EXHIBIT 99.1
[LAKES GAMING, INC. LOGO] NEWS RELEASE
LAKES GAMING, INC.
130 CHESHIRE LANE
MINNETONKA, MN 55305
952-449-9092
952-449-9353 (FAX)
WWW.LAKESGAMING.COM
TRADED: NASDAQ "LACO"
FOR FURTHER INFORMATION CONTACT:
Timothy J. Cope 952-449-7030
FOR IMMEDIATE RELEASE:
Friday, October 19, 2001
LAKES GAMING ANNOUNCES THIRD QUARTER DILUTED EARNINGS OF $.39
MINNEAPOLIS, FRIDAY, OCTOBER 19, 2001 - LAKES GAMING, INC. (NASDAQ "LACO") today
announced results for the third quarter ended September 30, 2001. Revenues for
the quarter totaled $8.7 million, compared to $10.7 million in the same quarter
in the prior year. Net earnings for the quarter were $4.1 million, basic and
diluted earnings were $.39 per share, compared to net earnings of $5.0 million
and basic and diluted earnings of $.47 per share and $.46 per share,
respectively, in the prior year comparable period.
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 $2.0 million compared to the same quarter in the prior
year due to a general decline in operating income at Grand Casino Coushatta. As
a result, Lakes' third quarter net earnings decreased approximately $0.9 million
compared to prior year third quarter net earnings of $5.0 million.
Lyle Berman, Chairman of the Board and Chief Executive Officer, stated, "The
decline in revenue at Coushatta reflects the road construction in progress both
south and north of the casino and adverse weather conditions in the surrounding
area during the quarter. Also affecting operations were intensive marketing
campaigns implemented by casinos in the competitive Lake Charles market. In
addition, the tragic events of September 11, 2001
resulted in a decrease in visitation and, accordingly, revenue during that
period. We are pleased that Grand Casino Coushatta has continued to outperform
the competitive Louisiana market and remains the market leader."
In addition, Mr. Berman stated, "We are excited about the five planned Indian
owned casino resort projects we are currently involved in and continue to work
toward their successful development."
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".
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)
SEPTEMBER 30, 2001 DECEMBER 31, 2000
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ASSETS
Current Assets:
Cash and cash equivalents $ 22,647 $ 10,469
Short-term investments 3,060 32,477
Current installments of notes receivable 11,736 16,679
Accounts receivable 4,107 2,373
Deferred tax asset 6,111 13,674
Other current assets 1,052 2,383
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Total Current Assets 48,713 78,055
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Property and Equipment-Net 2,171 1,414
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OTHER ASSETS:
Land held for development 71,649 58,671
Notes receivable-less current installments 54,236 35,337
Cash and cash equivalents-restricted 15,296 30,270
Investments in and notes from unconsolidated affiliates 2,540 3,209
Interest receivable 5,195 2,027
Other long-term assets 8,021 3,826
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Total Other Assets 156,937 133,340
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TOTAL ASSETS $207,821 $212,809
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 176 $ 79
Current maturities of long-term debt 525 525
Income taxes payable 4,546 5,479
Litigation and claims accrual 6,672 25,078
Other accrued expenses 5,470 4,521
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Total Current Liabilities 17,389 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 18,714 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 September 30, 2001, and December 31, 2000 106 106
Additional paid-in-capital 131,525 131,525
Retained Earnings 57,544 44,504
Accumulated other comprehensive earnings (loss) (68) (333)
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Total Shareholders' Equity 189,107 175,802
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $207,821 $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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SEPTEMBER 30, 2001 OCTOBER 1, 2000
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REVENUES:
Management fee income $ 8,664 $10,684
COSTS AND EXPENSES:
Selling, general and administrative 2,541 2,647
Depreciation and amortization 323 329
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Total Costs and Expenses 2,864 2,976
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EARNINGS FROM OPERATIONS 5,800 7,708
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OTHER INCOME (EXPENSE):
Interest income 1,350 2,040
Interest expense (24) (24)
Equity in loss of unconsolidated affiliates (103) (797)
Other - 61
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Total other income, net 1,223 1,280
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Earnings before income taxes 7,023 8,988
Provision for income taxes 2,880 4,012
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NET EARNINGS $ 4,143 $ 4,976
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BASIC EARNINGS PER SHARE $ 0.39 $ 0.47
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DILUTED EARNINGS PER SHARE $ 0.39 $ 0.46
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 10,638 10,638
DILUTIVE EFFECT OF STOCK COMPENSATION PROGRAMS 0 74
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WEIGHTED AVERAGE COMMON AND DILUTED
SHARES OUTSTANDING 10,638 10,712
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LAKES GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
NINE MONTHS ENDED
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SEPTEMBER 30, 2001 OCTOBER 1, 2000
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REVENUES:
Management fee income $27,486 $52,392
COSTS AND EXPENSES:
Selling, general and administrative 8,061 7,447
Depreciation and amortization 983 2,578
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Total Costs and Expenses 9,044 10,025
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EARNINGS FROM OPERATIONS 18,442 42,367
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OTHER INCOME (EXPENSE):
Interest income 4,763 5,786
Interest expense (73) (73)
Equity in loss of unconsolidated affiliates (364) (2,003)
Provision for litigation loss -- (18,000)
Write-down of unconsolidated affiliates (666) --
Other -- 63
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Total other income (expense), net 3,660 (14,227)
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Earnings before income taxes 22,102 28,140
Provision for income taxes 9,062 12,359
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NET EARNINGS $13,040 $15,781
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BASIC EARNINGS PER SHARE $1.23 $1.48
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DILUTED EARNINGS PER SHARE $1.22 $1.48
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 10,638 10,633
DILUTIVE EFFECT OF STOCK COMPENSATION PROGRAMS 40 25
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WEIGHTED AVERAGE COMMON AND DILUTED
SHARES OUTSTANDING 10,678 10,658
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