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Last updated on April 16, 2014 at 1:21 EDT

Isle of Capri Casinos, Inc. Announces Fiscal 2013 Fourth Quarter And Year Results

June 6, 2013

ST. LOUIS, June 6, 2013 /PRNewswire/ — Isle of Capri Casinos, Inc. (NASDAQ: ISLE) (“Isle”) today reported financial results for the fourth fiscal quarter and fiscal year ended April 28, 2013.

2013 Fourth Quarter Financial Highlights

  • Net revenues, excluding insurance recoveries in the fourth quarter of fiscal 2012, declined from $282.4 million to $268.1 million, and Consolidated Adjusted EBITDA decreased from $69.8 million to $59.1 million.
  • Adjusted income per share, which normalizes for the effect of non-recurring and unusual items, was $0.24 compared to $0.39 in the prior year period.
  • The extra week in fiscal 2012 is estimated to have an approximately $18 million impact on net revenues and an approximately $5 million impact on Consolidated Adjusted EBITDA, or approximately $0.13 in adjusted income per share.

Discussing the results, president and chief executive officer Virginia McDowell said, “Consistent with other regional gaming companies, the quarter presented a difficult operating environment in our markets, as the combination of continuing economic challenges, changes in payroll tax rates and the delay in income tax refunds led to softer business levels at our casinos. In addition, when compared to the extremely mild winter in fiscal 2012, there was significant impact from weather-related disruptions in the fiscal 2013 quarter. Finally, the fourth quarter of fiscal 2012 contained an extra 14(th) week compared to 13 weeks in this year’s quarter. Adjusting for the extra week in fiscal 2012 and last year’s insurance recoveries, we believe our results were in-line with other regional casino operators.”

Summary of Consolidated Operating Results

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

                   Three Months      Twelve Months
                       Ended             Ended
                  -------------     --------------

                    April 28,         April 29,       April 28,       April 29,

                              2013              2012            2013            2012
                              ----              ----            ----            ----

     Net
     revenues               $268.1            $291.0          $965.2          $977.4

     Net
     revenues,
     excluding
     insurance
     recoveries              268.1             282.4           965.2           967.7

     Consolidated
     Adjusted
     EBITDA
     (1)                      59.1              69.8           184.8           201.2

     Income
     (loss)
     from
     continuing
     operations              (45.4)            (13.5)          (46.0)          (17.4)

     Income
     (loss)
     from
     discontinued
     operations                  -            (111.3)           (1.6)         (112.4)

     Net
     income
     (loss)                  (45.4)           (124.8)          (47.6)         (129.8)

     Diluted
     income
     (loss)
     per
     share
     from
     continuing
     operations              (1.15)            (0.35)          (1.17)          (0.45)

     Diluted
     income
     (loss)
     per
     share
     from
     discontinued
     operations                  -             (2.85)          (0.04)          (2.90)

     Diluted
     income
     (loss)
     per
     share                   (1.15)            (3.20)          (1.21)          (3.35)

     Adjusted
     income
     (loss)
     per
     share
     (2)                      0.24              0.39            0.39            0.45

    (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 Net
     Income (Loss) to Adjusted
     Income (Loss) and GAAP Net
     Income (Loss) Per Share to
     Adjusted Income (Loss) Per
     Share."

In addition to the extra week in fiscal 2012, the following items impacted income from continuing operations during the quarters and years ended April 28, 2013 and April 29, 2012:

  • Net revenues and operating income for the fourth quarter of fiscal year 2012 included $8.6 million of insurance recoveries received as a result of business interruption claims related to flooding along the Mississippi River.
  • The Company recorded $50.1 million in impairment charges in fiscal 2013 and $30.5 in fiscal 2012.
  • Pre-opening expenses were $1.0 million higher than in the fiscal 2012 quarter due to the impending opening of the new Lady Luck Nemacolin Casino.
  • Depreciation and amortization increased from $17.9 million to $20.4 million primarily as a result of the opening our Cape Girardeau, Missouri casino.
  • Interest expense in the fourth quarter of fiscal 2013 includes approximately $2.2 million in charges related to the Company’s recently completed financing transactions.

McDowell continued, “Fiscal 2013 was marked by tremendous progress in our efforts to renew our asset base, even in a challenging operating environment. We opened Cape Girardeau, rebranded Vicksburg as a new Lady Luck, completed the sale of Biloxi, renovated our hotels in Lake Charles and Black Hawk and introduced many new outlets of our popular food and beverage concepts, including the Farmer’s Pick Buffet and Otis & Henry’s Bar & Grill.

“We are aggressively implementing cost efficiencies at our properties and corporate office that we expect to save us approximately $­­2 million per year, including the consolidation of our two Black Hawk properties under a single management team, and efficiencies at our corporate office through cost-reductions and attrition. In connection with these moves we incurred approximately $0.9 million in severance expenses in the fourth quarter.

“The ramp of our Cape Girardeau property has been slower than expected. While we were successful in building our database during the fourth quarter, our promotional spending did not generate the desired results. Recently introduced measures aimed at rationalizing our marketing programs and reducing operating costs should have a positive impact on EBITDA moving forward.

“In addition, we are looking forward to the debut of our new, flagship Lady Luck property at Nemacolin Woodlands Resort in western Pennsylvania. Lady Luck Nemacolin is scheduled to open to the public on July 1(st), pending final regulatory approvals. And we are looking forward to continuing to work closely with our partner in Philadelphia as the Gaming Control Board outlines next steps in the competitive licensing process for the remaining Category 2 gaming license in Pennsylvania.”

Fourth Quarter Property Operating Results

As previously stated the fourth quarter of fiscal 2012 contained 14 weeks compared to 13 weeks in the fiscal 2013 quarter. This fact would lead to an approximately 7% reduction in net revenue and Adjusted EBITDA on a comparable basis before any other factors are considered.

Black Hawk - Net revenues decreased $2.8 million to $31.2 million and Adjusted EBITDA decreased $1.7 million to $7.8 million. Results were negatively impacted by weather, as the market experienced 17 days of snow compared to only 6 days in the prior year and a year-over-year increase in the gaming tax rate, which resulted in $0.3 million in additional gaming taxes.

Pompano - Net revenues decreased from $48.5 million to $46.4 million and Adjusted EBITDA decreased $1.0 million to $9.8 million, attributable to increased marketing and a heightened promotional environment during the quarter.

Iowa - Net revenues decreased $4.8 million (7.2%) to $61.8 million and Adjusted EBITDA decreased $2.5 million to $17.8 million. In Davenport, we were closed for eight days in April due to flooding. We estimate that this had approximately $0.5 million impact on Adjusted EBITDA. In Waterloo, we are currently renovating the casino bar and building a Farmers Pick Buffet. Severe winter weather impacted results during 5 of the 13 weeks of the quarter.

Lake Charles - Net revenues decreased from $38.7 million to $32.9 million and Adjusted EBITDA decreased $1.2 million to $6.0 million primarily as a result of increased competitive pressures.

Missouri - Combined net revenues in Boonville, Caruthersville and Kansas City decreased $8.5 million to $47.9 million and Adjusted EBITDA decreased $2.6 million to $14.5 million. In Boonville results were hampered by significantly worse weather year over year and construction late in the quarter when we began renovations to our casino floor and Lone Wolf bar. In Caruthersville, we have shifted our marketing dollars to new territories, leading to improved revenue from west Tennessee; however the property was still impacted by the opening of Cape Girardeau. In Kansas City, we continue to face the ramp-up of new competition which opened in the prior year quarter, and severe weather impacted results.

Cape Girardeau generated net revenues of $16.7 million and Adjusted EBITDA $1.6 million. We recently made significant changes to our management and marketing strategy that, we believe, will benefit EBITDA moving forward as we refine our operations in the developing market.

Mississippi - Net revenues decreased $6.7 million to $31.0 million and Adjusted EBITDA decreased $4.4 million to $7.8 million. The Mississippi market continues to feel the impact of a sluggish economy. All of our casinos in Mississippi felt the impact of the delayed IRS refunds as the amount of refund checks cashed fell by 22%. In Vicksburg, increased market share at our newly rebranded Lady Luck were not enough to offset an overall 7% decline in market revenue. Vicksburg revenues decreased $1.1 million to $9.3 million and Adjusted EBITDA decreased $1.3 million to $2.8 million. New competition in Natchez led to a $2.7 million decrease in net revenue and a $2.3 million decrease in Adjusted EBITDA, as we are aggressively positioning to maintain market share.

Corporate Expenses

Corporate and development expenses were $7.2 million for the quarter, a decrease of $3.6 million compared to prior year, primarily due to reduced incentive compensation of $3.5 million, as we did not meet the threshold annual performance level under our management incentive program, and reduced insurance costs of approximately $0.7 million, offset by $0.9 million in severance expenses. In addition, non-cash stock compensation expense was $0.9 million for the quarter compared to $1.3 million in the fourth quarter of fiscal 2012.

For the fiscal year, non-cash stock compensation expense was $4.8 million, compared to $7.3 million in fiscal 2012.

Development

Nemacolin Woodlands Resort, Pennsylvania - Lady Luck Nemacolin is scheduled to open to the public July 1, 2013, subject to final regulatory approval. Lady Luck Nemacolin is planned to include 600 slot machines, 28 table games and two food and beverage outlets. The Company expects the total project to cost approximately $60 million, including $12.5 million in licensing fees.

Philadelphia, Pennsylvania - On February 1, 2013, we entered into an agreement with Tower Entertainment, LLC, to operate the proposed $700 million casino entertainment complex, dubbed The Provence, in Philadelphia, 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 3,000 electronic gaming machines and 150 table games, as well as a rooftop village, concert hall, 8 restaurants, private swim club, night club, retail shopping and meeting and event space. The Pennsylvania Gaming Control Board has held public input hearings for the competitors for Pennsylvania’s final remaining slot machine and table games licenses. The Pennsylvania Gaming Control Board has not announced a timeline for suitability hearings or eventual licensure.

Capital Structure and FY 2014 Guidance

As of April 28, 2013, the Company had:

  • $68.5 million in cash and cash equivalents, excluding $11.4 million in restricted cash and investments;
  • $1.2 billion in total debt; and
  • $90 million in net line of credit availability.

Fiscal year 2013 capital expenditures were $153.2 million, of which $79.0 million related to our new casino in Cape Girardeau, $23.7 million related to the development of Lady Luck Nemacolin, and $50.5 million related to maintenance capital and projects at our existing properties.

The Company provided guidance for the following specific non-operating items for fiscal year 2014:

  • Depreciation and amortization expense is expected to be approximately $91 million to $93 million.
  • The Company expects cash income taxes pertaining to FY 2014 operations to be less than $2 million, primarily representing state income taxes.
  • Interest expense is expected to be approximately $88 million to $90 million, net of capitalized interest.
  • Corporate and development expenses for FY 2014 are expected to be approximately $34 million, including approximately $5 million in non-cash stock compensation expense.
  • Capital expenditures for FY 2014 are expected to be approximately $80 million to $83 million, including approximately $30 million for the completion of Lady Luck Nemacolin.
  • We expect to incur approximately $2.5 million of incremental pre-opening expenses related to Lady Luck Nemacolin.

Conference Call Information

Isle of Capri Casinos, Inc. will host a conference call on June 6, 2013 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 877-917-8929. International callers can access the conference call by dialing 517-308-9020. The conference call reference number is 1955456. The conference call will be recorded and available for review starting at midnight central on June 6, 2013, until midnight central on June 13, 2013, by dialing 866-422-8156; International: 203-369-0832 and access number 4589.

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 gaming and entertainment facilities in Mississippi, Louisiana, Iowa, Missouri, Colorado and Florida. The Company is also currently developing a new facility at Nemacolin Woodlands Resort in western 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.,
Dale Black, Chief Financial Officer-314.813.9327
Jill Alexander, Senior Director of Corporate Communication-314.813.9368

                                                                  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 28,                       April 29,                       April 28,                       April 29,

                                                          2013                            2012                            2013                            2012
                                                          ----                            ----                            ----                            ----

    Revenues:

    Casino                                            $282,684                        $294,940                      $1,016,005                      $1,006,523

    Rooms                                                8,063                           8,631                          31,851                          32,438

    Food, beverage, pari-
     mutuel and other                                   37,385                          37,275                         133,377                         128,560

    Insurance recoveries                                     -                           8,654                               -                           9,637

     Gross revenues                                    328,132                         349,500                       1,181,233                       1,177,158

      Less promotional allowances                      (60,058)                        (58,480)                       (216,034)                       (199,787)
                                                       -------                         -------                        --------                        --------

       Net revenues                                    268,074                         291,020                         965,199                         977,371

    Operating expenses:

     Casino                                             41,715                          41,900                         156,179                         153,743

     Gaming taxes                                       71,569                          73,225                         255,105                         251,780

     Rooms                                               1,727                           1,762                           6,686                           7,027

     Food, beverage, pari-
      mutuel and other                                  12,164                          12,185                          42,472                          41,281

     Marine and facilities                              14,854                          14,421                          56,421                          57,225

     Marketing and
      administrative                                    60,714                          61,635                         236,146                         234,470

     Corporate and development                           7,197                          10,831                          33,953                          40,248

     Valuation charges                                  50,100                          30,549                          50,100                          30,549

     Preopening                                          1,446                             484                           5,765                             615

     Depreciation and
      amortization                                      20,357                          17,924                          73,419                          76,050

      Total operating expenses                         281,843                         264,916                         916,246                         892,988
                                                       -------                         -------                         -------                         -------

    Operating income                                   (13,769)                         26,104                          48,953                          84,383

    Interest expense                                   (25,036)                        (22,466)                        (89,461)                        (87,905)

    Interest income                                         96                             199                             502                             819

    Derivative income (expense)                            216                             187                             748                             439
                                                           ---                             ---                             ---                             ---

    Income (loss) from
     continuing operations
     before

      income taxes

      (38,493)                                           4,024                         (39,258)                         (2,264)

     Income tax provision                               (6,898)                        (17,502)                         (6,732)                        (15,119)
                                                        ------                         -------                          ------                         -------

    Income (loss) from
     continuing operations                             (45,391)                        (13,478)                        (45,990)                        (17,383)

    Income (loss)  from
     discontinued operations,

      net of income taxes

                                -                     (111,313)                         (1,579)                       (112,370)
                                -                     --------                          ------                        --------

    Net income (loss)                                 $(45,391)                      $(124,791)                       $(47,569)                      $(129,753)
                                                      ========                       =========                        ========                       =========

    Income (loss) per common
     share-basic:

     Income (loss) from
      continuing operations                             $(1.15)                         $(0.35)                         $(1.17)                         $(0.45)

     Income (loss) from
      discontinued operations,

       net of income taxes

                                -                        (2.85)                          (0.04)                          (2.90)
                                -                        -----                           -----                           -----

    Net income (loss)                                   $(1.15)                         $(3.20)                         $(1.21)                         $(3.35)
                                                        ======                          ======                          ======                          ======

    Income (loss) per common
     share-dilutive:

     Income (loss) from
      continuing operations                             $(1.15)                         $(0.35)                         $(1.17)                         $(0.45)

     Income (loss) from
      discontinued operations,

       net of income taxes

                                -                        (2.85)                          (0.04)                          (2.90)
                                -                        -----                           -----                           -----

    Net income (loss)                                   $(1.15)                         $(3.20)                         $(1.21)                         $(3.35)
                                                        ======                          ======                          ======                          ======

    Weighted average basic
     shares                                         39,518,406                      38,982,281                      39,340,325                      38,753,098

    Weighted average diluted
     shares                                         39,518,406                      38,982,281                      39,340,325                      38,753,098

                                        ISLE OF CAPRI CASINOS, INC.

                                        CONSOLIDATED BALANCE SHEETS

                             (In thousands, except share and per share amounts)

                                                    April 28,                   April 29,

                                                                  2013                        2012
                                                                  ----                        ----

                    ASSETS                         (unaudited)
                                 ------

    Current assets:

    Cash and
     cash
     equivalents                                               $68,469                     $94,461

    Marketable
     securities                                                 25,520                      24,943

    Accounts
     receivable,
     net                                                        11,077                       6,941

    Insurance
     receivable                                                      -                       7,497

    Income
     taxes
     receivable                                                  4,789                       2,161

    Deferred
     income
     taxes                                                       1,573                         627

    Prepaid
     expenses
     and other
     assets                                                     20,872                      18,950

    Assets held
     for sale                                                        -                      46,703

    Total
     current
     assets                                                    132,300                     202,283

    Property
     and
     equipment,
     net                                                     1,034,026                     950,014

    Other assets:

    Goodwill                                                   280,803                     330,903

    Other
     intangible
     assets,
     net                                                        60,748                      56,586

    Deferred
     financing
     costs, net                                                 27,230                      13,205

    Restricted
     cash and
     investments                                                11,417                      12,551

    Prepaid
     deposits
     and other                                                   7,075                       9,428

    Total
     assets                                                 $1,553,599                  $1,574,970
                                                            ==========                  ==========

                  LIABILITIES AND STOCKHOLDERS' EQUITY
                  ------------------------------------

    Current liabilities:

    Current
     maturities
     of long-
     term debt                                                    $415                      $5,393

    Accounts
     payable                                                    34,533                      23,536

    Accrued liabilities:

    Payroll and
     related                                                    35,093                      38,566

    Property
     and other
     taxes                                                      21,340                      19,522

    Interest                                                    18,502                       9,296

    Progressive
     jackpots
     and slot
     club awards                                                16,579                      14,892

    Liabilities
     related to
     assets held
     for sale                                                        -                       4,362

    Other                                                       29,337                      40,549

    Total
     current
     liabilities                                               155,799                     156,116

    Long-term
     debt, less
     current
     maturities                                              1,156,469                   1,149,038

    Deferred
     income
     taxes                                                      43,104                      36,057

    Other
     accrued
     liabilities                                                33,303                      33,583

    Other long-
     term
     liabilities                                                22,514                      16,556

    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
     28, 2013
     and
     42,066,148
     at April
     29, 2012                                                      421                         421

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

    Additional
     paid-in
     capital                                                   246,214                     247,855

    Retained
     earnings
     (deficit)                                                 (74,227)                    (26,658)

    Accumulated
     other
     comprehensive
     (loss)
     income                                                       (247)                       (855)
                                                                  ----                        ----

                                                               172,161                     220,763

    Treasury
     stock,
     2,470,128
     shares at
     April 28,
     2013 and
     3,083,867
     April 29,
     2012                                                      (29,751)                    (37,143)

    Total
     stockholders'
     equity                                                    142,410                     183,620

    Total
     liabilities
     and
     stockholders'
     equity                                                 $1,553,599                  $1,574,970
                                                            ==========                  ==========

                                               Isle of Capri Casinos, Inc.

                                             Supplemental Data - Net Revenues

                                                (unaudited, in thousands)

                       Three Months Ended          Twelve Months Ended
                       ------------------          -------------------

                            April 28,                   April 29,             April 28,         April 29,

                                        2013                        2012                   2013              2012
                                        ----                        ----                   ----              ----

    Properties Not
     Impacted by
     Flooding

      Lake Charles,
       Louisiana                     $32,884                     $38,714               $125,575          $138,634

      Kansas City,
       Missouri                       19,493                      22,554                 73,538            80,703

      Boonville,
       Missouri                       20,055                      23,315                 78,624            81,796

      Cape
       Girardeau,
       Missouri                       16,671                                             32,782

      Bettendorf,
       Iowa                           20,642                      21,715                 78,083            79,156

      Marquette,
       Iowa                            6,889                       7,357                 27,605            28,036

      Waterloo, Iowa                  23,547                      24,721                 86,654            86,484

      Black Hawk,
       Colorado                       31,233                      34,073                122,135           124,051

      Pompano,
       Florida                        46,393                      48,538                154,629           154,740

                                     217,807                     220,987                779,625           773,600
                                     -------                     -------                -------           -------

    Properties
     Impacted by
     Flooding

      Natchez,
       Mississippi                     6,286                       9,009                 25,378            26,739

      Lula,
       Mississippi                    15,454                      18,300                 55,444            56,070

      Vicksburg,
       Mississippi                     9,296                      10,437                 29,918            31,937

       Caruthersville,
       Missouri                        8,356                      10,539                 32,282            33,890

      Davenport,
       Iowa                           10,680                      12,769                 41,794            44,055

                                      50,072                      61,054                184,816           192,691
                                      ------                      ------                -------           -------

    Property Net
     Revenues
     before Other                    267,879                     282,041                964,441           966,291

    Insurance
     Recoveries(2)

      Natchez                              -                       1,485                      -             1,904

      Lula                                 -                       5,455                      -             5,455

      Vicksburg                            -                         703                      -               758

      Caruthersville                       -                         751                      -             1,149

      Davenport                            -                         260                      -               371

    Other                                195                         325                    758             1,443
                                         ---                         ---                    ---             -----

    Net Revenues
     from
     Continuing
     Operations                     $268,074                    $291,020               $965,199          $977,371
                                    ========                    ========               ========          ========

                                                                                           Isle of Capri Casinos, Inc.

                                                                          Reconciliation of Operating Income (Loss) to Adjusted EBITDA

                                                                                            (unaudited, in thousands)

                                    Three Months Ended April 28, 2013
                                    ---------------------------------

                       Operating Income             Depreciation and Amortization          Valuation Charges (3)               Stock-Based Compensation               Preopening            Adjusted EBITDA (1)
                            (Loss)
                             -----

    Properties Not
     Impacted by
     Flooding

      Lake Charles,
       Louisiana                      $2,893                                  $3,057              $              -                                          $6        $                  -                 $5,956

      Kansas City,
       Missouri                        4,208                                     992                             -                                           4                           -                  5,204

      Boonville,
       Missouri                        6,251                                     896                             -                                           5                           -                  7,152

      Cape
       Girardeau,
       Missouri                       (1,177)                                  2,810                             -                                           4                           -                  1,637

      Bettendorf,
       Iowa                            4,211                                   1,737                             -                                           3                           -                  5,951

      Marquette,
       Iowa                              978                                     556                             -                                           3                           -                  1,537

      Waterloo, Iowa                   6,627                                   1,194                             -                                           6                           -                  7,827

      Black Hawk,
       Colorado                        5,443                                   2,303                             -                                          11                           -                  7,757

      Pompano,
       Florida                         7,981                                   1,846                             -                                           7                           -                  9,834

      Nemacolin,
       Pennsylvania                   (1,446)                                      -                             -                                           -                       1,446                      -

                                      35,969                                  15,391                             -                                          49                       1,446                 52,855
                                      ------                                  ------                           ---                                         ---                       -----                 ------

    Properties
     Impacted by
     Flooding

      Natchez,
       Mississippi                   (15,836)                                    353                        16,000                                           5                           -                    522

      Lula,
       Mississippi                   (31,001)                                  1,318                        34,100                                           6                           -                  4,423

      Vicksburg,
       Mississippi                     1,490                                   1,324                             -                                           5                           -                  2,819

       Caruthersville,
       Missouri                        1,276                                     840                             -                                           5                           -                  2,121

      Davenport,
       Iowa                            1,873                                     596                             -                                           5                           -                  2,474

                                     (42,198)                                  4,431                        50,100                                          26                           -                 12,359
                                     -------                                   -----                        ------                                         ---                         ---                 ------

    Total
     Operating
     Properties                       (6,229)                                 19,822                        50,100                                          75                       1,446                 65,214

      Corporate and
       Other                          (7,540)                                    535                             -                                         938                           -                 (6,067)

    Total                           $(13,769)                                $20,357                       $50,100                                      $1,013                      $1,446                $59,147
                                    ========                                 =======                       =======                                      ======                      ======                =======

                                   Three Months Ended April 29, 2012
                                   ---------------------------------

                       Operating Income             Depreciation and Amortization                Valuation                     Stock-Based Compensation        Insurance Recoveries (2)     Adjusted EBITDA (1)
                            (Loss)                                                               and Other                                                               and
                                                                                                 Charges(3)                                                           Preopening
                                                                                                 ---------                                                            ----------

    Properties Not
     Impacted by
     Flooding

      Lake Charles,
       Louisiana                    $(11,193)                                 $2,236                       $16,149                                          $3        $                  -                 $7,195

      Kansas City,
       Missouri                        4,741                                     980                             -                                           1                           -                  5,722

      Boonville,
       Missouri                        7,867                                     849                             -                                           5                           -                  8,721

      Cape
       Girardeau,
       Missouri                         (484)                                      -                             -                                           -                         484                      -

      Bettendorf,
       Iowa                            4,423                                   1,994                             -                                           5                           -                  6,422

      Marquette,
       Iowa                            1,214                                     469                             -                                           5                           -                  1,688

      Waterloo, Iowa                   7,133                                   1,651                             -                                           5                           -                  8,789

      Black Hawk,
       Colorado                        7,457                                   1,992                             -                                          10                           -                  9,459

      Pompano,
       Florida                         8,338                                   2,457                             -                                           6                           -                 10,801

                                      29,496                                  12,628                        16,149                                          40                         484                 58,797
                                      ------                                  ------                        ------                                         ---                         ---                 ------

    Properties
     Impacted by
     Flooding

      Natchez,
       Mississippi                     3,858                                     418                             -                                           5                      (1,485)                 2,796

      Lula,
       Mississippi                    (5,303)                                  1,585                        14,400                                           5                      (5,455)                 5,232

      Vicksburg,
       Mississippi                     3,528                                   1,259                             -                                           3                        (703)                 4,087

       Caruthersville,
       Missouri                        2,528                                     893                             -                                           5                        (751)                 2,675

      Davenport,
       Iowa                            3,110                                     533                             -                                           5                        (260)                 3,388

                                       7,721                                   4,688                        14,400                                          23                      (8,654)                18,178
                                       -----                                   -----                        ------                                         ---                      ------                 ------

    Total
     Operating
     Properties                       37,217                                  17,316                        30,549                                          63                      (8,170)                76,975

      Corporate and
       Other                         (11,113)                                    608                         1,979                                       1,326                           -                 (7,200)

    Total                            $26,104                                 $17,924                       $32,528                                      $1,389                     $(8,170)               $69,775
                                     =======                                 =======                       =======                                      ======                     =======                =======

                                                                                                              Isle of Capri Casinos, Inc.

                                                                                             Reconciliation of Operating Income (Loss) to Adjusted EBITDA

                                                                                                               (unaudited, in thousands)

                                                       Twelve Months Ended April 28, 2013
                                                       ----------------------------------

                                       Operating Income (Loss)            Depreciation and Amortization                Stock-Based Compensation           Valuation Charges (3)  Preopening and Financing (4)  Adjusted EBITDA (1)
                                       ----------------------             -----------------------------                ------------------------           --------------------    ---------------------------   ------------------

    Properties Not Impacted by Flooding

      Lake Charles,
       Louisiana                                           $9,270                                  $10,070                                         $20           $             -          $                  -                 $19,360

      Kansas City,
       Missouri                                            13,275                                    4,012                                          14                         -                             -                  17,301

      Boonville,
       Missouri                                            24,004                                    3,545                                          22                         -                             -                  27,571

      Cape
       Girardeau,
       Missouri                                            (5,135)                                   5,572                                          10                         -                         4,050                   4,497

      Bettendorf,
       Iowa                                                13,995                                    6,948                                          16                         -                             -                  20,959

      Marquette,
       Iowa                                                 3,718                                    1,901                                          15                         -                             -                   5,634

      Waterloo, Iowa                                       21,544                                    5,026                                          22                         -                             -                  26,592

      Black Hawk,
       Colorado                                            20,109                                    8,837                                          43                         -                             -                  28,989

      Pompano,
       Florida                                             19,396                                    7,252                                          28                         -                             -                  26,676

      Nemacolin,
       Pennsylvania                                        (1,715)                                       -                                           -                         -                         1,715                       -

                                                          118,461                                   53,163                                         190                         -                         5,765                 177,579
                                                          -------                                   ------                                         ---                       ---                         -----                 -------

    Properties Impacted by Flooding

      Natchez,
       Mississippi                                        (14,667)                                   1,539                                          19                    16,000                             -                   2,891

      Lula,
       Mississippi                                        (29,815)                                   6,098                                          21                    34,100                             -                  10,404

      Vicksburg,
       Mississippi                                          1,184                                    4,664                                          19                         -                             -                   5,867

       Caruthersville,
       Missouri                                             2,832                                    3,361                                          21                         -                             -                   6,214

      Davenport,
       Iowa                                                 6,492                                    2,255                                          21                         -                             -                   8,768

                                                          (33,974)                                  17,917                                         101                    50,100                             -                  34,144
                                                          -------                                   ------                                         ---                    ------                           ---                  ------

    Total
     Operating
     Properties                                            84,487                                   71,080                                         291                    50,100                         5,765                 211,723

      Corporate and
       Other                                              (35,534)                                   2,339                                       4,788                         -                         1,478                 (26,929)

    Total                                                 $48,953                                  $73,419                                      $5,079                   $50,100                        $7,243                $184,794
                                                          =======                                  =======                                      ======                   =======                        ======                ========

                                                      Twelve Months Ended April 29, 2012
                                                      ----------------------------------

                                       Operating Income (Loss)            Depreciation and Amortization                Stock-Based Compensation            Valuation and Other
                                                                                                                                                               Charges (3)                 Preopening          Adjusted EBITDA (1)
                                           ----------------------            -----------------------------                    ------------------------    --------------------             ----------           ------------------

    Properties Not Impacted by Flooding

      Lake Charles,
       Louisiana                                          $(4,478)                                  $9,291                                         $38                   $16,149          $                  -                 $21,000

      Kansas City,
       Missouri                                            13,902                                    3,997                                          11                         -                             -                  17,910

      Boonville,
       Missouri                                            26,018                                    3,481                                          45                         -                             -                  29,544

      Cape
       Girardeau,
       Missouri                                              (615)                                       -                                           -                                                     615                       -

      Bettendorf,
       Iowa                                                12,793                                    8,122                                          21                         -                             -                  20,936

      Marquette,
       Iowa                                                 4,169                                    1,791                                          25                         -                             -                   5,985

      Waterloo, Iowa                                       20,399                                    6,573                                          37                         -                             -                  27,009

      Black Hawk,
       Colorado                                            17,468                                   10,953                                          40                         -                             -                  28,461

      Pompano,
       Florida                                             17,393                                   10,539                                          24                         -                             -                  27,956

                                                          107,049                                   54,747                                         241                    16,149                           615                 178,801
                                                          -------                                   ------                                         ---                    ------                           ---                 -------

    Properties Impacted by Flooding

      Natchez,
       Mississippi                                          6,478                                    1,536                                          25                         -                             -                   8,039

      Lula,
       Mississippi                                         (4,729)                                   6,590                                          45                    14,400                             -                  16,306

      Vicksburg,
       Mississippi                                          4,145                                    5,067                                          10                         -                             -                   9,222

       Caruthersville,
       Missouri                                             4,497                                    3,395                                          26                         -                             -                   7,918

      Davenport,
       Iowa                                                 8,261                                    2,202                                          26                         -                             -                  10,489

                                                           18,652                                   18,790                                         132                    14,400                             -                  51,974
                                                           ------                                   ------                                         ---                    ------                           ---                  ------

    Total
     Operating
     Properties                                           125,701                                   73,537                                         373                    30,549                           615                 230,775

      Corporate and
       Other                                              (41,318)                                   2,513                                       7,269                     1,979                             -                 (29,557)

    Total                                                 $84,383                                  $76,050                                      $7,642                   $32,528                          $615                $201,218
                                                          =======                                  =======                                      ======                   =======                          ====                ========

                                             Isle of Capri Casinos, Inc.

                    Reconciliation of Income (Loss) From Continuing Operations to Adjusted EBITDA

                                              (unaudited, in thousands)

                    Three Months Ended          Twelve Months Ended
                    ------------------          -------------------

                        April 28,                    April 29,                    April 28,          April 29,

                                     2013                        2012                          2013               2012
                                     ----                        ----                          ----               ----

    Income
     (loss) from
     continuing
     operations                  $(45,391)                   $(13,478)                     $(45,990)          $(17,383)

      Income tax
       provision                    6,898                      17,502                         6,732             15,119

      Derivative
       (income)
       expense                       (216)                       (187)                         (748)              (439)

      Interest
       income                         (96)                       (199)                         (502)              (819)

      Interest
       expense                     25,036                      22,466                        89,461             87,905

      Depreciation
       and
       amortization                20,357                      17,924                        73,419             76,050

      Stock-based
       compensation                 1,013                       1,389                         5,079              7,642

      Valuation
       charges and
       other (3)                   50,100                      32,528                        50,100             32,528

      Preopening
       expense                      1,446                         484                         5,765                615

      Financing
       expense (4)                      -                           -                         1,478                  -

      Insurance
       recoveries
       (2)                              -                      (8,654)                            -                  -

    Adjusted
     EBITDA (1)                   $59,147                     $69,775                      $184,794           $201,218
                                  =======                     =======                      ========           ========

                                                                      Isle of Capri Casinos, Inc.

                  Reconciliations of GAAP Net Income (Loss) to Adjusted Net Income (Loss) and GAAP Net Income (Loss) Per Share to Adjusted Net Income
                                                                            (Loss) Per Share

                                                                       (unaudited, in thousands)

                                   Three Months Ended                 Twelve Months Ended
                                   ------------------                 -------------------

                                       April 28,                           April 29,                           April 28,                           April 29,

                                                       2013                                2012                                2013                               2012
                                                       ----                                ----                                ----                               ----

    GAAP net
     income
     (loss)                                        $(45,391)                          $(124,791)                           $(47,569)                         $(129,753)

    Insurance
     recoveries
     (2)                                                  -                              (8,654)                                  -                                  -

    Valuation
     charges
     and other
     (3)                                             50,100                              32,528                              50,100                             32,528

    Financing
     costs (4)                                        2,236                                   -                               4,742                                  -

    Preopening                                        1,446                                 484                               5,765                                615

    Adjustment
     for taxes
     on above
     items (5)                                            -                              (3,790)                                  -                             (7,251)

    Tax
     valuation
     allowance                                          758                               8,742                                 758                              8,742

     Discontinued
     operations                                           -                             111,313                               1,579                            112,370

    Adjusted
     net
     income                                          $9,149                             $15,832                             $15,375                            $17,251
                                                     ======                             =======                             =======                            =======

    GAAP net
     income
     (loss)                                          $(1.15)                             $(3.20)                             $(1.21)                            $(3.35)

    Insurance
     recoveries
     (2)                                                  -                               (0.22)                                  -                                  -

    Valuation
     charges
     and other
     (3)                                               1.27                                0.83                                1.27                               0.84

    Financing
     costs (4)                                         0.06                                   -                                0.12                                  -

    Preopening                                         0.04                                0.01                                0.15                               0.02

    Adjustment
     for taxes
     on above
     items (5)                                            -                               (0.10)                                  -                              (0.19)

    Tax
     valuation
     allowance                                         0.02                                0.22                                0.02                               0.23

     Discontinued
     operations                                           -                                2.85                                0.04                               2.90

    Adjusted
     net
     income
     per share                                        $0.24                               $0.39                               $0.39                              $0.45
                                                      =====                               =====                               =====                              =====

  1. Adjusted EBITDA is “earnings before interest and other non-operating income (expense), income taxes, stock-based compensation, preopening expense, valuation charges and other unusual items (see Note 4 below) 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 operating income is included in the financial schedules accompanying this release.

    Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by net revenues before insurance recoveries.

    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. We have received insurance recoveries related to our flood claims associated with the flooding along the Mississippi River in the first quarter of fiscal 2012.
  3. 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. Valuation charges and other in the fourth quarter and fiscal 2012 consists of a goodwill impairment charge at our Lula property of $14.4 million, a charge of $16.1 million at our Lake Charles property related to the sale of our smaller riverboat and associated gaming license, and a charge of $2.0 million at Corporate in connection with a legal judgment.
  4. 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.
  5. Because of our tax valuation allowances, there is no adjustment for income taxes on the above items during fiscal 2013.

SOURCE Isle of Capri Casinos, Inc.


Source: PR Newswire