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EXHIBIT 99.1
[LAKES LOGO] NEWS RELEASE
LAKES GAMING, INC.
LAKES GAMING, INC. 130 CHESHIRE LANE
MINNETONKA, MN 55305
952-449-9092
952-449-9353 (FAX)
WWW.LAKESGAMING.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:
Thursday, July 19, 2001
LAKES GAMING ANNOUNCES SECOND QUARTER DILUTED EARNINGS OF $.39
MINNEAPOLIS, THURSDAY, JULY 19, 2001 - LAKES GAMING, INC. (NASDAQ "LACO") today
announced results for the second quarter ended July 1, 2001. Revenues for the
quarter totaled $9.6 million, compared to $10.7 million in the same quarter in
the prior year. Net earnings were $4.2 million or $.39 per share, compared to a
net loss of $5.3 million or $.50 per share in the comparable period in the prior
year. The prior year quarter included a provision for litigation loss of $10.6
million net of tax, or $1.00 per share.
Revenues for the quarter were derived from fees related to the management of
Grand Casino Coushatta. As previously announced, the existing contract with the
Coushatta Tribe of Louisiana for management of Grand Casino Coushatta is due to
expire on January 16, 2002 and will not be renewed. Revenue for the quarter
declined approximately $1.1 million compared to the same quarter in the prior
year due to a general decline in operating income at Grand Casino Coushatta.
Lakes' second quarter net earnings also decreased approximately $1.1 million
compared to prior year second quarter net earnings of $5.3 million before the
provision for litigation loss. Selling, general and administrative expenses
increased slightly during the quarter compared to the same prior year period due
to costs associated with planned casino developments. In addition, in June 2001
Lakes entered into an agreement with New Horizon Kids Quest (NHKQ), pursuant to
which NHKQ will acquire Lakes' interest in NHKQ. As a result of this
transaction, Lakes incurred a one time write-down charge of $.7 million before
tax, during the quarter.
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Lyle Berman, Chairman of the Board, and Chief Executive Officer stated, "The
Coushatta revenue for the quarter was negatively affected by the adverse weather
conditions in the area including the overwhelming impact our customers suffered
at the hands of tropical storm Allison. Grand Casino Coushatta however,
continues to outperform the market and has in fact increased its market share in
the second quarter from the first quarter of this year."
Mr. Berman continued, "Although the Coushatta contract expires in January, 2002,
we are excited about our participation in five other Indian owned casino resort
projects, which are currently in the development phase, including our recently
announced Development and Management Agreement with the Nipmuc Nation."
Lakes Gaming, Inc. currently manages Grand Casino Coushatta, which is the
largest casino resort in Louisiana, under a management contract that expires in
January, 2002. The company has also entered into 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. In
addition, the Company has agreements for the development of one additional
casino 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".
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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 the Company) contains statements that are
forward-looking, such as statements relating to plan 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, 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 of 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.
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LAKES GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
JULY 1, 2001 DECEMBER 31, 2000
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ASSETS
Current Assets:
Cash and cash equivalents $9,038 $10,469
Short-term investments 10,406 32,477
Current installments of notes receivable 13,402 16,679
Accounts receivable 7,109 2,373
Deferred tax asset 13,747 13,674
Other current assets 4,930 2,383
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Total Current Assets 58,632 78,055
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Property and Equipment-Net 1,880 1,414
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Other Assets:
Land held for development 70,853 58,671
Notes receivable-less current installments 51,388 35,337
Cash and cash equivalents-restricted 33,210 30,270
Investments in and notes from unconsolidated affiliates 2,477 3,209
Other long-term assets 5,683 5,853
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Total Other Assets 163,611 133,340
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TOTAL ASSETS $224,123 $212,809
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $166 $79
Current maturities of long-term debt 525 525
Income taxes payable 8,578 5,479
Litigation and claims accrual 24,752 25,078
Other accrued expenses 4,183 4,521
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Total Current Liabilities 38,204 35,682
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Long-term Liabilities:
Long-term debt-less current installments 1,325 1,325
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Total Long-Term Liabilities 1,325 1,325
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TOTAL LIABILITIES 39,529 37,007
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COMMITMENTS AND CONTINGENCIES
Shareholders' Equity:
Capital stock, $.01 par value; authorized 100,000 shares; 10,638 common
shares issued and outstanding
at July 1, 2001, and December 31, 2000 106 106
Additional paid-in-capital 131,525 131,525
Retained Earnings 53,401 44,504
Accumulated other comprehensive earnings (loss) (438) (333)
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Total Shareholders' Equity 184,594 175,802
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $224,123 $212,809
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LAKES GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
THREE MONTHS ENDED
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JULY 1, 2001 JULY 2, 2000
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REVENUES:
Management fee income $9,599 $10,655
COSTS AND EXPENSES:
Selling, general and administrative 2,940 2,747
Depreciation and amortization 329 328
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Total Costs and Expenses 3,269 3,075
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EARNINGS FROM OPERATIONS 6,330 7,580
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OTHER INCOME (EXPENSE):
Interest income 1,599 2,116
Interest expense (24) (24)
Equity in loss of unconsolidated affiliates (153) (397)
Provision for litigation loss -- (18,000)
Write-down of unconsolidated affiliates (666) --
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Total other income (expense), net 756 (16,305)
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Earnings before income taxes 7,086 (8,725)
Provision for income taxes 2,906 (3,414)
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NET EARNINGS $4,180 ($5,311)
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BASIC EARNINGS PER SHARE $0.39 ($0.50)
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DILUTED EARNINGS PER SHARE $0.39 ($0.50)
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 10,638 10,632
DILUTIVE EFFECT OF STOCK COMPENSATION PROGRAMS 120 10
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WEIGHTED AVERAGE COMMON AND DILUTED
SHARES OUTSTANDING 10,758 10,642
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LAKES GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
SIX MONTHS ENDED
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JULY 1, 2001 JULY 2, 2000
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REVENUES:
Management fee income $18,822 $41,708
COSTS AND EXPENSES:
Selling, general and administrative 5,520 4,800
Depreciation and amortization 660 2,249
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Total Costs and Expenses 6,180 7,049
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EARNINGS FROM OPERATIONS 12,642 34,659
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OTHER INCOME (EXPENSE):
Interest income 3,414 3,746
Interest expense (49) (49)
Equity in loss of unconsolidated affiliates (260) (1,205)
Provision for litigation loss -- (18,000)
Write-down of unconsolidated affiliates (666) --
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Total other income (expense), net 2,439 (15,508)
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Earnings before income taxes 15,081 19,151
Provision for income taxes 6,184 8,347
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NET EARNINGS $8,897 $10,804
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BASIC EARNINGS PER SHARE $0.84 $1.02
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DILUTED EARNINGS PER SHARE $0.83 $1.02
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 10,638 10,631
DILUTIVE EFFECT OF STOCK COMPENSATION PROGRAMS 132 4
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WEIGHTED AVERAGE COMMON AND DILUTED
SHARES OUTSTANDING 10,770 10,635
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