CENTERPLATE REPORTS CONTINUED REVENUE GROWTH
FOR SECOND QUARTER 2005
SPARTANBURG, S.C., August 1, 2005 – Centerplate, Inc. (AMEX: CVP; TSX: CVP.un), today reported financial results for the second quarter and fiscal year-to-date ended June 28, 2005. Net sales increased by $8.3 million, or 4.8%, to $182.1 million, compared to net sales of $173.7 million for the second quarter of 2004. During the quarter, Major League Baseball (MLB) sales improved $3.5 million compared to the second quarter of 2004 primarily due to six additional games played during this quarter. Sales at convention centers increased approximately $5.8 million compared to the second quarter of 2004 due to an increase in the number of events held in these facilities. New accounts, added after the second quarter of 2004, increased sales by $7.2 million and all other facilities contributed an additional $1.5 million. Partially offsetting the improvement in revenues were declines of $4.1 million due to the expiration of some of the company’s contracts and $5.6 million in revenues from other entertainment facilities, due primarily to lower concert activity at some of these facilities.
Adjusted earnings before interest, income taxes, depreciation and amortization (EBITDA) increased 2.1%, or approximately $0.4 million, to $18.0 million for the second quarter of 2005 compared to $17.6 million in the second quarter of 2004.
“We are pleased to report continued revenue growth during the second quarter of 2005", said Janet L. Steinmayer, President and Acting Chief Executive Officer of Centerplate. “We are also pleased to report growth in EBITDA, year over year, while we have continued our investments in the company’s strategic initiatives.”
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For the twenty-six weeks ended June 28, 2005, net sales increased by 6.4%, or $17.3 million, to $289.3 million from $272.0 million during the comparable period in 2004. Adjusted EBITDA for the twenty-six week period increased by 1.4%, or approximately $0.3 million, to $20.5 million in 2005 from $20.2 million in 2004.
The company reported a net loss of $2.5 million for the second quarter of 2005 compared to income of $5.4 million in the second quarter of 2004. For the twenty-six weeks ended June 28, 2005, the company reported a net loss of $6.9 million compared to a loss of $3.8 million in the prior year period. The primary reason for the declines were the prepayment fees and other costs associated with refinancing the company’s senior credit facility. On a per share basis, Centerplate reported a net loss of $0.11 for the second quarter of 2005 compared to income of $0.23 for the comparable period in 2004.
As previously announced, Centerplate will make its 20th monthly distribution to IDS holders on August 19, 2005 at the anticipated annual rate of approximately $1.56 per IDS.
Centerplate will discuss its second quarter 2005 financial results on a conference call today, Monday, August 1 at 5:30 p.m. eastern daylight time. Interested parties may participate in the call by dialing 877-692-2590 approximately 10 minutes before the call is scheduled to begin. International callers should dial 973-935-8508. An audio webcast of the conference call can also be accessed via www.centerplate.com. For individuals unable to participate in the conference call, a telephone replay will be available from 8:00 p.m. on August 1, 2005 through midnight on August 21, 2005. The replay can be accessed domestically by dialing 877-519-4471 or for international callers, 973-341-3080. The passcode for the replay call is 6281973.
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About Centerplate
Centerplate is a leading provider of catering, concessions, merchandise and facility management services for sports facilities, convention centers and other entertainment venues. Visit the company online atwww.centerplate.com.
Presentation of Information in this Press Release
Centerplate presents Adjusted EBITDA because covenants in the indenture governing the company’s subordinated notes contain ratios based on this measure. A reconciliation of adjusted EBITDA to net income or loss is included in the attached tables.
Forward-Looking Statements
The information contained in this news release, other than historical information, includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. These statements may involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. Although Centerplate believes that the expectations reflected in such forward-looking statements are reasonable, the company can give no assurance that such expectations will prove to have been correct or that they will occur. Important factors beyond Centerplate’s control, including general economic conditions, consumer spending levels, adverse weather conditions and other factors, as well as the risks identified in the prospectus relating to the offering of IDSs and our most recent annual report on Form 10-K, could cause actual results to differ materially from Centerplate’s expectations. Centerplate undertakes no obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
Contact Information
Gael Doar
Director of Communications
203-975-5941
gael.doar@centerplate.com
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(Financial Tables Follow)
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CENTERPLATE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
| | | | | | | | | | | | | | | | | |
| | | Thirteen Weeks Ended | | | Twenty-six Weeks Ended | |
| | | June 28, | | | June 29, | | | June 28, | | | June 29, | |
| | | 2005 | | | 2004 | | | 2005 | | | 2004 | |
| | | (In thousands, except share data) | |
| | | | | | | | | | | | | | | | | |
| Net sales | | $ | 182,071 | | | $ | 173,725 | | | $ | 289,291 | | | $ | 271,961 | |
| | | | | | | | | | | | | | | | | |
| Cost of sales | | | 146,410 | | | | 140,546 | | | | 235,441 | | | | 222,693 | |
| Selling, general and administrative expense | | | 17,884 | | | | 15,596 | | | | 33,650 | | | | 29,143 | |
| Depreciation and amortization | | | 7,296 | | | | 6,601 | | | | 14,101 | | | | 13,479 | |
| Contract related losses | | | — | | | | 121 | | | | — | | | | 121 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Income from operations | | | 10,481 | | | | 10,861 | | | | 6,099 | | | | 6,525 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Interest expense, net | | | 13,123 | | | | 7,052 | | | | 18,523 | | | | 14,028 | |
| | | | | | | | | | | | | | | | | |
| Other income, net | | | (219 | ) | | | (38 | ) | | | (305 | ) | | | (95 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Income (loss) before income taxes | | | (2,423 | ) | | | 3,847 | | | | (12,119 | ) | | | (7,408 | ) |
| | | | | | | | | | | | | | | | | |
| Income tax provision (benefit) | | | 50 | | | | (1,547 | ) | | | (5,213 | ) | | | (3,625 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net income (loss) | | | (2,473 | ) | | | 5,394 | | | | (6,906 | ) | | | (3,783 | ) |
| | | | | | | | | | | | | | | | | |
| Accretion of conversion option | | | — | | | | (142 | ) | | | — | | | | (317 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net income (loss) available to common stock with or without the conversion option | | $ | (2,473 | ) | | $ | 5,252 | | | $ | (6,906 | ) | | $ | (4,100 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Basic net income (loss) per share with conversion option | | $ | (0.11 | ) | | $ | 0.27 | | | $ | (0.31 | ) | | $ | (0.10 | ) |
| | | | | | | | | | | | | |
| Diluted net income (loss) per share with conversion option | | $ | (0.11 | ) | | $ | 0.27 | | | $ | (0.31 | ) | | $ | (0.10 | ) |
| | | | | | | | | | | | | |
| Basic net income (loss) per share without conversion option | | $ | (0.11 | ) | | $ | 0.23 | | | $ | (0.31 | ) | | $ | (0.18 | ) |
| | | | | | | | | | | | | |
| Diluted net income (loss) per share without conversion option | | $ | (0.11 | ) | | $ | 0.23 | | | $ | (0.31 | ) | | $ | (0.18 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding with conversion option | | | 4,060,997 | | | | 4,060,997 | | | | 4,060,997 | | | | 4,060,997 | |
| Weighted average shares outstanding without conversion option | | | 18,463,995 | | | | 18,463,995 | | | | 18,463,995 | | | | 18,463,995 | |
| | | | | | | | | | | | | |
| Total weighted average shares outstanding | | | 22,524,992 | | | | 22,524,992 | | | | 22,524,992 | | | | 22,524,992 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Dividends declared per share | | $ | 0.20 | | | $ | 0.20 | | | $ | 0.40 | | | $ | 0.40 | |
| | | | | | | | | | | | | |
CENTERPLATE, INC.
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EARNINGS BEFORE INTEREST,
INCOME TAXES, DEPRECIATION, AND AMORTIZATION (UNAUDITED)
| | | | | | | | | | | | | | | | | |
| | | Thirteen Weeks Ended | | | Twenty-six Weeks Ended | |
| | | June 28, | | | June 29, | | | June 28, | | | June 29, | |
| | | 2005 | | | 2004 | | | 2005 | | | 2004 | |
| | | (In thousands) | |
| Net income (loss) | | $ | (2,473 | ) | | $ | 5,394 | | | $ | (6,906 | ) | | $ | (3,783 | ) |
| Income tax provision (benefit) | | | 50 | | | | (1,547 | ) | | | (5,213 | ) | | | (3,625 | ) |
| | | | | | | | | | | | | |
| Income (loss) before income taxes | | | (2,423 | ) | | | 3,847 | | | | (12,119 | ) | | | (7,408 | ) |
| Adjustments: | | | | | | | | | | | | | | | | |
| Interest expense (1) | | | 13,123 | | | | 7,052 | | | | 18,523 | | | | 14,028 | |
| Depreciation and amortization | | | 7,296 | | | | 6,601 | | | | 14,101 | | | | 13,479 | |
| | | | | | | | | | | | | |
| EBITDA (2) | | $ | 17,996 | | | $ | 17,500 | | | $ | 20,505 | | | $ | 20,099 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| The following adjustments to EBITDA were made to compute Adjusted EBITDA: |
| | | | | | | | | | | | | | | | | |
| EBITDA | | $ | 17,996 | | | $ | 17,500 | | | $ | 20,505 | | | $ | 20,099 | |
| Adjustments: | | | | | | | | | | | | | | | | |
| Contract related losses | | | — | | | | 121 | | | | — | | | | 121 | |
| | | | | | | | | | | | | |
| Adjusted EBITDA (2) | | $ | 17,996 | | | $ | 17,621 | | | $ | 20,505 | | | $ | 20,220 | |
| | | | | | | | | | | | | |
| | |
| (1) | | Included in interest expense for the 13 and 26 week periods ended June 29, 2004 is $1.2 million in expenses related to the repurchase of $12.3 million in senior subordinated notes issued in 1999, of which $0.3 million is amortization expense. Included in interest expense for the 13 and 26 week periods ended June 28, 2005 is $6.2 million in expenses related to entering into our new credit agreement on April 1, 2005. The $6.2 million includes a prepayment premium of approximately $4.6 million on the prior credit facility and a $1.6 million non-cash charge for the write-off of deferred financing costs. |
| |
| (2) | | EBITDA is not a measure in accordance with GAAP. EBITDA is not intended to represent cash flows from operations as determined by GAAP and should not be used as an alternative to income (loss) before taxes or net income (loss) as an indicator of operating performance or to cash flows as a measure of liquidity. We believe that EBITDA is an important measure of the cash returned on our investment in capital expenditures under our contracts. Adjusted EBITDA as defined in the indenture governing our subordinated notes issued in 2003, is determined as EBITDA as adjusted for transaction related expenses, contract related losses, other non-cash charges, and the former annual management fee paid to affiliates of Blackstone and GE Capital, less any non-cash credits. We present Adjusted EBITDA because covenants in the indenture governing our 2003 notes contain ratios based on this measure and it is used by management to among other things evaluate our ability to make interest and dividend payments. |
CENTERPLATE, INC.
SELECTED CONSOLIDATED CASH FLOW DATA (UNAUDITED)
| | | | | | | | | | | | | | | | | |
| | | Thirteen Weeks Ended | | | Twenty-six Weeks Ended | |
| | | June 28, | | | June 29, | | | June 28, | | | June 29, | |
| | | 2005 | | | 2004 | | | 2005 | | | 2004 | |
| | | (In thousands) | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | (2,473 | ) | | $ | 5,394 | | | $ | (6,906 | ) | | $ | (3,783 | ) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | | | | | | | | | | | | | | |
| Depreciation and amortization | | | 7,296 | | | | 6,601 | | | | 14,101 | | | | 13,479 | |
| Amortization of deferred financing costs | | | 1,803 | | | | 379 | | | | 2,185 | | | | 1,051 | |
| Non-cash interest earned on restricted cash | | | (45 | ) | | | — | | | | (45 | ) | | | — | |
| Changes in liability for derivative | | | 601 | | | | 1,586 | | | | 496 | | | | 1,755 | |
| Contract related losses | | | — | | | | 121 | | | | — | | | | 121 | |
| Deferred tax change | | | 50 | | | | (1,547 | ) | | | (5,213 | ) | | | (3,625 | ) |
| Gain (loss) on disposition of assets | | | (3 | ) | | | — | | | | (4 | ) | | | 7 | |
| Other | | | (92 | ) | | | (112 | ) | | | (159 | ) | | | (109 | ) |
| | | | | | | | | | | | | | | | | |
| Changes in assets and liabilities | | | 15,746 | | | | 13,370 | | | | 15,007 | | | | 12,737 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net cash provided by operating activities | | | 22,883 | | | | 25,792 | | | | 19,462 | | | | 21,633 | |
| | | | | | | | | | | | | |
| |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | | | | | |
| Purchase of property and equipment | | | (3,977 | ) | | | (2,092 | ) | | | (7,509 | ) | | | (3,119 | ) |
| Proceeds from sale of property and equipment | | | 7 | | | | 87 | | | | 336 | | | | 90 | |
| Purchase of contract rights | | | (1,633 | ) | | | (445 | ) | | | (6,277 | ) | | | (1,958 | ) |
| Return of unamortized capital investment | | | — | | | | 6,148 | | | | — | | | | 6,148 | |
| Restricted cash | | | 180 | | | | — | | | | — | | | | 13,628 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net cash provided by (used in) investing activities | | | (5,423 | ) | | | 3,698 | | | | (13,450 | ) | | | 14,789 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | | | | |
| Net payments — revolving loans | | | (18,750 | ) | | | (16,000 | ) | | | — | | | | (4,000 | ) |
| Principal payments on long-term debt | | | (65,000 | ) | | | — | | | | (65,000 | ) | | | — | |
| Proceeds from issuance of long-term debt | | | 107,500 | | | | — | | | | 107,500 | | | | — | |
| Payment of existing subordinated notes | | | — | | | | — | | | | — | | | | (12,250 | ) |
| Payment of financing costs | | | (6,403 | ) | | | (8 | ) | | | (7,194 | ) | | | (351 | ) |
| Payment of debt issuance costs | | | — | | | | — | | | | — | | | | (267 | ) |
| Dividend payments | | | (4,460 | ) | | | (4,459 | ) | | | (8,920 | ) | | | (9,414 | ) |
| Increase (decrease) in bank overdrafts | | | 1,232 | | | | 3,356 | | | | (461 | ) | | | 100 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net cash provided by (used in) financing activities | | | 14,119 | | | | (17,111 | ) | | | 25,925 | | | | (26,182 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| INCREASE IN CASH | | | 31,579 | | | | 12,379 | | | | 31,937 | | | | 10,240 | |
| | | | | | | | | | | | | | | | | |
| CASH AND CASH EQUIVALENTS: | | | | | | | | | | | | | | | | |
| Beginning of period | | | 25,135 | | | | 20,790 | | | | 24,777 | | | | 22,929 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| End of period | | $ | 56,714 | | | $ | 33,169 | | | $ | 56,714 | | | $ | 33,169 | |
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CENTERPLATE, INC.
SELECTED CONSOLIDATED BALANCE SHEET DATA (UNAUDITED)
| | | | | | | | | |
| | | June 28, | | | December 28, | |
| | | 2005 | | | 2004 | |
| ASSETS | | (In thousands) | |
| | | | | | | | | |
| Current assets | | $ | 112,207 | | | $ | 71,755 | |
| | | | | | | | | |
| Property and equipment, net | | | 50,397 | | | | 48,222 | |
| | | | | | | | | |
| Contract rights, net | | | 86,575 | | | | 87,981 | |
| | | | | | | | | |
| Cost in excess of net assets acquired | | | 41,142 | | | | 41,142 | |
| | | | | | | | | |
| Deferred financing costs, net | | | 16,716 | | | | 11,707 | |
| | | | | | | | | |
| Other assets | | | 42,431 | | | | 38,239 | |
| | | | | | | |
| | | | | | | | | |
| TOTAL ASSETS | | $ | 349,468 | | | $ | 299,046 | |
| | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| | | | | | | | | |
| Current liabilities | | $ | 93,664 | | | $ | 70,243 | |
| | | | | | | | | |
| Long-term debt | | | 211,670 | | | | 170,245 | |
| | | | | | | | | |
| Other liabilities | | | 7,893 | | | | 6,332 | |
| | | | | | | | | |
| | | | | | | | | |
| Common Stock with conversion option, par value $0.01, exchangeable for subordinated debt, net of discount | | | 14,352 | | | | 14,352 | |
| | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Total stockholders’ equity | | | 21,889 | | | | 37,874 | |
| | | | | | | |
| | | | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 349,468 | | | $ | 299,046 | |
| | | | | | | |
