ISLE Isleworth Healthcare Acquisition Corporation

BILOXI, Miss., Aug. 11 /PRNewswire-FirstCall/ -- Isle of Capri Casinos, Inc. (NASDAQ:ISLE) today reported first quarter financial results for the quarter ended July 24, 2005. For the first quarter, the Company reported net income of $4.0 million or $0.13 per diluted common share compared to net income of $10.6 million or $0.35 per diluted common share for the same quarter last year. During the quarter ended July 24, 2005, Isle of Capri Casinos had net revenues of $281.5 million, compared to $278.7 million for the same period in fiscal 2005, and Adjusted EBITDA(1) of $53.5 million (after a deduction of $4.0 million for the Singapore project), compared to $60.0 million for the same period in fiscal 2005. "This past quarter the Isle began wrapping up several renovation and expansion projects. The new products have brought state-of-the-art amenities and updated accommodations to our properties. We remain committed to developing our brands and product offerings to meet the growing demands of today's gaming customer," according to Bernard Goldstein, Isle of Capri Casinos, Inc.'s chairman and chief executive officer. Highlights * The Isle-Biloxi hotel grand opening was held in June, adding 400 hotel rooms to the Biloxi property. The Company expects to open a spa in early fall of 2005, and a new casino currently under construction offsite will add significantly expanded gaming space, new entertainment venues, restaurants and other amenities later this year. * In mid-June, additional parking, a new Kitt's Kitchen restaurant and the sky bridges connecting the Isle-Black Hawk and the Colorado Central Station- Black Hawk were completed. The new 162-room Colorado Central Station hotel is currently ahead of schedule and expected to be completed by end of this calendar year. Construction on the extension of Main Street to Colorado Route 119 is expected to be completed in spring 2006. * In June, the Company and the City of Davenport agreed to a $43.0 million project that has the Isle building a 180-room hotel and rooftop restaurant, and the City constructing a 500+ space parking ramp and providing funding to realign the casino with the new hotel facility. This project is scheduled to open 18-20 months after all permits and approvals are received. * The Company continues to deploy the IGT Advantage(TM) Casino System to replace the existing systems in six of its casinos. The Company rolled out the system at the Isle-Lula this quarter, making it the fourth Isle property, along with Colorado Central Station, Isle-Biloxi and Isle-Vicksburg, to be upgraded. After implementation, these properties will feature the NexGen(TM) Interactive Display, supporting loyalty-building Bonusing(TM) tools, which will allow the Company to enhance its uniquely branded marketing programs. "The benefits of our completed projects were impacted by two weather- related events, as well as a rock slide this quarter. Despite these events, the new accommodations and amenities have been well received by our customers," Timothy M. Hinkley, Isle of Capri Casinos, Inc. president and chief operating officer, said. "I look forward to continued evolution of our products and brands." Operational Review of the First Quarter Fiscal 2006 Compared to the First Quarter Fiscal 2005 In Mississippi, the Company's four operations contributed 24% of its net revenues. Isle-Biloxi's net revenues were up despite Hurricane Dennis and Tropical Storm Cindy, and Adjusted EBITDA(1) decreased due to an adjustment of marketing efforts associated with the opening of the new hotel, storm-related expenses and increased health benefit costs. Isle-Natchez experienced an increase in net revenues and a slight decrease in Adjusted EBITDA(1) as a result of increased health benefits. Isle-Vicksburg showed an increase in net revenues and Adjusted EBITDA(1) primarily due to an adjustment of its marketing efforts. Despite continuing to face a very competitive and contracting market, the Isle-Lula showed an increase in net revenues and Adjusted EBITDA(1) decreased slightly due to higher benefit costs. In Louisiana, the Company's two properties contributed 23% of its net revenues. Isle-Lake Charles experienced a decrease in net revenues and Adjusted EBITDA(1) due to the entry into the market of a new competitor and the completion of another competitor's expansion. Isle-Bossier City showed a decrease in net revenues and Adjusted EBITDA(1) due to increased competition from, and expansion of, Native American gaming in Oklahoma. In Missouri, the Company's two properties contributed 14% of its net revenues. Isle-Kansas City's net revenues and Adjusted EBITDA(1) were down due to the closure of the I-35 Paseo Bridge immediately adjacent to the Isle property. Isle-Boonville continues to show increases in net revenue and Adjusted EBITDA(1) as it penetrates its markets more deeply. Construction of the 140-room hotel continues on schedule and is expected to open in Spring 2006. In Iowa, the Company's three casinos contributed 19% of its net revenues. Isle-Bettendorf showed a decline in both net revenues and Adjusted EBITDA(1) due to increased competition in the outer markets. At Rhythm City, which attracts a local market, net revenues and Adjusted EBITDA(1) remained constant. Isle-Marquette experienced increases in both net revenues and Adjusted EBITDA(1). In Colorado, the Company's two Black Hawk casino operations contributed 14% of its net revenues. The properties saw an increase in net revenues and an aggregate increase in Adjusted EBITDA(1) due to substantial completion of our expansion projects and the reduction of construction disruption compared to prior year. The Company believes that results were adversely affected by the closure of US 6 due to a rockslide in June. The Colorado Department of Transportation announced it expects the reopening of US 6 this September. Our international operations account for a small percentage of our overall revenues. Isle-Our Lucaya experienced an increase in both net revenues and in Adjusted EBITDA(1) primarily due to $1.0 million in business interruption recovery and additional expense controls. New development expenses increased approximately $5.7 million due mainly to the $4.0 million payment previously announced in the agreement the Company signed with resort developer Eighth Wonder to manage a casino included in Eighth Wonder's proposed integrated resort complex in Singapore. New development expenses for the three months ended July 24, 2005 also include United Kingdom-related expenses of $2.0 million compared to $0.6 million for the three months ended July 25, 2004. Isle of Capri Casinos, Inc. Consolidated Statements of Income (Unaudited) (In thousands, except per share amounts) Three Months Ended July 24, July 25, 2005 2004 Revenues: Casino $283,851 $282,080 Hotel, pari-mutuel, food, beverage & other 58,041 53,534 Gross revenues 341,892 335,614 Less promotional allowances 60,359 56,894 Net revenues 281,533 278,720 Operating and other expenses: Properties 215,810 211,600 Corporate 4,915 5,523 New development (2) 7,276 1,558 Preopening 33 55 Depreciation and amortization 25,269 23,522 Total operating and other expenses 253,303 242,258 Operating income 28,230 36,462 Net interest expense (3) (19,136) (17,395) Minority interest (4) (2,056) (2,133) Income from continuing operations before income taxes 7,038 16,933 Income tax expense (5) 2,996 6,686 Income from continuing operations 4,042 10,247 Income (loss) from discontinued operations net of income taxes (6) (58) 362 Net income $3,984 $10,609 Per share data - diluted: Income from continuing operations $0.13 $0.34 Income (loss) from discontinued operations net of income taxes (0.00) 0.01 Net income $0.13 $0.35 Weighted average diluted common shares 31,361 30,749 Selected Consolidated Balance Sheet Accounts July 24, 2005 April 24, 2005 (Unaudited) Cash and cash equivalents $116,326 $146,743 Property and equipment, net 1,063,526 1,026,906 Debt 1,164,171 1,156,118 Stockholders' equity 261,659 261,396 Isle of Capri Casinos, Inc. Comparative Financial Highlights by Casino Property (Unaudited) (In thousands) Three Months Ended July 24, 2005 Adjusted Net Revenues Adjusted EBITDA (7) EBITDA (1) Margin% (1) MISSISSIPPI BILOXI $23,355 $3,847 16.5% NATCHEZ 9,038 2,218 24.5% VICKSBURG 13,512 3,574 26.5% LULA 21,287 4,907 23.1% MISSISSIPPI TOTAL 67,192 14,546 21.6% LOUISIANA BOSSIER CITY 25,527 4,206 16.5% LAKE CHARLES 39,585 7,961 20.1% LOUISIANA TOTAL 65,112 12,167 18.7% MISSOURI KANSAS CITY 21,989 3,877 17.6% BOONVILLE 18,370 5,345 29.1% MISSOURI TOTAL 40,359 9,222 22.8% IOWA BETTENDORF 24,962 8,086 32.4% DAVENPORT 17,703 4,852 27.4% MARQUETTE 11,480 3,560 31.0% IOWA TOTAL 54,145 16,498 30.5% COLORADO BLACK HAWK (8) 28,943 9,824 33.9% COLORADO CENTRAL STATION (8) 10,413 2,526 24.3% COLORADO TOTAL 39,356 12,350 31.4% INTERNATIONAL BLUE CHIP 2,115 (236) (11.2%) OUR LUCAYA 6,955 1,312 18.9% INTERNATIONAL TOTAL 9,070 1,076 11.9% CORPORATE & OTHER (9) 6,299 (12,327) N/M TOTAL $281,533 $53,532 19.0% Isle of Capri Casinos, Inc. Comparative Financial Highlights by Casino Property (Unaudited) (In thousands) Three Months Ended July 25, 2004 Adjusted Net Revenues Adjusted EBITDA (7) EBITDA (1) Margin% (1) MISSISSIPPI BILOXI $20,297 $4,178 20.6% NATCHEZ 8,531 2,272 26.6% VICKSBURG 13,050 3,166 24.3% LULA 20,798 5,243 25.2% MISSISSIPPI TOTAL 62,676 14,859 23.7% LOUISIANA BOSSIER CITY 29,702 6,586 22.2% LAKE CHARLES 41,735 9,519 22.8% LOUISIANA TOTAL 71,437 16,105 22.5% MISSOURI KANSAS CITY 24,344 5,080 20.9% BOONVILLE 17,570 4,827 27.5% MISSOURI TOTAL 41,914 9,907 23.6% IOWA BETTENDORF 25,738 8,753 34.0% DAVENPORT 17,684 4,856 27.5% MARQUETTE 11,020 3,334 30.3% IOWA TOTAL 54,442 16,943 31.1% COLORADO BLACK HAWK (8) 26,297 10,186 38.7% COLORADO CENTRAL STATION (8) 8,343 521 6.2% COLORADO TOTAL 34,640 10,707 30.9% INTERNATIONAL BLUE CHIP 1,615 (218) -13.5% OUR LUCAYA 6,732 (993) -14.8% INTERNATIONAL 8,347 (1,211) -14.5% TOTAL CORPORATE & OTHER (9) 5,264 (7,271) N/M TOTAL $278,720 $60,039 21.5% Isle of Capri Casinos, Inc. Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Casino Property (Unaudited) (In thousands) Three Months Ended July 24, 2005 Operating Income Depreciation & (Loss) Amortization MISSISSIPPI BILOXI $694 $3,153 NATCHEZ 1,108 1,110 VICKSBURG 2,370 1,204 LULA 2,700 2,207 MISSISSIPPI TOTAL 6,872 7,674 LOUISIANA BOSSIER CITY 1,741 2,465 LAKE CHARLES 4,245 3,716 LOUISIANA TOTAL 5,986 6,181 MISSOURI KANSAS CITY 2,059 1,818 BOONVILLE 4,196 1,149 MISSOURI TOTAL 6,255 2,967 IOWA BETTENDORF 6,343 1,743 DAVENPORT 3,020 1,832 MARQUETTE 2,831 729 IOWA TOTAL 12,194 4,304 COLORADO BLACK HAWK (8) 7,762 2,062 COLORADO CENTRAL STATION (8) 1,532 994 COLORADO TOTAL 9,294 3,056 INTERNATIONAL BLUE CHIP (343) 107 OUR LUCAYA 863 449 INTERNATIONAL TOTAL 520 556 CORPORATE & OTHER (9) (12,891) 531 TOTAL $28,230 $25,269 Isle of Capri Casinos, Inc. Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Casino Property (Unaudited) (In thousands) Three Months Ended July 24, 2005 Operating Adjusted Income Preopening EBITDA (1) Margin% (1) MISSISSIPPI BILOXI $-- $3,847 3.0% NATCHEZ -- 2,218 12.3% VICKSBURG -- 3,574 17.5% LULA -- 4,907 12.7% MISSISSIPPI TOTAL -- 14,546 10.2% LOUISIANA BOSSIER CITY -- 4,206 6.8% LAKE CHARLES -- 7,961 10.7% LOUISIANA TOTAL -- 12,167 9.2% MISSOURI KANSAS CITY -- 3,877 9.4% BOONVILLE -- 5,345 22.8% MISSOURI TOTAL -- 9,222 15.5% IOWA BETTENDORF -- 8,086 25.4% DAVENPORT -- 4,852 17.1% MARQUETTE -- 3,560 24.7% IOWA TOTAL -- 16,498 22.5% COLORADO BLACK HAWK (8) -- 9,824 26.8% COLORADO CENTRAL STATION (8) -- 2,526 14.7% COLORADO TOTAL -- 12,350 23.6% INTERNATIONAL BLUE CHIP -- (236) (16.2%) OUR LUCAYA -- 1,312 12.4% INTERNATIONAL TOTAL -- 1,076 5.7% CORPORATE & OTHER (9) 33 (12,327) N/M TOTAL $33 $53,532 10.0% Isle of Capri Casinos, Inc. Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Casino Property (Unaudited) (In thousands) Three Months Ended July 25, 2004 Operating Income Depreciation & (Loss) Amortization MISSISSIPPI BILOXI $2,229 $1,949 NATCHEZ 1,495 777 VICKSBURG 2,013 1,153 LULA 3,150 2,093 MISSISSIPPI TOTAL 8,887 5,972 LOUISIANA BOSSIER CITY 3,909 2,677 LAKE CHARLES 6,330 3,189 LOUISIANA TOTAL 10,239 5,866 MISSOURI KANSAS CITY 3,083 1,997 BOONVILLE 3,170 1,657 MISSOURI TOTAL 6,253 3,654 IOWA BETTENDORF 7,009 1,744 DAVENPORT 2,659 2,197 MARQUETTE 2,499 835 IOWA TOTAL 12,167 4,776 COLORADO BLACK HAWK (8) 8,470 1,716 COLORADO CENTRAL STATION (8) (46) 567 COLORADO TOTAL 8,424 2,283 INTERNATIONAL BLUE CHIP (327) 54 OUR LUCAYA (1,328) 335 INTERNATIONAL TOTAL (1,655) 389 CORPORATE & OTHER (9) (7,853) 582 TOTAL $36,462 $23,522 Isle of Capri Casinos, Inc. Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Casino Property (Unaudited) (In thousands) Three Months Ended July 25, 2004 Adjusted Operating Preopening EBITDA (1) Income MISSISSIPPI Margin% (1) BILOXI $-- $4,178 11.0% NATCHEZ -- 2,272 17.5% VICKSBURG -- 3,166 15.4% LULA -- 5,243 15.1% MISSISSIPPI TOTAL -- 14,859 14.2% LOUISIANA BOSSIER CITY -- 6,586 13.2% LAKE CHARLES -- 9,519 15.2% LOUISIANA TOTAL -- 16,105 14.3% MISSOURI KANSAS CITY -- 5,080 12.7% BOONVILLE -- 4,827 18.0% MISSOURI TOTAL -- 9,907 14.9% IOWA BETTENDORF -- 8,753 27.2% DAVENPORT -- 4,856 15.0% MARQUETTE -- 3,334 22.7% IOWA TOTAL -- 16,943 22.3% COLORADO BLACK HAWK (8) -- 10,186 32.2% COLORADO CENTRAL STATION (8) -- 521 -0.6% COLORADO TOTAL -- 10,707 24.3% INTERNATIONAL BLUE CHIP 55 (218) -20.2% OUR LUCAYA (993) -19.7% INTERNATIONAL TOTAL 55 (1,211) -19.8% CORPORATE & OTHER (9) -- (7,271) N/M TOTAL $55 $60,039 13.1% 1. EBITDA is "earnings before interest, income taxes, depreciation and amortization." Isle of Capri calculates Adjusted EBITDA at its properties by adding preopening expense, management fees, other charges and non-cash items to EBITDA. 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 and 2) a principal basis of valuing gaming companies. Management uses property level Adjusted EBITDA (Adjusted EBITDA before corporate expense) as the primary measure of the Company's operating properties' performance, including the evaluation of operating personnel. 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. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by net revenues. Fiscal 2006 and 2005 results have been reclassified to reflect the Colorado Grande-Cripple Creek as discontinued operations. Reconciliations of operating income to Adjusted EBITDA and operating income as a percentage of net revenues are included in the financial schedules accompanying this release. A reconciliation of Adjusted EBITDA with the Company's net income is shown below. Three Months Ended July 24, 2005 July 25, 2004 (In thousands) Adjusted EBITDA $53,532 $60,039 (Add)/deduct: Depreciation and amortization 25,269 23,522 Preopening 33 55 Interest expense, net 19,136 17,395 Minority interest 2,056 2,133 Income tax expense 2,996 6,686 Loss (income) from discontinued operations, net of income taxes 58 (362) Net income $3,984 $10,609 2. New development expenses increased approximately $5.7 million mainly due to the $4.0 million payment previously announced in the agreement the Company signed with resort developer Eighth Wonder to manage a casino included in Eighth Wonder's proposed integrated resort complex in Singapore. New development expenses for the three months ended July 24, 2005 also include United Kingdom-related expenses of $2.0 million compared to $0.6 million for the three months ended July 25, 2004. 3. Consolidated net interest expense is comprised of the following components: Three Months Ended July 24, 2005 Blue Restricted Chip & Consolidated Group Colorado Other Interest expense $17,951 $3,485 $209 $21,646 Interest income (557) (17) (499) (1,074) Capitalized interest (652) (628) (156) (1,436) Net interest expense $16,742 $2,841 $(447) $19,136 Three Months Ended July 25, 2004 Interest expense $15,628 2,411 73 $18,112 Interest income (344) (36) (1) (381) Capitalized interest (198) (138) -- (336) Net interest expense $15,086 2,237 72 17,395 Colorado includes the Isle-Black Hawk's and Colorado Central Station- Black Hawk's components of net interest expense. Blue Chip and Other includes Blue Chip-Dudley's, Blue Chip-Wolverhampton's and Blue Chip- Walsall's components of net interest expense. 4. Minority interest represents unrelated third parties' portions of the Isle-Black Hawk's income before income taxes and Colorado Central Station-Black Hawk's net income. 5. The Company's effective tax rate from continuing operations for the quarter ended July 24, 2005 was 42.6% compared to 39.5% for the quarter ended July 25, 2004, which, in each case, excludes an unrelated party's portion of the Colorado Central Station-Black Hawk's income taxes. The increase in effective rate over the comparable prior fiscal period is attributable to the effect of permanent items on full-year projected pre-tax income. 6. On April 25, 2005, the Company sold Colorado Grande-Cripple Creek. As a result, its operations are reflected as discontinued operations. 7. Net revenues are presented net of complimentaries, slot points expense and cash coupon redemptions. Fiscal 2006 and 2005 results have been reclassified to reflect the Colorado Grande-Cripple Creek as discontinued operations. 8. As management fees are eliminated in consolidation, Adjusted EBITDA for the Isle-Black Hawk and the Colorado Central Station-Black Hawk does not include management fees. Fiscal 2006 and 2005 results have been reclassified to reflect the Colorado Grande-Cripple Creek as discontinued operations. The following table shows management fees and Adjusted EBITDA inclusive of management fees for the three months ended July 24, 2005 and July 25, 2004: Three Months Ended July 24, July 25, 2005 2004 (In thousands) Management Fees Isle - Black Hawk $1,335 $1,268 Colorado Central Station 504 264 Adjusted EBITDA with Management Fees Isle - Black Hawk 8,489 8,918 Colorado Central Station 2,022 257 9. For the three months ended July 24, 2005, corporate and other includes net revenues of $6,167 and Adjusted EBITDA of ($316) for Pompano Park. For the three months ended July 25, 2004, corporate and other includes net revenues of $5,147 and Adjusted EBITDA of ($460) for Pompano Park. Isle of Capri Casinos, Inc., a leading developer and owner of gaming and entertainment facilities, operates 15 casinos in 13 locations. The Company owns and operates riverboat and dockside casinos in Biloxi, Vicksburg, Lula and Natchez, Mississippi; Bossier City and Lake Charles (2 riverboats), Louisiana; Bettendorf, Davenport and Marquette, Iowa; and Kansas City and Boonville, Missouri. The Company also owns a 57 percent interest in and operates two land-based casinos in Black Hawk, Colorado. Isle of Capri's international gaming interests include a casino that it operates in Freeport, Grand Bahamas, and a two-thirds ownership interest in casinos in Dudley, Wolverhampton and Walsall, England. The Company also owns and operates Pompano Park Harness Racing Track in Pompano Beach, Florida. As a publicly held company, the Company regularly files reports with the Securities and Exchange Commission (the "SEC"). These reports are required by the Securities Exchange Act of 1934 and include: * Annual Reports on Form 10-K; * Quarterly Reports on Form 10-Q; * Current Reports on Form 8-K; and * All amendments to those reports. The Company's Internet website is http://www.islecorp.com/ . The Company makes its filings available free of charge on its Internet website as soon as reasonably practical after the Company electronically files or furnishes such reports to the SEC. You may read and copy the reports, statements and other information the Company files with the SEC at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20546. You can request copies of these documents by writing to the SEC but must pay photocopying fees. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Its SEC filings are also available to the public on the SEC's Internet site ( http://www.sec.gov/ ). Contact: Allan B. Solomon, Executive Vice President, 561-995-6660 Rex Yeisley, Chief Financial Officer, 228-396-7052 Jill Haynes, Director of Corporate Communications, 228-396-7031 This press release contains forward-looking statements which are subject to change. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" or the negative thereof or variations thereon or similar terminology. 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, permits, weather, 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 10-K for the fiscal year ended April 24, 2005 and Form 10-Q for the fiscal quarters ended since that date. http://www.newscom.com/cgi-bin/prnh/20020502/ISLELOGO http://photoarchive.ap.org/ DATASOURCE: Isle of Capri Casinos, Inc. CONTACT: Allan B. Solomon, Executive Vice President, +1-561-995-6660, or Rex Yeisley, Chief Financial Officer, +1-228-396-7052, or Jill Haynes, Director of Corporate Communications, +1-228-396-7031, all of Isle of Capri Web site: http://www.theislecorp.com/

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