Century Casinos Inc: Form 10-Q/A for the period ended Mar 31, 2025

Forward-Looking Statements, Business Environment and Risk Factors

This quarterly report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. In addition, Century Casinos, Inc. (together with its subsidiaries, the “Company”) may make other written and oral communications from time to time that contain such statements. Forward-looking statements include statements as to industry trends, ongoing projects and capital investments, cost savings initiatives, casino licensing matters and future expectations of the Company and other matters that do not relate strictly to historical facts and are based on certain assumptions by management at the time such statements are made. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. These statements are based on the beliefs and assumptions of the management of the Company based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, among others, the risks described in the section entitled “Risk Factors” under Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2024. We caution the reader to carefully consider such factors. Furthermore, such forward-looking statements speak only as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

References in this item to “we,” “our,” or “us” are to the Company and its subsidiaries on a consolidated basis unless the context otherwise requires. The term “USD” refers to US dollars, the term “CAD” refers to Canadian dollars, and the term “PLN” refers to Polish zloty. Certain terms used in this Item 2 without definition are defined in Item 1.

Amounts presented in this Item 2 are rounded. As such, rounding differences could occur in period over period changes and percentages reported throughout this Item 2.

EXECUTIVE OVERVIEW

Overview

Since our inception in 1992, we have been primarily engaged in developing and operating gaming establishments and related lodging, restaurant and entertainment facilities. Our primary source of revenue is from the net proceeds of our gaming machines and tables, with ancillary revenue generated from hotel, restaurant, horse racing (including off-track betting), sports betting, iGaming and entertainment facilities that are in most instances a part of the casinos.

We aggregate all operating segments into three reportable segments based on the geographical locations in which our casinos operate: United States, Canada and Poland. We have additional business activities including certain other corporate and management operations that we report as Corporate and Other. In the United States, we view our operating segments as East, Midwest and West. The reporting units, except for Century Downs Racetrack and Casino and Casinos Poland, are owned, operated and managed through wholly-owned subsidiaries. Our ownership and operation of Century Downs Racetrack and Casino and Casinos Poland are discussed below. The table below provides information about the aggregation of our operating segments and reporting units into reportable segments.

(1) The real estate assets, except The Riverview hotel in Cape Girardeau and The Farmstead hotel in Caruthersville, are owned by VICI PropCo and leased to us under the Master Lease.

We have controlling financial interests through our subsidiary CRM in the following reporting units:

We have a 75% ownership interest in CDR, and we consolidate CDR as a majority-owned subsidiary for which we have a controlling financial interest. We account for and report the remaining 25% ownership interest in CDR as a non-controlling financial interest. CDR operates Century Downs Racetrack and Casino, a REC in Balzac, a north metropolitan area of Calgary, Alberta, Canada. CDR is the only horse racetrack in the Calgary area and is located less than one mile north of the city limits of Calgary and seven miles from the Calgary International Airport.

We have a 66.6% ownership interest in CPL and we consolidate CPL as a majority-owned subsidiary for which we have a controlling financial interest. Polish Airports owns the remaining 33.3% of CPL. We account for and report the 33.3% Polish Airports ownership interest as a non-controlling financial interest. CPL has been in operation since 1989. As of March 31, 2025, CPL had casino licenses for seven casinos and operated six casinos throughout Poland. The following table summarizes information about CPL’s casinos as of March 31, 2025.

(1) We closed the casinos in Katowice and Bielsko-Biala in October 2023 due to the expiration of the gaming licenses. We were awarded both licenses in February 2024. The Bielsko-Biala casino reopened in February 2024, and the Katowice casino reopened in March 2024 with a reduced gaming floor. We are waiting on regulatory approval to reopen the full gaming floor at the Katowice casino.

(2) We closed the Wroclaw casino in November 2023 due to the expiration of the gaming license. We were awarded the license in December 2023. We relocated the casino to a new location and opened the casino in October 2024.

(3) We were awarded a license for a second location in Wroclaw in March 2025. We anticipate opening the casino in the fourth quarter of 2025 with 50 slot machines and four table games.

Through our wholly-owned subsidiary Century Nevada Acquisition, Inc., we have a 50% equity interest in Smooth Bourbon, LLC (“Smooth Bourbon”) which we consolidate as a subsidiary for which we have a controlling financial interest. The remaining 50% of Smooth Bourbon is owned by Marnell Gaming, LLC (“Marnell”) and is reported as a non-controlling financial interest.

Recent Developments Related to Economic Uncertainty

Current macroeconomic conditions remain very dynamic, including volatile changes in stock markets, foreign currency exchange rates, political unrest and armed conflicts, inflation, US domestic and other international economic policies, such as tariffs, and other factors. Both customer visits and customer spending at our casinos are key drivers of our revenue and profitability, and reductions in either could have a material adverse effect on our business, financial condition and results of operations. The actual or perceived impact of macroeconomic conditions on consumer spending could lead to fewer customer visits and decreased discretionary spending by our customers. We are seeing weaker trends from retail and low-end customers, which we believe is due to macroeconomic conditions impacting consumer spending in our markets. Any worsening in economic conditions in the regions in which we operate or globally, or the perception that conditions may worsen, could reduce consumer discretionary spending or increase our costs and erode our net earnings and cash flows.

Restatement of Previously Issued Condensed Consolidated Financial Statements

As discussed in the Explanatory Note, we concluded that our previously issued condensed consolidated financial statements for the three months ended March 31, 2025 should be restated to reflect the correction of the calculation of the carrying value of invested capital used in the valuation of our Rocky Gap reporting unit, which resulted in impairment of goodwill for this reporting unit of $26.5 million in the fourth quarter of the year ended December 31, 2024. The discussion of financial results presented herein reflects this restatement and related adjustments. The impairment was recorded in the fourth quarter of 2024 and had no impact on the previously reported results of operations during the three months ended March 31, 2025 and 2024. Management has restated their evaluation of disclosure controls and procedures.

Other Projects and Developments

Caruthersville Land-Based Casino

On November 1, 2024, we opened our new land-based casino with a 38 room hotel in Caruthersville, Missouri. The new land-based casino is adjacent to and connected with the temporary casino pavilion building. The project cost approximately $51.9 million and was funded with financing provided by VICI PropCo in conjunction with the Master Lease. VICI PropCo owns the real estate improvements associated with the Caruthersville project. We previously amended our Master Lease in December 2022 to provide for an increase in initial annualized rent of approximately $4.2 million upon completion of the Caruthersville project. See Part I, Item 1. Note 5, “Long-Term Financing Obligation” for a discussion of the Master Lease as amended to date.

Cape Girardeau Hotel

On April 4, 2024, we opened our 69 room hotel at our Cape Girardeau location called The Riverview. The Riverview is a six story building with 68,000 square feet that is adjacent to and connected with the existing casino building. The project cost approximately $30.5 million. We financed the project with cash on hand.

Additional Gaming Projects

We periodically explore additional potential gaming projects and acquisition opportunities. Along with the capital needs of potential projects, there are various other risks which, if they materialize, could affect our ability to complete a proposed project or acquisition or could eliminate its feasibility altogether.

Presentation of Foreign Currency Amounts

The average exchange rates to the US dollar used to translate balances during each reported period are as follows:

We recognize in our condensed consolidated statements of loss foreign currency transaction gains or losses resulting from the translation of casino operations and other transactions that are denominated in a currency other than US dollars. Our casinos in Canada and Poland represent a significant portion of our business, and the revenue generated and expenses incurred by these operations are generally denominated in Canadian dollars and Polish zloty. A decrease in the value of these currencies in relation to the value of the US dollar would decrease the earnings from our foreign operations when translated into US dollars. An increase in the value of these currencies in relation to the value of the US dollar would increase the earnings from our foreign operations when translated into US dollars.

DISCUSSION OF RESULTS

Century Casinos, Inc. and Subsidiaries

Amounts in thousands

(1) For a discussion of Adjusted EBITDAR and reconciliation of Adjusted EBITDAR to net loss attributable to Century Casinos, Inc. shareholders, see “Non-US GAAP Measures Definitions and Calculations – Adjusted EBITDAR” below.

Comparability Impacts

Items impacting comparability of the results include the following:

Sports Betting (Colorado) – During 2024, we mutually agreed to cancel two of our sports betting agreements in Colorado. Prior to the termination of the agreements, revenue from these agreements was $1.8 million per year in our United States segment.

Weather – Increased inclement weather impacted revenue for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 for all of our North American properties.

Summary of Changes by Reportable Segment

Net operating revenue decreased by ($5.6) million, or (4.1%), for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Following is a breakout of net operating revenue by segment for the three months ended March 31, 2025 compared to the three months ended March 31, 2024:

United States decreased by ($2.7) million, or (2.9%).

Canada decreased by ($1.8) million, or (9.9%).

Poland decreased by ($1.0) million, or (4.7%).

Corporate and Other remained constant.

Operating costs and expenses decreased by ($4.4) million, or (3.5%), for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Following is a breakout of operating costs and expenses by segment for the three months ended March 31, 2025 compared to the three months ended March 31, 2024:

United States decreased by ($1.6) million, or (1.8%).

Canada decreased by ($1.1) million, or (8.0%).

Poland decreased by ($0.9) million, or (4.3%).

Corporate and Other decreased by ($0.7) million, or (17.7%).

Earnings from operations decreased by ($1.1) million, or (13.8%), for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Following is a breakout of earnings from operations by segment for the three months ended March 31, 2025 compared to the three months ended March 31, 2024:

United States decreased by ($1.1) million, or (13.3%).

Canada decreased by ($0.7) million, or (16.5%).

Poland decreased by ($0.1) million, or (395.5%).

Corporate and Other increased by $0.7 million, or 17.4%.

Net loss attributable to Century Casinos, Inc. shareholders increased by $7.1 million, or 52.2%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Items deducted from or added to earnings from operations to arrive at net loss attributable to Century Casinos, Inc. shareholders include interest income, interest expense, gains (losses) on foreign currency transactions and other, income tax expense (benefit) and non-controlling interests. Interest expense primarily from the Master Lease negatively impacts net loss attributable to Century Casinos, Inc. shareholders. Increased income tax expense negatively impacted net loss attributable to Century Casinos, Inc. shareholders for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. For the three months ended March 31, 2024, we recognized an income tax benefit on losses incurred in the United States. There was income tax expense for the three months ended March 31, 2025 as a valuation allowance was recognized in the second quarter of 2024 for the United States deferred tax assets. For a discussion of these items, see “Non-Operating Income (Expense)” and “Taxes” below in this Item 2.

Other

Pari-Mutuel

Pari-mutuel revenue includes live racing, export, advanced deposit wagering and off-track betting. Pari-mutuel expenses relate to pari-mutuel revenue and the operation of our racetracks.

Other

Other revenue and other expenses include gift shops, entertainment, golf and spa. Other revenue also includes revenue from ATM and credit card commissions.

Non-US GAAP Measures Definitions and Calculations

Adjusted EBITDAR

Adjusted EBITDAR is used outside of our financial statements as a valuation metric. We define Adjusted EBITDAR as net (loss) earnings attributable to Century Casinos, Inc. shareholders before interest expense (income), net, including interest expense related to the Master Lease as discussed below, income taxes (benefit), depreciation, amortization, non-controlling interests net earnings (losses) and transactions, pre-opening expenses, termination expenses related to closing a casino, acquisition costs, non-cash stock-based compensation charges, asset impairment costs, loss (gain) on disposition of fixed assets, discontinued operations, (gain) loss on foreign currency transactions, cost recovery income and other, gain on business combination and certain other one-time transactions. Intercompany transactions consisting primarily of management and royalty fees and interest, along with their related tax effects, are excluded from the presentation of net earnings (loss) attributable to Century Casinos, Inc. shareholders and Adjusted EBITDAR reported for each reportable segment. Not all of the aforementioned items occur in each reporting period, but have been included in the definition based on historical activity. These adjustments have no effect on the consolidated results as reported under US generally accepted accounting principles (“US GAAP”).

The Master Lease is accounted for as a financing obligation. As such, a portion of the periodic payment under the Master Lease is recognized as interest expense with the remainder of the payment impacting the financing obligation using the effective interest method.

Adjusted EBITDAR information is a non-US GAAP measure that is a valuation metric, should not be used as an operating metric, and is presented solely as a supplemental disclosure to reported US GAAP measures because we believe this measure is widely used by analysts, lenders, financial institutions, and investors as a principal basis for the valuation of gaming companies. Management believes that presenting Adjusted EBITDAR to investors provides them with information used by management for financial and operational decision-making in order to understand the Company’s operating performance and evaluate the methodology used by management to evaluate and measure such performance.

Adjusted EBITDAR should not be viewed as a measure of overall operating performance, as an indicator of our performance, considered in isolation, or construed as an alternative to operating income or net income, the most directly comparable US GAAP measure, or as an alternative to cash flows from operating activities, as a measure of liquidity, or as an alternative to any other measure determined in accordance with generally accepted accounting principles because this measure is not presented on a US GAAP basis and excludes certain expenses, including the rent expense related to our Master Lease, and is provided for the limited purposes discussed herein. In addition, Adjusted EBITDAR as used by us may not be defined in the same manner as other companies in our industry, and, as a result, may not be comparable to similarly titled non-US GAAP financial measures of other companies. Consolidated Adjusted EBITDAR should not be viewed as a measure of overall operating performance or considered in isolation or as an alternative to net income, because it excludes the rent expense associated with our Master Lease and certain other items.

The reconciliation of Adjusted EBITDAR to net loss attributable to Century Casinos, Inc. shareholders is presented below.

Amounts in thousands

(1) See “Non-Operating Income (Expense) – Interest income” and “– Interest expense” below for a breakdown of interest expense (income), net and “Liquidity and Capital Resources” below for more information on the rent payments related to the Master Lease.

Amounts in thousands

(1) See “Non-Operating Income (Expense) – Interest income” and “– Interest expense” below for a breakdown of interest expense (income), net and “Liquidity and Capital Resources” below for more information on the rent payments related to the Master Lease.

Net Debt

We define Net Debt as total long-term debt (including current portion) plus deferred financing costs minus cash and cash equivalents. Net Debt is not considered a liquidity measure recognized under US GAAP. Management believes that Net Debt is a valuable measure of our overall financial situation. Net Debt provides investors with an indication of our ability to pay off all of our long-term debt if it became due simultaneously. The reconciliation of Net Debt is presented below.

Amounts in thousands

Reportable Segments

The following discussion provides further detail of consolidated results by reportable segment.

Amounts in thousands

We opened the new land-based casino and hotel in Caruthersville on November 1, 2024. The casino has 579 slot machines and nine live table games, which is almost a 50% increase in gaming positions compared with the prior temporary location. The number of hotel rooms doubled to 74.

We opened The Riverview in Cape Girardeau in April 2024. The Riverview is a 69 room, six-story building with 68,000 square feet that is adjacent to and connected with Century Casino Cape Girardeau.

We partner with sports betting operators that conduct sports wagering at our Colorado, West Virginia and Nevada locations. Each agreement with the sports betting operators provides for a share of net gaming revenue, and the Colorado agreement also provides for a minimum revenue guarantee each year. In addition, we operate internet and mobile interactive gaming applications in West Virginia with two iGaming partners. The agreements provide for a share of net iGaming revenue. Sports betting in Missouri was approved by voters in November 2024, and we plan to partner with sports betting operators to conduct sports betting at our Missouri casinos when it begins in late 2025. As stated above, two of our sports betting agreements in Colorado were terminated in May 2024 and July 2024. Revenue from these agreements was $0.5 million for the three months ended March 31, 2024 in our United States segment.

The Cripple Creek and Central City casinos in Colorado stopped offering table games in January 2025. We believe this will have a positive impact on earnings from operations at both properties as the expense savings are projected to offset the decrease in revenue. Table games revenue in Colorado was $0.4 million for the three months ended March 31, 2024.

The table below provides results by operating segment within the United States reportable segment.

Amounts in millions

(1) Operating costs and expenses are calculated as total operating costs and expenses less depreciation and amortization.

Three Months Ended March 31, 2025 and 2024

The following discussion highlights results for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Winter weather negatively impacted all US properties during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

East – Decreased net operating revenue and operating costs and expenses were due to decreased gaming revenue and gaming-related expenses at both properties. At our Rocky Gap property, the golf course was closed for the majority of the quarter due to winter weather that impacted gaming, hotel and food and beverage revenue.

Midwest – In Missouri, net operating revenue increased by approximately $2.8 million primarily due to increased gaming revenue at our new casino in Caruthersville and increased hotel and food and beverage revenue at both properties due to the new hotels that were opened in 2024. The increases in Missouri were offset by decreased net operating revenue of approximately $2.2 million in Colorado. Decreased net operating revenue in Colorado was primarily due to the termination of two sports betting agreements in 2024, as detailed above, decreased gaming revenue due to the elimination of table games at both properties, and inclement weather in February 2025. Operating expenses in the Midwest operating segment increased due to increased payroll, marketing and operating costs, primarily at the Missouri locations due to opening our new hotels and the new Caruthersville casino in 2024.

West – Net operating revenue at the Nugget decreased primarily due to decreased hotel and food and beverage revenue. We are increasing our efforts to market group and convention sales for the hotel and are implementing a new loyalty program in an effort to drive revenue growth. Operating expenses decreased primarily due to decreased payroll and marketing costs due to the cost saving measures we began implementing mid-April 2024. These measures included marketing improvements, staffing changes and changes to hotel operations.

A reconciliation of net loss attributable to Century Casinos, Inc. shareholders to Adjusted EBITDAR can be found in the “Non-US GAAP Measures Definitions and Calculations – Adjusted EBITDAR” discussion above.

Amounts in thousands

In February 2023, the AGLC, Alberta’s gaming regulatory agency, approved a temporary increase from 15% of slot machine net sales retained by casinos to 17% effective from April 1, 2023 through March 31, 2025. In December 2024, the temporary increase was extended through March 31, 2026. The increase in the slot machine net sales retention percentage has had a positive impact on net operating revenue and results of operations at our Canadian properties.

A competitor is requesting to relocate their casino from a city about 50 miles southeast of Edmonton to south Edmonton, approximately 11 miles from our Century Mile property. Additional approvals are needed before the project begins and we anticipate construction could take approximately one year if the project is approved. An increase in competitors to the Edmonton market and near our Century Mile property could lead to a decrease in visitors at our casinos and have a negative impact on our results of operations in Canada.

Results in US dollars were impacted by a (6.5%) decrease in the average exchange rate between the US dollar and Canadian dollar for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

The tables below provide results for the Canada reportable segment.

Amounts in CAD, in millions

Amounts in USD, in millions

(1) Operating costs and expenses are calculated as total operating costs and expenses less depreciation and amortization.

Three Months Ended March 31, 2025 and 2024

The following discussion highlights results for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Explanations below are provided based on CAD results.

Decreased net operating revenue was primarily due to decreased gaming revenue at all of our Canadian properties which were impacted by winter weather in January and February 2025. Operating costs and expenses decreased due primarily to decreased utility costs.

A reconciliation of net (loss) earnings attributable to Century Casinos, Inc. shareholders to Adjusted EBITDAR can be found in the “Non-US GAAP Measures Definitions and Calculations – Adjusted EBITDAR” discussion above.

Amounts in thousands

In Poland, casino gaming licenses are granted for a term of six years. These licenses are not renewable. Before a gaming license expires in a particular city, there is a public notification of the available license and any gaming company can apply for a new license for that city. The license for the Hilton Hotel in Warsaw expires in June 2025. CPL has applied for a license in Warsaw but there can be no assurance that such license will be received.

The table below provides information about the closures due to licensing delays during the periods discussed in this Item 2.

(1) The Katowice casino reopened with a reduced gaming floor.

(2) The Wroclaw casino reopened at a new location following the closure.

(3) We were notified in October 2024 that we were not awarded casino licenses for these locations.

Results in US dollars were impacted by a (0.3%) decrease in the average exchange rate between the US dollar and Polish zloty for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

The tables below provide results for the Poland reportable segment.

Amounts in PLN, in millions

Amounts in USD, in millions

(1) Operating costs and expenses are calculated as total operating costs and expenses less depreciation and amortization.

Three Months Ended March 31, 2025 and 2024

The following discussion highlights results for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Explanations below are provided based on PLN results.

Net operating revenue decreased primarily due to licensing-related closures at our LIM Center casino in Warsaw and the Krakow casino and slower gaming activity in the Warsaw market, offset by increased revenue at the casino in Wroclaw that opened in October 2024. Operating costs and expenses decreased due to decreased payroll and gaming-related expenses primarily related to the casino closures.

A reconciliation of net (loss) earnings attributable to Century Casinos, Inc. shareholders to Adjusted EBITDAR can be found in the “Non-US GAAP Measures Definitions and Calculations – Adjusted EBITDAR” discussion above.

Amounts in thousands

Three Months Ended March 31, 2025 and 2024

The following discussion highlights results for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Total operating costs and expenses, including general and administrative expenses, decreased due primarily to lower stock compensation expense and insurance costs.

A reconciliation of net loss attributable to Century Casinos, Inc. shareholders to Adjusted EBITDAR can be found in the “Non-US GAAP Measures Definitions and Calculations – Adjusted EBITDAR” discussion above.

Non-Operating Income (Expense)

Non-operating income (expense) was as follows:

Amounts in thousands

Interest income

Interest income is primarily related to interest earned on our cash reserves.

Interest expense

Interest expense is directly related to interest owed on the borrowings under our Goldman Credit Agreement, the UniCredit Term Loan, CPL’s credit facility, our financing obligation under the Master Lease with VICI PropCo, deferred financing costs and our finance lease agreements.

A breakdown of interest expense is below.

Amounts in thousands

Gain on foreign currency transactions, cost recovery income and other

Cost recovery income is related to infrastructure built during the development of CDR. The infrastructure was built by the non-controlling shareholders prior to our acquisition of our controlling ownership interest in CDR. There was no cost recovery income received by CDR for the three months ended March 31, 2025 and 2024. The decrease in gain on foreign currency transaction, cost recovery income and other is due to changes in foreign currency gains.

Taxes

Income tax expense is recorded relative to the jurisdictions that recognize book earnings. During the three months ended March 31, 2025, we recognized income tax expense of $0.5 million on pre-tax loss of ($18.4) million, representing an effective income tax rate of (2.6%) compared to an income tax benefit of $4.0 million on pre-tax loss of ($15.7) million, representing an effective income tax rate of 25.4% for the same period in 2024. For further discussion of our effective income tax rates and an analysis of our effective income tax rate compared to the US federal statutory income tax rate, see Note 7, “Income Taxes,” to our condensed consolidated financial statements included in Part I, Item 1 of this report.

LIQUIDITY AND CAPITAL RESOURCES

Our business is capital intensive, and we rely heavily on the ability of our casinos to generate operating cash flow. We use the cash flows that we generate to maintain operations, fund reinvestment in existing properties for both refurbishment and expansion projects, repay third party debt, and pursue additional growth via new development and acquisition opportunities. When necessary and available, we supplement the cash flows generated by our operations with either cash on hand or funds provided by bank borrowings, other debt or equity financing activities or funding arrangements with third-party partners, such as VICI PropCo in connection with our casino project in Caruthersville.

Cash Flows – Summary

Our cash flows; cash, cash equivalents and restricted cash; and working capital consisted of the following:

Amounts in thousands

40

Amounts in thousands

(1) Cash, cash equivalents and restricted cash as of March 31, 2025 and 2024 included $1.9 million and $19.9 million, respectively, of cash previously funded by VICI PropCo that had not been spent on our Caruthersville project as of such date.

(2) Working capital is defined as current assets minus current liabilities.

Operating Activities

Trends in our operating cash flows tend to follow trends in earnings from operations excluding non-cash charges, offset by cash rent, income tax payments and interest payments on our long-term debt. Please refer to the condensed consolidated statements of cash flows in Part I, Item 1 of this Form 10-Q and to management’s discussion of the results of operations above in this Item 2 for a discussion of earnings from operations.

Investing Activities

Net cash used in investing activities for the three months ended March 31, 2025 consisted of $0.7 million for a casino license in Poland, $0.7 million in slot machines and gaming related purchases for our US properties, $0.6 million for exterior renovations at our Cripple Creek property in Colorado, $0.9 million in exterior renovations at Mountaineer in West Virginia, $0.8 million for our casino project in Caruthersville, $2.0 million in elevator upgrades at the Nugget in Nevada, $0.3 million in racing related updates at Century Downs and $0.3 million in exterior renovations at St. Albert in Canada, and $1.2 million in other fixed asset additions at our properties, offset by less than $0.1 million in proceeds from the disposal of assets.

Net cash used in investing activities for the three months ended March 31, 2024 consisted of $1.2 million for casino licenses in Poland, $1.9 million in slot machines and gaming related purchases for our US properties, $0.4 million for various hotel renovations and $0.1 million in restaurant renovations at Mountaineer in West Virginia, $6.1 million for our hotel project in Cape Girardeau, $6.7 million for our casino project in Caruthersville, $0.1 million in various renovations at the Nugget in Nevada, $0.2 million in hotel renovations at our Colorado properties, $0.4 million in racing related updates at Century Downs in Canada and $2.5 million in other fixed asset additions at our properties, offset by less than $0.1 million in proceeds from the disposal of assets.

Financing Activities

Net cash used in financing activities for the three months ended March 31, 2025 consisted of $1.9 million in distributions to non-controlling interests and $0.3 million principal payments net of proceeds from borrowings.

Net cash used in financing activities for the three months ended March 31, 2024 consisted of $2.0 million in distributions to non-controlling interests and $0.2 million to repurchase shares to satisfy tax withholding related to our performance stock unit awards, offset by $1.3 million in proceeds from borrowings net of principal payments, of which $5.9 million consisted of proceeds from borrowings from VICI PropCo for the Caruthersville project.

Borrowings and Repayments of Long-Term Debt and Lease Agreements

As of March 31, 2025, our total debt under bank borrowings and other agreements, net of $10.8 million related to deferred financing costs, was $328.8 million, of which $321.7 million was long-term debt and $7.1 million was the current portion of long-term debt. The current portion relates to payments due within one year under our Goldman Credit Agreement, the UniCredit Term Loan and CPL’s credit facility. Our Goldman Credit Agreement provides for a $350.0 million Term Loan, drawn in April 2022, and a $30.0 million Revolving Facility. No amounts are currently outstanding under the Revolving Facility. For a description of our debt agreements, see Note 4, “Long-Term Debt” to our condensed consolidated financial statements included in Part I, Item 1 of this report. Net Debt was $254.9 million as of March 31, 2025 compared to $205.5 million as of March 31, 2024. The increase in net debt is primarily due to decreased cash. For the definition and reconciliation of Net Debt to the most directly comparable US GAAP measure, see “Non-US GAAP Measures Definitions and Calculations – Net Debt” above.

The following table lists the amount of 2025 maturities of our debt as of March 31, 2025:

Amounts in thousands

(1) The Goldman Term Loan requires scheduled quarterly payments of $875,000, equal to 0.25% of the original aggregate principal amount of the Goldman Term Loan, with the balance due at maturity.

The following table lists the amount of remaining 2025 payments due under our operating and finance lease agreements:

Amounts in thousands

As of March 31, 2025, estimated cash payments due under the Master Lease for the remainder of 2025 are $44.1 million, which includes a CPI increase. We have elected to defer the cash payments of $4.2 million in annual increased rent related to the Caruthersville project for 12 months and the deferred rent will be paid over a six month period beginning in December 2025. Estimated cash payments to the non-controlling partners under the lease between Smooth Bourbon and Nugget (the “Nugget Lease”) for the remainder of 2025 are $5.8 million.

The following table details cash payments under the Master Lease and 50% of the cash payments under the Nugget Lease for the three months ended March 31, 2025 and three months ended March 31, 2024.

Amounts in thousands

(1) Represents payments with respect to the 50% interest in the Nugget Lease owned by Marnell through Smooth Bourbon. Smooth Bourbon is a 50% owned subsidiary of the Company that owns the real estate assets underlying the Nugget Casino Resort.

Rent expense related to the Master Lease is included in interest expense on our condensed consolidated statements of loss. The Nugget Lease is considered an intercompany lease, and income and expense related to the lease are eliminated in consolidation. The 50% interest in the Nugget Lease owned by Marnell through Smooth Bourbon is recorded as non-controlling interest on our condensed consolidated statements of loss.

Common Stock Repurchase Program

Since March 2000, we have had a discretionary program to repurchase our outstanding common stock. The total amount remaining under the repurchase program was $14.7 million as of March 31, 2025. We did not repurchase any common stock during the three months ended March 31, 2025 but currently plan to do so. The repurchase program has no set expiration or termination date.

Potential Sources and Uses of Liquidity and Short-Term Liquidity

Historically, our primary source of liquidity and capital resources has been cash flow from operations. As of March 31, 2025, we had $84.7 million in cash and cash equivalents compared to $98.8 million in cash and cash equivalents at December 31, 2024. Cash and cash equivalents decreased primarily due to net cash used in investing activities of $7.4 million as discussed in “Investing Activities” above and net cash used in operating and financing activities as discussed above. When necessary and available, we supplement the cash flows generated by our operations with funds provided by bank borrowings or other debt or equity financing activities. As of March 31, 2025, we had $30.0 million available on our Revolving Facility. See Note 4, “Long-Term Debt” to our condensed consolidated financial statements included in Part I, Item 1 of this report.

We estimate that we have spent approximately one-third of our planned capital expenditures for 2025 in the first quarter. Remaining capital expenditures for 2025 are estimated to be approximately $12.0 million inclusive of approximately $1.8 million in growth capital expenditures and the remaining in maintenance capital expenditures, including elevator upgrades at the Nugget and various upgrades at our properties. We opened the new land-based casino and hotel at Century Casino Caruthersville on November 1, 2024. The project cost approximately $51.9 million and was funded with financing provided by VICI PropCo in conjunction with the Master Lease. We estimate approximately $1.9 million in remaining cash payments related to the Caruthersville project.

We may be required to raise additional capital to address our liquidity and capital needs. We have a shelf registration statement with the SEC that became effective in June 2023 under which we may issue, from time to time, up to $100 million of common stock, preferred stock, debt securities and other securities. We intend to renew the shelf registration statement in 2026.

If necessary, we may seek to obtain further term loans, mortgages or lines of credit with commercial banks or other debt or equity financings to supplement our working capital and investing requirements. Our access to and cost of financing will depend on, among other things, global economic conditions, conditions in the financing markets, the availability of sufficient amounts of financing, our prospects and our credit ratings. A financing transaction may not be available on terms acceptable to us, or at all, and a financing transaction may be dilutive to our current stockholders. The failure to raise the funds necessary to fund our debt service and rent obligations and finance our operations and other capital requirements could have a material and adverse effect on our business, financial condition and liquidity.

We estimate that approximately $41.7 million of our total $84.7 million in cash and cash equivalents at March 31, 2025 is held by our foreign subsidiaries, of which $21.0 million is held by our Canadian subsidiaries and $15.4 million is held by our Austrian subsidiary. The cash and cash equivalents held by our foreign subsidiaries are not available to fund US operations unless repatriated. We expect to incur withholding tax on future repatriation of current earnings in certain non-US subsidiaries.

Critical Accounting Estimates

As of the filing date of this report, there were no significant changes in our critical accounting estimates from those discussed in our Annual Report on Form 10-K for the year ended December 31, 2024. See Note 2 to our Unaudited Condensed Consolidated Financial Statements for accounting pronouncements issued but not yet adopted that may impact the Company’s consolidated financial position, earnings, cash flows or disclosures.

We had no material changes in our exposure to market risks from that previously reported in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2024.

Evaluation of Disclosure Controls and Procedures (Restated) – Our management, with the participation of our principal executive officers and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of March 31, 2025. Based on such evaluation, our principal executive officers and principal financial officer concluded at the time we filed the Original Form 10-Q that our disclosure controls and procedures were effective as of March 31, 2025.

Subsequent to the filing of the Original Form 10-Q, management identified a material weakness in internal control over financial reporting in connection with the restatement of the previously filed consolidated financial statements for the year ended December 31, 2024. As a result, management reevaluated the effectiveness of the Company’s disclosure controls and procedures, as further described in this Amendment, and concluded that our disclosure controls and procedures were not effective as of March 31, 2025 because of the material weakness described in "Material Weakness" below.

Notwithstanding the material weakness, and based on the additional analyses and other procedures management performed, we have concluded that our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q/A present fairly, in all material respects, our financial position, results of operations and cash flows for each of the periods presented herein.

Material Weakness

We concluded that our internal control over financial reporting was not effective as of December 31, 2024. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

Management identified the following material weakness in our internal control over financial reporting as of December 31, 2024:

We did not adequately design, implement and maintain effective controls to timely review certain key inputs and assumptions used in the performance of impairment testing and related disclosures.

Remediation plan for material weakness

With the oversight of the Audit Committee of the Board of Directors, management is in the process of developing a detailed remediation plan to address the material weakness. Elements of the plan include the design and implementation of review attributes of the carrying value of invested capital at an increased level of precision of the calculation and additional reviews around assumptions used in the performance impairment testing. While we will devote significant time and attention to these remediation efforts, the material weakness will not be considered remediated until management completes the design and implementation of the actions described above and the controls operate for a sufficient period of time, and management has concluded, through testing, that these controls are effective.

Changes in Internal Control Over Financial Reporting – There were no changes in our internal control over financial reporting that occurred during the three months ended March 31, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.