ISLE Isleworth Healthcare Acquisition Corporation

BILOXI, Miss., Feb. 16 /PRNewswire-FirstCall/ -- Isle of Capri Casinos, Inc. (NASDAQ:ISLE) today reported financial results for its third quarter of fiscal 2006 ended January 22, 2006. For the third quarter, the Company reported net income of $4.1 million or $0.13 per diluted common share compared to net income of $3.5 million or $0.11 per diluted common share for the same quarter last year. Included in net income for the quarter ended January 22, 2006, are $3.8 million in net hurricane related pre-tax charges, related to Isle-Biloxi, Isle-Lake Charles, and Pompano Park, and a $2.1 million pre-tax loss on early extinguishment of debt related to Isle-Black Hawk. These two items combined to reduce net income per diluted common share by $0.10. The Company had net revenues of $269.8 million for the quarter ended January 22, 2006, compared to $265.4 million for the same quarter in fiscal 2005, and Adjusted EBITDA(1) of $62.0 million compared to $53.1 million for the same quarter in fiscal 2005. For the first nine months of fiscal 2006, the Company reported net income of $3.9 million, or $0.12 per diluted common share. Net income for the same period in fiscal 2005 was $14.6 million, or $0.47 per diluted common share. Net revenues for the nine months ended January 22, 2006, were $799.3 million, compared to $811.9 million for the comparable period in the prior year. Adjusted EBITDA(1) in the nine-month period was $157.1 million, compared to $161.7 million for the comparable nine-month period in fiscal 2005. "I am pleased with the third quarter results particularly because during this quarter most of the short term challenges facing the Company's southern markets have been resolved. I believe the Company is positioned well going forward, as our expansion work continues with projects in Iowa and Missouri, our rebuilding in Mississippi and new development opportunities in Florida and Pennsylvania," according to chairman and chief executive officer, Bernard Goldstein. Highlights and Updates * Subsequent to the end of the quarter, the Company entered into an agreement to sell its properties in Bossier City, Louisiana and Vicksburg, Mississippi for $240 million cash. Net proceeds from the sale are expected to be used to fund existing development projects and/or pay down debt. The Company expects to record a gain on this transaction. The closing of the transaction, expected to occur during the summer of 2006, is subject to regulatory and other customary closing conditions. * Isle-Biloxi reopened on December 26, 2005, following Hurricane Katrina, with 730 slot machines, a live poker room with nine poker tables, 27 table games, three restaurants and 525 hotel rooms. The casino was the first land-based casino to open since the change in Mississippi gaming legislation. Subsequent to the end of the quarter, Isle-Biloxi added an additional 220 slot machines and a European spa. * The Company signed a joint development agreement with Lemieux Group LP that includes a provision for Isle to fund a $290 million new multi-purpose arena and pursue a gaming license for 3,000 slot machines in Pittsburgh, Pennsylvania. The new multi-purpose arena and gaming facility are part of a larger billion-dollar effort known as Pittsburgh First to redevelop the Lower Hill and Uptown Districts in conjunction with the Pittsburgh Penguins and a development partner. This proposal is one of three applications under consideration by the Pennsylvania Gaming Control Board for a single license with a decision expected by the end of calendar 2006 or early 2007. If the license is granted to the Isle of Capri, the Company anticipates that the construction of the project would begin shortly thereafter with a temporary casino also a possibility. * Pompano Park Harness Track reopened for live racing on December 2, 2005 following Hurricane Wilma. In early December, the Florida legislature passed legislation to allow 1,500 slot machines at pari-mutuel facilities in Broward County including the Company's Pompano Park Harness Track. The Company has proceeded with the design for the development of an approximately $125 million racino at Pompano Park and further development is awaiting operating rules and regulations from the state and the satisfaction of other contingencies. * The Company announced plans for an $85 million expansion project at its Kansas City, Missouri property. The expansion project will improve guest traffic patterns and renovate existing gaming space. Exterior plans include a new, updated entryway, exterior facade refinishing, reconfiguration of existing parking, and the addition of 1,000 parking spaces. Plans for the casino interior include expanding and renovating the gaming area including 400 additional slots and adding an entertainment venue to seat at least 1,000 guests, as well as additional food and beverage amenities. The Kansas City expansion project is subject to negotiation of an amended lease and development agreement and receipt of necessary permits and approvals. * The new 162-room Colorado Central Station Hotel in Black Hawk, Colorado opened on December 24, 2005 ahead of schedule. Colorado Central Station also added a food court with Quizno's, Station Burger and Mexican Grill, as well as approximately 250 additional parking spaces. Construction on the extension of Main Street continues just south of the Isle-Black Hawk connecting to Colorado Route 119 with completion expected in spring 2006. * The Inn at Isle-Lake Charles reopened in late November and brought the number of rooms at the property back to 493. The Company also opened a new entryway to the Crown gaming vessel. * The Company announced that it will relocate its corporate headquarters to the St. Louis County municipality of Creve Coeur while maintaining a regional presence in Biloxi, Mississippi. The Company plans to relocate approximately 150 corporate positions. The relocation process will begin in early summer 2006. "Our new casino in Biloxi is an example of the direction our product is taking. I am proud of our team members in the southern markets for overcoming significant challenges both personally and professionally in order to get our properties open and operating, " according to Timothy Hinkley, president and chief operating officer. Operational Review of the Third Quarter Fiscal 2006 Compared to the Third Quarter Fiscal 2005 In Mississippi, the Company's four operations accounted for 23.6% of its net revenues. Isle-Biloxi's net revenues were down from the prior year period principally because the casino was closed for the first two months of the quarter. However, Adjusted EBITDA(1) at the property was up significantly over the same quarter in fiscal 2005 due to reduced competition in the market. The Isle-Biloxi recorded an insurance receivable in the third quarter in the amount equal to the operating and incremental expenses incurred until the casino reopened on December 26, 2005. The net effect of this is that Isle-Biloxi reported no Adjusted EBITDA(1) contribution for the period October 24, 2005 through December 25, 2005. Isle-Biloxi will record any income from business interruption proceeds when the insurance carriers have agreed to the amount. Isle-Natchez experienced increases in both net revenues and Adjusted EBITDA(1) primarily resulting from population shifts into its market area. Isle-Vicksburg also showed increases in both net revenues and Adjusted EBITDA(1) as compared to the prior year due to growth in its market area, improved marketing efforts and cost controls. Isle-Lula's net revenues and Adjusted EBITDA(1) both increased due to improved marketing programs and more efficient management of expenses. In Louisiana, the Company's two properties contributed 25.7% of its net revenues. Isle-Lake Charles experienced an increase in net revenues and Adjusted EBITDA(1) due to growth in the overall market. For the three month period ended January 22, 2006, the Isle-Lake Charles has recorded a $3.3 million expense for estimated property damage, included in the line item Hurricane related charges, net on the income statement, because the Company expects the property damage insurance proceeds to be less than such costs. Isle-Lake Charles will record any income from expected business interruption proceeds when the insurance carriers have agreed to the amount. Isle-Bossier City showed a decrease in net revenues and Adjusted EBITDA(1) due mostly to increased competition from, and expansion of, Native American gaming in Oklahoma. In Missouri, the Company's two properties contributed 13.9% of its net revenues. Isle-Kansas City's net revenues and Adjusted EBITDA(1) were down due to a decreased gaming patron count caused by the completion of competitors' expansion projects in the market. Isle-Boonville's net revenues increased, but Adjusted EBITDA(1) decreased slightly due to construction disruption from the property's new hotel. Construction of the 140-room hotel continues on schedule and is expected to open in the spring of 2006. In Iowa, the Company's three casinos contributed 17.6% of its net revenues. Both Isle-Bettendorf and Rhythm City-Davenport showed a decline in both net revenues and Adjusted EBITDA(1) due to increased competition from surrounding markets and an increase in marketing spend. Construction continues at the Isle-Bettendorf of a new hotel with additional restaurants. Isle-Marquette showed a slight increase in net revenues and slightly lower Adjusted EBITDA(1). Additionally in Iowa, the Company continues construction on a new casino-hotel project in Waterloo. In Colorado, the Company's two Black Hawk casino operations contributed 14.2% of its net revenues. The properties saw an increase in net revenues and Adjusted EBITDA(1) due to completion of our expansion projects and the reduction of construction disruption compared to prior year. In Florida, Pompano Park recorded a $0.5 million expense for estimated property damage, included in the line item Hurricane related charges, net on the income statement, because the Company expects the property damage insurance proceeds to be less than such costs. Our international operations accounted for approximately 3.2% of our overall revenues. Isle-Our Lucaya experienced increases in net revenues and a positive Adjusted EBITDA(1) compared to a negative Adjusted EBITDA(1) in the prior year, primarily due to closure in the prior year related to hurricanes. The increase in Corporate expenses are primarily related to an increase in insurance costs and non-recurring legal expenses. Isle of Capri Casinos, Inc. Consolidated Statements of Income (Unaudited) (In thousands, except per share amounts) Three Months Ended Nine Months Ended January 22, January 23, January 22, January 23, 2006 2005 2006 2005 Revenues: Casino $276,987 $266,700 $813,417 $822,344 Hotel, pari-mutuel, food, beverage & other 47,149 52,230 154,198 157,683 Gross revenues 324,136 318,930 967,615 980,027 Less promotional allowances 54,288 53,504 168,291 168,110 Net revenues 269,848 265,427 799,324 811,917 Operating and other expenses: Properties 197,516 203,505 605,209 625,188 New development (2) 3,519 3,668 11,778 8,914 Corporate 6,796 5,157 25,214 16,083 Preopening 40 - 224 247 Other Charges - 1,621 - 1,621 Hurricane related charges, net (3) 3,759 - 4,959 - Depreciation and amortization 25,384 23,510 76,036 72,757 Total operating and other expenses 237,014 237,461 723,420 724,810 Operating income 32,834 27,965 75,904 87,107 Net interest expense (4) (20,967) (18,463) (60,405) (54,815) Loss on early extinguishment of debt (11) (2,110) - (2,110) - Minority interest (5) (439) (1,440) (4,387) (5,122) Income before income taxes 9,318 8,063 9,002 27,169 Income tax expense (6) 5,185 4,568 5,046 13,243 Income from continuing operations 4,133 3,494 3,956 13,926 Income (loss) from discontinued operations (including minority interest), net of income taxes (7) - 36 (58) 661 Net income $4,133 $3,530 $3,898 $14,587 Net income per basic common share $0.14 $0.12 $0.13 $0.49 Net income per diluted common share $0.13 $0.11 $0.12 $0.47 Weighted average basic common shares 29,951 29,675 30,054 29,632 Weighted average diluted common shares 31,042 31,037 31,292 30,776 Selected Consolidated Balance Sheet Accounts (In Thousands) January 22, 2006 April 24, 2005 (Unaudited) Cash and cash equivalents $107,804 $146,743 Property and equipment, net 1,070,796 1,026,906 Debt 1,230,613 1,156,118 Stockholders' equity 259,920 261,396 Isle of Capri Casinos, Inc. Comparative Financial Highlights by Casino Property (Unaudited) (In thousands) Three Months Ended January 22, January 23, 2006 2005 Net Adjusted Adjusted Net Adjusted Adjusted Revenues EBITDA EBITDA Revenues EBITDA EBITDA (8) (1) Margin % (8) (1) Margin % MISSISSIPPI BILOXI $14,554 $7,854 54.0% $19,672 $4,270 21.7% NATCHEZ 11,945 4,597 38.5% 8,636 1,903 22.0% VICKSBURG 16,727 6,191 37.0% 13,412 3,157 23.5% LULA 20,341 5,369 26.4% 19,803 4,216 21.3% MISSISSIPPI TOTAL 63,567 24,011 37.8% 61,523 13,546 22.0% LOUISIANA BOSSIER CITY 24,166 4,765 19.7% 24,973 5,748 23.0% LAKE CHARLES 45,153 13,042 28.9% 44,163 11,334 25.7% LOUISIANA TOTAL 69,319 17,807 25.7% 69,136 17,082 24.7% MISSOURI KANSAS CITY 20,378 3,770 18.5% 22,310 4,122 18.5% BOONVILLE 17,117 4,717 27.6% 16,977 4,972 29.3% MISSOURI TOTAL 37,495 8,487 22.6% 39,287 9,094 23.1% IOWA BETTENDORF 22,758 6,921 30.4% 23,719 8,289 34.9% DAVENPORT 15,654 3,563 22.8% 16,145 3,903 24.2% MARQUETTE 9,129 1,746 19.1% 8,971 1,826 20.4% IOWA TOTAL 47,541 12,230 25.7% 48,835 14,018 28.7% COLORADO BLACK HAWK (9) 27,987 8,933 31.9% 24,760 8,526 34.4% COLORADO CENTRAL STATION (9) 10,360 1,869 18.0% 7,228 282 3.9% COLORADO TOTAL 38,347 10,802 28.2% 31,988 8,808 27.5% INTERNATIONAL BLUE CHIP 2,094 (331) (15.8%) 2,237 (520) (23.2%) OUR LUCAYA 6,408 286 4.5% 4,608 (1,288) (28.0%) INTERNATIONAL TOTAL 8,502 (45) (0.5%) 6,845 (1,808) (26.4%) CORPORATE & OTHER (10) 5,078 (11,274) N/M 7,811 (7,645) N/M TOTAL $269,849 $62,018 23.0% $265,425 $53,095 20.0% Isle of Capri Casinos, Inc. Comparative Financial Highlights by Casino Property (Unaudited) (In thousands) Nine Months Ended January 22, January 23, 2006 2005 Net Adjusted Adjusted Net Adjusted Adjusted Revenues EBITDA EBITDA Revenues EBITDA EBITDA (8) (1) Margin % (8) (1) Margin % MISSISSIPPI BILOXI $48,361 $13,935 28.8% $58,438 $11,304 19.3% NATCHEZ 32,060 10,389 32.4% 25,398 5,917 23.3% VICKSBURG 43,991 13,609 30.9% 40,045 9,362 23.4% LULA 60,711 13,810 22.7% 60,973 13,832 22.7% MISSISSIPPI TOTAL 185,123 51,743 28.0% 184,854 40,415 21.9% LOUISIANA BOSSIER CITY 73,843 14,210 19.2% 81,340 17,977 22.1% LAKE CHARLES 112,582 25,632 22.8% 127,967 29,981 23.4% LOUISIANA TOTAL 186,425 39,842 21.4% 209,307 47,958 22.9% MISSOURI KANSAS CITY 63,728 11,247 17.6% 70,144 13,518 19.3% BOONVILLE 53,480 15,316 28.6% 52,644 15,102 28.7% MISSOURI TOTAL 117,208 26,563 22.7% 122,788 28,620 23.3% IOWA BETTENDORF 71,321 21,654 30.4% 75,010 24,774 33.0% DAVENPORT 50,199 12,281 24.5% 51,745 13,259 25.6% MARQUETTE 31,806 8,128 25.6% 31,058 7,987 25.7% IOWA TOTAL 153,326 42,063 27.4% 157,813 46,020 29.2% COLORADO BLACK HAWK (9) 86,453 28,653 33.1% 76,605 27,564 36.0% COLORADO CENTRAL STATION (9) 30,882 7,114 23.0% 23,644 1,212 5.1% COLORADO TOTAL 117,335 35,767 30.5% 100,249 28,776 28.7% INTERNATIONAL BLUE CHIP 6,007 (1,131) (18.8%) 5,685 (1,019) (17.9%) OUR LUCAYA 17,935 1,290 7.2% 13,878 (4,411) (31.8%) INTERNATIONAL TOTAL 23,942 159 0.7% 19,563 (5,430) (27.8%) CORPORATE & OTHER(10) 15,964 (39,013) N/M 17,342 (24,628) N/M TOTAL $799,323 $157,124 19.7% $811,916 $161,731 19.9% Isle of Capri Casinos, Inc. Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Casino Property (Unaudited) (In thousands) Three Months Ended January 22, 2006 Hurricane Operating Depreci- Related Operating Income ation & Charges, Pre- Other Adjusted Income (Loss) Amorti- net opening Charges EBITDA Margin% zation (1) (1) MISSISSIPPI BILOXI $5,789 $2,096 $(31) $- $- $7,854 39.8% NATCHEZ 3,744 849 4 - - 4,597 31.3% VICKSBURG 4,910 1,281 - - - 6,191 29.4% LULA 2,900 2,469 - - - 5,369 14.3% MISSISSIPPI TOTAL 17,343 6,695 (27) - - 24,011 27.3% LOUISIANA BOSSIER CITY 2,202 2,563 - - - 4,765 9.1% LAKE CHARLES 5,456 4,303 3,283 - - 13,042 12.1% LOUISIANA TOTAL 7,658 6,866 3,283 - - 17,807 11.0% MISSOURI KANSAS CITY 2,123 1,647 - - - 3,770 10.4% BOONVILLE 3,620 1,097 - - - 4,717 21.1% MISSOURI TOTAL 5,743 2,744 - - - 8,487 15.3% IOWA BETTENDORF 5,047 1,874 - - - 6,921 22.2% DAVENPORT 1,794 1,769 - - - 3,563 11.5% MARQUETTE 973 773 - - - 1,746 10.7% IOWA TOTAL 7,814 4,416 - - - 12,230 16.4% COLORADO BLACK HAWK (9) 6,546 2,387 - - - 8,933 23.4% COLORADO CENTRAL STATION (9) 702 1,167 - - - 1,869 6.8% COLORADO TOTAL 7,248 3,554 - - - 10,802 18.9% INTERNATIONAL BLUE CHIP (434) 103 - - - (331) (20.7%) OUR LUCAYA (118) 401 3 - - 286 (1.8%) INTERNATIONAL TOTAL (552) 504 3 - - (45) (6.5%) CORPORATE & OTHER (10) (12,421) 607 500 40 - (11,274) N/M TOTAL $32,833 $25,386 $3,759 $40 $- $62,018 12.2% Isle of Capri Casinos, Inc. Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Casino Property (Unaudited) (In thousands) Three Months Ended January 23, 2005 Operating Operating Depreciation Income Income & Pre- Other Adjusted Margin% (Loss) Amortization opening Charges EBITDA (1) (1) MISSISSIPPI BILOXI $2,232 $2,038 $- $- $4,270 11.3% NATCHEZ 1,054 849 - - 1,903 12.2% VICKSBURG 2,009 1,148 - - 3,157 15.0% LULA 1,981 2,235 - - 4,216 10.0% MISSISSIPPI TOTAL 7,276 6,270 - - 13,546 11.8% LOUISIANA BOSSIER CITY 3,119 2,629 - - 5,748 12.5% LAKE CHARLES 7,834 3,500 - - 11,334 17.7% LOUISIANA TOTAL 10,953 6,129 - - 17,082 15.8% MISSOURI KANSAS CITY 2,274 1,848 - - 4,122 10.2% BOONVILLE 3,656 1,316 - - 4,972 21.5% MISSOURI TOTAL 5,930 3,164 - - 9,094 15.1% IOWA BETTENDORF 6,444 1,845 - - 8,289 27.2% DAVENPORT 1,953 1,950 - - 3,903 12.1% MARQUETTE 1,102 724 - - 1,826 12.3% IOWA TOTAL 9,499 4,519 - - 14,018 19.5% COLORADO BLACK HAWK (9) 6,724 1,802 - - 8,526 27.2% COLORADO CENTRAL STATION (9) (354) 636 - - 282 (4.9%) COLORADO TOTAL 6,370 2,438 - - 8,808 19.9% INTERNATIONAL BLUE CHIP (572) 52 - - (520) (25.6%) OUR LUCAYA (1,686) 398 - - (1,288) (36.6%) INTERNATIONAL TOTAL (2,258) 450 - - (1,808) (33.0%) CORPORATE & OTHER (10) (9,806) 540 - 1,621 (7,645) N/M TOTAL $27,964 $23,510 $- $1,621 $53,095 10.5% Isle of Capri Casinos, Inc. Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Casino Property (Unaudited) (In thousands) Nine Months Ended January 22, 2006 Hurricane Operating Depreci- Related Operating Income ation & Charges, Pre- Other Adjusted Income (Loss) Amorti- net opening Charges EBITDA Margin% zation (1) (1) MISSISSIPPI BILOXI $5,691 $8,275 $(31) $- $- $13,935 11.8% NATCHEZ 7,361 3,024 4 - - 10,389 23.0% VICKSBURG 9,955 3,654 - - - 13,609 22.6% LULA 6,839 6,971 - - - 13,810 11.3% MISSISSIPPI TOTAL 29,846 21,924 (27) - - 51,743 16.1% LOUISIANA BOSSIER CITY 6,616 7,594 - - - 14,210 9.0% LAKE CHARLES 9,274 11,875 4,483 - - 25,632 8.2% LOUISIANA TOTAL 15,890 19,469 4,483 - - 39,842 8.5% MISSOURI KANSAS CITY 6,030 5,217 - - - 11,247 9.5% BOONVILLE 12,007 3,309 - - - 15,316 22.5% MISSOURI TOTAL 18,037 8,526 - - - 26,563 15.4% IOWA BETTENDORF 16,225 5,429 - - - 21,654 22.7% DAVENPORT 6,906 5,375 - - - 12,281 13.8% MARQUETTE 5,893 2,235 - - - 8,128 18.5% IOWA TOTAL 29,024 13,039 - - - 42,063 18.9% COLORADO BLACK HAWK (9) 21,973 6,680 - - - 28,653 25.4% COLORADO CENTRAL STATION (9) 3,921 3,193 - - - 7,114 12.7% COLORADO TOTAL 25,894 9,873 - - - 35,767 22.1% INTERNATIONAL BLUE CHIP (1,445) 314 - - - (1,131) (24.1%) OUR LUCAYA 29 1,258 3 - - 1,290 0.2% INTERNATIONAL TOTAL (1,416) 1,572 3 - - 159 (5.9%) CORPORATE & OTHER (10) (41,373) 1,636 500 224 - (39,013) N/M TOTAL $75,902 $76,039 $4,959 $224 $- $157,124 9.5% Isle of Capri Casinos, Inc. Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Casino Property (Unaudited) (In thousands) Nine Months Ended January 23, 2005 Operating Operating Depreciation Income Income & Pre- Other Adjusted Margin% (Loss) Amortization opening Charges EBITDA (1) (1) MISSISSIPPI BILOXI $5,191 $6,113 $- $- $11,304 8.9% NATCHEZ 3,471 2,446 - - 5,917 13.7% VICKSBURG 5,894 3,468 - - 9,362 14.7% LULA 5,155 8,677 - - 13,832 8.5% MISSISSIPPI TOTAL 19,711 20,704 - - 40,415 10.7% LOUISIANA BOSSIER CITY 10,096 7,881 - - 17,977 12.4% LAKE CHARLES 20,045 9,936 - - 29,981 15.7% LOUISIANA TOTAL 30,141 17,817 - - 47,958 14.4% MISSOURI KANSAS CITY 7,804 5,714 - - 13,518 11.1% BOONVILLE 9,836 5,266 - - 15,102 18.7% MISSOURI TOTAL 17,640 10,980 - - 28,620 14.4% IOWA BETTENDORF 19,370 5,404 - - 24,774 25.8% DAVENPORT 7,855 5,404 - - 13,259 15.2% MARQUETTE 5,623 2,364 - - 7,987 18.1% IOWA TOTAL 32,848 13,172 - - 46,020 20.8% COLORADO BLACK HAWK (9) 22,288 5,276 - - 27,564 29.1% COLORADO CENTRAL STATION (9) (652) 1,864 - - 1,212 (2.8%) COLORADO TOTAL 21,636 7,140 - - 28,776 21.6% INTERNATIONAL BLUE CHIP (1,427) 161 247 - (1,019) (25.1%) OUR LUCAYA (5,510) 1,099 - - (4,411) (39.7%) INTERNATIONAL TOTAL (6,937) 1,260 247 - (5,430) (35.5%) CORPORATE & OTHER(10) (27,933) 1,684 - 1,621 (24,628) N/M TOTAL $87,106 $72,757 $247 $1,621 $161,731 10.7% 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 Nine Months Ended January 22, January 23, January 22, January 23, 2006 2005 2006 2005 (In thousands) Adjusted EBITDA $62,018 $53,095 $157,124 $161,731 (Add)/deduct: Depreciation and amortization 25,384 23,510 76,036 72,757 Hurricane related charges, net (3) 3,759 - 4,959 - Preopening 40 - 224 247 Other Charges - 1,621 - 1,621 Interest expense, net 20,967 18,463 60,405 54,815 Loss on early extinguishment of debt 2,110 - 2,110 - Minority interest 439 1,440 4,387 5,122 Income tax expense 5,185 4,568 5,046 13,243 Loss (income) from discontinued operations, net of income taxes - (36) 58 (661) Net income $4,133 $3,529 $3,898 $14,587 2. New development expenses include incremental costs incurred pursuing new opportunities within the industry. Such costs include, but are not limited to, legal and other professional fees, application fees, as well as personnel and travel costs. New development expenses for the three and nine months ended January 22, 2006, also include UK related expenditures of $1.6 million and $4.8 million, respectively, compared to $1.5 million and $3.4 million for the three and nine months ended January 23, 2005. 3. Hurricane related charges, net, include impairment charges for assets damaged or destroyed by hurricanes, incremental costs incurred related to hurricanes and operating costs related to periods affected by hurricanes. This account also includes anticipated recoveries expected from our insurance carriers related to property damage, incremental costs and operating expenses. When the Company and its insurance carriers agree on the final amount of the insurance proceeds, the Company will also record any related gain in this account. Any lost profit recoveries will be recognized when agreed to with the insurance carrier and will be reflected in the related properties revenue and Adjusted EBITDA(1). 4. Consolidated net interest expense is comprised of the following components: Restricted Other Group Colorado Unrestricted Consolidated (In thousands) Three Months Ended January 22, 2006 Interest expense $19,467 $3,296 $199 $22,962 Interest income (446) (26) (422) (894) Capitalized interest (381) (415) (305) (1,101) Net interest expense $18,640 $2,855 $(528) $20,967 Three Months Ended January 23, 2005 Interest expense $17,176 $2,731 $166 $20,073 Interest income (496) (8) (25) (528) Capitalized interest (604) (477) - (1,081) Net interest expense $16,077 $2,246 $141 $18,463 Nine Months Ended January 22, 2006 Interest expense $55,844 $10,619 $628 $67,091 Interest income (1,634) (96) (1,330) (3,060) Capitalized interest (1,360) (1,554) (712) (3,626) Net interest expense $52,850 $8,969 $(1,414) $60,405 Nine Months Ended January 23, 2005 Interest expense $49,765 $7,847 $354 $57,966 Interest income (1,107) (58) (37) (1,202) Capitalized interest (1,072) (877) - (1,949) Net interest expense $47,586 $6,912 $317 $54,815 Colorado includes the Isle-Black Hawk's and Colorado Central Station-Black Hawk's components of net interest expense. Other Unrestricted includes Blue Chip, other United Kingdom entities and Capri Insurance Corporation's components of net interest expense. 5. 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. 6. The Company's effective tax rate from continuing operations for the nine month period ending January 22, 2006 was 54.4% compared to 46.6% for the nine month period ending January 23, 2005, which, in each case, excludes an unrelated party's portion of the Colorado Central Station-Black Hawk's income taxes. This increase in effective rate over the comparable prior fiscal period is attributable to the effect of permanent items on lower forecasted earnings for the entire fiscal year. 7. On April 25, 2005, the Company sold Colorado Grande-Cripple Creek. As a result, its operations are reflected as discontinued operations. 8. 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 a discontinued operation. 9. 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 and nine months ended January 22, 2006 and January 23, 2005: Three Months Ended Nine Months Ended January 22, January 23, January 22, January 23, 2006 2005 2006 2005 (In thousands) Management Fees Isle - Black Hawk $1,293 $1,211 $3,977 $3,683 Colorado Central Station 471 214 1,468 734 Adjusted EBITDA with Management Fees Isle - Black Hawk 7,640 7,315 24,675 23,881 Colorado Central Station 1,398 67 5,646 478 10. For the three months ended January 22, 2006 corporate and other includes net revenues of $5.1 million and Adjusted EBITDA of $(0.8) million for Pompano Park. For the nine months ended January 22, 2006, corporate and other includes net revenues of $15.9 million and Adjusted EBITDA of $(2.2) million for Pompano Park. For the three months ended January 23, 2005, corporate and other includes net revenues of $6.6 million and Adjusted EBITDA of $(0.0) million for Pompano Park. For the nine months ended January 23, 2005, corporate and other includes net revenues of $15.9 million and Adjusted EBITDA of $(1.1) million for Pompano Park. 11. On October 24, 2005, Isle Black-Hawk entered into a $240 million credit agreement to replace an existing facility. As a result of this transaction Isle Black-Hawk expensed the unamortized debt issuance costs related to its previous credit agreement. 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 Donn Mitchell, Chief Financial Officer, 228-396-7052 Jill Haynes, Director of Corporate Communications, 228-396-7031 http://www.islecorp.com/ 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. FCMN Contact: kim_ransom@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 Financial Officer, +1-228-396-7052, or Jill Haynes, Director of Corporate Communications, +1-228-396-7031, all of Isle of Capri Casinos, Inc. Web site: http://www.islecorp.com/

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