Isle of Capri Casinos, Inc. Provides Hurricane Update and Revises Second Quarter Earnings Estimate
November 03 2005 - 5:18PM
PR Newswire (US)
BILOXI, Miss., Nov. 3 /PRNewswire-FirstCall/ -- Isle of Capri
Casinos, Inc. on Thursday announced that it expects fiscal second
quarter earnings for the company to be below the low end of its
August 12, 2005 (pre-Katrina) guidance of a $.01 per share loss.
Due primarily to the effect on its business of Hurricanes Katrina
and Rita, the company expects to report a second quarter loss of
between $.03 and $.07 per share. The company does not expect that
the effect of the hurricanes will give rise to any debt covenant or
liquidity issues. Hurricane recovery: The Isle-Biloxi's existing
casino barge and a planned new barge, which was under construction,
were both destroyed by Hurricane Katrina, which struck the
Mississippi/Louisiana gulf coast areas on August 29, 2005. The
Isle-Biloxi's hotel has reopened and is primarily housing emergency
and relief workers. Subject to receipt of necessary approvals, the
company currently expects to have an interim casino with
approximately 1,100 gaming positions opened and operating within
the next 90 days. The Isle-Lake Charles property was closed for 16
days following Hurricane Rita, which struck the area on September
22, 2005. The Isle-Lake Charles sustained moderate damage and was
reopened on October 8, 2005. Subsequent to the end of the second
quarter, Pompano Park Harness Track was closed on October 24, 2005,
as Hurricane Wilma approached South Florida. The company is still
in the process of estimating the extent of damage to the barns,
clubhouse and grandstand structures. The track will remain closed
until repairs are completed. Insurance update: The company is in
the process of working with its insurers and independent adjusters
to reach an agreement on the amount of business interruption
payments the company can expect in addition to its property damage
claims. Details about the company's insurance coverage and the
potential financial impacts are set forth below. The company's
property damage insurance coverage covers the replacement cost of
damaged/destroyed property after a deductible. The company's
maximum deductible is equal to 2% of the insured value for each
incident. Based on current estimates, the net insurance proceeds
are expected to equal or exceed the net book value of the impacted
assets. Isle's insurance policies provide coverage for interruption
to the company's operation, including lost profits. The policies
also reimburse the company for other costs and expenses it has
incurred relating to the losses and damages suffered by the
hurricanes. In these instances the coverage provides for payments
after a 24-hour closure. To date the company has collected an
advance on insurance proceeds of $12.5 million related to Hurricane
Katrina. These proceeds have had no income statement impact.
Financial Impact: At the Isle-Biloxi, the net insurance payments
related to property damage are expected to exceed the net book
value of the damaged assets. Therefore, the company will record an
impairment charge in the quarter, which will be offset by the
expected reimbursement under its insurance policies related to that
impairment. To the extent the expected net insurance payments
exceed the net book value of the damaged assets, the excess will be
recorded as income in the period the amounts are agreed to by the
insurance carriers. At the Isle-Lake Charles, the damage was not as
extensive and the net insurance payments related to property damage
may not exceed the net book value of the damaged assets. This would
require the company to record an expense for an amount up to the
deductible. The company is still working with the insurers and
adjusters to determine the extent of the damage and the expected
proceeds. To the extent the expected net insurance payments exceed
the net book value of the damaged assets, the excess will be
recorded as income in the period the amounts are agreed to by the
insurance carriers. The company has recognized a receivable for its
other costs incurred, net of applicable deductibles, for the amount
of the actual costs incurred during the quarter and expected to be
reimbursed by the insurance carriers. Recovery of lost profits from
business interruption insurance is expected to be recorded when
realized. 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 land-based casinos in Black Hawk (two
casinos), Colorado. Isle of Capri's international gaming interests
include a casino that it operates in Freeport, Grand Bahama and a
two-thirds ownership interest in casinos in Dudley, Walsall and
Wolverhampton, England. The company also owns and operates Pompano
Park Harness Racing Track in Pompano Beach, Florida. 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., Allan B. Solomon, Executive
Vice President-561.995.6660 Donn Mitchell, Chief Accounting
Officer-228.396.7030 Jill Haynes, Director of Corporate
Communication-228.396.7031 NOTE: Other Isle of Capri Casinos, Inc.
press releases and a corporate profile are available at
http://www.prnewswire.com/ . Isle of Capri Casinos, Inc.'s home
page is http://www.islecorp.com/ .
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 Donn Mitchell, Chief Accounting Officer,
+1-228-396-7030, or Jill Haynes, Director of Corporate
Communication, +1-228-396-7031, all of Isle of Capri Casinos, Inc.
Web site: http://www.theislecorp.com/
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