ISLE Isleworth Healthcare Acquisition Corporation

Isle Of Capri Casinos, Inc. Announces First-Quarter Results BILOXI, Miss., Aug. 12 /PRNewswire-FirstCall/ -- Isle of Capri Casinos, Inc. (NASDAQ:ISLE) today reported first-quarter financial results for the quarter ended July 25, 2004. For the first quarter, the company reported net income of $10.6 million or $0.34 per diluted common share compared to net income of $13.6 million or $0.45 per diluted common share for the same quarter last year. During the quarter ended July 25, 2004, Isle of Capri Casinos had net revenues of $280.9 million, compared to $285.8 million for the same period in fiscal 2004, and Adjusted EBITDA(1) of $60.6 million, compared to $67.7 million for the same period in fiscal 2004. Bernard Goldstein, Isle of Capri Casinos, Inc.'s chairman and chief executive officer, said, "Our first quarter began with some challenges, including greater than expected construction disruption; however, the end of the quarter produced stronger results. Geographic diversity has been a successful component of our business model, and this quarter, it allowed for solid results in markets where we did not experience disruption." Highlights The Isle-Lake Charles substantially completed renovation of the Grand Palais in early July 2004. The construction disruption is over, and the result is a greatly enhanced and updated gaming atmosphere for our customers. Based on the continued strong operating results at the Isle-Boonville, the Isle is in the planning stages to build an approximately 120-room hotel and event center. Recent developments in the United Kingdom's deregulation efforts appear to favor the Isle's business model for regional casinos of approximately 1,200 slot machines. The Isle continues to move forward with improvement to its standardized Calypso's Buffet. The Isle-Vicksburg recently completed its upgrade to this Isle-branded product. Operational Review In Mississippi, our four operations contributed 22% of our net revenues. In three Mississippi markets, we experienced declines in net revenue and Adjusted EBITDA. The Isle-Biloxi is midway through its $79.0 million transformation, but the impact from the construction disruption has increased as the construction has moved to the front entrance of the property. We expect to complete these additions in spring 2005. The Isle-Vicksburg faces strong competition as its competitors continue to make large capital and marketing investments. The Isle-Lula has faced a relatively weak economy in eastern Arkansas, its main feeder market. The Isle-Natchez had a modest increase in both net revenues and Adjusted EBITDA despite tough economic conditions in the Natchez market. In Louisiana, our two properties contributed 25% of our net revenues. The Isle-Bossier City is starting to see the benefits of its expansion. Occupancy rates at the all-suite tower hotels have increased to 88%, for the first quarter of fiscal 2005, from 83% for the fourth fiscal quarter of 2004, driving increased revenues and Adjusted EBITDA, despite a flat and highly competitive market environment. In Lake Charles, the Grand Palais construction disruption through the end of June, coupled with low table hold percentages, had a negative impact, leading to decreased net revenues and Adjusted EBITDA. In Missouri, our two properties contributed 15% of our net revenue. We saw quarter-over-quarter increases in net revenues and in Adjusted EBITDA in both Kansas City and Boonville. The Isle-Kansas City's operating performance has benefited from its gaming floor expansion despite a major new competitor's product and aggressive marketing by nearby properties. In Iowa, our three casinos made up 19% of our net revenue. We have shown quarter-over-quarter increases in net revenue, Adjusted EBITDA and Adjusted EBITDA Margin at each of our Iowa properties. We believe that we are well positioned to continue to take advantage of the overall strength of the Iowa market. The market has drawn strength from improving overall economic conditions and from a significantly higher gaming tax burden in neighboring Illinois. In Colorado, our three casino operations made up 13% of our net revenue. Construction continues to cause considerable disruption, particularly to parking for the Colorado Central Station-Black Hawk and to the street entrances to both Black Hawk casinos. We are prioritizing our construction efforts to mitigate disruptions as quickly as possible. However, we expect the effects of the disruptions to continue until spring 2005. Our international operations account for a small percentage of our overall revenues. We are, however, excited about the growth opportunities in the United Kingdom. We believe we are in a strong position to take advantage of the possible liberalization of gaming in the United Kingdom. We also operate the Isle-Our Lucaya as a higher-end player incentive. The ramp-up of this property has been slower than we expected. We continue to focus efforts to better utilize the marketing potential of this property. Timothy M. Hinkley, Isle of Capri Casinos, Inc. president and chief operating officer, said, "We realize the value of a strong marketing effort and we have long used these tools to maximize the growth of our company. This quarter we introduced an aggressive promotions plan, which is starting to turn positive results for the company. We also remain focused on our expansion plan, allowing us to improve our existing product while continuing to provide a consistent and fun experience for our customers." Isle of Capri Casinos, Inc. Consolidated Statements of Income (Unaudited) (In thousands, except per share amounts) Three Months Ended July 25, July 27, 2004 2003 Revenues: Casino $284,195 $288,783 Hotel, pari-mutuel, food, beverage & other 54,045 54,235 Gross revenues 338,240 343,018 Less promotional allowances 57,368 57,267 Net revenues 280,872 285,751 Operating and other expenses: Properties 213,239 211,826 New development (2) 1,558 753 Corporate 5,523 5,480 Preopening (3) 55 291 Depreciation and amortization 23,623 21,617 Total operating and other expenses 243,998 239,967 Operating income 36,874 45,784 Net interest expense (4) (17,400) (21,098) Minority interest (5) (2,133) (2,833) Income before income taxes 17,341 21,853 Income tax expense (6) 6,732 8,301 Net income $10,609 $13,552 Net income per diluted common share $0.34 $0.45 Weighted average diluted common shares 30,799 30,355 Selected Consolidated Balance Sheet Accounts July 25, 2004 April 25, 2004 (Unaudited) Cash and cash equivalents $151,024 $134,582 Property and equipment, net 914,824 907,460 Debt 1,089,969 1,088,864 Stockholders' equity 246,734 241,406 Isle of Capri Casinos, Inc. Comparative Financial Highlights by Casino Property (Unaudited) (In thousands) Three Months Ended July 25, 2004 July 27, 2003 Adjusted Adjusted Net Adjusted EBITDA Net Adjusted EBITDA Revenues EBITDA Margin% Revenues EBITDA Margin% (7) (1) (1) (7) (1) (1) MISSISSIPPI BILOXI $20,297 $4,178 20.6% $22,186 $5,602 25.3% NATCHEZ 8,531 2,272 26.6% 8,215 2,241 27.3% VICKSBURG 13,050 3,166 24.3% 14,130 4,123 29.2% LULA 20,798 5,243 25.2% 22,242 5,544 24.9% MISSISSIPPI TOTAL 62,676 14,859 23.7% 66,773 17,510 26.2% LOUISIANA BOSSIER CITY 29,702 6,586 22.2% 28,794 5,396 18.7% LAKE CHARLES 41,735 9,519 22.8% 43,424 10,993 25.3% LOUISIANA TOTAL 71,437 16,105 22.5% 72,218 16,389 22.7% MISSOURI KANSAS CITY 24,344 5,080 20.9% 23,362 4,783 20.5% BOONVILLE 17,570 4,827 27.5% 16,888 4,486 26.6% MISSOURI TOTAL 41,914 9,907 23.6% 40,250 9,269 23.0% IOWA BETTENDORF 25,738 8,753 34.0% 25,034 7,952 31.8% DAVENPORT 17,684 4,856 27.5% 16,523 4,116 24.9% MARQUETTE 11,020 3,334 30.3% 10,962 3,055 27.9% IOWA TOTAL 54,442 16,943 31.1% 52,519 15,123 28.8% COLORADO BLACK HAWK (8) 26,297 10,186 38.7% 28,080 10,649 37.9% COLORADO CENTRAL STATION (8) 8,343 521 6.2% 12,019 2,560 21.3% COLORADO GRANDE (8) 2,152 513 23.8% 2,037 514 25.2% COLORADO TOTAL 36,792 11,220 30.5% 42,136 13,723 32.6% INTERNATIONAL BLUE CHIP (3)(9) 1,615 (218) (13.5%) -- -- 0.0% OUR LUCAYA (3) 6,732 (993) (14.8%) -- -- 0.0% INTERNATIONAL TOTAL 8,347 (1,211) (14.5%) -- -- 0.0% CORPORATE & OTHER (10) 5,264 (7,271) N/M 11,855 (4,322) N/M TOTAL $280,872 $60,552 21.6% $285,751 $67,692 23.7% 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 Depreciation Operating Operating & Preopening Adjusted Income Income Amortization (3) EBITDA Margin% (Loss) (1) (1) MISSISSIPPI BILOXI $ 2,229 $ 1,949 $-- $ 4,178 11.0% NATCHEZ 1,495 777 -- 2,272 17.5% VICKSBURG 2,013 1,153 -- 3,166 15.4% LULA 3,150 2,093 -- 5,243 15.1% MISSISSIPPI TOTAL 8,887 5,972 -- 14,859 14.2% LOUISIANA BOSSIER CITY 3,909 2,677 -- 6,586 13.2% LAKE CHARLES 6,330 3,189 -- 9,519 15.2% LOUISIANA TOTAL 10,239 5,866 -- 16,105 14.3% MISSOURI KANSAS CITY 3,083 1,997 -- 5,080 12.7% BOONVILLE 3,170 1,657 -- 4,827 18.0% MISSOURI TOTAL 6,253 3,654 -- 9,907 14.9% IOWA BETTENDORF 7,009 1,744 -- 8,753 27.2% DAVENPORT 2,659 2,197 -- 4,856 15.0% MARQUETTE 2,499 835 -- 3,334 22.7% IOWA TOTAL 12,167 4,776 -- 16,943 22.3% COLORADO BLACK HAWK (8) 8,470 1,716 -- 10,186 32.2% COLORADO CENTRAL STATION (8) (46) 567 -- 521 (0.6%) COLORADO GRANDE (8) 412 101 -- 513 19.1% COLORADO TOTAL 8,836 2,384 -- 11,220 24.0% INTERNATIONAL BLUE CHIP (3)(9) (327) 54 55 (218) (20.2%) OUR LUCAYA (3) (1,328) 335 -- (993) (19.7%) INTERNATIONAL TOTAL (1,655) 389 55 (1,211) (19.8%) CORPORATE & OTHER (10) (7,853) 582 -- (7,271) N/M TOTAL $36,874 $23,623 $55 $60,552 13.1% Isle of Capri Casinos, Inc. Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Casino Property (Unaudited) (In thousands) Three Months Ended July 27, 2003 Depreciation Operating Operating & Preopening Adjusted Income Income Amortization (3) EBITDA Margin% (Loss) (1) (1) MISSISSIPPI BILOXI $ 3,694 $ 1,908 $-- $ 5,602 16.7% NATCHEZ 1,639 602 -- 2,241 20.0% VICKSBURG 2,877 1,246 -- 4,123 20.4% LULA 3,056 2,488 -- 5,544 13.7% MISSISSIPPI TOTAL 11,266 6,244 -- 17,510 16.9% LOUISIANA BOSSIER CITY 3,401 1,995 -- 5,396 11.8% LAKE CHARLES 8,236 2,757 -- 10,993 19.0% LOUISIANA TOTAL 11,637 4,752 -- 16,389 16.1% MISSOURI KANSAS CITY 3,328 1,455 -- 4,783 14.2% BOONVILLE 3,014 1,472 -- 4,486 17.8% MISSOURI TOTAL 6,342 2,927 -- 9,269 15.8% IOWA BETTENDORF 6,052 1,900 -- 7,952 24.2% DAVENPORT 1,835 2,281 -- 4,116 11.1% MARQUETTE 2,254 801 -- 3,055 20.6% IOWA TOTAL 10,141 4,982 -- 15,123 19.3% COLORADO BLACK HAWK (8) 8,915 1,734 -- 10,649 31.7% COLORADO CENTRAL STATION (8) 2,191 369 -- 2,560 18.2% COLORADO GRANDE (8) 444 70 -- 514 21.8% COLORADO TOTAL 11,550 2,173 -- 13,723 27.4% INTERNATIONAL BLUE CHIP (3) (9) -- -- -- -- 0.0% OUR LUCAYA (3) (291) -- 291 -- 0.0% INTERNATIONAL TOTAL (291) -- 291 -- 0.0% CORPORATE & OTHER (10) (4,861) 539 -- (4,322) N/M TOTAL $45,784 $21,617 $291 $67,692 16.0% 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 accounting principles generally accepted in the United States. 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. 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. 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. 3. Preopening expenses for the first fiscal quarter of 2005 relate to the future opening of the Blue Chip-Walsall pub-style casino, which is slated to open in September 2004. For the fiscal quarter ended July 27, 2003, preopening related to expenses incurred opening the casino at Our Lucaya Beach and Golf Resort, Grand Bahama Island. 4. Consolidated net interest expense is comprised of the following components: Three Months Ended July 25, 2004 Restricted Blue Group Colorado Chip Consolidated Interest expense $15,628 $2,411 $73 $18,112 Interest income (344) (31) (1) (376) Capitalized interest (198) (138) -- (336) Net interest expense $15,086 $2,242 $72 $17,400 Three Months Ended July 27, 2003 Restricted Blue Group Colorado Chip Consolidated Interest expense $18,488 $2,911 $-- $21,399 Interest income (55) (30) -- (85) Capitalized interest (216) -- -- (216) Net interest expense $18,217 $2,881 $-- $21,098 Blue Chip includes Blue Chip-Dudley's and Blue Chip-Wolverhampton's components of net interest expense. Colorado includes the Isle-Black Hawk's, the Colorado Central Station-Black Hawk's and the Colorado Grande-Cripple Creek's components of net interest expense. 5. Minority interest represents unrelated third parties' portion of Blue Chip Casinos, PLC's net income, and the Isle-Black Hawk's, the Colorado Central Station-Black Hawk's and the Colorado Grande-Cripple Creek's income before income taxes. 6. Our effective tax rate for the quarter ended July 25, 2004, was 38.8%, compared to 37.5%, for the quarter ended July 27, 2003, which excludes an unrelated party's portion of the Colorado Central Station-Black Hawk's and the Colorado Grande-Cripple Creek's income taxes. The increase in the rate, over the comparable fiscal quarter is attributable to the effect of permanent items on lower earnings for the quarter. 7. Net revenues are presented net of complimentaries, slot points expense and cash coupon redemptions. 8. As management fees are eliminated in consolidation, the Adjusted EBITDA for the Isle-Black Hawk, the Colorado Central Station-Black Hawk and the Colorado Grande-Cripple Creek does not include management fees. The following table shows management fees and Adjusted EBITDA inclusive of management fees for the three months ended July 25, 2004 and July 27, 2003: Three Months Ended July 25, 2004 July 27, 2003 (In thousands) Management Fees Isle - Black Hawk $1,268 $1,264 Colorado Central Station 264 543 Colorado Grande 101 102 Adjusted EBITDA with Management Fees Isle - Black Hawk 8,918 9,385 Colorado Central Station 257 2,017 Colorado Grande 412 412 9. The Isle of Capri Casinos, Inc. acquired a two-thirds interest in Blue Chip Casinos, PLC on November 28, 2003. Blue Chip Casinos, PLC owns and operates pub-style casinos in Dudley and Wolverhampton, England, and is currently in the process of developing a pub-style casino in Walsall, England. 10. Corporate and other includes net revenues of $5,147 and Adjusted EBITDA of ($310) for Pompano Park. Prior year corporate and other includes net revenues of $5,108 and Adjusted EBITDA of ($386) for Pompano Park, as well as net revenues of $5,588 and Adjusted EBITDA of $1,138 for the Lady Luck-Las Vegas. The sale of the Lady Luck-Las Vegas was finalized on September 3, 2003. Additionally, prior year corporate net revenues and Adjusted EBITDA include $875 related to a litigation settlement. Isle of Capri Casinos, Inc., a leading developer and owner of gaming and entertainment facilities, operates 16 casinos in 14 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) and Cripple Creek, Colorado. Isle of Capri's international gaming interests include a casino that the company operates in Freeport, Grand Bahamas, and a two-thirds ownership interest in casinos in Dudley and Wolverhampton, England. The company also owns and 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 25, 2004. 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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