Isle of Capri Casinos, Inc. Announces Fiscal 2011 Second Quarter Results

- Company selected to develop Cape Girardeau, Missouri casino

- Property EBITDA increases by 11.3%, including new Vicksburg property

- Same-Store EBITDA and EBITDA margins increase at 11 of 14 properties

- Marketing, cost-containment lead to favorable financial results while net revenue remains flat

Dec 02, 2010, 08:00 ET from Isle of Capri Casinos, Inc.

ST. LOUIS, Dec. 2, 2010 /PRNewswire-FirstCall/ -- Isle of Capri Casinos, Inc. (Nasdaq: ISLE) (the "Company") today reported financial results for the second quarter of fiscal year 2011, the three and six month period ended October 24, 2010, and other Company-related news.  

In making the announcement, James B. Perry, the Company's chairman and chief executive officer, said, "Clearly, our operational efforts are working.  Despite continued uncertainty in the national economy that has led to generally stagnant revenues in regional and local gaming markets, we have been able to increase our EBITDA through more efficient marketing and streamlined operations.

"Additionally, we are excited that our efforts to pursue prudent development opportunities have delivered positive results.  Yesterday, the Missouri Gaming Commission announced that our proposal, Isle Casino Cape Girardeau, has been selected for prioritization for the 13th and final gaming license in the state. We thank the Commission for their confidence in our proposals, and are excited about this decision and look forward to commencing development on our Isle Casino in Cape Girardeau, which we anticipate opening by the end of 2012.

"In Pennsylvania, the Gaming Board has indicated that it will announce its selection for the final resort casino license at its scheduled meeting on either December 16 or in early January.  We are confident that we have submitted a proposal together with Nemacolin Woodlands Resort that will provide maximum benefits to the Commonwealth in terms of both tourism impact and new tax revenue.  We are hopeful that we will be the successful applicant in that competitive application process."

Consolidated Results

The following table outlines the Company's financial results (dollars in millions, except per share data, unaudited):


Three Months Ended


Six Months Ended


October 24,


October 25,


October 24,


October 25,


2010


2009


2010


2009

Net revenues

$          246.7


$          246.1


$          498.6


$          504.0

EBITDA(1)

42.5


42.3


85.7


91.0

Income (loss) from continuing operations

(1.8)


2.4


(4.5)


3.4

Net income (loss)

(1.0)


1.6


(3.7)


2.5

Income (loss) per share from continuing








 operations

(0.06)


0.07


(0.14)


0.11

Net income (loss) per share

(0.03)


0.05


(0.11)


0.08



Significant items impacting EBITDA during the three and six months ended October 24, 2010 and October 25, 2009 are as follows:


Three Months Ended


Six Months Ended


October 24,


October 25,


October 24,


October 25,


2010


2009


2010


2009

Expense recoveries - Pittsburgh development cost(3)

$                -


$              6.8


$                -


$              6.8

Marquette hotel demolition(4)

-


(0.5)


-


(0.5)

Caruthersville property tax settlement(5)

-


0.9


-


0.9


$                -


$              7.2


$                -


$              7.2











Compared to the second quarter of fiscal 2010, before consideration of the items in the above table during the second quarter of fiscal year 2011:

  • Property-level EBITDA increased 11.3% from $47.1 million to  $52.4 million, including the contribution of $2.1 million from our newly acquired Vicksburg property;
  • Consolidated EBITDA increased 21.3% to $42.5 million,

Discussing the operating results, Virginia McDowell, the Company's president and chief operating officer, remarked, "We have posted improved operating results on a year-over-year basis because of a solid operating plan and the continued dedication of our team to providing value for our shareholders.  First and foremost, I want to thank all of our team members for staying focused and improving our business as we bump along the bottom of this economic cycle.

“Revenues in our markets were generally flat during the quarter, according to reported results.  We are pleased to have achieved modestly increased results in Iowa, Missouri and Mississippi.  Management initiatives in Lake Charles to control costs and cut out unprofitable marketing efforts led to an increase in earnings despite decreased net revenues.  In Florida, we were able to take advantage of the gaming tax rates and modify our marketing efforts to achieve significant year over year improvement.

"In Black Hawk, we had a significant decrease in EBITDA due to a major competitive expansion in the market, which recently had its one year anniversary.  Our midweek revenues and hotel occupancy were impacted the most significantly.  We continue to refine our marketing programs and cost savings initiatives, and believe these changes will lead to more positive results in the coming periods.

"Including our recently acquired Vicksburg property, our operating costs decreased by $1.0 million, or 0.8%.  Excluding Vicksburg, we decreased our same-store operating cost structure by $5.3 million, or 4.0%, during the quarter.  Overall, we remain dedicated to keeping our costs tight and marketing to our most profitable customers until the economy improves."

Dale R. Black, the Company's senior vice president and chief financial officer, commented, "While we have recently seen positive signs in certain economic indicators and hope this positive news will continue, we believe that discretionary consumer spending could continue to lag these trends.  In the meantime, we will remain focused on executing our operating plan that proved successful during the second quarter, and look forward to increasing profitability upon growth in discretionary spending reaching the gaming and entertainment sectors."

Corporate Expenses, Capital Structure, and Capital Expenditures

Corporate and development expenses were $10.9 million for the quarter compared to $12.3 million in the second quarter of fiscal 2010.  Non-cash stock compensation was $2.4 million during the quarter, compared to $2.6 million for the second quarter of fiscal 2010.  

The Company had $64.1 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 $23.4 million, an increase of approximately $5.5 million compared to the prior fiscal year, primarily as a result of increased borrowing costs and increased borrowings related to the acquisition of Rainbow Casino in Vicksburg.

Capital expenditures during the quarter totaled $13 million, consisting almost entirely of maintenance capital expenditures.  The Company expects maintenance capital expenditures for the remainder of the fiscal year to be approximately $22 million and expenditures related to Cape Girardeau to be approximately $10 million.  

Conference Call Information

Isle of Capri Casinos, Inc. will host a conference call on Thursday, December 2, 2010 at 8:30 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.

The conference call will also be available by telephone, for domestic callers, by dialing 877-917-8929.  International callers can access the conference call by dialing 517-308-9020.  The conference call reference number is 5980634. The conference call will be recorded and available for review starting at noon central on Thursday, December 2, 2010, until midnight central on Wednesday, December 8, 2010, by dialing 800-337-6538; International: 203-369-3798 and access number 4423.

ISLE OF CAPRI CASINOS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

(unaudited)












Three Months Ended


Six Months Ended



October 24,


October 25,


October 24,


October 25,



2010


2009


2010


2009

Revenues:









Casino


$      254,640


$      251,173


$      513,802


$      513,436

Rooms


10,643


11,803


21,524


24,064

Pari-mutuel, food, beverage and other


33,997


33,286


68,088


67,581

Gross revenues


299,280


296,262


603,414


605,081

Less promotional allowances


(52,629)


(50,207)


(104,842)


(101,112)

Net revenues


246,651


246,055


498,572


503,969

Operating expenses:









Casino


39,979


39,651


79,588


78,916

Gaming taxes


60,214


64,223


124,620


130,527

Rooms


2,725


2,824


5,494


5,881

Pari-mutuel, food, beverage and other


11,123


11,243


22,291


22,085

Marine and facilities


15,347


16,110


29,956


31,756

Marketing and administrative


63,808


64,167


127,428


128,255

Corporate and development


10,940


12,340


23,461


22,285

Expense recoveries and other charges


-


(6,762)


-


(6,762)

Depreciation and amortization


22,179


28,437


45,112


57,265

Total operating expenses


226,315


232,233


457,950


470,208

Operating income


20,336


13,822


40,622


33,761

Interest expense


(23,410)


(17,883)


(47,205)


(36,230)

Interest income


467


395


941


763

Derivative income (expense)


(743)


-


(2,230)


-










Loss from continuing operations before









 income taxes


(3,350)


(3,666)


(7,872)


(1,706)

Income tax benefit


1,537


6,039


3,404


5,134

Income (loss) from continuing operations


(1,813)


2,373


(4,468)


3,428

Income (loss) from discontinued operations,









  net of income taxes


794


(811)


794


(961)

Net income (loss)


$        (1,019)


$          1,562


$        (3,674)


$          2,467










Income (loss) per common share-basic and dilutive:









Income (loss) from continuing operations


$          (0.06)


$            0.07


$          (0.14)


$            0.11

Income (loss) from discontinued operations,









 net of income taxes


0.03


(0.02)


0.03


(0.03)

Net income (loss)


$          (0.03)


$            0.05


$          (0.11)


$            0.08










Weighted average basic shares


32,783,726


32,319,789


32,615,815


32,049,444

Weighted average diluted shares


32,783,726


32,511,462


32,615,815


32,251,102



ISLE OF CAPRI CASINOS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)






October 24,


April 25,


2010


2010

ASSETS

(unaudited)



Current assets:




Cash and cash equivalents

$          64,133


$          68,069

Marketable securities

23,014


22,926

Accounts receivable, net

7,766


8,879

Income taxes receivable

8,850


8,109

Deferred income taxes

16,826


16,826

Prepaid expenses and other assets

30,749


25,095

Total current assets

151,338


149,904

Property and equipment, net

1,122,523


1,098,942

Other assets:




Goodwill

345,303


313,136

Other intangible assets, net

84,631


79,675

Deferred financing costs, net

8,712


10,354

Restricted cash

12,806


2,774

Prepaid deposits and other

16,826


20,055

Total assets

$     1,742,139


$     1,674,840





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Current maturities of long-term debt

$            8,766


$            8,754

Accounts payable

24,495


24,072

Accrued liabilities:




Payroll and related

43,939


45,863

Property and other taxes

25,508


20,253

Interest

8,113


14,779

Progressive jackpots and slot club awards

15,286


14,144

Other

33,980


29,290

Total current liabilities

160,087


157,155

Long-term debt, less current maturities

1,251,158


1,192,135

Deferred income taxes

28,291


29,193

Other accrued liabilities

40,431


38,972

Other long-term liabilities

16,833


17,166

Stockholders' equity:




Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued

-


-

Common stock, $.01 par value; 60,000,000 shares authorized; shares issued:




36,781,374 at October 24, 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

200,117


201,464

Retained earnings

94,881


98,555

Accumulated other comprehensive (loss) income

(3,736)


(8,060)


291,630


292,326

Treasury stock, 3,843,358 shares at October 24, 2010 and 4,326,242 shares at




April 25, 2010

(46,291)


(52,107)

Total stockholders' equity

245,339


240,219

Total liabilities and stockholders' equity

$     1,742,139


$     1,674,840












Isle of Capri Casinos, Inc.

Supplemental Data - Net Revenues

(unaudited, in thousands)












Three Months Ended


Six Months Ended



October 24,


October 25,


October 24,


October 25,



2010


2009


2010


2009

Mississippi









Biloxi

$    17,268


$    17,824


$       35,907


$    38,244


Natchez

7,299


7,786


15,369


16,359


Lula

15,948


15,820


33,266


33,548


Vicksburg(2)

7,231




11,199




Mississippi Total

47,746


41,430


95,741


88,151










Louisiana









Lake Charles

31,770


34,243


65,954


71,857










Missouri









Kansas City

19,110


19,101


38,150


38,586


Boonville

20,142


19,846


40,210


39,918


Caruthersville

8,248


7,925


16,639


16,257


Missouri Total

47,500


46,872


94,999


94,761










Iowa









Bettendorf

20,307


20,507


40,048


41,673


Davenport

11,069


11,866


22,417


24,319


Marquette

7,589


7,478


14,698


14,955


Waterloo

20,054


20,224


40,988


40,100


Iowa Total

59,019


60,075


118,151


121,047










Colorado









Black Hawk

29,893


34,595


59,937


68,385










Florida









Pompano

29,713


28,569


62,433


59,367



















Property Net Revenues before Other

245,641


245,784


497,215


503,568










Other

1,010


271


1,357


401










Net Revenues from Continuing Operations

$  246,651


$  246,055


$     498,572


$  503,969












Isle of Capri Casinos, Inc.

Supplemental Data - EBITDA (1)

(unaudited, in thousands)












Three Months Ended


Six Months Ended



October 24,


October 25,


October 24,


October 25,



2010


2009


2010


2009

Mississippi









Biloxi

$            1,586


$            1,507


$            3,432


$            3,892


Natchez

2,024


2,394


4,475


5,127


Lula

4,305


3,632


9,504


8,287


Vicksburg(2)

2,077




3,350




Mississippi Total

9,992


7,533


20,761


17,306










Louisiana









Lake Charles

4,800


4,254


11,599


11,836










Missouri









Kansas City

4,238


4,148


8,237


8,600


Boonville

6,657


6,525


13,549


13,301


Caruthersville

1,286


1,140


3,075


2,893


Missouri Total

12,181


11,813


24,861


24,794










Iowa









Bettendorf

5,586


5,286


10,051


11,268


Davenport

2,527


3,073


5,320


6,687


Marquette

1,767


1,397


3,257


3,169


Waterloo

5,797


5,510


11,838


11,358


Iowa Total

15,677


15,266


30,466


32,482










Colorado









Black Hawk

5,794


9,028


12,897


17,594










Florida









Pompano

4,001


(786)


7,254


1,677



















Property EBITDA Before








    Corporate and Other Items

52,445


47,108


107,838


105,689

Corporate and Other

(9,930)


(12,070)


(22,104)


(21,884)










EBITDA Before Other Items

42,515


35,038


85,734


83,805

Other Items:








Expense Recoveries and Other(3)

-


6,762


-


6,762

Marquette Hotel Demolition(4)

-


(475)


-


(475)

Caruthersville Property Tax Settlement(5)

-


934


-


934










EBITDA from Continuing Operations

$          42,515


$          42,259


$          85,734


$          91,026












Isle of Capri Casinos, Inc.

Supplemental Data - Reconciliation of Operating Income to EBITDA (1)

(unaudited, in thousands)


















Three Months Ended October 24, 2010


Three Months Ended October 25, 2009






Depreciation






Depreciation






Operating


and




Operating


and






Income


Amortization


EBITDA


Income


Amortization


EBITDA

Mississippi














Biloxi


$     (1,412)


$            2,998


$      1,586


$       (1,979)


$            3,486


$       1,507


Natchez


1,656


368


2,024


1,956


438


2,394


Lula


2,469


1,836


4,305


1,614


2,018


3,632


Vicksburg(2)


827


1,250


2,077








Mississippi Total


3,540


6,452


9,992


1,591


5,942


7,533















Louisiana














Lake Charles


2,456


2,344


4,800


1,658


2,596


4,254















Missouri














Kansas City


3,345


893


4,238


3,169


979


4,148


Boonville


5,544


1,113


6,657


5,396


1,129


6,525


Caruthersville


427


859


1,286


311


829


1,140


Missouri Total


9,316


2,865


12,181


8,876


2,937


11,813















Iowa














Bettendorf


3,603


1,983


5,586


3,077


2,209


5,286


Davenport


1,961


566


2,527


2,234


839


3,073


Marquette


1,378


389


1,767


803


594


1,397


Waterloo


4,387


1,410


5,797


2,541


2,969


5,510


Iowa Total


11,329


4,348


15,677


8,655


6,611


15,266















Colorado














Black Hawk


2,578


3,216


5,794


5,265


3,763


9,028















Florida














Pompano


1,642


2,359


4,001


(5,163)


4,377


(786)





























Total Property Before













   Corporate and Other Items


30,861


21,584


52,445


20,882


26,226


47,108

Corporate and Other


(10,525)


595


(9,930)


(13,323)


1,253


(12,070)















Total Before Other Items


20,336


22,179


42,515


7,559


27,479


35,038















Other Items:













Expense Recoveries and Other(3)

-


-


-


6,762


-


6,762

Marquette Hotel Demolition(4)


-


-


-


(1,433)


958


(475)

Caruthersville Property Tax Settlement(5)

-


-


-


934


-


934















Total From Continuing Operations


$    20,336


$          22,179


$    42,515


$       13,822


$          28,437


$     42,259































Isle of Capri Casinos, Inc.

Supplemental Data - Reconciliation of Operating Income to EBITDA (1)

(unaudited, in thousands)


















Six Months Ended October 24, 2010


Six Months Ended October 25, 2009






Depreciation






Depreciation






Operating


and




Operating


and






Income


Amortization


EBITDA


Income


Amortization


EBITDA

Mississippi














Biloxi


$     (2,660)


$            6,092


$      3,432


$       (3,247)


$            7,139


$       3,892


Natchez


3,757


718


4,475


4,093


1,034


5,127


Lula


5,815


3,689


9,504


4,055


4,232


8,287


Vicksburg(2)


1,458


1,892


3,350








Mississippi Total


8,370


12,391


20,761


4,901


12,405


17,306















Louisiana














Lake Charles


6,871


4,728


11,599


6,501


5,335


11,836















Missouri














Kansas City


6,481


1,756


8,237


6,524


2,076


8,600


Boonville


11,378


2,171


13,549


10,988


2,313


13,301


Caruthersville


1,349


1,726


3,075


1,149


1,744


2,893


Missouri Total


19,208


5,653


24,861


18,661


6,133


24,794















Iowa














Bettendorf


6,038


4,013


10,051


6,712


4,556


11,268


Davenport


4,187


1,133


5,320


4,892


1,795


6,687


Marquette


2,443


814


3,257


1,876


1,293


3,169


Waterloo


7,972


3,866


11,838


5,440


5,918


11,358


Iowa Total


20,640


9,826


30,466


18,920


13,562


32,482















Colorado














Black Hawk


6,433


6,464


12,897


9,960


7,634


17,594















Florida














Pompano


2,532


4,722


7,254


(6,970)


8,647


1,677





























Total Property Before













   Corporate and Other Items


64,054


43,784


107,838


51,973


53,716


105,689

Corporate and Other


(23,432)


1,328


(22,104)


(24,475)


2,591


(21,884)















Total Before Other Items


40,622


45,112


85,734


27,498


56,307


83,805















Other Items:













Expense Recoveries and Other(3)

-


-


-


6,762


-


6,762

Marquette Hotel Demolition(4)


-


-


-


(1,433)


958


(475)

Caruthersville Property Tax Settlement(5)

-


-


-


934


-


934















Total From Continuing Operations


$    40,622


$          45,112


$    85,734


$       33,761


$          57,265


$     91,026































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


Six Months Ended


October 24,

October 25,


October 24,

October 25,


2010


2009


2010


2009

EBITDA

$      42,515


$      42,259


$      85,734


$      91,026

Add/(deduct):








Depreciation and amortization

(22,179)


(28,437)


(45,112)


(57,265)

Interest expense, net

(22,943)


(17,488)


(46,264)


(35,467)

Derivative income (expense)

(743)


-


(2,230)


-

Income tax benefit

1,537


6,039


3,404


5,134

Income (loss) from discontinued operations,








 net of income taxes

794


(811)


794


(961)

Net income (loss)

$      (1,019)


$        1,562


$      (3,674)


$        2,467












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.



3.

Expense recoveries and other of $(6.8) million for the three and six months ended October 25, 2009 reflect income from the recording of a receivable for reimbursement of Pittsburgh development costs.



4.

During October, 2009 we demolished the hotel at our casino in Marquette, Iowa. As a result, our operating income for the three and six months ended October 25, 2009 includes $0.5 million in demolition costs and $1.0 million in acceleration of remaining depreciation.



5.

Caruthersville includes the favorable impact of $0.9 million from the settlement of a property tax appeal during both the three and six months ended October 25, 2009.



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.



RELATED LINKS

http://www.islecorp.com