ISLE OF CAPRI CASINOS ST. LOUIS, Sept. 2, 2015 /PRNewswire/ -- Isle of Capri Casinos, Inc. (NASDAQ: ISLE) ("we", "our" or the "Company") today reported financial results for the first quarter of fiscal year 2016 ended July 26, 2015.
Fiscal 2016 First Quarter Highlights
-- Net revenues increased 4.2% to $246.9 million year over year.
-- Adjusted EBITDA increased 15.9% to $51.1 million year over year.
-- Adjusted EBITDA margin increased to 20.7%, up 210 bps year over year.
-- Adjusted earnings per share of $0.28 versus $0.04 in the prior year
quarter.
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,
2015 2014
---- ----
Net revenues $246.9 $236.9
Consolidated adjusted EBITDA (1) 51.1 44.1
Income (loss) from continuing
operations 8.4 (1.7)
Loss from discontinued
operations (5.3) (0.6)
Net income (loss) 3.1 (2.3)
Diluted income (loss) per share
from continuing operations 0.21 (0.04)
Diluted loss per share from
discontinued operations (0.13) (0.02)
Diluted income (loss) per share 0.08 (0.06)
Adjusted income per share (2) 0.28 0.04
(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
per share, refer to the reconciliation
table labeled "Reconciliation of GAAP
Income (Loss) from Continuing
Operations to Adjusted Income and GAAP
Income (Loss) from Continuing
Operations Per Share to Adjusted
Income Per Share."
Virginia McDowell, president and chief executive officer, commented: "We grew Adjusted EBITDA for the sixth consecutive quarter, and this quarter marks our fourth consecutive quarter with a double-digit, year-over-year increase in Adjusted EBITDA.
"We continue to benefit from our enhanced operating model and better overall regional market trends. We improved margins over 200 bps during the quarter as we drove higher efficiency from our marketing programs and effectively managed our cost structure.
"We are making prudent investments in both gaming and non-gaming amenities at our properties. At the same time, we improved our balance sheet reducing our debt and interest expense during the quarter."
Financial Highlights
On August 11, we announced that we will close our casino property in Natchez and entered into a definitive agreement to sell the hotel and certain assets to Casino Holding Investment Partners, LLC, the parent company of Magnolia Bluffs Casino in Natchez, for $11.5 million. The transaction is expected to close in October 2015, subject to customary closing conditions. As such, the operations of our Natchez property have been classified as discontinued operations and as assets held for sale for all periods presented.
Net revenues for the current quarter were $246.9 million compared to $236.9 million in the prior year quarter, up 4.2% year over year. Consolidated Adjusted EBITDA was $51.1 million for the quarter compared to $44.1 million in the prior year quarter, up 15.9% year over year. Adjusted EBITDA margin increased to 20.7% from 18.6%. Interest expense was $17.4 million relative to $21.3 million in the prior year quarter, as a result of our lower overall debt balance as well as the benefits of refinancing our 7.75% Senior Notes due 2019, completed early in the fiscal first quarter 2016.
During the quarter, we also recorded a $3.0 million loss on early extinguishment of debt related to completion of the previously announced refinancing of our 7.75% Senior Notes.
Operating results in the prior year's quarter were impacted by $2.3 million of severance expenses related to the corporate office restructuring and $1.0 million in expenses related to a voter referendum in Colorado.
As a result of our decision to separately sell the Natchez gaming vessel and certain other assets, we determined the fixed assets were impaired and recorded a non-cash pretax charge of $4.4 million in discontinued operations during our first fiscal quarter. The loss from discontinued operations was $5.3 million for the quarter, or a loss of $0.13 per share.
On a GAAP basis, diluted income per share from continuing operations was $0.21 compared to a loss from continuing operations of ($0.04) in the prior year's quarter. Net income per share was $0.08 for the quarter, relative to a loss of ($0.06) per share in the prior year quarter. Adjusted income per share from continuing operations was $0.28 for the quarter compared to adjusted net income per share from continuing operations of $0.04 in the prior year.
Operating Results
(All comparisons are to the prior year quarter)
Black Hawk - Net revenues increased $2.7 million to $34.4 million, and Adjusted EBITDA increased $2.9 million to $10.7 million, or 36.2%. Black Hawk benefited from more effective marketing spend during the quarter and a stable competitive environment.
Pompano - Net revenues increased $4.2 million, or 11.1%, to $41.9 million, and Adjusted EBITDA increased $1.2 million, or 17.7%, to $7.8 million. The property benefited from improved customer reinvestment and increased market share.
Iowa - Net revenues decreased $0.4 million to $46.9 million, while Adjusted EBITDA decreased $0.6 million to $12.8 million. Adjusted EBITDA increases of 18.6% and 2.9%, at Marquette and Waterloo, respectively, were offset by an 18.7% decline in Adjusted EBITDA at Bettendorf. In last year's first quarter, Marquette experienced disruption related to road work in its key feeder market. At Bettendorf, during the previous year's quarter, a competitor in the Quad Cities market was closed for 14 days over the July 4(th) period, resulting in a difficult comparison. Additionally the property was impacted in the current year quarter by ongoing construction around Interstate 74, which at times affected access to the property, as well as construction disruption from the South Tower hotel renovations at the property.
Lake Charles - Net revenues decreased $0.7 million to $31.8 million, or 2.2%, while Adjusted EBITDA decreased $0.6 million to $4.6 million, or 11.9%. Results were impacted by the opening of a new competitor in the market in December which has resulted in increased marketing spend for the property.
Mississippi - Net revenues for Lula and Vicksburg increased $0.4 million, to $20.5 million, or 2.1%. Adjusted EBITDA increased 54.4%, to $4.9 million from $3.2 million. In Lula, we improved Adjusted EBITDA 38.0%, to $3.1 million. Lula benefited from lower operating costs and more efficient marketing programs. Vicksburg's Adjusted EBITDA increased 91.4%, to $1.9 million from $1.0 million driven by optimization of marketing programs and more streamlined food and beverage operations.
Missouri - Net revenues increased $2.6 million to $61.5 million, or 4.5%, and Adjusted EBITDA increased $2.5 million to $16.7 million, or 17.2%. Net revenues, Adjusted EBITDA and operating margins increased at each of our four Missouri properties during the quarter led by a 63.2% increase in Adjusted EBITDA at Caruthersville which benefited from improved parking and a new slots area during the quarter. Boonville's net revenues increased 6.0%, resulting in an EBITDA gain of 13.3%. Cape Girardeau generated an Adjusted EBITDA gain of 15.4% on relatively flat revenues as a result of lower cost of sales and lower marketing costs. Kansas City's Adjusted EBITDA increased 9.4%.
Pennsylvania - Net revenues were $9.8 million, up 13.4%, and Adjusted EBITDA was nearly flat, compared to $(0.4) million during the prior year. The property generated a double-digit increase in gaming revenue despite a decrease in total marketing expenses as it continues to focus on rationalizing marketing costs.
Corporate Expenses
Corporate and development expenses were $7.6 million for the quarter compared to $9.1 million in the first quarter of fiscal 2015. The prior year's quarter included severance of $2.3 million related to our corporate office restructuring. Excluding the aforementioned items, corporate expenses increased 10.9% year over year primarily related to an increase in non-cash stock compensation expense and the timing of our long-term incentive award, which occurred in first quarter of the current year versus the second quarter of the prior year.
Non-cash stock compensation expense was $1.2 million for the quarter compared to $0.8 million in the first quarter of fiscal 2015.
Capital Structure and Capital Expenditures
As of July 26, 2015, the Company had:
-- $62.0 million in cash and cash equivalents, excluding $9.7 million in
restricted cash and investments;
-- $989.3 million in total debt; and
-- $159.0 million in net line of credit availability.
First quarter capital expenditures were $15.8 million, primarily consisting of maintenance and gaming equipment purchases as well as spending related to the South Tower hotel renovation in Bettendorf. During the quarter, we spent $0.1 million on the previously announced up to $60 million land-based project at Bettendorf. We have spent $2.3 million on the project to date.
Consistent with previous guidance, the Company continues to expect total capital expenditures for fiscal 2016 of approximately $100 million to $105 million, inclusive of approximately $45 million to $50 million of capital spending this fiscal year related to the land-based casino build out in Bettendorf.
Conference Call Information
Isle of Capri Casinos, Inc. will host a conference call on Wednesday, September 2, 2015 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 888-346-3970. International callers can access the conference call by dialing 412-902-4263. The conference call will be recorded and available for review starting at 11:59 pm central on Wednesday, September 2, 2015, until 11:59 pm central on Wednesday, September 16, 2015, by dialing 877-344-7529; International: 412-317-0088 and access number 10071603.
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 26, July 27,
2015 2014
---- ----
Revenues:
Casino $260,053 $249,541
Rooms 8,115 8,031
Food, beverage, pari-mutuel and other 32,989 33,466
Gross revenues 301,157 291,038
Less promotional allowances (54,233) (54,142)
------- -------
Net revenues 246,924 236,896
Operating expenses:
Casino 38,713 39,002
Gaming taxes 66,359 63,290
Rooms 1,883 1,847
Food, beverage, pari-mutuel and other 12,122 11,847
Marine and facilities 14,106 14,147
Marketing and administrative 56,400 57,706
Corporate and development 7,643 9,148
Depreciation and amortization 20,051 19,409
Total operating expenses 217,277 216,396
------- -------
Operating income 29,647 20,500
Interest expense (17,441) (21,329)
Interest income 79 87
Loss on early extinguishment of debt (2,966) -
------ ---
Income (loss) from continuing operations before
income taxes
9,319 (742)
Income tax provision (851) (983)
---- ----
Income (loss) from continuing operations 8,468 (1,725)
Loss from discontinued operations, net of income
taxes
(5,324) (592)
------ ----
Net income (loss) $3,144 $(2,317)
====== =======
Income (loss) per common share-basic and diluted:
Income (loss) from continuing operations $0.21 $(0.04)
Loss from discontinued operations, net of income
taxes
(0.13) (0.02)
----- -----
Net income (loss) $0.08 $(0.06)
===== ======
Weighted average basic shares 40,580,806 39,827,889
Weighted average diluted shares 41,253,611 39,827,889
ISLE OF CAPRI CASINOS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
July 26, April 26,
ASSETS 2015 2015
------ ---- ----
Current assets:
Cash and cash equivalents $61,966 $66,437
Marketable securities 19,445 19,517
Accounts receivable, net 11,585 11,171
Inventory 6,365 6,509
Deferred income taxes 4,626 4,626
Prepaid expenses and other
assets 17,522 11,274
Assets held for sale 5,386 138
Total current assets 126,895 119,672
Property and equipment, net 900,654 902,226
Other assets:
Goodwill 108,970 108,970
Other intangible assets, net 53,864 54,073
Deferred financing costs,
net 17,903 19,075
Restricted cash and
investments 9,724 9,193
Prepaid deposits and other 5,229 4,743
Long-term assets held for
sale - 9,810
Total assets $1,223,239 $1,227,762
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current maturities of long-
term debt $75 $170
Accounts payable 25,925 19,690
Accrued liabilities:
Payroll and related 32,816 43,371
Property and other taxes 23,110 20,456
Income tax payable 125 125
Interest 14,492 15,350
Progressive jackpots and
slot club awards 16,520 16,123
Other 22,198 18,326
Total current liabilities 135,261 133,611
Long-term debt, less
current maturities 989,209 992,712
Deferred income taxes 38,185 37,334
Other accrued liabilities 18,032 18,432
Other long-term liabilities 13,912 22,211
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 26, 2015
and at April 26, 2015 421 421
Class B common stock, $.01
par value; 3,000,000 shares
authorized; none issued - -
Additional paid-in capital 241,500 241,899
Retained earnings (deficit) (195,928) (199,072)
-------- --------
45,993 43,248
Treasury stock, 1,375,953
shares at July 26, 2015 and
1,568,875 shares at April
26, 2015 (17,353) (19,786)
Total stockholders' equity 28,640 23,462
Total liabilities and
stockholders' equity $1,223,239 $1,227,762
========== ==========
Isle of Capri Casinos, Inc.
Supplemental Data - Net Revenues
(unaudited, in thousands)
Three Months Ended
------------------
July 26, July 27,
2015 2014
---- ----
Colorado
Black Hawk $34,406 $31,681
Florida
Pompano 41,898 37,724
Iowa
Bettendorf 17,992 19,534
Marquette 6,871 6,487
Waterloo 22,043 21,252
Iowa Total 46,906 47,273
Louisiana
Lake Charles 31,825 32,536
Mississippi
Lula 12,947 12,675
Vicksburg 7,587 7,442
Mississippi Total 20,534 20,117
Missouri
Boonville 20,338 19,190
Cape Girardeau 14,481 14,360
Caruthersville 8,422 7,483
Kansas City 18,279 17,829
Missouri Total 61,520 58,862
Pennsylvania
Nemacolin 9,816 8,657
Property Net
Revenues before
Other 246,905 236,850
Other 19 46
--- ---
Net Revenues from
Continuing
Operations $246,924 $236,896
======== ========
Isle of Capri Casinos, Inc.
Reconciliation of Operating Income (Loss) to Adjusted EBITDA
(unaudited, in thousands)
Three Months Ended July 26, 2015
--------------------------------
Operating Income (Loss) Depreciation and Amortization Stock-Based Compensation Other Adjusted EBITDA
---------------------- ----------------------------- ------------------------ ----- ---------------
Black Hawk, Colorado $8,471 $2,239 $14 $ - $10,724
Pompano, Florida 5,842 1,899 14 - 7,755
Bettendorf 2,173 2,265 10 - 4,448
Marquette 1,240 361 6 - 1,607
Waterloo 5,410 1,311 8 - 6,729
Iowa Total 8,823 3,937 24 - 12,784
Lake Charles, Louisiana 1,772 2,780 9 - 4,561
Lula 1,781 1,270 6 - 3,057
Vicksburg 988 892 7 - 1,887
Mississippi Total 2,769 2,162 13 - 4,944
Boonville 6,629 1,029 12 - 7,670
Cape Girardeau (221) 2,881 7 - 2,667
Caruthersville 1,556 612 6 - 2,174
Kansas City 3,229 991 9 - 4,229
Missouri Total 11,193 5,513 34 - 16,740
Nemacolin, Pennsylvania (1,141) 1,064 29 (48)
------ ----- --- ---
Total Operating Properties 37,729 19,594 137 - 57,460
Corporate and Other (8,082) 457 1,224 - (6,401)
Total $29,647 $20,051 $1,361 $ - $51,059
======= ======= ====== ========== =======
Three Months Ended July 27, 2014
--------------------------------
Operating Income (Loss) Depreciation and Amortization Stock-Based Compensation Other Adjusted 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
Vicksburg 90 892 4 - 986
Mississippi Total 1,016 2,179 7 - 3,202
Boonville 5,778 988 6 - 6,772
Cape Girardeau (479) 2,790 1 - 2,312
Caruthersville 660 668 4 - 1,332
Kansas City 2,912 949 4 - 3,865
Missouri Total 8,871 5,395 15 - 14,281
Nemacolin, Pennsylvania (1,773) 1,357 1 (415)
------ ----- --- ----
Total Operating Properties 30,070 18,940 50 1,013 50,073
Corporate and Other (9,570) 469 829 2,259 (6,013)
Total $20,500 $19,409 $879 $3,272 $44,060
======= ======= ==== ====== =======
Isle of Capri Casinos, Inc.
Reconciliation of Income (Loss) From Continuing Operations to Adjusted EBITDA
(unaudited, in thousands)
Three Months Ended
------------------
July 26, July 27,
2015 2014
---- ----
Income (loss) from continuing
operations $8,468 $(1,725)
Income tax provision 851 983
Loss on early extinguishment of debt 2,966 -
Interest income (79) (87)
Interest expense 17,441 21,329
Depreciation and amortization 20,051 19,409
Stock-based compensation 1,361 879
Severance charges - 2,259
Colorado referendum costs - 1,013
Adjusted EBITDA (1) $51,059 $44,060
======= =======
Isle of Capri Casinos, Inc.
Reconciliation of GAAP Income (Loss) From Continuing Operations to Adjusted Income
and GAAP Income (Loss) From Continuing Operations Per Share to Adjusted Income
Per Share
(unaudited, in thousands)
Three Months Ended
------------------
July 26, July 27,
2015 2014
---- ----
GAAP income (loss)
from continuing
operations $8,468 $(1,725)
Loss on early
extinguishment of
debt 2,966 -
Severance expense (3) - 2,259
Colorado referendum
expense (3) - 1,013
Adjusted income (2) $11,434 $1,547
======= ======
GAAP income (loss)
from continuing
operations per share $0.21 $(0.04)
Loss on early
extinguishment of
debt 0.07 -
Severance expense (3) - 0.06
Colorado referendum
expense (3) - 0.02
Adjusted income per
share $0.28 $0.04
===== =====
1. Adjusted EBITDA is "earnings from
continuing operations 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 gain (loss) on
early extinguishment of debt,
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 the loss on early
extinguishment of debt, 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.
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SOURCE Isle of Capri Casinos, Inc.
