Isle of Capri Casinos, Inc. Announces Fiscal 2011 First Quarter Results
- Company Completes Acquisition of Rainbow Casino in Vicksburg, Mississippi
- Retail Revenue Increases at Nine Properties; Database Customer Spend Per Visit Stable; Modest Decline in Database Customer Visits Due to Economic Weakness
ST. LOUIS, Aug. 31 /PRNewswire-FirstCall/ -- Isle of Capri Casinos, Inc. (Nasdaq: ISLE) (the "Company") today reported financial results for the first quarter of fiscal year 2011, the three-month period ended July 25, 2010, and other Company-related news.
In making the announcement, James B. Perry, the Company's chairman and chief executive officer, said, "I believe we achieved solid performance by taking steps to maintain profitability in the midst of poor economic conditions that impacted regional gaming markets across the country during the quarter. We remain committed to improving our margins as a result of our operational accomplishments and are finding opportunities to attract new retail customers through our branding and service programs. Further, we continue to focus on de-leveraging our balance sheet.
"We believe we are poised to capitalize on our progress when this economic cycle turns and are continually searching for prudent investment opportunities. We are currently engaged in competitive bid processes for projects in Cape Girardeau, Missouri, and at the Nemacolin Woodlands Resort in Fayette County, Pennsylvania. Both of these licenses should be awarded by the end of the year, and we are actively exploring opportunities in other jurisdictions to increase and diversify cash flows."
Consolidated Results
The following table outlines the Company's financial results (dollars in millions, except per share data, unaudited):
Three Months Ended |
||||
July 25, |
July 26, |
|||
2010 |
2009 |
|||
Net revenues |
$ 251.9 |
$ 257.9 |
||
Income (loss) from continuing operations |
(2.7) |
1.1 |
||
Net income (loss) |
(2.7) |
0.9 |
||
Income (loss) per share from continuing operations |
(0.08) |
0.03 |
||
Net income (loss) per share |
(0.08) |
0.03 |
||
During the first quarter of fiscal year 2011:
- Net revenues decreased 2.3% to $251.9 million; primarily attributable to decreased gaming and hotel revenues;
- Consolidated EBITDA decreased 11.4% to $43.2 million, largely as a result of decreased gaming revenues and increased corporate and development costs associated with the Company's acquisition of the Rainbow Casino and attempted equity offering;
- Property-level EBITDA decreased 5.4% to $55.4 million; and
- Property-level EBITDA margins were 22.0% compared to 22.7% in the first quarter of fiscal year 2010.
Discussing the operating results, Virginia McDowell, the Company's president and chief operating officer, remarked, "We have again demonstrated the agility of our business by increasing retail play, managing costs and maintaining our average customer spend and visitation. We did experience a modest decline in our overall number of database customers, as residents in our markets have continued to feel the squeeze of the economic contraction and the unemployment and housing pictures have not improved. We are confident that our branding and marketing programs have been successful in influencing customers across the portfolio during the quarter, which stands to have a positive impact on profitability upon economic recovery."
The Company welcomed Rainbow Casino in Vicksburg, Mississippi, to the property portfolio during the quarter. McDowell commented, "We are excited by the enthusiasm of the team there, and believe we can make improvement through the implementation of our operational, marketing and technology platforms."
The Company noted that property-level operating margins have largely remained stable as initiatives continue to adjust cost-structure to business volume, although performance was impacted specifically by properties in Iowa and Colorado. In particular, properties in the Iowa Quad Cities market have continually been negatively impacted by road construction projects which have hindered access to our properties, and Black Hawk continued to experience difficulty in the retail segment. Regulatory changes and efforts by management in Florida have led to a dramatic improvement at the Company's Pompano property, and Lula continues to improve its performance by consistently improving operations.
Dale R. Black, the Company's senior vice president and chief financial officer, commented, "While consumer confidence appeared to be gaining traction early in the quarter, leading indicators including the Consumer Confidence Index showed a steep decline through the critical summer months of June and July. We obviously cannot control the national economy, we were successful in managing costs through this period, and continue to remain focused on keeping our balance sheet strong to wade through this economic cycle and capitalize on opportunities for growth."
Corporate Expenses, Capital Structure, and Capital Expenditures
Corporate and development expenses were $12.5 million for quarter compared to $9.9 million in fiscal 2010. During the quarter the company incurred approximately $1.1 million in expenses related to its attempted equity offering and an additional $1.1 million in acquisition related costs regarding the Rainbow acquisition. Non-cash stock compensation was $1.7 million during the quarter, compared to $1.1 million for the first quarter of fiscal 2010.
The Company had $63.5 million in cash and cash equivalents and total debt of $1.3 billion at the end of the quarter.
Interest expense for the quarter was $23.8 million, an increase of approximately $5.4 million compared to the prior fiscal year, primarily as a result of increased borrowing costs associated with the recent amendment to the Company's credit facility.
Due to the ineffectiveness of the Company's interest rate swaps as a result of the amendment to our credit facility, we recorded other expense of $1.5 million during the first quarter of fiscal 2011. The Company expects other expense of approximately $2 million associated with the anticipated change in fair value to be recorded during the remainder of fiscal 2011.
Capital expenditures during the quarter totaled $13 million, consisting almost entirely of maintenance capital expenditures. The Company expects capital expenditures for the remainder of the fiscal year to be approximately $35 million.
Conference Call Information
Isle of Capri Casinos, Inc. will host a conference call on Tuesday, August 31, 2010 at 10:00 am Central Time during which management will discuss the financial and other matters addressed in this press release. The conference call can be accessed by interested parties via webcast through the investor relations page of the Company's website, www.islecorp.com, or, for domestic callers, by dialing (888) 469-0509. International callers can access the conference call by dialing (630) 395-0133. The conference call reference number is 8572561. The conference call will be recorded and available for review starting at noon central on Tuesday, August 31, 2010, until midnight central on Monday, September 6, 2010, by dialing (866) 479-2464; International: (203) 369-1538 and access number 875962.
ISLE OF CAPRI CASINOS, INC. |
|||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||
(In thousands, except share and per share amounts) |
|||||
(Unaudited) |
|||||
Three Months Ended |
|||||
July 25, |
July 26, |
||||
2010 |
2009 |
||||
Revenues: |
|||||
Casino |
$ 259,162 |
$ 262,263 |
|||
Rooms |
10,881 |
12,261 |
|||
Pari-mutuel, food, beverage and other |
34,091 |
34,295 |
|||
Gross revenues |
304,134 |
308,819 |
|||
Less promotional allowances |
(52,213) |
(50,905) |
|||
Net revenues |
251,921 |
257,914 |
|||
Operating expenses: |
|||||
Casino |
39,609 |
39,265 |
|||
Gaming taxes |
64,406 |
66,304 |
|||
Rooms |
2,769 |
3,057 |
|||
Pari-mutuel, food, beverage and other |
11,168 |
10,842 |
|||
Marine and facilities |
14,609 |
15,646 |
|||
Marketing and administrative |
63,620 |
64,088 |
|||
Corporate and development |
12,521 |
9,945 |
|||
Depreciation and amortization |
22,933 |
28,828 |
|||
Total operating expenses |
231,635 |
237,975 |
|||
Operating income |
20,286 |
19,939 |
|||
Interest expense |
(23,795) |
(18,347) |
|||
Interest income |
474 |
368 |
|||
Other expense |
(1,487) |
- |
|||
Income (loss) from continuing operations before income taxes |
(4,522) |
1,960 |
|||
Income tax benefit (provision) |
1,867 |
(905) |
|||
Income (loss) from continuing operations |
(2,655) |
1,055 |
|||
Income (loss) from discontinued operations, |
|||||
including loss on sale, net of income taxes |
- |
(150) |
|||
Net income (loss) |
$ (2,655) |
$ 905 |
|||
Income (loss) per common share-basic and dilutive: |
|||||
Income (loss) from continuing operations |
$ (0.08) |
$ 0.03 |
|||
Income (loss) from discontinued operations, |
|||||
including loss on sale, net of income taxes |
- |
- |
|||
Net income (loss) |
$ (0.08) |
$ 0.03 |
|||
Weighted average basic shares |
32,447,904 |
31,779,100 |
|||
Weighted average diluted shares |
32,447,904 |
31,885,101 |
|||
ISLE OF CAPRI CASINOS, INC. |
||||
CONSOLIDATED BALANCE SHEETS |
||||
(In thousands, except share and per share amounts) |
||||
July 25, |
April 25, |
|||
2010 |
2010 |
|||
ASSETS |
(unaudited) |
|||
Current assets: |
||||
Cash and cash equivalents |
$ 63,516 |
$ 68,069 |
||
Marketable securities |
23,664 |
22,926 |
||
Accounts receivable, net |
9,478 |
8,879 |
||
Income taxes receivable |
7,318 |
8,109 |
||
Deferred income taxes |
16,826 |
16,826 |
||
Prepaid expenses and other assets |
33,785 |
25,095 |
||
Total current assets |
154,587 |
149,904 |
||
Property and equipment, net |
1,129,683 |
1,098,942 |
||
Other assets: |
||||
Goodwill |
345,303 |
313,136 |
||
Other intangible assets, net |
85,834 |
79,675 |
||
Deferred financing costs, net |
9,533 |
10,354 |
||
Restricted cash |
12,730 |
2,774 |
||
Prepaid deposits and other |
17,795 |
20,055 |
||
Total assets |
$ 1,755,465 |
$ 1,674,840 |
||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||
Current liabilities: |
||||
Current maturities of long-term debt |
$ 8,762 |
$ 8,754 |
||
Accounts payable |
30,212 |
24,072 |
||
Accrued liabilities: |
||||
Payroll and related |
43,149 |
45,863 |
||
Property and other taxes |
21,870 |
20,253 |
||
Interest |
17,713 |
14,779 |
||
Progressive jackpots and slot club awards |
14,788 |
14,144 |
||
Other |
33,007 |
29,290 |
||
Total current liabilities |
169,501 |
157,155 |
||
Long-term debt, less current maturities |
1,258,302 |
1,192,135 |
||
Deferred income taxes |
28,763 |
29,193 |
||
Other accrued liabilities |
40,006 |
38,972 |
||
Other long-term liabilities |
17,120 |
17,166 |
||
Stockholders' equity: |
||||
Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued |
- |
- |
||
Common stock, $.01 par value; 45,000,000 shares authorized; shares issued: |
||||
36,783,871 at July 25, 2010 and 36,771,730 at April 25, 2010 |
368 |
367 |
||
Class B common stock, $.01 par value; 3,000,000 shares authorized; none issued |
- |
- |
||
Additional paid-in capital |
203,323 |
201,464 |
||
Retained earnings |
95,900 |
98,555 |
||
Accumulated other comprehensive (loss) income |
(5,711) |
(8,060) |
||
293,880 |
292,326 |
|||
Treasury stock, 4,326,242 shares at July 25, 2010 and April 25, 2010 |
(52,107) |
(52,107) |
||
Total stockholders' equity |
241,773 |
240,219 |
||
Total liabilities and stockholders' equity |
$ 1,755,465 |
$ 1,674,840 |
||
Isle of Capri Casinos, Inc. |
||||||
Supplemental Data - Net Revenues |
||||||
(unaudited, in thousands) |
||||||
Three Months Ended |
||||||
July 25, |
July 26, |
|||||
2010 |
2009 |
|||||
Mississippi |
||||||
Biloxi |
$ 18,639 |
$ 20,420 |
||||
Natchez |
8,070 |
8,573 |
||||
Lula |
17,318 |
17,728 |
||||
Vicksburg(2) |
3,968 |
|||||
Mississippi Total |
47,995 |
46,721 |
||||
Louisiana |
||||||
Lake Charles |
34,184 |
37,614 |
||||
Missouri |
||||||
Kansas City |
19,040 |
19,485 |
||||
Boonville |
20,068 |
20,072 |
||||
Caruthersville |
8,391 |
8,332 |
||||
Missouri Total |
47,499 |
47,889 |
||||
Iowa |
||||||
Bettendorf |
19,741 |
21,166 |
||||
Davenport |
11,348 |
12,453 |
||||
Marquette |
7,109 |
7,477 |
||||
Waterloo |
20,934 |
19,876 |
||||
Iowa Total |
59,132 |
60,972 |
||||
Colorado |
||||||
Black Hawk |
30,044 |
33,790 |
||||
Florida |
||||||
Pompano |
32,720 |
30,798 |
||||
Property Net Revenues before Other |
251,574 |
257,784 |
||||
Other |
347 |
130 |
||||
Net Revenues from Continuing Operations |
$ 251,921 |
$ 257,914 |
||||
Isle of Capri Casinos, Inc. |
||||||
Supplemental Data - EBITDA (1) |
||||||
(unaudited, in thousands) |
||||||
Three Months Ended |
||||||
July 25, |
July 26, |
|||||
2010 |
2009 |
|||||
Mississippi |
||||||
Biloxi |
$ 1,846 |
$ 2,385 |
||||
Natchez |
2,451 |
2,733 |
||||
Lula |
5,199 |
4,655 |
||||
Vicksburg(2) |
1,273 |
|||||
Mississippi Total |
10,769 |
9,773 |
||||
Louisiana |
||||||
Lake Charles |
6,799 |
7,582 |
||||
Missouri |
||||||
Kansas City |
3,999 |
4,452 |
||||
Boonville |
6,892 |
6,776 |
||||
Caruthersville |
1,789 |
1,753 |
||||
Missouri Total |
12,680 |
12,981 |
||||
Iowa |
||||||
Bettendorf |
4,465 |
5,982 |
||||
Davenport |
2,793 |
3,614 |
||||
Marquette |
1,490 |
1,772 |
||||
Waterloo |
6,041 |
5,848 |
||||
Iowa Total |
14,789 |
17,216 |
||||
Colorado |
||||||
Black Hawk |
7,103 |
8,566 |
||||
Florida |
||||||
Pompano |
3,253 |
2,463 |
||||
Property EBITDA Before |
||||||
Corporate and Other Items |
55,393 |
58,581 |
||||
Corporate and Other |
(12,174) |
(9,814) |
||||
EBITDA from Continuing Operations |
$ 43,219 |
$ 48,767 |
||||
Isle of Capri Casinos, Inc. |
||||||||||||||
Supplemental Data - Reconciliation of Operating Income to EBITDA (1) |
||||||||||||||
(unaudited, in thousands) |
||||||||||||||
Three Months Ended July 25, 2010 |
Three Months Ended July 26, 2009 |
|||||||||||||
Depreciation |
Depreciation |
|||||||||||||
Operating |
and |
Operating |
and |
|||||||||||
Income |
Amortization |
EBITDA |
Income |
Amortization |
EBITDA |
|||||||||
Mississippi |
||||||||||||||
Biloxi |
$ (1,248) |
$ 3,094 |
$ 1,846 |
$ (1,268) |
$ 3,653 |
$ 2,385 |
||||||||
Natchez |
2,101 |
350 |
2,451 |
2,137 |
596 |
2,733 |
||||||||
Lula |
3,346 |
1,853 |
5,199 |
2,441 |
2,214 |
4,655 |
||||||||
Vicksburg(2) |
631 |
642 |
1,273 |
|||||||||||
Mississippi Total |
4,830 |
5,939 |
10,769 |
3,310 |
6,463 |
9,773 |
||||||||
Louisiana |
||||||||||||||
Lake Charles |
4,415 |
2,384 |
6,799 |
4,843 |
2,739 |
7,582 |
||||||||
Missouri |
||||||||||||||
Kansas City |
3,136 |
863 |
3,999 |
3,355 |
1,097 |
4,452 |
||||||||
Boonville |
5,834 |
1,058 |
6,892 |
5,592 |
1,184 |
6,776 |
||||||||
Caruthersville |
922 |
867 |
1,789 |
838 |
915 |
1,753 |
||||||||
Missouri Total |
9,892 |
2,788 |
12,680 |
9,785 |
3,196 |
12,981 |
||||||||
Iowa |
||||||||||||||
Bettendorf |
2,435 |
2,030 |
4,465 |
3,635 |
2,347 |
5,982 |
||||||||
Davenport |
2,226 |
567 |
2,793 |
2,658 |
956 |
3,614 |
||||||||
Marquette |
1,065 |
425 |
1,490 |
1,073 |
699 |
1,772 |
||||||||
Waterloo |
3,585 |
2,456 |
6,041 |
2,899 |
2,949 |
5,848 |
||||||||
Iowa Total |
9,311 |
5,478 |
14,789 |
10,265 |
6,951 |
17,216 |
||||||||
Colorado |
||||||||||||||
Black Hawk |
3,855 |
3,248 |
7,103 |
4,694 |
3,872 |
8,566 |
||||||||
Florida |
||||||||||||||
Pompano |
890 |
2,363 |
3,253 |
(1,807) |
4,270 |
2,463 |
||||||||
Total Property Before |
||||||||||||||
Corporate and Other Items |
33,193 |
22,200 |
55,393 |
31,090 |
27,491 |
58,581 |
||||||||
Corporate and Other |
(12,907) |
733 |
(12,174) |
(11,151) |
1,337 |
(9,814) |
||||||||
Total From Continuing Operations |
$ 20,286 |
$ 22,933 |
$ 43,219 |
$ 19,939 |
$ 28,828 |
$ 48,767 |
||||||||
1. EBITDA is "earnings before interest and other non-operating income (expense), income taxes, and depreciation and amortization." "Property EBITDA" is EBITDA before Corporate and development expenses and minority interest. 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, 2) used as a component of calculating required leverage and minimum interest coverage ratios under our Senior Credit Facility and 3) a principal basis of valuing gaming companies. Management uses EBITDA and Property EBITDA as the primary measure of the Company's operating properties' performance, and they are important components in evaluating the performance of management and other operating personnel in the determination of certain components of employee compensation. 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. A reconciliation of EBITDA and Property EBITDA to operating income is included in the financial schedules accompanying this release. A reconciliation of EBITDA to the Company's net income (loss) is shown below (in thousands). |
|
Three Months Ended |
||||
July 25, |
July 26, |
|||
2010 |
2009 |
|||
EBITDA |
$ 43,219 |
$ 48,767 |
||
Add/(deduct): |
||||
Depreciation and amortization |
(22,933) |
(28,828) |
||
Interest expense: |
||||
Interest expense, net |
(23,321) |
(17,979) |
||
Other expense |
(1,487) |
- |
||
Income tax benefit (provision) |
1,867 |
(905) |
||
Income (loss) from discontinued operations, |
||||
including loss on sale, net of income taxes |
- |
(150) |
||
Net income (loss) |
$ (2,655) |
$ 905 |
||
Certain of our debt agreements use "Adjusted EBITDA" as a financial measure for the calculation of financial debt covenants. Adjusted EBITDA differs from EBITDA as Adjusted EBITDA includes add back of items such as gain on early extinguishment of debt, pre-opening expenses, certain write-offs and valuation expenses, and non-cash stock compensation expense. Reference can be made to the definition of Adjusted EBITDA in the applicable debt agreements on file as Exhibits to our filings with the Securities and Exchange Commission. |
||||
2. Rainbow Casino in Vicksburg, Mississippi was acquired on June 8, 2010 and we have included the results of Rainbow in our consolidated financial statements subsequent to acquisition. |
||||
About Isle of Capri Casinos, Inc.
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 15 casino properties. The Company owns and operates casinos domestically in Biloxi, Lula, Natchez and Vicksburg, Mississippi; Lake Charles, Louisiana; Bettendorf, Davenport, Marquette and Waterloo, Iowa; Boonville, Caruthersville and Kansas City, Missouri, two casinos in Black Hawk, Colorado, and a casino and harness track in Pompano Beach, Florida. More information is available at the Company's website, www.islecorp.com.
Forward-Looking Statements
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/A for the most recently ended fiscal year.
CONTACTS: |
|
Isle of Capri Casinos, Inc., |
|
Dale Black, Chief Financial Officer-314.813.9327 |
|
Jill Haynes, Senior Director of Corporate Communication-314.813.9368 |
|
SOURCE Isle of Capri Casinos, Inc.
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