Exhibit 99.1
FOR IMMEDIATE RELEASE
ISLE OF CAPRI CASINOS, INC. ANNOUNCES
SECOND QUARTER RESULTS
· Company reaches settlement with insurance carriers for Hurricane Katrina
· Company continues to cut costs, realign corporate structure to integrate two-brand strategy
· Strategic plan showing clear signs of operational progress in uncertain economic market
SAINT LOUIS, MO – December 2, 2008 – Isle of Capri Casinos, Inc. (NASDAQ: ISLE) (the “Company”) today reported financial results for the second quarter of fiscal year 2009 ended October 26, 2008 and other Company-related news.
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 26, | | October 28, | | October 26, | | October 28, | |
| | 2008 | | 2007 | | 2008 | | 2007 | |
Net revenues | | $ | 254.1 | | $ | 278.8 | | $ | 536.4 | | $ | 557.4 | |
Net (loss) | | (13.5 | ) | (24.6 | ) | (17.1 | ) | (31.8 | ) |
Net Loss per share | | (0.43 | ) | (0.80 | ) | (0.55 | ) | (1.04 | ) |
EBITDA(1) | | 35.7 | | 35.5 | | 87.1 | | 82.2 | |
| | | | | | | | | | | | | |
Significant items impacting EBITDA and the net loss during the three and six months ended October 26, 2008 and October 28, 2007 are as follows:
| | Three Months Ended | | Six Months Ended | |
| | October 26, | | October 28, | | October 26, | | October 28, | |
| | 2008 | | 2007 | | 2008 | | 2007 | |
Items impacting EBITDA and Net Loss: | | | | | | | | | |
Write-offs and other charges | | $ | — | | $ | (6.5 | ) | $ | (6.0 | ) | $ | (6.5 | ) |
Pre-opening | | — | | (0.3 | ) | — | | (6.5 | ) |
Development | | (0.1 | ) | (0.8 | ) | (0.2 | ) | (2.3 | ) |
Minority interest | | — | | (2.0 | ) | — | | (4.0 | ) |
Additional item impacting Net Loss: | | | | | | | | | |
Loss on early extinguishment of debt | | — | | (11.5 | ) | — | | (13.7 | ) |
| | | | | | | | | | | | | |
In making the announcement, James B. Perry, the Company’s executive vice chairman and chief executive officer, said, “Despite the overall economic uncertainty that has had a profound impact on consumer spending across the country, I believe that our company has done an effective job of improving our operations while coping with the first overall declining gaming market that I have experienced in my thirty year career. We are doing everything prudently possible to partially compensate for declining revenues. Overall, we are optimistic that we are implementing the right measures to have a meaningful positive impact on our operations which we believe will provide a platform for improved results when the economy improves.
“Consistent with industry trends, we experienced pronounced revenue declines in August and September, but slightly recovered in October. Our primary focus continues to be improving our operations, our balance sheet and protecting our capital structure.
“From the capital structure standpoint we’re pleased to announce that we have recently reached an agreement with our insurance carriers to settle our Hurricane Katrina claim and expect to receive approximately $95 million by the end of December. While the settlement provides us with a significant liquidity cushion for the next twelve months, in light of the current economic uncertainty, the state of the capital markets, and our financial position we will not
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undertake any new significant capital projects, including any further work in Biloxi, until we have seen sustained signs of economic improvement.”
Second Quarter Highlights
During the quarter, net revenues decreased $24.7 million, or 8.9%, compared to the second quarter of fiscal 2008, to $254.1 million. EBITDA increased by $0.2 million, to $35.7 million. The Company’s net loss for the quarter improved to ($13.5) million, or ($0.43) per share, compared to ($24.6) million, or ($0.80) per share, for the same period of the prior fiscal year.
Included in EBITDA for the quarter ended October 28, 2007 is $6.5 million in write-offs and other charges related to abandoned development projects, $0.3 million in pre-opening costs, $0.8 million in development costs and $2.0 million in minority interest charges related to the previous minority interest in the Company’s Colorado operations. Before consideration of these items, EBITDA for the second quarter of fiscal 2008 was $45.2 million. These items had a combined impact on earnings per share of ($0.25) during the second quarter of fiscal 2008.
Property EBITDA during the quarter ended October 26, 2008 was $48.8 million compared to Property EBITDA of $57.2 million for the quarter ended October 28, 2007 before consideration of the previously mentioned charges.
In commenting on the results, Virginia McDowell, the Company’s president and chief operating officer, remarked, “We continue to focus on the key operating initiatives that we have implemented to enhance the customer experience and improve financial results across the company. We know through steadily improving See. Say. Smile. scores and customer research that our customer courtesy initiatives are proving successful and our customers are reacting positively to our operating and physical changes.
“Second quarter EBITDA was negatively impacted by the slowing economic environment and the impact on our Lake Charles, Biloxi and Natchez properties caused by hurricanes Gustav and Ike. We estimate the combined impact of the hurricanes to be at least $3.5 million in EBITDA in the second quarter. In addition, the smoking ban in Colorado, and an extremely unlevel playing field in terms of taxes and the nearby competitive landscape in Pompano continue to negatively impact operating results. We have also been operating without one of our hotels in Lula, Mississippi since October 2007, which has negatively impacted business, however, we look forward to re-opening the refurbished hotel in December, which will provide an important amenity for our overnight guests and provide the property with much needed weekend hotel capacity.
“On the positive front, our operations in Iowa and Missouri have held up relatively well in these uncertain economic conditions and we have been able to significantly reduce the losses in our international operations.”
Corporate and Other Expenses
Corporate expense during the second quarter of fiscal 2009 increased to $13.2 million from $12.9 million during the comparable quarter in fiscal 2008. The increase is primarily due to stock compensation expenses related to the Company’s recent tender offer pertaining to the exchange of certain employee stock options for cash and restricted stock.
Total consolidated stock compensation expense, including corporate and properties, was $3.8 million for the second quarter of fiscal 2009 compared to $2.9 million for the second quarter of fiscal 2008. For the six months ended October 26, 2008 stock compensation expense was $6.5 million compared to $3.8 million for the six months ended October 28, 2007.
A loss from early extinguishment of debt was recognized during the quarter ended October 28, 2007, relating to a previously outstanding bond issue with proceeds from the refinancing of our Senior Credit Facility.
Capital Structure and Capital Expenditures Update
The Company announced that it recently reached a final settlement with its insurance carriers relating to Hurricane Katrina. The settlement calls for the Company to receive approximately $95 million in cash before the end of the calendar year. In addition, the Company will record a pretax gain of approximately $90 million in its fiscal third quarter relating to this settlement.
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As of October 26, 2008, the Company had $85.5 million cash and cash equivalents and total debt of $1.5 billion. Total borrowing capacity at the end of the quarter was approximately 100.0 million.
Capital expenditures for the three months ended October 26, 2008, totaled $23.0 million of which, approximately $11.5 million related to project capital expenditures. For the six months ended October 26, 2008, capital expenditures were approximately $31.0 million, of which approximately $14.0 million was related to project capital.
Capital expenditures for the last two quarters of the year are expected to be between $30 and $40 million, of which approximately $10 to $15 million is expected to be project capital, primarily attributable to completing room renovations in Lula and Lake Charles and completion of the rebranding efforts in Caruthersville and Marquette.
Conference Call Information
Isle of Capri Casinos, Inc. will host a conference call on Tuesday, December 2, 2008, at 10:00 am central time during which management will discuss the financial and other matters addressed in this press release. The conference call can be accessed by interested parties via webcast through the investor relations page of the Company’s website, www.islecorp.com, or, for domestic callers, by dialing (800) 299-0148. Other international callers can access the conference call by dialing (617) 801-9711. The conference call reference number is 86106121.
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ISLE OF CAPRI CASINOS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
| | Three Months Ended | | Six Months Ended | |
| | October 26, | | October 28, | | October 26, | | October 28, | |
| | 2008 | | 2007 | | 2008 | | 2007 | |
Revenues: | | | | | | | | | |
Casino | | $ | 255,655 | | $ | 278,282 | | $ | 536,656 | | $ | 555,516 | |
Rooms | | 12,774 | | 13,080 | | 26,480 | | 26,921 | |
Pari-mutuel commissions and fees | | 3,123 | | 3,838 | | 7,396 | | 8,414 | |
Food, beverage and other | | 30,682 | | 33,603 | | 63,722 | | 67,671 | |
Gross revenues | | 302,234 | | 328,803 | | 634,254 | | 658,522 | |
Less promotional allowances | | 48,094 | | 49,965 | | 97,809 | | 101,151 | |
Net revenues | | 254,140 | | 278,838 | | 536,445 | | 557,371 | |
Operating expenses: | | | | | | | | | |
Casino | | 39,677 | | 41,330 | | 80,103 | | 80,693 | |
Gaming taxes | | 63,722 | | 71,965 | | 134,867 | | 141,037 | |
Rooms | | 3,193 | | 3,164 | | 6,582 | | 6,345 | |
Pari-mutuel | | 2,929 | | 3,172 | | 6,115 | | 6,844 | |
Food, beverage and other | | 10,274 | | 11,400 | | 21,592 | | 23,029 | |
Marine and facilities | | 17,388 | | 16,781 | | 34,293 | | 33,271 | |
Marketing and administrative | | 68,049 | | 73,683 | | 136,301 | | 142,999 | |
Corporate and development | | 13,225 | | 12,919 | | 23,531 | | 23,993 | |
Write-offs and other charges | | — | | 6,526 | | 6,000 | | 6,526 | |
Pre-opening | | — | | 324 | | — | | 6,457 | |
Depreciation and amortization | | 32,268 | | 35,270 | | 65,007 | | 65,827 | |
Total operating expenses | | 250,725 | | 276,534 | | 514,391 | | 537,021 | |
Operating income | | 3,415 | | 2,304 | | 22,054 | | 20,350 | |
Interest expense | | (24,837 | ) | (29,176 | ) | (49,493 | ) | (54,990 | ) |
Interest income | | 499 | | 1,140 | | 1,056 | | 2,234 | |
Loss on early extinguishment of debt | | — | | (11,468 | ) | — | | (13,660 | ) |
| | | | | | | | | |
Income (loss) before income taxes and minority interest | | (20,923 | ) | (37,200 | ) | (26,383 | ) | (46,066 | ) |
Income tax (provision) benefit | | 7,423 | | 14,611 | | 9,257 | | 18,289 | |
Minority interest | | — | | (2,046 | ) | — | | (3,973 | ) |
Net income (loss) | | $ | (13,500 | ) | $ | (24,635 | ) | $ | (17,126 | ) | $ | (31,750 | ) |
| | | | | | | | | |
Earnings (loss) per common share-basic: | | | | | | | | | |
Net income (loss) | | $ | (0.43 | ) | $ | (0.80 | ) | $ | (0.55 | ) | $ | (1.04 | ) |
| | | | | | | | | |
Earnings (loss) per common share-diluted: | | | | | | | | | |
Net income (loss) | | $ | (0.43 | ) | $ | (0.80 | ) | $ | (0.55 | ) | $ | (1.04 | ) |
| | | | | | | | | |
Weighted average basic shares | | 31,171,903 | | 30,726,768 | | 31,019,289 | | 30,558,957 | |
Weighted average diluted shares | | 31,171,903 | | 30,726,768 | | 31,019,289 | | 30,558,957 | |
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ISLE OF CAPRI CASINOS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
| | (unaudited) | | | |
| | October 26, | | April 27, | |
| | 2008 | | 2008 | |
ASSETS | | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 85,497 | | $ | 91,790 | |
Marketable securities | | 19,227 | | 18,533 | |
Accounts receivable, net | | 9,093 | | 12,195 | |
Insurance receivable, net | | 3,928 | | 7,689 | |
Income tax receivable | | 37,539 | | 28,663 | |
Deferred income taxes | | 12,606 | | 12,606 | |
Prepaid expenses and other assets | | 35,797 | | 27,905 | |
Total current assets | | 203,687 | | 199,381 | |
Property and equipment, net | | 1,287,098 | | 1,328,986 | |
Other assets: | | | | | |
Goodwill | | 307,649 | | 307,649 | |
Other intangible assets, net | | 88,676 | | 89,252 | |
Deferred financing costs, net | | 12,098 | | 13,381 | |
Restricted cash | | 2,774 | | 4,802 | |
Prepaid deposits and other | | 21,629 | | 22,948 | |
Deferred income taxes | | 8,910 | | 7,767 | |
Total assets | | $ | 1,932,521 | | $ | 1,974,166 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
Current liabilities: | | | | | |
Current maturities of long-term debt | | $ | 9,225 | | $ | 9,698 | |
Accounts payable | | 23,095 | | 29,283 | |
Accrued liabilities: | | | | | |
Interest | | 9,665 | | 8,580 | |
Payroll and related | | 46,925 | | 47,618 | |
Property and other taxes | | 34,676 | | 30,137 | |
Other | | 58,064 | | 58,121 | |
Total current liabilities | | 181,650 | | 183,437 | |
Long-term debt, less current maturities | | 1,476,081 | | 1,497,591 | |
Other accrued liabilities | | 51,062 | | 52,821 | |
Other long-term liabilities | | 50,423 | | 52,305 | |
Stockholders’ equity: | | | | | |
Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued | | — | | — | |
Common stock, $.01 par value; 45,000,000 shares authorized; shares issued: | | | | | |
36,104,924 at October 26, 2008 and 35,229,006 at April 27, 2008 | | 361 | | 353 | |
Class B common stock, $.01 par value; 3,000,000 shares authorized; none issued | | — | | — | |
Additional paid-in capital | | 193,936 | | 188,036 | |
Retained earnings | | 41,127 | | 58,253 | |
Accumulated other comprehensive income (loss) | | (9,720 | ) | (5,601 | ) |
| | 225,704 | | 241,041 | |
Treasury stock, 4,340,476 shares at October 26, 2008 and 4,372,073 shares at April 27, 2008 | | (52,399 | ) | (53,029 | ) |
Total stockholders’ equity | | 173,305 | | 188,012 | |
Total liabilities and stockholders’ equity | | $ | 1,932,521 | | $ | 1,974,166 | |
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Isle of Capri Casinos, Inc.
Supplemental Data - Net Revenues
(unaudited, in thousands)
| | Three Months Ended | | Six Months Ended | |
| | October 26, | | October 28, | | October 26, | | October 28, | |
| | 2008 | | 2007 | | 2008 | | 2007 | |
| | | | | | | | | |
Mississippi | | | | | | | | | |
Biloxi | | $ | 19,112 | | $ | 21,019 | | $ | 43,455 | | $ | 47,772 | |
Natchez | | 8,511 | | 8,766 | | 17,096 | | 18,420 | |
Lula | | 15,945 | | 18,549 | | 34,346 | | 38,065 | |
Mississippi Total | | 43,568 | | 48,334 | | 94,897 | | 104,257 | |
| | | | | | | | | |
Louisiana | | | | | | | | | |
Lakes Charles | | 32,928 | | 37,502 | | 74,102 | | 80,503 | |
| | | | | | | | | |
Missouri | | | | | | | | | |
Kansas City | | 17,360 | | 18,766 | | 35,571 | | 38,476 | |
Boonville | | 18,610 | | 20,403 | | 38,845 | | 41,069 | |
Caruthersville (2) | | 7,331 | | 7,459 | | 15,146 | | 11,839 | |
Missouri Total | | 43,301 | | 46,628 | | 89,562 | | 91,384 | |
| | | | | | | | | |
Iowa | | | | | | | | | |
Bettendorf | | 23,154 | | 23,133 | | 49,281 | | 46,580 | |
Davenport | | 13,357 | | 13,068 | | 23,942 | | 26,677 | |
Marquette | | 8,327 | | 8,875 | | 16,814 | | 18,372 | |
Waterloo (2) | | 20,267 | | 18,955 | | 39,866 | | 27,069 | |
Iowa Total | | 65,105 | | 64,031 | | 129,903 | | 118,698 | |
| | | | | | | | | |
Colorado | | | | | | | | | |
Black Hawk/Colorado Central Station | | 31,423 | | 39,309 | | 64,612 | | 78,529 | |
| | | | | | | | | |
Florida | | | | | | | | | |
Pompano (2) | | 31,117 | | 36,396 | | 68,020 | | 70,593 | |
| | | | | | | | | |
International | | | | | | | | | |
Blue Chip | | 1,840 | | 2,078 | | 3,903 | | 4,555 | |
Coventry (2) | | 2,723 | | 1,576 | | 5,570 | | 1,976 | |
Our Lucaya | | 2,072 | | 2,879 | | 5,645 | | 6,709 | |
International Total | | 6,635 | | 6,533 | | 15,118 | | 13,240 | |
| | | | | | | | | |
Other | | 63 | | 105 | | 231 | | 167 | |
| | | | | | | | | |
| | $ | 254,140 | | $ | 278,838 | | $ | 536,445 | | $ | 557,371 | |
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Isle of Capri Casinos, Inc.
Supplemental Data - EBITDA
(unaudited, in thousands)
| | Three Months Ended | | Six Months Ended | |
| | October 26, | | October 28, | | October 26, | | October 28, | |
| | 2008 | | 2007 | | 2008 | | 2007 | |
| | | | | | | | | |
Mississippi | | | | | | | | | |
Biloxi | | $ | 1,333 | | $ | 2,967 | | $ | 6,245 | | $ | 9,260 | |
Natchez | | 2,729 | | 2,547 | | 5,707 | | 5,571 | |
Lula | | 3,526 | | 4,862 | | 9,626 | | 10,289 | |
Mississippi Total | | 7,588 | | 10,376 | | 21,578 | | 25,120 | |
| | | | | | | | | |
Louisiana | | | | | | | | | |
Lakes Charles | | 5,467 | | 7,676 | | 16,154 | | 18,222 | |
| | | | | | | | | |
Missouri | | | | | | | | | |
Kansas City | | 2,658 | | 2,301 | | 6,277 | | 6,011 | |
Boonville | | 5,995 | | 6,184 | | 12,343 | | 12,797 | |
Caruthersville (2) | | 1,246 | | 1,809 | | 2,949 | | 2,927 | |
Missouri Total | | 9,899 | | 10,294 | | 21,569 | | 21,735 | |
| | | | | | | | | |
Iowa | | | | | | | | | |
Bettendorf | | 7,945 | | 7,040 | | 17,514 | | 14,752 | |
Davenport | | 4,309 | | 2,637 | | 7,509 | | 6,203 | |
Marquette | | 2,267 | | 2,067 | | 4,687 | | 4,825 | |
Waterloo (2) | | 5,589 | | 3,761 | | 11,722 | | 3,481 | |
Iowa Total | | 20,110 | | 15,505 | | 41,432 | | 29,261 | |
| | | | | | | | | |
Colorado | | | | | | | | | |
Black Hawk/Colorado Central Station | | 7,919 | | 14,035 | | 17,327 | | 27,911 | |
| | | | | | | | | |
Florida | | | | | | | | | |
Pompano (2) | | (224 | ) | 2,844 | | 2,006 | | 2,238 | |
| | | | | | | | | |
International | | | | | | | | | |
Blue Chip | | (195 | ) | (433 | ) | (307 | ) | (409 | ) |
Coventry (2) | | (802 | ) | (4,146 | ) | (2,326 | ) | (8,255 | ) |
Our Lucaya | | (918 | ) | (897 | ) | (1,074 | ) | (956 | ) |
International Total | | (1,915 | ) | (5,476 | ) | (3,707 | ) | (9,620 | ) |
| | | | | | | | | |
Total Property EBITDA(1) | | 48,844 | | 55,254 | | 116,359 | | 114,867 | |
| | | | | | | | | |
Corporate, Development and Other(3)(4) | | (13,161 | ) | (17,680 | ) | (29,298 | ) | (28,690 | ) |
| | | | | | | | | |
Minority Interest | | — | | (2,046 | ) | — | | (3,973 | ) |
| | | | | | | | | |
Total EBITDA(1) | | $ | 35,683 | | $ | 35,528 | | $ | 87,061 | | $ | 82,204 | |
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Isle of Capri Casinos, Inc.
Supplemental Data - Reconciliation of Operating Income to EBITDA
(unaudited, in thousands)
| | Three Months Ended October 26, 2008 | | Three Months Ended October 28, 2007 | |
| | | | Depreciation | | | | | | Depreciation | | | |
| | Operating | | and | | | | Operating | | and | | | |
| | Income | | Amortization | | EBITDA | | Income | | Amortization | | EBITDA | |
Mississippi | | | | | | | | | | | | | |
Biloxi | | $ | (3,093 | ) | $ | 4,426 | | $ | 1,333 | | $ | (1,724 | ) | $ | 4,691 | | $ | 2,967 | |
Natchez | | 1,925 | | 804 | | 2,729 | | 1,612 | | 935 | | 2,547 | |
Lula | | 1,404 | | 2,122 | | 3,526 | | 1,583 | | 3,279 | | 4,862 | |
Mississippi Total | | 236 | | 7,352 | | 7,588 | | 1,471 | | 8,905 | | 10,376 | |
| | | | | | | | | | | | | |
Louisiana | | | | | | | | | | | | | |
Lakes Charles | | 2,320 | | 3,147 | | 5,467 | | 3,855 | | 3,821 | | 7,676 | |
| | | | | | | | | | | | | |
Missouri | | | | | | | | | | | | | |
Kansas City | | 1,503 | | 1,155 | | 2,658 | | 827 | | 1,474 | | 2,301 | |
Boonville | | 4,776 | | 1,219 | | 5,995 | | 4,911 | | 1,273 | | 6,184 | |
Caruthersville (2) | | 58 | | 1,188 | | 1,246 | | 1,130 | | 679 | | 1,809 | |
Missouri Total | | 6,337 | | 3,562 | | 9,899 | | 6,868 | | 3,426 | | 10,294 | |
| | | | | | | | | | | | | |
Iowa | | | | | | | | | | | | | |
Bettendorf | | 5,698 | | 2,247 | | 7,945 | | 4,655 | | 2,385 | | 7,040 | |
Davenport | | 3,249 | | 1,060 | | 4,309 | | 1,345 | | 1,292 | | 2,637 | |
Marquette | | 1,583 | | 684 | | 2,267 | | 1,318 | | 749 | | 2,067 | |
Waterloo (2) | | 2,686 | | 2,903 | | 5,589 | | 997 | | 2,764 | | 3,761 | |
Iowa Total | | 13,216 | | 6,894 | | 20,110 | | 8,315 | | 7,190 | | 15,505 | |
| | | | | | | | | | | | | |
Colorado | | | | | | | | | | | | | |
Black Hawk/Colorado Central Station | | 3,432 | | 4,487 | | 7,919 | | 10,038 | | 3,997 | | 14,035 | |
| | | | | | | | | | | | | |
Florida | | | | | | | | | | | | | |
Pompano (2) | | (4,395 | ) | 4,171 | | (224 | ) | (1,161 | ) | 4,005 | | 2,844 | |
| | | | | | | | | | | | | |
International | | | | | | | | | | | | | |
Blue Chip | | (267 | ) | 72 | | (195 | ) | (560 | ) | 127 | | (433 | ) |
Coventry (2) | | (2,063 | ) | 1,261 | | (802 | ) | (6,058 | ) | 1,912 | | (4,146 | ) |
Our Lucaya | | (922 | ) | 4 | | (918 | ) | (899 | ) | 2 | | (897 | ) |
International Total | | (3,252 | ) | 1,337 | | (1,915 | ) | (7,517 | ) | 2,041 | | (5,476 | ) |
| | | | | | | | | | | | | |
Total Properties | | 17,894 | | 30,950 | | 48,844 | | 21,869 | | 33,385 | | 55,254 | |
| | | | | | | | | | | | | |
Corporate, Development and Other (3)(4) | | (14,479 | ) | 1,318 | | (13,161 | ) | (19,565 | ) | 1,885 | | (17,680 | ) |
Minority Interest | | | | | | — | | | | | | (2,046 | ) |
| | $ | 3,415 | | $ | 32,268 | | $ | 35,683 | | $ | 2,304 | | $ | 35,270 | | $ | 35,528 | |
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Isle of Capri Casinos, Inc.
Supplemental Data - Reconciliation of Operating Income to EBITDA
(unaudited, in thousands)
| | Six Months Ended October 26, 2008 | | Six Months Ended October 28, 2007 | |
| | | | Depreciation | | | | | | Depreciation | | | |
| | Operating | | and | | | | Operating | | and | | | |
| | Income | | Amortization | | EBITDA | | Income | | Amortization | | EBITDA | |
Mississippi | | | | | | | | | | | | | |
Biloxi | | $ | (2,731 | ) | $ | 8,976 | | $ | 6,245 | | $ | (216 | ) | $ | 9,476 | | $ | 9,260 | |
Natchez | | 4,018 | | 1,689 | | 5,707 | | 3,676 | | 1,895 | | 5,571 | |
Lula | | 5,252 | | 4,374 | | 9,626 | | 4,175 | | 6,114 | | 10,289 | |
Mississippi Total | | 6,539 | | 15,039 | | 21,578 | | 7,635 | | 17,485 | | 25,120 | |
| | | | | | | | | | | | | |
Louisiana | | | | | | | | | | | | | |
Lakes Charles | | 9,709 | | 6,445 | | 16,154 | | 10,526 | | 7,696 | | 18,222 | |
| | | | | | | | | | | | | |
Missouri | | | | | | | | | | | | | |
Kansas City | | 3,858 | | 2,419 | | 6,277 | | 3,243 | | 2,768 | | 6,011 | |
Boonville | | 9,914 | | 2,429 | | 12,343 | | 10,296 | | 2,501 | | 12,797 | |
Caruthersville (2) | | 630 | | 2,319 | | 2,949 | | 1,956 | | 971 | | 2,927 | |
Missouri Total | | 14,402 | | 7,167 | | 21,569 | | 15,495 | | 6,240 | | 21,735 | |
| | | | | | | | | | | | | |
Iowa | | | | | | | | | | | | | |
Bettendorf | | 12,967 | | 4,547 | | 17,514 | | 9,883 | | 4,869 | | 14,752 | |
Davenport | | 5,322 | | 2,187 | | 7,509 | | 3,562 | | 2,641 | | 6,203 | |
Marquette | | 3,311 | | 1,376 | | 4,687 | | 3,259 | | 1,566 | | 4,825 | |
Waterloo (2) | | 6,004 | | 5,718 | | 11,722 | | (225 | ) | 3,706 | | 3,481 | |
Iowa Total | | 27,604 | | 13,828 | | 41,432 | | 16,479 | | 12,782 | | 29,261 | |
| | | | | | | | | | | | | |
Colorado | | | | | | | | | | | | | |
Black Hawk/Colorado Central Station | | 8,352 | | 8,975 | | 17,327 | | 19,943 | | 7,968 | | 27,911 | |
| | | | | | | | | | | | | |
Florida | | | | | | | | | | | | | |
Pompano (2) | | (6,371 | ) | 8,377 | | 2,006 | | (5,615 | ) | 7,853 | | 2,238 | |
| | | | | | | | | | | | | |
International | | | | | | | | | | | | | |
Blue Chip | | (477 | ) | 170 | | (307 | ) | (661 | ) | 252 | | (409 | ) |
Coventry (2) | | (4,662 | ) | 2,336 | | (2,326 | ) | (11,005 | ) | 2,750 | | (8,255 | ) |
Our Lucaya | | (1,083 | ) | 9 | | (1,074 | ) | (958 | ) | 2 | | (956 | ) |
International Total | | (6,222 | ) | 2,515 | | (3,707 | ) | (12,624 | ) | 3,004 | | (9,620 | ) |
| | | | | | | | | | | | | |
Total Properties | | 54,013 | | 62,346 | | 116,359 | | 51,839 | | 63,028 | | 114,867 | |
| | | | | | | | | | | | | |
Corporate, Development and Other (3)(4) | | (31,959 | ) | 2,661 | | (29,298 | ) | (31,489 | ) | 2,799 | | (28,690 | ) |
Minority Interest | | | | | | — | | | | | | (3,973 | ) |
| | $ | 22,054 | | $ | 65,007 | | $ | 87,061 | | $ | 20,350 | | $ | 65,827 | | $ | 82,204 | |
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1. EBITDA is “earnings before interest and other non-operating income (expense), income taxes, and depreciation and amortization.” EBITDA is presented after consideration of minority interest. “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 26, | | October 28, | | October 26, | | October 28, | |
| | 2008 | | 2007 | | 2008 | | 2007 | |
| | | | | | | | | |
EBITDA | | $ | 35,683 | | $ | 35,528 | | $ | 87,061 | | $ | 82,204 | |
(Add)/deduct: | | | | | | | | | |
Depreciation and amortization | | 32,268 | | 35,270 | | 65,007 | | 65,827 | |
Interest expense: | | | | | | | | | |
Interest expense, net | | 24,338 | | 28,036 | | 48,437 | | 52,756 | |
Loss on early extinguishment of debt | | — | | 11,468 | | — | | 13,660 | |
Income tax provision (benefit) | | (7,423 | ) | (14,611 | ) | (9,257 | ) | (18,289 | ) |
Net income (loss) | | $ | (13,500 | ) | $ | (24,635 | ) | $ | (17,126 | ) | $ | (31,750 | ) |
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 pre-opening expenses, certain write-offs and valuation expenses, and stock compensation expense. Reference can be made to the definition of Adjusted EBITDA in the applicable debt agreements on file as Exhibits to our filing with the Securities and Exchange Commission.
2. During 2007, we opened or acquired new properties as follows:
Property | | Date | |
| | | |
Pompano | | April 2007 | |
Caruthersville | | June 2007 | |
Waterloo | | June 2007 | |
Coventry | | July 2007 | |
Our operating results reflect the impact of these openings as well as the incurrence of pre-opening costs for the three and six months ended October 26, 2007 as follows:
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| | Pre-Opening Expenses | |
| | October 28, 2007 | |
Property | | Three Months Ended | | Six Months Ended | |
Pompano | | $ | — | | $ | 307 | |
Waterloo | | 324 | | 3,348 | |
Coventry | | — | | 2,802 | |
| | | | | | | |
3. Total consolidated stock compensation expense including corporate and properties for the three and six months ended October 26, 2008 and October 28, 2007 was $3.8 million, $6.5 million, $2.9 million, and $3.8 million respectively, of which, $2.8 million, $4.8 million, $2.5 million, and $3.2 million were included in corporate and development expense, respectively.
4. Write-offs and other charges for the six months ended October 26, 2008 reflect a charge for $6.0 million relating the termination of an agreement for the potential development of a casino project in the Portland, Oregon area. As a part of this termination agreement reached during the six months ended October 26, 2008, we agreed to terminate our rights under a land option and to pay a termination fee. As a result of this termination, we recorded a $6.0 million charge consisting of a write-off of $5.0 million representing our previously capitalized rights under the land option and $1.0 million termination fee. For the three and six months ended October 28, 2007, write-offs and other charges reflected a $6.5 million for the termination of a lease to develop a new casino in West Harrison County, Mississippi and the write-off of construction projects in Davenport, Iowa, and Kansas City, Missouri.
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 18 casino properties. The Company owns and operates casinos in Biloxi, Lula and Natchez, Mississippi; Lake Charles, Louisiana; Bettendorf, Davenport, Marquette and Waterloo, Iowa; Boonville, Caruthersville, Kansas City, Missouri; two casinos in Black Hawk, Colorado; and a casino and harness track in Pompano Beach, Florida. Isle of Capri Casinos’ international gaming interests include a casino that it operates in Freeport, Grand Bahama, a casino in Coventry, England, and a two-thirds ownership interest in casinos in Dudley and Wolverhampton, England.
Forward-Looking Statements
This press release may 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 conditions, the economy, 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 and results of operations is included in the Company’s filings with the Securities and Exchange Commission, including, but not limited to, the Company’s annual report on Form 10-K for the most recently ended fiscal year. This and other information is available through the Securities and Exchange Commission at www.sec.gov, or through the Company’s website, www.islecorp.com.
CONTACTS:
Isle of Capri Casinos, Inc.,
Dale Black, Chief Financial Officer-314.813.9327
Jill Haynes, Senior Director of Corporate Communication-314.813.9368
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