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Isle of Capri Casinos, Inc. Announces Second Quarter Results
BILOXI, Miss., Nov. 17 /PRNewswire-FirstCall/ -- Isle of Capri Casinos, Inc. (NASDAQ: ISLE) today reported financial results for its second quarter of fiscal 2006 ended October 23, 2005. For the second quarter, the Company reported a net loss of $4.2 million or $0.14 per basic common share compared to net income of $0.45 million or $0.01 per diluted common share for the same quarter last year. As a result of settlement discussions taking place in recent days related to an outstanding litigation matter, the Company recorded an additional legal reserve charge in the second quarter of fiscal 2006 of approximately $0.08 per basic common share in anticipation of a probable settlement. The Company expects to settle this litigation during the third quarter fiscal 2006 and does not expect that this will have any effects on its on-going operating results. During the quarter ended October 23, 2005, the Company had net revenues of $247.9 million, compared to $267.8 million for the same period in fiscal 2005, and Adjusted EBITDA(1) of $41.6 million compared to $48.6 million for the same period in fiscal 2005. For the first six months of fiscal 2006, the Company reported a net loss of $0.2 million, or $0.01 per basic common share. This compares to net income for the same period in fiscal 2005 of $11.1 million, or $0.36 per diluted share. Net revenues for the six months ended October 23, 2005, were $529.5 million, down from $546.5 million for the comparable period in the previous year. Adjusted EBITDA(1) in the six-month period was $95.1 million, compared to $108.6 million for the comparable six-month period in fiscal 2005. "Over the quarter, the Company faced significant challenges in our southern markets, however, these challenges did not deter us from continuing to work toward enhancing our existing property amenities. These new amenities continue to be at the forefront of our development work as we redevelop existing properties and begin construction on new ones," according to Bernard Goldstein, Isle of Capri Casinos, Inc.'s chairman and chief executive officer. Highlights and Updates * Hurricane Katrina in late August caused interruption in service at three Isle properties - Isle-Biloxi, Isle-Vicksburg and Isle-Natchez. Isle-Vicksburg and Isle-Natchez reopened shortly after the storm, however, Isle-Biloxi remains closed. * Subject to the receipt of necessary permits and licenses, the Company plans to reopen Isle-Biloxi within the next 60 days. The proposed interim casino, to be located in the hotel, is expected to offer approximately 1,100 gaming positions, to be accompanied by two restaurants, parking for 1,000 vehicles and 550 hotel rooms. Preliminary plans are in process for rebuilding a new permanent casino on the property. * Hurricane Rita in late September caused the closure of Isle-Lake Charles for 16 days. Both casino vessels weathered the storm with minimal damage. The hotels and pavilion area suffered moderate damage. * Subsequent to the end of the second fiscal quarter, Hurricane Wilma caused considerable damage to the barns and clubhouse/grandstand structures at Pompano Park Harness Track. The facility reopened for simulcast racing today with live racing expected to resume in early December. * The Company does not expect that the effect of these hurricanes or the litigation matter discussed above will give rise to any debt covenant or liquidity issues. * The Company has business interruption and property insurance covering the company's operations and assets affected by these storms. At the Isle- Biloxi, the Company expects the related insurance proceeds to exceed the cost incurred and thus there is no net impact on the income statement for the second fiscal quarter 2006. At the Isle-Lake Charles, the Company does not expect the insurance proceeds to exceed the cost incurred and thus has recorded a $1.2 million expense. A more in-depth discussion of the specific accounting treatment is explained in the Operational Review below. * Isle team member relief funds were established, in conjunction with the Gulf Coast Community Foundation, to provide team members living in the areas affected by Hurricanes Katrina and Rita with emergency relief as they recover from the devastation that hit the region. To date, over $1 million has been raised and assistance has been provided to over 500 team members. * Construction is underway at the Isle-Waterloo in Iowa. The Company plans to spend approximately $134.0 million constructing a single-level casino with 1,300 gaming positions, three of its signature restaurants, a 200-room hotel and 1,000 parking spaces. The Company expects construction to be complete in the spring of 2007. * The Company began construction in Bettendorf of a new 250-room Isle hotel, additional parking, a Kitt's Kitchen restaurant, and expansion of the existing buffet. In conjunction with the project the City of Bettendorf has agreed to construct a 50,000 square foot convention center adjacent to the Company's facility that will be managed by the Isle-Bettendorf. The cost of the Company's portion of this project is expected to be approximately $45.0 million. The new hotel is scheduled to open in the summer of 2007. * The new 162-room Colorado Central Station hotel is currently ahead of schedule and expected to be completed by the end of the 2005 calendar year. US 6, the primary access route to the Black Hawk market, re-opened on September 12, 2005 following repairs related to the rockslide in June 2005. Construction continues on the extension of Main Street, in front of the Isle- Black Hawk connecting to Colorado Route 119 with completion expected in Spring 2006. * The Company continues to deploy the IGT Advantage(TM) Casino System to replace the existing slot systems in six of its casinos. The Company completed the roll out of this system at the Isle-Lula and Isle-Natchez this quarter. After implementation, these properties will feature the NexGen(TM) Interactive Display, supporting loyalty-building Bonusing(TM) tools, which will allow the Company to enhance its uniquely branded marketing programs. * On October 24, Isle of Capri Black Hawk, L.L.C., a joint venture company owned 57% by the Company, entered into a new $240.0 million Credit Agreement. This agreement provides a larger term loan and revolving credit agreement, an extension of the maturity dates and more favorable terms. * On November 4, 2005, the Governor of Florida called a special session of the legislature for December 5-9 to address slot regulations for pari-mutuel facilities in Broward County where the Company owns Pompano Park Harness Track. "Storms affected our properties in Mississippi, Louisiana and Florida and road closures had an impact on Kansas City and Black Hawk. While the aftermath of the storms has been a challenge for our team members, they continue to be outstanding examples of the power of the human spirit. The outpouring of compassion from our guests, vendors and communities has been greatly appreciated," according to Tim Hinkley, Isle of Capri Casinos, Inc.'s president and chief operating officer. Operational Review of the Second Quarter Fiscal 2006 Compared to the Second Quarter Fiscal 2005 In Mississippi, the Company's four operations accounted for 21.9% of its net revenues. Isle-Biloxi's net revenues and Adjusted EBITDA(1) for the second quarter fiscal 2006, decreased primarily to the closure of the property from extensive Hurricane Katrina damage. The Isle-Biloxi recorded an insurance receivable in the second quarter up to the amount of operating and incremental expenses incurred since the storm. The net effect of this is that Isle-Biloxi reflected no Adjusted EBITDA(1) contribution for the period impacted by Hurricane Katrina. Isle-Biloxi will record any related income from business interruption proceeds when the insurance carriers agree to the amount. The Company has also recorded an impairment charge for the estimated amount of the property damage and an offsetting insurance receivable. Accordingly these expenses do not impact our operating results. When the insurance carriers agree to the amounts of property damage payments, the Company will record any related gains. Isle-Natchez experienced increases in both net revenues and Adjusted EBITDA(1) resulting from significant population shifts into its market area. Isle-Vicksburg showed an increase in Adjusted EBITDA(1) over prior year on flat net revenues driven primarily by improved efficiencies in marketing spend and overall cost controls. Isle-Lula's net revenues and Adjusted EBITDA(1) both saw a decline due to a very competitive market. In Louisiana, the Company's two properties contributed 21.0% of its net revenues. Isle-Lake Charles experienced a decrease in net revenues and Adjusted EBITDA(1) due to the entry into the market of a new competitor and from the closure of the casino from the effects of Hurricane Rita. Isle-Lake Charles recorded an insurance receivable for operating and incremental expenses related to the 16-day closure caused by Hurricane Rita. The net effect of this is that Isle-Lake Charles reflected no Adjusted EBITDA(1) contribution for the 16-day period. Isle-Lake Charles will record any related income from expected business interruption proceeds when the insurance carrier has agreed to the amount. The Isle-Lake Charles has recorded a $1.2 million expense for estimated property damage, which is included in the line item Hurricane related charges, net on the income statement, because the Company does not expect the property damage insurance proceeds to exceed the cost. Isle-Bossier City showed a decrease in net revenues and Adjusted EBITDA(1) due to increased competition from, and expansion of, Native American gaming in Oklahoma. In Missouri, the Company's two properties contributed 15.9% of its net revenues. Isle-Kansas City's net revenues and Adjusted EBITDA(1) were down due primarily to the closure of the I-35 Paseo Bridge immediately adjacent to the Isle property. The I-35 Paseo Bridge was closed for 68 days during the second quarter and 106 days during the six months ended October 23, 2005. The bridge re-opened on September 1, 2005. Isle-Boonville's net revenues and Adjusted EBITDA remained constant despite construction disruption from the property's new hotel. Construction of the 140-room hotel continues on schedule and is expected to open in the spring of 2006. In Iowa, the Company's three casinos contributed 20.8% of its net revenues. Both Isle-Bettendorf and Rhythm City-Davenport showed a decline in both net revenues and Adjusted EBITDA(1) due to increased competition. Isle- Marquette remained constant in both net revenues and Adjusted EBITDA(1). In Colorado, the Company's two Black Hawk casino operations contributed 16.0% of its net revenues. The properties saw an increase in net revenues and Adjusted EBITDA(1) due to substantial completion of our expansion projects and the reduction of construction disruption compared to prior year. US 6, the main route into the Black-Hawk market, was closed for 49 days during the second quarter and 82 days during the six months ended October 23, 2005. Our international operations account for approximately 2.6% of our overall revenues. Isle-Our Lucaya experienced an increase in net revenues and a decrease in the negative Adjusted EBITDA(1) compared to the prior year, primarily due to being closed in the prior year related to Hurricane Frances and Jeanne. New development costs have decreased compared to second quarter fiscal 2005 due to a reduction in Florida related development costs. The increase in corporate and other expenses are primarily related to an increase in costs and reserves related to litigation matters, increased insurance costs and the Company's contributions to the Isle team members' relief funds. 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
23, 24, 23, 24,
2005 2004 2005 2004
Revenues:
Casino $252,579 $273,564 $536,430 $555,644
Hotel, pari-mutuel, food,
beverage & other 49,007 51,919 107,049 105,453
Gross revenues 301,586 325,483 643,479 661,097
Less promotional allowances 53,644 57,712 114,003 114,606
Net revenues 247,942 267,771 529,476 546,491
Operating and other expenses:
Properties 191,896 209,932 407,693 421,683
New development (2) 1,345 3,839 8,259 5,247
Corporate 13,127 5,402 18,418 10,925
Preopening 151 192 184 247
Hurricane related charges,
net (3) 1,200 -- 1,200 --
Depreciation and amortization 25,383 25,725 50,652 49,247
Total operating and other expenses 233,102 245,090 486,406 487,349
Operating income 14,840 22,681 43,070 59,142
Net interest expense (4) (20,302) (18,958) (39,438) (36,353)
Minority interest (5) (1,892) (1,549) (3,948) (3,682)
Income (loss) before income taxes (7,354) 2,174 (316) 19,107
Income tax expense (benefit) (6) (3,135) 1,989 (139) 8,675
Income (loss) from continuing
operations (4,219) 185 (177) 10,432
Income (loss) from discontinued
operations (including minority
interest and goodwill impairment),
net of income taxes (7) -- 263 (58) 625
Net income (loss) $(4,219) $448 $(235) $11,057
Net income per basic common share $(0.14) $0.02 $(0.01) $0.37
Net income per diluted common
share $(0.14) $0.01 $(0.01) $0.36
Weighted average basic common
shares 30,097 29,532 30,105 29,610
Weighted average diluted common
shares 30,097 30,542 30,105 30,646
Selected Consolidated Balance Sheet Accounts
(In Thousands)
October 23, 2005 April 24, 2005
(Unaudited)
Cash and cash equivalents $125,495 $146,743
Property and equipment, net 1,030,246 1,026,906
Debt 1,212,063 1,156,118
Stockholders' equity 250,596 261,396
Isle of Capri Casinos, Inc.
Comparative Financial Highlights by Casino Property
(Unaudited)
(In thousands)
Three Months Ended
October 23, October 24,
2005 2004
Net Adjusted Adjusted Net Adjusted Adjusted
Revenues EBITDA EBITDA Revenues EBITDA EBITDA
(8) (1) Margin % (8) (1) Margin %
MISSISSIPPI
BILOXI $10,453 $2,234 21.4% $18,469 $2,856 15.5%
NATCHEZ 11,077 3,575 32.3% 8,231 1,742 21.2%
VICKSBURG 13,753 3,844 28.0% 13,583 3,039 22.4%
LULA 19,083 3,533 18.5% 20,372 4,373 21.5%
MISSISSIPPI
TOTAL 54,366 13,186 24.3% 60,655 12,010 19.8%
LOUISIANA
BOSSIER CITY 24,150 5,240 21.7% 26,665 5,643 21.2%
LAKE CHARLES 27,844 4,629 16.6% 42,069 9,128 21.7%
LOUISIANA TOTAL 51,994 9,869 19.0% 68,734 14,771 21.5%
MISSOURI
KANSAS CITY 21,361 3,602 16.9% 23,490 4,316 18.4%
BOONVILLE 17,993 5,255 29.2% 18,097 5,303 29.3%
MISSOURI TOTAL 39,354 8,857 22.5% 41,587 9,619 23.1%
IOWA
BETTENDORF 23,601 6,647 28.2% 25,553 7,732 30.3%
DAVENPORT 16,842 3,866 23.0% 17,916 4,500 25.1%
MARQUETTE 11,197 2,823 25.2% 11,067 2,827 25.5%
IOWA TOTAL 51,640 13,336 25.8% 54,536 15,059 27.6%
COLORADO
BLACK HAWK (9) 29,523 9,896 33.5% 25,548 8,852 34.6%
COLORADO CENTRAL
STATION (9) 10,110 2,718 26.9% 8,073 409 5.1%
COLORADO TOTAL 39,633 12,614 31.8% 33,621 9,261 27.5%
INTERNATIONAL
BLUE CHIP 1,799 (564) (31.4%) 1,833 (281) (15.3%)
OUR LUCAYA 4,572 (309) (6.8%) 2,538 (2,130) (83.9%)
INTERNATIONAL
TOTAL 6,371 (873) (13.7%) 4,371 (2,411) (55.2%)
CORPORATE &
OTHER (10) 4,584 (15,415) N/M 4,267 (9,711) N/M
TOTAL $247,942 $41,574 16.8% $267,771 $48,598 18.1%
Isle of Capri Casinos, Inc.
Comparative Financial Highlights by Casino Property
(Unaudited)
(In thousands)
Six Months Ended
October 23, October 24,
2005 2004
Net Adjusted Adjusted Net Adjusted Adjusted
Revenues EBITDA EBITDA Revenues EBITDA EBITDA
(8) (1) Margin % (8) (1) Margin %
MISSISSIPPI
BILOXI $33,807 6,081 18.0% $38,766 $7,034 18.1%
NATCHEZ 20,115 5,792 28.8% 16,762 4,014 23.9%
VICKSBURG 27,265 7,418 27.2% 26,633 6,205 23.3%
LULA 40,370 8,440 20.9% 41,170 9,616 23.4%
MISSISSIPPI
TOTAL 121,557 27,731 22.8% 123,331 26,869 21.8%
LOUISIANA
BOSSIER CITY 49,678 9,446 19.0% 56,367 12,229 21.7%
LAKE CHARLES 67,428 12,590 18.7% 83,804 18,647 22.3%
LOUISIANA
TOTAL 117,106 22,036 18.8% 140,171 30,876 22.0%
MISSOURI
KANSAS CITY 43,350 7,479 17.3% 47,834 9,396 19.6%
BOONVILLE 36,363 10,559 29.1% 35,667 10,130 28.4%
MISSOURI TOTAL 79,713 18,078 22.7% 83,501 19,526 23.4%
IOWA
BETTENDORF 48,563 14,733 30.3% 51,291 16,485 32.1%
DAVENPORT 34,545 8,718 25.2% 35,600 9,356 26.3%
MARQUETTE 22,677 6,383 28.1% 22,087 6,161 27.9%
IOWA TOTAL 105,785 29,834 28.2% 108,978 32,002 29.4%
COLORADO
BLACK HAWK (9) 58,467 19,720 33.7% 51,845 19,038 36.7%
COLORADO
CENTRAL
STATION (9) 20,522 5,245 25.6% 16,416 930 5.7%
COLORADO TOTAL 78,989 24,965 31.6% 68,261 19,968 29.3%
INTERNATIONAL
BLUE CHIP 3,913 (800) (20.4%) 3,448 (499) (14.5%)
OUR LUCAYA 11,527 1,003 8.7% 9,270 (3,123) (33.7%)
INTERNATIONAL
TOTAL 15,440 203 1.3% 12,718 (3,622) (28.5%)
CORPORATE &
OTHER (10) 10,886 (27,741) N/M 9,531 (16,983) N/M
TOTAL $529,476 $95,106 18.0% $546,491 $108,636 19.9%
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
Operating
Operating Depreciation Writedowns, Adjusted Income
Income & Reserves, & Pre- EBITDA Margin%
(Loss) Amortization Recoveries opening (1) (1)
MISSISSIPPI
BILOXI $(792) $3,026 $-- $-- $2,234 (7.6%)
NATCHEZ 2,509 1,066 -- -- 3,575 22.7%
VICKSBURG 2,675 1,169 -- -- 3,844 19.5%
LULA 1,239 2,294 -- -- 3,533 6.5%
MISSISSIPPI
TOTAL 5,631 7,555 -- -- 13,186 10.4%
LOUISIANA
BOSSIER
CITY 2,674 2,566 -- -- 5,240 11.1%
LAKE
CHARLES (427) 3,856 1,200 -- 4,629 (1.5%)
LOUISIANA
TOTAL 2,247 6,422 1,200 -- 9,869 4.3%
MISSOURI
KANSAS CITY 1,849 1,753 -- -- 3,602 8.7%
BOONVILLE 4,191 1,064 -- -- 5,255 23.3%
MISSOURI
TOTAL 6,040 2,817 -- -- 8,857 15.3%
IOWA
BETTENDORF 4,834 1,813 -- -- 6,647 20.5%
DAVENPORT 2,092 1,774 -- -- 3,866 12.4%
MARQUETTE 2,089 734 -- -- 2,823 18.7%
IOWA TOTAL 9,015 4,321 -- -- 13,336 17.5%
COLORADO
BLACK HAWK
(9) 7,665 2,231 -- -- 9,896 26.0%
COLORADO
CENTRAL
STATION
(9) 1,687 1,031 -- -- 2,718 16.7%
COLORADO
TOTAL 9,352 3,262 -- -- 12,614 23.6%
INTERNATIONAL
BLUE CHIP (669) 105 -- -- (564) (37.2%)
OUR LUCAYA (717) 408 -- -- (309) (15.7%)
INTER-
NATIONAL
TOTAL (1,386) 513 -- -- (873) (21.8%)
CORPORATE &
OTHER (10) (16,060) 494 -- 151 (15,415) N/M
TOTAL $14,839 $25,384 $1,200 $151 $41,574 6.0%
Isle of Capri Casinos, Inc.
Reconciliation of Operating Income (Loss) to
Adjusted EBITDA by Casino Property
(Unaudited) (In thousands)
Three Months Ended October 24, 2004
Operating Depreciation Adjusted Operating
Income & EBITDA Income
(Loss) Amortization Preopening (1) Margin% (1)
MISSISSIPPI
BILOXI $730 $2,126 $-- $2,856 4.0%
NATCHEZ 922 820 -- 1,742 11.2%
VICKSBURG 1,872 1,167 -- 3,039 13.8%
LULA 24 4,349 -- 4,373 0.1%
MISSISSIPPI
TOTAL 3,548 8,462 -- 12,010 5.8%
LOUISIANA
BOSSIER
CITY 3,069 2,574 -- 5,643 11.5%
LAKE
CHARLES 5,881 3,247 -- 9,128 14.0%
LOUISIANA
TOTAL 8,950 5,821 -- 14,771 13.0%
MISSOURI
KANSAS CITY 2,447 1,869 -- 4,316 10.4%
BOONVILLE 3,010 2,293 -- 5,303 16.6%
MISSOURI
TOTAL 5,457 4,162 -- 9,619 13.1%
IOWA
BETTENDORF 5,917 1,815 -- 7,732 23.2%
DAVENPORT 3,243 1,257 -- 4,500 18.1%
MARQUETTE 2,022 805 -- 2,827 18.3%
IOWA TOTAL 11,182 3,877 -- 15,059 20.5%
COLORADO
BLACK HAWK
(9) 7,094 1,758 -- 8,852 27.8%
COLORADO
CENTRAL
STATION
(9) (252) 661 -- 409 (3.1%)
COLORADO
TOTAL 6,842 2,419 -- 9,261 20.4%
INTERNATIONAL
BLUE CHIP (528) 55 192 (281) (28.8%)
OUR LUCAYA (2,496) 366 -- (2,130) (98.3%)
INTER-
NATIONAL
TOTAL (3,024) 421 192 (2,411) (69.2%)
CORPORATE &
OTHER (10) (10,274) 563 -- (9,711) N/M
$22,681 $25,725 $192 $48,598 8.5%
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
Operating
Operating Depreciation Writedowns, Adjusted Income
Income & Reserves, & Pre- EBITDA Margin%
(Loss) Amortization Recoveries opening (1) (1)
MISSISSIPPI
BILOXI $(97) $6,178 $-- $-- $6,081 (0.3%)
NATCHEZ 3,617 2,175 -- -- 5,792 18.0%
VICKSBURG 5,045 2,373 -- -- 7,418 18.5%
LULA 3,939 4,501 -- -- 8,440 9.8%
MISSISSIPPI
TOTAL 12,504 15,227 -- -- 27,731 10.3%
LOUISIANA
BOSSIER
CITY 4,415 5,031 -- -- 9,446 8.9%
LAKE
CHARLES 3,818 7,572 1,200 -- 12,590 5.7%
LOUISIANA
TOTAL 8,233 12,603 1,200 -- 22,036 7.0%
MISSOURI
KANSAS CITY 3,908 3,571 -- -- 7,479 9.0%
BOONVILLE 8,387 2,212 -- -- 10,599 23.1%
MISSOURI
TOTAL 12,295 5,783 -- -- 18,078 15.4%
IOWA
BETTENDORF 11,177 3,556 -- -- 14,733 23.0%
DAVENPORT 5,112 3,606 -- -- 8,718 14.8%
MARQUETTE 4,921 1,462 -- -- 6,383 21.7%
IOWA TOTAL 21,210 8,624 -- -- 29,834 20.1%
COLORADO
BLACK HAWK
(9) 15,427 4,293 -- -- 19,720 26.4%
COLORADO
CENTRAL
STATION
(9) 3,219 2,026 -- -- 5,245 15.7%
COLORADO
TOTAL 18,646 6,319 -- -- 24,965 23.6%
INTERNATIONAL
BLUE CHIP (1,011) 211 -- -- (800) (25.8%)
OUR LUCAYA 146 857 -- -- 1,003 1.3%
INTER-
NATIONAL
TOTAL (865) 1,068 -- -- 203 (5.6%)
CORPORATE &
OTHER (10) (28,953) 1,028 -- 184 (27,741) N/M
TOTAL $43,070 $50,652 $1,200 $184 $95,106 8.1%
Isle of Capri Casinos, Inc.
Reconciliation of Operating Income (Loss)
to Adjusted EBITDA by Casino Property
(Unaudited) (In thousands)
Six Months Ended October 24, 2004
Operating Depreciation Adjusted Operating
Income & EBITDA Income
(Loss) Amortization Preopening (1) Margin% (1)
MISSISSIPPI
BILOXI $2,959 $4,075 $-- $7,034 7.6%
NATCHEZ 2,417 1,597 -- 4,014 14.4%
VICKSBURG 3,885 2,320 -- 6,205 14.6%
LULA 3,174 6,442 -- 9,616 7.7%
MISSISSIPPI
TOTAL 12,435 14,434 -- 26,869 10.1%
LOUISIANA
BOSSIER
CITY 6,978 5,251 -- 12,229 12.4%
LAKE
CHARLES 12,211 6,436 -- 18,647 14.6%
LOUISIANA
TOTAL 19,189 11,687 -- 30,876 13.7%
MISSOURI
KANSAS CITY 5,530 3,866 -- 9,396 11.6%
BOONVILLE 6,180 3,950 -- 10,130 17.3%
MISSOURI
TOTAL 11,710 7,816 -- 19,526 14.0%
IOWA
BETTENDORF 12,926 3,559 -- 16,485 25.2%
DAVENPORT 5,902 3,454 -- 9,356 16.6%
MARQUETTE 4,521 1,640 -- 6,161 20.5%
IOWA TOTAL 23,349 8,653 -- 32,002 21.4%
COLORADO
BLACK HAWK
(9) 15,564 3,474 -- 19,038 30.0%
COLORADO
CENTRAL
STATION
(9) (298) 1,228 -- 930 (1.8%)
COLORADO
TOTAL 15,266 4,702 -- 19,968 22.4%
INTERNATIONAL
BLUE CHIP (855) 109 247 (499) (24.8%)
OUR LUCAYA (3,824) 701 -- (3,123) (41.3%)
INTER-
NATIONAL
TOTAL (4,679) 810 247 (3,622) (36.8%)
CORPORATE &
OTHER (10) (18,128) 1,145 -- (16,983) N/M
$59,142 $49,247 $247 $108,636 10.8%
1. EBITDA is "earnings before interest, income taxes, depreciation and
amortization." Isle of Capri calculates Adjusted EBITDA at its
properties by adding preopening expense, management fees, other
charges and non-cash items to EBITDA. 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 (Adjusted EBITDA before
corporate expense) 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 2006 and 2005 results have been reclassified to
reflect the Colorado Grande-Cripple Creek 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 23, October 24, October 23, October 24,
2005 2004 2005 2004
(In thousands)
Adjusted EBITDA $41,574 $48,598 $95,106 $108,636
(Add)/deduct:
Depreciation and
amortization 25,383 25,725 50,652 49,247
Hurricane related
charges, net (3) 1,200 -- 1,200 --
Preopening 151 192 184 247
Interest expense, net 20,302 18,958 39,438 36,353
Minority interest 1,892 1,549 3,948 3,682
Loss on early
extinguishment of debt -- -- --
Income tax expense
(benefit) (3,135) 1,989 (139) 8,675
Loss (income) from
discontinued operations,
net of income taxes -- (263) 58 (625)
Net income $(4,219) $448 $(235) $11,057
2. New development expenses include incremental costs incurred pursuing
new opportunities within the industry. Such costs include, but are
not limited to, legal and other professional fees, application fees,
as well as personnel and travel costs. New development expenses for
the three and six months ended October 23, 2005, also include UK
related expenditures of $1.1 million and $3.2 million, respectively,
compared to $1.9 million for the three and six months ended October
24, 2004.
3. 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 effected by
hurricanes. This account 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. Any lost profit recoveries will be recognized when agreed to
with the insurance carrier and will be reflected in the related
properties revenue and Adjusted EBITDA(1).
4. Consolidated net interest expense is comprised of the following
components:
Restricted Blue Chip
Group Colorado & Other Consolidated
(In thousands)
Three Months Ended October 23, 2005
Interest expense $18,427 $3,838 $219 $22,484
Interest income (631) (53) (409) (1,092)
Capitalized interest (329) (511) (250) (1,090)
Net interest expense $17,467 $3,274 $(440) $20,302
Six Months Ended October 23, 2005
Interest expense $36,378 $7,323 $428 $44,129
Interest income (1,188) (70) (908) (2,166)
Capitalized interest (980) (1,139) (407) (2,526)
Net interest expense $34,209 $6,115 $(886) $39,438
Restricted Blue Chip
Group Colorado & Other Consolidated
(In thousands)
Three Months Ended October 24, 2004
Interest expense $16,961 $2,710 $115 $19,786
Interest income (267) (19) (11) (297)
Capitalized interest (270) (261) -- (531)
Net interest expense $16,424 $2,423 $104 $18,958
Six Months Ended October 24, 2004
Interest expense $32,589 $5,116 $188 $37,893
Interest income (611) (50) (12) (675)
Capitalized interest (468) (399) -- (867)
Net interest expense $31,510 $4,667 $176 $36,353
Colorado includes the Isle-Black Hawk's and Colorado Central Station-
Black Hawk's components of net interest expense. Blue Chip and Other
includes Blue Chip-Dudley's, Blue Chip-Wolverhampton's and Blue Chip-
Walsall's components of net interest expense.
5. Minority interest represents unrelated third parties' portions of the
Isle-Black Hawk's income before income taxes and Colorado Central
Station-Black Hawk's net income.
6. The company's effective tax rate from continuing operations for the
year to date ending October 23, 2005 was 60.0% compared to 44.1% for
the six months ended October 24, 2004, which, in each case, excludes
an unrelated party's portion of the Colorado Central Station-Black
Hawk's income taxes. This increase in effective rate over the
comparable prior fiscal period is attributable to the effect of
permanent items on lower forecasted earnings for the entire fiscal
year.
7. On April 25, 2005, the Company sold Colorado Grande-Cripple Creek. As
a result, its operations are reflected as discontinued operations.
8. Net revenues are presented net of complimentaries; slot points expense
and cash coupon redemptions. Fiscal 2006 and 2005 results have been
reclassified to reflect the Colorado Grande-Cripple Creek as
discontinued operations.
9. As management fees are eliminated in consolidation, Adjusted EBITDA
for the Isle-Black Hawk and the Colorado Central Station-Black Hawk
does not include management fees. Fiscal 2006 and 2005 results have
been reclassified to reflect the Colorado Grande-Cripple Creek as
discontinued operations. The following table shows management fees
and Adjusted EBITDA inclusive of management fees for the three and six
months ended October 23, 2005 and October 24, 2004:
Three Months Ended Six Months Ended
October October October October
23, 2005 24, 2004 23, 2005 24, 2004
(In thousands)
Management Fees
Isle - Black Hawk $1,349 $1,204 $2,684 $2,472
Colorado Central Station 493 255 997 519
Colorado Grande -- 89 -- 190
Adjusted EBITDA with
Management Fees
Isle - Black Hawk 8,547 7,648 17,036 16,566
Colorado Central Station 2,225 154 4,248 411
Colorado Grande -- 276 (58) 688
10. For the three months ended October 23, 2005, corporate and other
includes net revenues of $4.5 million and Adjusted EBITDA of
$(1.1) million for Pompano Park. For the six months ended October 23,
2005, corporate and other includes net revenues of $10.7 million and
Adjusted EBITDA of $(1.4) million for Pompano Park. For the three
months ended October 24, 2004, corporate and other includes net
revenues of $4.2 million and Adjusted EBITDA of $(0.6) million for
Pompano Park. For the six months ended October 24, 2004, corporate
and other includes net revenues of $9.3 million and Adjusted EBITDA of
$(1.0) million for Pompano Park.
Isle of Capri Casinos, Inc., a leading developer and owner of gaming and entertainment facilities, operates 15 casinos in 13 locations. The Company owns and operates riverboat and dockside casinos in Biloxi, Vicksburg, Lula and Natchez, Mississippi; Bossier City and 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 Bahamas, and a two-thirds ownership interest in casinos in Dudley, Wolverhampton and Walsall, England. The Company also owns and operates Pompano Park Harness Racing Track in Pompano Beach, Florida. As a publicly held company, the Company regularly files reports with the Securities and Exchange Commission (the "SEC"). These reports are required by the Securities Exchange Act of 1934 and include: * Annual Reports on Form 10-K; * Quarterly Reports on Form 10-Q; * Current Reports on Form 8-K; and * All amendments to those reports. The Company's Internet website is http://www.islecorp.com/ . The Company makes its filings available free of charge on its Internet website as soon as reasonably practical after the Company electronically files or furnishes such reports to the SEC. You may read and copy the reports, statements and other information the Company files with the SEC at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20546. You can request copies of these documents by writing to the SEC but must pay photocopying fees. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Its SEC filings are also available to the public on the SEC's Internet site (http://www.sec.gov/). Contact: Allan B. Solomon, Executive Vice President, 561-995-6660 Donn Mitchell, Chief Accounting Officer, 228-396-7030 Jill Haynes, Director of Corporate Communications, 228-396-7031 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 24, 2005 and Form 10-Q for the fiscal quarters ended since that date. Website: http://www.theislecorp.com/ |
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