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Isle of Capri Casinos Announces Fiscal 2010 First Quarter Results

ST. LOUIS, Aug. 26 /PRNewswire-FirstCall/ -- Isle of Capri Casinos, Inc. (Nasdaq: ISLE) (the "Company") today reported financial results for the first quarter of the Company's 2010 fiscal year (the "FY"), ended July 26, 2009, and other Company-related news.

Consolidated Results

The following table outlines the Company's financial results (dollars in millions, except per share data, unaudited):

                                                          Three Months Ended
                                                          ------------------
                                                         July 26,    July 27,
                                                           2009        2008
                                                           ----        ----
    Net revenues                                         $259.9      $277.4
    Income (loss) from continuing operations                0.8        (2.6)
    Net income (loss)                                       0.9        (3.6)
    Income (loss) per share from continuing operations     0.02       (0.09)
    Net income (loss) per share                            0.03       (0.12)


In making the announcement, James B. Perry, the Company's chairman and chief executive officer, said, "We believe we continue to be well positioned to endure this period of economic uncertainty as we have focused during the past two years on fiscal discipline and creating a value proposition for our customers. Our results during the quarter make clear to us that the economy appears to be engaged in a slow, long-term recovery process, and consumers are being more discriminating about their leisure spending. Our operational focus has enabled us to either maintain or increase share in most of our markets. Based upon the company's experience in the fourth quarter last fiscal year, we believe our cost structure will enable us to increase flow-through and achieve solid margin improvement on incremental revenue when we see economic improvement.

"We are committed to managing our business for long-term success, and continue to take steps to improve our capital structure while aggressively pursuing cash-flow positive management and acquisition opportunities. In order to capitalize on these possible acquisition and management opportunities, we are pleased to welcome Eric Hausler to our team as our new senior vice president for strategic initiatives. As previously announced, we remain on track to exit our international operations in the near term, as we will exit the Bahamas no later than October 31, and expect to exit our remaining UK operations by the end of the calendar year."

First Quarter Highlights

During the quarter, net revenues decreased by 6.3% to $259.9 million compared to the first quarter of FY 2009, primarily as a result of a $12.8 million decrease in gaming revenue. EBITDA from continuing operations for the first quarter of FY 2010 was $ 48.4 million, compared to $53.0 million for the first quarter of FY 2009. EBITDA from continuing operations for the first quarter of FY 2009 included a $6.0 million valuation charge relating to the termination of a potential development of a casino project. Property EBITDA decreased from $69.2 million in the prior year quarter to $58.2 million.

Virginia McDowell, the Company's president and chief operating officer, said, "First quarter results were generally in line with our expectations at most of our properties, with the decrease in company EBITDA primarily attributable to decreases in gaming revenue and EBITDA at the Company's properties in Biloxi and Lula MS, Lake Charles, LA and Bettendorf, IA. The Mississippi properties were impacted by continuing softness in their respective markets and an increase in unemployment rates, Bettendorf was negatively impacted by access issues caused by bridge repairs and the opening of a new gaming facility by one of our competitors in the Quad Cities, and Lake Charles was negatively impacted by changes in the promotional spend in the market.

"Despite the continued economic weakness, we have been successful in most of our markets maintaining our customer volumes while, consistent with other businesses dependent upon discretionary spending, our win per patron has decreased. We expect these visitation and spending behaviors to continue until there is a significant increase in consumer confidence.

"While unemployment has risen in a large number of our markets, we believe we have made operational progress through our focus on creating value for customers through our slot programs, courtesy initiatives and amenity pricing. It is, however evident that our year-over-year revenue and margin comparisons are difficult because government stimulus checks during the same period of the last fiscal year clearly had a positive impact on consumer spending.

"We were among the first gaming companies to implement aggressive cost savings initiatives, which led us to a savings in operating costs of almost $30 million during our last fiscal year ended April 26, 2009. While implementing these savings, we were successful in creating a more valued entertainment experience for our patrons and improving our customer service metrics across the portfolio. Moving forward, our plan is to continue to identify targeted opportunities to reduce costs and drive incremental revenue, to continue to strengthen our relationships with profitable customers, and to avoid measures that would negatively impact our performance in the long-term.

"We are holding firm in our resolve to defer the great majority of our planned renovation and project capital expenditures until we achieve more visibility into an economic turnaround. However, we are continuing to evaluate the competitive landscape in Colorado to capitalize on the opportunity presented by recent regulatory changes in that market, and we are also looking forward to the substantial completion of our Lady Luck conversion projects by the end of this month at our properties in Caruthersville and Marquette."

Corporate and Other Expenses

Corporate and other expenses decreased to $9.9 million for the three months ended July 26, 2009, from $10.3 million for the three months ended July 27, 2008. Corporate costs include cash expenses of $2.2 million related to payments made under our long-term incentive plan as a result of awarding long-term incentive awards in the first quarter of fiscal 2010. Our prior year long-term incentive awards were made during the second quarter of fiscal 2008. Non-cash stock compensation expense decreased $1.0 million in the three months ended July 26, 2009 to $1.1 million from $2.1 million for the three months ended July 27, 2008.

Interest expense for the quarter was $18.3 million, a decline of approximately $5.5 million compared to the prior fiscal year, primarily as a result of lower debt levels.

Capital Structure and Capital Expenditures

As of July 26, 2009, the Company had $104.8 million in cash and cash equivalents and total debt of $1.3 billion. Capital expenditures for the three months ended July 26, 2009 totaled $4.4 million, which included approximately $2.7 million of maintenance capital expenditures. We expect maintenance capital expenditures for the rest of the year to be approximately $35 million.

Conference Call Information

Isle of Capri Casinos, Inc. will host a conference call on Wednesday, August 26, 2009 at 9:00 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, www.islecorp.com, or, for domestic callers, by dialing 800-659-2032. International callers can access the conference call by dialing 617-614-2712. The conference call access code is 95652888. This conference call will be recorded and available for review starting at noon on August 26, 2009, until September 2, 2009, by dialing 888-286-8010 for domestic callers or 617-801-6888 for International callers. The access code will be 83031870.

                            ISLE OF CAPRI CASINOS, INC.
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                  (In thousands, except share and per share data)
                                    (unaudited)

                                                     Three Months Ended
                                                     ------------------
                                                   July 26,        July 27,
                                                     2009            2008
                                                     ----            ----
    Revenues:
      Casino                                       $263,956        $276,786
      Rooms                                          12,261          13,706
      Pari-mutuel, food, beverage and other          34,870          36,547
                                                     ------          ------
      Gross revenues                                311,087         327,039
        Less promotional allowances                 (51,145)        (49,644)
                                                    -------         -------
          Net revenues                              259,942         277,395
    Operating expenses:
      Casino                                         39,994          38,541
      Gaming taxes                                   66,428          70,658
      Rooms                                           2,981           3,389
      Pari-mutuel, food, beverage and other          11,158          13,661
      Marine and facilities                          15,954          16,470
      Marketing and administrative                   65,117          65,354
      Corporate and development                       9,945          10,330
      Valuation charges                                   -           6,000
      Depreciation and amortization                  28,829          31,566
                                                     ------          ------
        Total operating expenses                    240,406         255,969
                                                    -------         -------
    Operating income                                 19,536          21,426
      Interest expense                              (18,347)        (23,897)
      Interest income                                   369             446
                                                        ---             ---

    Income (loss) from continuing operations
     before income taxes                              1,558          (2,025)
      Income tax provision                             (767)           (615)
                                                       ----            ----
    Income (loss) from continuing operations            791          (2,640)
    Income (loss) from discontinued operations, net
     of income taxes                                    114            (986)
                                                        ---            ----
    Net income (loss)                                  $905         $(3,626)
                                                       ====         =======

    Income (loss) per common share-basic and
     dilutive:
      Income (loss) from continuing operations        $0.02          $(0.09)
      Income (loss) from discontinued
       operations, net of income taxes                 0.01           (0.03)
                                                       ----           -----
      Net income (loss)                               $0.03          $(0.12)
                                                      =====          ======

    Weighted average basic shares                31,799,100      30,866,687
    Weighted average diluted shares              31,855,101      30,866,687


                             ISLE OF CAPRI CASINOS, INC.
                             CONSOLIDATED BALANCE SHEETS
                      (In thousands, except  per share amounts)

                                              July 26,       April 26,
                                                2009            2009
                                                ----            ----
                   ASSETS                    (unaudited)
                   ------
    Current assets:
      Cash and cash equivalents               $104,784         $96,654
      Marketable securities                     18,644          17,548
      Accounts receivable, net                   7,746          11,935
      Income taxes receivable                    5,473           7,744
      Deferred income taxes                     16,295          16,295
      Prepaid expenses and other assets         36,157          23,234
      Assets held for sale                       4,557           4,183
                                                 -----           -----
       Total current assets                    193,656         177,593
    Property and equipment, net              1,155,156       1,177,540
    Other assets:
      Goodwill                                 313,136         313,136
      Other intangible assets, net              82,610          83,588
      Deferred financing costs, net              8,721           9,314
      Restricted cash                            2,774           2,774
      Prepaid deposits and other                18,482          18,717
                                                ------          ------
        Total assets                        $1,774,535      $1,782,662
                                            ==========      ==========
      LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Current maturities of long-term debt      $9,808          $9,688
      Accounts payable                          18,532          16,246
    Accrued liabilities:
      Interest                                  14,771           9,280
      Payroll and related                       45,159          47,209
      Property and other taxes                  36,626          31,487
      Other                                     48,688          52,195
      Liabilities related to assets held
       for sale                                  2,173           1,888
                                                 -----           -----
      Total current liabilities                175,757         167,993
    Long-term debt, less current maturities  1,270,059       1,291,384
    Deferred income taxes                       27,758          24,970
    Other accrued liabilities                   50,899          52,575
    Other long-term liabilities                 17,563          17,314
    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: 36,614,478 at July 26,
       2009 and 36,111,089 at April 26, 2009       366             361
      Class B common stock, $.01 par
      value; 3,000,000 shares
      authorized; none issued                       -               -
      Additional paid-in capital               194,845         193,827
      Retained earnings                        102,733         101,828
      Accumulated other comprehensive
       (loss) income                           (13,313)        (15,191)
                                              --------         -------
                                               284,631         280,825
      Treasury stock, 4,327,623 shares at
       July 26, 2009 and 4,340,436
       shares at April 26, 2009                (52,132)        (52,399)
                                              --------         -------
      Total stockholders' equity               232,499         228,426
                                              -------         -------
      Total liabilities and stockholders'
       equity                               $1,774,535      $1,782,662
                                            ==========      ==========


                           Isle of Capri Casinos, Inc.
                        Supplemental Data - Net Revenues
                            (unaudited, in thousands)

                                                      Three Months Ended
                                                      ------------------
                                                July 26,              July 27,
                                                  2009                  2008
                                                  ----                  ----
     Mississippi
        Biloxi                                 $20,314                 $24,343
        Natchez                                  8,573                   8,585
        Lula                                    17,728                  18,401
                                                ------                  ------
        Mississippi Total                       46,615                  51,329
                                                ------                  ------

     Louisiana
        Lake Charles                            37,614                  41,175
                                                ------                  ------

     Missouri
        Kansas City                             19,485                  18,211
        Boonville                               20,072                  20,234
        Caruthersville                           8,332                   7,815
                                                 -----                   -----
        Missouri Total                          47,889                  46,260
                                                ------                  ------

     Iowa
        Bettendorf                              21,166                  26,127
        Davenport                               12,453                  10,584
        Marquette                                7,477                   8,488
        Waterloo                                19,876                  19,599
                                                ------                  ------
        Iowa Total                              60,972                  64,798
                                                ------                  ------

     Colorado
        Black Hawk                              33,790                  33,189
                                                ------                  ------

     Florida
        Pompano                                 30,798                  36,902
                                                ------                  ------

     International
        Our Lucaya                               2,134                   3,573
                                                 -----                   -----


     Property Net Revenues before
      Other                                    259,812                 277,226

     Other                                         130                     169
                                                   ---                     ---

     Net Revenues from Continuing
      Operations                              $259,942                $277,395
                                              ========                ========


                            Isle of Capri Casinos, Inc.
                           Supplemental Data - EBITDA (1)
                              (unaudited, in thousands)

                                            Three Months Ended
                                            ------------------
                                           July 26,      July 27,
                                             2009          2008
                                             ----          ----
     Mississippi
        Biloxi                              $2,385        $4,913
        Natchez                              2,733         2,978
        Lula                                 4,655         6,100
                                             -----         -----
        Mississippi Total                    9,773        13,991
                                             -----        ------

     Louisiana
        Lake Charles                         7,582        10,687
                                             -----        ------

     Missouri
        Kansas City                          4,452         3,618
        Boonville                            6,776         6,348
        Caruthersville                       1,753         1,703
                                             -----         -----
        Missouri Total                      12,981        11,669
                                            ------        ------

     Iowa
        Bettendorf                           5,982         9,570
        Davenport                            3,614         3,200
        Marquette                            1,772         2,420
        Waterloo                             5,848         6,133
                                             -----         -----
        Iowa Total                          17,216        21,323
                                            ------        ------

     Colorado
        Black Hawk                           8,565         9,408
                                             -----         -----

     Florida
        Pompano                              2,463         2,231
                                             -----         -----

     International
        Our Lucaya                            (401)         (156)
                                              ----          ----

     Property EBITDA Before
         Corporate and Other Items          58,179        69,153
     Corporate and Other                    (9,814)      (10,161)
                                            ------       -------

     EBITDA Before Other Items              48,365        58,992
     Other Items:
          Valuation Charges (2)                  -        (6,000)
                                                 -        ------
     EBITDA from Continuing Operations     $48,365       $52,992
                                           =======       =======

                           Isle of Capri Casinos, Inc.
      Supplemental Data - Reconciliation of Operating Income to EBITDA (1) (2)
                             (unaudited, in thousands)

                         Three Months Ended           Three Months Ended
                            July 26, 2009                July 27, 2008
                     ---------------------------  ---------------------------
                             Depreciation                 Depreciation
                     Operating   and              Operating   and
                      Income Amortization EBITDA   Income Amortization EBITDA
                      ------ ------------ ------   ------ ------------ ------
     Mississippi
       Biloxi         $(1,268)  $3,653    $2,385     $362   $4,551    $4,913
       Natchez          2,137      596     2,733    2,093      885     2,978
       Lula             2,441    2,214     4,655    3,847    2,253     6,100
                        -----    -----     -----    -----    -----     -----
       Mississippi
        Total           3,310    6,463     9,773    6,302    7,689    13,991
                        -----    -----     -----    -----    -----    ------

     Louisiana
       Lake
        Charles         4,843    2,739     7,582    7,389    3,298    10,687
                        -----    -----     -----    -----    -----    ------

     Missouri
       Kansas City      3,355    1,097     4,452    2,354    1,264     3,618
       Boonville        5,592    1,184     6,776    5,139    1,209     6,348
       Caruthersville     838      915     1,753      572    1,131     1,703
                          ---      ---     -----      ---    -----     -----
       Missouri
        Total           9,785    3,196    12,981    8,065    3,604    11,669
                        -----    -----    ------    -----    -----    ------

     Iowa
       Bettendorf       3,635    2,347     5,982    7,269    2,301     9,570
       Davenport        2,658      956     3,614    2,073    1,127     3,200
       Marquette        1,073      699     1,772    1,729      691     2,420
       Waterloo         2,899    2,949     5,848    3,319    2,814     6,133
                        -----    -----     -----    -----    -----     -----
       Iowa
        Total          10,265    6,951    17,216   14,390    6,933    21,323
                       ------    -----    ------   ------    -----    ------

     Colorado
       Black
        Hawk            4,694    3,871     8,565    4,920    4,488     9,408
                        -----    -----     -----    -----    -----     -----

     Florida
       Pompano         (1,807)   4,270     2,463   (1,975)   4,206     2,231
                       ------    -----     -----   ------    -----     -----

     International
       Our Lucaya        (403)       2      (401)    (160)       4      (156)
                         ----      ---      ----     ----      ---      ----

     Total
      Property
       Before
       Corporate
       and Other
       Items           30,687   27,492    58,179   38,931   30,222    69,153
     Corporate
      and Other       (11,151)   1,337    (9,814) (11,505)   1,344   (10,161)
                      -------    -----    ------  -------    -----   -------

     Total
      Before
      Other
      Items            19,536   28,829    48,365   27,426   31,566    58,992
     Other
      Items:
         Valuation
          Charges (2)       -        -         -   (6,000)       -    (6,000)
                          ---      ---       ---   ------      ---    ------
     Total From
      Continuing
      Operations      $19,536  $28,829   $48,365  $21,426  $31,566   $52,992
                      =======  =======   =======  =======  =======   =======


    1.  EBITDA is "earnings before interest and other non-operating income
        (expense), income taxes, and depreciation and amortization."  EBITDA
        is presented after consideration of minority interest.  "Property
        EBITDA" is EBITDA before Corporate and development expenses and
        minority interest.  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 they 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.  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 (loss) is shown
        below (in thousands).



                                                  Three Months Ended
                                                  ------------------
                                                  July 26,    July 27,
                                                    2009        2008
                                                    ----        ----
    EBITDA                                        $48,365     $52,992
     Add/(deduct):
     Depreciation and amortization                (28,829)    (31,566)
     Interest expense:
       Interest expense, net                      (17,978)    (23,451)
     Income tax (provision) benefit                  (767)       (615)
     Income (loss) from discontinued
      operations,
       net of income taxes                            114        (986)
                                                      ---        ----
    Net income (loss)                                $905     $(3,626)
                                                     ====     =======



        Certain of our debt agreements use "Adjusted EBITDA" as a financial
        measure for the calculation of financial debt covenants.  Adjusted
        EBITDA differs from EBITDA as Adjusted EBITDA includes add back of
        items such as gain on early extinguishment of debt, 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.  Valuation charges of $6.0 million for the three months ended July 27,
        2008 reflect a charge representing the cancellation of our rights to
        acquire land including a $1.0 million termination fee, related to the
        potential development of a casino project in the Portland, Oregon
        area.

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 17 casino properties. The Company owns and operates casinos domestically in Biloxi, Lula and Natchez, Mississippi; Lake Charles, Louisiana; Bettendorf, Davenport, Marquette and Waterloo, Iowa; Boonville, Caruthersville and Kansas City, Missouri; two casinos in Black Hawk, Colorado; and a casino and harness track in Pompano Beach, Florida. More information is available at the Company's website, www.islecorp.com.

Forward-Looking Statement

This press release may be deemed to 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 approvals, 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, results of operations and expansion projects, is included in the filings of the Company with the Securities and Exchange Commission, including, but not limited to, its Form 10-K for the most recently ended fiscal year.

      CONTACTS:
      Isle of Capri Casinos, Inc.,
         Dale Black, Chief Financial Officer-314.813.9327
         Jill Haynes, Senior Director of Corporate Communication-314.813.9368

NOTE: Other Isle of Capri Casinos, Inc. press releases and a corporate profile are available at http://www.prnewswire.com/. Isle of Capri Casinos, Inc.'s home page is http://www.islecorp.com/.

Available Topic Expert(s): For information on the listed expert(s), click appropriate link.

James Perry

https://profnet.prnewswire.com/Subscriber/ExpertProfile.aspx?ei=74947

Virginia McDowell

https://profnet.prnewswire.com/Subscriber/ExpertProfile.aspx?ei=72331

Dale Black

https://profnet.prnewswire.com/Subscriber/ExpertProfile.aspx?ei=74948

SOURCE Isle of Capri Casinos, Inc.

Dale Black
Chief Financial Officer
+1-314-813-9327
or Jill Haynes
Senior Director of Corporate Communication
+1-314-813-9368
both of Isle of Capri Casinos, Inc.

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