Like many other gambling industry companies, Century Casinos was glad to see the end of the coronavirus infection curve shutdowns. The Colorado Springs, Colorado-based company reversed its year-earlier second-quarter loss and recorded higher revenue, both of which topped Wall Street forecasts. Century Casinos also posted record quarterly cash flow and investors rejoiced, sending the stock up 17.5% Friday.
In a statement, Century Casinos, which owns three hotel-casinos and a racetrack in Canada, five in the United States, one in England, and through a subsidiary, a two-thirds stake in Casinos Poland, said its net income was $8.9 million, or 22 cents per diluted share, for the three months ended June 30, reversing a loss of $12.6 million, or 43 cents per diluted share, a year earlier.
The latest result topped the 3-cents-per-share consensus average forecast of analysts surveyed by Seeking Alpha.
Adjusted earnings before interest, taxes, depreciation and amortization, a cash flow measure that excludes one-time costs, surged to a positive $25.2 million from a negative $1.8 million.
Revenue more than doubled, rising to $92.2 million from $36.1 million and topping the $85.3 million consensus average forecast of Seeking Alpha-polled analysts.
Century Casinos shares, which trade on the Nasdaq, rose $2.04 to close at $13.69 in regular trading Friday. The shares slipped after hours, falling 4 cents, or 0.29 percent, to settle at $13.65. (Stifel Nicolaus rates the stock “buy.”)
In a conference call with analysts and journalists, Chief Executive Officer Peter Hoetzinger said the company’s U.S. properties fueled the quarter’s gains, given that casinos in Poland and Canada were closed for most of the quarter. (The company’s four Canadian casinos opened June 10; its eight Poland casinos opened May 28.)
“Our nationwide portfolio continues to generate robust levels of EBITDA, and our operating strategy and tight focus on the right customer are producing the highest margins in our history,” Hoetzinger said. “And we believe that our strong performances since reopening are largely sustainable.”
In July, Century Casinos said it bought a two-story hotel and several houses to allow for the expansion and renovation of its riverboat casino in Carruthersville, Missouri. The move came after the Missouri Legislature ruled that the state’s casinos no longer needed to float and could be on land. The company said it expects to open the hotel with 36 rooms and finish the refurbishment by early 2022.
Missouri’s casino license count is capped at 13, and though casinos no longer need to be in water, they must be within 1,000 feet of the Mississippi or Missouri rivers. Century’s two Missouri casinos, Century Casino Caruthersville and Century Casino Cape Girardeau, operate 1,365 slot machines and 32 table games.
In the question-and-answer session, Hoetzinger said Century Casinos expects to keep its goal of an acquisition every 12 to 18 months and added that there are “interesting” targets, but named none.
“The big question is valuation,” he said. “And … that’s really the one and only focus point.”
Follow Matthew Crowley on Twitter @copyjockey
