ST. LOUIS, May 4 /PRNewswire-FirstCall/ -- Isle of Capri Casinos, Inc.
(Nasdaq: ISLE) (the "Company") today provided additional comments and
information on its financial results for the third fiscal quarter ended
January 28, 2007, which were reported in its Form 10-Q filing on April 18,
2007. This filing had been delayed due to the restatement of certain prior
period financial statements as previously announced by the Company and as
summarized below. Accordingly, the financial information presented herein
related to the nine months ended January 28, 2007 and the three and nine
months ended January 22, 2006 have been restated.
The Company reported a 0.8% increase in net revenues from continuing
operations to $230.8 million for the third quarter compared to net revenues
from continuing operations of $229.0 million for the same quarter in fiscal
2006 as restated. Loss from continuing operations was $9.7 million, or
$0.32 per diluted common share, during the third quarter of fiscal 2007
compared to income of $2.2 million or $0.07 per diluted common share for
the third quarter of fiscal 2006. Adjusted EBITDA(1) from continuing
operations for the third quarter of fiscal 2007 decreased 22.8% to $39.3
million compared to Adjusted EBITDA(1) from continuing operations of $50.9
million for the same quarter in fiscal 2006. During the third quarter ended
January 28, 2007, the Company was negatively impacted by severe weather
conditions and increased competition in several of the Company's markets,
while the third quarter ended January 22, 2006 was benefited by post
hurricane effects in Biloxi and Lake Charles.
For the nine months ended January 28, 2007, the Company reported a 9.7%
increase in net revenues from continuing operations to $748.0 million,
compared to $682.0 million for the comparable period in the prior year. For
the first nine months of fiscal 2007, the Company reported a loss from
continuing operations of $7.7 million, or $0.25 per diluted common share,
compared to a loss of $0.6 million, or $0.02 per diluted common share for
the same period in fiscal 2006. Adjusted EBITDA(1) from continuing
operations in the nine month period increased 6.1% to $138.7 million,
compared to $130.7 million for the comparable nine month period in fiscal
2006. Operating results for fiscal 2006 were negatively impacted by
Hurricanes Katrina, Wilma and Rita. During the nine months ended January
28, 2007, the Company recognized a pretax gain of $22.9 million related to
the sale of its Isle-Bossier City and Isle-Vicksburg properties. This gain
is included in income from discontinued operations and the impact on net
income per diluted common share was $0.37 for the nine-months ended January
28, 2007, while the operating results of discontinued operations
contributed another $0.13.
Isle-Bossier City and Isle-Vicksburg are reflected as discontinued
operations for all periods presented. Accordingly, the operating results
for these properties are not included in the net revenue, income from
continuing operations and Adjusted EBITDA(1) results discussed above. The
sale of Isle-Bossier City and Isle-Vicksburg closed on July 31, 2006.
On March 12, 2007, the Company announced that it would restate its
financial statements for the fiscal years ended April 25, 2004, April 24,
2005 and April 30, 2006 and the quarterly results for fiscal 2005 and 2006
included therein, and for the first two fiscal quarters of fiscal 2007. A
Form 10-Q for the three months and nine months ended January 28, 2007 and
January 22, 2006 has been filed prior to the filing of the amended Form
10-K and Forms 10-Q for the above referenced periods. Financial information
reported within the Form 10-Q for the nine months ended January 28, 2007
and the three and nine months ended January 22, 2006 contains the
restatement of financial information referred to above.
The nine months ended January 28, 2007 reflected no changes from the
restatement to the six months ended October 29, 2006 for net revenue, a
$4.3 million increase to Net income and a $1.4 million increase to Adjusted
EBITDA(1). For the three and nine months ended January 22, 2006, the net
effect of these restatements has resulted in an increase to Net revenues of
$0.07 million and $0.5 million, respectively, an increase to Net income of
$0.1 million and a decrease to Net income of $0.9 million, respectively,
and a increase to Adjusted EBITDA(1) of $0 and $1.6 million, respectively.
The restatement adjustments primarily relate to the following items:
accounting for the lease of the Company's new casino space in Coventry,
England in accordance with Emerging Issue Task Force 97-10, "The Effect of
Lessee Involvement in Asset Construction"; the correction of accounting
errors at the Company's 66-2/3% owned subsidiary, Blue Chip Casinos plc, in
England; adjustments to the calculation of the gain on the sale of the
Isle-Bossier City in the second quarter of fiscal 2007; and adjustments on
various income tax accounting issues. Refer to Form 10-Q for the quarterly
period ended January 28, 2007 filed on April 18, 2007 with the Securities
and Exchange Commission for a detailed discussion of all restatement
adjustments.
Highlights and Updates
-- The Company unveiled its newest brand, "the isle(R)" at Pompano Park on
April 14, 2007 with 1,500 slot machines and two restaurants, a full
service delicatessen and tropical-themed buffet. Two additional
restaurants, Farraddays' signature steakhouse and Bragozzo, an Italian
osteria created by accomplished Chef Luke Palladino, are expected to
open in May along with other amenities.
-- On May 3, the Florida legislature passed a bill to increase the number
of slot machines at Broward County pari-mutuel facilities from 1,500 to
2,000, increase operating hours including 24 hours on the weekends,
allow progressive machines, and permit ATMs on the premises, although
not on the casino floor. The bill was moved to the Governor's office
for signature.
-- Construction continues at the Company's new casino property, "the isle"
casino resort at Waterloo in Iowa. Interior finishing is well underway
on the 35,000 square foot single level casino, three restaurants and
200-room hotel, which is expected to open by July 1, 2007. A nightclub,
spa and pool will follow later this year.
-- The Company announced construction plans for "the isle" casino resort
at Biloxi including a land-based casino with approximately 2,100 slot
machines, 50 table games, a new poker room, new buffet and adding
another yet to be named restaurant. The more than $180 million project
will be largely funded by insurance proceeds associated with Hurricane
Katrina. When complete, this project will return the property to the
pre-Katrina planned levels. Also in Biloxi, the Company completed a
property purchase of approximately 5 acres located on Point Cadet,
bringing the total incremental acreage acquired in Biloxi to
approximately 7.5 acres.
-- The $45 million, 250-room Isle of Capri Hotel in Bettendorf, Iowa
remains on schedule and is expected to open by June 1, 2007.
-- The Company also expects to open its $62 million casino, "the isle"
casino at Coventry located at the RICOH(TM) Arena in the United Kingdom
in summer 2007. The project, authorized under the Gaming Act of 1968,
includes 90 electronic gaming machines, over 40 table games including
poker, as well as the Company's signature steakhouse, Farraddays', a
Tradewinds Marketplace, a private dining club, and three bars including
an entertainment venue and sports bar.
-- The Company has begun implementation of technology improvements
including a comprehensive data warehouse to enhance direct marketing
programs, as well as a new hotel revenue management system designed to
optimize hotel room pricing and availability. The Company expects the
development and roll out of both systems to continue throughout fiscal
2008.
-- Subsequent to the end of the quarter, the Company announced that it has
entered into an agreement to purchase Casino Aztar in Caruthersville,
Missouri from an affiliate of Columbia Sussex Corporation for
approximately $45 million. The agreement is subject to general
conditions including the approval of the Missouri Gaming Commission.
-- Subsequent to the end of the quarter, the Company also announced an
agreement with government officials in the Bahamas to continue the
operation of its casino at Our Lucaya in Freeport. The Company had
previously announced that it would be terminating its lease as of
June 1, 2007.
"Last month we revealed our newest brand, 'the isle,' unveiling the
next generation of our brand at Pompano Park. Enhanced with water features,
marble flooring and wood grain accents, our guests continue to experience
the tropical oasis we embrace while enjoying the excitement of Vegas-style
gaming at the same time. The brand roll-out will continue into Fiscal 2008
as we expand our reach into markets in Iowa and the United Kingdom,"
Bernard Goldstein, chairman and chief executive officer, said.
Operational Review of the Company's Continuing Operations for the Third
Quarter of Fiscal 2007 Compared to the Third Quarter of Fiscal 2006
Operating results for the third quarter of fiscal 2007 include some
significant additional expenses, some of which will not be recurring, as
compared to the third quarter of fiscal 2006. These include an increase of
approximately $4.5 million in property insurance expense over the prior
year's third quarter, for a nine-month total increase of approximately
$13.5 million over the prior year period, which was allocated across all
operating properties. This increase is expected to continue throughout
fiscal 2007. The Company also recorded approximately $1.6 million of stock
compensation expense in the third quarter of fiscal 2007 related to the
adoption of FASB Statement No. 123 (revised 2004), "Share-Based Payment"
(SFAS 123(R)). These costs will also be recurring. The stock compensation
expense is reflected in the corporate and other expense line item.
Preopening costs increased $3.2 million compared to the third quarter of
fiscal 2006 primarily due to costs related to our casino developments in
Pompano Beach, Florida; Waterloo, Iowa and Coventry, England.
In Mississippi, the Company's three continuing operations contributed
25.0% of net revenues. Isle-Biloxi's net revenues were up from the prior
year period principally due to the prior year closure of the property
caused by Hurricane Katrina. Adjusted EBITDA(1) at the property was down
due to increased competition in the market as competitors have re-opened
while the Isle-Biloxi remains negatively impacted by the destruction of the
Ocean Springs bridge, which is the primary thoroughfare for travelers from
Alabama, Florida and Georgia into east Biloxi where Isle-Biloxi is located.
Isle-Natchez continues to experience decreases in both net revenues and
Adjusted EBITDA(1) primarily resulting from the re-opening of competitor
casinos on the Gulf Coast that were previously rebuilding from the
hurricane. Isle-Lula's net revenues decreased slightly while Adjusted
EBITDA(1) at the property increased slightly due to more efficient
management of expenses.
In Louisiana, Isle-Lake Charles contributed 18.9% of net revenues.
Isle-Lake Charles experienced a decrease in net revenues and Adjusted
EBITDA(1) as compared to the prior year period, primarily due to severe
weather conditions and a decrease in the market due to post hurricane
population shifts that benefited the prior year. During the current
quarter, the Company recorded $2.2 million of income related to a business
interruption insurance claim for Hurricane Rita.
The post hurricane effects in the third quarter of fiscal 2007 compared
to the third quarter of fiscal 2006 related to Biloxi, Natchez and Lake
Charles were the primary reason for the overall decline in the Company's
Adjusted EBITDA(1) margin in the third quarter of fiscal 2007.
In Missouri, the Company's two properties contributed 16.9% of net
revenues. Isle-Kansas City's net revenues and Adjusted EBITDA(1) were down
slightly due primarily to severe weather conditions and decreased gaming
patron count, which is attributable to the completion of other competitor
expansion projects in the market and increased marketing intensity by
competitors. Isle-Boonville's net revenues and Adjusted EBITDA(1) increased
due to the opening of the Company's new hotel in July 2006.
In Iowa, the Company's three casinos contributed 18.6% of net revenues.
Combined, the Company's two Quad City properties and Isle-Marquette showed
a decrease in both net revenues and Adjusted EBITDA(1) due to severe
weather conditions and increased competition.
In Colorado, the Company's two Black Hawk casino operations contributed
15.1% of net revenues. The Black Hawk properties experienced a decrease in
net revenues and Adjusted EBITDA(1) as compared to the prior year period
primarily due to increased competition and the impact of severe snowstorms
affecting seven consecutive weekends of the quarter.
New development expenses increased compared to the third quarter of
fiscal 2006 primarily due to the pursuit of gaming licenses in Pittsburgh,
Pennsylvania and Singapore. In December 2006, the Company was notified that
the respective gaming commissions did not award the Company either gaming
license.
The increase in corporate and other expenses compared to the third
quarter of fiscal 2006 is primarily due to the stock compensation expense
as mentioned above and $0.9 million in non-recurring charges related to
moving the Company's corporate headquarters to Saint Louis, Missouri.
Operating results from the Colorado Grande-Cripple Creek,
Isle-Vicksburg and Isle-Bossier City have been classified as discontinued
operations for all periods presented and thus are not included in the
Operational Review discussed above.
"As expected our existing properties faced challenges during this
transition period as we experienced increased competition and softness in
certain markets. Additionally, we experienced severe weather conditions in
several of our markets. Our team continues to carefully adjust our business
model and implement new marketing technologies as we complete fiscal 2007.
With the beginning of fiscal 2008, we look forward to the opening of our
hotel in Bettendorf and finalizing the purchase of Casino Aztar in
Caruthersville as we continue to focus on growing our business," said Tim
Hinkley, president and chief operating officer.
The registrant's independent registered public accounting firm has not
completed the review of the registrant's interim financial statements
included in the Form 10-Q filed on April 18, 2007 as required by the
Securities and Exchange Commission Rule 10-01(d) of Regulation S-X because
of the pending financial statement restatements discussed herein.
Isle of Capri Casinos, Inc.
Consolidated Statements of Income*
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
January January January January
28, 22, 28, 22,
2007 2006 2007 2006
(Restated)(Restated)(Restated)
Revenues:
Casino $233,158 $234,954 $760,015 $694,711
Hotel, pari-mutuel, food,
beverage & other 47,367 37,891 151,098 126,025
Gross revenues 280,525 272,845 911,113 820,736
Less promotional allowances 49,680 43,821 163,073 138,717
Net revenues (2) 230,845 229,024 748,040 682,019
Operating and other expenses:
Properties 179,200 167,794 573,145 514,800
New development (3) 4,923 3,519 14,518 11,382
Corporate and other (4) 8,994 6,796 27,456 25,138
Preopening (5) 3,236 40 4,066 224
Valuation Charge (6) --- --- 665 ---
Hurricane related charges,
net (7) --- 3,576 --- 4,776
Depreciation and amortization 24,703 21,958 72,943 65,666
Total operating and other expenses 221,056 203,683 692,793 621,986
Operating income 9,789 25,341 55,247 60,033
Interest expense, net (20,668) (18,663) (60,365) (53,594)
Loss on early extinguishment of
debt --- (2,110) --- (2,110)
Minority interest (8) (598) (439) (2,216) (4,387)
Income from continuing operations
before income taxes (11,477) 4,129 (7,334) (58)
Income tax expense (benefit) (9) (1,770) 1,907 347 575
Income (loss) from continuing
operations (9,707) 2,222 (7,681) (633)
Income from discontinued
operations (including minority
interest and gain on sale of
discontinued operations), net of
income taxes (12) 216 2,010 15,148 3,632
Net income (loss) $(9,491) $4,232 $7,467 $2,999
Earnings per common share - basic:
Income (loss) from continuing
operations $(0.32) $0.07 $--- $(0.02)
Income from discontinued
operations (including gain on
sale of assets), net of income
taxes 0.01 0.07 0.50 0.12
Net income (loss) $(0.31) $0.14 $0.50 $0.10
Earnings per common share -
diluted:
Income (loss) from continuing
operations $(0.32) $0.07 $(0.25) $(0.02)
Income from discontinued
operations (including gain on
sale of assets), net of income
taxes 0.01 0.06 0.50 0.12
Net income (loss) $(0.31) $0.14 $0.25 $0.10
Weighted average basic common
shares 30,371 29,951 30,379 30,054
Weighted average diluted common
shares 30,371 31,042 30,379 30,054
Isle of Capri Casinos, Inc.
Comparative Financial Highlights by Casino Property
(Unaudited)
(In thousands)
Three Months Ended
January 28, 2007 January 22, 2006 (Restated)
Adjusted Adjusted
Net Adjusted EBITDA Net Adjusted EBITDA
Revenues EBITDA (1) Revenues EBITDA (1)
(2) (1) Margin% (2) (1) Margin%
MISSISSIPPI
BILOXI $28,503 $5,611 19.7% $14,554 $7,854 54.0%
NATCHEZ 9,429 3,010 31.9% 11,945 4,597 38.5%
LULA 19,661 5,686 28.9% 20,341 5,369 26.4%
MISSISSIPPI
TOTAL 57,593 14,307 24.8% 46,840 17,820 38.0%
LOUISIANA
LAKE CHARLES 43,517 10,459 24.0% 45,153 12,859 28.5%
MISSOURI
KANSAS CITY 19,925 3,641 18.3% 20,378 3,770 18.5%
BOONVILLE 18,987 5,658 29.8% 17,117 4,717 27.6%
MISSOURI TOTAL 38,912 9,299 23.9% 37,495 8,487 22.6%
IOWA
BETTENDORF 20,172 5,313 26.3% 22,758 6,921 30.4%
DAVENPORT 14,081 2,592 18.4% 15,654 3,563 22.8%
MARQUETTE 8,585 1,770 20.6% 9,129 1,746 19.1%
IOWA TOTAL 42,838 9,675 22.6% 47,541 12,230 25.7%
COLORADO
BLACK HAWK/
COLORADO
CENTRAL
STATION (10) 34,787 9,964 28.6% 38,347 10,802 28.2%
INTERNATIONAL
BLUE CHIP 2,398 (88) (3.7%) 2,094 (363) (17.3%)
OUR LUCAYA 4,058 (508) (12.5%) 6,408 286 4.5%
INTERNATIONAL
TOTAL 6,456 (596) (9.2%) 8,502 (77) (0.9%)
CORPORATE &
OTHER (11) 6,742 (13,824) N/M 5,146 (11,206) N/M
TOTAL $230,845 $39,284 17.0% $229,024 $50,915 22.2%
Note: The above excludes properties classified as discontinued
operations. Discontinued operations include the Company's Bossier City,
Louisiana and Vicksburg, Mississippi properties which were sold on
July 31, 2006.
Isle of Capri Casinos, Inc.
Comparative Financial Highlights by Casino Property
(Unaudited)
(In thousands)
Nine Months Ended
January 28, 2007 January 22, 2006 (Restated)
Adjusted Adjusted
Net Adjusted EBITDA Net Adjusted EBITDA
Revenues EBITDA (1) Revenues EBITDA (1)
(2) (1) Margin% (2) (1) Margin%
MISSISSIPPI
BILOXI $118,970 $40,142 33.7% $48,361 $13,935 28.8%
NATCHEZ 30,224 8,953 29.6% 32,060 10,389 32.4%
LULA 60,945 15,475 25.4% 60,711 13,810 22.7%
MISSISSIPPI
TOTAL 210,139 64,570 30.7% 141,132 38,134 27.0%
LOUISIANA
LAKE CHARLES 128,136 28,132 22.0% 112,582 25,449 22.6%
MISSOURI
KANSAS CITY 60,515 9,065 15.0% 63,728 11,247 17.6%
BOONVILLE 59,457 16,711 28.1% 53,480 15,319 28.6%
MISSOURI
TOTAL 119,972 25,776 21.5% 117,208 26,566 22.7%
IOWA
BETTENDORF 65,599 17,929 27.3% 71,321 21,654 30.4%
DAVENPORT 46,319 10,965 23.7% 50,199 12,282 24.5%
MARQUETTE 28,964 6,353 21.9% 31,806 8,128 25.6%
IOWA TOTAL 140,882 35,247 25.0% 153,326 42,064 27.4%
COLORADO
BLACK HAWK/
COLORADO
CENTRAL
STATION (10) 113,904 31,206 27.4% 117,335 35,766 30.5%
INTERNATIONAL
BLUE CHIP 6,289 (893) (14.2%) 6,007 (553) (9.2%)
OUR LUCAYA 11,579 (4,633) (40.0%) 17,935 1,290 7.2%
INTERNATIONAL
TOTAL 17,868 (5,526) (30.9%) 23,942 737 3.1%
CORPORATE &
OTHER (11) 17,139 (40,696) N/M 16,494 (38,017) N/M
TOTAL $748,040 $138,709 18.5% $682,019 $130,699 19.2%
Note: The above excludes properties classified as discontinued
operations. Discontinued operations include the Company's Bossier City,
Louisiana and Vicksburg, Mississippi properties which were sold on
July 31, 2006.
Isle of Capri Casinos, Inc.
Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Casino
Property
(Unaudited) (In thousands)
Three Months Ended January 28, 2007
Stock
Operating Depreciation Compensation
Income & Preopening Expense Adjusted
(Loss) Amortization (5) (4) EBITDA(1)
MISSISSIPPI
BILOXI $867 $4,744 $--- $--- $5,611
NATCHEZ 2,047 963 --- --- 3,010
LULA 3,069 2,617 --- --- 5,686
MISSISSIPPI TOTAL 5,983 8,324 --- --- 14,307
LOUISIANA
LAKE CHARLES 6,425 4,034 --- --- 10,459
MISSOURI
KANSAS CITY 2,103 1,538 --- --- 3,641
BOONVILLE 4,415 1,243 --- --- 5,658
MISSOURI TOTAL 6,518 2,781 --- --- 9,299
IOWA
BETTENDORF 3,337 1,976 --- --- 5,313
DAVENPORT 985 1,607 --- --- 2,592
MARQUETTE 1,068 702 --- --- 1,770
IOWA TOTAL 5,390 4,285 --- --- 9,675
COLORADO
BLACK HAWK/
COLORADO
CENTRAL
STATION (10) 5,988 3,976 --- --- 9,964
INTERNATIONAL
BLUE CHIP (254) 166 --- --- (88)
OUR LUCAYA (587) 79 --- --- (508)
INTERNATIONAL TOTAL (841) 245 --- --- (596)
CORPORATE &
OTHER (11) (19,674) 1,058 3,236 1,556 (13,824)
TOTAL $9,789 $24,703 $3,236 $1,556 $39,284
Note: The above excludes properties classified as discontinued
operations. Discontinued operations include the Company's Bossier
City, Louisiana and Vicksburg, Mississippi properties which were sold on
July 31, 2006.
Isle of Capri Casinos, Inc.
Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Casino
Property
(Unaudited) (In thousands)
Three Months Ended January 22, 2006 (Restated)
Hurricane
Operating Depreciation Related
Income & Charges, Preopening Adjusted
(Loss) Amortization net (5) EBITDA(1)
MISSISSIPPI
BILOXI $5,843 $2,042 $(31) $--- $7,854
NATCHEZ 3,744 849 4 --- 4,597
LULA 2,900 2,469 --- --- 5,369
MISSISSIPPI
TOTAL 12,487 5,360 (27) --- 17,820
LOUISIANA
LAKE CHARLES 5,456 4,303 3,100 --- 12,859
MISSOURI
KANSAS CITY 2,123 1,647 --- --- 3,770
BOONVILLE 3,620 1,097 --- --- 4,717
MISSOURI TOTAL 5,743 2,744 --- --- 8,487
IOWA
BETTENDORF 5,047 1,874 --- --- 6,921
DAVENPORT 1,794 1,769 --- --- 3,563
MARQUETTE 973 773 --- --- 1,746
IOWA TOTAL 7,814 4,416 --- --- 12,230
COLORADO
BLACK HAWK/
COLORADO
CENTRAL
STATION (10) 7,248 3,554 --- --- 10,802
INTERNATIONAL
BLUE CHIP (499) 136 --- --- (363)
OUR LUCAYA (118) 401 3 --- 286
INTERNATIONAL
TOTAL (617) 537 3 --- (77)
CORPORATE &
OTHER (11) (12,790) 1,044 500 40 (11,206)
TOTAL $25,341 $21,958 $3,576 $40 $50,915
Note: The above excludes properties classified as discontinued
operations. Discontinued operations include the Company's Bossier City,
Louisiana and Vicksburg, Mississippi properties which were sold on
July 31, 2006.
Isle of Capri Casinos, Inc.
Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Casino
Property
(Unaudited) (In thousands)
Nine Months Ended January 28, 2007 (Restated)
Stock
Compen-
Operating Depreci- Pre- sation Valuation Adjusted
Income ation & opening Expense Charge EBITDA
(Loss) Amortization (5) (4) (6) (1)
MISSISSIPPI
BILOXI $27,077 $13,065 $--- $--- $--- $40,142
NATCHEZ 6,085 2,868 --- --- --- 8,953
LULA 7,826 7,649 --- --- --- 15,475
MISSISSIPPI
TOTAL 40,988 23,582 --- --- --- 64,570
LOUISIANA
LAKE CHARLES 16,144 11,988 --- --- --- 28,132
MISSOURI
KANSAS CITY 3,917 5,148 --- --- --- 9,065
BOONVILLE 12,843 3,868 --- --- --- 16,711
MISSOURI
TOTAL 16,760 9,016 --- --- --- 25,776
IOWA
BETTENDORF 12,279 5,650 --- --- --- 17,929
DAVENPORT 6,260 4,705 --- --- --- 10,965
MARQUETTE 3,998 2,355 --- --- --- 6,353
IOWA TOTAL 22,537 12,710 --- --- --- 35,247
COLORADO
BLACK HAWK/
COLORADO
CENTRAL
STATION (10) 19,285 11,921 --- --- --- 31,206
INTERNATIONAL
BLUE CHIP (1,953) 395 --- --- 665 (893)
OUR LUCAYA (4,871) 238 --- --- --- (4,633)
INTERNATIONAL
TOTAL (6,824) 633 --- --- 665 (5,526)
CORPORATE &
OTHER (11) (53,643) 3,093 4,066 5,788 --- (40,696)
TOTAL $55,247 $72,943 $4,066 $5,788 $665 $138,709
Note: The above excludes properties classified as discontinued
operations. Discontinued operations include the Company's Bossier City,
Louisiana and Vicksburg, Mississippi properties which were sold on
July 31, 2006.
Isle of Capri Casinos, Inc.
Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Casino
Property
(Unaudited) (In thousands)
Nine Months Ended January 22, 2006 (Restated)
Hurricane
Operating Deprecia- Related Pre- Adjusted
Income tion & Charges, opening BITDA
(Loss) Amortization net (5) (1)
MISSISSIPPI
BILOXI $5,799 $8,167 $(31) $--- $13,935
NATCHEZ 7,361 3,024 4 --- 10,389
LULA 6,839 6,971 --- --- 13,810
MISSISSIPPI
TOTAL 19,999 18,162 (27) --- 38,134
LOUISIANA
LAKE CHARLES 9,274 11,875 4,300 --- 25,449
MISSOURI
KANSAS CITY 6,030 5,217 --- --- 11,247
BOONVILLE 12,010 3,309 --- --- 15,319
MISSOURI
TOTAL 18,040 8,526 --- --- 26,566
IOWA
BETTENDORF 16,225 5,429 --- --- 21,654
DAVENPORT 6,907 5,375 --- --- 12,282
MARQUETTE 5,893 2,235 --- --- 8,128
IOWA TOTAL 29,025 13,039 --- --- 42,064
COLORADO
BLACK HAWK/
COLORADO
CENTRAL
STATION (10) 25,893 9,873 --- --- 35,766
INTERNATIONAL
BLUE CHIP (966) 413 --- --- (553)
OUR LUCAYA 29 1,258 3 --- 1,290
INTERNATIONAL
TOTAL (937) 1,671 3 --- 737
CORPORATE &
OTHER (11) (41,261) 2,520 500 224 (38,017)
TOTAL $60,033 $65,666 $4,776 $224 $130,699
Note: The above excludes properties classified as discontinued
operations. Discontinued operations include the Company's Bossier City,
Louisiana and Vicksburg, Mississippi properties which were sold on
July 31, 2006.
1. EBITDA is "earnings before interest, income taxes, depreciation and
amortization." Isle of Capri calculates Adjusted EBITDA at its
properties by adding depreciation and amortization, preopening
expense, management fees, other charges and non-cash items to
Operating Income (Loss). Adjusted EBITDA is presented solely as a
supplemental disclosure because management believes that it is 1) a
widely used measure of operating performance in the gaming industry
and 2) a principal basis of valuing gaming companies. Management uses
property level Adjusted EBITDA as the primary measure of the Company's
operating properties' performance, including the evaluation of
operating personnel. Adjusted EBITDA should not be construed as an
alternative to operating income as an indicator of the Company's
operating performance, 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 U.S. generally accepted
accounting principles (GAAP). The Company has significant uses of cash
flows, including capital expenditures, interest payments, taxes and
debt principal repayments, which are not reflected in Adjusted EBITDA.
Also, other gaming companies that report Adjusted EBITDA information
may calculate Adjusted EBITDA in a different manner than the Company.
Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by
net revenues. Fiscal 2007 and 2006 results have been reclassified to
reflect the Colorado Grande-Cripple Creek, Isle-Bossier City and
Isle-Vicksburg as discontinued operations. Reconciliations of
operating income to Adjusted EBITDA and operating income as a
percentage of net revenues are included in the financial schedules
accompanying this release. A reconciliation of Adjusted EBITDA with
the Company's net income is shown below.
Three Months Ended Nine Months Ended
January January January January
28, 22, 28, 22,
2007 2006 2007 2006
(Restated) (Restated) (Restated)
(In thousands)
Adjusted EBITDA $39,284 $50,915 $138,709 $130,699
(Add)/deduct:
Depreciation and
amortization 24,703 21,958 72,943 65,666
Stock compensation
expense (4) 1,556 --- 5,788 ---
Preopening (5) 3,236 40 4,066 224
Valuation Charge (6) --- --- 665 ---
Hurricane related
charges, net (7) --- 3,576 --- 4,776
Interest expense, net 20,668 18,663 60,365 53,594
Loss on early
extinguishment of debt --- 2,110 --- 2,110
Minority interest (8) 598 439 2,216 4,387
Income tax expense
(benefit) (9) (1,770) 1,907 347 575
Income from discontinued
operations, including gain
on sale, net of income
taxes (12) (216) (2,010) (15,148) (3,632)
Net income (loss) $(9,491) $4,232 $7,467 $2,999
2. Net revenues are presented net of complimentaries, slot points expense
and cash coupon redemptions. Fiscal 2007 and 2006 results have been
reclassified to reflect Colorado Grande-Cripple Creek, Isle-Bossier
City and Isle-Vicksburg as discontinued operations.
3. New development expenses include incremental costs incurred pursuing
new opportunities within the industry. Such costs include legal and
other professional fees, application fees and personnel and travel
costs. These expenses are detailed in the table below.
Three Months Ended Nine Months Ended
January January January January
28, 22, 28, 22,
2007 2006 2007 2006
(Restated) (Restated) (Restated)
(In thousands)
Domestic(a) $3,503 $1,847 $10,298 $2,708
International(b) 1,420 1,672 4,220 8,674
$4,923 $3,519 $14,518 $11,382
(a) Relates primarily to the Company's development efforts in
Pittsburgh, Pennsylvania. The Company was notified in December
2006 that it was not awarded this license.
(b) Includes development expenses related to development the
Company's development agreement with Eighth Wonder related to
Singapore. The Company was notified in December 2006 that it
was not awarded this license.
4. Included in corporate and other expenses for the three months and the
nine months ended January 28, 2007 was $1.6 and $5.8 million,
respectively, of compensation cost related to qualified and
non-qualified stock options recognized related to the adoption of SFAS
123(R) on May 1, 2006. Also included in the three months and nine
months ended January 28, 2007, was $0.9 million and $4.6 million,
respectively, related to the relocation of the Company's corporate
headquarters to Saint Louis, Missouri. The nine month increase was
offset when comparing to prior year due to a decrease in legal fees of
$0.5 million and a decrease in marketing and administrative expenses
of $5.1 year-over-year.
5. Pre-opening expenses for the three months and the nine months ended
January 28, 2007 are related to our development at Pompano Beach,
Florida, construction of the hotel and casino in Waterloo, Iowa, and
our development project at RICOH(TM) Arena in Coventry, England.
Pre-opening expenses for the three months and the nine months ended
January 22, 2006 relate to the development at Pompano Beach, Florida
and construction of the hotel and casino in Waterloo, Iowa.
6. Valuation charges for the nine months ended January 28, 2007 are
related to the impairment of land and buildings at the Company's Blue
Chip operations and for the write-off of costs related to a potential
new casino site also at the Company's Blue Chip operations.
7. Hurricane related charges, net, include impairment charges for assets
damaged or destroyed by hurricanes, incremental costs incurred related
to hurricanes and operating costs related to periods affected by
hurricanes. This item also includes anticipated recoveries expected
from our insurance carriers related to property damage, incremental
costs and operating expenses. When the Company and its insurance
carriers agree on the final amount of the insurance proceeds, the
Company will also record any related gain in this account. In
addition, any recoveries of lost profit will be recognized when agreed
to with the insurance carrier and will be reflected in the related
properties revenue and Adjusted EBITDA(1). Accordingly, during the
quarter ended January 28, 2007, the Company recorded $2.2 million of
income at its Lake Charles facility related to lost profits from
Hurricane Rita and $0.6 million at its Pompano facility related to
Hurricane Wilma.
8. Minority interest represents unrelated third parties' interest in
Isle-Black Hawk's income before income taxes and Colorado Central
Station-Black Hawk's net income.
9. The Company's effective tax rate from continuing operations for the
quarter ended January 28, 2007 was a benefit of 15.4% compared to an
expense of 46.2% for the quarter ended January 22, 2006, which, in
each case, includes an unrelated party's portion of Colorado Central
Station-Black Hawk's income taxes. The Company's effective tax rate
from combining continuing and discontinued operations for the quarter
ended January 28, 2007 was a benefit of 15.7% compared to an expense
of 47.2% for the quarter ended January 22, 2006. For each comparison,
the change in effective rate over the comparable prior fiscal period
is primarily attributable to the effect of certain expenses related to
the adoption of SFAS 123(R) and other permanent items on full-year
projected pre-tax income.
10. As management fees are eliminated in consolidation, Adjusted EBITDA(1)
for the combined Black Hawk/Colorado Central Station property does not
include management fees. Fiscal 2006 results have been reclassified to
reflect Colorado Grande-Cripple Creek as a discontinued operation. The
following table shows management fees and Adjusted EBITDA(1) inclusive
of management fees for the three and nine months ended January 28,
2007 and January 22, 2006:
Three Months Ended Nine Months Ended
January 28, January 22, January 28, January 22,
2007 2006 2007 2006
(Restated) (Restated) (Restated)
(In thousands)
Management Fees
Black Hawk/Colorado
Central Station $1,585 $1,764 $5,118 $5,445
Adjusted EBITDA with
Management Fees
Black Hawk/Colorado
Central Station $8,379 $9,038 $26,088 $30,321
11. For the three months ended January 28, 2007, corporate and other
includes net revenues of $6.6 million and Adjusted EBITDA(1) of
($1.5) million related to operations at the Pompano Park property
compared to net revenues of $5.1 million and Adjusted EBITDA(1) of
($0.8) million for the same prior year period. For the nine months
ended January 28, 2007, corporate and other includes net revenues of
$16.9 million and Adjusted EBITDA(1) of ($4.7) million related to
operations at the Pompano Park property compared to net revenues of
$15.8 million and Adjusted EBITDA(1) of ($2.2) million for the nine
months ended January 22, 2006.
12. On July 31, 2006, the Company completed the sale of Isle-Bossier City
and Isle-Vicksburg to Legends Gaming, LLC. The Company received
approximately $240 million in proceeds from the sale and has
recognized a pre-tax gain of $22.9 million. Taxes on the gain were
$11.5 million with a net gain on sale of discontinued operations of
$11.3 million. Adjustments related to the sale totaling $0.2 million,
net of taxes, were recorded in the third quarter ended January 28,
2007.
Isle of Capri Casinos, Inc., founded in 1992, is dedicated to providing
its customers with an exceptional gaming and entertainment experience.
Welcoming guests at each of its 15 casino properties are team members
committed to superior service and a fun atmosphere. The Company owns and
operates casinos in Biloxi, Lula and Natchez, Mississippi; Lake Charles,
Louisiana; Bettendorf, Davenport and Marquette, Iowa; Kansas City and
Boonville, Missouri and a casino and harness track in Pompano Beach,
Florida. The Company also operates and has a 57 percent ownership interest
in two casinos in Black Hawk, Colorado. Isle of Capri Casinos'
international gaming interests include a casino that it operates in
Freeport, Grand Bahama and a two-thirds ownership interest in casinos in
Dudley and Wolverhampton.
The Company is also developing a new casino and hotel in Waterloo,
Iowa, as well as a casino in Coventry, England. The Company has also signed
an agreement to acquire a casino in Caruthersville, Missouri. There are
four Isle of Capri Casinos brands including the isle, Isle of Capri,
Colorado Central Station and Rhythm City, providing over 12,000 slot
machines, 500 table games and 2600 hotel rooms for our guests' enjoyment.
This press release may be deemed to contain forward-looking statements,
which are subject to change. These forward-looking statements may be
significantly impacted, either positively or negatively by various factors,
including without limitation, licensing, and other regulatory approvals,
financing sources, development and construction activities, costs and
delays, weather, permits, competition and business conditions in the gaming
industry. The forward-looking statements are subject to numerous risks and
uncertainties that could cause actual results to differ materially from
those expressed in or implied by the statements herein.
CONTACTS:
Isle of Capri Casinos, Inc.,
Allan B. Solomon, Executive Vice President-561.995.6660
Donn Mitchell, Chief Financial Officer-314.813.9319
Jill Haynes, Director of Corporate Communication-314.813.9368
NOTE: Other Isle of Capri Casinos, Inc. press releases and a corporate
profile are available at http://www.prnewswire.com. Isle of Capri Casinos,
Inc.'s home page is http://www.islecorp.com
SOURCE Isle of Capri Casinos, Inc.
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Related links:
http://www.islecorp.com
CONTACT:
Allan B. Solomon, Executive Vice President,
+1-561-995-6660, or Donn Mitchell, Chief Financial Officer,
+1-314-813-9319, or Jill Haynes, Director of Corporate
Communication, +1-314-813-9368, all of Isle of Capri Casinos,
Inc.
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