Exhibit 99.1
NEWS RELEASE
LAKES GAMING, INC.
[LAKES LOGO] 130 CHESHIRE LANE
LAKES GAMING, INC. 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:
Monday, February 4, 2002
LAKES GAMING ANNOUNCES RESULTS FOR YEAR 2001
MINNEAPOLIS, FEBRUARY 4, 2002 - LAKES GAMING, INC. (NASDAQ "LACO") today
announced results for the fiscal year ended December 30, 2001. Revenue for the
year totaled $34.9 million. The net loss for the year was $0.3 million and basic
and diluted losses were $.03 per share. This compares with net earnings of $15.7
million, and basic and diluted earnings of $1.47 per share, in 2000.
The loss for 2001 includes a combined one-time charge of approximately $17.2
million after-tax, or $1.62 per share, related to the previously announced sale
of the Polo Plaza Shopping Center property in Las Vegas, Nevada, sale of the
rights to the adjacent Travelodge property in Las Vegas, the write down of the
adjacent Shark Club site to its estimated market value and various other
non-recurring charges related to allowing the option for the purchase of the
adjacent Cable property to lapse. Also included in the current year loss were
several other non-recurring charges. The Company wrote off $0.6 million
after-tax in loans made relating to the Paskenta project in which Lakes
discontinued its involvement during 2001. The Company also incurred a $0.4
million after-tax write-down charge during 2001, resulting from an agreement
with New Horizon Kids Quest, Inc. (NHKQ), pursuant to which NHKQ acquired Lakes'
interest in NHKQ. Further, the Company wrote off its investment in the
development of various new casino game concepts during the year, incurring an
after-tax loss of $0.4 million. Net earnings for 2001 excluding the charges
relating to the Las Vegas land and other non-recurring charges totaling $18.6
million after tax, were $18.3 million with basic and diluted earnings of $1.72
per share. By comparison, net earnings in the previous year also reflected the
negative effects of several one-time charges, including a $10.6 million
after-tax litigation loss provision; $1.7 million after-tax for equity in losses
of unconsolidated affiliates; and $3.3 million after-tax for write-downs of
equity in affiliates.
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Revenue for the year decreased by $24.2 million from 2000, principally because
2000 revenues included compensation from the early buyout of the Company's
management agreement with Grand Casino Avoyelles in the first quarter of 2000.
The decrease in revenues also relates to a decline in management fees of
approximately $4.2 million from Grand Casino Coushatta in 2001, principally due
to decreased tourism and competitive factors. The 2001 revenues reflects the
last full year of management fees received from Grand Casino Coushatta. The
management contract between the Company and the Coushatta Tribe expired on
January 16, 2002.
Lakes' balance sheet at December 30, 2001 included approximately $197 million in
assets and $21 million in liabilities for a book value of approximately $16.50
per share. The book value is comprised almost entirely of cash, receivables from
loans related to new Indian casino projects and land held for development.
Lyle Berman, Chairman, CEO and President of Lakes stated, "We have development
and management contracts for what we feel are the best potential new Native
American Casino sites in the country. Although the regulatory and development
approvals are moving more slowly than expected and no construction was started
in 2001, we continue to proceed with our development and architecture plans so
that we may start building as soon as all necessary approvals are received.
During 2001, we were able to complete the Las Vegas land transactions. Although
Lakes incurred a large book loss, we were able to monetize a portion of our
investment in property on the Las Vegas strip and take advantage of the tax
savings generated by these transactions. In addition, during January 2002, we
completed the purchase of our corporate office building eliminating the risk of
a long-term lease commitment." Mr. Berman continued, "We remain focused on the
successful development of our five potential new gaming locations and continue
to look for new business opportunities to enhance shareholder value."
The fourth quarter financial performance resulted in a loss of approximately
$13.4 million or $1.26 per share which included the loss on the Las Vegas land
transaction of approximately $17.2 million after-tax, as well as the write-off
of the investment in the development of various new casino game concepts which
resulted in an after-tax loss of $0.4 million. Net earnings for the quarter
excluding these non-recurring charges totaling $17.6 million after-tax, were
$4.2 million or $0.39 per share.
The Company 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. 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.
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 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, 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.
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LAKES GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
DECEMBER 30, 2001 DECEMBER 31, 2000
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ASSETS
Current Assets:
Cash and cash equivalents $42,638 $10,469
Short-term investments 2,027 32,477
Current installments of notes receivable 28,273 16,679
Accounts receivable 3,601 2,373
Deferred tax asset 4,549 13,674
Other current assets 1,079 355
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Total Current Assets 82,167 76,027
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Property and Equipment-Net 7,524 1,414
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Other Assets:
Land held for development 16,038 58,671
Notes receivable-less current installments 67,525 35,337
Cash and cash equivalents-restricted 9,175 30,270
Investments in and notes from unconsolidated affiliates 839 3,209
Interest receivable 6,147 2,028
Other long-term assets 7,527 5,853
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Total Other Assets 107,251 135,368
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TOTAL ASSETS $196,942 $212,809
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $105 $79
Current maturities of long-term debt 1,325 525
Current installments of capital lease obligations 123 --
Income taxes payable 3,906 5,479
Litigation and claims accrual 6,572 25,078
Other accrued expenses 3,341 4,521
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Total Current Liabilities 15,372 35,682
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Long-term Liabilities:
Long-term debt-less current maturities -- 1,325
Capital lease obligations-less current installments 5,591 --
Other long-term liabilities 225 --
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Total Long-Term Liabilities 5,816 1,325
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TOTAL LIABILITIES 21,188 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 December 30, 2001, and December 31, 2000 106 106
Additional paid-in-capital 131,525 131,525
Retained Earnings 44,183 44,504
Accumulated other comprehensive loss (60) (333)
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Total Shareholders' Equity 175,754 175,802
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $196,942 $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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DECEMBER 30, 2001 DECEMBER 31, 2000
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REVENUES:
Management fee income $7,368 $6,652
COSTS AND EXPENSES:
Selling, general and administrative 4,538 1,578
Depreciation and amortization 346 332
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Total Costs and Expenses 4,884 1,910
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EARNINGS FROM OPERATIONS 2,484 4,742
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OTHER INCOME (EXPENSE):
Interest income 1,533 2,157
Interest expense (97) (24)
Equity in loss of unconsolidated affiliates (102) (901)
Loss on sale of land held for development (25,781) --
Write-down of unconsolidated affiliates -- (5,522)
Other (683) --
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Total other expense, net (25,130) (4,290)
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Earnings (loss) before income taxes (22,646) 452
Provision (benefit) for income taxes (9,285) 556
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NET LOSS ($13,361) ($104)
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BASIC LOSS PER SHARE ($1.26) ($0.01)
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DILUTED LOSS PER SHARE ($1.26) ($0.01)
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 10,638 10,638
DILUTIVE EFFECT OF STOCK COMPENSATION PROGRAMS -- 1
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WEIGHTED AVERAGE COMMON AND DILUTED
SHARES OUTSTANDING 10,638 10,639
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LAKES GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
TWELVE MONTHS ENDED
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DECEMBER 30, 2001 DECEMBER 31, 2000
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REVENUES:
Management fee income $34,854 $59,044
COSTS AND EXPENSES:
Selling, general and administrative 12,599 9,025
Depreciation and amortization 1,329 2,910
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Total costs and expenses 13,928 11,935
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EARNINGS FROM OPERATIONS 20,926 47,109
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OTHER INCOME (EXPENSE):
Interest income 6,297 7,943
Interest expense (170) (97)
Equity in loss of unconsolidated affiliates (465) (2,904)
Loss on sale of land held for development (25,781) --
Provision for litigation loss -- (18,000)
Write-down of unconsolidated affiliates (666) (5,522)
Other (684) 63
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Total other expense, net (21,469) (18,517)
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Earnings (loss) before income taxes (543) 28,592
Provision (benefit) for income taxes (222) 12,915
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NET EARNINGS (LOSS) ($321) $15,677
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BASIC EARNINGS (LOSS) PER SHARE ($0.03) $1.47
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DILUTED EARNINGS (LOSS) PER SHARE ($0.03) $1.47
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 10,638 10,635
DILUTIVE EFFECT OF STOCK COMPENSATION PROGRAMS 6 7
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WEIGHTED AVERAGE COMMON AND DILUTED
SHARES OUTSTANDING 10,644 10,642
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