ISLE Isleworth Healthcare Acquisition Corporation

Isle Of Capri Casinos, Inc. Announces Second Quarter Results BILOXI, Miss., Nov. 13 /PRNewswire-FirstCall/ -- Isle of Capri Casinos, Inc. today reported financial results for the second quarter and six months ended October 26, 2003. For the second quarter, the company reported net income of $10.7 million, or $0.35 per diluted common share compared to net income of $6.8 million, or $0.22 per diluted common share for the same quarter last year. For the second quarter ended October 26, 2003, the company reported second quarter net revenues of $269.7 million, compared to $260.1 million for the same period in fiscal 2003, and Adjusted EBITDA(1) of $57.9 million, compared to $51.9 million for the same period in fiscal 2003. For the first six months of fiscal 2004, the company reported net income of $24.3 million, or $0.79 per diluted share. This compares to net income for the same period in fiscal 2003, of $19.0 million, or $0.62 per diluted share. Net revenues for the six months ended October 26, 2003, were $555.4 million, up from $536.8 million for the comparable period in the previous year. Adjusted EBITDA(1) in the six-month period was $125.6 million, an increase of $12.8 million, or 11.3%, over the prior year six-month period Adjusted EBITDA(1) of $112.8 million. See tables and footnotes on the following pages for further details regarding the above operating results. (1) See Adjusted EBITDA defined in footnote (7) of Comparative Financial Highlights. Second Quarter Results Bernard Goldstein, Isle of Capri Casinos, Inc. chairman and chief executive officer, said, "Once again our business model produced positive results in a quarter in which we faced increased competition and markets that did not grow as anticipated. Our leadership role in the regional gaming industry continues as we recently received approval as the first U.S. company to own a casino in the United Kingdom. We look forward to serving as a leader internationally as we bring IsleStyle to Great Britain." Timothy M. Hinkley, Isle of Capri Casinos, Inc. president and chief operating officer, said, "Again, the company's geographic diversity has given us strength. Although we experienced a slight decline in the Louisiana and Mississippi markets, the numbers in our northern region allowed us to produce another good quarter." The company has continued with its slot improvement plan, introduced in 2000, to provide a better slot experience to Isle customers through upgrades such as state-of-the-art machines and systems. The plan, which has allowed the company to serve as a leader in cashless play, includes ticket-in/ticket- out technology to be installed in approximately 50% of the Isle's slot machines by the end of the fiscal year. The company's IsleOne(TM) Players Club, an industry-leading members' club, continued growth in terms of acceptance and loyalty with players. Revenue from club members, at the same properties, quarter over quarter increased by approximately 6.4%. This quarter, the company announced that it became the first U.S. gaming company to receive gaming board approval to own casinos in the United Kingdom. By the end of calendar 2003, the Isle of Capri expects to acquire the majority interest in Blue Chip Casinos PLC, which will operate a pub-style casino in Dudley, England, near Birmingham. This approval positions the Isle of Capri Casinos to potentially expand gaming operations upon reform of UK gaming regulations. The company also announced that it completed agreements to lease and operate a casino at the Our Lucaya Beach & Golf Resort at Freeport, Grand Bahama. The company expects the casino project to be open by this winter. The Isle-Biloxi's 1,000-space parking garage is on track to be completed by December. The parking garage is the first phase of a $79 million expansion plan for the Mississippi casino resort, which includes an additional 400 hotel rooms, an Isle-branded Kitt's Kitchen restaurant, an upgraded Calypso's Buffet, and a 12,000-square-foot convention/entertainment center. The project is expected to be completed by spring 2005. It is expected that the Isle-Bossier City's new 265-room hotel will be open before New Year's Eve, completing the property's $50 million improvement plan. The expansion also includes a Kitt's Kitchen restaurant, an upgraded Calypso's Buffet, a new pool, deck and spa, and a 12,000-square-foot convention/entertainment center. The improvement plan continues as the Isle-Kansas City completes a $10 million expansion this fall. New amenities include 12,000 square-feet of additional gaming space, 400 new slot machines with ticket-in/ticket-out technology, and a themed bar. The video lottery terminal referendum was soundly defeated in Colorado on November 4, allowing the company to proceed with its $75 million expansion plan at its Black Hawk properties. Construction is now expected to begin this winter. The Isle-Black Hawk and the Colorado Central Station-Black Hawk expansion will include 15,000 square-feet of additional gaming space, a skywalk to connect the properties, and a new 1,200-space parking garage, and is expected to be completed by the end of calendar 2004. The expansion also includes a 160-room hotel expansion, which will open in approximately 24 months. The lower Main Street extension, to be funded with special improvement district bonds, is expected to be completed by August 2005. Isle of Capri Casinos, Inc. Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts) Three Months Ended Six Months Ended October 26, October 27, October 26, October 27, 2003 2002 2003 2002 Revenues: Casino $ 275,527 $ 257,094 $ 564,310 $ 527,179 Hotel, pari-mutuel, food, beverage & other 49,252 53,783 103,487 111,218 Gross revenue 324,779 310,877 667,797 638,397 Less promotional allowances 55,113 50,764 112,380 101,621 Net revenues 269,666 260,113 555,417 536,776 Operating and other expenses: Properties 203,312 201,165 415,138 411,994 Corporate and new development (1) 8,467 7,010 14,700 11,952 Preopening (2) 307 -- 598 -- Depreciation and amortization 21,437 18,277 43,054 36,261 Total operating and other expenses 233,523 226,452 473,490 460,207 Operating income 36,143 33,661 81,927 76,569 Net interest expense (3) (20,642) (20,650) (41,740) (41,690) Minority interest (4) (2,657) (2,352) (5,490) (4,910) Income before income taxes 12,844 10,659 34,697 29,969 Income tax expense (5) 2,134 3,872 10,435 11,009 Net income $ 10,710 $ 6,787 $ 24,262 $ 18,960 Net income per diluted common share $ 0.35 $ 0.22 $ 0.79 $ 0.62 Weighted average diluted common shares 30,827 30,637 30,591 30,680 Consolidated Balance Sheet Highlights (In thousands) October 26, 2003 April 27, 2003 (Unaudited) Cash and cash equivalents $105,590 $94,626 Property and equipment, net 870,267 841,332 Long-term debt, including current portion 1,013,730 1,027,987 Stockholders' equity 233,000 203,904 Isle of Capri Casinos, Inc. Comparative Financial Highlights by Casino Property (Unaudited) (In thousands) THREE MONTHS ENDED October 26, October 27, 2003 2002 Adjusted Adjusted EBITDA EBITDA Net Adjusted Margin Net Adjusted Margin Revenues(6) EBITDA(7) % Revenues(6) EBITDA(7) % BILOXI $20,613 $5,270 25.6% $19,232 $4,812 25.0% NATCHEZ 7,843 1,691 21.6% 7,776 1,907 24.5% VICKSBURG 13,056 2,933 22.5% 13,598 3,617 26.6% LULA 20,690 5,682 27.5% 22,805 6,501 28.5% BOSSIER CITY 26,625 4,330 16.3% 28,882 6,102 21.1% LAKE CHARLES 39,799 7,833 19.7% 40,645 9,388 23.1% BLACK HAWK (8) 27,473 9,900 36.0% 25,919 9,239 35.6% COLORADO CENTRAL STATION (9)(10) 11,641 2,684 23.1% -- -- -- COLORADO GRANDE (9)(11) 2,281 687 30.1% -- -- -- BETTENDORF 25,158 7,937 31.5% 23,930 7,603 31.8% DAVENPORT 17,475 4,728 27.1% 14,875 2,821 19.0% MARQUETTE 11,284 3,191 28.3% 10,305 2,408 23.4% KANSAS CITY 21,982 3,792 17.3% 22,034 4,044 18.4% BOONVILLE 17,096 4,473 26.2% 15,328 3,518 23.0% CORPORATE & OTHER (12) 6,650 (7,244) N/M 14,784 (10,022) N/M TOTAL $269,666 $57,887 21.5% $260,113 $ 51,938 20.0% Isle of Capri Casinos, Inc. Comparative Financial Highlights by Casino Property (Unaudited) (In thousands) SIX MONTHS ENDED October 26, October 27, 2003 2002 Adjusted Adjusted EBITDA EBITDA Net Adjusted Margin Net Adjusted Margin Revenues(6) EBITDA(7) % Revenues(6) EBITDA(7) % BILOXI $42,799 $10,872 25.4% $40,838 $9,944 24.3% NATCHEZ 16,058 3,932 24.5% 16,688 4,292 25.7% VICKSBURG 27,186 7,056 26.0% 28,149 7,943 28.2% LULA 42,932 11,226 26.1% 45,389 12,854 28.3% BOSSIER CITY 55,419 9,726 17.5% 60,535 13,581 22.4% LAKE CHARLES 83,223 18,826 22.6% 83,746 20,643 24.6% BLACK HAWK (8) 55,553 20,549 37.0% 52,630 19,045 36.2% COLORADO CENTRAL STATION (9)(10) 23,660 5,244 22.2% -- -- -- COLORADO GRANDE (9)(11) 4,318 1,201 27.8% -- -- -- BETTENDORF 50,192 15,889 31.7% DAVENPORT 33,998 8,844 26.0% 29,846 5,648 18.9% MARQUETTE 22,246 6,246 28.1% 20,170 4,827 23.9% KANSAS CITY 45,344 8,575 18.9% 44,748 8,477 18.9% BOONVILLE 33,984 8,959 26.4% 30,433 6,878 22.6% CORPORATE & OTHER (12) 18,505 (11,566) N/M 35,913 (15,952) N/M TOTAL $555,417 $ 125,579 22.6% $536,776 $112,830 21.0% Isle of Capri Casinos, Inc. Reconciliation of Adjusted EBITDA to Net Income (Loss) by Casino Property (In thousands) (Unaudited) Three Months Ended October 26, 2003 Net Income Net Net (Loss) Adjusted Depreciation & Interest Income Margin EBITDA(7) Amortization Expense Other(13) (Loss) % BILOXI $5,270 $ 1,924 $1,526 $783 $1,037 5.0% NATCHEZ 1,691 587 889 328 (113) -1.4% VICKSBURG 2,933 1,191 1,349 538 (145) -1.1% LULA 5,682 2,461 3,708 792 (1,279) -6.2% BOSSIER CITY 4,330 1,883 3,323 842 (1,718) -6.5% LAKE CHARLES 7,833 2,790 4,284 1,268 (509) -1.3% BLACK HAWK (8) 9,900 1,709 2,019 476 5,696 20.7% COLORADO CENTRAL STATION (9)(10) 2,684 332 1,368 698 286 2.5% COLORADO GRANDE (9)(11) 687 71 184 235 197 8.6% BETTENDORF 7,937 1,862 4,267 951 857 3.4% DAVENPORT 4,728 2,215 1,903 660 (50) -0.3% MARQUETTE 3,191 741 2,181 384 (115) -1.0% KANSAS CITY 3,792 1,532 961 753 546 2.5% BOONVILLE 4,473 1,525 363 523 2,062 12.1% CORPORATE & OTHER (12) (7,244) 614 (7,683) (4,133) 3,958 N/M TOTAL $57,887 $21,437 $20,642 $5,098 $10,710 4.0% Isle of Capri Casinos, Inc. Reconciliation of Adjusted EBITDA to Net Income (Loss) by Casino Property (In thousands) (Unaudited) Three Months Ended October 27, 2002 Net Income Net Net (Loss) Adjusted Depreciation & Interest Income Margin EBITDA(7) Amortization Expense Other(13) (Loss) % BILOXI $4,812 $ 1,558 $1,710 $729 $815 4.2% NATCHEZ 1,907 491 1,344 322 (250) -3.2% VICKSBURG 3,617 1,163 1,347 554 553 4.1% LULA 6,501 2,266 5,004 878 (1,647) -7.2% BOSSIER CITY 6,102 1,994 2,800 924 384 1.3% LAKE CHARLES 9,388 2,522 4,322 1,298 1,246 3.1% BLACK HAWK (8) 9,239 1,226 1,382 1,165 5,466 21.1% BETTENDORF 7,603 1,691 4,732 982 198 0.8% DAVENPORT 2,821 1,574 1,903 215 (871) -5.9% MARQUETTE 2,408 766 2,186 352 (896) -8.7% KANSAS CITY 4,044 1,229 967 716 1,132 5.1% BOONVILLE 3,518 1,374 362 453 1,329 8.7% CORPORATE & OTHER (12) (10,022) 423 (7,409) (2,364) (672) N/M TOTAL $51,938 $18,277 $20,650 $6,224 $6,787 2.6% Isle of Capri Casinos, Inc. Reconciliation of Adjusted EBITDA to Net Income (Loss) by Casino Property (In thousands) (Unaudited) Six Months Ended October 26, 2003 Net Income Net Net (Loss) Adjusted Depreciation & Interest Income Margin EBITDA(7) Amortization Expense Other(13) (Loss) % BILOXI $10,872 $ 3,832 $3,129 $1,624 $2,287 5.3% NATCHEZ 3,932 1,189 1,778 688 277 1.7% VICKSBURG 7,056 2,437 2,698 1,131 790 2.9% LULA 11,226 4,949 7,414 1,652 (2,789) -6.5% BOSSIER CITY 9,726 3,878 6,810 1,763 (2,725) -4.9% LAKE CHARLES 18,826 5,547 8,585 2,658 2,036 2.4% BLACK HAWK (8) 20,549 3,443 3,364 1,740 12,002 21.6% COLORADO CENTRAL STATION (9)(10) 5,244 701 2,723 1,352 468 2.0% COLORADO GRANDE (9)(11) 1,201 141 365 397 298 6.9% BETTENDORF 15,889 3,761 8,472 1,881 1,775 3.5% DAVENPORT 8,844 4,496 3,806 1,275 (733) -2.2% MARQUETTE 6,246 1,542 4,366 758 (420) -1.9% KANSAS CITY 8,575 2,987 1,921 1,559 2,108 4.6% BOONVILLE 8,959 2,997 725 1,047 4,190 12.3% CORPORATE & OTHER (12) (11,566) 1,154 (14,416) (3,002) 4,698 N/M TOTAL $125,579 $43,054 $41,740 $16,523 $24,262 4.4% Isle of Capri Casinos, Inc. Reconciliation of Adjusted EBITDA to Net Income (Loss) by Casino Property (In thousands) (Unaudited) Six Months Ended October 27, 2002 Net Income Net Net (Loss) Adjusted Depreciation & Interest Income Margin EBITDA(7) Amortization Expense Other(13) (Loss) % BILOXI $9,944 $ 3,091 $3,441 $1,540 $1,872 4.6% NATCHEZ 4,292 940 2,489 692 171 1.0% VICKSBURG 7,943 2,270 2,709 1,141 1,823 6.5% LULA 12,854 4,507 9,444 1,725 (2,822) -6.2% BOSSIER CITY 13,581 4,019 5,640 1,931 1,991 3.3% LAKE CHARLES 20,643 5,219 8,697 2,672 4,055 4.8% BLACK HAWK (8) 19,045 2,421 2,853 2,352 11,419 21.7% BETTENDORF 14,650 3,342 9,255 1,768 285 0.6% DAVENPORT 5,648 3,066 3,827 435 (1,680) -5.6% MARQUETTE 4,827 1,504 4,396 678 (1,751) -8.7% KANSAS CITY 8,477 2,409 1,946 1,482 2,640 5.9% BOONVILLE 6,878 2,692 729 900 2,557 8.4% CORPORATE & OTHER (12) (15,952) 781 (13,736) (1,397) (1,600) N/M TOTAL $112,830 $36,261 $41,690 $15,919 $18,960 3.5% (1) Corporate and new development expenses for the three and six months ended October 26, 2003, include a $2.0 million charge related to the accrual of additional loss contingencies for litigation matters as compared to a $1.8 million charge in the prior year's three and six months ended October 27, 2002. (2) Preopening relates to expenses incurred in the opening of the casino at Our Lucaya Beach and Golf Resort, Grand Bahama Island, scheduled for the third quarter of fiscal 2004. (3) Consolidated net interest expense is comprised of the following components: Three Months Ended Six Months Ended October 26, October 27, October 26, October 27, 2003 2002 2003 2002 Interest expense $21,372 $20,683 $42,771 $41,804 Interest income (255) (18) (340) (83) Capitalized interest (475) (15) (691) (31) Net interest expense $20,642 $20,650 $41,740 $41,690 Included in the consolidated net interest expense is the Isle-Black Hawk's, the Colorado Central Station-Black Hawk's and the Colorado Grande- Cripple Creek's net interest expense that is comprised of the following: Three Months Ended Six Months Ended October 26, October 27, October 26, October 27, 2003 2002 2003 2002 Interest expense $ 2,836 $ 1,387 $ 5,747 $ 2,865 Interest income (33) (5) (63) (12) Net interest expense $ 2,803 $ 1,382 $ 5,684 $ 2,853 (4) Minority interest represents an unrelated third party's portion of the Isle-Black Hawk's income before income taxes and the Colorado Central Station- Black Hawk's and the Colorado Grande-Cripple Creek's net income. (5) During the second quarter of fiscal 2004, the Internal Revenue Service concluded a federal tax examination covering four tax years without significant adjustments and provided administrative guidance on certain other tax matters for other open years. As a result, we analyzed our tax reserves and reduced income tax expense by approximately $3.0 million for the three and six months ended October 26, 2003, for previously accrued income tax liabilities. This had the effect of reducing our effective tax rate to 14.5% and 28.8% for the three and six months ended October 26, 2003, respectively, excluding an unrelated party's portion of the Colorado Central Station-Black Hawk's and the Colorado Grande-Cripple Creek's income taxes as compared to 36.3% and 36.7% for the three and six months ended October 27, 2002. Excluding the impact of these developments, our fiscal 2004 effective tax rate for the six months ended October 26, 2003, would have been 37.3%, excluding an unrelated party's portion of the Colorado Central Station-Black Hawk's and the Colorado Grande-Cripple Creek's income taxes. (6) Net revenues are presented net of complimentaries, slot points expense and cash coupon redemptions. (7) 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 and non-cash items to EBITDA. Adjusted EBITDA is a supplemental financial measurement used by Isle of Capri's management, as well as industry analysts, in the evaluation of its businesses. Adjusted EBITDA is not presented as an alternative measure of net income or cash flow from operations (as determined in accordance with accounting principles generally accepted in the United States (GAAP)). All companies do not calculate Adjusted EBITDA in the same manner. As a result, Adjusted EBITDA as presented here may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by net revenues. A reconciliation of net income as determined in accordance with GAAP to Adjusted EBITDA and the Net Income (Loss) Margin Percentage is shown above. The Net Income (Loss) Margin Percentage is calculated by dividing net income (loss) by net revenues. (8) As management fees are eliminated in consolidation, the Isle-Black Hawk's Adjusted EBITDA does not include management fees of $1.2 million and $1.2 million for the three months ended October 26, 2003, and October 27, 2002, and $2.5 million and $2.4 million for the six months ended October 26, 2003, and October 27, 2002, respectively. If these charges were included, the Isle-Black Hawk's Adjusted EBITDA would have been $8.7 million and $8.1 million for the three months ended October 26, 2003, and October 27, 2002, respectively, and $18.0 million and $16.7 million for the six months ended October 26, 2003, and October 27, 2003, respectively. (9) The Isle of Capri Casinos, Inc. acquired these properties on April 22, 2003. (10) As management fees are eliminated in consolidation, the Colorado Central Station-Black Hawk's Adjusted EBITDA does not include management fees of $0.4 million and $0.9 million for the three and six months ended October 26, 2003, respectively. If this charge was included, the Colorado Central Station-Black Hawk's Adjusted EBITDA would have been $2.3 million and $4.3 million for the three and six months ended October 26, 2003, respectively. (11) As management fees are eliminated in consolidation, the Colorado Grande-Cripple Creek's Adjusted EBITDA does not include management fees of $0.1 million and $0.2 million for the three and six months ended October 26, 2003, respectively. If this charge was included, the Colorado Grande-Cripple Creek's Adjusted EBITDA would have been $0.6 million and $1.0 million for the three months and six months ended October 26, 2003, respectively. (12) Corporate and other includes the results of operations of Lady Luck- Las Vegas and Pompano Park. Prior year corporate and other also includes the results of operations of the Isle-Tunica. The Isle-Tunica ceased casino operations on September 3, 2002, and the assets were sold to Boyd Casino Strip, LLC on October 7, 2002. On October 30, 2002, the Isle of Capri completed the sale of the Lady Luck-Las Vegas and continued to operate the casino until September 3, 2003, the date the purchaser's designated gaming operator received regulatory approval. (13) Other adjustments to reconcile Adjusted EBITDA to net income represent management fees. Additionally, for the Isle-Black Hawk, the Colorado Central Station-Black Hawk, the Colorado Grande-Cripple Creek and corporate, other adjustments also include preopening expense, minority interest and income taxes. Isle of Capri Casinos, Inc. owns and operates 15 riverboat, dockside and land-based casinos at 14 locations, including Biloxi, Vicksburg, Lula and Natchez, Mississippi; Bossier City and Lake Charles (two riverboats), Louisiana; Black Hawk (two land-based casinos) and Cripple Creek, Colorado; Bettendorf, Davenport and Marquette, Iowa; and Kansas City and Boonville, Missouri. The company also operates Pompano Park Harness Racing Track in Pompano Beach, Florida. As a publicly held company, we regularly file 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. Our Internet website is http://www.islecorp.com/. We make our filings available free of charge on our Internet website as soon as reasonably practical after we electronically file or furnish such reports to the SEC. You may read and copy the reports, statements and other information we file 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. Our 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 Lori Hutzler, Director of Corporate Communications, 228-396-7031 This press release contains 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, 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 27, 2003, and 10-Q for the fiscal quarter ended July 27, 2003. 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 Lori Hutzler, Director of Corporate Communications, +1-228-396-7031, all of Isle of Capri Casinos Web site: http://www.theislecorp.com/

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