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| Isle of Capri Casinos, Inc. Announces Fourth Quarter and Year End Results |
* Strategic Transition to Operational Focus Producing Benefits
* Company Details Planned Capital Investments to Implement Strategic Plan
* Company Records Charge of $78.7 Million Relating to Value of UK Assets
ST. LOUIS, July 2 /PRNewswire-FirstCall/ -- Isle of Capri Casinos, Inc. (Nasdaq: ISLE) (the Company) today reported financial results for the fourth quarter and fiscal year ended April 27, 2008, and other Company-related news. In making the announcement, James B. Perry, the Company's executive vice chairman and chief executive officer, said, Fiscal 2008 was a transformational period for Isle of Capri. Following a series of expansions into several new markets, we are now executing a transition to a company clearly focused on strengthening our operating results. Additionally, the Company completed a thorough planning process that resulted in the strategic plan announced earlier this year. We believe that pursuing this plan, based on improving operations and organic growth opportunities, is the path that holds the most financial potential for our company for the short and intermediate term. As we introduce our new brands and continue working to improve margins through operating enhancements, we remain fiscally disciplined, and will match our capital spending to our financial flexibility. In the UK, we have implemented a dual strategy to continue to reduce our cost structure in the short term while we explore strategic options for our UK portfolio. This includes focusing on marketing programs that are designed to drive volume, including direct marketing programs and building our player development initiatives. We continue to explore ways to reduce both fixed and variable costs, including successfully cutting our utility bills nearly in half, and restructuring our food and beverage departments and comp policies. Our evaluation of our UK operations led us to record a charge of $78.7 million in the fourth quarter of fiscal 2008 to write down the value of the UK assets. 2008 Highlights The Company pointed to a series of accomplishments during the 2008 fiscal year that have had an impact on the Company's operations, and are critical to the implementation of the Company's new strategic plan. Specifically, the Company:
* Made several critical changes to the corporate management team,
including the appointment of James B. Perry as executive vice chairman
of the board of directors and chief executive officer following the
retirement of founder Bernard Goldstein, who will remain chairman of the
board, and the appointment of Virginia McDowell as president and chief
operating officer;
* Successfully maintained focus on margin improvement through marketing
enhancements and reductions in operational and promotional expenses;
* Opened three new properties in the following locations -- Coventry in
the United Kingdom, Pompano Beach in Florida, and Waterloo, Iowa,
purchased a fourth with the acquisition of Casino Aztar in
Caruthersville, Missouri and acquired the minority interest in its
property in Blackhawk, Colorado; and
* Completed a refinancing of the Company's debt, providing overall
flexibility to implement the new strategic plan.
CONSOLIDATED RESULTS
The following table outlines the Company's financial results (dollars in millions, except per share data, unaudited):
Three Months Ended Fiscal Year Ended
April 27, April 29, April 27, April 29,
2008 2007 2008 2007
Net revenues $298.3 $253.4 $1,125.4 $1,001.4
(Loss) from continuing
operations (51.3) (13.1) (96.9) (21.3)
Net (loss) (51.3) (14.6) (96.9) (4.6)
Net Loss per share from
continuing operations (1.66) (0.43) (3.16) (0.70)
Net Loss per share (1.66) (0.48) (3.16) (0.15)
EBITDA (1) (27.3) 36.0 95.2 161.8
Significant items impacting EBITDA and the loss from continuing operations
during the quarters and fiscal years ended April 27, 2008 and April 29, 2007
are as follows:
Three Months Ended Fiscal Year Ended
April 27, April 29, April 27, April 29,
2008 2007 2008 2007
Write-offs and
valuation charges(a) $(78.7) $(7.8) $(85.2) $(8.5)
Pre-opening(a) - (10.4) (6.5) (13.6)
Development(a) (1.7) (1.6) (5.5) (16.3)
Insurance recoveries(a) 1.8 - 2.1 2.8
Lucaya gaming tax and
lease settlements(a) - 11.6 - 9.4
Corporate office
relocation(a) - 0.7 - 5.4
Minority interest(b) - (1.4) (4.9) (3.6)
Loss on early
extinguishment of
debt(b) (1.6) - (15.3) -
(a) Impacts both EBITDA(1) and loss from continuing operations
(b) Impacts loss from continuing operations
Fourth Quarter Operating Highlights
The Company's loss from continuing operations of ($51.3) million or ($1.66) per share during the quarter ended April 27, 2008 includes a ($78.7) million pretax impairment charge or ($1.60) per share net of income taxes relating to its UK operations. This non-cash impairment charge is a result of our review of fair values of our assets invested in our UK operations. Before consideration of the items reflected in the above table, consolidated EBITDA(1) for the fourth quarter of fiscal 2008 was $51.3 million compared to $44.9 million for the fourth quarter of fiscal 2007. Before consideration of the items mentioned in the above tables, Property EBITDA(1) for the fourth quarter of fiscal 2008 increased 6.1% to $62.5 million, compared to Property EBITDA(1) of $58.9 million for the comparable quarter in fiscal 2007. Property EBITDA(1) at domestic locations with casino operations open for both full years, before consideration of items listed in the table above, was $55.0 million in the fourth quarter of fiscal 2008 compared to $63.0 million in the fourth quarter 2007, while margins decreased from 27.1% to 26.0%. The change in EBITDA(1) is due primarily to reductions in net revenues and EBITDA(1) at our Biloxi property due to increased competition in the Biloxi market, the closure of our Natchez property for 15 days during the fourth quarter of fiscal year 2008 due to flooding and the impact of a smoking ban effective January 2008 on our Colorado operations. EBITDA(1) at our new properties was $6.9 million in the fourth quarter of 2008 excluding significant items impacting EBITDA(1) listed in the table above. During the quarter ended April 27, 2008, net revenues increased by $45.0 million, or 17.7%, as compared to the fourth quarter of fiscal 2007. Net revenues were a combined $66.3 million from our Pompano Beach, Waterloo, Caruthersville, and Coventry properties. Net revenues at our properties open more than one year decreased $21.3 million to $218.9 million, primarily due to decreases in Biloxi, Natchez and Colorado discussed above as well as the impacts of the elimination of some unprofitable marketing initiatives. Corporate and development expenses decreased from $14.8 million in the fourth quarter to $13.1 million for the three months ended April 27, 2008 primarily due to cost reductions and the inclusion of $0.7 million in corporate office relocation costs in the fourth quarter of fiscal year 2007. Total consolidated stock compensation expense, including corporate and properties, for the three months ended April 27, 2008 increased $0.3 million to $1.9 million. Of this, $1.5 million was included in corporate and development expenses for the quarter and fiscal year ended April 27, 2008. Fiscal Year Operating Highlights The Company's loss from continuing operations of ($96.9) million ($3.16) per share during the fiscal year ended April 27, 2008 includes a ($78.7) million pretax impairment charge or ($1.60) per share net of income taxes relating to its UK operations and ($0.31) per share related to the loss on early extinguishment of debt. Before consideration of the significant items impacting EBITDA(1) for both comparable fiscal year periods mentioned in the previous table, EBITDA(1) for fiscal 2008 was $190.3 million compared to $193.3 million for fiscal 2007. Before consideration of the items mentioned in the above tables, Property EBITDA(1) for 2008 increased 2.5% to $238.0 million, compared to Property EBITDA(1) of $232.2 million for fiscal 2007. Property EBITDA(1) at domestic locations with casino operations open for both full years, was $219.8 million in fiscal 2008 compared to $244.3 million in fiscal 2007, while margins increased to 26.2% from 25.8% before consideration of the items in the previous table. The change in EBITDA(1) is due primarily to reductions in net revenues and EBITDA(1) at our Biloxi property due to increased competition in the Biloxi market as competitors have re-opened after closures caused by Hurricane Katrina and the closure of our Natchez property for 15 days during the fourth quarter of fiscal year 2008 due to flooding. For the same property locations operating in both full fiscal years, without the impact of Biloxi and Natchez, margins improved from 24.5% to 27.1%. EBITDA(1) at our new properties was $19.3 million in fiscal 2008 excluding significant expenses impacting EBITDA(1) listed in the table above. Corporate and development expenses decreased from $57.2 million to $49.0 million for the fiscal year ended April 27, 2008, primarily due to reductions in our development costs. Total consolidated stock compensation expense, including corporate and properties, for fiscal 2008 increased $0.1 million to $7.3 million for the fiscal year. Of this, $6.1 million was included in corporate and development expenses for the fiscal year ended April 27, 2008. Results from operations for the three and twelve month periods ended April 27, 2008 and April 29, 2007 reflect the consolidated operations of all of the Company's subsidiaries. The Vicksburg and Bossier City properties are reflected as discontinued operations for the periods prior to their sale in July 2006. Virginia McDowell, the Company's president and chief operating officer, remarked, We have implemented several key strategies for building a stronger operating company and improving free cash flow over the past year. As we introduce operating strategies designed to meet and exceed customer expectations by providing an experience that is consistently clean, safe, friendly and fun, we are complementing these strategies with key operating initiatives that focus on marketing and technology improvements that we believe will improve the gaming experience for our customers. As we begin to migrate towards our two brand strategy, we have made important changes to effectively deploy our human capital. At several of our properties, we have also reassigned general managers to match skill sets more closely to specific properties' needs and better utilize our existing talent pool, and are continuing to make similar changes within our corporate structure to streamline processes and more effectively deploy our resources. During the fourth quarter, the closure of our property for 15 days in Natchez due to flooding, the implementation of the Colorado smoking ban, the rising price of gas and the overall pressure on the national economy did, we believe, had an impact on our results. In June we introduced Caruthersville as the first Lady Luck casino, marking a significant event as we re-introduce this brand into our local casino markets, and begin the process of introducing our two brand strategy across the company. Future Outlook and Upcoming Projects Perry continued, Through the strategic planning process, the Company identified several capital projects which we will seek to implement over the next 18 to 24 months and beyond, aimed at enhancing the experience of our customers and consistent with a brand strategy that is designed to clearly define the experience that will be delivered by each brand. This will enable us to manage the expectations of our customers, employees and the investment community, and will align our operating strategy with the needs of our customers in each market. We believe that these internal projects offer us the highest potential uses of the free cash flow that we expect to generate in the intermediate term, as we look to improve our properties and also begin to de-lever our Company. We expect that approximately $160 million will go towards the rebuilding and refurbishment of the Biloxi property, which we plan to begin as soon as we determine the timing of the settlement of our Hurricane Katrina insurance claims, and our goal is to have the project completed roughly in line with the Margaritaville project which is being developed adjacent to our property. We are striving to have the insurance claim settled within the next 90 days and expect the insurance proceeds will provide a significant portion of the construction cost of the Biloxi project. The Biloxi project is expected to include a new single level casino, restoration of our convention space new food venues, and renovation of the hotel rooms in the south hotel tower. Additionally, we have earmarked approximately $16 million to $18 million to convert several of our local facilities to the Lady Luck brand. The Company plans to re-brand its properties in Davenport, Iowa, Lula, Mississippi, and Marquette, Iowa, and complete the re-branding in Caruthersville. Perry further commented, Lastly, we have identified approximately 1,200 hotel rooms (approximately forty percent of our room inventory) and many of the public areas in our hotels which are in need of renovation. We expect to begin the renovations once we have more clarity on the macro economic picture, our operating success and credit flexibility and better understand the estimated costs of completing the renovations. McDowell noted, Together, these projects will continue the introduction of the Lady Luck brand and allow us to update hotel product that has not been renovated, in some cases, for many years. This will enable us to become more competitive in our markets. Specifically, we believe our plans for Biloxi will create a product that is much more competitive in one of the nation's largest gaming markets, and where we have additional expansion capability we could explore as the market continues to develop post Hurricane Katrina. The Company generated consolidated EBITDA (before consideration of the significant items in the previously mentioned table) of $190.3 in 2008 and paid approximately $108 million, $8 million and $42 million in interest, cash taxes and maintenance capital, expenditures, respectively. As mentioned previously, stock based compensation was approximately $7.3 million in 2008. The Company provided guidance for the following specific items for fiscal year 2009:
* Depreciation expense is expected to be approximately $125 million;
* The Company cash income taxes pertaining to 2009 operations to be less
than $10 million which would primarily represent state income taxes.
* Interest expense is expected to be approximately $95 million to
$100 million, net of capitalized interest.
* Maintenance capital expenditures for 2009 are expected to be
approximately $40 million.
Conference Call Information
Isle of Capri Casinos, Inc. will host a conference call on Wednesday July 2, 2008 at 10:00 am Central Time during which management will discuss the financial and other matters addressed in this press release. The conference call can be accessed by interested parties via webcast through the investor relations page of the Company's website, http://www.islecorp.com, or, for domestic callers, by dialing (800) 230-1092. International callers can access the conference call by dialing (612) 332-0345. The conference call reference number is 931600. Operational Review of the Company's Continuing Operations for the Fourth Quarter of Fiscal 2008 Compared to the Fourth Quarter of Fiscal 2007 Mississippi -- The Company's three continuing casino operations contributed 17.2% of net revenues for the three months ended April 27, 2008. Net revenues and EBITDA(1) at our Biloxi property decreased significantly from artificially high prior year operating results due to increased competition in the market as competitors have returned to full capacity after closures caused by Hurricane Katrina. The Company's Natchez property continues to experience decreases in both net revenues and income from operations primarily resulting from the re-opening of competing casinos along the Gulf Coast. Additionally, Natchez was closed for 15 days during the fourth quarter due to flooding. Net revenues at the Lula property decreased due to increased competition impacting certain of the property's outlying primary feeder markets. EBITDA(1) at Lula for the three months ended April 29, 2007 included a $7.8 million impairment charge. Louisiana -- The Company's casino in Lake Charles contributed 13.7% of net revenues for the three months ended April 27, 2008. While net revenues decreased slightly, EBITDA(1) increased due to reductions in operating and marketing costs. Missouri -- The Company's three casinos in Missouri contributed 16.1% of net revenues for the three months ended April 27, 2008. Net revenues and EBITDA(1) increased primarily due to the acquisition of the Caruthersville property on June 11, 2007. Iowa -- The Company's four casinos in Iowa contributed 22.2% of net revenues for the three months ended April 27, 2008. Net revenues and EBITDA(1) increased primarily due to the opening of the Waterloo property on June 30, 2007. The Company's two Quad Cities properties had combined net revenues of $38.6 million, an increase of $2.3 million from the fourth quarter of fiscal 2007. EBITDA(1) in the Quad Cities was $12.2 million and EBITDA margins were 31.5% compared to $10.3 million and 28.4%, respectively. The improved Quad Cities results were favorably impacted by a smoking ban effective during the fourth quarter for competing gaming operations in Illinois. Colorado -- The Company's two casinos in Black Hawk, Colorado contributed 10.9% of net revenues for the three months ended April 27, 2008. The Colorado properties experienced a decrease in net revenues and EBITDA(1) primarily due to impact of a state smoking ban at casinos effective January 2008. Florida -- The Pompano Beach racetrack and casino contributed 16.4% of net revenues for the three months ended April 27, 2008. Net revenues and EBITDA(1) reflect the opening of the slot gaming facility on April 14, 2007. International Operations -- Net revenues increased for the three months ended April 27, 2008, primarily due to the opening of the Coventry property in July 2007. The loss from international operations for the three months ended April 27, 2008, includes impairment charges of $78.0 million from our Coventry operations and $0.7 million from our Blue Chip operations. Discontinued Operations -- Operating results from the Company's Vicksburg and Bossier City properties have been classified as discontinued operations for all periods presented and thus are not included in the Operational Review discussed above.
ISLE OF CAPRI CASINOS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended Fiscal Year Ended
April 27, April 29, April 27, April 29,
2008 2007 2008 2007
Revenues:
Casino $296,864 $255,614 $1,121,860 $1,015,629
Rooms 11,903 11,619 49,498 49,584
Pari-mutuel
commissions and fees 5,696 6,154 19,096 20,004
Food, beverage and
other 35,673 31,361 136,481 130,635
Gross revenues 350,136 304,748 1,326,935 1,215,852
Less promotional
allowances 51,820 51,385 201,583 214,458
Net revenues 298,316 253,363 1,125,352 1,001,394
Operating expenses:
Casino 41,594 37,562 163,250 159,534
Gaming taxes 77,242 49,246 288,402 210,404
Rooms 3,179 2,758 12,031 9,811
Pari-mutuel
commissions and fees 5,554 4,549 16,834 15,342
Food, beverage and
other 11,895 8,742 45,538 32,262
Marine and facilities 17,921 15,195 68,044 60,174
Marketing and
administrative 76,418 64,836 290,591 269,279
Corporate and
development 13,135 14,810 48,974 57,217
Write-offs and other
valuation charges 78,658 7,801 85,184 8,466
Pre-opening - 10,436 6,457 13,573
Depreciation and
amortization 35,429 26,608 136,127 99,506
Total operating
expenses 361,025 242,543 1,161,432 935,568
Operating income (62,709) 10,820 (36,080) 65,826
Interest expense (26,748) (23,459) (109,286) (89,150)
Interest income 708 1,623 3,814 7,469
Loss on early
extinguishment of
debt (1,614) - (15,274) -
Income (loss) from
continuing operations
before income taxes
and minority interest (90,363) (11,016) (156,826) (15,855)
Income tax (provision)
benefit 39,088 (659) 64,820 (1,906)
Minority interest - (1,449) (4,868) (3,568)
Income (loss) from
continuing
operations (51,275) (13,124) (96,874) (21,329)
Income from
discontinued
operations, net
of income taxes - (1,497) - 16,692
Net income (loss) $(51,275) $(14,621) $(96,874) $(4,637)
Earnings (loss) per
common share-basic:
Income (loss) from
continuing
operations $(1.66) $(0.43) $(3.16) $(0.70)
Income from
discontinued
operations, net
of income taxes - (0.05) - 0.55
Net income (loss) $(1.66) $(0.48) $(3.16) $(0.15)
Earnings (loss) per
common share-diluted:
Income (loss) from
continuing
operations $(1.66) $(0.43) $(3.16) $(0.70)
Income from
discontinued
operations, net
of income taxes - (0.05) - 0.55
Net income (loss) $(1.66) $(0.48) $(3.16) $(0.15)
Weighted average
basic shares 30,845,436 30,400,245 30,699,457 30,384,255
Weighted average
diluted shares 30,845,436 30,400,245 30,699,457 30,384,255
ISLE OF CAPRI CASINOS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
ASSETS
April 27, April 29,
2008 2007
Current assets:
Cash and cash equivalents $91,790 $188,114
Marketable securities 18,533 17,169
Accounts receivable, net 12,195 22,527
Insurance receivable, net 7,689 56,040
Income tax receivable 28,663 -
Deferred income taxes 12,606 12,421
Prepaid expenses and other assets 27,905 24,067
Total current assets 199,381 320,338
Property and equipment, net 1,328,986 1,338,570
Other assets:
Goodwill 307,649 297,268
Other intangible assets, net 89,252 74,154
Deferred financing costs, net 13,381 13,644
Restricted cash 4,802 4,637
Prepaid deposits and other 22,948 27,080
Deferred income taxes 7,767 -
Total assets $1,974,166 $2,075,691
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $9,698 $7,594
Accounts payable 29,283 60,460
Accrued liabilities:
Interest 8,580 10,166
Payroll and related 47,618 48,402
Property and other taxes 30,137 23,380
Income taxes - 16,011
Progressive jackpots and slot club awards 13,768 12,785
Other 44,353 56,943
Total current liabilities 183,437 235,741
Long-term debt, less current maturities 1,497,591 1,410,385
Deferred income taxes - 41,451
Other accrued liabilities 57,068 30,817
Other long-term liabilities 48,058 47,639
Minority interest - 27,836
Stockholders' equity:
Preferred stock, $.01 par value; 2,000,000
shares authorized; none issued - -
Common stock, $.01 par value; 45,000,000 shares
authorized; shares issued: 35,229,006 at
April 27, 2008 and 34,682,534 at April 29, 2007 353 347
Class B common stock, $.01 par value; 3,000,000
shares authorized; none issued - -
Additional paid-in capital 188,036 175,132
Retained earnings 58,253 155,127
Accumulated other comprehensive income (5,601) 3,358
241,041 333,964
Treasury stock, 4,372,073 shares at April 27,
2008 and 4,323,555 shares at April 29, 2007 (53,029) (52,142)
Total stockholders' equity 188,012 281,822
Total liabilities and stockholders' equity $1,974,166 $2,075,691
Isle of Capri Casinos, Inc.
Supplemental Data - Net Revenues
(unaudited, in thousands)
Three Months Ended Fiscal Year Ended
April 27, April 29, April 27, April 29,
2008 2007 2008 2007
Mississippi
Biloxi $22,742 $28,856 $90,586 $147,825
Natchez 8,587 10,640 35,707 40,864
Lula 19,876 22,124 75,399 83,068
Mississippi Total 51,205 61,620 201,692 271,757
Louisiana
Lakes Charles 40,893 42,615 159,470 170,751
Missouri
Kansas City 19,696 21,754 75,630 82,269
Boonville 20,421 21,698 79,816 81,156
Caruthersville (2) 7,889 - 26,857 -
Missouri Total 48,006 43,452 182,303 163,425
Iowa
Bettendorf 24,789 22,100 92,429 87,699
Davenport 13,847 14,164 52,681 60,483
Marquette 7,901 8,629 32,968 37,593
Waterloo (2) 19,541 - 64,650 -
Iowa Total 66,078 44,893 242,728 185,775
Colorado
Black Hawk/Colorado
Central Station 32,468 39,814 144,521 153,718
Florida
Pompano (2) 48,964 13,199 160,831 30,059
International
Blue Chip 2,627 2,589 9,435 8,898
Coventry (2) 3,068 - 8,227 -
Our Lucaya 4,758 5,198 15,548 16,777
International Total 10,453 7,787 33,210 25,675
Other 249 (17) 597 234
$298,316 $253,363 $1,125,352 $1,001,394
Isle of Capri Casinos, Inc.
Supplemental Data EBITDA(1)
(unaudited, in thousands)
Three Months Ended Fiscal Year Ended
April 27, April 29, April 27, April 29,
2008 2007 2008 2007
Mississippi
Biloxi $3,023 $5,605 $14,965 $45,599
Natchez 2,948 4,367 11,243 13,244
Lula 7,210 (842) 22,166 14,476
Mississippi Total 13,181 9,130 48,374 73,319
Louisiana
Lakes Charles 10,701 10,167 37,475 37,888
Missouri
Kansas City 3,942 4,533 12,613 13,779
Boonville 5,878 6,389 24,543 22,969
Caruthersville (2) 1,907 - 6,548 -
Missouri Total 11,727 10,922 43,704 36,748
Iowa
Bettendorf 7,845 6,919 28,492 24,792
Davenport 4,312 3,376 13,730 14,301
Marquette 1,668 1,817 7,362 7,923
Waterloo (2) 4,838 (470) 11,679 (921)
Iowa Total 18,663 11,642 61,263 46,095
Colorado
Black Hawk/Colorado
Central Station 9,209 12,838 47,625 43,726
Florida
Pompano (2) 4,028 (12,443) 8,527 (19,036)
International
Blue Chip (345) (322) (1,012) (1,697)
Coventry (2) (81,859) (1,306) (91,854) (2,212)
Our Lucaya 299 11,638 (826) 7,492
International Total (81,905) 10,010 (93,692) 3,583
Total Property
EBITDA(1) (14,396) 52,266 153,276 222,323
Corporate, Development
and Other (12,884) (14,838) (53,229) (56,991)
Minority Interest - (1,449) (4,868) (3,568)
Total EBITDA(1) $(27,280) $35,979 $95,179 $161,764
Isle of Capri Casinos, Inc.
Supplemental Data - Detail of Certain Charges Affecting EBITDA(1)
(unaudited, in thousands)
Three Months Ended Three Months Ended
April 27, 2008 April 29, 2007
Write-offs Write-offs
and and
Pre-opening Valuation Pre-opening Valuation
Expenses Charges Total Expenses Charges Total
Waterloo $- $- $- $466 $- $466
Lula - 7,801 7,801
Pompano - - - 8,675 - 8,675
Coventry - 77,978 77,978 1,295 - 1,295
Blue Chip 680 680
Total Properties - 78,658 78,658 10,436 7,801 18,237
Corporate,
Development and
Other - - - - - -
$- $78,658 $78,658 $10,436 $7,801 $18,237
Fiscal Year Ended Fiscal Year Ended
April 27, 2008 April 29, 2007
Write-offs Write-offs
and and
Pre-opening Valuation Pre-opening Valuation
Expenses Charges Total Expenses Charges Total
Kansas City $- $1,136 $1,136 $- $- $-
Davenport - 532 532 - - -
Waterloo 3,347 - 3,347 889 - 889
Lula 7,801 7,801
Pompano 307 - 307 10,544 - 10,544
Coventry 2,803 77,978 80,781 2,140 - 2,140
Blue Chip - 680 680 - 665 665
Total
Properties 6,457 80,326 86,783 13,573 8,466 22,039
Corporate,
Development
and Other - 4,858 4,858 - - -
$6,457 $85,184 $91,641 $13,573 $8,466 $22,039
Isle of Capri Casinos, Inc.
Supplemental Data - Reconciliation of Operating Income to EBITDA(1)
(unaudited, in thousands)
Three Months Ended Three Months Ended
April 27, 2008 April 29, 2007
Depreciation Depreciation
and and
Operating Amorti- Operating Amorti-
Income zation EBITDA(1) Income zation EBITDA(1)
Mississippi
Biloxi $(1,361) $4,384 $3,023 $19 $5,586 $5,605
Natchez 1,917 1,031 2,948 3,381 986 4,367
Lula 4,910 2,300 7,210 (3,438) 2,596 (842)
Mississippi
Total 5,466 7,715 13,181 (38) 9,168 9,130
Louisiana
Lakes Charles 7,096 3,605 10,701 6,346 3,821 10,167
Missouri
Kansas City 2,665 1,277 3,942 3,116 1,417 4,533
Boonville 4,632 1,246 5,878 5,173 1,216 6,389
Caruthersville(2) 524 1,383 1,907 - - -
Missouri Total 7,821 3,906 11,727 8,289 2,633 10,922
Iowa
Bettendorf 5,514 2,331 7,845 4,896 2,023 6,919
Davenport 3,143 1,169 4,312 1,790 1,586 3,376
Marquette 969 699 1,668 1,051 766 1,817
Waterloo(2) 1,790 3,048 4,838 (473) 3 (470)
Iowa Total 11,416 7,247 18,663 7,264 4,378 11,642
Colorado
Black Hawk/
Colorado
Central
Station 4,361 4,848 9,209 8,926 3,912 12,838
Florida
Pompano(2) (404) 4,432 4,028 (13,547) 1,104 (12,443)
International
Blue Chip (496) 151 (345) (513) 191 (322)
Coventry(2) (83,891) 2,032 (81,859) (1,802) 496 (1,306)
Our Lucaya 296 3 299 11,576 62 11,638
International
Total (84,091) 2,186 (81,905) 9,261 749 10,010
Total Properties (48,335) 33,939 (14,396) 26,501 25,765 52,266
Corporate,
Development and
Other(3) (14,374) 1,490 (12,884) (15,681) 843 (14,838)
Corporate Write
Offs - - - - - -
Minority
Interest - (1,449)
$(62,709) $35,429 $(27,280) $10,820 $26,608 $35,979
Isle of Capri Casinos, Inc.
Supplemental Data - Reconciliation of Operating Income to EBITDA(1)
(unaudited, in thousands)
Fiscal Year Ended Fiscal Year Ended
April 27, 2008 April 29, 2007
Depreciation Depreciation
and and
Operating Amorti- Operating Amorti-
Income zation EBITDA(1) Income zation EBITDA(1)
Mississippi
Biloxi $(3,538) $18,503 $14,965 $26,948 $18,651 $45,599
Natchez 7,412 3,831 11,243 9,391 3,853 13,244
Lula 11,034 11,132 22,166 4,231 10,245 14,476
Mississippi
Total 14,908 33,466 48,374 40,570 32,749 73,319
Louisiana
Lakes Charles 22,380 15,095 37,475 22,079 15,809 37,888
Missouri
Kansas City 6,985 5,628 12,613 7,258 6,521 13,779
Boonville 19,485 5,058 24,543 17,884 5,085 22,969
Caruthersville(2) 2,574 3,974 6,548 - - -
Missouri Total 29,044 14,660 43,704 25,142 11,606 36,748
Iowa
Bettendorf 18,967 9,525 28,492 17,120 7,672 24,792
Davenport 8,650 5,080 13,730 8,094 6,207 14,301
Marquette 4,380 2,982 7,362 4,802 3,121 7,923
Waterloo(2) 2,314 9,365 11,679 (925) 4 (921)
Iowa Total 34,311 26,952 61,263 29,091 17,004 46,095
Colorado
Black Hawk/
Colorado
Central
Station 30,811 16,814 47,625 27,894 15,832 43,726
Florida
Pompano(2) (7,749) 16,276 8,527 (20,308) 1,272 (19,036)
International
Blue Chip (1,563) 551 (1,012) (2,282) 585 (1,697)
Coventry(2) (98,485) 6,631 (91,854) (4,135) 1,923 (2,212)
Our Lucaya (835) 9 (826) 7,192 300 7,492
International
Total (100,883) 7,191 (93,692) 775 2,808 3,583
Total Properties 22,822 130,454 153,276 125,243 97,080 222,323
Corporate,
Development and
Other(3) (58,902) 5,673 (53,229) (59,417) 2,426 (56,991)
Minority
Interest (4,868) (3,568)
$(36,080) $136,127 $95,179 $65,826 $99,506 $161,764
1. EBITDA is earnings before interest and other non-operating income (expense), income taxes, and depreciation and amortization. Property EBITDA is EBITDA before Corporate and development expenses. EBITDA is presented solely as a supplemental disclosure because management believes that it is 1) a widely used measure of operating performance in the gaming industry, 2) used as a component of calculating required leverage and minimum interest coverage ratios under our Senior Credit Facility and 3) a principal basis of valuing gaming companies. Management uses EBITDA and Property EBITDA as the primary measure of the Company's operating properties' performance, and are important components in evaluating the performance of management and other operating personnel in the determination of certain components of employee compensation. EBITDA should not be construed as an alternative to operating income as an indicator of the Company's operating performance, as an alternative to cash flows from operating activities as a measure of liquidity or as an alternative to any other measure determined in accordance with U.S. generally accepted accounting principles (GAAP). The Company has significant uses of cash flows, including capital expenditures, interest payments, taxes and debt principal repayments, which are not reflected in EBITDA. Also, other gaming companies that report EBITDA information may calculate EBITDA in a different manner than the Company. Reconciliations of operating income to EBITDA are included in the financial schedules accompanying this release. A reconciliation of EBITDA and Property EBITDA to operating income is included in the financial schedules accompanying this release. A reconciliation of EBITDA to the Company's net income is shown below (in thousands).
Three Months Ended Fiscal Year Ended
April 27, April 29, April 27, April 29,
2008 2007 2008 2007
EBITDA $(27,280) $35,979 $95,179 $161,764
(Add)/deduct:
Depreciation and
amortization 35,429 26,608 136,127 99,506
Interest expense:
Interest expense,
net 26,040 21,836 105,472 81,681
Loss on early
extinguishment of
debt 1,614 - 15,274 -
Income tax provision
(benefit) (39,088) 659 (64,820) 1,906
Income (loss) from
discontinued
operations,
net of income taxes - 1,497 - (16,692)
Net income (loss) $(51,275) $(14,621) $(96,874) $(4,637)
Certain of our debt agreement use Adjusted EBITDA as a financial measure for the calculation financial debt covenants. Adjusted EBITDA differs from EBITDA as Adjusted EBITDA includes add back of items such as pre-opening expenses, certain write-offs and valuation expenses, and stock compensation expense. Reference can be made to the definition of Adjusted EBITDA in the applicable debt agreements on file as Exhibits to our filing with the Securities and Exchange Commission.
2. Reflects results since opening or acquisition date as follows:
Property Date
Pompano April 2007
Caruthersville June 2007
Waterloo June 2007
Coventry July 2007
3. Total consolidated stock compensation expense including corporate and properties for the three months ended April 27, 2008 and April 29, 2007 was $1.9 million and $1.6 million, respectively, of which, $1.5 million and $1.2 million were included in Corporate and development expense, respectively. Total consolidated stock compensation expense including corporate and properties for the fiscal years ended April 28, 2008 and April 27, 2007 was $7.3 million and $7.2 million, respectively, of which, $6.1 million and $5.6 million were included in Corporate and development expense, respectively. 4. Corporate write offs of $4.9 million for the fiscal year ended April 27, 2008 primarily reflect the termination of our plans to develop a new project in west Harrison County, Mississippi. About Isle of Capri Casinos, Inc. Isle of Capri Casinos, Inc., founded in 1992, is dedicated to providing its customers with an exceptional gaming and entertainment experience at each of its 18 casino properties. The Company owns and operates casinos in Biloxi, Lula and Natchez, Mississippi; Lake Charles, Louisiana; Bettendorf, Davenport, Marquette and Waterloo, Iowa; Boonville, Caruthersville, Kansas City, Missouri; two casinos in Black Hawk, Colorado; and a casino and harness track in Pompano Beach, Florida. Isle of Capri Casinos' international gaming interests include a casino that it operates in Freeport, Grand Bahama, a casino in Coventry, England, and a two-thirds ownership interest in casinos in Dudley and Wolverhampton, England. Forward-Looking Statements This press release may contain forward-looking statements which are subject to change. These forward-looking statements may be significantly impacted, either positively or negatively by various factors, including without limitation, licensing and other regulatory conditions, the economy, financing sources, development and construction activities, costs and delays, weather, permits, competition and business conditions in the gaming industry. The forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements herein. Additional information concerning potential factors that could affect the Company's financial condition and results of operations is included in the Company's filings with the Securities and Exchange Commission, including, but not limited to, the Company's annual report on Form 10-K for the most recently ended fiscal year. This and other information is available through the Securities and Exchange Commission at http://www.sec.gov, or through the Company's website, http://www.islecorp.com.
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