EXHIBIT 99.1
NEWS RELEASE
LAKES ENTERTAINMENT, INC.
130 CHESHIRE LANE
MINNETONKA, MN 55305
[LAKES ENTERTAINMENT, INC. LOGO] 952-449-9092
952-449-9353 (fax)
WWW.LAKESENTERTAINMENT.COM
TRADED: NASDAQ "LACO"
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FOR FURTHER INFORMATION CONTACT:
Timothy J. Cope 952-449-7030
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FOR IMMEDIATE RELEASE:
Monday, May 3, 2004
LAKES ENTERTAINMENT, INC. ANNOUNCES RESULTS FOR
FIRST QUARTER 2004
MINNEAPOLIS, MAY 3, 2004 -- LAKES ENTERTAINMENT, INC. (NASDAQ "LACO") today
announced results for the first quarter ended April 4, 2004. Net loss for the
quarter was $0.9 million and basic and diluted losses were $0.08 per share. This
compares with a net loss of $1.3 million and basic and diluted losses of $0.12
per share for the quarter ended March 30, 2003. Revenue for the quarter totaled
$3.9 million, compared to $0.6 million in the prior year period.
Revenues for the current year quarter were derived primarily from license fees
related to the World Poker Tour (WPT) series which is now airing its second
season on the Travel Channel, LLC, (TRV). Revenue from the prior year quarter
was derived from license fees related to the first season of the WPT series. The
increase in revenue is primarily due to a greater number of episodes being
delivered during the first quarter of 2004 versus the same period in the prior
year. In August of 2003, World Poker Tour, LLC, a subsidiary company of Lakes,
entered into an agreement with TRV granting TRV the exclusive right to broadcast
the second season of the WPT series within the United States. This agreement
also provides TRV with consecutive, exclusive options to broadcast five
additional seasons of the program. In April 2004, TRV exercised its option to
broadcast the first of these additional seasons. WPT receives fixed license
payments from TRV subject to satisfaction of production milestones and other
conditions.
Selling, general and administrative expenses increased from $3.0 million for the
three months ended March 30, 2003 to $5.7 million for the three months ended
April 4, 2004. This increase is primarily due to an increase in costs associated
with World Poker Tour including production costs.
(more)
During the first quarter Lakes sold its 2022 Ranch land, owned with a joint
venture partner, located near San Diego. Lakes' share of the proceeds related to
this sale was approximately $1.7 million in cash after payment of closing costs.
The sale resulted in a gain to Lakes of approximately $0.4 million which is
included in Lakes' consolidated statement of earnings for the three months ended
April 4, 2004.
Lyle Berman, Chairman and CEO of Lakes, stated, "Our stock price hit a new high
this quarter as we continue to implement our previously stated business
strategies of eliminating risk, growing our assets and diversifying the company.
During the first quarter we realized approximately $1.7 million in cash from the
sale of the 2022 Ranch land, after payment of closing costs. We plan to use this
cash to provide additional funding related to the development of our Native
American owned casino projects."
Lakes Entertainment, Inc. currently has development and management agreements
with four separate Tribes for four new casino operations, one in Michigan, two
in California and one with the Nipmuc Nation on the East Coast. Lakes
Entertainment also has agreements for the development of one additional casino
on Indian-owned land in California through a joint venture with MRD Gaming,
which is currently being disputed by the Tribe. Additionally, the Company owns
approximately 80% of World Poker Tour, LLC, a media and entertainment company
principally engaged in development, production and marketing of gaming-themed
televised programming, the licensing and sale of branded products and the sale
of corporate sponsorships.
Lakes Entertainment, Inc. common shares are traded on the Nasdaq National Market
under the trading symbol "LACO".
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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 Lakes Entertainment, Inc.) 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 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, possible delays
in completion of Lakes' casino projects, including various regulatory approvals
and numerous other conditions which must be satisfied before completion of these
projects; possible termination or adverse modification of management contracts;
continued indemnification obligations to Grand Casinos; highly competitive
industry; possible changes in regulations; reliance on continued positive
relationships with Indian tribes and repayment of amounts owned to Lakes by
Indian tribes; possible need for future financing to meet Lakes' expansion
goals; risks of entry into new businesses; and reliance on Lakes' management.
For more information, review the Company's filings with the Securities and
Exchange Commission.
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LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
APRIL 4, 2004 DECEMBER 28, 2003
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ASSETS
Current Assets:
Cash and cash equivalents $24,951 $25,340
Accounts receivable, net 244 1,038
Deferred tax asset 5,385 5,385
Prepaids 3,220 2,119
Other current assets 1,846 1,645
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Total Current Assets 35,646 35,527
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Property and Equipment-Net 6,435 6,492
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Other Assets:
Land held under contract for sale 4,795 4,612
Land held for development 14,590 14,536
Notes receivable 89,908 84,682
Investments 7,611 8,717
Deferred tax asset 7,242 6,634
Other long-term assets 8,920 8,860
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Total Other Assets 133,066 128,041
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TOTAL ASSETS $175,147 $170,060
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $2,113 $1,906
Income taxes payable 7,182 7,215
Litigation and claims accrual 126 250
Accrued payroll and related costs 304 497
Other accrued expenses 5,128 2,768
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Total Current Liabilities 14,853 12,636
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TOTAL LIABILITIES 14,853 12,636
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COMMITMENTS AND CONTINGENCIES
Shareholders' Equity:
Capital stock, $.01 par value; authorized 100,000 shares; 11,099 and 10,737
common shares issued and outstanding
at April 4, 2004, and December 28, 2003, respectively 111 107
Additional paid-in-capital 136,149 132,399
Retained Earnings 24,034 24,918
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Total Shareholders' Equity 160,294 157,424
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $175,147 $170,060
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LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
THREE MONTHS ENDED
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APRIL 4, 2004 MARCH 30, 2003
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REVENUES:
License fee income $3,940 $550
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Total Revenues 3,940 550
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COSTS AND EXPENSES:
Selling, general and administrative 5,732 2,979
Depreciation and amortization 143 128
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Total Costs and Expenses 5,875 3,107
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LOSS FROM OPERATIONS (1,935) (2,557)
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OTHER INCOME (EXPENSE):
Interest income 48 237
Equity in earnings (loss) of unconsolidated affiliates 419 (87)
Other 42 159
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Total other income, net 509 309
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Loss before income taxes (1,426) (2,248)
Benefit for income taxes (542) (921)
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NET LOSS ($884) ($1,327)
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BASIC LOSS PER SHARE ($0.08) ($0.12)
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DILUTED LOSS PER SHARE ($0.08) ($0.12)
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 10,885 10,638
DILUTIVE EFFECT OF STOCK COMPENSATION PROGRAMS - -
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WEIGHTED AVERAGE COMMON AND DILUTED
SHARES OUTSTANDING 10,885 10,638
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