Company Staying Focused on Long Term Opportunities; Near Term Challenges
ST. LOUIS, Nov. 30 /PRNewswire-FirstCall/ -- Isle of Capri Casinos,
Inc. (Nasdaq: ISLE) today reported financial results for the second quarter
ended October 29, 2006. The Company reported a 15.8% increase in net
revenues from continuing operations to $243.2 million for the second
quarter compared to net revenues from continuing operations of $210.0
million for the same quarter in fiscal 2006. Net loss from continuing
operations decreased to $4.2 million or $0.14 per diluted common share,
during the second quarter of fiscal 2007 compared to $5.5 million or $0.18
per diluted common share for the second quarter of fiscal 2006. Adjusted
EBITDA(1) from continuing operations for the second quarter of fiscal 2007
increased 26.2% to $41.0 million compared to Adjusted EBITDA(1) from
continuing operations of $32.5 million for the same quarter in fiscal 2006.
Operating results for fiscal 2006 were negatively impacted by Hurricanes
Katrina and Rita. During the quarter ended October 29, 2006, the Company
recognized a pretax gain of $13.8 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 $0.25 for the three months ended October 29,2006.
For the six months ended October 29, 2006, the Company reported a 14.3%
increase in net revenues from continuing operations to $517.2 million,
compared to $452.5 million for the comparable period in the prior year. For
the first six months of fiscal 2007, the Company reported an increase in
income from continuing operations to $1.1 million, or $0.03 per diluted
common share. Net loss from continuing operations for the same period in
fiscal 2006 was $2.2 million, or $0.07 per diluted common share. Adjusted
EBITDA(1) from continuing operations in the six-month period reported a
25.1% increase to $97.9 million, compared to $78.2 million for the
comparable six-month period in fiscal 2006. During the six months ended
October 29, 2006, the Company recognized a pretax gain of $13.8 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 share was $0.25 for the six months
ended October 29, 2006 with the remaining $0.12 coming from the
discontinued operations.
For the three and six months ended October 29, 2006 and October 23,
2005, Isle-Bossier City, Isle-Vicksburg and Colorado Grande-Cripple Creek
are reflected as discontinued operations. 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.
Proceeds from the sale were approximately $240.0 million.
"Fiscal 2007 continues to be a transitional year as we concentrate on
new development projects, future growth opportunities and long-term
strategies. Our portfolio will soon increase by two as we move closer to
opening gaming properties in Pompano Beach, Fla. and Waterloo, Iowa
bringing the Isle of Capri experience to new markets," Bernard Goldstein,
chairman and chief executive officer, said.
Highlights and Updates
-- The Company topped out its slot machine facility at Pompano Park
Harness Track in Florida on October 4 and anticipates opening the
facility in early 2007 with 1,500 slot machines, a poker room and four
restaurants including Bragozzo, an Italian bistro and wine bar created
by accomplished chef, Luke Palladino; Farraddays', it's signature
steakhouse; a tropical-themed Isle Buffet and a traditional New York
Style delicatessen.
-- The Company's new casino property in Waterloo, Iowa was topped out
on November 9. The project will include a 35,000 square foot single
level casino with 1,300 gaming positions, three restaurants, a 200-room
hotel and 1,000 parking spaces. The project scope has recently been
expanded and will also include a night club, a full service spa and a
resort pool. The project cost has been increased to $175 million and
the Company expects to open the casino in late Spring 2007.
-- The $45 million, 250-room Isle of Capri Hotel in Bettendorf, Iowa is on
schedule and is expected to open in the Summer of 2007.
-- The Company continues to pursue the one stand-alone slot machine gaming
license in Pittsburgh, Pennsylvania. The Company has received master
plan approval from the City Planning Commission for its proposed
project, and participated in a suitability hearing before the
Pennsylvania Gaming Control Board (PGCB). The proposed project, one of
three competing proposals before the PGCB, includes a $450 million
casino, a $290 million multi-purpose arena, and more than $350 million
in residential, office and retail development by Nationwide Realty
Investors on the site of the existing Mellon Arena. The Company
expects a licensure decision by late-December.
-- The Company announced a revised agreement in connection with resort
developer Eighth Wonder's proposal to build an integrated resort
complex on Sentosa Island in Singapore. The proposal is one of three
bidders for the project with a licensure decision expected in early-
December. The revised agreement includes equity ownership in the resort
complex by Melco PBL Entertainment, Eighth Wonder and Isle of Capri.
If the project is selected, Isle of Capri would own a 13.8 percent
interest for an investment of $65 million. Additionally, Isle of Capri
will receive a payment equal to 2% of casino gross revenues for a
15-year period.
-- The Company repurchased 255,721 shares of its common stock during the
second quarter ended October 29, 2006, at an average price of $21.21
per share.
"Our team is closely monitoring results and managing costs during this
transitional year. We are facing some near-term challenges due to increased
competition and softness in certain markets that require cost cutting in
operational expenses and broadened marketing strategies. As fiscal 2007
moves forward we will continue to face these challenges head-on, elevate
our brand offerings and position the Company for future growth and
stability," said Tim Hinkley, president and chief operating officer.
Operational Review of the Company's Continuing Operations for the
Second Quarter of Fiscal 2007 Compared to the Second Quarter of Fiscal 2006
Operating results for the second quarter of fiscal 2007 include some
significant additional expenses as compared to the second quarter of fiscal
2006. These include an increase of approximately $4.5 million in property
insurance expense over the prior year's second quarter, for a six-month
total increase of $9.0 million over the prior year, which was allocated
across all operating properties. This increase is expected to continue
through fiscal 2007. The Company also recorded approximately $1.6 million
of stock compensation expense in the second 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 Company
also recorded approximately $1.7 million of relocation costs related to
moving its corporate headquarters to Saint Louis, Missouri. Further office
relocation costs will be recorded in the third fiscal quarter of 2007 and
will end with the completion of the office relocation. The stock
compensation expense and office relocation costs are reflected in the
Corporate and other expense line item.
In Mississippi, the Company's three continuing operations contributed
27.6% of net revenues. Isle-Biloxi's net revenues and adjusted EBITDA(1)
were up from the prior year period principally due to prior year closure of
the property caused by Hurricane Katrina. Adjusted EBITDA(1) at the
property was also up significantly over the same quarter in fiscal 2006 due
to reduced competition in the market. Isle-Natchez experienced decreases in
both net revenues and Adjusted EBITDA(1) primarily resulting from the
reopening of the casinos on the Gulf Coast. Isle-Lula's net revenues
increased slightly. Adjusted EBITDA(1) at the property increased moderately
due to more efficient management of expenses.
In Louisiana, Isle-Lake Charles contributed 16.4% of net revenues.
Isle- Lake Charles experienced an increase in net revenues and Adjusted
EBITDA(1) as compared to the prior year period, primarily due to the
closure of a competitor in the market and the closure of Isle-Lake Charles
between September 22, 2005 and October 8, 2005 due to Hurricane Rita.
In Missouri, the Company's two properties contributed 16.5% of net
revenues. Isle-Kansas City's net revenues were down due to a decreased
gaming patron count attributable to the completion of other expansion
projects in the market and increased marketing intensity by competitors.
Isle-Boonville's net revenues and Adjusted EBITDA(1) increased due to an
increase in marketing efforts and the opening of the new hotel.
In Iowa, the Company's three casinos contributed 19.5% 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 increased
competition in the key feeder markets.
In Colorado, the Company's two Black Hawk casino operations contributed
16.2% of net revenues. The Black Hawk properties experienced a decrease in
net revenues as compared to the prior year period primarily due to the
opening of competitors' upgraded facilities. Adjusted EBITDA(1) also
decreased primarily due to increased operating costs associated with our
expanded facility and marketing expenses associated with the opening of
competitors' expansion projects.
New development expenses increased compared to the second quarter of
fiscal 2006 primarily due to an increase in expenses related to the pursuit
of the gaming license in Pittsburgh, Pennsylvania and costs incurred during
the second fiscal quarter of 2007 relating to pursuit of the casino license
in Singapore.
The decrease in corporate expenses is primarily due to prior year costs
and reserves related to litigation matters and contributions the Company
made in the prior year to Isle team member relief funds from Hurricane
Katrina.
Preopening cost increased compared to the second quarter of fiscal 2006
primarily due to costs related to our casino developments in Coventry,
England, Pompano Beach, Florida and Waterloo, Iowa.
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.
Isle of Capri Casinos, Inc.
Consolidated Statements of Income*
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
October October October October
29, 23, 29, 23,
2006 2005 2006 2005
Revenues:
Casino $249,237 $215,472 $526,857 $459,757
Hotel, pari-mutuel, food,
beverage & other 49,307 39,627 103,731 87,674
Gross revenues 298,544 255,099 630,588 547,431
Less promotional allowances 55,317 45,060 113,393 94,896
Net revenues (2) 243,227 210,039 517,195 452,535
Operating and other expenses:
Properties 190,863 163,077 394,141 347,616
New development (3) 4,563 1,345 9,521 8,259
Corporate and other (4) 8,418 13,127 19,157 18,418
Preopening (5) 2,786 151 3,035 184
Hurricane related charges,
net (6) - 1,200 - 1,200
Depreciation and amortization 23,981 21,648 47,483 43,248
Total operating and other expenses 230,611 200,548 473,337 418,925
Operating income 12,616 9,491 43,858 33,610
Interest expense, net (19,172) (17,396) (38,280) (33,812)
Minority interest (7) (547) (1,892) (1,618) (3,948)
Income from continuing operations
before income taxes (7,103) (9,797) 3,960 (4,150)
Income tax expense (benefit) (8) (2,855) (4,266) 2,893 (1,914)
Income (loss) from continuing
operations (4,248) (5,531) 1,067 (2,236)
Gain on sale of discontinued
operations, net of taxes (11) 7,730 - 7,730 -
Income (loss) from discontinued
operations (including minority
interest), net of income taxes (97) 1,312 3,828 2,001
Net income (loss) $3,385 $(4,219) $12,625 $(235)
Earnings per common share - basic:
Income (loss) from continuing
operations $(0.14) $(0.18) $0.04 $(0.07)
Income from discontinued
operations (including gain on
sale of assets), net of
income taxes 0.25 0.04 0.38 0.07
Net income (loss) $0.11 $(0.14) $0.42 $(0.01)
Earnings per common share -
diluted:
Income (loss) from continuing
operations $(0.14) $(0.18) $0.03 $(0.07)
Income from discontinued
operations (including gain on
sale of assets), net of
income taxes 0.25 0.04 0.37 0.07
Net income (loss) $0.11 $(0.14) $0.40 $(0.01)
Weighted average basic common
shares 30,346 30,097 30,384 30,105
Weighted average diluted common
shares 31,053 30,097 31,228 30,105
Selected Consolidated Balance Sheet Accounts*
(In Thousands)
October 29, April 30,
2006 2006
Cash and cash equivalents $124,456 $121,193
Property and equipment, net 1,049,459 938,428
Debt 1,222,018 1,221,280
Stockholders' equity 296,676 282,688
*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. The
Company had restricted cash of $69 million as of October 29, 2006 related
to sale proceeds held in escrow for a possible tax free exchange
transaction.
Isle of Capri Casinos, Inc.
Comparative Financial Highlights by Casino Property
(Unaudited)
(In thousands)
Three Months Ended
October 29, October 23,
2006 2005
Adjusted Adjusted
Net Adjusted EBITDA Net Adjusted EBITDA
Revenues EBITDA (1) Revenues EBITDA (1)
(2) (1) Margin % (2) (1) Margin %
MISSISSIPPI
BILOXI $37,612 $11,970 31.8% $10,453 $2,234 21.4%
NATCHEZ 9,639 2,667 27.7% 11,077 3,575 32.3%
LULA 19,912 4,059 20.4% 19,083 3,533 18.5%
MISSISSIPPI
TOTAL 67,163 18,696 27.8% 40,613 9,342 23.0%
LOUISIANA
LAKE CHARLES 39,952 7,552 18.9% 27,844 4,629 16.6%
MISSOURI
KANSAS CITY 19,880 2,717 13.7% 21,361 3,602 16.9%
BOONVILLE 20,349 5,690 28.0% 17,993 5,255 29.2%
MISSOURI TOTAL 40,229 8,407 20.9% 39,354 8,857 22.5%
IOWA
BETTENDORF 22,049 5,898 26.7% 23,601 6,647 28.2%
DAVENPORT 15,303 3,248 21.2% 16,842 3,866 23.0%
MARQUETTE 10,178 2,202 21.6% 11,197 2,823 25.2%
IOWA TOTAL 47,530 11,348 23.9% 51,640 13,336 25.8%
COLORADO
BLACK HAWK/
COLORADO
CENTRAL
STATION (9) 39,502 10,087 25.5% 39,633 12,614 31.8%
INTERNATIONAL
BLUE CHIP 1,712 (592) (34.6%) 1,799 (564) (31.4%)
OUR LUCAYA 2,591 (1,280) (49.4%) 4,572 (309) (6.8%)
INTERNATIONAL
TOTAL 4,303 (1,872) (43.5%) 6,371 (873) (13.7%)
CORPORATE &
OTHER (10) 4,548 (13,268) N/M 4,584 (15,415) N/M
TOTAL $243,227 $40,950 16.8% $210,039 $32,490 15.5%
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)
Six Months Ended
October 29, October 23,
2006 2005
Adjusted Adjusted
Net Adjusted EBITDA Net Adjusted EBITDA
Revenues EBITDA (1) Revenues EBITDA (1)
(2) (1) Margin % (2) (1) Margin %
MISSISSIPPI
BILOXI $90,466 $34,530 38.2% $33,807 $6,081 18.0%
NATCHEZ 20,796 5,942 28.6% 20,115 5,792 28.8%
LULA 41,283 9,789 23.7% 40,370 8,440 20.9%
MISSISSIPPI
TOTAL 152,545 50,261 32.9% 94,292 20,313 21.5%
LOUISIANA
LAKE CHARLES 84,619 17,589 20.8% 67,428 12,590 18.7%
MISSOURI
KANSAS CITY 40,590 5,424 13.4% 43,350 7,479 17.3%
BOONVILLE 40,470 11,053 27.3% 36,363 10,599 29.1%
MISSOURI TOTAL 81,060 16,477 20.3% 79,713 18,078 22.7%
IOWA
BETTENDORF 45,427 12,615 27.8% 48,563 14,733 30.3%
DAVENPORT 32,238 8,373 26.0% 34,545 8,718 25.2%
MARQUETTE 20,379 4,526 22.2% 22,677 6,383 28.1%
IOWA TOTAL 98,044 25,514 26.0% 105,785 29,834 28.2%
COLORADO
BLACK HAWK/
COLORADO
CENTRAL
STATION (9) 79,117 21,242 26.8% 78,989 24,965 31.6%
INTERNATIONAL
BLUE CHIP 3,891 (802) (20.6%) 3,913 (800) (20.4%)
OUR LUCAYA 7,521 (4,124) (54.8%) 11,527 1,003 8.7%
INTERNATIONAL
TOTAL 11,412 (4,926) (43.2%) 15,440 203 1.3%
CORPORATE &
OTHER (10) 10,398 (28,264) N/M 10,888 (27,741) N/M
TOTAL $517,195 $97,893 18.9% $452,535 $78,242 17.3%
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 October 29, 2006
Stock
Deprecia- Compensa-
Operating tion & Pre- tion Adjusted
Income Amorti- opening Expense EBITDA
(Loss) zation (5) (4) (1)
MISSISSIPPI
BILOXI $7,789 $4,181 $- $- $11,970
NATCHEZ 1,687 980 - - 2,667
LULA 1,504 2,555 - - 4,059
MISSISSIPPI
TOTAL 10,980 7,716 - - 18,696
LOUISIANA
LAKE
CHARLES 3,554 3,998 - - 7,552
MISSOURI
KANSAS CITY 845 1,872 - - 2,717
BOONVILLE 4,344 1,346 - - 5,690
MISSOURI TOTAL 5,189 3,218 - - 8,407
IOWA
BETTENDORF 4,024 1,874 - - 5,898
DAVENPORT 1,680 1,568 - - 3,248
MARQUETTE 1,362 840 - - 2,202
IOWA TOTAL 7,066 4,282 - - 11,348
COLORADO
BLACK HAWK/
COLORADO
CENTRAL
STATION (9) 6,062 4,025 - - 10,087
INTERNATIONAL
BLUE CHIP (712) 120 - - (592)
OUR LUCAYA (1,359) 79 - - (1,280)
INTERNATIONAL
TOTAL (2,071) 199 - - (1,872)
CORPORATE &
OTHER(10) (18,164) 543 2,786 1,567 (13,268)
TOTAL $12,616 $23,981 $2,786 $1,567 $40,950
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 October 23, 2005
Deprecia- Hurricane
Operating tion & Related Pre- Adjusted
Income Amorti- Charges, opening EBITDA
(Loss) zation net (5) (1)
MISSISSIPPI
BILOXI $(792) $3,026 $- $- $2,234
NATCHEZ 2,509 1,066 - - 3,575
LULA 1,239 2,294 - - 3,533
MISSISSIPPI
TOTAL 2,956 6,386 - - 9,342
LOUISIANA
LAKE CHARLES (427) 3,856 1,200 - 4,629
MISSOURI
KANSAS CITY 1,849 1,753 - - 3,602
BOONVILLE 4,191 1,064 - - 5,255
MISSOURI TOTAL 6,040 2,817 - - 8,857
IOWA
BETTENDORF 4,834 1,813 - - 6,647
DAVENPORT 2,092 1,774 - - 3,866
MARQUETTE 2,089 734 - - 2,823
IOWA TOTAL 9,015 4,321 - - 13,336
COLORADO
BLACK HAWK/
COLORADO
CENTRAL
STATION (9) 9,352 3,262 - - 12,614
INTERNATIONAL
BLUE CHIP (669) 105 - - (564)
OUR LUCAYA (717) 408 - - (309)
INTERNATIONAL
TOTAL (1,386) 513 - - (873)
CORPORATE &
OTHER (10) (16,059) 493 - 151 (15,415)
TOTAL $9,491 $21,648 $1,200 $151 $32,490
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)
Six Months Ended October 29, 2006
Stock
Deprecia- Compensa-
Operating tion & Pre- tion Adjusted
Income Amorti- opening Expense EBITDA
(Loss) zation (5) (4) (1)
MISSISSIPPI
BILOXI $26,086 $8,444 $- $- $34,530
NATCHEZ 4,038 1,904 - - 5,942
LULA 4,757 5,032 - - 9,789
MISSISSIPPI
TOTAL 34,881 15,380 - - 50,261
LOUISIANA
LAKE CHARLES 9,635 7,954 - - 17,589
MISSOURI
KANSAS CITY 1,814 3,610 - - 5,424
BOONVILLE 8,428 2,625 - - 11,053
MISSOURI TOTAL 10,242 6,235 - - 16,477
IOWA
BETTENDORF 8,942 3,673 - - 12,615
DAVENPORT 5,275 3,098 - - 8,373
MARQUETTE 2,873 1,653 - - 4,526
IOWA TOTAL 17,090 8,424 - - 25,514
COLORADO
BLACK HAWK/
COLORADO
CENTRAL
STATION (9) 13,297 7,945 - - 21,242
INTERNATIONAL
BLUE CHIP (1,030) 228 - - (802)
OUR LUCAYA (4,283) 159 - - (4,124)
INTERNATIONAL
TOTAL (5,313) 387 - - (4,926)
CORPORATE &
OTHER (10) (35,974) 1,158 3,035 3,517 (28,264)
TOTAL $43,858 $47,483 $3,035 $3,517 $97,893
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)
Six Months Ended October 23, 2005
Deprecia- Hurricane
Operating tion & Related Pre- Adjusted
Income Amorti- Charges, opening EBITDA
(Loss) zation net (5) (1)
MISSISSIPPI
BILOXI $(97) $6,178 $- $- $6,081
NATCHEZ 3,617 2,175 - - 5,792
LULA 3,939 4,501 - - 8,440
MISSISSIPPI
TOTAL 7,459 12,854 - - 20,313
LOUISIANA
LAKE CHARLES 3,818 7,572 1,200 - 12,590
MISSOURI
KANSAS CITY 3,908 3,571 - - 7,479
BOONVILLE 8,387 2,212 - - 10,599
MISSOURI TOTAL 12,295 5,783 - - 18,078
IOWA
BETTENDORF 11,177 3,556 - - 14,733
DAVENPORT 5,112 3,606 - - 8,718
MARQUETTE 4,921 1,462 - - 6,383
IOWA TOTAL 21,210 8,624 - - 29,834
COLORADO
BLACK HAWK/
COLORADO
CENTRAL
STATION (9) 18,646 6,319 - - 24,965
INTERNATIONAL
BLUE CHIP (1,011) 211 - - (800)
OUR LUCAYA 146 857 - - 1,003
INTERNATIONAL
TOTAL (865) 1,068 - - 203
CORPORATE &
OTHER (10) (28,953) 1,028 - 184 (27,741)
TOTAL $33,610 $43,248 $1,200 $184 $78,242
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 Six Months Ended
October 29, October 23, October 29, October 23,
2006 2005 2006 2005
(In thousands)
Adjusted EBITDA $40,950 $32,490 $97,893 $78,242
(Add)/deduct:
Depreciation and
amortization 23,981 21,648 47,483 43,248
Stock compensation
expense (4) 1,567 - 3,517 -
Preopening (5) 2,786 151 3,035 184
Hurricane related
charges, net (6) - 1,200 - 1,200
Interest expense, net 19,172 17,396 38,280 33,812
Minority interest (7) 547 1,892 1,618 3,948
Income tax expense
(benefit) (8) (2,855) (4,266) 2,893 (1,914)
Gain on sale of
discontinued
operations, net
of tax (7,730) - (7,730) -
Loss (income) from
discontinued
operations, net of
income taxes 97 (1,312) (3,828) (2,001)
Net income (loss) $3,385 $(4,219) $12,625 $(235)
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 Six Months Ended
October 29, October 23, October 29, October 23,
2006 2005 2006 2005
Domestic(a) $3,002 $210 $6,756 $5,086
International(b) 1,561 1,135 2,765 3,173
$4,563 $1,345 $9,521 $8,259
(a) Relates primarily to the Company's development efforts in Pittsburgh,
Pennsylvania
(b) Includes development expenses related to development the Company's
development agreement with Eighth Wonder related to Singapore
4. Included in Corporate and other expenses for the three months and the
six months ended October 29, 2006 was $1.6 and $3.5 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 Corporate and other expenses
for the three months and the six months ended October 23, 2005 was an
increase in legal reserves of $6.1 million.
5. Preopening expenses for the three months and the six months ended
October 29, 2006 are related to construction of the hotel and casino
in Waterloo, Iowa, our development at Pompano Beach, Florida and our
development project at Ricoh Arena in Coventry, England. Preopening
expenses for the three months and the six months ended October 23,
2005 relate to the construction of the hotel and casino in Waterloo,
Iowa and development at Pompano Beach, Florida.
6. 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)
7. 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.
8. The Company's effective tax rate from continuing operations for the
quarter ended October 29, 2006 was a benefit of 39.9% compared to a
benefit of 43.5% for the quarter ended October 23, 2005, which, in
each case, includes an unrelated party's portion of Colorado Central
Station-Black Hawk's income taxes. The quarter ended October 29, 2006
does not include the income tax expense related to gain from the sale
of the Company's Vicksburg and Bossier City properties in our
continuing operations. That gain is included in discontinued
operations. The Company's effective tax rate from combining
continuing and discontinued operations for the quarter ended October
29, 2006 was 48.2% compared to 42.6% for the quarter ended October 23,
2005. 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.
9. 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 six months ended
October 29, 2006 and October 23, 2005:
Three Months Ended Six Months Ended
October 29, October 23, October 29, October 23,
2006 2005 2006 2005
(In thousands)
Management Fees
Black Hawk/Colorado
Central Station $1,788 $1,842 $3,533 $3,681
Adjusted EBITDA with
Management Fees
Black Hawk/Colorado
Central Station $8,299 $10,772 $17,709 $21,284
10. For the three months ended October 29, 2006, corporate and other
includes net revenues of $4.4 million and Adjusted EBITDA(1) of ($2.0)
million related to operations at the Pompano Park property. For the
three months ended October 23, 2005, corporate and other includes net
revenues of $4.5 million and Adjusted EBITDA(1) of ($1.1) million
related to operations at the Pompano Park property. For the six
months ended October 29, 2006, corporate and other includes net
revenues of $10.3 million and Adjusted EBITDA(1) of ($3.2) million
related to operations at the Pompano Park property. For the six
months ended October 23, 2005, corporate and other includes net
revenues of $10.7 million and Adjusted EBITDA(1) of ($1.4) million
related to operations at the Pompano Park property.
11. 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 $13.8 million. Taxes on the gain were
$6.0 with a net gain on sale of discontinued operations of $7.7
million.
Isle of Capri Casinos, Inc., a leading developer and owner of gaming
and entertainment facilities, operates 13 casinos in 11 locations. The
company owns and operates riverboat and dockside casinos in Biloxi, Lula
and Natchez, Mississippi; Lake Charles (2 riverboats), Louisiana;
Bettendorf, Davenport and Marquette, Iowa; and Kansas City and Boonville,
Missouri. The company also owns a 57 percent interest in and operates two
land-based casinos in Black Hawk, Colorado. Isle of Capri's 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, England. The company also owns and operates Pompano Park
Harness Racing Track in Pompano Beach, Florida, where it is developing a
gaming facility.
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 .
This press release contains forward-looking statements which are
subject to change. Forward-looking statements generally can be identified
by the use of forward-looking terminology such as "may", "will", "expect",
"intend", "estimate", "anticipate", "believe" or "continue" or the negative
thereof or variations thereon or similar terminology. 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, permits, weather, 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.
Additional information concerning potential factors that could affect
the Company's financial condition, results of operations and expansion
projects is included in the filings of the Company with the Securities and
Exchange Commission including, but not limited to, its 10-K for the fiscal
year ended April 30, 2006.
SOURCE Isle of Capri Casinos, Inc.
 back to top
Related links:
http://www.theislecorp.com
Photo Notes:
NewsCom: http://www.newscom.com/cgi-bin/prnh/20020502/ISLELOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.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.
|
