ST. LOUIS, Missouri -- (PRESS RELEASE) -- Isle of Capri Casinos, Inc. today reported financial results for the third quarter of fiscal year 2014 ended January 26, 2014 and other Company-related news.
Virginia McDowell, the Company's president and chief executive officer, commented, "We continue to improve the efficiency of our operations despite the ongoing impact of sluggish consumer spending and the severe winter weather conditions we experienced during the quarter. We increased Adjusted EBITDA at four of our properties and improved Adjusted EBITDA margins at seven of our properties, leading to overall margin growth across the portfolio of properties open for more than one year."
Diluted income (loss) per share from continuing operations for the quarter was $0.24 compared to ($0.06) for the third quarter last year. Income from continuing operations for the quarter ended January 26, 2014 was impacted by the reversal of a $2.0 million litigation accrual due to a recent favorable court ruling, and the $12.0 million reversal of a previously recorded tax valuation allowance, as a result of the recent sale of our Davenport property. The Loss from continuing operations for the prior year quarter were impacted by preopening expense of $1.0 million related to our Nemacolin and Cape Girardeau properties. Excluding these items, Adjusted earnings per share from continuing operations would have been a loss of ($0.12) for the fiscal 2014 quarter, compared to a loss of ($0.04) for the prior year quarter.
McDowell continued, "The impacts of the weather and continuing revenue pressure, particularly at the lower end of our customer database, were at least partially offset by our ongoing and aggressive efforts to control costs and right-size our operating structure to our business volumes. The success of our profit improvement initiatives led directly to the improvement in same store Adjusted EBITDA margins. We estimate these initiatives contributed approximately $2 million to Adjusted EBITDA during the quarter. We continue to believe that the profit improvement initiatives will result in annual savings of $10 million, when fully implemented.
"A few weeks ago we completed the sale of our property in Davenport and received approximately $50 million in net proceeds. We have initially used the proceeds to reduce borrowings under our senior credit facility.
"Furthermore, we completed the suitability hearing with our partner Tower Entertainment before the Pennsylvania Gaming Control Board in January. We are hopeful that The Provence, a unique proposal for a casino-anchored urban entertainment complex in Philadelphia, will be chosen by the Board for the remaining gaming license in Pennsylvania."
Black Hawk – Our profit improvement efforts lead to an increase in Adjusted EBITDA from $6.0 million to $6.9 million at our two casinos in Black Hawk while operating margins increased to 24.3%, despite a decrease in net revenues of $0.5 million to $28.4 million. While weather conditions impacted the Black Hawk gaming market, we were successful in growing market share during the period.
Pompano – Net revenues increased 6.3% to $42.4 million, Adjusted EBITDA increased 23.1% to $9.1 million at Pompano Park, and operating margins increased 300 basis points to 21.6%. Growth was driven by a combination of focused marketing efforts resulting in increased slot play and disciplined cost control.
Iowa – Net revenues decreased 7.4% to $41.4 million, consistent with the markets in which we operate. In Waterloo and Marquette we were able to absorb the revenue decrease through operating efficiencies resulting in Adjusted EBITDA which was flat with the prior year, while Adjusted EBITDA margins increased by over 100 basis points at each property. The decline in Iowa Adjusted EBITDA was attributable to our property in Bettendorf where we were not able to offset an 11% decrease in net revenue.
Lake Charles – Net revenues increased 2.0% to $29.9 million, and Adjusted EBITDA increased 0.5% to $3.8 million. Market conditions were positively impacted by improved economic conditions in Louisiana and Northwest Texas, where unemployment declined during the period.
Missouri – Net revenues decreased 10.4% to $53.0 million, and Adjusted EBITDA decreased from $13.9 million to $12.9 million at our properties in Missouri, collectively. The third fiscal quarter was the first period reflecting year-over-year results for our property in Cape Girardeau. Despite a net revenue decrease of $3.0 million collectively at our properties in Boonville, Caruthersville and Kansas City, Adjusted EBITDA only decreased $0.1 million year-over-year and Adjusted EBITDA margins increased at each property, including increases of 176 basis points in Boonville to 35.7% and 181 basis points to 23.5% in Kansas City.
We continue to refine our business model in Cape Girardeau, where comparative net revenues decreased $3.2 million and Adjusted EBITDA decreased $0.9 million compared to the prior year third quarter, its first quarter of operations.
Mississippi – Net revenues decreased from $25.9 million to $22.9 million and Adjusted EBITDA decreased from $3.9 million to $2.1 million. Our properties in Mississippi continued to face competitive pressures during the period.
Pennsylvania – Net revenues were $6.1 million and Adjusted EBITDA was ($1.6) million. This is the first year of operation for Lady Luck Casino at Nemacolin Woodlands Resort. We continue to identify opportunities for cost savings in order to better match our operating expenses to revenue levels throughout the seasonal low period. We are also continuing to aggressively market the property in order to grow our database of customers.
Corporate and development expenses were $7.2 million for the quarter, a decrease of $0.3 million compared to the prior year.
Non-cash stock compensation expense was $0.8 million for the quarter compared to $1.1 million in the third quarter of fiscal 2013.
The Provence, Philadelphia, Pennsylvania – We are partnered with Tower Entertainment, LLC, to operate the proposed $700 million casino entertainment complex, dubbed The Provence, if selected for licensure by the Pennsylvania Gaming Control Board. 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. The Pennsylvania Gaming Control Board has previously indicated that they currently expect to announce a decision with respect to the license in April of this year. More information about the project is available at www.theprovencecasino.com.
Capital Structure, Capital Expenditures and Updated Guidance
As of January 26, 2014, the Company had:
$68.4 million in cash and cash equivalents, excluding $9.8 million in restricted cash and investments;
$1.1 billion in total debt; and
$120 million in net line of credit availability.
Third quarter capital expenditures were $2.2 million, bringing total capital expenditures to $32.9 million for the first nine months of fiscal 2014. The Company expects to incur approximately $6 million to $8 million in capital expenditures for the balance of fiscal 2014.
As a result of the impact of the recent sale of our Davenport casino, the favorable litigation reversals and other events, the Company updated its previously issued guidance for the following non-operating items for fiscal 2014:
Interest expense is expected to be approximately $82 million ($22 million in the fourth quarter).
Depreciation and amortization expense is expected to be approximately $81 million ($21 million in the fourth quarter).
Conference Call Information
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 av
> Latest Headlines
The stories that are the news.
> Daily News
In depth coverage of the news that
affects the gaming enthusiast.
> Featured Articles
Articles by RGT's featured writers.
> Vegas News
Tales from Sin City.
> Investor News
Press releases and Investor info.
> Casino City's Online Poker Directory
The web's most comprehensive online
> Advanced Search
Check our archives for past articles.