120
|
934
|
||||||
Prepaid
expenses
|
1,465
|
1,183
|
||||||
Inventories
|
479
|
445
|
||||||
Other
current assets
|
473
|
1,091
|
||||||
Deferred
income taxes – foreign
|
221
|
193
|
||||||
Total
current assets
|
24,239
|
41,167
|
||||||
Property
and Equipment, net
|
130,897
|
124,638
|
||||||
Goodwill
|
12,997
|
12,262
|
||||||
Investment
in Unconsolidated Subsidiary
|
10,406
|
-
|
||||||
Casino
Licenses and Other Intangible Assets
|
10,364
|
9,341
|
||||||
Deferred
Income Taxes – domestic
|
2,307
|
1,763
|
||||||
–
foreign
|
2,230
|
2,143
|
||||||
Note
Receivable (see Note 2)
|
-
|
5,170
|
||||||
Other
Assets
|
1,830
|
1,376
|
||||||
Total
|
$ |
195,270
|
$ |
197,860
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
Current
Liabilities:
|
||||||||
Current
portion of long-term debt
|
$ |
11,022
|
$ |
20,669
|
||||
Accounts
payable and accrued liabilities
|
8,635
|
10,625
|
||||||
Accrued
payroll
|
2,447
|
2,172
|
||||||
Taxes
payable
|
2,555
|
2,509
|
||||||
Deferred
income taxes – domestic
|
13
|
16
|
||||||
Total
current liabilities
|
24,672
|
35,991
|
||||||
Long-Term
Debt, less current portion
|
54,085
|
56,036
|
||||||
Other
Long-Term Accrued Liabilities
|
1,545
|
-
|
||||||
Minority
Interest
|
5,636
|
5,406
|
||||||
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;23,568,443 and 23,168,443 shares issued,
respectively;
23,451,067
and 23,004,067 shares outstanding, respectively
|
236
|
232
|
||||||
Additional
paid-in
capital
|
70,299
|
69,779
|
||||||
Accumulated
other
comprehensive earnings
|
6,643
|
2,768
|
||||||
Retained
earnings (see Note
7)
|
32,419
|
28,020
|
||||||
109,597
|
100,799
|
|||||||
Treasury
stock – 117,376 and 164,376 shares at cost, respectively
|
(265 | ) | (372 | ) | ||||
Total
shareholders’ equity
|
109,332
|
100,427
|
||||||
Total
|
$ |
195,270
|
$ |
197,860
|
For
the three months
ended
September 30,
|
For
the nine months
ended
September 30,
|
|||||||||||||||
Amounts
in thousands, except for share information
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Operating
revenue:
|
||||||||||||||||
Casino
|
$ |
23,163
|
$ |
16,261
|
$ |
64,541
|
$ |
36,667
|
||||||||
Hotel,
food and beverage
|
3,479
|
1,627
|
9,325
|
3,981
|
||||||||||||
Other
|
550
|
298
|
1,489
|
758
|
||||||||||||
Gross
revenues
|
27,192
|
18,186
|
75,355
|
41,406
|
||||||||||||
Less
promotional allowances
|
2,468
|
1,208
|
6,897
|
3,093
|
||||||||||||
Net
operating revenue
|
24,724
|
16,978
|
68,458
|
38,313
|
||||||||||||
Operating
costs and expenses:
|
||||||||||||||||
Casino
|
9,222
|
6,705
|
25,790
|
14,368
|
||||||||||||
Hotel,
food and beverage
|
2,802
|
1,616
|
7,927
|
3,437
|
||||||||||||
General
and administrative
|
7,166
|
5,118
|
19,951
|
12,667
|
||||||||||||
Impairments
and other write-offs, net of recoveries
|
9
|
(420 | ) |
34
|
(405 | ) | ||||||||||
Depreciation
|
1,987
|
1,293
|
6,310
|
2,998
|
||||||||||||
Total
operating costs and expenses
|
21,186
|
14,312
|
60,012
|
33,065
|
||||||||||||
Earnings
from unconsolidated subsidiary
|
37
|
-
|
91
|
-
|
||||||||||||
Earnings
from operations
|
3,575
|
2,666
|
8,537
|
5,248
|
||||||||||||
Non-operating
income (expense):
|
||||||||||||||||
Interest
income
|
85
|
156
|
802
|
595
|
||||||||||||
Interest
expense
|
(1,649 | ) | (1,320 | ) | (5,280 | ) | (1,777 | ) | ||||||||
Other
(expense) income, net
|
(146 | ) | (19 | ) |
641
|
300
|
||||||||||
Non-operating
(expense), net
|
(1,710 | ) | (1,183 | ) | (3,837 | ) | (882 | ) | ||||||||
Earnings
before income taxes, minority interest and preferred
dividends
|
1,865
|
1,483
|
4,700
|
4,366
|
||||||||||||
Provision
(benefit) for income taxes
|
27
|
(67 | ) |
655
|
394
|
|||||||||||
Earnings
before minority interest and preferred dividends
|
1,838
|
1,550
|
4,045
|
3,972
|
||||||||||||
Minority
interest in subsidiary losses, net
|
170
|
301
|
822
|
900
|
||||||||||||
Preferred
dividends issued by subsidiary
|
(59 | ) |
-
|
(335 | ) |
-
|
||||||||||
Net
earnings
|
$ |
1,949
|
$ |
1,851
|
$ |
4,532
|
$ |
4,872
|
||||||||
Earnings
per share:
|
||||||||||||||||
Basic
|
$ |
0.08
|
$ |
0.08
|
$ |
0.20
|
$ |
0.21
|
||||||||
Diluted
|
$ |
0.08
|
$ |
0.08
|
$ |
0.19
|
$ |
0.20
|
For
the three months
ended
September 30,
|
For
the nine months
ended
September 30,
|
|||||||||||||||
Amounts
in thousands
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Net
earnings
|
$ |
1,949
|
$ |
1,851
|
$ |
4,532
|
$ |
4,872
|
||||||||
Foreign
currency translation adjustments
|
2,712
|
(1,830 | ) |
3,875
|
(2,239 | ) | ||||||||||
Comprehensive
earnings
|
$ |
4,661
|
$ |
21
|
$ |
8,407
|
$ |
2,633
|
For
the nine months
ended
September 30,
|
||||||||
Amounts
in thousands
|
2007
|
2006
|
||||||
Cash
Flows from Operating Activities:
|
||||||||
Net
earnings
|
$ |
4,532
|
$ |
4,872
|
||||
Adjustments
to reconcile net earnings to net cash provided by operating
activities:
|
||||||||
Depreciation
|
6,310
|
2,998
|
||||||
Imputed
interest
|
124
|
-
|
||||||
Amortization
of share-based compensation
|
458
|
280
|
||||||
Amortization
of deferred financing costs
|
352
|
104
|
||||||
Deferred
tax expense
|
(505 | ) | (410 | ) | ||||
Minority
interest in subsidiary losses
|
(822 | ) | (900 | ) | ||||
Earnings
from unconsolidated subsidiary
|
(91 | ) |
-
|
|||||
Other
|
78
|
11
|
||||||
Excess
tax benefits from stock-based payment arrangements
|
(62 | ) | (376 | ) | ||||
Changes
in operating assets and liabilities:
|
||||||||
Receivables
|
(136 | ) | (392 | ) | ||||
Prepaid
expenses and other assets
|
(186 | ) | (5 | ) | ||||
Accounts
payable and accrued liabilities
|
(2,807 | ) | (820 | ) | ||||
Accrued
payroll
|
167
|
427
|
||||||
Taxes
payable
|
35
|
(271 | ) | |||||
Net
cash provided by operating activities
|
7,447
|
5,518
|
||||||
Cash
Flows from Investing Activities:
|
||||||||
Purchases
of property and equipment
|
(7,141 | ) | (41,943 | ) | ||||
Decrease
in restricted cash
|
218
|
-
|
||||||
Note
receivable
|
-
|
(4,751 | ) | |||||
Deferred
income – Sale of Gauteng interest
|
-
|
5,399
|
||||||
Acquisition
of remaining interest in Century Resorts Alberta, Inc.
|
-
|
(5,135 | ) | |||||
Cash
contribution of $0.7 million towards interest in Century 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
|
-
|
(5,122 | ) | |||||
Cash
contribution of $2.0 million towards interest in G5 Sp. z
o.o.
|
(2,016 | ) |
-
|
|||||
Proceeds
from disposition of assets
|
17
|
88
|
||||||
Net
cash used in investing activities
|
(8,922 | ) | (51,742 | ) |
For
the nine months
ended
September 30,
|
||||||||
Amounts
in thousands
|
2007
|
2006
|
||||||
Cash
Flows from Financing Activities:
|
||||||||
Proceeds
from borrowings
|
$ |
19,047
|
$ |
64,898
|
||||
Principal
repayments
|
(34,321 | ) | (24,730 | ) | ||||
Excess
tax benefits from stock-based payment arrangements
|
62
|
376
|
||||||
Deferred
financing charges
|
(40 | ) | (51 | ) | ||||
Proceeds
from exercise of options
|
106
|
450
|
||||||
Other
|
-
|
(75 | ) | |||||
Net
cash (used in) provided by financing activities
|
(15,146 | ) |
40,868
|
|||||
Effect
of Exchange Rate Changes on Cash
|
(164 | ) |
202
|
|||||
Decrease
in Cash and Cash Equivalents
|
(16,785 | ) | (5,154 | ) | ||||
Cash
and Cash Equivalents at Beginning of Period
|
34,969
|
37,167
|
||||||
Cash
and Cash Equivalents at End of Period
|
$ |
18,184
|
$ |
32,013
|
Amounts
in Thousands
|
For
the nine months
ended
September 30,
|
|||||||
2007
|
2006
|
|||||||
Interest
paid
|
$ |
5,607
|
$ |
2,631
|
||||
Income
taxes paid
|
$ |
1,437
|
$ |
662
|
Amounts
in thousands
|
||||
Fair
value of minority interest acquired
|
$ |
1,818
|
||
Goodwill
|
4,342
|
|||
Long-term
debt
|
(1,025 | ) | ||
Cash
paid
|
$ |
5,135
|
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
|
$ |
1,530
|
||
Accounts
receivable
|
35
|
|||
Prepaid
expenses
|
91
|
|||
Inventory
|
74
|
|||
Property
and equipment, net
|
3,009
|
|||
Casino
licenses
|
8,911
|
|||
Deferred
income taxes – foreign
|
1,314
|
|||
Accounts
payable and accrued liabilities
|
(801 | ) | ||
Accrued
payroll
|
(183 | ) | ||
Taxes
payable
|
(446 | ) | ||
Long-term
debt
|
(1,965 | ) | ||
Amount
credited to minority partner
|
(4,917 | ) | ||
Cash
paid
|
$ |
6,652
|
Amounts
in thousands
|
||||
Investment
in Casinos Poland Ltd.
|
$ |
9,029
|
||
Accounts
payable and accrued liabilities
|
(362 | ) | ||
Long-term
debt, including intercompany debt assumed
|
(6,651 | ) | ||
Cash
paid
|
$ |
2,016
|
|
September
30, 2007
|
December
31, 2006
|
September
30, 2006
|
|||||||||
Canadian
Dollars (CAD)
|
0.9963
|
1.1653
|
1.1153
|
|||||||||
Czech
Koruna (CZK)
|
19.3420
|
20.8500
|
22.3910
|
|||||||||
Euros
(€)
|
0.7033
|
0.7578
|
0.7882
|
|||||||||
Polish
Zloty (PLN)
|
2.6519
|
2.9016
|
3.1311
|
|||||||||
South
African Rand (ZAR)
|
6.8853
|
7.0496
|
7.7451
|
Amounts
in thousands
|
As
of
|
|||
August
31, 2007
|
||||
Balance
Sheet:
|
||||
Current
assets
|
$ |
3,165
|
||
Noncurrent
assets
|
$ |
20,655
|
||
Current
liabilities
|
$ |
15,682
|
||
Noncurrent
liabilities
|
$ |
3,604
|
For
the three
months
ended
August
31, 2007
|
March
12, 2007 through
August
31, 2007
|
|||||||
Operating
Results:
|
||||||||
Net
operating revenue
|
$ |
11,330
|
$ |
25,462
|
||||
Net
earnings
|
$ |
110
|
$ |
274
|
Weighted-average
risk-free interest rate
|
4.99%
|
|
Weighted-average
expected life
|
6.25
yrs
|
|
Weighted-average
expected volatility
|
47.5%
|
|
Weighted-average
expected dividends
|
$
0
|
Weighted-
|
||
Average
|
||
Exercise
|
||
Shares
|
Price
|
|
Employee
Stock Options:
|
||
Outstanding
at January 1, 2007
|
1,368,710
|
$ 2.98
|
Granted
|
60,000
|
9.00
|
Exercised
|
(25,000)
|
1.63
|
Forfeited
|
(35,000)
|
6.32
|
Outstanding
at September 30, 2007
|
1,368,710
|
$
3.19
|
Options
exercisable at September 30, 2007
|
789,226
|
$ 2.92
|
Intrinsic
Value of Options (in millions):
|
||
Outstanding
|
$ 4.0
|
|
Exercisable
|
$ 2.5
|
For
the three months
ended
September 30,
|
For
the nine months
ended
September 30,
|
|||||||||||||||
Amounts
in thousands
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Food
& Beverage and Hotel
|
$ |
894
|
$ |
558
|
$ |
2,355
|
$ |
1,129
|
||||||||
Free
Plays or Coupons
|
755
|
348
|
2,366
|
1,006
|
||||||||||||
Player
Points
|
819
|
302
|
2,176
|
958
|
||||||||||||
Total
Promotional Allowances
|
$ |
2,468
|
$ |
1,208
|
$ |
6,897
|
$ |
3,093
|
For
the three months
ended
September 30,
|
For
the nine months
ended
September 30,
|
|||||||||||||||
Amounts
in thousands
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Provision
for federal income taxes
|
$ | (322 | ) | $ | (438 | ) | $ | (473 | ) | $ | (649 | ) | ||||
Provision
for state income taxes
|
(8 | ) | (71 | ) | (28 | ) | (101 | ) | ||||||||
Provision
for foreign income taxes
|
357
|
442
|
1,156
|
1,144
|
||||||||||||
Total
provision for income taxes
|
$ |
27
|
$ | (67 | ) | $ |
655
|
$ |
394
|
For
the three months
ended
September 30,
|
For
the nine months
ended
September 30,
|
|||||||
2007
|
2006
|
2007
|
2006
|
|||||
Federal
income tax statutory rate
|
34.0%
|
34.0%
|
34.0%
|
34.0%
|
||||
Foreign
income taxes
|
(41.9%)
|
(60.5%)
|
(45.5%)
|
(52.7%)
|
||||
State
income tax (net of federal benefit)
|
0.0%
|
(0.1%)
|
1.3%
|
0.9%
|
||||
Losses
assigned to minority partner
|
4.1%
|
10.2%
|
8.3%
|
9.8%
|
||||
Permanent
and other items
|
5.2%
|
11.9%
|
15.8%
|
17.0%
|
||||
Total
provision for income taxes
|
1.4%
|
(4.5%)
|
13.9%
|
9.0%
|
|
Basic
and diluted earnings per share for the three and nine months ended
September 30, 2007 and 2006 were computed as
follows:
|
Amounts
in thousands,
except
for share information
|
For
the three months
ended
September 30,
|
For
the nine months
ended
September 30,
|
||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Basic
Earnings Per Share:
|
||||||||||||||||
Net
earnings
|
$ |
1,949
|
$ |
1,851
|
$ |
4,532
|
$ |
4,872
|
||||||||
Weighted
average common shares
|
23,051,067
|
22,980,567
|
23,043,351
|
22,705,842
|
||||||||||||
Basic
earnings per share
|
$ |
0.08
|
$ |
0.08
|
$ |
0.20
|
$ |
0.21
|
||||||||
Diluted
Earnings Per Share:
|
||||||||||||||||
Net
earnings
|
$ |
1,949
|
$ |
1,851
|
$ |
4,532
|
$ |
4,872
|
||||||||
Weighted
average common shares
|
23,051,067
|
22,980,567
|
23,043,351
|
22,705,842
|
||||||||||||
Effect
of dilutive securities using the
treasury
stock method:
|
||||||||||||||||
Stock
options and warrants
|
782,431
|
967,290
|
861,510
|
1,200,070
|
||||||||||||
Dilutive
potential common shares
|
23,833,498
|
23,947,857
|
23,904,861
|
23,905,912
|
||||||||||||
Diluted
earnings per share
|
$ |
0.08
|
$ |
0.08
|
$ |
0.19
|
$ |
0.20
|
For
the three months
ended
September 30,
|
For
the nine months
ended
September 30,
|
|||
2007
|
2006
|
2007
|
2006
|
|
Stock
options and warrants
|
85,000
|
-
|
85,000
|
25,000
|
Unvested
restricted stock
|
400,000
|
-
|
400,000
|
-
|
Long-Lived
Assets*
|
Total
Assets
|
|||||||||||||||
Amounts
in thousands
|
September
30,
2007
|
December
31,
2006
|
September
30,
2007
|
December
31,
2006
|
||||||||||||
Cripple
Creek (Colorado, USA)
|
$ |
29,369
|
$ |
29,324
|
$ |
31,904
|
$ |
31,465
|
||||||||
Central
City (Colorado, USA)
|
42,679
|
43,952
|
47,971
|
48,661
|
||||||||||||
Edmonton
(Alberta, Canada)
|
37,400
|
31,927
|
44,965
|
39,305
|
||||||||||||
Caledon
(South Africa)
|
18,655
|
17,188
|
21,268
|
19,134
|
||||||||||||
Newcastle
(South Africa)
|
23,244
|
21,499
|
26,451
|
24,535
|
||||||||||||
Other
operating:
|
||||||||||||||||
Casino
Millennium (Czech Republic)
|
563
|
496
|
2,306
|
2,166
|
||||||||||||
Cruise
Ships (International)
|
881
|
1,032
|
1,649
|
1,839
|
||||||||||||
Corporate
|
1,467
|
823
|
18,756
|
30,755
|
||||||||||||
Total
|
$ |
154,258
|
$ |
146,241
|
$ |
195,270
|
$ |
197,860
|
Net
Operating Revenue
|
||||||||
Amounts
in thousands
|
For
the three months
ended
September 30,
|
For
the nine months
ended
September 30,
|
||||||
2007
|
2006
|
2007
|
2006
|
|||||
Cripple
Creek (Colorado, USA)
|
$
|
5,011
|
$
|
4,730
|
$
|
13,510
|
$
|
12,534
|
Central
City (Colorado, USA)
|
5,954
|
4,688
|
15,529
|
4,688
|
||||
Edmonton
(Alberta, Canada)
|
4,930
|
1
|
13,562
|
3
|
||||
Caledon
(South Africa)
|
4,526
|
4,350
|
13,324
|
13,783
|
||||
Newcastle
(South Africa)
|
2,885
|
1,891
|
8,595
|
3,941
|
||||
Other
operating:
|
||||||||
Casino
Millennium (Czech Republic)
|
719
|
561
|
1,862
|
956
|
||||
Cruise
Ships (International)
|
656
|
757
|
2,026
|
2,396
|
||||
Corporate
|
43
|
-
|
50
|
12
|
||||
Total
|
$
|
24,724
|
$
|
16,978
|
$
|
68,458
|
$
|
38,313
|
Net
Earnings
|
||||||||
Amounts
in thousands
|
For
the three months
ended
September 30,
|
For
the nine months
ended
September 30,
|
||||||
2007
|
2006
|
2007
|
2006
|
|||||
Cripple
Creek (Colorado, USA)
|
$
|
908
|
$
|
966
|
$
|
2,255
|
$
|
2,135
|
Central
City (Colorado, USA)
|
312
|
(405)
|
307
|
(655)
|
||||
Edmonton
(Alberta, Canada)
|
534
|
(199)
|
1,138
|
(263)
|
||||
Caledon
(South Africa)
|
1,046
|
990
|
2,555
|
2,872
|
||||
Newcastle
(South Africa)
|
321
|
297
|
858
|
567
|
||||
Other
operating:
|
||||||||
Casino
Millennium (Czech Republic)
|
119
|
22
|
166
|
(9)
|
||||
Cruise
Ships (International)
|
(44)
|
152
|
(60)
|
439
|
||||
Corporate
|
(1,247)
|
28
|
(2,687)
|
(214)
|
||||
Total
|
$
|
1,949
|
$
|
1,851
|
$
|
4,532
|
$
|
4,872
|
|
·
|
Our
new casinos in Central City, Colorado, Newcastle, South Africa and
Edmonton, Canada contributed $7.2 million towards the total increase
of
$7.7 million in net operating revenue and contributed $4.9 million
towards
the total increase of $6.9 million in net operating
expenses;
|
|
·
|
Corporate
expenses increased $1.2 million for the three months ended September
30,
2007 compared to the three months ended September 30, 2006, primarily
due
to a $0.5 million increase in payroll resulting from additional staffing
and the amortization of costs associated with restricted stock and
stock
options issued in July 2007 and $0.1 million in increased legal,
accounting and other professional fees expenses. In addition, for
the
three months ended September 30, 2006, the Company recovered approximately
$0.4 million of previously written off loans in conjunction with
the sale
of our interest in a casino project located in Gauteng, South Africa;
and
|
|
·
|
Net
interest charges increased $0.4 million primarily due to the interest
charges on bank debt that funded the construction of the three new
casinos.
|
|
·
|
Our
new casinos in Central City, Colorado, Newcastle, South Africa and
Edmonton, Canada contributed $29.1 million towards the total increase
of
$30.1 million in net operating revenue and contributed $22.9 million
towards the total increase of $26.9 million in net operating
expenses;
|
|
·
|
Corporate
expenses increased $2.5 million for the nine months ended September
30,
2007 as compared to the nine months ended September 30, 2006 primarily
because of $0.5 million in increased travel and communication expenses,
$0.7 million in increased professional fees which includes an arbitration
with one of our cruise ship based casinos, and $0.6 million in increased
payroll due to an increase in the number of corporate employees to
support
the Company’s growth and the amortization of costs associated with
restricted stock and stock options issued in July 2007. In addition,
for
the nine months ended September 30, 2006, the Company recovered
approximately $0.4 million of previously written off loans in conjunction
with the sale of our interest in a casino project located in Gauteng,
South Africa; and
|
|
·
|
Net
interest charges increased $3.3 million primarily due to the interest
charges on bank debt that funded the construction of the three new
casinos.
|
For
the three months
ended
September 30,
|
For
the nine months
ended
September 30,
|
|||||||||||||||
Amounts
in thousands
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Operating
Revenue
|
||||||||||||||||
Casino
|
$ |
5,392
|
$ |
5,126
|
$ |
14,742
|
$ |
13,768
|
||||||||
Hotel,
food and beverage
|
444
|
400
|
1,104
|
1,043
|
||||||||||||
Other
(net of promotional allowances)
|
(825 | ) | (796 | ) | (2,336 | ) | (2,277 | ) | ||||||||
Net
operating revenue
|
5,011
|
4,730
|
13,510
|
12,534
|
||||||||||||
Operating
Costs and Expenses
|
||||||||||||||||
Casino
|
1,716
|
1,218
|
4,644
|
3,590
|
||||||||||||
Hotel,
food and beverage
|
450
|
424
|
1,211
|
1,076
|
||||||||||||
General
and administrative
|
1,013
|
1,021
|
2,851
|
2,921
|
||||||||||||
Depreciation
|
399
|
399
|
1,183
|
1,211
|
||||||||||||
Total
operating costs and expenses
|
3,578
|
3,062
|
9,889
|
8,798
|
||||||||||||
Earnings
from operations
|
1,433
|
1,668
|
3,621
|
3,736
|
||||||||||||
Interest
income
|
3
|
6
|
8
|
12
|
||||||||||||
Interest
(expense)
|
28
|
(103 | ) |
10
|
(306 | ) | ||||||||||
Other
(expense), net
|
-
|
-
|
(1 | ) |
-
|
|||||||||||
Earnings
before income taxes
|
1,464
|
1,571
|
3,638
|
3,442
|
||||||||||||
Income
tax expense
|
556
|
605
|
1,383
|
1,307
|
||||||||||||
Net
Earnings
|
$ |
908
|
$ |
966
|
$ |
2,255
|
$ |
2,135
|
For
the three months
ended
September 30,
|
For
the nine months
ended
September 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Market
share of the Cripple Creek gaming revenue*
|
12.5 | % | 12.0 | % | 12.3 | % | 11.6 | % | ||||||||
Average
number of slot machines
|
586
|
585
|
590
|
584
|
||||||||||||
Market
share of Cripple Creek gaming devices*
|
12.7 | % | 12.4 | % | 12.7 | % | 12.3 | % | ||||||||
Average
slot machine win per day
|
$ |
101
|
$ |
94
|
$ |
90
|
$ |
85
|
||||||||
Cripple
Creek average slot machine win per day*
|
$ |
103
|
$ |
96
|
$ |
92
|
$ |
89
|
For
the three months
ended
September 30,
|
For
the nine months
ended
September 30,
|
|||||||||||||||
Amounts
in thousands
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Operating
Revenue
|
||||||||||||||||
Casino
|
$ |
6,312
|
$ |
4,475
|
$ |
16,898
|
$ |
4,475
|
||||||||
Hotel,
food and beverage
|
732
|
432
|
1,903
|
432
|
||||||||||||
Other
(net of promotional allowances)
|
(1,090 | ) | (219 | ) | (3,272 | ) | (219 | ) | ||||||||
Net
operating revenue
|
5,954
|
4,688
|
15,529
|
4,688
|
||||||||||||
Operating
Costs and Expenses
|
||||||||||||||||
Casino
|
2,441
|
2,425
|
6,530
|
2,468
|
||||||||||||
Hotel,
food and beverage
|
597
|
661
|
1,709
|
661
|
||||||||||||
General
and administrative
|
1,147
|
968
|
3,387
|
1,663
|
||||||||||||
Depreciation
|
762
|
451
|
2,173
|
451
|
||||||||||||
Total
operating costs and expenses
|
4,947
|
4,505
|
13,799
|
5,243
|
||||||||||||
Earnings
(loss) from operations
|
1,007
|
183
|
1,730
|
(555 | ) | |||||||||||
Interest
income
|
6
|
-
|
6
|
-
|
||||||||||||
Interest
(expense)
|
(734 | ) | (1,281 | ) | (2,389 | ) | (1,766 | ) | ||||||||
Other
(expense), net
|
-
|
-
|
(1 | ) |
-
|
|||||||||||
Earnings
(loss) before income taxes and minority interest
|
279
|
(1,098 | ) | (654 | ) | (2,321 | ) | |||||||||
Income
tax expense (benefit)
|
191
|
(247 | ) |
188
|
(401 | ) | ||||||||||
Earnings
(loss) before minority interest
|
88
|
(851 | ) | (842 | ) | (1,920 | ) | |||||||||
Minority
Interest
|
(224 | ) | (446 | ) | (1,149 | ) | (1,265 | ) | ||||||||
Net
earnings (loss)
|
$ |
312
|
$ | (405 | ) | $ |
307
|
$ | (655 | ) |
For
the three months
ended
September 30,
|
For
the nine months
ended
September 30,
|
||||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||
Market
share of the Central City gaming revenue*
|
28.5 | % | 21.1 | % | 27.5 | % |
N/A
|
||||||
Average
number of slot machines
|
580
|
488
|
572
|
N/A
|
|||||||||
Market
share of Central City gaming devices*
|
26.6 | % | 22.3 | % | 26.2 | % |
N/A
|
||||||
Average
slot machine win per day
|
$ |
115
|
$ |
109
|
$ |
105
|
N/A
|
||||||
Central
City average slot machine win per day*
|
$ |
107
|
$ |
115
|
$ |
100
|
N/A
|
For
the three months
ended
September 30,
|
For
the nine months
ended
September 30,
|
|||||||
Amounts
in thousands
|
2007
|
2006
|
2007
|
2006
|
||||
Operating
Revenue
|
||||||||
Casino
|
$
|
3,759
|
$
|
-
|
$
|
10,309
|
$
|
-
|
Hotel,
food and beverage
|
1,066
|
-
|
2,913
|
-
|
||||
Other
(net of promotional allowances)
|
105
|
1
|
340
|
3
|
||||
Net
operating revenue
|
4,930
|
1
|
13,562
|
3
|
||||
Operating
Costs and Expenses
|
||||||||
Casino
|
1,368
|
8
|
3,837
|
9
|
||||
Hotel,
food and beverage
|
905
|
27
|
2,660
|
32
|
||||
General
and administrative
|
1,139
|
129
|
3,397
|
234
|
||||
Depreciation
|
347
|
6
|
954
|
14
|
||||
Total
operating costs and expenses
|
3,759
|
170
|
10,848
|
289
|
||||
Earnings
(loss) from operations
|
1,171
|
(169)
|
2,714
|
(286)
|
||||
Interest
income
|
13
|
4
|
57
|
16
|
||||
Interest
(expense)
|
(373)
|
(101)
|
(1,031)
|
(110)
|
||||
Other
(expense), net
|
(11)
|
(21)
|
(16)
|
(9)
|
||||
Earnings
(loss) before income taxes
|
800
|
(287)
|
1,724
|
(389)
|
||||
Income
tax expense (benefit)
|
266
|
(88)
|
586
|
(126)
|
||||
Net
earnings (loss)
|
$
|
534
|
$
|
(199)
|
$
|
1,138
|
$
|
(263)
|
Average
exchange rate (CAD/USD)
|
1.04
|
1.12
|
1.10
|
1.13
|
For
the three months
ended
September 30,
|
For
the nine months
ended
September 30,
|
|||||||
Amounts
in thousands
|
2007
|
2006
|
2007
|
2006
|
||||
Operating
Revenue
|
||||||||
Casino
|
CAD
|
3,949
|
CAD
|
-
|
CAD
|
11,323
|
CAD
|
-
|
Hotel,
food and beverage
|
1,113
|
-
|
3,209
|
-
|
||||
Other
(net of promotional allowances)
|
117
|
-
|
381
|
3
|
||||
Net
operating revenue
|
5,179
|
-
|
14,913
|
3
|
||||
Operating
Costs and Expenses
|
||||||||
Casino
|
1,421
|
9
|
4,213
|
10
|
||||
Hotel,
food and beverage
|
937
|
31
|
2,920
|
36
|
||||
General
and administrative
|
1,226
|
144
|
3,764
|
262
|
||||
Depreciation
|
362
|
7
|
1,050
|
16
|
||||
Total
operating costs and expenses
|
3,946
|
191
|
11,947
|
324
|
||||
Earnings
(loss) from operations
|
1,233
|
(191)
|
2,966
|
(321)
|
||||
Interest
income
|
12
|
5
|
64
|
18
|
||||
Interest
(expense)
|
(443)
|
(114)
|
(1,180)
|
(123)
|
||||
Other
income, net
|
1
|
-
|
3
|
1
|
||||
Earnings
(loss) before income taxes
|
803
|
(300)
|
1,853
|
(425)
|
||||
Income
tax expense (benefit)
|
261
|
(246)
|
622
|
(140)
|
||||
Net
Earnings
|
CAD
|
542
|
CAD
|
(54)
|
CAD
|
1,231
|
CAD
|
(285)
|
For
the three months
ended
September 30,
|
For
the nine months
ended
September 30,
|
|||||||
Amounts
in thousands
|
2007
|
2006
|
2007
|
2006
|
||||
Operating
Revenue
|
||||||||
Casino
|
$
|
3,912
|
$
|
3,728
|
$
|
11,369
|
$
|
11,732
|
Hotel,
food and beverage
|
810
|
676
|
2,342
|
2,182
|
||||
Other
(net of promotional allowances)
|
(196)
|
(54)
|
(387)
|
(131)
|
||||
Net
operating revenue
|
4,526
|
4,350
|
13,324
|
13,783
|
||||
Operating
Costs and Expenses
|
||||||||
Casino
|
1,531
|
1,416
|
4,426
|
4,434
|
||||
Hotel,
food and beverage
|
541
|