Isle of Capri Casinos, Inc. Announces Fiscal 2014 Fourth Quarter And Year Results - WBOY.com: Clarksburg, Morgantown: News, Sports, Weather

Isle of Capri Casinos, Inc. Announces Fiscal 2014 Fourth Quarter And Year Results

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SOURCE Isle of Capri Casinos, Inc.

SAINT LOUIS, June 17, 2014 /PRNewswire/ -- Isle of Capri Casinos, Inc. (NASDAQ: ISLE) (the "Company") today reported financial results for the fourth quarter and fiscal year ended April 27, 2014.

Consolidated Financial Results

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


Three Months Ended


Twelve Months Ended


April 27,


April 28,


April 27,


April 28,


2014


2013


2014


2013

Net revenues

$    260.8


$    257.4


$    954.6


$    923.4

Consolidated Adjusted EBITDA (1)

57.2


56.7


173.4


176.0









Loss from continuing operations

(139.7)


(47.3)


(129.7)


(52.5)

Income (loss) from discontinued operations

(1.8)


1.9


2.0


4.9

Net loss

(141.5)


(45.4)


(127.7)


(47.6)

Diluted loss per share from continuing operations

(3.51)


(1.20)


(3.26)


(1.33)

Diluted income (loss)  per share from discontinued operations

(0.04)


0.05


0.05


0.12

Diluted loss per share

(3.55)


(1.15)


(3.21)


(1.21)

Adjusted income (loss) per share (2)

0.34


0.19


(0.06)


0.23



(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) Per Share from Continuing Operations to Adjusted Income (Loss) Per Share."

Commenting on the results of the quarter Virginia McDowell, the Company's president and chief executive officer said "Our continued focus on operating efficiencies allowed us to increase revenues and Adjusted EBITDA in a tough operating environment. We improved Adjusted EBITDA and margins on a same store basis (i.e. excluding Nemacolin), despite an overall decline in net revenues.  We were able to partially offset the impact of the continued challenging operating environment through refined marketing programs and focused cost discipline.   In particular, in Cape Girardeau, these efforts led to a $1.6 million increase in Adjusted EBITDA despite a $1.7 million decrease in net revenue.  Also, in Pompano where net revenue increased $2.2 million, Adjusted EBITDA increased $1.7 million, resulting in flow through of 77% of incremental net revenue.

"Weakness in both visitation and win per visit impacted revenue from customers who spend less than $100 per visit.  However, visitation and revenues from our top customers has remained relatively constant.  In the current environment, we remain disciplined in our marketing and promotional activities.

"We benefited from the impact of our cost savings initiatives as same store operating expenses decreased by over $3 million for the quarter, while our corporate costs were flat despite a $1.6 million increase in our insurance costs, caused by very favorable insurance experience in the prior year quarter.  These initiatives are now producing a run rate of $12 million in annualized savings."

Financial Highlights

Net revenue for the quarter increased $3.4 million to $260.8 million and consolidated Adjusted EBITDA increased from $56.7 million to $57.2 million.  Adjusted income per share was $0.34 during the quarter, compared to $0.19 in the prior year.  GAAP basis diluted income (loss) per share from continuing operations for the fiscal 2014 quarter was ($3.51) compared to ($1.20) for the fourth quarter of the prior year, including non-cash valuation charges assessed during both periods. 

The following items impacted earnings from continuing operations during the fourth quarters of fiscal 2014 and 2013:

  • The Company recorded non-cash impairment charges of $162.1 million in fiscal 2014 and $50.1 million in fiscal 2013.
  • Interest expense decreased from $25.0 million in the fourth quarter of fiscal 2013 to $21.6 million in the fourth quarter of fiscal 2014 due to lower revolving credit borrowings in the current year quarter, due to the application of the approximately $48.7 million in net proceeds from the sale of our Davenport facility. Additionally the fiscal 2013 quarter included $2.2 million of financing related costs.
  • The Company incurred $1.4 million in preopening costs associated with Nemacolin in the fourth quarter of fiscal 2013.

Operating Results

Black Hawk – Adjusted EBITDA decreased by $0.3 million to $7.5 million due to decreased net revenues of $1.0 million.  Operating margins remained relatively stable at the property.  Decreased revenues were largely attributable to an increased promotional market environment and the extended winter weather, but were partially offset by our targeted marketing efforts during the period.

Pompano – Net revenues increased 4.8% to $48.6 million, Adjusted EBITDA increased 17.6% to $11.6 million, and operating margins increased 258 basis points to 23.8%.   This growth was largely attributable to increased slot play, as well as slightly higher food and beverage revenues.

Iowa – Net revenues decreased 5.5% to $48.3 million and Adjusted EBITDA decreased 8.7% to $14.0 million. Net revenues in Iowa were negatively impacted during the quarter by the extended winter weather where, on average, our properties experienced 10 -12 more days with severe weather conditions than in the fourth quarter of fiscal 2013. 

Lake Charles – Net revenues increased 6.6% to $35.0 million, and Adjusted EBITDA increased 14.1% to $6.8 million, leading to an increase in operating margins of 128 basis points.  A combination of more effective database marketing, improved hotel yielding, as well as stable operating costs drove the improvement.

Mississippi – Net revenues decreased 7.6% to $28.7 million and Adjusted EBITDA decreased $1.9 million to $5.9 million. Our properties in Mississippi continue to be impacted by competitive pressures in their respective markets which were further compounded by unusual winter weather conditions.

Missouri – Net revenues decreased 3.6% to $62.3 million, while Adjusted EBITDA increased by 13.6% to $18.3 million, leading to an increase in operating margins of 445 basis points to 29.4%.  In Cape Girardeau, more focused marketing efforts and continued alignment of costs with business volumes produced an adjusted EBITDA increase of $1.6 million while net revenue decreased $1.7 million. We are continuing to develop and refine our marketing programs in this relatively new market.  In Kansas City, operating margins, net revenues and Adjusted EBITDA grew, as a result of marketing improvements and cost savings initiatives.

Pennsylvania – Net revenues were $7.5 million and Adjusted EBITDA was ($0.8) million.   We remain focused on growing our customer database while continuing to align our operating structure with the business volumes.   The winter months are seasonally the slowest and we believe we are better positioned now to capitalize on the high-season periods at this five-star resort in Western Pennsylvania.

Corporate Expenses

Corporate and development expenses were $7.1 million for the quarter, consistent with prior year, despite a $1.6 million increase in insurance related costs.

Non-cash stock compensation expense was $0.8 million for the quarter compared to $0.9 million in the fourth quarter of fiscal 2013. For the fiscal year, non-cash stock compensation expense was $4.2 million, compared to $4.8 million in fiscal 2013.

Capital Structure, Capital Expenditures and Updated Guidance

As of April 27, 2014, the Company had:

  • $69.8 million in cash and cash equivalents, excluding $9.8 million in restricted cash and investments;
  • $1.1 billion in total debt; and
  • $184 million in net line of credit availability.

Fourth quarter capital expenditures were $5.2 million.  For the year our total capital expenditures were approximately $38.1 million, including $18.1 million related to the completion of our Nemacolin facility.

The Company provided guidance for the following specific non-operating items for fiscal year 2015:

  • Depreciation and amortization expense is expected to be approximately $80 million to $82 million.
  • Interest expense is expected to be approximately $83 million to $85 million.
  • The Company expects cash income taxes pertaining to FY 2015 operations to be less than $1 million, primarily representing state income taxes.
  • Corporate and development expenses for FY 2015 are expected to be approximately $30 million, including approximately $4 million in non-cash stock compensation expense.
  • Maintenance capital expenditures for FY 2015 are expected to be approximately $47 million to $50 million.

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, of the PGCB has not communicated the timetable with respect to a forthcoming decision.

Conference Call Information

Isle of Capri Casinos, Inc. will host a conference call on Tuesday, June 17, 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 Tuesday, June 17, 2014, until 11:59 pm central on Tuesday, June 24, 2014, by dialing 877-344-7529; International: 412-317-0088 and access number 10047860.

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 casino properties that it owns and operates, primarily under the Isle and Lady Luck brands.  The Company currently owns and operates 15 gaming and entertainment facilities in Mississippi, Louisiana, Iowa, Missouri, Colorado, Pennsylvania and Florida. 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.,
               Dale Black, Chief Financial Officer-314.813.9327
               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


Twelve Months Ended



April 27,


April 28,


April 27,


April 28,



2014


2013


2014


2013

Revenues:









   Casino


$      271,070


$      270,559


$   1,004,255


$      967,142

   Rooms


7,889


8,063


32,449


31,851

   Food, beverage, pari-mutuel and other


36,182


36,265


135,305


128,319

   Gross revenues


315,141


314,887


1,172,009


1,127,312

   Less promotional allowances


(54,365)


(57,493)


(217,409)


(203,907)

   Net revenues


260,776


257,394


954,600


923,405

Operating expenses:









   Casino


39,605


40,266


158,019


150,075

   Gaming taxes


69,231


68,050


254,685


241,038

   Rooms


1,802


1,720


7,023


6,654

   Food, beverage, pari-mutuel and other


12,392


11,891


44,116


41,289

   Marine and facilities


14,655


14,348


57,624


54,509

   Marketing and administrative


59,680


58,257


234,690


226,397

   Corporate and development


7,141


7,196


28,455


33,953

   Valuation charges


162,100


50,100


162,100


50,100

   Litigation accrual reversals


-


-


(9,330)


-

   Preopening expense


-


1,446


3,898


5,765

   Depreciation and amortization


20,390


19,762


80,885


71,164

   Total operating expenses


386,996


273,036


1,022,165


880,944

Operating income (loss)


(126,220)


(15,642)


(67,565)


42,461










Interest expense


(21,584)


(25,032)


(81,342)


(89,446)

Interest income


89


96


349


502

Derivative income


-


216


398


748

Loss from continuing operations before    income taxes










(147,715)


(40,362)


(148,160)


(45,735)

   Income tax benefit (provision)


7,995


(6,898)


18,494


(6,732)

Loss from continuing operations 


(139,720)


(47,260)


(129,666)


(52,467)

Income (loss) from discontinued operations, net of income taxes










(1,798)


1,869


1,980


4,898

Net loss


$    (141,518)


$      (45,391)


$    (127,686)


$      (47,569)










Income (loss) per common share-basic and diluted:









Loss from continuing operations


$          (3.51)


$          (1.20)


$          (3.26)


$          (1.33)

Income (loss) from discontinued operations, net of income taxes 










(0.04)


0.05


0.05


0.12

Net loss


$          (3.55)


$          (1.15)


$          (3.21)


$          (1.21)










Weighted average basic shares


39,829,177


39,518,406


39,731,766


39,340,325

Weighted average diluted shares


39,829,177


39,518,406


39,731,766


39,340,325

 

 

ISLE OF CAPRI CASINOS, INC. 

CONSOLIDATED BALANCE SHEETS 

(In thousands, except share and per share amounts) 






April 27,


April 28,


2014


2013

ASSETS

(unaudited)



Current assets:




   Cash and cash equivalents

$        69,830


$        68,469

   Marketable securities

27,289


25,520

   Accounts receivable, net

12,615


11,077

   Income taxes receivable

73


4,789

   Deferred income taxes

4,106


1,573

   Prepaid expenses and other assets

18,526


20,872

   Total current assets

132,439


132,300

Property and equipment, net

955,604


1,034,026

Other assets:




   Goodwill

108,970


280,803

   Other intangible assets, net

54,911


60,748

   Deferred financing costs, net

23,439


27,230

   Restricted cash and investments

9,807


11,417

   Prepaid deposits and other

4,904


7,075

   Total assets

$   1,290,074


$   1,553,599





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




   Current maturities of long-term debt

$             230


$             415

   Accounts payable 

20,869


34,533

   Accrued liabilities:




   Payroll and related

34,700


35,093

   Property and other taxes

20,360


21,340

   Interest

16,920


18,502

   Progressive jackpots and slot club awards

16,306


16,579

   Other

18,478


29,337

   Total current liabilities

127,863


155,799

Long-term debt, less current maturities

1,066,071


1,156,469

Deferred income taxes

35,870


43,104

Other accrued liabilities

18,495


33,303

Other long-term liabilities

22,391


22,514

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 April 27, 2014 and  at April 28, 2013




421


421

   Class B common stock, $.01 par value; 3,000,000 shares authorized; none issued



-

   Additional paid-in capital

247,819


246,214

   Retained earnings (deficit)

(201,913)


(74,227)

   Accumulated other comprehensive (loss) income

-


(247)


46,327

-

172,161

   Treasury stock, 2,236,971 shares at April 27, 2014 and 2,470,128 shares at April 28, 2013




(26,943)


(29,751)

   Total stockholders' equity

19,384

-

142,410

   Total liabilities and stockholders' equity

$   1,290,074


$   1,553,599

 

 

Isle of Capri Casinos, Inc.

Supplemental Data - Net Revenues

(unaudited, in thousands)














Three Months Ended


Twelve Months Ended




April 27,


April 28,


April 27,


April 28,




2014


2013


2014


2013

Colorado










Black Hawk


$         30,242


$         31,233


$       121,313


$         122,135











Florida










Pompano


48,631


46,393


164,777


154,629











Iowa










Bettendorf


19,257


20,642


73,695


78,083


Marquette


5,928


6,889


25,014


27,605


Waterloo


23,090


23,547


85,361


86,654


Iowa Total


48,275


51,078


184,070


192,342











Louisiana










Lake Charles


35,044


32,884


129,899


125,575











Mississippi










Lula


14,785


15,454


50,489


55,444


Natchez


5,404


6,286


20,190


25,378


Vicksburg


8,501


9,296


29,947


29,918


Mississippi Total


28,690


31,036


100,626


110,740











Missouri










Boonville


19,463


20,055


74,531


78,624


Cape Girardeau


15,016


16,671


54,833


32,782


Caruthersville


8,231


8,356


29,879


32,282


Kansas City


19,541


19,493


70,385


73,538


Missouri Total


62,251


64,575


229,628


217,226











Pennsylvania










Nemacolin


7,473


-


23,575


-











Property Net Revenues before Other


260,606


257,199


953,888


922,647

Other


170


195


712


758

Net Revenues from Continuing Operations


$       260,776


$       257,394


$       954,600


$         923,405




















 

 

Isle of Capri Casinos, Inc.

Reconciliation of Operating Income (Loss) to Adjusted EBITDA

(unaudited, in thousands)




Three Months Ended April 27, 2014




Operating Income (Loss)


Depreciation and Amortization


Stock-Based Compensation


Valuation charges, Preopening and Other


Adjusted EBITDA

Black Hawk, Colorado


$             4,936


$                  2,552


$                      8


$                           -


$          7,496













Pompano, Florida


9,833


1,726


6


-


11,565













Bettendorf


(56,212)


1,448


3


60,000


5,239

Marquette


738


452


1


-


1,191

Waterloo


6,367


1,183


4


-


7,554


Iowa Total


(49,107)


3,083


8


60,000


13,984













Lake Charles, Louisiana


(20,366)


2,919


4


24,238


6,795













Lula


(33,693)


1,279


3


36,000


3,589

Natchez


(10,865)


299


4


10,509


(53)

Vicksburg


(3,531)


903


4


5,000


2,376


Mississippi Total


(48,089)


2,481


11


51,509


5,912













Boonville


6,403


977


6


-


7,386

Cape Girardeau


379


2,822


1


-


3,202

Caruthersville


1,250


693


4


-


1,947

Kansas City


4,822


941


4


-


5,767


Missouri Total


12,854


5,433


15


-


18,302













Nemacolin, Pennsylvania


(28,767)


1,655


1


26,353


(758)













Total Operating Properties

(118,706)


19,849


53


162,100


63,296

Corporate and Other


(7,514)


541


827


-


(6,146)

Total


$        (126,220)


$                20,390


$                  880


$                  162,100


$        57,150
















Three Months Ended April 28, 2013




Operating Income (Loss)


Depreciation and Amortization


Stock-Based Compensation


Valuation charges, Preopening and Other


Adjusted EBITDA

Black Hawk, Colorado


$             5,443


$                  2,303


$                    11


$                           -


$          7,757













Pompano, Florida


7,981


1,846


7


-


9,834













Bettendorf


4,211


1,737


3


-


5,951

Marquette


978


556


3


-


1,537

Waterloo


6,627


1,194


6


-


7,827


Iowa Total


11,816


3,487


12


-


15,315













Lake Charles, Louisiana


2,893


3,057


6


-


5,956













Lula


(31,001)


1,318


6


34,100


4,423

Natchez


(15,836)


353


5


16,000


522

Vicksburg


1,490


1,324


5


-


2,819


Mississippi Total


(45,347)


2,995


16


50,100


7,764













Boonville


6,251


896


5


-


7,152

Cape Girardeau


(1,177)


2,810


4


-


1,637

Caruthersville


1,276


840


5


-


2,121

Kansas City


4,208


992


4


-


5,204


Missouri Total


10,558


5,538


18


-


16,114













Nemacolin, Pennsylvania


(1,446)


-


-


1,446


-













Total Operating Properties


(8,102)


19,226


70


51,546


62,740

Corporate and Other


(7,540)


536


938


-


(6,066)

Total


$          (15,642)


$                19,762


$               1,008


$                    51,546


$        56,674

 

 

Isle of Capri Casinos, Inc.

Reconciliation of Operating Income (Loss) to Adjusted EBITDA

(unaudited, in thousands)




Twelve Months Ended April 27, 2014




Operating Income (Loss)


Depreciation and Amortization


Stock-Based Compensation


Valuation charges, Preopening and Other


Adjusted EBITDA

Black Hawk, Colorado


$             20,067


$                  9,593


$                     35


$                           -


$       29,695













Pompano, Florida


25,116


7,109


25


-


32,250













Bettendorf


(47,873)


6,381


13


60,000


18,521

Marquette


3,472


1,875


6


-


5,353

Waterloo


21,074


4,791


18


-


25,883


Iowa Total


(23,327)


13,047


37


60,000


49,757













Lake Charles, Louisiana


(15,350)


11,738


17


24,238


20,643













Lula


(33,285)


5,225


14


36,000


7,954

Natchez


(12,865)


1,306


17


10,509


(1,033)

Vicksburg


(3,282)


3,698


17


5,000


5,433


Mississippi Total


(49,432)


10,229


48


51,509


12,354













Boonville


22,583


4,074


24


-


26,681

Cape Girardeau


(2,359)


11,183


6


-


8,830

Caruthersville


2,232


2,960


18


-


5,210

Kansas City


13,022


3,802


16


-


16,840


Missouri Total


35,478


22,019


64


-


57,561













Nemacolin, Pennsylvania


(39,993)


5,440


3


30,251


(4,299)













Total Operating Properties


(47,441)


79,175


229


165,998


197,961

Corporate and Other


(20,124)


1,710


4,170


(10,349)


(24,593)

Total


$           (67,565)


$                80,885


$                4,399


$                 155,649


$     173,368








Twelve Months Ended April 28, 2013




Operating Income (Loss)


Depreciation and Amortization


Stock-Based Compensation


Valuation charges, Preopening and Other


Adjusted EBITDA

Black Hawk, Colorado


$             20,109


$                  8,837


$                     43


$                           -


$       28,989













Pompano, Florida


19,396


7,252


28


-


26,676













Bettendorf


13,995


6,948


16


-


20,959

Marquette


3,718


1,901


15


-


5,634

Waterloo


21,544


5,026


22


-


26,592


Iowa Total


39,257


13,875


53


-


53,185













Lake Charles, Louisiana


9,270


10,070


20


-


19,360













Lula


(29,815)


6,098


21


34,100


10,404

Natchez


(14,667)


1,539


19


16,000


2,891

Vicksburg


1,184


4,664


19


-


5,867


Mississippi Total


(43,298)


12,301


59


50,100


19,162













Boonville


24,004


3,545


22


-


27,571

Cape Girardeau


(5,135)


5,572


10


4,050


4,497

Caruthersville


2,832


3,361


21


-


6,214

Kansas City


13,275


4,012


14


-


17,301


Missouri Total


34,976


16,490


67


4,050


55,583













Nemacolin, Pennsylvania


(1,715)


-


-


1,715


-













Total Operating Properties


77,995


68,825


270


55,865


202,955

Corporate and Other


(35,534)


2,339


4,788


1,478


(26,929)

Total


$             42,461


$                71,164


$                5,058


$                   57,343


$     176,026

 

 

Isle of Capri Casinos, Inc.

Reconciliation of Loss From Continuing Operations to Adjusted EBITDA

(unaudited, in thousands)














Three Months Ended


Twelve Months Ended




April 27,


April 28,


April 27,


April 28,




2014


2013


2014


2013

Loss from continuing operations


$    (139,720)


$    (47,260)


$    (129,666)


$     (52,467)


Income tax provision (benefit)


(7,995)


6,898


(18,494)


6,732


Derivative income


-


(216)


(398)


(748)


Interest income


(89)


(96)


(349)


(502)


Interest expense


21,584


25,032


81,342


89,446


Depreciation and amortization


20,390


19,762


80,885


71,164


Stock-based compensation


880


1,008


4,399


5,058


Valuation charges


162,100


50,100


162,100


50,100


Litigation accrual reversal


-


-


(9,330)


-


Preopening expense


-


1,446


3,898


5,765


Gain on sale of airplane


-


-


(1,019)


-


Financing related


-


-


-


1,478

Adjusted EBITDA


$        57,150


$      56,674


$      173,368


$     176,026

 

 


Isle of Capri Casinos, Inc.

Reconciliations 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


Twelve Months Ended


April 27,


April 28,


April 27,


April 28,


2014


2013


2014


2013









GAAP loss from continuing operations

$  (139,720)


$    (47,260)


$  (129,666)


$    (52,467)

Valuation charges (4)

162,100


50,100


162,100


50,100

Tax valuation allowance (reversal)

(1,813)


758


(13,806)


758

Uncertain tax benefit reversal

(6,884)


-


(6,884)


-

Litigation accrual reversals (3)

-


-


(16,953)


-

Preopening expense

-


1,446


3,898


5,765

Gain on sale of corporate aircraft

-


-


(1,019)


-

Financing related (5)

-


2,236


-


4,742

Adjusted income (loss)  (2)

$     13,683


$       7,280


$      (2,330)


$       8,898

















GAAP loss from continuing operations per share

$        (3.51)


$        (1.20)


$        (3.26)


$        (1.33)

Valuation charges (4)

4.07


1.27


4.08


1.27

Tax valuation allowance (reversal)

(0.05)


0.02


(0.35)


0.02

Uncertain tax benefit reversal

(0.17)


-


(0.17)


-

Litigation accrual reversals (3)

-


-


(0.43)


-

Preopening expense

-


0.04


0.10


0.15

Gain on sale of corporate aircraft

-


-


(0.03)


-

Financing related (5)

-


0.06


-


0.12

Adjusted income (loss) per share

$         0.34


$         0.19


$        (0.06)


$         0.23





1.

Adjusted EBITDA is "earnings before interest and other non-operating income (expense), income taxes, stock-based compensation, valuation charges, preopening expense, litigation accrual reversals, financing related expenses 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 they are important components 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 charges, 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 valuation charges, litigation accrual reversals or 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 tax valuation allowance reversals, valuation charges, litigation accrual reversals, preopening expenses, certain asset sale gains, certain financing related expenses, and income or loss from discontinued operations.



3.

Litigation accrual reversals for the twelve months ended April 27, 2014, includes a $9.3 million reduction to operating expenses and a $7.6 million reduction of interest expense.



4.

Valuation charges in the fourth quarter and fiscal 2014 consist of goodwill impairment charges of $60.0 million at our Bettendorf property, $24.2 million at our Lake Charles property, $36.0 million at our Lula property, $8.6 million at our Natchez property and $5.0 million at our Vicksburg property.  In addition, during the fourth quarter of fiscal 2014, we also recorded impairment charges related to property, plant and equipment, net of $14.2 million and $1.9 million at our Nemacolin and Natchez properties, respectively, and $12.2 million related to intangible assets at our Nemacolin property.  Valuation charges in the fourth quarter and fiscal 2013 consist of goodwill impairment charges of $34.1 million at our Lula property and $16.0 million at our Natchez property.



5.

Fiscal 2013 financing charges relate to non-capitalizable fees of $1.5 million associated with the tender offer of our 7% Senior Subordinated Notes during fiscal 2013, recorded in Corporate and development expenses, and the non-cash write off of deferred financing costs of $2.2 million and $3.3 million during the fourth quarter and fiscal 2013, respectively, related to debt refinancing and recorded in interest expense.

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