Exhibit 99.1
ISLE OF CAPRI CASINOS, INC. ANNOUNCES
FISCAL 2014 THIRD QUARTER RESULTS
SAINT LOUIS, MO — February 27, 2014 — Isle of Capri Casinos, Inc. (NASDAQ: ISLE) (the “Company”) today reported financial results for the third quarter of fiscal year 2014 ended January 26, 2014 and other Company-related news.
Consolidated Financial Results
The following table outlines the Company’s financial results (dollars in millions, except per share data, unaudited):
| | Three Months Ended | | Nine Months Ended | |
| | January 26, | | January 27, | | January 26, | | January 27, | |
| | 2014 | | 2013 | | 2014 | | 2013 | |
Net revenues | | $ | 224.2 | | $ | 228.0 | | $ | 693.8 | | $ | 666.0 | |
Consolidated Adjusted EBITDA (1) | | 37.0 | | 39.9 | | 116.2 | | 119.4 | |
| | | | | | | | | |
Income (loss) from continuing operations | | 9.4 | | (2.5 | ) | 10.0 | | (5.2 | ) |
Income (loss) from discontinued operations | | 1.3 | | 0.3 | | 3.8 | | 3.0 | |
Net income (loss) | | 10.7 | | (2.2 | ) | 13.8 | | (2.2 | ) |
Diluted income (loss) per share from continuing operations | | 0.24 | | (0.06 | ) | 0.25 | | (0.13 | ) |
Diluted income per share from discontinued operations | | 0.03 | | — | | 0.10 | | 0.07 | |
Diluted income (loss) per share | | 0.27 | | (0.06 | ) | 0.35 | | (0.06 | ) |
| | | | | | | | | | | | | |
(1) For a further description of Consolidated Adjusted EBITDA, refer to the reconciliation tables following the narrative and the definition of Adjusted EBITDA in footnote (1) of this release.
Virginia McDowell, the Company’s president and chief executive officer, commented, “We continue to improve the efficiency of our operations despite the ongoing impact of sluggish consumer spending and the severe winter weather conditions we experienced during the quarter. We increased Adjusted EBITDA at four of our properties and improved Adjusted EBITDA margins at seven of our properties, leading to overall margin growth across the portfolio of properties open for more than one year.”
Diluted income (loss) per share from continuing operations for the quarter was $0.24 compared to ($0.06) for the third quarter last year. Income from continuing operations for the quarter ended January 26, 2014 was impacted by the reversal of a $2.0 million litigation accrual due to a recent favorable court ruling, and the $12.0 million reversal of a previously recorded tax valuation allowance, as a result of the recent sale of our Davenport property. The Loss from continuing operations for the prior year quarter were impacted by preopening expense of $1.0 million related to our Nemacolin and Cape Girardeau properties. Excluding these items, Adjusted earnings per share from continuing operations would have been a loss of ($0.12) for the fiscal 2014 quarter, compared to a loss of ($0.04) for the prior year quarter.
McDowell continued, “The impacts of the weather and continuing revenue pressure, particularly at the lower end of our customer database, were at least partially offset by our ongoing and aggressive efforts to control costs and right-size our operating structure to our business volumes.
1
The success of our profit improvement initiatives led directly to the improvement in same store Adjusted EBITDA margins. We estimate these initiatives contributed approximately $2 million to Adjusted EBITDA during the quarter. We continue to believe that the profit improvement initiatives will result in annual savings of $10 million, when fully implemented.
“A few weeks ago we completed the sale of our property in Davenport and received approximately $50 million in net proceeds. We have initially used the proceeds to reduce borrowings under our senior credit facility.
“Furthermore, we completed the suitability hearing with our partner Tower Entertainment before the Pennsylvania Gaming Control Board in January. We are hopeful that The Provence, a unique proposal for a casino-anchored urban entertainment complex in Philadelphia, will be chosen by the Board for the remaining gaming license in Pennsylvania.”
Operating Results
Black Hawk — Our profit improvement efforts lead to an increase in Adjusted EBITDA from $6.0 million to $6.9 million at our two casinos in Black Hawk while operating margins increased to 24.3%, despite a decrease in net revenues of $0.5 million to $28.4 million. While weather conditions impacted the Black Hawk gaming market, we were successful in growing market share during the period.
Pompano — Net revenues increased 6.3% to $42.4 million, Adjusted EBITDA increased 23.1% to $9.1 million at Pompano Park, and operating margins increased 300 basis points to 21.6%. Growth was driven by a combination of focused marketing efforts resulting in increased slot play and disciplined cost control.
Iowa — Net revenues decreased 7.4% to $41.4 million, consistent with the markets in which we operate. In Waterloo and Marquette we were able to absorb the revenue decrease through operating efficiencies resulting in Adjusted EBITDA which was flat with the prior year, while Adjusted EBITDA margins increased by over 100 basis points at each property. The decline in Iowa Adjusted EBITDA was attributable to our property in Bettendorf where we were not able to offset an 11% decrease in net revenue.
Lake Charles — Net revenues increased 2.0% to $29.9 million, and Adjusted EBITDA increased 0.5% to $3.8 million. Market conditions were positively impacted by improved economic conditions in Louisiana and Northwest Texas, where unemployment declined during the period.
Missouri — Net revenues decreased 10.4% to $53.0 million, and Adjusted EBITDA decreased from $13.9 million to $12.9 million at our properties in Missouri, collectively. The third fiscal quarter was the first period reflecting year-over-year results for our property in Cape Girardeau. Despite a net revenue decrease of $3.0 million collectively at our properties in Boonville, Caruthersville and Kansas City, Adjusted EBITDA only decreased $0.1 million year-over-year and Adjusted EBITDA margins increased at each property, including increases of 176 basis points in Boonville to 35.7% and 181 basis points to 23.5% in Kansas City.
2
We continue to refine our business model in Cape Girardeau, where comparative net revenues decreased $3.2 million and Adjusted EBITDA decreased $0.9 million compared to the prior year third quarter, its first quarter of operations.
Mississippi — Net revenues decreased from $25.9 million to $22.9 million and Adjusted EBITDA decreased from $3.9 million to $2.1 million. Our properties in Mississippi continued to face competitive pressures during the period.
Pennsylvania — Net revenues were $6.1 million and Adjusted EBITDA was ($1.6) million. This is the first year of operation for Lady Luck Casino at Nemacolin Woodlands Resort. We continue to identify opportunities for cost savings in order to better match our operating expenses to revenue levels throughout the seasonal low period. We are also continuing to aggressively market the property in order to grow our database of customers.
Corporate Expenses
Corporate and development expenses were $7.2 million for the quarter, a decrease of $0.3 million compared to the prior year.
Non-cash stock compensation expense was $0.8 million for the quarter compared to $1.1 million in the third quarter of fiscal 2013.
Development
The Provence, Philadelphia, Pennsylvania — We are partnered with Tower Entertainment, LLC, to operate the proposed $700 million casino entertainment complex, dubbed The Provence, if selected for licensure by the Pennsylvania Gaming Control Board. As proposed the 1.25 million square foot project is expected to include a 125-room hotel, a casino featuring approximately 3,300 electronic gaming machines and 150 table games, as well as a wide variety of non-gaming entertainment amenities. The Pennsylvania Gaming Control Board has previously indicated that they currently expect to announce a decision with respect to the license in April of this year. More information about the project is available at www.theprovencecasino.com.
Capital Structure, Capital Expenditures and Updated Guidance
As of January 26, 2014, the Company had:
· $68.4 million in cash and cash equivalents, excluding $9.8 million in restricted cash and investments;
· $1.1 billion in total debt; and
· $120 million in net line of credit availability.
Third quarter capital expenditures were $2.2 million, bringing total capital expenditures to $32.9 million for the first nine months of fiscal 2014. The Company expects to incur approximately $6 million to $8 million in capital expenditures for the balance of fiscal 2014.
3
As a result of the impact of the recent sale of our Davenport casino, the favorable litigation reversals and other events, the Company updated its previously issued guidance for the following non-operating items for fiscal 2014:
· Interest expense is expected to be approximately $82 million ($22 million in the fourth quarter).
· Depreciation and amortization expense is expected to be approximately $81 million ($21 million in the fourth quarter).
Conference Call Information
Isle of Capri Casinos, Inc. will host a conference call on Thursday, February 27, 2014 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 877-870-4263. International callers can access the conference call by dialing 412-317-0790. The conference call will be recorded and available for review starting at 11:59 pm central on Thursday, February 27, 2014, until 11:59 pm central on Thursday, March 6, 2014, by dialing 877-344-7529; International: 412-317-0088 and access number 10041585.
About Isle of Capri Casinos, Inc.
Isle of Capri Casinos, Inc. is a leading regional gaming and entertainment company dedicated to providing guests with exceptional experience at each of the casino properties that it owns and operates, primarily under the Isle and Lady Luck brands. The Company currently owns and operates 15 gaming and entertainment facilities in Mississippi, Louisiana, Iowa, Missouri, Colorado, Pennsylvania and Florida. More information is available at the Company’s website, www.islecorp.com.
Forward-Looking Statements
This press release may be deemed to contain forward-looking statements, which are subject to change. These forward-looking statements may be significantly impacted, either positively or negatively by various factors, including without limitation, licensing, and other regulatory approvals, financing sources, development and construction activities, costs and delays, weather, permits, competition and business conditions in the gaming industry. The forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements herein.
Additional information concerning potential factors that could affect the Company’s financial condition, results of operations and expansion projects, is included in the filings of the Company with the Securities and Exchange Commission, including, but not limited to, its Form 10-K for the most recently ended fiscal year.
4
Contacts
Isle of Capri Casinos, Inc.,
Dale Black, Chief Financial Officer-314.813.9327
Jill Alexander, Senior Director of Corporate Communication-314.813.9368
###
5
ISLE OF CAPRI CASINOS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
| | Three Months Ended | | Nine Months Ended | |
| | January 26, | | January 27, | | January 26, | | January 27, | |
| | 2014 | | 2013 | | 2014 | | 2013 | |
Revenues: | | | | | | | | | |
Casino | | $ | 235,843 | | $ | 236,727 | | $ | 733,185 | | $ | 696,583 | |
Rooms | | 6,933 | | 6,830 | | 24,560 | | 23,788 | |
Food, beverage, pari-mutuel and other | | 32,404 | | 31,571 | | 99,123 | | 92,054 | |
Gross revenues | | 275,180 | | 275,128 | | 856,868 | | 812,425 | |
Less promotional allowances | | (50,990 | ) | (47,111 | ) | (163,044 | ) | (146,414 | ) |
Net revenues | | 224,190 | | 228,017 | | 693,824 | | 666,011 | |
Operating expenses: | | | | | | | | | |
Casino | | 38,354 | | 37,644 | | 118,414 | | 109,809 | |
Gaming taxes | | 60,324 | | 59,888 | | 185,454 | | 172,988 | |
Rooms | | 1,448 | | 1,398 | | 5,221 | | 4,934 | |
Food, beverage, pari-mutuel and other | | 10,608 | | 10,700 | | 31,724 | | 29,398 | |
Marine and facilities | | 13,967 | | 13,477 | | 42,969 | | 40,161 | |
Marketing and administrative | | 56,120 | | 58,690 | | 175,010 | | 168,140 | |
Corporate and development | | 7,230 | | 7,506 | | 21,314 | | 26,757 | |
Litigation accrual reversals | | (1,979 | ) | — | | (9,330 | ) | — | |
Preopening expense | | — | | 978 | | 3,898 | | 4,319 | |
Depreciation and amortization | | 20,171 | | 18,805 | | 60,495 | | 51,402 | |
Total operating expenses | | 206,243 | | 209,086 | | 635,169 | | 607,908 | |
Operating income | | 17,947 | | 18,931 | | 58,655 | | 58,103 | |
| | | | | | | | | |
Interest expense | | (21,910 | ) | (22,005 | ) | (59,758 | ) | (64,414 | ) |
Interest income | | 84 | | 100 | | 260 | | 406 | |
Derivative income | | — | | 222 | | 398 | | 532 | |
Loss from continuing operations before income taxes | | (3,879 | ) | (2,752 | ) | (445 | ) | (5,373 | ) |
Income tax benefit | | 13,270 | | 302 | | 10,499 | | 166 | |
Income (loss) from continuing operations | | 9,391 | | (2,450 | ) | 10,054 | | (5,207 | ) |
Income from discontinued operations, net of income taxes | | 1,266 | | 264 | | 3,778 | | 3,029 | |
Net income (loss) | | $ | 10,657 | | $ | (2,186 | ) | $ | 13,832 | | $ | (2,178 | ) |
| | | | | | | | | |
Income (loss) per common share-basic: | | | | | | | | | |
Income (loss) from continuing operations | | $ | 0.24 | | $ | (0.06 | ) | $ | 0.25 | | $ | (0.13 | ) |
Income from discontinued operations, net of income taxes | | 0.03 | | — | | 0.10 | | 0.07 | |
Net income (loss) | | $ | 0.27 | | $ | (0.06 | ) | $ | 0.35 | | $ | (0.06 | ) |
| | | | | | | | | |
Income (loss) per common share-dilutive: | | | | | | | | | |
Income (loss) from continuing operations | | $ | 0.24 | | $ | (0.06 | ) | $ | 0.25 | | $ | (0.13 | ) |
Income from discontinued operations, net of income taxes | | 0.03 | | — | | 0.10 | | 0.07 | |
Net income (loss) | | $ | 0.27 | | $ | (0.06 | ) | $ | 0.35 | | $ | (0.06 | ) |
| | | | | | | | | |
Weighted average basic shares | | 39,828,740 | | 39,488,480 | | 39,699,295 | | 39,280,965 | |
Weighted average diluted shares | | 39,911,715 | | 39,488,480 | | 39,758,965 | | 39,280,965 | |
6
ISLE OF CAPRI CASINOS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
| | January 26, | | April 28, | |
| | 2014 | | 2013 | |
| | (unaudited) | | | |
ASSETS | | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 68,422 | | $ | 68,469 | |
Marketable securities | | 25,477 | | 25,520 | |
Accounts receivable, net | | 10,115 | | 11,077 | |
Income taxes receivable | | 5,550 | | 4,789 | |
Deferred income taxes | | 2,027 | | 1,573 | |
Prepaid expenses and other assets | | 24,553 | | 20,872 | |
Assets held for sale | | 49,654 | | — | |
Total current assets | | 185,798 | | 132,300 | |
Property and equipment, net | | 987,968 | | 1,034,026 | |
Other assets: | | | | | |
Goodwill | | 242,795 | | 280,803 | |
Other intangible assets, net | | 67,377 | | 60,748 | |
Deferred financing costs, net | | 24,559 | | 27,230 | |
Restricted cash and investments | | 9,796 | | 11,417 | |
Prepaid deposits and other | | 5,015 | | 7,075 | |
Total assets | | $ | 1,523,308 | | $ | 1,553,599 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
Current liabilities: | | | | | |
Current maturities of long-term debt | | $ | 438 | | $ | 415 | |
Accounts payable | | 17,622 | | 34,533 | |
Accrued liabilities: | | | | | |
Payroll and related | | 34,977 | | 35,093 | |
Property and other taxes | | 20,141 | | 21,340 | |
Interest | | 20,533 | | 18,502 | |
Progressive jackpots and slot club awards | | 16,369 | | 16,579 | |
Other | | 29,686 | | 29,337 | |
Liabilities related to assets held for sale | | 1,196 | | — | |
Total current liabilities | | 140,962 | | 155,799 | |
Long-term debt, less current maturities | | 1,146,366 | | 1,156,469 | |
Deferred income taxes | | 33,895 | | 43,104 | |
Other accrued liabilities | | 19,393 | | 33,303 | |
Other long-term liabilities | | 22,671 | | 22,514 | |
Stockholders’ equity: | | | | | |
Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued | | — | | — | |
Common stock, $.01 par value; 60,000,000 shares authorized; shares issued: 42,066,148 at January 26, 2014 and April 28, 2013 | | 421 | | 421 | |
Class B common stock, $.01 par value; 3,000,000 shares authorized; none issued | | | | — | |
Additional paid-in capital | | 246,938 | | 246,214 | |
Retained earnings (deficit) | | (60,395 | ) | (74,227 | ) |
Accumulated other comprehensive (loss) income | | — | | (247 | ) |
| | 186,964 | | 172,161 | |
Treasury stock, 2,236,971 shares at January 26, 2014 and 2,470,128 at April 28, 2013 | | (26,943 | ) | (29,751 | ) |
Total stockholders’ equity | | 160,021 | | 142,410 | |
Total liabilities and stockholders’ equity | | $ | 1,523,308 | | $ | 1,553,599 | |
7
Isle of Capri Casinos, Inc.
Supplemental Data - Net Revenues
(unaudited, in thousands)
| | Three Months Ended | | Nine Months Ended | |
| | January 26, | | January 27, | | January 26, | | January 27, | |
| | 2014 | | 2013 | | 2014 | | 2013 | |
Colorado | | | | | | | | | |
Black Hawk | | $ | 28,364 | | $ | 28,879 | | $ | 91,071 | | $ | 90,902 | |
| | | | | | | | | |
Florida | | | | | | | | | |
Pompano | | 42,360 | | 39,860 | | 116,146 | | 108,236 | |
| | | | | | | | | |
Iowa | | | | | | | | | |
Bettendorf | | 16,008 | | 17,892 | | 54,438 | | 57,441 | |
Marquette | | 5,063 | | 6,003 | | 19,086 | | 20,716 | |
Waterloo | | 20,289 | | 20,770 | | 62,271 | | 63,107 | |
Iowa Total | | 41,360 | | 44,665 | | 135,795 | | 141,264 | |
| | | | | | | | | |
Louisiana | | | | | | | | | |
Lake Charles | | 29,945 | | 29,364 | | 94,855 | | 92,691 | |
| | | | | | | | | |
Mississippi | | | | | | | | | |
Lula | | 11,602 | | 12,587 | | 35,704 | | 39,990 | |
Natchez | | 4,664 | | 6,129 | | 14,786 | | 19,092 | |
Vicksburg | | 6,632 | | 7,167 | | 21,446 | | 20,622 | |
Mississippi Total | | 22,898 | | 25,883 | | 71,936 | | 79,704 | |
| | | | | | | | | |
Missouri | | | | | | | | | |
Boonville | | 17,448 | | 18,383 | | 55,068 | | 58,569 | |
Cape Girardeau | | 12,959 | | 16,111 | | 39,817 | | 16,111 | |
Caruthersville | | 6,762 | | 7,149 | | 21,648 | | 23,926 | |
Kansas City | | 15,837 | | 17,513 | | 50,844 | | 54,045 | |
Missouri Total | | 53,006 | | 59,156 | | 167,377 | | 152,651 | |
| | | | | | | | | |
Pennsylvania | | | | | | | | | |
Nemacolin | | 6,080 | | — | | 16,102 | | — | |
| | | | | | | | | |
Property Net Revenues before Other | | 224,013 | | 227,807 | | 693,282 | | 665,448 | |
Other | | 177 | | 210 | | 542 | | 563 | |
Net Revenues from Continuing Operations | | $ | 224,190 | | $ | 228,017 | | $ | 693,824 | | $ | 666,011 | |
8
Isle of Capri Casinos, Inc.
Reconciliation of Operating Income (Loss) to Adjusted EBITDA
(unaudited, in thousands)
| | Three Months Ended January 26, 2014 | |
| | Operating
Income (Loss) | | Depreciation
and
Amortization | | Stock-Based
Compensation | | Preopening
and Other | | Adjusted
EBITDA | |
Black Hawk, Colorado | | $ | 4,515 | | $ | 2,366 | | $ | 8 | | $ | — | | $ | 6,889 | |
| | | | | | | | | | | |
Pompano, Florida | | 7,389 | | 1,749 | | 6 | | — | | 9,144 | |
| | | | | | | | | | | |
Bettendorf | | 1,850 | | 1,555 | | 3 | | — | | 3,408 | |
Marquette | | 272 | | 458 | | 1 | | — | | 731 | |
Waterloo | | 4,849 | | 1,186 | | 4 | | — | | 6,039 | |
Iowa Total | | 6,971 | | 3,199 | | 8 | | — | | 10,178 | |
| | | | | | | | | | | |
Lake Charles, Louisiana | | 822 | | 2,939 | | 4 | | — | | 3,765 | |
| | | | | | | | | | | |
Lula | | 232 | | 1,298 | | 3 | | — | | 1,533 | |
Natchez | | (665 | ) | 314 | | 4 | | — | | (347 | ) |
Vicksburg | | (21 | ) | 899 | | 4 | | — | | 882 | |
Mississippi Total | | (454 | ) | 2,511 | | 11 | | — | | 2,068 | |
| | | | | | | | | | | |
Boonville | | 5,193 | | 1,034 | | 6 | | — | | 6,233 | |
Cape Girardeau | | (828 | ) | 2,786 | | 1 | | — | | 1,959 | |
Caruthersville | | 200 | | 720 | | 4 | | — | | 924 | |
Kansas City | | 2,800 | | 924 | | 4 | | — | | 3,728 | |
Missouri Total | | 7,365 | | 5,464 | | 15 | | — | | 12,844 | |
| | | | | | | | | | | |
Nemacolin, Pennsylvania | | (3,202 | ) | 1,558 | | 1 | | — | | (1,643 | ) |
| | | | | | | | | | | |
Total Operating Properties | | 23,406 | | 19,786 | | 53 | | — | | 43,245 | |
Corporate and Other | | (5,459 | ) | 385 | | 838 | | (1,979 | ) | (6,215 | ) |
Total | | $ | 17,947 | | $ | 20,171 | | $ | 891 | | $ | (1,979 | ) | $ | 37,030 | |
| | Three Months Ended January 27, 2013 | |
| | Operating
Income (Loss) | | Depreciation
and
Amortization | | Stock-Based
Compensation | | Preopening
and Other | | Adjusted
EBITDA | |
Black Hawk, Colorado | | $ | 3,823 | | $ | 2,176 | | $ | 8 | | $ | — | | $ | 6,007 | |
| | | | | | | | | | | |
Pompano, Florida | | 5,595 | | 1,829 | | 7 | | — | | 7,431 | |
| | | | | | | | | | | |
Bettendorf | | 2,676 | | 1,728 | | 4 | | — | | 4,408 | |
Marquette | | 309 | | 469 | | 2 | | — | | 780 | |
Waterloo | | 4,785 | | 1,175 | | 5 | | — | | 5,965 | |
Iowa Total | | 7,770 | | 3,372 | | 11 | | — | | 11,153 | |
| | | | | | | | | | | |
Lake Charles, Louisiana | | 1,147 | | 2,591 | | 8 | | — | | 3,746 | |
| | | | | | | | | | | |
Lula | | 882 | | 1,355 | | 4 | | — | | 2,241 | |
Natchez | | 208 | | 359 | | 4 | | — | | 571 | |
Vicksburg | | (41 | ) | 1,078 | | 5 | | — | | 1,042 | |
Mississippi Total | | 1,049 | | 2,792 | | 13 | | — | | 3,854 | |
| | | | | | | | | | | |
Boonville | | 5,341 | | 896 | | 6 | | — | | 6,243 | |
Cape Girardeau | | (616 | ) | 2,762 | | 6 | | 708 | | 2,860 | |
Caruthersville | | 140 | | 830 | | 6 | | — | | 976 | |
Kansas City | | 2,800 | | 1,001 | | 4 | | — | | 3,805 | |
Missouri Total | | 7,665 | | 5,489 | | 22 | | 708 | | 13,884 | |
| | | | | | | | | | | |
Nemacolin, Pennsylvania | | (270 | ) | — | | — | | 270 | | — | |
| | | | | | | | | | | |
Total Operating Properties | | 26,779 | | 18,249 | | 69 | | 978 | | 46,075 | |
Corporate and Other | | (7,848 | ) | 556 | | 1,097 | | — | | (6,195 | ) |
Total | | $ | 18,931 | | $ | 18,805 | | $ | 1,166 | | $ | 978 | | $ | 39,880 | |
9
Isle of Capri Casinos, Inc.
Reconciliation of Operating Income (Loss) to Adjusted EBITDA
(unaudited, in thousands)
| | Nine Months Ended January 26, 2014 |
| | Operating
Income (Loss) | | Depreciation and
Amortization | | Stock-Based
Compensation | | Preopening
and Other | | Adjusted
EBITDA | |
Black Hawk, Colorado | | $ | 15,131 | | $ | 7,041 | | $ | 27 | | $ | — | | $ | 22,199 | |
| | | | | | | | | | | |
Pompano, Florida | | 15,283 | | 5,383 | | 19 | | — | | 20,685 | |
| | | | | | | | | | | |
Bettendorf | | 8,339 | | 4,933 | | 10 | | — | | 13,282 | |
Marquette | | 2,734 | | 1,423 | | 5 | | — | | 4,162 | |
Waterloo | | 14,707 | | 3,608 | | 14 | | — | | 18,329 | |
Iowa Total | | 25,780 | | 9,964 | | 29 | | — | | 35,773 | |
| | | | | | | | | | | |
Lake Charles, Louisiana | | 5,016 | | 8,819 | | 13 | | — | | 13,848 | |
| | | | | | | | | | | |
Lula | | 408 | | 3,946 | | 11 | | — | | 4,365 | |
Natchez | | (2,000 | ) | 1,007 | | 13 | | — | | (980 | ) |
Vicksburg | | 249 | | 2,795 | | 13 | | — | | 3,057 | |
Mississippi Total | | (1,343 | ) | 7,748 | | 37 | | — | | 6,442 | |
| | | | | | | | | | | |
Boonville | | 16,180 | | 3,097 | | 18 | | — | | 19,295 | |
Cape Girardeau | | (2,738 | ) | 8,361 | | 5 | | — | | 5,628 | |
Caruthersville | | 982 | | 2,267 | | 14 | | — | | 3,263 | |
Kansas City | | 8,200 | | 2,861 | | 12 | | — | | 11,073 | |
Missouri Total | | 22,624 | | 16,586 | | 49 | | — | | 39,259 | |
| | | | | | | | | | | |
Nemacolin, Pennsylvania | | (11,226 | ) | 3,785 | | 2 | | 3,898 | | (3,541 | ) |
| | | | | | | | | | | |
Total Operating Properties | | 71,265 | | 59,326 | | 176 | | 3,898 | | 134,665 | |
Corporate and Other | | (12,610 | ) | 1,169 | | 3,343 | | (10,349 | ) | (18,447 | ) |
Total | | $ | 58,655 | | $ | 60,495 | | $ | 3,519 | | $ | (6,451 | ) | $ | 116,218 | |
| | Nine Months Ended January 27, 2013 | |
| | Operating
Income (Loss) | | Depreciation and
Amortization | | Stock-Based
Compensation | | Preopening
and Other | | Adjusted
EBITDA | |
Black Hawk, Colorado | | $ | 14,666 | | $ | 6,534 | | $ | 32 | | $ | — | | $ | 21,232 | |
| | | | | | | | | | | |
Pompano, Florida | | 11,415 | | 5,406 | | 21 | | — | | 16,842 | |
| | | | | | | | | | | |
Bettendorf | | 9,784 | | 5,211 | | 13 | | — | | 15,008 | |
Marquette | | 2,740 | | 1,345 | | 12 | | — | | 4,097 | |
Waterloo | | 14,917 | | 3,832 | | 16 | | — | | 18,765 | |
Iowa Total | | 27,441 | | 10,388 | | 41 | | — | | 37,870 | |
| | | | | | | | | | | |
Lake Charles, Louisiana | | 6,377 | | 7,013 | | 14 | | — | | 13,404 | |
| | | | | | | | | | | |
Lula | | 1,186 | | 4,780 | | 15 | | — | | 5,981 | |
Natchez | | 1,169 | | 1,186 | | 14 | | — | | 2,369 | |
Vicksburg | | (306 | ) | 3,340 | | 14 | | — | | 3,048 | |
Mississippi Total | | 2,049 | | 9,306 | | 43 | | — | | 11,398 | |
| | | | | | | | | | | |
Boonville | | 17,753 | | 2,649 | | 17 | | — | | 20,419 | |
Cape Girardeau | | (3,957 | ) | 2,762 | | 6 | | 4,049 | | 2,860 | |
Caruthersville | | 1,556 | | 2,521 | | 16 | | — | | 4,093 | |
Kansas City | | 9,067 | | 3,020 | | 10 | | — | | 12,097 | |
Missouri Total | | 24,419 | | 10,952 | | 49 | | 4,049 | | 39,469 | |
| | | | | | | | | | | |
Nemacolin, Pennsylvania | | (270 | ) | — | | — | | 270 | | — | |
| | | | | | | | | | | |
Total Operating Properties | | 86,097 | | 49,599 | | 200 | | 4,319 | | 140,215 | |
Corporate and Other | | (27,994 | ) | 1,803 | | 3,850 | | 1,478 | | (20,863 | ) |
Total | | $ | 58,103 | | $ | 51,402 | | $ | 4,050 | | $ | 5,797 | | $ | 119,352 | |
10
Isle of Capri Casinos, Inc.
Reconciliation of Income (Loss) From Continuing Operations to Adjusted EBITDA
(unaudited, in thousands)
| | Three Months Ended | | Nine Months Ended | |
| | January 26, | | January 27, | | January 26, | | January 27, | |
| | 2014 | | 2013 | | 2014 | | 2013 | |
Income (loss) from continuing operations | | $ | 9,391 | | $ | (2,450 | ) | $ | 10,054 | | $ | (5,207 | ) |
Income tax benefit | | (13,270 | ) | (302 | ) | (10,499 | ) | (166 | ) |
Derivative income | | — | | (222 | ) | (398 | ) | (532 | ) |
Interest income | | (84 | ) | (100 | ) | (260 | ) | (406 | ) |
Interest expense | | 21,910 | | 22,005 | | 59,758 | | 64,414 | |
Depreciation and amortization | | 20,171 | | 18,805 | | 60,495 | | 51,402 | |
Stock-based compensation | | 891 | | 1,166 | | 3,519 | | 4,050 | |
Litigation accrual reversals (3) | | (1,979 | ) | — | | (9,330 | ) | — | |
Preopening expense | | — | | 978 | | 3,898 | | 4,319 | |
Gain on sale of airplane | | — | | — | | (1,019 | ) | — | |
Financing related | | — | | — | | — | | 1,478 | |
Adjusted EBITDA | | $ | 37,030 | | $ | 39,880 | | $ | 116,218 | | $ | 119,352 | |
11
Isle of Capri Casinos, Inc.
Reconciliations of GAAP Net Income (Loss) to Adjusted Income (Loss) From Continuing Operations and GAAP Net
Income (Loss) Per Share to Adjusted Income (Loss) From Continuing Operations Per Share
(unaudited, in thousands)
| | Three Months Ended | | Nine Months Ended | |
| | January 26, | | January 27, | | January 26, | | January 27, | |
| | 2014 | | 2013 | | 2014 | | 2013 | |
| | | | | | | | | |
GAAP net income (loss) | | $ | 10,657 | | $ | (2,186 | ) | $ | 13,832 | | $ | (2,178 | ) |
Tax valuation allowance reversal | | (11,993 | ) | — | | (11,993 | ) | — | |
Litigation accrual reversals (3) | | (2,223 | ) | — | | (16,953 | ) | — | |
Preopening expense | | — | | 978 | | 3,898 | | 4,319 | |
Gain on sale of corporate aircraft | | — | | — | | (1,019 | ) | — | |
Financing related | | — | | — | | — | | 2,506 | |
Discontinued operations | | (1,266 | ) | (264 | ) | (3,778 | ) | (3,029 | ) |
Adjusted income (loss) from continuing operations (2) | | $ | (4,825 | ) | $ | (1,472 | ) | $ | (16,013 | ) | $ | 1,618 | |
| | | | | | | | | |
GAAP net income (loss) per share | | $ | 0.27 | | $ | (0.06 | ) | $ | 0.35 | | $ | (0.06 | ) |
Tax valuation allowance reversal | | (0.30 | ) | — | | (0.30 | ) | — | |
Litigation accrual reversals (3) | | (0.06 | ) | — | | (0.43 | ) | — | |
Preopening expense | | — | | 0.02 | | 0.10 | | 0.11 | |
Gain on sale of corporate aircraft | | — | | — | | (0.03 | ) | — | |
Financing related | | — | | — | | — | | 0.07 | |
Discontinued operations | | (0.03 | ) | — | | (0.10 | ) | (0.08 | ) |
Adjusted income (loss) from continuing operations per share (2) | | $ | (0.12 | ) | $ | (0.04 | ) | $ | (0.41 | ) | $ | 0.04 | |
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(1) Adjusted EBITDA is “earnings before interest and other non-operating income (expense), income taxes, stock-based compensation, preopening expense, litigation accrual reversals, financing related expenses and depreciation and amortization.” 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, 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 Adjusted 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. 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. A reconciliation of Adjusted EBITDA to income (loss) from continuing operations is included in the financial schedules accompanying this release.
Certain of our debt agreements use a similar calculation of “Adjusted EBITDA” as a financial measure for the calculation of financial debt covenants and includes add back of items such as gain on early extinguishment of debt, pre-opening expenses, certain write-offs and valuation expenses, and non-cash stock compensation expense. Reference can be made to the definition of Adjusted EBITDA in the applicable debt agreements on file as Exhibits to our filings with the Securities and Exchange Commission.
(2) Adjusted income (loss) from continuing operations is presented solely as a supplemental disclosure as this is one method management reviews and utilizes to analyze the performance of its core operating business. For many of the same reasons mentioned above related to Adjusted EBITDA, management believes Adjusted income (loss) from continuing operations and Adjusted income (loss) from continuing operations per share are useful analytic tools as they enable management to track the performance of its core casino operating business separate and apart from factors that do not impact decisions affecting its operating casino properties, such as litigation accrual reversals or preopening expenses. Management believes Adjusted income (loss) from continuing operations and Adjusted income (loss) from continuing operations per share are useful to investors since these adjustments provide a measure of financial performance that more closely resembles widely used measures of performance and valuation in the gaming industry. Adjusted income (loss) from continuing operations and adjusted income (loss) from continuing operations per share do not include tax valuation allowance reversals, litigation accrual reversals, preopening expenses, certain asset sale gains, financing related expenses, and income or loss from discontinued operations.
(3) Litigation accrual reversals for the three months ended January 26, 2014 includes a $2.0 million reduction to operating expenses and a $0.2 million reduction of interest expense. Litigation accrual reversals for the nine months ended January 26, 2014, includes a $9.3 million reduction to operating expenses and a $7.6 million reduction of interest expense.
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