ISLE OF CAPRI CASINOS SAINT LOUIS, Aug. 27, 2014 /PRNewswire/ -- Isle of Capri Casinos, Inc. (NASDAQ: ISLE) (the "Company") today reported financial results for the first quarter of fiscal year 2015 ended July 27, 2014 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 27, July 28,
2014 2013
---- ----
Net revenues $241.6 $238.0
Consolidated adjusted EBITDA (1) 43.7 41.9
Loss from continuing operations (2.3) (5.7)
Income from discontinued operations - 0.8
Net loss (2.3) (4.9)
Diluted loss per share from
continuing operations (0.06) (0.14)
Diluted income per share from
discontinued operations - 0.02
Diluted loss per share (0.06) (0.12)
Adjusted income (loss) per share
(2) 0.02 (0.07)
(1) For a further description of
Consolidated Adjusted EBITDA, refer to
the reconciliation tables following the
narrative and the definition of
Adjusted EBITDA in footnote (1) of this
release.
(2) For a reconciliation of the GAAP basis
per share amounts to adjusted income
(loss) per share, refer to the
reconciliation table labeled
"Reconciliation of GAAP Income (Loss)
from Continuing Operations to Adjusted
Income (Loss) and GAAP Income (Loss)
from Continuing Operations Per Share to
Adjusted Income (Loss) Per Share."
Virginia McDowell, President and Chief Executive Officer, commented: "For the second consecutive quarter, we increased Adjusted EBITDA and operating margins, on a same-store basis, despite a still challenging operating environment. Excluding Nemacolin, which was open for only one month during last year's quarter, six properties improved net revenues year over year and eight properties increased Adjusted EBITDA year over year. We continued to benefit from our profit improvement initiatives during the quarter.
"In July we implemented a restructuring of our corporate group in which we eliminated certain executive positions to maximize our efficiency and streamline reporting lines. These changes are expected to save approximately $2.5 million annually, not including severance expense of $2.3 million in the current quarter.
"We are also continuing to refine our marketing programs to enhance our customers' experience. On a same-store basis, during the quarter we saw a slight increase in play from our top tier customers and a 4% increase in retail play. This was offset by a decrease in play from customers in the lower segments of our database."
Financial Highlights
Net revenues for the current quarter were $241.6 million compared to $238.0 million in the prior year quarter, and consolidated Adjusted EBITDA was $43.7 million for the quarter compared to $41.9 million in the same quarter of the prior fiscal year. Excluding the results at Nemacolin, same-store property net revenues decreased from $235.2 million to $232.9 million, Adjusted EBITDA increased to $50.1 million from $48.9 million, and operating margins increased to 21.5% from 20.8%.
Adjusted income per share from continuing operations was $0.02 for the quarter compared to adjusted net income per share from continuing operations of ($0.07) in the prior year.
Operating results in the most recent quarter were impacted by $2.3 million of severance expenses related to the corporate restructuring and $1.0 million in expenses related to the voter referendum that would potentially allow casinos at certain racetracks in Colorado. The previous year's quarter benefited from a $1.0 million gain on the sale of our airplane.
On a GAAP basis, diluted loss per share from continuing operations was ($0.06) compared to a loss from continuing operations of ($0.14) in the prior year's quarter.
Operating Results
Black Hawk - Net revenues decreased $1.0 million to $31.7 million, and Adjusted EBITDA decreased $0.5 million to $7.9 million. Black Hawk continued to experience a heightened competitive environment during the quarter which impacted net revenues. However, we continued to aggressively manage expenses, which mitigated some of the top-line weakness.
Pompano - Net revenues increased $0.3 million to $37.7 million, and Adjusted EBITDA increased $0.6 million, or 9.4%, to $6.6 million. The property experienced an increased promotional environment at the beginning of the quarter and adjusted marketing programs and cost levels appropriately.
Iowa - Net revenues decreased $0.2 million to $47.3 million, while Adjusted EBITDA increased $0.9 million to $13.4 million. Net revenues, Adjusted EBITDA and operating margins each increased at both Bettendorf and Waterloo, where profit enhancement initiatives and stronger marketing programs to top-tier customers offset overall gaming market weakness. The decline in net revenues for the state was entirely attributable to Marquette, where road construction and softer tourism impacted results.
Lake Charles - Net revenues decreased $1.1 million to $32.5 million, and Adjusted EBITDA decreased $0.4 million to $5.2 million. Net revenues and Adjusted EBITDA were impacted by decreased rated play partially offset by lower expenses.
Mississippi - Net revenues decreased $0.8 million to $24.9 million, and Adjusted EBITDA was consistent with prior year at $2.8 million. In Lula, we improved Adjusted EBITDA by over 30% and margins by over 400 basis points primarily as result of a more targeted marketing program and our profit improvement initiatives. Natchez and Vicksburg continue to experience market pressures from competition and economic conditions.
Missouri -Net revenues increased $0.6 million to $58.9 million, and Adjusted EBITDA increased $0.7 million to $14.3 million. Operating margins and Adjusted EBITDA increased at each of our four Missouri properties, despite slight decreases in net revenue in Caruthersville and Kansas City. Boonville, Cape Girardeau and Caruthersville benefited from an increase in top-tier rated play during the quarter. We also saw positive retail play trends at Boonville, Cape Girardeau and Kansas City.
Pennsylvania - Net revenues were $8.7 million, and Adjusted EBITDA was ($0.4) million, compared to $2.6 million and $(0.6) million, respectively, during the prior year, which included only the month of July. We continue to focus on building our revenues at the property and bringing the cost structure in line with the business volumes.
Corporate Expenses
Corporate and development expenses were $9.1 million for the quarter compared to $6.7 million in the first quarter of fiscal 2014. The current year quarter includes severance of $2.3 million and the prior year quarter benefitted from a $1.0 million gain from the sale of our airplane. Excluding the aforementioned items, corporate expenses declined 10.7% year over year.
Non-cash stock compensation expense was $0.8 million for the quarter compared to $1.1 million in the first quarter of fiscal 2014.
Development
The Provence, Philadelphia, Pennsylvania - We continue to await the decision from the Pennsylvania Gaming Control Board (the "PGCB") regarding the awarding of the final license in Philadelphia where we would operate the proposed $700 million casino entertainment complex, dubbed The Provence, if the project is selected for licensure by the PGCB. As proposed, the 1.25 million square foot project is expected to include a 125-room hotel, a casino featuring approximately 3,300 electronic gaming machines and 150 table games, as well as a wide variety of non-gaming entertainment amenities. At this time, the PGCB has not communicated the timetable with respect to a forthcoming decision.
Capital Structure and Capital Expenditures
As of July 27, 2014, the Company had:
-- $68.3 million in cash and cash equivalents, excluding $9.1 million in
restricted cash and investments;
-- $1.1 billion in total debt; and
-- $125 million in net line of credit availability.
First quarter capital expenditures were $9.0 million, primarily consisting of maintenance and gaming equipment purchases. We expect to have capital expenditures of approximately $38 million to $41 million for the remainder of fiscal 2015.
Conference Call Information
Isle of Capri Casinos, Inc. will host a conference call on Wednesday, August 27, 2014 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, www.islecorp.com, or, for domestic callers, by dialing 877-870-4263. International callers can access the conference call by dialing 412-317-0790. The conference call will be recorded and available for review starting at 11:59 pm central on Wednesday, August 27, 2014, until 11:59 pm central on Wednesday, September 3, 2014, by dialing 877-344-7529; International: 412-317-0088 and access number 10051402.
About Isle of Capri Casinos, Inc.
Isle of Capri Casinos, Inc. is a leading regional gaming and entertainment company dedicated to providing guests with exceptional experience at each of the 15 casino properties that it owns or operates, primarily under the Isle and Lady Luck brands. The Company currently operates gaming and entertainment facilities in Mississippi, Louisiana, Iowa, Missouri, Colorado, Florida and Pennsylvania. More information is available at the Company's website, www.islecorp.com.
Forward-Looking Statements
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.,
Eric Hausler, Chief Financial Officer-314.813.9205
Jill Alexander, Senior Director of Corporate Communication-314.813.9368
www.islecorp.com
ISLE OF CAPRI CASINOS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended
------------------
July 27, July 28,
2014 2013
---- ----
Revenues:
Casino $255,072 $250,834
Rooms 8,312 8,915
Food, beverage, pari-mutuel and other 34,123 34,122
Gross revenues 297,507 293,871
Less promotional allowances (55,858) (55,858)
------- -------
Net revenues 241,649 238,013
Operating expenses:
Casino 40,128 40,268
Gaming taxes 64,467 62,678
Rooms 1,903 1,901
Food, beverage, pari-mutuel and other 11,372 10,802
Marine and facilities 14,719 14,619
Marketing and administrative 60,361 59,250
Corporate and development 9,148 6,698
Preopening - 3,898
Depreciation and amortization 19,643 19,802
Total operating expenses 221,741 219,916
------- -------
Operating income 19,908 18,097
Interest expense (21,329) (22,654)
Interest income 87 90
Derivative income - 230
--- ---
Loss from continuing operations before
income taxes (1,334) (4,237)
Income tax provision (983) (1,411)
---- ------
Loss from continuing operations (2,317) (5,648)
Income from discontinued operations,
net of income taxes - 786
--- ---
Net loss $(2,317) $(4,862)
======= =======
Income (loss) per common share-basic and diluted:
Loss from continuing operations $(0.06) $(0.14)
Income from discontinued operations,
net of income taxes - 0.02
--- ----
Net loss $(0.06) $(0.12)
====== ======
Weighted average basic shares 39,827,889 39,582,928
Weighted average diluted shares 39,827,889 39,582,928
ISLE OF CAPRI CASINOS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
July 27, April 27,
2014 2014
---- ----
ASSETS (unaudited)
------
Current assets:
Cash and cash equivalents $68,330 $69,830
Marketable securities 27,566 27,289
Accounts receivable, net 10,806 12,615
Income taxes receivable 243 73
Deferred income taxes 4,106 4,106
Prepaid expenses and other assets 28,535 18,526
Total current assets 139,586 132,439
Property and equipment, net 946,193 955,604
Other assets:
Goodwill 108,970 108,970
Other intangible assets, net 54,701 54,911
Deferred financing costs, net 22,320 23,439
Restricted cash and investments 9,125 9,807
Prepaid deposits and other 4,865 4,904
Total assets $1,285,760 $1,290,074
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current maturities of long-term debt $231 $230
Accounts payable 19,196 20,869
Accrued liabilities:
Payroll and related 35,384 34,700
Property and other taxes 22,274 20,360
Interest 20,020 16,920
Progressive jackpots and slot club awards 16,526 16,306
Other 19,746 18,478
Total current liabilities 133,377 127,863
Long-term debt, less current maturities 1,056,377 1,066,071
Deferred income taxes 36,852 35,870
Other accrued liabilities 18,575 18,495
Other long-term liabilities 22,629 22,391
Stockholders' equity:
Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued - -
Common stock, $.01 par value; 60,000,000 shares authorized; shares issued:
42,066,148 at July 27, 2014 and at April 27, 2014 421 421
Class B common stock, $.01 par value; 3,000,000 shares authorized; none issued - -
Additional paid-in capital 248,785 247,819
Retained earnings (deficit) (204,230) (201,913)
-------- --------
44,976 46,327
Treasury stock, 2,243,789 shares at July 27, 2014 and 2,236,971 shares at April
27, 2014 (27,026) (26,743)
Total stockholders' equity 17,950 19,584
Total liabilities and stockholders' equity $1,285,760 $1,290,274
========== ==========
Isle of Capri Casinos, Inc.
Supplemental Data - Net Revenues
(unaudited, in thousands)
Three Months Ended
------------------
July 27, July 28,
2014 2013
---- ----
Colorado
Black Hawk $31,681 $32,684
Florida
Pompano 37,724 37,386
Iowa
Bettendorf 19,534 19,465
Marquette 6,487 7,112
Waterloo 21,252 20,942
Iowa Total 47,273 47,519
Louisiana
Lake Charles 32,536 33,666
Mississippi
Lula 12,675 12,579
Natchez 4,753 5,327
Vicksburg 7,442 7,779
Mississippi Total 24,870 25,685
Missouri
Boonville 19,190 18,729
Cape Girardeau 14,360 13,809
Caruthersville 7,483 7,687
Kansas City 17,829 18,071
Missouri Total 58,862 58,296
Pennsylvania
Nemacolin 8,657 2,593
Property Net Revenues
before Other 241,603 237,829
Other 46 184
--- ---
Net Revenues from
Continuing Operations $241,649 $238,013
======== ========
Isle of Capri Casinos, Inc.
Reconciliation of Operating Income (Loss) to Adjusted EBITDA
(unaudited, in thousands)
Three Months Ended July 27, 2014
--------------------------------
Operating Depreciation and Stock-Based Other Adjusted
Income (Loss) Amortization Compensation EBITDA
------------ ------------ ------------ ------
Black Hawk, Colorado $4,510 $2,343 $8 $1,013 $7,874
Pompano, Florida 4,839 1,742 6 - 6,587
Bettendorf 4,016 1,452 4 - 5,472
Marquette 898 456 1 - 1,355
Waterloo 5,348 1,186 4 - 6,538
Iowa Total 10,262 3,094 9 - 13,365
----------
Lake Charles, Louisiana 2,345 2,830 4 - 5,179
Lula 926 1,287 3 - 2,216
Natchez (591) 233 4 - (354)
Vicksburg 90 892 4 - 986
Mississippi
Total 425 2,412 11 - 2,848
------------
Boonville 5,778 988 6 - 6,772
Cape Girardeau (479) 2,790 1 - 2,312
Caruthersville 660 668 4 - 1,332
Kansas City 2,912 950 4 - 3,866
Missouri
Total 8,871 5,396 15 - 14,282
---------
Nemacolin, Pennsylvania (1,773) 1,357 1 (415)
------ ----- --- ----
Total Operating
Properties 29,479 19,174 54 1,013 49,720
Corporate and Other (9,571) 469 829 2,259 (6,014)
Total $19,908 $19,643 $883 $3,272 $43,706
======= ======= ==== ====== =======
Three Months Ended July 28, 2013
--------------------------------
Operating Depreciation and Stock-Based Preopening Adjusted
Income (Loss) Amortization Compensation and Other EBITDA
------------ ------------ ------------ --------- ------
Black Hawk, Colorado $6,084 $2,319 $11 $ - $8,414
Pompano, Florida 4,167 1,846 7 - 6,020
Bettendorf 3,213 1,699 4 - 4,916
Marquette 1,220 478 3 - 1,701
Waterloo 4,628 1,220 6 - 5,854
Iowa Total 9,061 3,397 13 - 12,471
----------
Lake Charles, Louisiana 2,734 2,877 5 - 5,616
Lula 362 1,326 5 - 1,693
Natchez (599) 351 5 - (243)
Vicksburg 380 1,005 5 - 1,390
Mississippi
Total 143 2,682 15 - 2,840
------------
Boonville 5,225 1,152 6 - 6,383
Cape Girardeau (685) 2,787 3 - 2,105
Caruthersville 457 805 6 - 1,268
Kansas City 2,840 976 4 - 3,820
Missouri
Total 7,837 5,720 19 - 13,576
---------
Nemacolin, Pennsylvania (5,011) 557 - 3,898 (556)
------ --- --- ----- ----
Total Operating
Properties 25,015 19,398 70 3,898 48,381
Corporate and Other (6,918) 404 1,059 (1,019) (6,474)
Total $18,097 $19,802 $1,129 $2,879 $41,907
======= ======= ====== ====== =======
Isle of Capri Casinos, Inc.
Reconciliation of Income (Loss) From Continuing Operations to Adjusted EBITDA
(unaudited, in thousands)
Three Months Ended
------------------
July 27, July 28,
2014 2013
---- ----
Loss from continuing
operations $(2,317) $(5,648)
Income tax provision 983 1,411
Derivative income - (230)
Interest income (87) (90)
Interest expense 21,329 22,654
Depreciation and amortization 19,643 19,802
Stock-based compensation 883 1,129
Severance charges 2,259 -
Colorado referendum costs 1,013 -
Preopening expense - 3,898
Gain on sale of airplane - (1,019)
Adjusted EBITDA (1) $43,706 $41,907
======= =======
Isle of Capri Casinos, Inc.
Reconciliation of GAAP Income (Loss) From Continuing Operations to Adjusted
Income (Loss) and GAAP Income (Loss) From Continuing Operations Per Share to
Adjusted Income (Loss) Per Share
(unaudited, in thousands)
Three Months Ended
------------------
July 27, July 28,
2014 2013
---- ----
GAAP loss from
continuing
operations $(2,317) $(5,648)
Severance
expense (3) 2,259 -
Colorado
referendum
expense (3) 1,013 -
Preopening
expense - 3,898
Gain on sale of
corporate
aircraft - (1,019)
Adjusted income
(loss) (2) $955 $(2,769)
==== =======
GAAP loss from
continuing
operations per
share $(0.06) $(0.14)
Severance
expense (3) 0.06 -
Colorado
referendum
expense (3) 0.02 -
Preopening
expense - 0.10
Gain on sale of
corporate
aircraft - (0.03)
Adjusted income
(loss) per
share $0.02 $(0.07)
===== ======
1. Adjusted EBITDA is "earnings before
interest and other non-operating
income (expense), income taxes, stock-
based compensation, certain severance
expenses, certain expenses related to
the Colorado gaming referendum,
preopening expense, certain asset sale
gains and depreciation and
amortization." Adjusted 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 Adjusted
EBITDA as the primary measure of the
Company's operating properties'
performance, and it is an important
component in evaluating the
performance of management and other
operating personnel in the
determination of certain components of
employee compensation. Adjusted
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 Adjusted EBITDA. Also,
other gaming companies that report
Adjusted EBITDA information may
calculate Adjusted EBITDA in a
different manner than the Company. A
reconciliation of Adjusted EBITDA to
income (loss) from continuing
operations is included in the
financial schedules accompanying this
release.
Certain of our debt agreements use a
similar calculation of "Adjusted
EBITDA" as a financial measure for the
calculation of financial debt
covenants and includes add back of
items such as gain on early
extinguishment of debt, pre-opening
expenses, certain write-offs and
valuation expenses, and non-cash
stock compensation expense. Reference
can be made to the definition of
Adjusted EBITDA in the applicable debt
agreements on file as Exhibits to our
filings with the Securities and
Exchange Commission.
2. Adjusted income (loss) is presented
solely as a supplemental disclosure as
this is one method management reviews
and utilizes to analyze the
performance of its core operating
business. For many of the same
reasons mentioned above related to
Adjusted EBITDA, management believes
Adjusted income (loss) and Adjusted
income (loss) per share are useful
analytic tools as they enable
management to track the performance of
its core casino operating business
separate and apart from factors that
do not impact decisions affecting its
operating casino properties, such as
certain severance expenses, certain
expenses related to the Colorado
gaming referendum, certain asset sale
gains and preopening expenses.
Management believes Adjusted income
(loss) and Adjusted income (loss) per
share are useful to investors since
these adjustments provide a measure of
financial performance that more
closely resembles widely used measures
of performance and valuation in the
gaming industry. Adjusted income
(loss) and adjusted income (loss) per
share do not include certain severance
expenses, certain expenses related to
the Colorado gaming referendum,
certain asset sale gains and
preopening expenses.
3. The Company recorded $2.3 million of
severance expense in the first quarter
of fiscal 2015 related to
restructuring at the corporate office.
The Company incurred $1.0 million of
expense during the first quarter of
fiscal 2015 related to the Colorado
gaming expansion referendum.
SOURCE Isle of Capri Casinos, Inc.
