Isle of Capri Casinos, Inc. Announces Fiscal 2015 Fourth Quarter And Year-End Results

ST. LOUIS, June 9, 2015 /PRNewswire/ -- Isle of Capri Casinos, Inc. ISLE (the "Company") today reported financial results for the fourth quarter and fiscal year ended April 26, 2015.

2015 Fourth Quarter and Fiscal Year Highlights

• Fourth quarter Adjusted EBITDA increased 14.8% to $65.6 million year over year.
• Fiscal 2015 Adjusted EBITDA increased 15.5% to $200.2 million year over year.
• Fiscal 2015 Adjusted EBITDA margin exceeded 20%, up 193 bps year over year.
• Reduced debt by $73 million in fiscal 2015 to below $1 billion for the first time since 2000.
• Debt to Adjusted EBITDA ratio is below 5x at the end of fiscal 2015.

Consolidated Financial Results

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

 

Commenting on the results of the quarter and fiscal year, Virginia McDowell, the Company's president and chief executive officer said: "Fiscal 2015 was a year of many accomplishments.  During the year, we continued to focus on building a better operating company with a prudently leveraged balance sheet."

"Adjusted EBITDA increased 14.8% year over year in our fiscal 2015 fourth quarter, marking the fifth consecutive quarter with an increase in Adjusted EBITDA, and our third consecutive quarter with a double-digit, year-over-year change in Adjusted EBITDA. The early part of the quarter experienced more favorable weather than the prior year; while we also continued to benefit from the substantial changes we made to our operating model over the past 18 months."

"With fiscal 2015 behind us, we are focused on fiscal 2016 and beyond.  We continue to differentiate ourselves with friendly and excellent customer service. We are prudently investing in our properties by renovating hotel rooms and food and beverage outlets and improving our casino floors with new products. We broke ground on our land-based development at Bettendorf which we expect to open in early fiscal 2017. We continue to optimize our marketing programs and are introducing new productivity tools in fiscal 2016 across the enterprise. Finally we will remain vigilant about our cost structure and we will continue to manage our capital structure to maximize free cash flow, deleverage our balance sheet and lower our cost of capital."

Financial Highlights

Net revenues for the quarter increased 5.3% to $274.6 million and consolidated Adjusted EBITDA increased from $57.2 million to $65.6 million, or 14.8%.  Adjusted EBITDA margin was 23.9% for the quarter, relative to 21.9% in the year ago quarter.  Adjusted income per share was $0.58 during the quarter, compared to $0.34 in the prior year.  GAAP basis diluted income (loss) per share from continuing operations for the fiscal 2015 quarter was $0.08 compared to ($3.51) for the fourth quarter of the prior year, including non-cash valuation charges assessed during both periods. 

For fiscal 2015, net revenues increased 4.4%, to $996.3 million, while Adjusted EBITDA increased 15.5%, to $200.2 million.  Adjusted EBITDA margin for the year was 20.1% relative to 18.2% in fiscal 2014. 

The following items impacted earnings from continuing operations during the fourth quarters of fiscal 2015 and 2014:

• We recorded a loss on early extinguishment of debt of $13.8 million in fiscal 2015 related to the tender and refinancing of our 7.75% Senior Notes due 2019.
• We recorded non-cash impairment charges of $9.0 million in fiscal 2015 and $162.1 million in fiscal 2014.

Fourth Quarter Operating Results

Black Hawk – Adjusted EBITDA at our two properties increased by $2.6 million, or 34.8%, to $10.1 million, on a revenue increase of $3.5 million, or 11.7%.  The properties benefited from the rollout of Fan Club 2.0 during our fiscal third quarter, which resulted in more targeted marketing spend and gains in market share during the fourth quarter.  

Pompano – Net revenues increased 12.4% to $54.6 million, Adjusted EBITDA increased 28.6% to $14.9 million, and operating margins increased 345 basis points to 27.2%.   This growth was largely attributable to increased top-tier rated slot play, and continued enhancements in marketing programs.

Iowa – Net revenues for our three properties were up slightly to $48.5 million and Adjusted EBITDA increased slightly to $14.1 million.  Adjusted EBITDA increases of 33.1% and 1.8% at Marquette and Waterloo, respectively, were mostly offset by a 7.7% decline in Adjusted EBITDA at Bettendorf.  The continued proliferation of VLTs in Illinois affected Bettendorf's results during the quarter, as well as the ongoing renovations of the South Tower hotel, which resulted in approximately 1/3 fewer rooms being available during the period.   Additionally we sold Rhythm City during last year's fourth quarter.  Following the sale, that property was closed for several days during the transition which benefited Bettendorf. 

Lake Charles – Net revenues declined 3.1%, to $34.0 million, and Adjusted EBITDA declined 16.6%, to $5.7 million.  Results were impacted during the quarter primarily by a decline in retail non-rated play at the property, likely due to the opening of a new competitor in December 2014 as well as increased marketing expenses to rated players.  While revenue trends have remained solid since the opening of the new competitor, the property will continue to refine marketing programs in the coming months to appropriately match marketing expenses with revenue levels.  

Mississippi – Net revenues for our three Mississippi properties increased 1.3% to $29.1 million and Adjusted EBITDA increased 32.5% to $7.8 million.  All three properties reported increased Adjusted EBITDA year over year led by Vicksburg, up 28.1%, and Lula, which increased 27.1%.  Vicksburg and Lula benefited from lower marketing and operating costs during the quarter.

Missouri – Net revenues for our four Missouri properties increased 5.4% to $65.6 million year over year, while Adjusted EBITDA increased 8.6% to $19.9 million.  All four Missouri properties reported increased Adjusted EBITDA led by Cape Girardeau and Caruthersville which increased 22.2% and 23.8%, respectively.  Boonville's Adjusted EBITDA increased 5.2% during the quarter, while Kansas City was up slightly.

Pennsylvania – Net revenues at our casino at Nemacolin Woodlands Resort were up 20.8%, to $9.0 million and Adjusted EBITDA was ($0.2) million relative to ($0.8) million in the prior year quarter.   The property continues to see solid revenue growth trends which should benefit it into the peak season for the resort.

Corporate Expenses

Corporate and other expenses were $7.3 million for the quarter, up from $7.1 million, largely as a result of increased incentive compensation accruals relative to the previous year's fourth quarter. 

Non-cash stock compensation expense was $0.6 million for the quarter compared to $0.8 million in the fourth quarter of fiscal 2014. For the fiscal year, non-cash stock compensation expense was $3.2 million, compared to $4.2 million in fiscal 2014.

Capital Structure, Capital Expenditures and Updated Guidance

As of April 26, 2015, the Company had:

• $66.4 million in cash and cash equivalents, excluding $9.2 million in restricted cash and investments;
• $992.9 million in total debt; and
• $218.0 million in net line of credit availability.

Fourth quarter capital expenditures were $11.7 million.  For the year our total capital expenditures were approximately $41.7 million.

On April 7, 2015 we announced a tender offer for our $300 million of 7.75% Senior Notes due 2019.  Approximately $237.8 million of the Notes were tendered. We funded the tender with borrowings on our existing credit facility, cash on hand, and the issuance of a $150 million add-on to our 5.875% Senior Notes due 2021.  Subsequent to the end of the quarter, on May 14, 2015, we called the remainder of the 2019 notes, funding approximately $62.2 million with additional borrowings on our revolving credit facility.

Development

On May 13, 2015 we broke ground on our land-based casino project in Bettendorf.  The project will include converting the current three-level riverboat casino into a single-level land-based structure situated between the current North and South hotel towers and will also introduce several new food concepts to the property including a Farmer's Pick Buffet, an Otis & Henry's grab-and-go as well as a Lone Wolf bar and stage.  Customers will also benefit from a new porte-cochere, with a grand new casino entrance and a consolidated hotel front desk.  The project is expected to take 12-14 months to complete at a cost of up to $60 million and open in the first half of fiscal 2017.  We expect to fund the construction using cash from operations.

For fiscal 2016 we provide guidance for the following specific non-operating items:

• Depreciation and amortization expense is expected to be approximately $85 million to $87 million, inclusive of approximately $5 million in accelerated depreciation related to the existing riverboat at Bettendorf.
• Interest expense is expected to be approximately $69 million to $71 million.
• The Company expects cash income taxes pertaining to fiscal 2016 operations to be less than $1 million, primarily state income taxes.
• Corporate and development expenses for fiscal 2016 are expected to be approximately $28 million to $30 million, including approximately $5 million in non-cash stock compensation expense.
• Maintenance capital expenditures for fiscal 2016 are expected to be approximately $40 million.
• We also expect to spend approximately $15 million on smaller projects and renovation capital. These include ongoing hotel room renovations at the South Tower in Bettendorf, a hotel room renovation at Boonville, as well as various restaurant renovations across the portfolio. 
• We expect to spend approximately $45 million to $50 million on the land-based project at Bettendorf during fiscal 2016.  

Conference Call Information

Isle of Capri Casinos, Inc. will host a conference call on Tuesday, June 9, 2015 at 10:00 am central time during which management will discuss the financial and other matters addressed in this press release.  The conference call can be accessed by interested parties via webcast through the investor relations page of the Company's website, www.islecorp.com, or, for domestic callers, by dialing 888-346-3970.  International callers can access the conference call by dialing 412-317-6011.  The conference call will be recorded and available for review starting at 11:59 pm central on Tuesday, June 9, 2015, until 11:59 pm central on Tuesday, June 23, 2015, by dialing 877-344-7529; International: 412-317-0088 and access number 10066537.

About Isle of Capri Casinos, Inc.

Isle of Capri Casinos, Inc. is a leading regional gaming and entertainment company dedicated to providing guests with exceptional experience at each of the 15 casino properties that it owns or operates, primarily under the Isle and Lady Luck brands.  The Company currently operates gaming and entertainment facilities in Colorado, Florida, Iowa, Louisiana, Mississippi, Missouri, and Pennsylvania. More information is available at the Company's website, www.islecorp.com.

Forward-Looking Statements

This press release may be deemed to contain forward-looking statements, which are subject to change. These forward-looking statements may be significantly impacted, either positively or negatively by various factors, including without limitation, licensing, and other regulatory approvals, financing sources, development and construction activities, costs and delays, weather, permits, competition and business conditions in the gaming industry. The forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements herein.

Additional information concerning potential factors that could affect the Company's financial condition, results of operations and expansion projects, is included in the filings of the Company with the Securities and Exchange Commission, including, but not limited to, its Form 10-K for the most recently ended fiscal year.

CONTACTS:

Isle of Capri Casinos, Inc.,
               Eric Hausler, Chief Financial Officer-314-813-9205
               Jill Alexander, Senior Director of Corporate Communication-314-813-9368

 

 

 

 

 

 

 

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/isle-of-capri-casinos-inc-announces-fiscal-2015-fourth-quarter-and-year-end-results-300096030.html

SOURCE Isle of Capri Casinos, Inc.