ST. LOUIS, Dec. 3 /PRNewswire-FirstCall/ -- Isle of Capri Casinos, Inc.
(Nasdaq: ISLE) today reported financial results for the second fiscal
quarter ended October 28, 2007.
Bernard Goldstein, chairman of the board and chief executive officer
commented, "In the second quarter, the Company recorded a pre-tax charge of
$6.5 million related to costs previously capitalized in connection with a
proposed project in west Harrison County, Mississippi, and proposed
expansions in Davenport, Iowa and Kansas City, Missouri, which negatively
impacted our results. We have also begun conducting a strategic review of
our existing portfolio and growth opportunities."
"In addition, our second quarter results were impacted by significant
non-recurring charges, including charges resulting from the retirement of
our 9% Senior Subordinated Notes as part of the refinancing completed in
July 2007. The refinancing improved the flexibility of our balance sheet
and is consistent with our strategy to effectively lower our weighted
average interest rate."
President and Chief Operating Officer Virginia McDowell said, "Our
Company goal continues to be increased EBITDA(1) through margin
improvement, and we have identified opportunities to reduce spending at
both the corporate and site levels as a result of our focus on expense
reduction and cost containment measures."
"Although we continue to see improvements in operating results at
nearly all of our legacy properties, the isle casino at Coventry continues
to under perform. We are currently streamlining our cost structures at
Coventry and developing new marketing programs, but we have also been
negatively impacted by recent legislative changes, including an increase in
taxes and the implementation of a smoking ban. As a result, we are
currently evaluating the returns on and realization of our United Kingdom
investments as a part of our strategic review process. The process in the
United Kingdom will be led by Donn Mitchell, who was recently named Senior
Vice President of UK Operations."
The Company reported a 14.6% increase in net revenues to $278.8 million
for the second quarter compared to net revenues of $243.2 million for the
same quarter in fiscal 2007. The Company reported a loss from continuing
operations for the quarter of $24.6 million or $0.80 per diluted common
share during the second quarter of fiscal 2008 compared to a loss from
continuing operations of $4.2 million or $0.14 per diluted common share for
the second quarter of fiscal 2007.
Reflecting the impact of pre-opening expenses and write-offs, total
EBITDA(1) for the second quarter of fiscal 2008 was $37.6 million compared
to $38.3 million for the second quarter of fiscal 2007. Property EBITDA(1)
from continuing operations for the second quarter of fiscal 2008 increased
8.5% to $55.2 million compared to Property EBITDA(1) from continuing
operations of $50.9 million for the comparable quarter in fiscal 2007.
The results from operations for the second quarter of fiscal 2008
include $6.5 million of charges primarily related to costs previously
capitalized in connection with a proposed project in west Harrison County,
Mississippi and the write-off of construction projects in Davenport, Iowa
and Kansas City, Missouri. Additionally, in the second quarter of fiscal
2008, the Company recognized an $11.5 million loss from early
extinguishment of debt related to the retirement of the Company's 9% Senior
Subordinated Notes on August 29, 2007. Combined, these items resulted in a
$10.8 million after-tax impact on the quarterly results, or $0.35 loss per
diluted share. The results from continuing operations for the second
quarter of fiscal 2007 include $1.0 million of office relocation costs and
$3.7 million of increased new development costs compared to the second
quarter of fiscal 2008. Combined, these items resulted in $2.8 million of
after-tax impact on the prior year quarterly results or $0.09 loss per
diluted common share.
For the six months ended October 28, 2007, the Company reported a 7.8%
increase in net revenues to $557.4 million compared to net revenues of
$517.2 million for the same period in fiscal 2007. For the first six months
of fiscal 2008, the Company reported a loss from continuing operations of
$31.8 million or $1.04 per diluted common share compared to income from
continuing operations of $1.1 million or $0.04 per diluted common share for
the same period in fiscal 2007. EBITDA(1) from continuing operations for
the first six months of fiscal 2008 was $86.2 million compared to $93.6
million for the first six months of fiscal 2007.
The Company's Bossier City and Vicksburg properties are reflected as
discontinued operations for fiscal 2007 results. Accordingly, the operating
results for these properties are not included in the net revenue, income
and EBITDA(1) from continuing operations results discussed above. The sale
of the Bossier City and Vicksburg properties closed on July 31, 2006.
Accordingly, the net revenues, income and EBITDA(1) for fiscal 2008 are
comparable to the net revenue, income and EBITDA(1) from continuing
operations for fiscal 2007 because the Company had no discontinued
operations in fiscal 2008.
Recent Highlights:
-- On November 13, 2007, the Company executed a definitive agreement with
Nevada Gold & Casinos, Inc. to acquire the 43% interest in Isle of
Capri Black Hawk, L.L.C., which is currently owned by Nevada Gold.
Under the terms of the agreement, the Company agreed to pay
$64.6 million for the remaining 43% interest, payable upon closure of
the sale. Upon closing, Isle of Capri Black Hawk, L.L.C. would become
an indirect wholly owned subsidiary of Isle of Capri, and Isle of Capri
would gain complete control of the largest gaming operation in
Colorado. The closing of the transaction is subject to the
approval of Nevada Gold's stockholders and certain other customary
closing conditions, and is expected to occur in early 2008
-- The Company continued to realize margin improvements at nearly all of
the same store properties as a result of continuing its efforts of
managing expenses and improving marketing programs. Excluding
international operations and Biloxi which had fewer casinos operating
in the market during the comparable prior year period as the region
continued its recovery from Hurricane Katrina, EBITDA(1) margins at the
Company's legacy properties for the three months ended October 28, 2007
improved over 390 basis points from 22.3% to 26.2%.
-- Utilizing the enterprise data warehouse and business intelligence
tools, the Company has nearly completed the initial process of
re-segmenting the database at each property. This is expected to
enable management to improve the effectiveness of its marketing spend
by refocusing on increased share of wallet from higher value customers,
and building new acquisition programs.
Ms. McDowell commented, "On November 1st, we celebrated the opening of
the initial two lanes of the Biloxi Bay Bridge, linking Ocean Springs and
Biloxi. The East Biloxi casinos have been relatively isolated since
Hurricane Katrina, and the reopening of the bridge provides a vital link to
our customers who reside to the east. We have introduced a variety of new
marketing programs designed to reintroduce our Biloxi property to these
customers, and to prepare for the full opening of the bridge next spring,
when Mississippi Department of Transportation officials estimate that as
many as 30,000 vehicles a day could travel the span when all lanes reopen."
"We also continue to improve our properties by adding quality amenities
that have been very well received by our customers. In November, the isle
casino and hotel at Waterloo opened a 10,000 square foot indoor pool with a
bar and restaurant, as well as an expanded deck designed to accommodate
player parties and group sales opportunities. In September, we also opened
the new and expanded Farraddays' Steakhouse in Black Hawk, Colorado
resulting in a significant increase in revenue per cover. Relocating the
restaurant has enabled the property to expand the popular Calypso's buffet
by 66 much needed seats, which are expected to be available in late
December."
Ms. McDowell concluded, "As we continue with the strategic review of
our current assets and growth opportunities, we also continue to progress
with the development of our strategic brand portfolio, and hope to announce
our plans by our fourth fiscal quarter."
Operational Review of the Company's Continuing Operations for the
Second Quarter of Fiscal 2008 Compared to the Second Quarter of Fiscal 2007
Mississippi -- The Company's three continuing casino operations
contributed 17.3% of our net revenues for the three months ended October
28, 2007. Net revenues and EBITDA(1) at our Biloxi property decreased
significantly from abnormally high prior year operating results due to
increased competition in the market as competitors have re-opened after
closures caused by Hurricane Katrina. Additionally, the Biloxi property
remains negatively impacted by the destruction of the Biloxi/Ocean Springs
bridge, which is the primary thoroughfare for travelers from Alabama and
Florida to east Biloxi where our Biloxi property is located. Two lanes of
the new Biloxi/Ocean Springs bridge opened in November 2007 and the
complete new bridge with six lanes is scheduled to open in June 2008. The
Company's Natchez property continues to experience decreases in both net
revenues and income from operations primarily resulting from the re-opening
of competing casinos along the Gulf Coast. Net revenues at the Lula
property decreased due to increased competition impacting certain of the
property's outlying primary feeder markets and disruption due to
renovations of the casino floor.
Louisiana -- The Company's casino in Lake Charles contributed 13.4% of
our net revenues for the three months ended October 28, 2007. Lake Charles
experienced a decrease in net revenues due to increased competition in the
market as competitors have fully re-opened following closures caused by
Hurricane Rita and post hurricane normalization of population levels in the
property's feeder markets. Despite a decline in net revenues, EBITDA(1)
increased due primarily to decreased promotional and marketing expenses as
well as overall cost control efforts.
Missouri -- The Company's three casinos in Missouri contributed 16.7%
of our net revenues for the three months ended October 28, 2007. Net
revenues increased primarily due to the acquisition of the Caruthersville
property on June 11, 2007. Net revenues decreased at our Kansas City
property primarily due to aggressive marketing by our competition in the
Kansas City marketplace. EBITDA(1) increased in the second quarter of
fiscal 2008 due to the Caruthersville acquisition as well as overall cost
control efforts at our other Missouri properties.
Iowa -- The Company's four casinos in Iowa contributed 23.0% of our net
revenues for the three months ended October 28, 2007. Net revenues and
EBITDA(1) increased primarily due to the opening of the Waterloo property
on June 30, 2007. Combined net revenues decreased moderately at our
Quad-City and Marquette properties due primarily to the impact of increased
competition. However, combined EBITDA(1) for these properties increased due
to cost control efforts.
Colorado -- The Company's two casinos in Black Hawk, Colorado
contributed 14.1% of our net revenues for the three months ended October
28, 2007. Our Colorado properties experienced minor decreases in net
revenues primarily due to a planned reduction in complimentary rooms and
food and beverages. EBITDA(1) increased at both Colorado properties due to
decreases in marketing expenses and overall cost control efforts.
Florida -- The Pompano racetrack and casino contributed 13.1% of net
our revenues for the three months ended October 28, 2007. Net revenues and
EBITDA(1) reflect the opening of the slot gaming facility on April 14,
2007.
International Operations -- Net revenues increased primarily due to the
opening of the Coventry, England property in July 2007.
Corporate Development and Other -- Corporate development and other
expenses include the Company's corporate office operations, new development
costs and other write offs. The increase in corporate, development and
other expenses compared to the second quarter of fiscal 2007 was primarily
due to a $4.9 million charge recognized in relation to the write off of the
Company's terminated development project in west Harrison County,
Mississippi.
Discontinued Operations -- Operating results from the Company's Vicksburg
and Bossier City properties 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 OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
Oct. 28, Oct. 29, Oct. 28, Oct. 29,
2007 2006 2007 2006
(Restated) (Restated)
Revenues:
Casino $278,282 $249,237 $555,516 $526,857
Rooms 13,080 13,319 26,921 27,970
Pari-mutuel commissions and fees 3,838 3,832 8,414 8,793
Food, beverage and other 33,603 32,153 67,671 66,965
Gross revenues 328,803 298,541 658,522 630,585
Less promotional allowances 49,965 55,317 101,151 113,393
Net revenues 278,838 243,224 557,371 517,192
Operating expenses:
Casino 41,330 41,570 80,693 83,600
Gaming taxes 71,965 53,076 141,037 111,419
Rooms 3,164 2,429 6,345 4,880
Pari-mutuel commissions and fees 3,172 3,070 6,844 6,896
Food, beverage and other 11,400 7,506 23,029 16,592
Marine and facilities 16,781 15,634 33,271 30,746
Marketing and administrative 73,683 67,832 142,999 140,332
Corporate and development 12,919 12,790 23,993 27,835
Write-offs and other valuation
charges 6,526 665 6,526 665
Pre-opening 324 389 6,457 638
Depreciation and amortization 35,270 24,304 65,827 48,290
Total operating expenses 276,534 229,265 537,021 471,893
Operating income 2,304 13,959 20,350 45,299
Interest expense (29,176) (23,394) (54,990) (43,450)
Interest income 1,140 3,463 2,234 4,032
Loss on early extinguishment of
debt (11,468) - (13,660) -
Income (loss) from continuing
operations before income taxes
and minority interest (37,200) (5,972) (46,066) 5,881
Income tax (provision) benefit 14,611 2,300 18,289 (3,187)
Minority interest (2,046) (515) (3,973) (1,553)
Income (loss) from continuing
operations (24,635) (4,187) (31,750) 1,141
Income from discontinued
operations, net of income taxes - 13,817 - 17,773
Net income (loss) $(24,635) $9,630 $(31,750) $18,914
Earnings (loss) per common share --
basic:
Income (loss) from continuing
operations $(0.80) $(0.14) $(1.04) $0.04
Income from discontinued
operations, net of income taxes - 0.46 - 0.58
Net income (loss) $(0.80) $0.32 $(1.04) $0.62
Earnings (loss) per common share --
diluted:
Income (loss) from continuing
operations $(0.80) $(0.14) $(1.04) $0.04
Income from discontinued
operations, net of income taxes - 0.46 - 0.57
Net income (loss) $(0.80) $0.32 $(1.04) $0.61
Weighted average basic shares 30,727 30,346 30,559 30,384
Weighted average diluted shares 30,727 30,346 30,559 31,228
ISLE OF CAPRI CASINOS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
ASSETS October 28, April 29,
2007 2007
(Unaudited)
Current assets:
Cash and cash equivalents $114,961 $188,114
Marketable securities 18,025 17,169
Accounts receivable, net 24,445 22,527
Insurance receivable, net 55,172 56,040
Income tax receivable 11,636 -
Deferred income taxes 12,410 12,421
Prepaid expenses and other assets 34,498 24,067
Total current assets 271,147 320,338
Property and equipment, net 1,430,085 1,338,570
Other assets:
Goodwill 297,268 297,268
Other intangible assets, net 79,821 74,154
Deferred financing costs, net 15,858 13,644
Restricted cash 2,639 4,637
Prepaid deposits and other 23,463 27,080
Total assets $2,120,281 $2,075,691
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $10,105 $7,594
Accounts payable 34,238 60,460
Accrued liabilities:
Interest 7,684 10,166
Payroll and related 50,427 48,402
Property and other taxes 32,382 23,380
Income taxes - 16,011
Other 62,649 69,728
Total current liabilities 197,485 235,741
Long-term debt, less current
maturities 1,511,306 1,410,385
Deferred income taxes 31,243 41,451
Other accrued liabilities 41,739 30,817
Other long-term liabilities 49,358 47,639
Minority interest 30,115 27,836
Stockholders' equity:
Preferred stock, $.01 par value;
2,000 shares authorized; none issued - -
Common stock, $.01 par value; 45,000
shares authorized; shares issued:
35,206 at October 28, 2007 and
34,682 at April 29, 2007 352 347
Class B common stock, $.01 par value;
3,000 shares authorized; none issued - -
Additional paid-in capital 184,725 175,132
Retained earnings 123,377 155,127
Accumulated other comprehensive income 3,610 3,358
312,064 333,964
Treasury stock, 4,372 shares at
October 28, 2007 and 4,324 shares at
April 29, 2007 (53,029) (52,142)
Total stockholders' equity 259,035 281,822
Total liabilities and stockholders'
equity $2,120,281 $2,075,691
See notes to the unaudited consolidated financial statements.
Isle of Capri Casinos, Inc.
Supplemental Data -- Net Revenues
(unaudited, in thousands)
Three Months Ended Six Months Ended
Oct. 28, Oct. 29, Oct. 28, Oct. 29,
2007 2006 2007 2006
(Restated) (Restated)
Mississippi
Biloxi $21,020 $37,611 $47,772 $90,466
Natchez 8,765 9,639 18,420 20,796
Lula 18,549 19,912 38,065 41,283
Mississippi Total 48,334 67,162 104,257 152,545
Louisiana
Lakes Charles 37,502 39,952 80,503 84,619
Missouri
Kansas City 18,766 19,880 38,476 40,590
Boonville 20,403 20,349 41,069 40,470
Caruthersville (2) 7,459 - 11,839 -
Missouri Total 46,628 40,229 91,384 81,060
Iowa
Bettendorf 23,133 22,049 46,580 45,427
Davenport 13,068 15,303 26,677 32,238
Marquette 8,875 10,178 18,372 20,379
Waterloo (2) 18,955 - 27,069 -
Iowa Total 64,031 47,530 118,698 98,044
Colorado
Black Hawk/Colorado
Central Station 39,314 39,502 78,529 79,117
Florida
Pompano (2) 36,396 4,424 70,593 10,256
International
Blue Chip 2,077 1,712 4,555 3,891
Coventry (2) 1,575 - 1,976 -
Our Lucaya 2,879 2,591 6,709 7,521
International Total 6,531 4,303 13,240 11,412
Other 102 122 167 139
$278,838 $243,224 $557,371 $517,192
Isle of Capri Casinos, Inc.
Supplemental Data EBITDA(1)
(unaudited, in thousands)
Three Months Ended Six Months Ended
Oct. 28, Oct. 29, Oct. 28, Oct. 29,
2007 2006 2007 2006
(Restated) (Restated)
Mississippi
Biloxi $2,967 $11,924 $9,259 $34,435
Natchez 2,546 2,652 5,571 5,911
Lula 4,861 4,008 10,290 9,684
Mississippi Total 10,374 18,584 25,120 50,030
Louisiana
Lakes Charles 7,677 7,411 18,222 17,395
Missouri
Kansas City 2,302 2,821 6,012 5,682
Boonville 6,185 5,653 12,797 10,975
Caruthersville (2) 1,809 - 2,927 -
Missouri Total 10,296 8,474 21,736 16,657
Iowa
Bettendorf 7,040 5,881 14,753 12,579
Davenport 2,636 3,239 6,203 8,353
Marquette 2,065 2,153 4,824 4,423
Waterloo (2) 3,760 (44) 3,481 (96)
Iowa Total 15,501 11,229 29,261 25,259
Colorado
Black Hawk/Colorado
Central Station 14,035 9,987 27,910 21,039
Florida
Pompano (2) 2,843 (2,284) 2,237 (3,598)
International
Blue Chip (434) (1,259) (410) (1,468)
Coventry (2) (4,146) (96) (8,255) (232)
Our Lucaya (897) (1,115) (956) (3,798)
International Total (5,477) (2,470) (9,621) (5,498)
Total Property EBITDA 55,249 50,931 114,865 121,284
Corporate, Development and Other (17,675) (12,668) (28,688) (27,695)
Total EBITDA $37,574 $38,263 $86,177 $93,589
Isle of Capri Casinos, Inc.
Supplemental Data -- Detail of Certain Charges Affecting EBITDA(1)
(unaudited, in thousands)
Three Months Ended Three Months Ended
October 28, 2007 October 29, 2006
Write offs Write offs
Pre- and Pre- and
opening Valuation opening Valuation
Expenses Charges Total Expenses Charges Total
Kansas City $- $1,136 $1,136 $- $- $-
Davenport - 532 532 - - -
Waterloo 324 - 324 34 - 34
Pompano - - - 295 - 295
Coventry - - - 60 - 60
Blue Chip - - - - 665 665
Total Properties 324 1,668 1,992 389 665 1,054
Corporate, Development
and Other - 4,858 4,858 - - -
$324 $6,526 $6,850 $389 $665 $1,054
Six Months Ended Six Months Ended
October 28, 2007 October 29, 2006
Write offs Write offs
Pre- and Pre- and
opening Valuation opening Valuation
Expenses Charges Total Expenses Charges Total
Kansas City $- $1,136 $1,136 $- $- $-
Davenport - 532 532 - - -
Waterloo 3,347 - 3,347 81 - 81
Pompano 307 - 307 370 - 370
Coventry 2,803 - 2,803 - 665 665
Blue Chip - - - 187 - 187
Total Properties 6,457 1,668 8,125 638 665 1,303
Corporate, Development
and Other - 4,858 4,858 - - -
$6,457 $6,526 $12,983 $638 $665 $1,303
Isle of Capri Casinos, Inc.
Supplemental Data -- Reconciliation of Operating Income to EBITDA(1)
(unaudited, in thousands)
Three Months Ended Three Months Ended
October 28, 2007 October 29, 2006
Depr. Depr.
Operating and EBITDA Operating and EBITDA
Income Amort. (1) Income Amort. (1)
Mississippi
Biloxi $(1,724) $4,691 $2,967 $7,805 $4,119 $11,924
Natchez 1,611 935 2,546 1,673 979 2,652
Lula 1,582 3,279 4,861 1,453 2,555 4,008
Mississippi Total 1,469 8,905 10,374 10,931 7,653 18,584
Louisiana
Lakes Charles 3,855 3,822 7,677 3,413 3,998 7,411
Missouri
Kansas City 828 1,474 2,302 1,008 1,813 2,821
Boonville 4,912 1,273 6,185 4,307 1,346 5,653
Caruthersville (2) 1,130 679 1,809 - - -
Missouri Total 6,870 3,426 10,296 5,315 3,159 8,474
Iowa
Bettendorf 4,655 2,385 7,040 4,007 1,874 5,881
Davenport 1,344 1,292 2,636 1,699 1,540 3,239
Marquette 1,316 749 2,065 1,312 841 2,153
Waterloo (2) 996 2,764 3,760 (44) - (44)
Iowa Total 8,311 7,190 15,501 6,974 4,255 11,229
Colorado
Black Hawk/Colorado
Central Station 10,038 3,997 14,035 5,962 4,025 9,987
Florida
Pompano (2) (1,161) 4,004 2,843 (2,342) 58 (2,284)
International
Blue Chip (560) 126 (434) (1,378) 119 (1,259)
Coventry (2) (6,058) 1,912 (4,146) (569) 473 (96)
Our Lucaya (899) 2 (897) (1,195) 80 (1,115)
International
Total (7,517) 2,040 (5,477) (3,142) 672 (2,470)
Total Properties 21,865 33,384 55,249 27,111 23,820 50,931
Corporate,
Development and
Other (3) (14,703) 1,886 (12,817) (13,152) 484 (12,668)
Corporate write
offs(4) (4,858) - (4,858) - - -
$2,304 $35,270 $37,574 $13,959 $24,304 $38,263
Isle of Capri Casinos, Inc.
Supplemental Data -- Reconciliation of Operating Income to EBITDA(1)
(unaudited, in thousands)
Six Months Ended Six Months Ended
October 28, 2007 October 29, 2006
Depr. Depr.
Operating and EBITDA Operating and EBITDA
Income Amort. (1) Income Amort. (1)
Mississippi
Biloxi $(217) $9,476 $9,259 $26,114 $8,321 $34,435
Natchez 3,676 1,895 5,571 4,007 1,904 5,911
Lula 4,176 6,114 10,290 4,652 5,032 9,684
Mississippi Total 7,635 17,485 25,120 34,773 15,257 50,030
Louisiana
Lakes Charles 10,526 7,696 18,222 9,441 7,954 17,395
Missouri
Kansas City 3,244 2,768 6,012 2,021 3,661 5,682
Boonville 10,296 2,501 12,797 8,350 2,625 10,975
Caruthersville (2) 1,956 971 2,927 - - -
Missouri Total 15,496 6,240 21,736 10,371 6,286 16,657
Iowa
Bettendorf 9,884 4,869 14,753 8,906 3,673 12,579
Davenport 3,562 2,641 6,203 5,311 3,042 8,353
Marquette 3,258 1,566 4,824 2,770 1,653 4,423
Waterloo (2) (225) 3,706 3,481 (96) - (96)
Iowa Total 16,479 12,782 29,261 16,891 8,368 25,259
Colorado
Black Hawk/Colorado
Central Station 19,942 7,968 27,910 13,094 7,945 21,039
Florida
Pompano (2) (5,615) 7,852 2,237 (3,711) 113 (3,598)
International
Blue Chip (662) 252 (410) (1,696) 228 (1,468)
Coventry (2) (11,005) 2,750 (8,255) (1,170) 938 (232)
Our Lucaya (958) 2 (956) (3,957) 159 (3,798)
International
Total (12,625) 3,004 (9,621) (6,823) 1,325 (5,498)
Total Properties 51,838 63,027 114,865 74,036 47,248 121,284
Corporate,
Development and
Other (3) (26,630) 2,800 (23,830) (28,737) 1,042 (27,695)
Corporate write
offs (4) (4,858) - (4,858) - - -
$20,350 $65,827 $86,177 $45,299 $48,290 $93,589
(1) EBITDA is "earnings before interest, income taxes, depreciation,
amortization, loss on early extinguishment of debt, minority
interest and income (loss) from discontinued operations, net of
income taxes." 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 EBITDA as the primary measure of the Company's
operating properties' performance, including the evaluation of
operating personnel. 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 EBITDA. Also, other gaming companies that report EBITDA
information may calculate EBITDA in a different manner than the
Company. Reconciliations of operating income to EBITDA are included
in the financial schedules accompanying this release. A
reconciliation of EBITDA with the Company's net income is shown
below (in thousands).
Three Months Ended Six Months Ended
Oct. 28, Oct. 29, Oct. 28, Oct. 29,
2007 2006 2007 2006
(Restated) (Restated)
EBITDA $37,574 $38,263 $86,177 $93,589
(Add)/deduct:
Depreciation and amortization 35,270 24,304 65,827 48,290
Interest expense, net 28,036 19,931 52,756 39,418
Loss on early extinguishment
of debt 11,468 - 13,660 -
Income tax provision (benefit) (14,611) (2,300) (18,289) 3,187
Minority interest 2,046 515 3,973 1,553
Income (loss) from discontinued
operations, net of income taxes - (13,817) - (17,773)
Net income (loss) $(24,635) $9,630 $(31,750) $18,914
As management fees are eliminated in consolidation, EBITDA for the
combined Black Hawk/Colorado Central Station property does not
include management fees. The following table shows management fees
and EBITDA inclusive of management fees for the three and six months
ended October 28, 2007 and October 29, 2006:
Three Months Ended Six Months Ended
October 28, October 29, October 28, October 29,
2007 2006 2007 2006
(unaudited, in thousands)
Management Fees
Black Hawk/Colorado
Central Station $1,806 $1,761 $3,634 $3,480
Certain of our debt agreement use "Adjusted EBITDA" as a financial
measure for the calculation financial debt covenants. Adjusted
EBITDA differs from EBITDA as Adjusted EBITDA includes add back of
items such as pre-opening expenses, certain write-offs and valuation
expenses, and stock compensation expense. Reference can be made to
the definition of Adjusted EBITDA in the applicable debt agreements
on file as Exhibits to our filing with the Securities and Exchange
Commission.
(2) Reflects results since opening or acquisition date as follows:
Property Date
Pompano April 2007
Caruthersville June 2007
Waterloo June 2007
Coventry July 2007
(3) Total consolidated stock compensation expense including corporate and
properties for the three months ended October 28, 2007 and
October 29, 2006 was $2.9 million and $2.6 million, respectively, of
which, $2.5 million and $2.2 million were included in Corporate and
development expense, respectively. Total consolidated stock
compensation expense including corporate and properties for the six
months ended October 28, 2007 and October 29, 2006 was $3.8 million
and $4.1 million, respectively, of which, $3.1 million and
$3.4 million were included in Corporate and development expense,
respectively.
(4) Corporate write offs of $4.9 million primarily reflect the
termination of the lease to develop a new project in west Harrison
County, Mississippi.
Isle of Capri Casinos, Inc., founded in 1992, is dedicated to providing
its customers with an exceptional gaming and entertainment experience at
each of its 18 casino properties. The Company owns and operates casinos in
Biloxi, Lula and Natchez, Mississippi; Lake Charles, Louisiana; Bettendorf,
Davenport, Marquette and Waterloo, Iowa; Boonville, Caruthersville and
Kansas City, 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, a casino in Coventry, England, and a two-thirds
ownership interest in casinos in Dudley and Wolverhampton, England.
There are four Isle of Capri Casinos brands including "the isle," Isle
of Capri, Colorado Central Station and Rhythm City, providing over 16,000
slot machines, 550 table games and 3000 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.
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 Form 10-K for the
most recently ended fiscal year.
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, Senior 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 and Form 10-Q for the fiscal quarters ended since
that date.
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, Donn Mitchell, Chief Financial Officer,
+1-314-813-9319, Jill Haynes, Senior Director of Corporate
Communication, +1-314-813-9368, all of Isle of Capri Casinos,
Inc.
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