1
Exhibit 99.2
WEDNESDAY JANUARY 31, 2001
PRESS RELEASE
LAKES GAMING ANNOUNCES YEAR 2000 RESULTS
MINNEAPOLIS--(BUSINESS WIRE)--Jan. 31, 2001--Lakes Gaming, Inc. (Nasdaq:LACO)
today announced results for the fiscal year ended December 31, 2000. Revenue for
the year totaled $59.0 million. Net earnings for the year were $15.7 million and
basic and diluted earnings were $1.47 per common share. Net earnings include a
provision for litigation loss ($10.6 million net of tax), Lakes' share of losses
from unconsolidated affiliates ($1.7 million net of tax), and the write-off of
investments in unconsolidated affiliates ($3.3 million net of tax) for a total
of $15.6 million net of tax non-operating charges or $1.47 per common share. Net
earnings for the year prior to these charges were $31.3 million and basic and
diluted earnings per share were $2.94 before the non-operating charges were
incurred.
Lakes' balance sheet at December 31, 2000 included approximately $213 million in
assets and $37.0 million in liabilities, including the litigation settlement
provision of $18 million. Net worth of approximately $176 million represents a
ten percent increase in shareholders equity despite the litigation settlement
reserve and asset write-offs.
Total revenue at Grand Casino Coushatta, the casino resort in Louisiana managed
by Lakes, inreased approximately five percent over the prior year. Increases at
the casino in marketing and employee benefit costs resulted in a slight decrease
to Lakes' management fee income from Coushatta, to $38.9 million from $40.6
million in the prior year. Lyle Berman, Chairman, CEO and President of Lakes
stated, "We are very proud of the Grand Casino Coushatta operation and our
partnership with the Coushatta Tribe of Louisiana. Future expansion plans at the
site include 200 new hotel rooms opening in 2001, followed soon after by a
special events/entertainment center, golf course and additional hotel rooms."
Berman stated, "The past twelve months have been an exciting and productive time
for our company. We began the year by announcing in February, 2000 that the
Company and the Coushatta Tribe of Louisiana agreed to a new five year
management contract for the Tribe's Grand Casino Coushatta operations. Although
the contract has yet to be formally approved, we look forward to our continued
relationship with the Coushatta Tribe."
In March 2000, the voters in the State of California approved a state
constitutional amendment permitting California Tribes to operate Nevada-style
casinos on Indian lands.
2
Lakes quickly reacted by entering into agreements for the development of two new
California casinos through a joint venture, in addition to the two existing
development and management contracts Lakes has for two other California casinos.
During this time frame, Lakes announced the conclusion of the management
contract for Grand Casino Avoyelles and was repaid all amounts owing to it under
the buyout and loan agreements with the Tunica-Biloxi Tribe of Louisiana. At the
end of July 2000, the Company announced that it had formed a joint venture,
Metroplex-Lakes, to develop Las Vegas real estate owned by Lakes, with the goal
to reduce risks of the Company and to begin to capture the value of a
substantial asset on Lakes' balance sheet. A significant reduction in risk to
the Company was accomplished when Lakes announced in June 2000, settlement
agreements had been reached regarding both the Stratosphere shareholders'
litigation and the Grand Casinos, Inc. shareholders' litigation. The settlements
are still subject to final court approvals.
"At the end of the year," Berman continued, "we wrote off the carrying value of
our investments in other companies such as Interactive Learning Group,
Fanball.com and TRAK 21. We are always open to a good business opportunity,
however, at this time, we are fully focused on the continued success of Grand
Casino Coushatta and the five new casino projects to be developed."
The fourth quarter financial performance resulted in a loss of approximately
$100,000 or ($0.01) per share which included the investment write-off of $3.3
million net after tax or $0.31 per share and $0.08 per share for Lakes
proportionate share of losses from unconsolidated affiliates.
Lakes Gaming, Inc. currently manages the largest casino resort in Louisiana and
has entered into development and management agreements with three separate
tribes for three new casino operations, one in Michigan and two in California.
The Company also has agreements for the development of two additional casinos on
Indian owned land in California through a joint venture with MRD Gaming, and has
entered into a joint venture agreement for the development of land on the Las
Vegas strip. Lakes Gaming, Inc. common shares are traded on the Nasdaq National
Market under the trading symbol "LACO".
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. Certain information included in this press
release (as well as information included in oral statements or other written
statements made or to be made by the Company) contains statements that are
forward-looking, such as statements relating to plans for future expansion and
other business development activities as well as other capital spending,
financing sources and the effects of regulation (including gaming and tax
regulation) and competition. Such forward-looking information involves important
risks
3
and uncertainties that could significantly affect anticipated results in the
future and, accordingly, such results may differ from those expressed in any
forward-looking statements made by or on behalf of the Company. These risks and
uncertainties include, but are not limited to, those relating to development and
construction activities, dependence on existing management, domestic or global
economic conditions, activities of competitors and the presence of new or
additional competition, fluctuations and changes in customer preferences and
attitudes, changes in federal or state tax laws or the administration of such
laws and changes in gaming laws or regulations (including the legalization of
gaming in certain jurisdictions). For more information, review the Company's
filings with the Securities and Exchange Commission.
LAKES GAMING, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)
Dec. 31, Jan. 2,
2000 2000
---------------------
Assets
Current Assets:
Cash and cash equivalents $ 10,469 $ 24,392
Short-term investments 32,477 27,433
Current installments of notes receivable 16,679 15,406
Accounts receivable 2,373 5,613
Other current assets 16,057 7,380
- -----------------------------------------------------------------------------------------------------------------------------
Total Current Assets 78,055 80,224
- -----------------------------------------------------------------------------------------------------------------------------
Property and Equipment-Net 1,414 1,888
- -----------------------------------------------------------------------------------------------------------------------------
Other Assets:
Land held for development 58,671 54,812
Notes receivable-less current installments 35,337 20,022
Cash and cash equivalents-restricted 30,270 12,149
Investments in and notes from unconsolidated
affiliates 3,209 8,446
Other long-term assets 5,853 5,997
- -----------------------------------------------------------------------------------------------------------------------------
Total Other Assets 133,340 101,426
- -----------------------------------------------------------------------------------------------------------------------------
Total Assets $212,809 $183,538
=============================================================================================================================
4
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable $ 79 $ 488
Income taxes payable 5,479 6,385
Litigation and claims accrual 25,078 8,419
Other accrued expenses 4,521 6,099
- -----------------------------------------------------------------------------------------------------------------------------
Total Current Liabilities 35,157 21,391
- -----------------------------------------------------------------------------------------------------------------------------
Long-term Liabilities:
Long-term debt-less current installments 1,850 1,500
Deferred income taxes -- 786
- -----------------------------------------------------------------------------------------------------------------------------
Total Long-Term Liabilities 1,850 2,286
- -----------------------------------------------------------------------------------------------------------------------------
Total Liabilities 37,007 23,677
- -----------------------------------------------------------------------------------------------------------------------------
Commitments and Contingencies -- --
Shareholders' Equity:
Capital stock, $.01 par value; authorized
100,000 shares; 10,638 and 10,629 common shares
issued and outstanding at December 31, 2000,
and January 2, 2000, respectively 106 106
Additional paid-in-capital 131,525 131,406
Accumulated other comprehensive earnings (loss) (333) (478)
Retained Earnings 44,504 28,827
- -----------------------------------------------------------------------------------------------------------------------------
Total Shareholders' Equity 175,802 159,861
- -----------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $212,809 $183,538
=============================================================================================================================
5
LAKES GAMING, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
(In thousands, except earnings per share)
Three Months Ended
---------------------
Dec. 31, Jan. 2,
2000 2000
Revenues:
Management fee income $ 6,652 $ 10,275
Costs and Expenses:
Selling, general and administrative 1,578 2,298
Depreciation and amortization 332 481
- -----------------------------------------------------------------------------------------------------------------------------
Total Costs and Expenses 1,910 2,779
- -----------------------------------------------------------------------------------------------------------------------------
Earnings From Operations 4,742 7,496
- -----------------------------------------------------------------------------------------------------------------------------
Other income (expense):
Interest income 2,157 1,741
Interest expense (24) (24)
Equity in loss of unconsolidated affiliates (901) (1,153)
Other -- (135)
Provision for litigation loss -- --
Write-down of unconsolidated affiliates (5,522) --
- -----------------------------------------------------------------------------------------------------------------------------
Total other income (expense), net (4,290) 429
- -----------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes 452 7,925
Provision for income taxes 556 3,722
- -----------------------------------------------------------------------------------------------------------------------------
Net Earnings (Loss) ($ 104) $4,203
=============================================================================================================================
Diluted Earnings per Share ($ 0.01) $ 0.39
=============================================================================================================================
Weighted Average Common Shares Outstanding 10,638 10,628
Dilutive Effect of Stock Compensation Programs 1 83
- -----------------------------------------------------------------------------------------------------------------------------
Weighted Average Common and Diluted
Shares Outstanding 10,639 10,711
=============================================================================================================================
6
LAKES GAMING, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
(In thousands, except earnings per share)
Twelve Months Ended
---------------------
Dec. 31, Jan. 2,
2000 2000
Revenues:
Management fee income $59,044 $54,716
Costs and Expenses:
Selling, general and administrative 9,025 7,750
Depreciation and amortization 2,910 1,916
- -----------------------------------------------------------------------------------------------------------------------------
Total Costs and Expenses 11,935 9,666
- -----------------------------------------------------------------------------------------------------------------------------
Earnings From Operations 47,109 45,050
- -----------------------------------------------------------------------------------------------------------------------------
Other income (expense):
Interest income 7,943 7,580
Interest expense (97) (98)
Equity in loss of unconsolidated affiliates (2,904) (2,925)
Other 63 1,285
Provision for litigation loss (18,000) --
Write-down of unconsolidated affiliates (5,522) --
- -----------------------------------------------------------------------------------------------------------------------------
Total other income (expense), net (18,517) 5,842
- -----------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes 28,592 50,892
Provision for income taxes 12,915 22,065
- -----------------------------------------------------------------------------------------------------------------------------
Net Earnings $15,677 $28,827
=============================================================================================================================
Basic Earnings per Share $ 1.47 $ 2.72
=============================================================================================================================
Diluted Earnings per Share $ 1.47 $ 2.67
=============================================================================================================================
Weighted Average Common Shares Outstanding 10,635 10,600
Dilutive Effect of Stock Compensation Programs 7 186
- -----------------------------------------------------------------------------------------------------------------------------
Weighted Average Common and Diluted
Shares Outstanding 10,642 10,786
=============================================================================================================================
- --30--cr/ms*
Contact:
Lakes Gaming, Inc., Minneapolis
Timothy J. Cope: 952/449-7030
www.lakesgaming.com