Exhibit 99.1
CENTERPLATE REPORTS FOURTH QUARTER
AND FULL-YEAR 2007 RESULTS
STAMFORD, Conn., March 10, 2008 — Centerplate, Inc. (AMEX: CVP; TSX: CVP.un), today reported financial results for the fourth quarter and fiscal year ended January 1, 2008. Net sales of $740.7 million for fiscal year 2007 increased 8.7% from $681.1 million in fiscal year 2006 due to strong sales across key lines of business. Adjusted earnings before interest, income taxes, depreciation and amortization (EBITDA) increased $0.6 million, or 1%, to $58.1 million for 2007 compared to $57.5 million in 2006. The increase in adjusted EBITDA for the year was driven by strong sales, partially offset by higher product costs in convention centers, higher expenses in pursuit of new accounts and higher costs associated with continuing to implement the company’s strategic plan.
“We are pleased to be reporting increased sales and adjusted EBITDA for the second year in a row,” said Janet L. Steinmayer, President and CEO of Centerplate. She added, “We’re also pleased with the strength of our new sales with approximately $76 million awarded in 2007 — more than double our highest year since we went public — and an additional $36 million in new sales so far in 2008. With the recent announcement of our restaurant joint venture, we’re off to a good start in 2008.”
The net sales increase in fiscal year 2007 was primarily driven by higher sales at the company’s Major League Baseball (MLB), convention center, National Football League (NFL), and minor league baseball facilities, which increased $21.5 million, $13.1 million, $11.9 million and $10.1 million, respectively. Higher sales at the company’s MLB facilities were the result of increased attendance and per capita
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spending at a number of the company’s facilities and the All Star game. Higher sales at convention centers were primarily driven by an increase in the number and size of events held at these facilities. Sales at the company’s NFL accounts were higher primarily due to the re-opening of the Louisiana Superdome and New Orleans Arena which were closed for renovations until September 2006, and higher per capita spending in a number of NFL facilities. Sales at minor league baseball facilities increased primarily due to the addition of five new ballparks. Sales at all other facilities increased $3.0 million. New accounts contributed $19.0 million which was partially offset by closed accounts totaling $11.2 million.
Net sales in the fourth quarter increased 6.6%, to $168.4 million, compared to net sales of $158.0 million in the fourth quarter of 2006. Adjusted EBITDA increased 5.3%, to $11.3 million, compared to $10.7 million in the fourth quarter of 2006. The increase in net sales was driven by the opening of the Prudential Center in New Jersey, home of the National Hockey League’s New Jersey Devils, and higher convention center sales in the quarter. Adjusted EBITDA in the quarter increased due to higher sales and unmatched severance costs in the prior year period.
For the full year 2007, Centerplate reported a net loss of $1.9 million compared to income of $3.5 million in 2006. On a per share basis, Centerplate reported a net loss of $0.08 per share in 2007 compared to net income of $0.15 per share for fiscal 2006. The decline in net income and earnings per share was primarily due to increased interest expense driven by higher revolver borrowings and changes in the fair market value of the company’s derivatives. Net income was also negatively impacted by costs associated with the secondary offering completed in December 2007. For the fourth quarter of 2007, Centerplate reported a net loss of $2.1 million compared to a net loss of $3.1 million in the fourth quarter of 2006. On a per share basis, Centerplate reported a net loss of $0.09 per share in the fourth quarter of 2007 compared to a net loss of $0.14 per share in the fourth quarter of 2006. The improvement in the net loss for the fourth quarter of 2007 was partially due to higher income tax benefits.
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As previously announced, Centerplate will make its 51st consecutive monthly distribution to IDS holders on March 20, 2008 at the anticipated annual rate of approximately $1.56 per IDS.
Centerplate will discuss its year-end and fourth quarter 2007 financial results on a conference call today, Monday, March 10 at 5:30 p.m. EDT. Interested parties may participate in the call by dialing 877-407-8029 approximately 10 minutes before the call is scheduled to begin. International callers should dial 201-689-8029. 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 March 10, 2008 through midnight on March 24, 2008. The replay can be accessed domestically by dialing 877-660-6853 or for international callers, 201-612-7415. The replay account number is 252 and the pass code for the replay call is 276318.
About Centerplate
Centerplate, with its principal executive office in Stamford, CT, crafts and delivers extraordinary entertainment experiences in approximately 130 prominent sports, entertainment and convention center venues throughout the United States and Canada. Visit the company online atwww.centerplate.com .
Presentation of Information in this Press Release
Centerplate presents adjusted EBITDA, a non-GAAP measure, 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
This news release 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
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expectations reflected in these forward-looking statements are reasonable, the company can give no assurance that these 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, changing trends in our business and competitive environment, adverse weather conditions and other factors, as well as the risks identified in our most recent annual report on Form 10-K and other filings with the Securities and Exchange Commission, 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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CENTERPLATE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
| | | | | | | | | | | | | | | | | |
| | | 13 Weeks Ended | | | 52 Weeks Ended | |
| | | January 1, | | | January 2, | | | January 1, | | | January 2, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| | | (In thousands, except share data) | |
| | | | | | | | | | | | | | | | | |
| Net sales | | $ | 168,373 | | | $ | 157,987 | | | $ | 740,686 | | | $ | 681,120 | |
| Cost of sales (excluding depreciation and amortization) | | | 138,222 | | | | 128,919 | | | | 604,785 | | | | 554,752 | |
| Selling, general and administrative | | | 19,167 | | | | 18,854 | | | | 79,640 | | | | 70,538 | |
| Depreciation and amortization | | | 8,353 | | | | 7,517 | | | | 31,443 | | | | 28,854 | |
| Transaction related expenses | | | 660 | | | | 700 | | | | 1,660 | | | | 700 | |
| Contract related losses | | | — | | | | 258 | | | | — | | | | 358 | |
| | | | | | | | | | | | | |
| Operating income | | | 1,971 | | | | 1,739 | | | | 23,158 | | | | 25,918 | |
| | | | | | | | | | | | | |
| Interest expense | | | 6,045 | | | | 6,112 | | | | 28,505 | | | | 24,360 | |
| Other income | | | (327 | ) | | | (526 | ) | | | (1,841 | ) | | | (1,690 | ) |
| | | | | | | | | | | | | |
| Income (loss) before income taxes | | | (3,747 | ) | | | (3,847 | ) | | | (3,506 | ) | | | 3,248 | |
| Income tax provision (benefit) | | | (1,681 | ) | | | (720 | ) | | | (1,628 | ) | | | (230 | ) |
| | | | | | | | | | | | | |
| Net income (loss) | | $ | (2,066 | ) | | $ | (3,127 | ) | | $ | (1,878 | ) | | $ | 3,478 | |
| | | | | | | | | | | | | |
| Basic and diluted net earnings (loss) per share with and without conversion option | | $ | (0.09 | ) | | $ | (0.14 | ) | | $ | (0.08 | ) | | $ | 0.15 | |
| | | | | | | | | | | | | |
| Weighted average shares outstanding with conversion option | | | 2,856,086 | | | | 4,060,997 | | | | 3,759,769 | | | | 4,060,997 | |
| Weighted average shares outstanding without conversion option | | | 19,211,040 | | | | 18,463,995 | | | | 18,650,756 | | | | 18,463,995 | |
| | | | | | | | | | | | | |
| Total weighted average shares outstanding | | | 22,067,126 | | | | 22,524,992 | | | | 22,410,525 | | | | 22,524,992 | |
| | | | | | | | | | | | | |
| Dividends declared per share | | $ | 0.19 | | | $ | 0.20 | | | $ | 0.79 | | | $ | 0.79 | |
| | | | | | | | | | | | | |
CENTERPLATE, INC.
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EARNINGS BEFORE INTEREST,
INCOME TAXES, DEPRECIATION, AND AMORTIZATION (UNAUDITED)
| | | | | | | | | | | | | | | | | |
| | | 13 Weeks Ended | | | 52 Weeks Ended | |
| | | January 1, | | | January 2, | | | January 1, | | | January 2, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| | | (In thousands, except share data) | |
| | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | (2,066 | ) | | $ | (3,127 | ) | | $ | (1,878 | ) | | $ | 3,478 | |
| Income tax provision (benefit) | | | (1,681 | ) | | | (720 | ) | | | (1,628 | ) | | | (230 | ) |
| | | | | | | | | | | | | |
| Income (loss) before income taxes | | | (3,747 | ) | | | (3,847 | ) | | | (3,506 | ) | | | 3,248 | |
| Adjustments: | | | | | | | | | | | | | | | | |
| Interest expense | | | 6,045 | | | | 6,112 | | | | 28,505 | | | | 24,360 | |
| Depreciation and amortization | | | 8,353 | | | | 7,517 | | | | 31,443 | | | | 28,854 | |
| | | | | | | | | | | | | |
| EBITDA (1) | | $ | 10,651 | | | $ | 9,782 | | | $ | 56,442 | | | $ | 56,462 | |
| | | | | | | | | | | | | |
| The following adjustments to EBITDA were made to compute Adjusted EBITDA: | | | | | | | | | | | | | | | | |
| EBITDA | | $ | 10,651 | | | $ | 9,782 | | | $ | 56,442 | | | $ | 56,462 | |
| Adjustments: | | | | | | | | | | | | | | | | |
| Transaction related expenses (2) | | | 660 | | | | 700 | | | | 1,660 | | | | 700 | |
| Contract related losses (3) | | | — | | | | 258 | | | | — | | | | 358 | |
| | | | | | | | | | | | | |
| Adjusted EBITDA (1) | | $ | 11,311 | | | $ | 10,740 | | | $ | 58,102 | | | $ | 57,520 | |
| | | | | | | | | | | | | |
| | |
| (1) | | 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. |
| |
| (2) | | Reflects expenses incurred in connection with the secondary public offering completed in December 2007. |
| |
| (3) | | Reflects non-cash expense for the write-off of impaired assets associated with the Company’s contracts. |
CENTERPLATE, INC.
SELECTED CONSOLIDATED CASH FLOW DATA (UNAUDITED)
(in thousands)
| | | | | | | | | | | | | | | | | |
| | | 13 Weeks Ended | | | 52 Weeks Ended | |
| | | January 1, | | | January 2, | | | January 1, | | | January 2, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | (2,066 | ) | | $ | (3,127 | ) | | $ | (1,878 | ) | | $ | 3,478 | |
| Adjustments to reconcile net income (loss) to net cash provided by | | | | | | | | | | | | | | | | |
| (used in) operating activities: | | | | | | | | | | | | | | | | |
| Depreciation and amortization | | | 8,353 | | | | 7,517 | | | | 31,443 | | | | 28,854 | |
| Amortization of deferred financing costs | | | 642 | | | | 642 | | | | 2,569 | | | | 2,569 | |
| Charge for impaired assets | | | — | | | | 258 | | | | — | | | | 358 | |
| Non-cash interest earned on restricted cash | | | (109 | ) | | | (115 | ) | | | (459 | ) | | | (425 | ) |
| Derivative non-cash interest | | | (1,308 | ) | | | (1,010 | ) | | | (940 | ) | | | (3,364 | ) |
| Deferred tax change | | | (2,420 | ) | | | (710 | ) | | | (2,900 | ) | | | (707 | ) |
| Loss (gain) on disposition of assets | | | (8 | ) | | | 54 | | | | (34 | ) | | | 22 | |
| Other | | | 80 | | | | (281 | ) | | | 1,309 | | | | 9 | |
| Changes in assets and liabilities | | | (11,582 | ) | | | (9,070 | ) | | | (6,913 | ) | | | 8,562 | |
| | | | | | | | | | | | | |
| Net cash provided by (used in) operating activities | | | (8,418 | ) | | | (5,842 | ) | | | 22,197 | | | | 39,356 | |
| | | | | | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | | | | | |
| Purchase of property and equipment | | | (3,141 | ) | | | (4,148 | ) | | | (15,390 | ) | | | (13,752 | ) |
| Proceeds from sale of property and equipment | | | 117 | | | | — | | | | 134 | | | | 250 | |
| Purchase of contract rights | | | (10,710 | ) | | | (1,609 | ) | | | (21,690 | ) | | | (14,014 | ) |
| Return of unamortized capital investment | | | — | | | | — | | | | — | | | | 1,828 | |
| Restricted cash | | | 5,276 | | | | (13,080 | ) | | | 11,934 | | | | (13,080 | ) |
| | | | | | | | | | | | | |
| Net cash used in investing activities | | | (8,458 | ) | | | (18,837 | ) | | | (25,012 | ) | | | (38,768 | ) |
| | | | | | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | | | | |
| Repayments — revolving loans | | | (9,000 | ) | | | (5,000 | ) | | | (74,500 | ) | | | (10,000 | ) |
| Borrowings — revolving loans | | | 29,500 | | | | 20,000 | | | | 85,000 | | | | 25,000 | |
| Net borrowings — swingline loans | | | 4,000 | | | | — | | | | 4,000 | | | | — | |
| Principal payments on long-term debt | | | — | | | | (268 | ) | | | (807 | ) | | | (1,075 | ) |
| Restricted cash (proceeds from issuance of IDSs) | | | (807 | ) | | | — | | | | (807 | ) | | | — | |
| Dividend payments | | | (4,358 | ) | | | (4,460 | ) | | | (17,738 | ) | | | (17,840 | ) |
| Increase (decrease) in bank overdrafts | | | (2,804 | ) | | | (1,340 | ) | | | 1,929 | | | | 1,508 | |
| | | | | | | | | | | | | |
| Net cash provided by (used in) financing activities | | | 16,531 | | | | 8,932 | | | | (2,923 | ) | | | (2,407 | ) |
| | | | | | | | | | | | | |
| INCREASE (DECREASE) IN CASH | | | (344 | ) | | | (15,747 | ) | | | (5,738 | ) | | | (1,819 | ) |
| CASH AND CASH EQUIVALENTS: | | | | | | | | | | | | | | | | |
| Beginning of period | | | 34,198 | | | | 55,338 | | | | 39,591 | | | | 41,410 | |
| | | | | | | | | | | | | |
| End of period | | $ | 33,853 | | | $ | 39,591 | | | $ | 33,853 | | | $ | 39,591 | |
| | | | | | | | | | | | | |
CENTERPLATE, INC.
SELECTED CONSOLIDATED BALANCE SHEET DATA (UNAUDITED)
| | | | | | | | | |
| | | January 1, | | | January 2, | |
| | | 2008 | | | 2007 | |
| | | (in thousands) | |
| | | | | | | | | |
ASSETS | | | | | | | | |
| Current assets | | $ | 95,517 | | | $ | 102,194 | |
| Property and equipment, net | | | 51,986 | | | | 50,684 | |
| Contract rights, net | | | 85,183 | | | | 79,209 | |
| Cost in excess of net assets acquired | | | 41,142 | | | | 41,142 | |
| Deferred financing costs, net | | | 10,361 | | | | 12,930 | |
| Other assets | | | 48,163 | | | | 46,211 | |
| | | | | | | |
| TOTAL ASSETS | | $ | 332,352 | | | $ | 332,370 | |
| | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY) | | | | | | | | |
| Current liabilities | | $ | 114,992 | | | $ | 98,700 | |
| Long-term debt | | | 223,334 | | | | 209,789 | |
| Other liabilities | | | 11,560 | | | | 8,279 | |
| Common Stock with conversion option, par value $0.01, exchangeable for subordinated debt, net of discount | | | — | | | | 14,352 | |
| | | | | | | |
| Total stockholders’ equity (deficiency) | | | (17,534 | ) | | | 1,250 | |
| | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY) | | $ | 332,352 | | | $ | 332,370 | |
| | | | | | | |
